Exhibit 10.1
CREDIT AGREEMENT
$250,000,000
Dated as of December 2, 2005
among
SUNRISE SENIOR LIVING, INC.,
and
CERTAIN SUBSIDIARIES
as Borrowers,
THE SUBSIDIARIES OF THE BORROWER
IDENTIFIED HEREIN, as Guarantors
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender
and
L/C Issuer,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as
Syndication Agent
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager

 

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TABLE OF CONTENTS

          Section   Page    
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
    1  
Section 1.1 Defined Terms
    1  
Section 1.2 Other Interpretive Provisions
    24  
Section 1.3 Accounting Terms
    24  
Section 1.4 Exchange Rates; Currency Equivalents
    25  
Section 1.5 Additional Alternative Currencies
    25  
Section 1.6 Change of Currency
    26  
Section 1.7 Times of Day
    27  
Section 1.8 Letter of Credit Amounts
    27  
 
       
ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS
    27  
Section 2.1 Committed Loans
    27  
Section 2.2 Borrowings, Conversions and Continuations of Committed Loans
    29  
Section 2.3 Letters of Credit
    32  
Section 2.4 Swing Line Loans
    40  
Section 2.5 Prepayments
    43  
Section 2.6 Termination or Reduction of Commitments
    44  
Section 2.7 Repayment of Loans
    44  
Section 2.8 Interest
    45  
Section 2.9 Fees
    46  
Section 2.10 Computation of Interest and Fees
    46  
Section 2.11 Evidence of Debt
    46  
Section 2.12 Payments Generally; Administrative Agent’s Clawback
    47  
Section 2.13 Sharing of Payments by Lenders
    49  
Section 2.14 Designated Borrowers
    50  
Section 2.15 Extension of Maturity Date
    51  
Section 2.16 Increase in Commitments
    51  
Section 2.17 Collateral
    52  
 
       
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY
    53  
Section 3.1 Taxes
    53  
Section 3.2 Illegality
    55  
Section 3.3 Inability to Determine Rates
    56  
Section 3.4 Increased Costs; Reserves on Eurocurrency Rate Loans
    56  
Section 3.5 Compensation for Losses
    58  
Section 3.6 Mitigation Obligations; Replacement of Lenders
    59  
Section 3.7 Survival
    59  
 
       
ARTICLE IV GUARANTY
    59  
Section 4.1 The Guaranty
    59  
Section 4.2 Obligations Unconditional
    60  
Section 4.3 Reinstatement
    61  
Section 4.4 Certain Additional Waivers
    61  
Section 4.5 Remedies
    61  
Section 4.6 Rights of Contribution
    62  
Section 4.7 Guarantee of Payment; Continuing Guarantee
    63  
 
       
ARTICLE V CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
    63  

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TABLE OF CONTENTS (continued)

          Section   Page    
Section 5.1 Conditions of Initial Credit Extension
    63  
Section 5.2 Conditions to all Credit Extensions
    65  
 
       
ARTICLE VI REPRESENTATIONS AND WARRANTIES
    66  
Section 6.1 Existence, Qualification and Power; Compliance with Laws
    66  
Section 6.2 Authorization; No Contravention
    66  
Section 6.3 Governmental Authorization; Other Consents
    67  
Section 6.4 Binding Effect
    67  
Section 6.5 Financial Statements; No Material Adverse Effect; No Internal
Control Event
    67  
Section 6.6 Litigation
    67  
Section 6.7 No Default
    68  
Section 6.8 Ownership of Property; Liens
    68  
Section 6.9 Environmental Compliance
    68  
Section 6.10 Insurance
    68  
Section 6.11 Taxes
    68  
Section 6.12 ERISA Compliance
    68  
Section 6.13 Subsidiaries; Equity Interests
    69  
Section 6.14 Margin Regulations; Investment Company Act; Public Utility Holding
Company Act
    69  
Section 6.15 Disclosure
    70  
Section 6.16 Compliance with Laws
    70  
Section 6.17 Intellectual Property; Licenses, Etc.
    70  
Section 6.18 Representations as to Foreign Obligors
    70  
Section 6.19 Projected Financial Statements
    71  
Section 6.20 Employee Relations
    71  
Section 6.21 Management Agreements
    72  
 
       
ARTICLE VII AFFIRMATIVE COVENANTS
    72  
Section 7.1 Financial Statements
    72  
Section 7.2 Certificates; Other Information
    73  
Section 7.3 Notices
    74  
Section 7.4 Payment of Obligations
    75  
Section 7.5 Preservation of Existence, Etc.
    76  
Section 7.6 Maintenance of Properties
    76  
Section 7.7 Maintenance of Insurance
    76  
Section 7.8 Compliance with Laws
    76  
Section 7.9 Books and Records
    76  
Section 7.10 Inspection Rights
    76  
Section 7.11 Use of Proceeds
    77  
Section 7.12 Conduct of Business and Compliance with Laws; Licensure
    77  
Section 7.13 Additional Guarantors
    78  
Section 7.14 Financial Covenants
    78  
 
       
ARTICLE VIII NEGATIVE COVENANTS
    78  
Section 8.1 Liens
    79  
Section 8.2 Certain Investments
    79  
Section 8.3 Indebtedness
    80  
Section 8.4 Fundamental Changes
    80  
Section 8.5 Dispositions
    80  
Section 8.6 Restricted Payments
    81  

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TABLE OF CONTENTS (continued)

          Section   Page    
Section 8.7 Change in Nature of Business
    81  
Section 8.8 Transactions with Affiliates
    81  
Section 8.9 Burdensome Agreements
    82  
Section 8.10 Use of Proceeds
    82  
 
       
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES
    82  
Section 9.1 Events of Default
    82  
Section 9.2 Remedies Upon Event of Default
    84  
Section 9.3 Application of Funds
    85  
 
       
ARTICLE X ADMINISTRATIVE AGENT
    86  
Section 10.1 Appointment and Authority
    86  
Section 10.2 Rights as a Lender
    86  
Section 10.3 Exculpatory Provisions
    86  
Section 10.4 Reliance by Administrative Agent
    87  
Section 10.5 Delegation of Duties
    88  
Section 10.6 Resignation of Administrative Agent
    88  
Section 10.7 Non-Reliance on Administrative Agent and Other Lenders
    89  
Section 10.8 No Other Duties, Etc.
    89  
Section 10.9 Administrative Agent May File Proofs of Claim
    89  
Section 10.10 Collateral and Guaranty Matters
    90  
 
       
ARTICLE XI MISCELLANEOUS
    90  
Section 11.1 Amendments, Etc.
    90  
Section 11.2 Notices; Effectiveness; Electronic Communication
    92  
Section 11.3 No Waiver; Cumulative Remedies
    93  
Section 11.4 Expenses; Indemnity; Damage Waiver
    94  
Section 11.5 Payments Set Aside
    95  
Section 11.6 Successors and Assigns
    96  
Section 11.7 Treatment of Certain Information; Confidentiality
    99  
Section 11.8 Right of Setoff
    100  
Section 11.9 Interest Rate Limitation
    100  
Section 11.10 Counterparts; Integration; Effectiveness
    101  
Section 11.11 Survival of Representations and Warranties
    101  
Section 11.12 Severability
    101  
Section 11.13 Replacement of Lenders
    101  
Section 11.14 Tax Forms
    102  
Section 11.15 Governing Law
    104  
Section 11.16 USA PATRIOT Act Notice
    104  
Section 11.17 Dispute Resolution
    104  
Section 11.18 Time of the Essence
    106  
Section 11.19 Waiver of Right to Trial by Jury
    106  
Section 11.20 Judgment Currency
    107  

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CREDIT AGREEMENT
     This CREDIT AGREEMENT (“Agreement”) is entered into as of December 2, 2005,
among SUNRISE SENIOR LIVING, INC., a Delaware corporation (the “Company”),
certain Subsidiaries of the Company party hereto pursuant to Section 2.14 (each
a “Designated Borrower” and, together with the Company, the “Borrowers” and,
each a “Borrower”), each lender from time to time party hereto (collectively,
the “Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer.
     The Company has requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.
     In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
     Section 1.1 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
     “AAA” means the American Arbitration Association.
     “Administrative Agent” means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
     “Administrative Agent’s Office” means, with respect to any currency, the
Administrative Agent’s address and, as appropriate, account as set forth on
Schedule 10.2 with respect to such currency, or such other address or account
with respect to such currency as the Administrative Agent may from time to time
notify to the Company and the Lenders.
     “Administrative Questionnaire” means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
     “Affiliate” means, with respect to any designated Person, any other Person,
(a) directly or indirectly owning or holding forty-one percent (41%) or more of
any equity interest in such designated Person, or (c) forty-one percent (41%) or
more of whose stock or other equity interest is directly or indirectly owned or
held by such designated Person.
     “Aggregate Commitments” means the Commitments of all the Lenders.
     “Agreement” means this Credit Agreement.
     “Agreement Currency” has the meaning set forth in Section 11.20.
     “Alternative Currency” means each of Euro, Sterling, and each other
currency (other than Dollars) that is approved in accordance with Section 1.5.

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     “Alternative Currency Loan” means a Committed Loan in an Alternative
Currency.
     “Alternative Currency Non-Qualified Lender” means Chevy Chase Bank, F.S.B.,
Farmers & Mechanics Bank and First Horizon Bank, a division of First Tennessee
Bank, N.A., or their successors.
     “Alternative Currency Equivalent” means, at any time, with respect to any
amount denominated in Dollars, the equivalent amount thereof in the applicable
Alternative Currency as determined by the Administrative Agent or the L/C
Issuer, as the case may be, at such time on the basis of the Spot Rate
(determined in respect of the most recent Revaluation Date) for the purchase of
such Alternative Currency with Dollars.
     “Alternative Currency Sublimit” means an amount equal to the lesser of the
Aggregate Commitments and $50,000,000. The Alternative Currency Sublimit is part
of, and not in addition to, the Aggregate Commitments.
     “Applicable Foreign Obligor Documents” has the meaning set forth in
Section 6.18 hereof.
     “Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth (9th) decimal place) of the Aggregate
Commitments represented by such Lender’s Commitment at such time. If the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section 9.2 or if
the Aggregate Commitments have expired, then the Applicable Percentage of each
Lender shall be determined based on the Applicable Percentage of such Lender
most recently in effect, giving effect to any subsequent assignments. The
initial Applicable Percentage of each Lender is set forth opposite the name of
such Lender on Schedule 2.1 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.
     “Applicable Rate” means the following percentages per annum, based upon the
Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 7.2:

                      Eurodollar Rate Loans   Base Rate Loans Pricing      
Margin   Margin Level   Leverage Ratio   (bps)   (bps)
I
  < 2.25x   170   0               II   ³ 2.25x but < 3.00x   185   25          
    III   ³ 3.00x but < 3.75x   200   50               IV   ³ 3.75x   225   75

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Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Adjusted Leverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 7.2; provided, however, that if a Compliance
Certificate is not delivered when due in accordance with such Section and such
failure continues for ten (10) days after written notice thereof to the Company,
then Pricing Level IV shall apply as of the first Business Day after the date on
which such Compliance Certificate was required to have been delivered. The
Applicable Rate in effect from the Closing Date through the date a Compliance
Certificate is required to be delivered pursuant to Section 7.2(a) for the
fiscal quarter ending December 31, 2005 shall be determined based upon Pricing
Level I.
     “Applicable Time” means, with respect to any borrowings and payments in any
Alternative Currency, the local time in the place of settlement for such
Alternative Currency as may be determined by the Administrative Agent or the L/C
Issuer, as the case may be, to be necessary for timely settlement on the
relevant date in accordance with normal banking procedures in the place of
payment.
     “Applicant Borrower” has the meaning specified in Section 2.14.
     “Arranger” means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.
     “Assignee Group” means two or more Eligible Assignees that are Affiliates
of one another or two or more Approved Funds managed by the same investment
advisor.
     “Assignment and Assumption” means 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 11.6(b), and accepted by the Administrative
Agent, in substantially the form of Exhibit E or any other form approved by the
Administrative Agent.
     “Audited Financial Statements” means the audited consolidated balance sheet
of the Company and its Subsidiaries for the fiscal year ended December 31, 2004,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Company and its Subsidiaries,
including the notes thereto.
     “Auto Extension Letter of Credit” has the meaning specified in Section 2.3
hereof.
     “Availability Period” means the period from and including the Closing Date
to the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.6, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 9.2.
     “Bank of America” means Bank of America, N.A. and its successors.
     “BAS” means Banc of America Securities, LLC and its successors.

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     “Base Rate” means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its “prime rate.” The “prime rate” is a rate set by Bank of America
based upon various factors including Bank of America’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
     “Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.
     “Base Rate Loan” means a Loan that bears interest based on the Base Rate.
All Base Rate Loans shall be denominated in Dollars.
     “Borrower” and “Borrowers” each has the meaning specified in the
introductory paragraph hereto.
     “Borrower Materials” has the meaning specified in Section 7.2.
     “Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the
context may require.
     “Business Day” means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office with respect to
Obligations denominated in Dollars is located and:
     (a) if such day relates to any interest rate settings as to a Eurocurrency
Rate Loan denominated in Dollars, any fundings, disbursements, settlements and
payments in Dollars in respect of any such Eurocurrency Rate Loan, or any other
dealings in Dollars to be carried out pursuant to this Agreement in respect of
any such Eurocurrency Rate Loan, means any such day on which dealings in
deposits in Dollars are conducted by and between banks in the London interbank
eurodollar market;
     (b) if such day relates to any interest rate settings as to a Eurocurrency
Rate Loan denominated in Euro, any fundings, disbursements, settlements and
payments in Euro in respect of any such Eurocurrency Rate Loan, or any other
dealings in Euro to be carried out pursuant to this Agreement in respect of any
such Eurocurrency Rate Loan, means a TARGET Day;
     (c) if such day relates to any interest rate settings as to a Eurocurrency
Rate Loan denominated in a currency other than Dollars or Euro, means any such
day on which dealings in deposits in the relevant currency are conducted by and
between banks in the London or other applicable offshore interbank market for
such currency; and
     (d) if such day relates to any fundings, disbursements, settlements and
payments in a currency other than Dollars or Euro in respect of a Eurocurrency
Rate Loan denominated in a currency other than Dollars or Euro, or any other
dealings in any currency other than Dollars or Euro to be carried out pursuant
to this Agreement in respect of any such Eurocurrency Rate Loan

4

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(other than any interest rate settings), means any such day on which banks are
open for foreign exchange business in the principal financial center of the
country of such currency.
     “Capitalized Cash Interest Expense” means capitalized interest on
construction or development loans, to the extent not funded from an interest
reserve as part of third party construction financing.
     “Cash Collateralize” has the meaning specified in Section 2.3(g).
     “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 or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
     “Change of Control” means an event or series of events by which:
     (a) any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit
plan of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of thirty percent (30%) or more of the equity securities of such
Person entitled to vote for members of the board of directors or equivalent
governing body of such Person on a fully-diluted basis (and taking into account
all such securities that such person or group has the right to acquire pursuant
to any option right);
     (b) any Person or two or more Persons acting in concert shall have acquired
by contract or otherwise, directly or indirectly, a controlling influence over
the management or policies of the Company, or control over the equity securities
of the Company entitled to vote for members of the board of directors or
equivalent governing body of the Company on a fully-diluted basis (and taking
into account all such securities that such Person or group has the right to
acquire pursuant to any option right) representing thirty percent (30%) or more
of the combined voting power of such securities.
     “Closing Date” means the first date on which all the conditions precedent
in Section 5.1 are satisfied or waived in accordance with Section 11.1 (or in
the case of Section 5.1(b) waived by the person entitled to receive the
applicable payment).
     “Collateral” means the Collateral as defined in the Security Agreements.
     “Code” means the Internal Revenue Code of 1986.
     “Commitment” means, as to each Lender, its obligation to (a) make Committed
Loans to the Borrowers pursuant to Section 2.1, (b) purchase participations in
L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time

5

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outstanding not to exceed the Dollar amount set forth opposite such Lender’s
name on Schedule 2.1 or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable, as such amount may be adjusted
from time to time in accordance with this Agreement.
     “Committed Borrowing” means a Borrowing consisting of simultaneous
Committed Loans of the same Type, in the same currency and, in the case of
Eurocurrency Rate Loans, having the same Interest Period made by each of the
Lenders pursuant to Section 2.1.
     “Committed Loan” has the meaning specified in Section 2.1.
     “Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of Eurocurrency Rate Loans, pursuant to Section 2.2(a), which, if in writing,
shall be substantially in the form of Exhibit A.
     “Company” has the meaning specified in the introductory paragraph hereto.
     “Company Guaranty” means the Company Guaranty made by the Company in favor
of the Administrative Agent and the Lenders, substantially in the form of
Exhibit F.
     “Compliance Certificate” means a certificate substantially in the form of
Exhibit D.
     “Consolidated EBITDA” means the sum of: (a) (i) net income;
(ii) Consolidated Interest Expense; (iii) income taxes; (iv) depreciation and
amortization; (v) the non-cash component of any unusual or non-recurring item of
loss or expense which was deducted in determining net income (in accordance with
GAAP), and (vi) income (or loss) in respect of minority interest (assuming it
was deducted in the calculation of net income); minus (b) “other income –
operating properties” as shown on the Company’s financial statements in
accordance with GAAP as of the date hereof (or as such category may be
categorized in future financial statements) in each case for the Borrower and
its Subsidiaries on a consolidated basis. For purposes of calculating the
Leverage Ratio only, Consolidated EBITDA will be adjusted to reflect actual
transition costs (post-closing) or pre-closing on a pro forma basis to reflect
(i) material acquisitions and dispositions of property and (ii) material
acquisitions and dispositions of management contracts, provided that
documentation of such acquisitions and dispositions satisfactory to the
Administrative Agent in its sole discretion is delivered to the Administrative
Agent. Transition costs shall be subject to the approval of the Administrative
Agent.
     “Consolidated EBITDAR” means the sum of: (a) Consolidated EBITDA plus
(b) rent paid or payable under all operating leases as determined in accordance
with GAAP.
     “Consolidated Fixed Charges” means the sum of: (a) Consolidated Interest
Expense, (b) Capitalized Cash Interest Expense (c) scheduled payments of
principal on Total Funded Indebtedness (excluding balloon payments), (d) rent
payable under all operating leases (other than capital leases) as determined in
accordance with GAAP, and (e) dividends payable on stock.

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     “Consolidated Interest Expense” means total interest expense (whether paid
or accrued), including the amortization of debt discounts and premiums as well
as the interest component under capital leases, on a consolidated basis in
accordance with GAAP.
     “Consolidated Net Worth” means Shareholders’ Equity of the Borrower and its
Subsidiaries on a consolidated basis in accordance with GAAP.
     “Continuing Care Retirement Community” means a Senior Living Facility which
provides or arranges housing and health-related services that are effective for
the life of the resident or for an extended, specified period in excess of one
year, including mutually terminable contracts, in consideration for the payment
of an entrance fee, which services are provided on a comprehensive continuum of
care basis which includes a skilled nursing facility.
     “Contractual Obligation” means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
     “Control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.
     “Convertible Debt” means the $125,000,000 convertible subordinated notes of
the Borrower due February 1, 2009.
     “Credit Extension” means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.
     “Debtor Relief Laws” means the Bankruptcy Code of the United States, 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 and affecting the rights of
creditors generally.
     “Default” means any event or condition that constitutes an Event of Default
or that, with the giving of any notice, the passage of time, or both, would be
an Event of Default.
     “Default Rate” means (a) when used with respect to Obligations other than
Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) two percent
(2%) per annum; provided, however, that with respect to a Eurocurrency Rate
Loan, the Default Rate shall be an interest rate equal to the interest rate
(including any Applicable Rate and any Mandatory Cost) otherwise applicable to
such Loan plus two percent (2%) per annum, and (b) when used with respect to
Letter of Credit Fees, a rate equal to the Applicable Rate plus two percent (2%)
per annum.
     “Defaulting Lender” means any Lender that (a) has failed to fund any
portion of the Committed Loans, participations in L/C Obligations or
participations in Swing Line Loans required to be funded by it hereunder within
one Business Day of the date required to be funded

7

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by it hereunder, (b) has otherwise failed to pay over to the Administrative
Agent or any other Lender any other amount required to be paid by it hereunder
within one Business Day of the date when due, unless the subject of a good faith
dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy
or insolvency proceeding.
     “Designated Borrower” has the meaning set forth in Section 2.14 hereof.
     “Designated Borrower Notice” has the meaning specified in Section 2.14(a).
     “Designated Borrower Request and Assumption Agreement” has the meaning
specified in Section 2.14(a).
     “Development Joint Venture” means an entity which owns a Development Joint
Venture Investment.
     “Development Joint Venture Investments” means (a) Investments which are
(i) less than fifty percent (50%) owned and unconsolidated by any of the Loan
Parties and (ii) have a ratio of EBITDAR to Fixed Obligations of less than 1.20
to 1.0 for any fiscal quarter plus (b) any amounts funded by any of the Loan
Parties under operating deficit guaranties or construction completion
guaranties.
     “Dispute” means any controversy, claim or dispute between or among the
parties to this Agreement, including any such controversy, claim or dispute
arising out of or relating to (a) this Agreement, (b) any other Loan Document,
(c) any related agreements or instruments, or (d) the transaction contemplated
herein or therein (including any claim based on or arising from an alleged
personal injury or business tort).
     “Dollar” and “$” mean lawful money of the United States.
     “Dollar Equivalent” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in any Alternative Currency, the equivalent amount thereof in
Dollars as determined by the Administrative Agent or the L/C Issuer, as the case
may be, at such time on the basis of the Spot Rate (determined in respect of the
most recent Revaluation Date) for the purchase of Dollars with such Alternative
Currency.
     “Domestic Subsidiary” means any Subsidiary that is organized under the Laws
of any political subdivision of the United States.
     “Eligible Assignee” means (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 Administrative Agent, the L/C Issuer and the Swing Line
Lender, and (ii) 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 the Company or any of the Company’s Affiliates or Subsidiaries; and
provided further, however, that an Eligible Assignee shall include only a
Lender, an Affiliate of a Lender or another Person, which, through its Lending
Offices, is capable of lending the applicable Alternative Currencies to the
relevant Borrowers without the imposition of any additional Indemnified Taxes.

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     “EMU” means the economic and monetary union in accordance with the Treaty
of Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty
of 1992 and the Amsterdam Treaty of 1998.
     “EMU Legislation” means the legislative measures of the European Council
for the introduction of, changeover to or operation of a single or unified
European currency.
     “Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
     “Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.
     “Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or all of options for the purchase or acquisition from such
Person of such shares (or such other interests), the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination
and participating or mezzanine loans made by the Company or a Subsidiary where
such loans are treated under GAAP as investments.
     “ERISA” means the Employee Retirement Income Security Act of 1974.
     “ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Company or any

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ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Sections 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Company or
any ERISA Affiliate.
     “Euro” and “EUR” mean the lawful currency of the Participating Member
States introduced in accordance with the EMU Legislation.
     “Eurocurrency Rate” means, (a) for any Interest Period with respect to a
Eurocurrency Rate Loan other than any Alternative Currency Loan denominated in
Euro, the rate per annum equal to the British Bankers Association LIBOR Rate
(“BBA LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent from
time to time) at approximately 11:00 a.m., London time, two (2) Business Days
prior to the commencement of such Interest Period, for deposits in the relevant
currency (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period. If such rate is not available at such time
for any reason, then the “Eurocurrency Rate” for such Interest Period shall be
the rate per annum determined by the Administrative Agent to be the rate at
which deposits in the relevant currency for delivery on the first day of such
Interest Period in Same Day Funds in the approximate amount of the Eurocurrency
Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch (or other Bank of America branch or Affiliate) to major banks in the
London or other offshore interbank market for such currency at their request at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the
commencement of such Interest Period.
     (b) any Eurocurrency Rate Loan denominated in Euro for any Interest Period,
the rate per annum equal to the offered quotation which appears on the Reuters
Screen which displays the rate of the Banking Federation of the European Union
for the Euro (being currently page “EURIBORO1”) for such Interest Period at
approximately 11:00 a.m., Brussels time, two (2) Business Days prior to the
commencement of such Interest Period for deposits in the relevant currency (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period or, if such page shall cease to be available, such other
page or such other service for the purpose of displaying an average rate of the
Banking Federation of the European Union as the Administrative Agent, shall
select. If such rate is not available at such time for any reason, and the
Administrative Agent has not selected an alternative service on which a
quotation is displayed, then the “Eurocurrency Rate” for such Interest Period
shall be the rate at which the Administrative Agent was offering to prime banks
in the European interbank market for deposits in Euro for the relevant Interest
Period at approximately 11:00 a.m. Brussels time, two (2) Business Days prior to
the commencement of such Interest Period.
     “Eurocurrency Rate Loan” means a Committed Loan that bears interest at a
rate based on the Eurocurrency Rate. Eurocurrency Rate Loans may be denominated
in Dollars or in an

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Alternative Currency. All Committed Loans denominated in an Alternative Currency
must be Eurocurrency Rate Loans.
     “Event of Default” has the meaning specified in Section 9.1.
     “Excess Payment” has the meaning specified in Section 4.6.
     “Excluded Taxes” means, with respect to the Administrative Agent, any
Lender, the L/C Issuer or any other recipient of any payment to be made by or on
account of any obligation of any Borrower 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 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, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which such Borrower is located and (c) except as provided
in the following sentence, in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Company under Section 11.13), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
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 3.1(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 applicable Borrower with respect to such withholding
tax pursuant to Section 3.1(a). Notwithstanding anything to the contrary
contained in this definition, Excluded Taxes shall not include any withholding
tax imposed at any time on payments made by or on behalf of a Foreign Obligor to
any Lender hereunder or under any other Loan Document, provided that such Lender
shall have complied with the last paragraph of Section 3.1(e).
     “Existing Credit Agreement” means that certain Credit Agreement dated as of
September 23, 2003 among the Company, the Administrative Agent, as agent, and a
syndicate of lenders.
     “Existing Letters of Credit” means the Letters of Credit listed on Schedule
1.1 attached hereto.
     “Extension Effective Date” has the meaning specified in Section 2.15.
     “Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.

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     “Fee Letter” means the letter agreement, dated September 27, 2005, among
the Company, the Administrative Agent and the Arranger.
     “Financial Projections” has the meaning specified in Section 6.19.
     “Foreign Lender” has the meaning set forth in Section 11.14(a).
     “Foreign Obligor” means a Loan Party that is a Foreign Subsidiary.
     “Foreign Subsidiary” means any Subsidiary that is organized under the laws
of a jurisdiction other than the United States, a State thereof or the District
of Columbia.
     “FRB” means the Board of Governors of the Federal Reserve System of the
United States.
     “Fronting Lender” means Bank of America in its capacity as Lender fronting
for the Applicable Percentage of each Alternative Currency Non-Qualifying Lender
for any Alternative Currency Loan.
     “Fronting Lender’s Applicable Percentage” means to any Alternative Currency
Loan, the percentage (carried out to the ninth (9th) decimal place) of the
Fronting Lender’s Applicable Percentage of such Alternative Currency Loan plus
the aggregate of what would have been the Alternative Currency Non-Qualified
Lender’s Applicable Percentages of such Alternative Currency Loan as determined
by the Administrative Agent. If the commitment of each Lender to make Loans and
the obligation of the L/C Issuer to make L/C Credit Extensions have been
terminated pursuant to Section 9.2 or if the Aggregate Commitments have expired,
then the Applicable Percentage of each Fronting Lender shall be determined based
on the Fronting Lender’s Applicable Percentage most recently in effect, giving
effect to any subsequent assignments.
     “Fronting Loan” has the meaning set forth in Section 2.1.
     “Fund” means 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” means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
     “Governmental Authority” means the government of the United States 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

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government (including any supra-national bodies such as the European Union or
the European Central Bank).
     “Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning. The term “Guarantee” shall not include agreements to
complete construction or agreement to loan or advance funds to cover operating
deficits. “Guarantee” will not include an obligation of a person (unless such
Person is one of the Guarantors) where such Person has minimal capital, and such
minimally-capitalized Person’s obligation is not supported by the guarantee of
another Person with substantial capital.
     “Guarantors” means, collectively, Sunrise Senior Living Management, Inc.
(f/k/a Sunrise Assisted Living Management, Inc.), a Virginia corporation,
Sunrise Senior Living Investments, Inc. (f/k/a Sunrise Assisted Living
Investments, Inc.), a Virginia corporation, Sunrise Development, Inc., a
Virginia corporation and Sunrise Senior Living Services, Inc. (f/k/a Marriott
Senior Living Services, Inc.), a Delaware corporation and such other Material
Subsidiaries of the Borrower as may be added as Guarantors from time to time in
compliance with the covenants set forth in Section 6.13 hereof.
     “Guaranty” means the Guaranty made by the Guarantors in favor of the
Administrative Agent on behalf of the Lenders, pursuant to Article V hereof.
     “Hazardous Materials” means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
     “Honor Date” has the meaning set forth in Section 2.3 hereof.

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     “Increase Effective Date” has the meaning set forth in Section 2.16 hereof.
     “Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
     (a) obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;
     (b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;
     (c) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;
     (d) capital leases and Synthetic Lease Obligations; and
     (e) all Guarantees of such Person which can be quantified under GAAP in
respect of any of the foregoing.
     “Indemnified Taxes” means Taxes other than Excluded Taxes.
     “Indemnitee” has the meaning specified in Section 11.4(b).
     “Information” has the meaning specified in Section 11.7.
     “Interest Payment Date” means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurocurrency
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),
the last Business Day of each March, June, September and December and the
Maturity Date.
     “Interest Period” means, as to each Eurocurrency Rate Loan, the period
commencing on the date such Eurocurrency Rate Loan is disbursed or converted to
or continued as a Eurocurrency Rate Loan and ending on the date seven (7) days
or one (1), two (2), three (3) or six (6) months thereafter (or as otherwise
permitted pursuant to the terms of Section 2.2(a) hereof, as selected by the
Company in its Committed Loan Notice; provided that:
     (a) any Interest Period that would otherwise end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
     (b) any Interest Period other than a seven-day Interest Period 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

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Interest Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period;
     (c) no Interest Period shall extend beyond the Maturity Date;
     (d) a seven-day Interest Period may not be selected for Eurocurrency Rate
Loan made in an Alternative Currency.
     “Internal Control Event” means 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.
     “Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the carrying
value of such Investment determined in accordance with GAAP.
     “IP Rights” has the meaning set forth in Section 6.17.
     “IRS” means the United States Internal Revenue Service.
     “ISP” means, with respect to any Letter of Credit, 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).
     “Issuer Documents” means with respect to any Letter of Credit, the Letter
of Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and the Company (or any Subsidiary) or in favor the L/C
Issuer and relating to any such Letter of Credit.
     “Judgment Currency” has the meaning set forth in Section 11.20.
     “Laws” means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes 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 having the force of law.
     “L/C Advance” means, with respect to each Lender, such Lender’s funding of
its participation in any L/C Borrowing in accordance with its Applicable
Percentage. All L/C Advances shall be denominated in Dollars.

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     “L/C Borrowing” means an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Committed Borrowing. All L/C Borrowings shall be denominated in
Dollars.
     “L/C Credit Extension” means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.
     “L/C Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.
     “L/C Obligations” means, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For
purposes of computing the amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.8. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be “outstanding” in the amount so
remaining available to be drawn.
     “Lender” has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the Swing Line Lender.
     “Lending Office” means, as to any Lender, the office or offices of such
Lender described as such in such Lender’s Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Company and
the Administrative Agent.
     “Letter of Credit” means any standby letter of credit issued hereunder and
shall include the Existing Letters of Credit. Letters of Credit may be issued in
Dollars or in an Alternative Currency.
     “Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
     “Letter of Credit Expiration Date” means the day that is seven (7) days
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).
     “Letter of Credit Fee” has the meaning specified in Section 2.3(i).
     “Letter of Credit Sublimit” means an amount equal to fifty percent (50%) of
the Aggregate Commitments. The Letter of Credit Sublimit is part of, and not in
addition to, the Aggregate Commitments.
     “Licenses” means any and all licenses, certificates of need, operating
permits, franchises, and other licenses, authorizations, certifications,
permits, or approvals, other than local zoning, development, subdivision, site
plan and similar construction permits, issued by, or on behalf of, any
Governmental Authority now existing or at any time hereafter issued, with
respect to the acquisition, construction, renovation, expansion, leasing,
management, ownership and/or

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operation of any and all Senior Living Facilities, accreditation of any Senior
Living Facility, and/or the participation or eligibility for participation in
any third party payment or reimbursement programs to the extent any of the
Borrowers are participating in such programs (but specifically excluding any and
all Participation Agreements to the extent required by law), any and all
operating licenses issued by any state Governmental Authority, any and all
pharmaceutical licenses and other licenses related to the purchase, dispensing,
storage, prescription or use of drugs, medications, and other “controlled
substances,” any and all licenses relating to the operation of food or beverage
facilities or amenities, if any, and any and all certifications and eligibility
for participation in Medicare, Medicaid, Blue Cross and/or Blue Shield, or any
of the Managed Care Plans, private insurer, employee assistance programs or
other third party payment or reimbursement programs as the same may from time to
time be amended, renewed, restated, reissued, restricted, supplemented or
otherwise modified.
     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
     “Lifecare Bond” means a surety bond, irrevocable letter of credit or other
financial assurance required by a Governmental Authority as evidence of the
financial responsibility of the owner or operator of a Continuing Care
Retirement Community.
     “Loan” means an extension of credit by a Lender to a Borrower under
Article II in the form of a Committed Loan or a Swing Line Loan.
     “Loan Documents” means this Agreement, each Note, each Issuer Document, the
Fee Letter, the Security Agreements, and the Guaranty.
     “Loan Parties” means, collectively, the Company, each Subsidiary Guarantor,
and each Designated Borrower.
     “Mandatory Cost” means, with respect to any period, the percentage rate per
annum determined in accordance with Schedule 1.2.
     “Material Adverse Effect” means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Company or the Company and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform its obligations 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 Loan Party of
any Loan Document to which it is a party.
     “Material Subsidiary” means any direct or indirect Domestic Subsidiary of
the Borrower which earns ten percent (10%) or more of the Consolidated EBITDA or
which holds, controls or constitutes ten percent (10%) or more of the
consolidated assets of the Borrower.

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     “Maturity Date” means the later of (a) December 2, 2009 and (b) if maturity
is extended pursuant to Section 2.15, such extended maturity date as determined
pursuant to such Section.
     “Maximum Rate” has the meaning set forth in Section 11.9.
     “Multiemployer Plan” means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.
     “Non-Extension Notice Date” has the meaning set forth in Section 2.3.
     “Non-Reinstatement Deadline” has the meaning set forth in Section 2.3.
     “Note” means a promissory note made by a Borrower in favor of a Lender
evidencing Loans made by such Lender to such Borrower, substantially in the form
of Exhibit C.
     “Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan, Letter of Credit or Swap Contract, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding.
     “Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
     “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.
     “Outstanding Amount” means (i) with respect to Committed Loans on any date,
the Dollar Equivalent amount of the aggregate outstanding principal amount
thereof after giving effect to any borrowings and prepayments or repayments of
such Committed Loans occurring on such date; (ii) with respect to Swing Line
Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of such Swing Line
Loans occurring on such date; and (iii) with respect to any L/C Obligations on
any

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date, the Dollar Equivalent amount of the aggregate outstanding amount of such
L/C Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements by the
Company of Unreimbursed Amounts.
     “Overnight Rate” means, for any day, (a) with respect to any amount
denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an
overnight rate determined by the Administrative Agent, the L/C Issuer, or the
Swing Line Lender, as the case may be, in accordance with banking industry rules
on interbank compensation, and (b) with respect to any amount denominated in an
Alternative Currency, the rate of interest per annum at which overnight deposits
in the applicable Alternative Currency, in an amount approximately equal to the
amount with respect to which such rate is being determined, would be offered for
such day by a branch or Affiliate of Bank of America in the applicable offshore
interbank market for such currency to major banks in such interbank market.
     “Participant” has the meaning specified in Section 11.6(d).
     “Participating Member State” means each state so described in any EMU
Legislation.
     “Participation Agreements” means any and all third party payor
participation or reimbursement agreements now or at any time hereafter existing
for the benefit of any of the Loan Parties relating to rights to payment or
reimbursement from, and claims against, private insurers, managed care plans,
material employee assistance programs, Blue Cross and/or Blue Shield, federal,
state and local Governmental Authorities, including without limitation, Medicare
and Medicaid, and other third party payors, as the same may from time to time be
amended, restated, extended, supplemented or modified.
     “PBGC” means the Pension Benefit Guaranty Corporation.
     “Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Company or
any ERISA Affiliate or to which the Company or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
     “Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
     “Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Company or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
     “Platform” has the meaning specified in Section 7.2.
     “Public Lender” has the meaning specified in Section 7.2.
     “Ratable Shares” has the meaning specified in Section 4.6.

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     “Register” has the meaning specified in Section 11.6(c).
     “REIT Mezz Debt” has the meaning specified in Section 8.3.
     “Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the thirty (30) day notice period has been
waived.
     “Request for Credit Extension” means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice.
     “Required Lenders” means, as of any date of determination, Lenders having
more than fifty percent (50%) of the Aggregate Commitments or, if the commitment
of each Lender to make Loans and the obligation of the L/C Issuer to make L/C
Credit Extensions have been terminated pursuant to Section 9.2, Lenders holding
in the aggregate more than fifty percent (50%) of the Total Outstandings (with
the aggregate amount of each Lender’s risk participation and funded
participation in L/C Obligations and Swing Line Loans being deemed “held” by
such Lender for purposes of this definition); provided that the Commitment of,
and the portion of the Total Outstandings held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders.
     “Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer or assistant treasurer of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.
     “Restricted Payment” means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
Equity Interest of the Company or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other Equity Interest,
or on account of any return of capital to the Company’s stockholders, partners
or members (or the equivalent Person thereof).
     “Revaluation Date” means (a) with respect to any Loan, each of the
following: (i) each date of a Borrowing of a Eurocurrency Rate Loan denominated
in an Alternative Currency, (ii) each date of a continuation of a Eurocurrency
Rate Loan denominated in an Alternative Currency pursuant to Section 2.2, and
(iii) such additional dates as the Administrative Agent shall determine or
require; and (b) with respect to any Letter of Credit, each of the following:
(i) each date of issuance of a Letter of Credit denominated in an Alternative
Currency, (ii) each date of an amendment of any such Letter of Credit having the
effect of increasing the amount thereof (solely with respect to the increased
amount), (iii) each date of any payment by the L/C Issuer under any Letter of
Credit denominated in an Alternative Currency, and (iv) such additional

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dates as the Administrative Agent or the L/C Issuer shall determine or the
Required Lenders shall require.
     “Same Day Funds” means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in an Alternative Currency, same day or other funds as may be
determined by the Administrative Agent or the L/C Issuer, as the case may be, to
be customary in the place of disbursement or payment for the settlement of
international banking transactions in the relevant Alternative Currency.
     “Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.
     “SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
     “Securities Laws” means the Securities Act of 1933, the Securities Exchange
Act of 1934, 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 Agreements” means, the Pledge, Assignment and Security Agreement
of even date herewith by and between the Borrowers and the Administrative Agent
on behalf of the Lenders and any other assignment, pledge agreement, security
agreement, mortgage, deed of trust, leasehold mortgage, leasehold deed of trust,
deed to secure debt, financing statement, initial transaction statement and any
similar instrument, document or agreement under or pursuant to which a Lien is
now or hereafter granted to, or for the benefit of, the Lenders on any
collateral to secure the Obligations, as the same may from time to time be
amended, restated, supplemented or otherwise modified.
     “Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Company and its Subsidiaries as of that date
determined in accordance with GAAP.
     “Special Notice Currency” means at any time an Alternative Currency, other
than the currency of a country that is a member of the Organization for Economic
Cooperation and Development at such time located in North America or Europe.
     “Spot Rate” for a currency means the rate determined by the Administrative
Agent or the L/C Issuer, as applicable, to be the rate quoted by the Person
acting in such capacity as the spot rate for the purchase by such Person of such
currency with another currency through its principal foreign exchange trading
office at approximately 11:00 a.m. on the date two (2) Business Days prior to
the date as of which the foreign exchange computation is made; provided that the
Administrative Agent or the L/C Issuer may obtain such spot rate from another
financial institution designated by the Administrative Agent or the L/C Issuer
if the Person acting in such capacity does not have as of the date of
determination a spot buying rate for any such currency; and provided further
that the L/C Issuer may use such spot rate quoted on the date as of which

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the foreign exchange computation is made in the case of any Letter of Credit
denominated in an Alternative Currency.
     “Sterling” and “£” mean the lawful currency of the United Kingdom.
     “Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Company.
     “Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.
     “Swap Termination Value” means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
     “Swing Line” means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.4.
     “Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.4.
     “Swing Line Lender” means Bank of America in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.

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     “Swing Line Loan” has the meaning specified in Section 2.4(a).
     “Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant
to Section 2.4(b), which, if in writing, shall be substantially in the form of
Exhibit B.
     “Swing Line Sublimit” means an amount equal to ten percent (10%) of the
Aggregate Commitments. The Swing Line Sublimit is part of, and not in addition
to, the Aggregate Commitments.
     “Synthetic Lease Obligation” shall have the meaning provided by GAAP.
     “TARGET Day” means any day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer (TARGET) payment system (or, if such payment
system ceases to be operative, such other payment system (if any) determined by
the Administrative Agent to be a suitable replacement) is open for the
settlement of payments in Euro.
     “Taxes” means 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.
“Threshold Amount” means $10,000,000.
     “Total Funded Indebtedness” means all indebtedness and guarantees including
recourse and non-recourse mortgage debt, capitalized leases, letters of credit,
unsecured debt, guarantees (including all debt guarantees, but excluding all
development completion guarantees and operating deficit guarantees which will be
captured in the limitation on Development Joint Ventures), purchase obligations
treated as liabilities per GAAP, subordinated debt, unfunded obligations
(including total Lifecare Bond obligations at GAAP book value, subject to
certain exclusions as discussed below), all as defined in accordance with GAAP.
Total Funded Indebtedness shall not include security deposits, accounts payable,
accrued liabilities, any prepaid rent and any outstanding balance under the
Convertible Debt only to the extent that the Company’s common stock market price
remains at least $2.50 per share above the Convertible Debt conversion price.
Furthermore, certain Lifecare Bond obligations may be excluded from Total Funded
Indebtedness to the extent the Borrower is not obligated to refund these
obligations prior to receiving proceeds of new Lifecare Bonds. Total Funded
Indebtedness will be reduced by unrestricted cash balances, cash equivalents and
short-term marketable securities in excess of $50,000,000.
     “Total Outstandings” means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.
     “Type” means, with respect to a Committed Loan, its character as a Base
Rate Loan or a Eurocurrency Rate Loan.
     “Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

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     “United States” and “U.S.” mean the United States of America.
     “Unreimbursed Amount” has the meaning specified in Section 2.3(c)(i).
     “Unused Fee” has the meaning specified in Section 2.9(a).
     Section 1.2 Other Interpretive Provisions. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
     (a) 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,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder,” and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) 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.
     (b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”
     (c) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
     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 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 Audited Financial Statements, except
as otherwise specifically prescribed herein.

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     (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
Administrative 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 Administrative 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.
     (c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of the Company and its Subsidiaries or to the
determination of any amount for the Company and its Subsidiaries on a
consolidated basis or any similar reference shall, in each case, be deemed to
include each variable interest entity that the Company is required to
consolidate pursuant to FASB Interpretation No. 46 – Consolidation of Variable
Interest Entities: an interpretation of ARB No. 51 (January 2003) as if such
variable interest entity were a Subsidiary as defined herein.
     Section 1.4 Exchange Rates; Currency Equivalents.
     (a) The Administrative Agent or the L/C Issuer, as applicable, shall
determine the Spot Rates as of each Revaluation Date to be used for calculating
Dollar Equivalent amounts of Credit Extensions and Outstanding Amounts
denominated in Alternative Currencies. Such Spot Rates shall become effective as
of such Revaluation Date and shall be the Spot Rates employed in converting any
amounts between the applicable currencies until the next Revaluation Date to
occur. Except for purposes of financial statements delivered by Loan Parties
hereunder or calculating financial covenants hereunder or except as otherwise
provided herein, the applicable amount of any currency (other than Dollars) for
purposes of the Loan Documents shall be such Dollar Equivalent amount as so
determined by the Administrative Agent or the L/C Issuer, as applicable.
     (b) Wherever in this Agreement in connection with a Committed Borrowing,
conversion, continuation or prepayment of a Eurocurrency Rate Loan or the
issuance, amendment or extension of a Letter of Credit, an amount, such as a
required minimum or multiple amount, is expressed in Dollars, but such Committed
Borrowing, Eurocurrency Rate Loan or Letter of Credit is denominated in an
Alternative Currency, such amount shall be the relevant Alternative Currency
Equivalent of such Dollar amount (rounded to the nearest unit of such
Alternative Currency, with 0.5 of a unit being rounded upward), as determined by
the Administrative Agent or the L/C Issuer, as the case may be.
     Section 1.5 Additional Alternative Currencies.
     (a) The Company may from time to time request that Eurocurrency Rate Loans
be made and/or Letters of Credit be issued in a currency other than those
specifically listed in the definition of “Alternative Currency”; provided that
such requested currency is a lawful currency

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(other than Dollars) that is readily available and freely transferable and
convertible into Dollars. In the case of any such request with respect to the
making of Alternative Currency Rate Loans, such request shall be subject to the
approval of all Lenders other than the Alternative Currency Non-Qualified
Lenders; and in the case of any such request with respect to the issuance of
Letters of Credit, such request shall be subject to the approval of the
Administrative Agent and the L/C Issuer.
     (b) Any such request shall be made to the Administrative Agent not later
than 11:00 a.m., twenty (20) Business Days prior to the date of the desired
Credit Extension (or such other time or date as may be agreed by the
Administrative Agent and, in the case of any such request pertaining to Letters
of Credit, the L/C Issuer, in its or their sole discretion). In the case of any
such request pertaining to Alternative Currency Rate Loans, the Administrative
Agent shall promptly notify each Lender thereof; and in the case of any such
request pertaining to Letters of Credit, the Administrative Agent shall promptly
notify the L/C Issuer thereof. The Lenders other than the Alternative Currency
Non-Qualified Lenders (in the case of any such request pertaining to
Eurocurrency Rate Loans) or the L/C Issuer (in the case of a request pertaining
to Letters of Credit) shall notify the Administrative Agent, not later than
11:00 a.m., ten (10) Business Days after receipt of such request whether they
consent, in their sole discretion, to the making of Alternative Currency Rate
Loans or the issuance of Letters of Credit, as the case may be, in such
requested currency.
     (c) Any failure by a Lender or the L/C Issuer, as the case may be, to
respond to such request within the time period specified in the preceding
sentence shall be deemed to be a refusal by such Lender or the L/C Issuer, as
the case may be, to permit Eurocurrency Rate Loans to be made or Letters of
Credit to be issued in such requested currency. If the Lenders other than the
Alternative Currency Non-Qualified Lenders consent to making Eurocurrency Rate
Loans in such requested currency, the Administrative Agent shall so notify the
Company and such currency shall thereupon be deemed for all purposes to be an
Alternative Currency hereunder for purposes of any Committed Borrowings of
Alternative Currency Rate Loans; and if the Administrative Agent and the L/C
Issuer consent to the issuance of Letters of Credit in such requested currency,
the Administrative Agent shall so notify the Company and such currency shall
thereupon be deemed for all purposes to be an Alternative Currency hereunder for
purposes of any Letter of Credit issuances. If the Administrative Agent shall
fail to obtain consent to any request for an additional currency under this
Section 1.5, the Administrative Agent shall promptly so notify the Company. Any
specified currency of an Existing Letter of Credit that is neither Dollars nor
one of the Alternative Currencies specifically listed in the definition of
“Alternative Currency” shall be deemed an Alternative Currency with respect to
such Existing Letter of Credit only.
     Section 1.6 Change of Currency.
     (a) Each obligation of the Borrowers to make a payment denominated in the
national currency unit of any member state of the European Union that adopts the
Euro as its lawful currency after the date hereof shall be redenominated into
Euro at the time of such adoption (in accordance with the EMU Legislation). If,
in relation to the currency of any such member state, the basis of accrual of
interest expressed in this Agreement in respect of that currency shall be
inconsistent with any convention or practice in the London interbank market for
the basis of

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accrual of interest in respect of the Euro, such expressed basis shall be
replaced by such convention or practice with effect from the date on which such
member state adopts the Euro as its lawful currency; provided that if any
Committed Borrowing in the currency of such member state is outstanding
immediately prior to such date, such replacement shall take effect, with respect
to such Committed Borrowing, at the end of the then current Interest Period.
     (b) Each provision of this Agreement shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to time
specify to be appropriate to reflect the adoption of the Euro by any member
state of the European Union and any relevant market conventions or practices
relating to the Euro.
     (c) Each provision of this Agreement also shall be subject to such
reasonable changes of construction as the Administrative Agent may from time to
time specify to be appropriate to reflect a change in currency of any other
country and any relevant market conventions or practices relating to the change
in currency.
     Section 1.7 Times of Day. Unless otherwise specified, all references herein
to times of day shall be references to Eastern time (daylight or standard, as
applicable).
     Section 1.8 Letter of Credit Amounts. Unless otherwise specified herein,
the amount of a Letter of Credit at any time shall be deemed to be the Dollar
Equivalent of the stated amount of such Letter of Credit in effect at such time;
provided, however, that with respect to any Letter of Credit that, by its terms
or the terms of any Issuer Document related thereto, provides for one or more
automatic increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount
of such Letter of Credit after giving effect to all such increases, whether or
not such maximum stated amount is in effect at such time.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
     Section 2.1 Committed Loans.
     (a) Subject to the terms and conditions set forth herein, each Lender
(except as hereinafter provided regarding Alternative Currency Loans) severally
agrees to make loans (each such loan, a “Committed Loan”) to the Borrowers in
Dollars or in one or more Alternative Currencies from time to time, on any
Business Day during the Availability Period, in an aggregate amount not to
exceed at any time outstanding the amount of such Lender’s Commitment; provided,
however, that after giving effect to any Committed Borrowing, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, (ii) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus
such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment, and (iii) the aggregate
Outstanding Amount of all Committed Loans denominated in Alternative Currencies
shall not exceed the Alternative Currency Sublimit. Within the limits of each
Lender’s Commitment, and subject to the other terms and conditions hereof, the
Borrowers may borrow under this Section 2.1, prepay under Section 2.5, and
reborrow under this Section 2.1.

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Committed Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further
provided herein.
     (b)   (i) Upon a request for an Alternative Currency Loan, the Fronting
Lender agrees subject to the limitations set forth herein, to fund the Fronting
Lender’s Applicable Percentage of such Alternative Currency Loan in the
requested currency with respect to such Committed Borrowing (each a “Fronting
Loan”), notwithstanding the fact that such Fronting Loan when aggregated with
the Fronting Lender’s Applicable Percentage of other Committed Loans may exceed
the amount of such Fronting Lender’s Commitment. The Fronting Lender at any time
in its sole and absolute discretion may request that each Alternative Currency
Non-Qualified Lender, and each Alternative Currency Non-Qualified Lender hereby
irrevocably and unconditionally agrees to, purchase from such Fronting Lender a
risk participation in such Alternative Currency Non-Qualified Lender’s
Applicable Percentage of such Fronting Loan in the Dollar Equivalent of such
Fronting Loan. Such request shall be made in writing (which written request
shall be deemed to be a Committed Loan Notice for purposes hereof) and in
accordance with the requirements of Section 2.2, without regard to the minimum
and multiples specified therein for the principal amount of Eurodollar Rate
Loans, but subject to the unutilized portion of the Aggregate Commitments and
the conditions set forth in Section 4.2.
          (ii) Each Alternative Currency Non-Qualified Lender shall make an
amount equal to its Applicable Percentage of the amount specified in such
Committed Loan Notice available to the Administrative Agent in Same Day Funds
for the account of the Fronting Lender at the Administrative Agent’s Office for
Dollar-denominated payments not later than 1:00 p.m. on the day specified in
such Committed Loan Notice. The Administrative Agent shall remit the funds so
received to the Fronting Lender. The purchase of such risk participation in each
Alternative Currency Loan by such Alternative Currency Non-Qualified Lender
shall satisfy such Alternative Currency Non-Qualified Lender funding
requirements under this Section 2.1(b).
          (iii) If any Alternative Currency Non-Qualified Lender fails to make
available to the Administrative Agent for the account of the Fronting Lender any
amount required to be paid by such Alternative Currency Non-Qualified Lender
pursuant to the foregoing provisions of this Section 2.1(b) by the time
specified in Section 2.2, the Fronting Lender shall be entitled to recover from
such Alternative Currency Non-Qualified Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to such Fronting Lender at a rate per annum equal to
the applicable Overnight Rate from time to time in effect. A certificate of the
Fronting Lender submitted to any Alternative Currency Non-Qualified Lender
(through the Administrative Agent) with respect to any amounts owing under this
clause (c) shall be conclusive absent manifest error.
          (iv) Each Alternative Currency Non-Qualified Lender’s obligation to
purchase and fund participations in Alternative Currency Loans pursuant to this
Section 2.1(b) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any set-off, counterclaim, recoupment, defense
or other right which such Alternative Currency Non-Qualified Lender may have
against the Fronting Lender, the Company or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing.
No such funding

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of risk participations shall relieve or otherwise impair the obligation of the
Company to repay Alternative Currency Loans, together with interest as provided
herein.
          (v) Repayment of Participations.
                    (A) At any time after any Alternative Currency Non-Qualified
Lender has purchased and funded a risk participation in a Alternative Currency
Loan, if the Administrative Agent receives any payment on account of such
Alternative Currency Loan, the Administrative Agent will distribute to such
Alternative Currency Non-Qualified Lender its Applicable Percentage of such
payment (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Alternative Currency Non-Qualified Lender’s
risk participation was funded) in the Dollar Equivalent of the same funds as
those received by the Administrative Agent.
                    (B) If any payment received by the Administrative Agent in
respect of principal or interest on any Alternative Currency Loan is required to
be returned by the Administrative Agent under any of the circumstances described
in Section 11.5 (including pursuant to any settlement entered into by the
Administrative Agent in its discretion), each Alternative Currency Non-Qualified
Lender shall pay to the Administrative Agent its Applicable Percentage thereof
on demand of the Administrative Agent, plus interest thereon from the date of
such demand to the date such amount is returned, at a rate per annum equal to
the applicable Overnight Rate. The Administrative Agent will make such demand
upon the request of the Fronting Lender. The obligations of the Alternative
Currency Non-Qualified Lenders under this clause shall survive the payment in
full of the Obligations and the termination of this Agreement.
                    (C) Interest for Account of Fronting Lender. The
Administrative Agent shall be responsible for invoicing the Company for interest
on the Alternative Currency Loans. Until each Alternative Currency Non-Qualified
Lender funds its risk participation pursuant to this Section 2.1 to refinance
such Alternative Currency Non-Qualified Lender’s Applicable Percentage of any
Alternative Currency Loan, interest in respect of such Applicable Percentage
shall be solely for the account of the Fronting Lender.
     (c) Payments to Administrative Agent. The Company shall make all payments
of principal and interest in respect of the Alternative Currency Loans to the
Administrative Agent.
     Section 2.2 Borrowings, Conversions and Continuations of Committed Loans.
     (a) Each Committed Borrowing, each conversion of Committed Loans from one
Type to the other, and each continuation of Eurocurrency Rate Loans shall be
made upon the Company’s irrevocable notice to the Administrative Agent, which
may be given by telephone. Each such notice must be received by the
Administrative Agent not later than 11:00 a.m. (i) three (3) Business Days prior
to the requested date of any Borrowing of, conversion to or continuation of
Eurocurrency Rate Loans denominated in Dollars or of any conversion of
Eurocurrency Rate Loans denominated in Dollars to Base Rate Committed Loans,
(ii) four (4) Business Days (or five (5) Business Days in the case of a Special
Notice Currency) prior to the requested date of any Borrowing or continuation of
Eurocurrency Rate Loans denominated in Alternative Currencies, and (iii) on the
requested date of any Borrowing of Base Rate Committed Loans;

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provided, however, that if the Company wishes to request Eurocurrency Rate Loans
having an Interest Period other than seven (7) days or one (1), two (2), three
(3) or six (6) months in duration as provided in the definition of “Interest
Period”, the applicable notice must be received by the Administrative Agent not
later than 11:00 a.m. (i) four (4) Business Days prior to the requested date of
such Borrowing, conversion or continuation of Eurocurrency Rate Loans
denominated in Dollars, or (ii) five (5) Business Days (or six (6) Business days
in the case of a Special Notice Currency) prior to the requested date of such
Borrowing, conversion or continuation of Eurocurrency Rate Loans denominated in
Alternative Currencies, whereupon the Administrative Agent shall give prompt
notice to the Lenders of such request and determine whether the requested
Interest Period is acceptable to the Required Lenders. Not later than
11:00 a.m., (i) three (3) Business Days before the requested date of such
Borrowing, conversion or continuation of Eurocurrency Rate Loans denominated in
Dollars, or (ii) four (4) Business Days (or five (5) Business days in the case
of a Special Notice Currency) prior to the requested date of such Borrowing,
conversion or continuation of Eurocurrency Rate Loans denominated in Alternative
Currencies, the Administrative Agent shall notify the Company (which notice may
be by telephone) whether or not the requested Interest Period has been consented
to by the Required Lenders. Each telephonic notice by the Company pursuant to
this Section 2.2(a) must be confirmed promptly by delivery to the Administrative
Agent of a written Committed Loan Notice, appropriately completed and signed by
a Responsible Officer of the Company. Each Borrowing of, conversion to or
continuation of Eurocurrency Rate Loans shall be in a principal amount of
$1,000,000 or a whole multiple of $500,000 in excess thereof. Except as provided
in Section 2.3(c) and Section 2.4(c), each Committed Borrowing of or conversion
to Base Rate Committed Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof. Each Committed Loan Notice
(whether telephonic or written) shall specify (i) whether the Company is
requesting a Committed Borrowing, a conversion of Committed Loans from one Type
to the other, or a continuation of Eurocurrency Rate Loans, (ii) the requested
date of the Borrowing, conversion or continuation, as the case may be (which
shall be a Business Day), (iii) the principal amount of Committed Loans to be
borrowed, converted or continued, (iv) the Type of Committed Loans to be
borrowed or to which existing Committed Loans are to be converted, (v) if
applicable, the duration of the Interest Period with respect thereto, (vi) the
currency of the Committed Loans to be borrowed, and (vii) if applicable, the
Designated Borrower. If the Company fails to specify a currency in a Committed
Loan Notice requesting a Borrowing, then the Committed Loans so requested shall
be made in Dollars. If the Company fails to specify a Type of Committed Loan in
a Committed Loan Notice or if the Company fails to give a timely notice
requesting a conversion or continuation, then the applicable Committed Loans
shall be made as, or converted to, Base Rate Loans; provided, however, that in
the case of a failure to timely request a continuation of Committed Loans
denominated in an Alternative Currency, such Loans shall be continued as
Eurocurrency Rate Loans in their original currency with an Interest Period of
one month. Any automatic conversion to Base Rate Loans shall be effective as of
the last day of the Interest Period then in effect with respect to the
applicable Eurocurrency Rate Loans. If the Company requests a Borrowing of,
conversion to, or continuation of Eurocurrency Rate Loans in any such Committed
Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month. No Committed Loan may be converted
into or continued as a Committed Loan denominated in a different currency, but
instead must be prepaid in the original currency of such

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Committed Loan and reborrowed in the other currency. A seven-day Interest Period
may not be selected for any Alternative Currency Loan.
     (b) Following receipt of a Committed Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount (and currency) of its Applicable
Percentage of the applicable Committed Loans, and if no timely notice of a
conversion or continuation is provided by the Company, the Administrative Agent
shall notify each Lender of the details of any automatic conversion to Base Rate
Loans or continuation of Committed Loans denominated in a currency other than
Dollars, in each case as described in the preceding subsection. In the case of a
Committed Borrowing, each Lender shall make the amount of its Committed Loan
available to the Administrative Agent in Same Day Funds in the applicable
currency at the Administrative Agent’s Office for the applicable currency
(i) not later than 1:00 p.m., in the case of any Committed Loan denominated in
Dollars, and (ii) not later than the Applicable Time specified by the
Administrative Agent in the case of any Committed Loan in an Alternative
Currency, in each case on the Business Day specified in the applicable Committed
Loan Notice. Upon satisfaction of the applicable conditions set forth in
Section 5.2 (and, if such Borrowing is the initial Credit Extension, Section
5.1), the Administrative Agent shall make all funds so received available to the
Company or the other applicable Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of such Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Company; provided,
however, that if, on the date the Committed Loan Notice with respect to such
Borrowing denominated in Dollars is given by the Company, there are L/C
Borrowings outstanding, then the proceeds of such Borrowing, first, shall be
applied to the payment in full of any such L/C Borrowings, and, second, shall be
made available to the applicable Borrower as provided above.
     (c) Except as otherwise provided herein, a Eurocurrency Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurocurrency Rate Loan but any such Eurocurrency Rate Loan may be prepaid at any
time, subject to any applicable breakage charges. During the existence of a
Default, no Loans may be requested as, converted to or continued as Eurocurrency
Rate Loans (whether in Dollars or any Alternative Currency) without the consent
of the Required Lenders, and the Required Lenders may demand that any or all of
the then outstanding Eurocurrency Rate Loans denominated in an Alternative
Currency be prepaid, or redenominated into Dollars in the amount of the Dollar
Equivalent thereof, on the last day of the then current Interest Period with
respect thereto.
     (d) The Administrative Agent shall promptly notify the Company and the
Lenders of the interest rate applicable to any Interest Period for Eurocurrency
Rate Loans upon determination of such interest rate. At any time that Base Rate
Loans are outstanding, the Administrative Agent shall notify the Company and the
Lenders of any change in Bank of America’s prime rate used in determining the
Base Rate promptly following the public announcement of such change.
     (e) After giving effect to all Committed Borrowings, all conversions of
Committed Loans from one Type to the other, and all continuations of Committed
Loans as the same Type, there shall not be more than seven (7) Interest Periods
in effect with respect to Committed Loans.

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     Section 2.3 Letters of Credit.
     (a) The Letter of Credit Commitment.
          (i) Subject to the terms and conditions set forth herein, (A) the L/C
Issuer agrees, in reliance upon the agreements of the Lenders set forth in this
Section 2.3, (1) from time to time on any Business Day during the period from
the Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit denominated in Dollars or in one or more Alternative Currencies in any
amount greater than or equal to $10,000 for the account of the Company, and to
amend or extend Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drawings under the Letters of Credit; and
(B) the Lenders severally agree to participate in Letters of Credit issued for
the account of the Company and any drawings thereunder; provided that after
giving effect to any L/C Credit Extension with respect to any Letter of Credit,
(x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the
aggregate Outstanding Amount of the Committed Loans of any Lender, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations,
plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing
Line Loans shall not exceed such Lender’s Commitment, and (z) the Outstanding
Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit;
and provided further that the Outstanding Amount of the L/C Obligations in an
Alternative Currency plus the outstanding Alternative Currency Loans shall not
exceed the Alternative Currency Sublimit. Each request by the Company for the
issuance or amendment of a Letter of Credit shall be deemed to be a
representation by the Company that the L/C Credit Extension so requested
complies with the conditions set forth in the provisos to the preceding
sentence. Within the foregoing limits, and subject to the terms and conditions
hereof, the Company’s ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Company may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that have
been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed
to have been issued pursuant hereto, and from and after the Closing Date shall
be subject to and governed by the terms and conditions hereof.
          (ii) If the expiry date of any requested Letter of Credit would occur
after the Letter of Credit Expiration Date, the Company shall not later than
thirty (30) days prior to the Maturity Date then in effect Cash Collateralize
the then Outstanding Amount of all L/C Obligations.
          (iii) The L/C Issuer shall not be under any obligation to issue any
Letter of Credit if:
               (A) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer
from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or
any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or
request that the L/C Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the L/C
Issuer with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated hereunder)
not in effect on the Closing Date, or shall impose upon

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the L/C Issuer any unreimbursed loss, cost or expense which was not applicable
on the Closing Date and which the L/C Issuer in good faith deems material to it;
                         (B) the issuance of such Letter of Credit would violate
one or more policies of the L/C Issuer;
                         (C) except as otherwise agreed by the Administrative
Agent and the L/C Issuer, such Letter of Credit is to be denominated in a
currency other than Dollars or an Alternative Currency;
                         (D) the L/C Issuer does not as of the issuance date of
such requested Letter of Credit issue Letters of Credit in the requested
currency;
                         (E) such Letter of Credit contains any provisions for
automatic reinstatement of the stated amount after any drawing thereunder; or
                         (F) a default of any Lender’s obligations to fund under
Section 2.3(c) exists or any Lender is at such time a Defaulting Lender
hereunder, unless the L/C Issuer has entered into satisfactory arrangements with
the Company, such Lender or the other Lenders to eliminate the L/C Issuer’s risk
with respect to such Lender.
          (iv) The L/C Issuer shall be under no obligation to amend any Letter
of Credit if (A) the L/C Issuer would have no obligation at such time to issue
such Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.
          (v) The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
the L/C Issuer shall have all of the benefits and immunities (A) provided to the
Administrative Agent in Article X with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in Article X
included the L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the L/C Issuer.
     (b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Extension Letters of Credit.
          (i) Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the Company delivered to the L/C Issuer (with a copy to
the Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Company. Such
Letter of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 11:00 a.m. at least two (2) Business Days
(or such later date and time as the Administrative Agent and the L/C Issuer may
agree in a particular instance in their sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a

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Business Day); (B) the amount and currency thereof; (C) the expiry date thereof;
(D) the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the full
text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other matters as the L/C Issuer may require. In
the case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory to
the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may require.
Additionally, the Company shall furnish to the L/C Issuer and the Administrative
Agent such other documents and information pertaining to such requested Letter
of Credit issuance or amendment, including any Issuer Documents, as the L/C
Issuer or the Administrative Agent may require.
          (ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter of
Credit Application from the Company and, if not, the L/C Issuer will provide the
Administrative Agent with a copy thereof. Unless the L/C Issuer has received
written notice from any Lender, the Administrative Agent or any Loan Party, at
least one (1) Business Day prior to the requested date of issuance or amendment
of the applicable Letter of Credit, that one or more applicable conditions
contained in Article IV shall not then be satisfied, then, subject to the terms
and conditions hereof, the L/C Issuer shall, on the requested date, issue a
Letter of Credit for the account of the Company or enter into the applicable
amendment, as the case may be, in each case in accordance with the L/C Issuer’s
usual and customary business practices. Immediately upon the issuance of each
Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a risk participation in
such Letter of Credit in an amount equal to the product of such Lender’s
Applicable Percentage times the amount of such Letter of Credit.
          (iii) If the Company so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree to
issue a Letter of Credit that has automatic extension provisions (each, an
“Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter
of Credit must permit the L/C Issuer to prevent any such extension at least once
in each twelve-month period (commencing with the date of issuance of such Letter
of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “Non-Extension Notice Date”) in each such twelve (12) month period to
be agreed upon at the time such Letter of Credit is issued. Unless otherwise
directed by the L/C Issuer, the Company shall not be required to make a specific
request to the L/C Issuer for any such extension. Once an Auto-Extension Letter
of Credit has been issued, the Lenders shall be deemed to have authorized (but
may not require) the L/C Issuer to permit the extension of such Letter of Credit
at any time to an expiry date not later than the Letter of Credit Expiration
Date; provided, however, that the L/C Issuer shall not permit any such extension
if (A) the L/C Issuer has determined that it would not be permitted, or would
have no obligation, at such time to issue such Letter of Credit in its revised
form (as extended) under the terms hereof (by reason of the provisions of clause
(ii) or (iii) of Section 2.3(a) or otherwise), or (B) it has received notice
(which may be by telephone or in writing) on or before the day that is five
(5) Business Days before the Non-Extension Notice Date (1) from the
Administrative Agent that the Required Lenders have elected not to permit such
extension or (2) from the Administrative Agent, any Lender or the Company that
one or

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more of the applicable conditions specified in Section 5.2 is not then
satisfied, and in each such case directing the L/C Issuer not to permit such
extension.
          (iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or to
the beneficiary thereof, the L/C Issuer will also deliver to the Company and the
Administrative Agent a true and complete copy of such Letter of Credit or
amendment.
     (c) Drawings and Reimbursements; Funding of Participations.
          (i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the
Company and the Administrative Agent thereof. In the case of a Letter of Credit
denominated in an Alternative Currency, the Company shall reimburse the L/C
Issuer in such Alternative Currency, unless (A) the L/C Issuer (at its option)
shall have specified in such notice that it will require reimbursement in
Dollars, or (B) in the absence of any such requirement for reimbursement in
Dollars, the Company shall have notified the L/C Issuer promptly following
receipt of the notice of drawing that the Company will reimburse the L/C Issuer
in Dollars. In the case of any such reimbursement in Dollars of a drawing under
a Letter of Credit denominated in an Alternative Currency, the L/C Issuer shall
notify the Company of the Dollar Equivalent of the amount of the drawing
promptly following the determination thereof. Not later than 11:00 a.m. on the
date of any payment by the L/C Issuer under a Letter of Credit to be reimbursed
in Dollars, or the Applicable Time on the date of any payment by the L/C Issuer
under a Letter of Credit to be reimbursed in an Alternative Currency (each such
date, an “Honor Date”), the Company shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing and in the
applicable currency. If the Company fails to so reimburse the L/C Issuer by such
time, the Administrative Agent shall promptly notify each Lender of the Honor
Date, the amount of the unreimbursed drawing (expressed in Dollars in the amount
of the Dollar Equivalent thereof in the case of a Letter of Credit denominated
in an Alternative Currency) (the “Unreimbursed Amount”), and the amount of such
Lender’s Applicable Percentage thereof. In such event, the Company shall be
deemed to have requested a Committed Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in Section 2.2 for the
principal amount of Base Rate Loans, but subject to the amount of the unutilized
portion of the Aggregate Commitments and the conditions set forth in Section 5.2
(other than the delivery of a Committed Loan Notice). Any notice given by the
L/C Issuer or the Administrative Agent pursuant to this Section 2.3(c)(i) may be
given by telephone if immediately confirmed in writing; provided that the lack
of such an immediate confirmation shall not affect the conclusiveness or binding
effect of such notice.
          (ii) Each Lender shall upon any notice pursuant to Section 2.3(c)(i)
make funds available to the Administrative Agent for the account of the L/C
Issuer, in Dollars, at the Administrative Agent’s Office for Dollar-denominated
payments in an amount equal to its Applicable Percentage of the Unreimbursed
Amount not later than 1:00 p.m. on the Business Day specified in such notice by
the Administrative Agent, whereupon, subject to the provisions of Section
2.3(c)(iii), each Lender that so makes funds available shall be deemed to have
made a

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Base Rate Committed Loan to the Company in such amount. The Administrative Agent
shall remit the funds so received to the L/C Issuer in Dollars.
          (iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Committed Borrowing of Base Rate Loans because the conditions
set forth in Section 5.2 cannot be satisfied or for any other reason, the
Company shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in
the amount of the Unreimbursed Amount that is not so refinanced, which L/C
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the Default Rate. In such event, each Lender’s payment to the
Administrative Agent for the account of the L/C Issuer pursuant to
Section 2.3(c)(ii) shall be deemed payment in respect of its participation in
such L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.3.
          (iv) Until each Lender funds its Committed Loan or L/C Advance
pursuant to this Section 2.3(c) to reimburse the L/C Issuer for any amount drawn
under any Letter of Credit, interest in respect of such Lender’s Applicable
Percentage of such amount shall be solely for the account of the L/C Issuer.
          (v) Each Lender’s obligation to make Committed Loans or L/C Advances
to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.3(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Company, any Subsidiary or any other Person for any
reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender’s obligation to make Committed
Loans pursuant to this Section 2.3(c) is subject to the conditions set forth in
Section 5.2 (other than delivery by the Company of a Committed Loan Notice). No
such making of an L/C Advance shall relieve or otherwise impair the obligation
of the Company to reimburse the L/C Issuer for the amount of any payment made by
the L/C Issuer under any Letter of Credit, together with interest as provided
herein.
          (vi) If any Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.3(c) by the time
specified in Section 2.3(c)(ii), the L/C Issuer shall be entitled to recover
from such Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the L/C
Issuer at a rate per annum equal to the applicable Overnight Rate from time to
time in effect. A certificate of the L/C Issuer submitted to any Lender (through
the Administrative Agent) with respect to any amounts owing under this clause
(vi) shall be conclusive absent manifest error.
     (d) Repayment of Participations.
          (i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender’s L/C Advance in
respect of such payment in accordance with Section 2.3(c), if the Administrative
Agent receives for the account of the L/C Issuer any payment in respect of the
related Unreimbursed Amount or interest thereon

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(whether directly from the Company or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Applicable Percentage thereof
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s L/C Advance was outstanding) in Dollars and
in the same funds as those received by the Administrative Agent.
          (ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.3(c)(i) is required to be
returned under any of the circumstances described in Section 11.6 (including
pursuant to any settlement entered into by the L/C Issuer in its discretion),
each Lender shall pay to the Administrative Agent for the account of the L/C
Issuer its Applicable Percentage thereof on demand of the Administrative Agent,
plus interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the applicable Overnight
Rate from time to time in effect. The obligations of the Lenders under this
clause shall survive the payment in full of the Obligations and the termination
of this Agreement.
     (e) Obligations Absolute. The obligation of the Company to reimburse the
L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:
          (i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document;
          (ii) the existence of any claim, counterclaim, set-off, defense or
other right that the Company or any Subsidiary may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), the L/C Issuer or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;
          (iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under such Letter of Credit;
          (iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law;

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          (v) any adverse change in the relevant exchange rates or in the
availability of the relevant Alternative Currency to the Company or any
Subsidiary or in the relevant currency markets generally; or
          (vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Company or
any Subsidiary.
     The Company shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Company’s instructions or other irregularity, the Company
will within five (5) business days of receipt thereof notify the L/C Issuer. The
Company shall be conclusively deemed to have waived any such claim against the
L/C Issuer and its correspondents unless such notice is given as aforesaid.
     (f) Role of L/C Issuer. Each Lender and the Company agree that, in paying
any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Lenders or the Required Lenders, as applicable;
(ii) any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. The Company hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided, however, that this assumption is not intended to, and shall
not, preclude the Company’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuer, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of the L/C Issuer shall
be liable or responsible for any of the matters described in clauses (i) through
(vi) of Section 2.3(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Company may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to the Company, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Company which the Company proves were caused by the L/C Issuer’s
willful misconduct or gross negligence or the L/C Issuer’s willful failure to
pay under any Letter of Credit after the presentation to it by the beneficiary
of a sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

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     (g) Cash Collateral.
          (i) Upon the request of the Administrative Agent, (A) if the L/C
Issuer has honored any full or partial drawing request under any Letter of
Credit and such drawing has resulted in an L/C Borrowing, or (B) if, as of
thirty (30) days prior to the Maturity Date, any L/C Obligation for any reason
remains outstanding, the Company shall, in each case, on or before the date
which is thirty (30) days prior to the Maturity Date, Cash Collateralize the
then Outstanding Amount of all L/C Obligations.
          (ii) In addition, if the Administrative Agent notifies the Company at
any time that the Outstanding Amount of all L/C Obligations at such time exceeds
105% of the Letter of Credit Sublimit then in effect, then, within five
(5) Business Days after receipt of such notice, the Company shall Cash
Collateralize the L/C Obligations in an amount equal to the amount by which the
Outstanding Amount of all L/C Obligations exceeds the Letter of Credit Sublimit.
          (iii) The Administrative Agent may, at any time and from time to time
after the initial deposit of Cash Collateral, request that additional Cash
Collateral be provided in order to protect against the results of exchange rate
fluctuations in amounts based upon the then-current market conditions; provided
that any excess Cash Collateral will be returned if exchange rates thereafter
become favorable to the Company or if outstanding L/C Obligations are reduced
below the Letter of Credit Sublimit.
          (iv) Section 2.5 and Section 9.2(c) sets forth certain additional
requirements to deliver Cash Collateral hereunder. For purposes of this
Section 2.3, and Section 2.5 and Section 9.2(c), “Cash Collateralize” means to
pledge and deposit with or deliver to the Administrative Agent, for the benefit
of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash
or deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the L/C Issuer (which documents are
hereby consented to by the Lenders). Derivatives of such term have corresponding
meanings. The Company hereby grants to the Administrative Agent, for the benefit
of the L/C Issuer and the Lenders, a security interest in all such cash, deposit
accounts and all balances therein and all proceeds of the foregoing. Cash
Collateral shall be maintained in blocked, non-interest bearing deposit accounts
at Bank of America.
     (h) Applicability of ISP. Unless otherwise expressly agreed by the L/C
Issuer and the Company when a Letter of Credit is issued (including any such
agreement applicable to an Existing Letter of Credit), the rules of the ISP
shall apply to each standby Letter of Credit.
     (i) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender, in accordance with its Applicable
Percentage, a Letter of Credit fee for each standby Letter of Credit equal to
200 basis points per annum if the Leverage Ratio is greater than 3.75 to 1.0 as
of the most recent quarterly financial statement and 150 basis points per annum
if the Leverage Ratio is less than or equal to 3.75 to 1.0 times the daily
maximum amount available to be drawn under such Letter of Credit (whether or not
such maximum amount is then in effect under such Letter of Credit)
(collectively, “Letter of Credit Fees”). Such Letter of Credit Fees shall be
computed on a quarterly basis in arrears. Such letter of credit fees shall be
due and payable on the first Business Day after the end of each March, June,
September and

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December prorated for the number of days in such preceding quarter such Letter
of Credit was outstanding, commencing with the first such date to occur after
the issuance of such Letter of Credit and on the Letter of Credit Expiration
Date and thereafter on demand. If there is any change in the Applicable Rate
during any quarter, the daily maximum amount of each standby Letter of Credit
shall be computed and multiplied by the Applicable Rate separately for each
period during such quarter that such Applicable Rate was in effect. The initial
Letter of Credit Fee in effect from the Closing Date through the date a
Compliance Certification is required to be delivered pursuant to Section 7.2(a)
for the fiscal quarter endings December 31, 2005 shall be 150 basis points per
annum.
     (j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Company shall pay directly to the L/C Issuer for its own account, in
Dollars, a fronting fee in the amount of $1,500 per annum with respect to each
Letter of Credit payable on the date of issuance of such Letter of Credit and on
each anniversary thereafter. In addition, the Company shall pay directly to the
L/C Issuer for its own account, in Dollars, the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time in
effect. Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.
     (k) Conflict with Issuer Documents. In the event of any conflict between
the terms hereof and the terms of any Issuer Document, the terms hereof shall
control.
     Section 2.4 Swing Line Loans.
     (a) The Swing Line. Subject to the terms and conditions set forth herein,
the Swing Line Lender agrees, in reliance upon the agreements of the other
Lenders set forth in this Section 2.4, to make loans in Dollars (each such loan,
a “Swing Line Loan”) to the Company from time to time on any Business Day during
the Availability Period in an aggregate amount not to exceed at any time
outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that
such Swing Line Loans, when aggregated with the Applicable Percentage of the
Outstanding Amount of Committed Loans and L/C Obligations of the Lender acting
as Swing Line Lender, may exceed the amount of such Lender’s Commitment;
provided, however, that after giving effect to any Swing Line Loan, (i) the
Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the
aggregate Outstanding Amount of the Committed Loans of any Lender, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations,
plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing
Line Loans shall not exceed such Lender’s Commitment, and provided, further,
that (i) the Company shall not use the proceeds of any Swing Line Loan to
refinance any outstanding Swing Line Loan. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Company may borrow under
this Section 2.4, prepay under Section 2.5, and reborrow under this Section 2.4.
Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a
Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Lender’s Applicable Percentage times the amount of such Swing Line Loan.

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     (b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Company’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $100,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Company. Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing Line Lender has received notice (by telephone
or in writing) from the Administrative Agent (including at the request of any
Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing
(A) directing the Swing Line Lender not to make such Swing Line Loan as a result
of the limitations set forth in the proviso to the first sentence of
Section 2.4(a), or (B) that one or more of the applicable conditions specified
in Article IV is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to the Company at its office by crediting the account of the
Company on the books of the Swing Line Lender in Same Day Funds.
     (c) Refinancing of Swing Line Loans.
          (i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Company (which hereby irrevocably
authorizes the Swing Line Lender to so request on its behalf), that each Lender
make a Base Rate Committed Loan in an amount equal to such Lender’s Applicable
Percentage of the amount of Swing Line Loans then outstanding. Such request
shall be made in writing (which written request shall be deemed to be a
Committed Loan Notice for purposes hereof) and in accordance with the
requirements of Section 2.2, without regard to the minimum and multiples
specified therein for the principal amount of Base Rate Loans, but subject to
the unutilized portion of the Aggregate Commitments and the conditions set forth
in Section 4.2. The Swing Line Lender shall furnish the Company with a copy of
the applicable Committed Loan Notice promptly after delivering such notice to
the Administrative Agent. Each Lender shall make an amount equal to its
Applicable Percentage of the amount specified in such Committed Loan Notice
available to the Administrative Agent in Same Day Funds for the account of the
Swing Line Lender at the Administrative Agent’s Office for Dollar-denominated
payments not later than 1:00 p.m. on the day specified in such Committed Loan
Notice, whereupon, subject to Section 2.4(c)(ii), each Lender that so makes
funds available shall be deemed to have made a Base Rate Committed Loan to the
Company in such amount. The Administrative Agent shall remit the funds so
received to the Swing Line Lender.
          (ii) If for any reason any Swing Line Loan cannot be refinanced by
such a Committed Borrowing in accordance with Section 2.4(c)(i), the request for
Base Rate Committed Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by

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the Swing Line Lender that each of the Lenders fund its risk participation in
the relevant Swing Line Loan and each Lender’s payment to the Administrative
Agent for the account of the Swing Line Lender pursuant to Section 2.4(c)(i)
shall be deemed payment in respect of such participation.
          (iii) If any Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to be paid by
such Lender pursuant to the foregoing provisions of this Section 2.4(c) by the
time specified in Section 2.4(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the Swing
Line Lender at a rate per annum equal to the applicable Overnight Rate from time
to time in effect. A certificate of the Swing Line Lender submitted to any
Lender (through the Administrative Agent) with respect to any amounts owing
under this clause (iii) shall be conclusive absent manifest error.
          (iv) Each Lender’s obligation to make Committed Loans or to purchase
and fund risk participations in Swing Line Loans pursuant to this Section 2.4(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Company or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Lender’s obligation to make Committed Loans pursuant to this Section 2.4(c) is
subject to the conditions set forth in Section 4.2. No such funding of risk
participations shall relieve or otherwise impair the obligation of the Company
to repay Swing Line Loans, together with interest as provided herein.
     (d) Repayment of Participations.
          (i) At any time after any Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Applicable Percentage of such payment
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s risk participation was funded) in the same
funds as those received by the Swing Line Lender.
          (ii) If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by the
Swing Line Lender under any of the circumstances described in Section 11.5
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Lender shall pay to the Swing Line Lender its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the applicable Overnight Rate. The Administrative Agent will make
such demand upon the request of the Swing Line Lender. The obligations of the
Lenders under this clause shall survive the payment in full of the Obligations
and the termination of this Agreement.

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          (iii) Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Company for interest on the Swing Line
Loans. Until each Lender funds its Base Rate Committed Loan or risk
participation pursuant to this Section 2.4 to refinance such Lender’s Applicable
Percentage of any Swing Line Loan, interest in respect of such Applicable
Percentage shall be solely for the account of the Swing Line Lender.
     (e) Payments Directly to Swing Line Lender. The Company shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.
     Section 2.5 Prepayments.
     (a) Each Borrower may, upon notice from the Company to the Administrative
Agent, at any time or from time to time voluntarily prepay Committed Loans in
whole or in part without premium or penalty; provided that (i) such notice must
be received by the Administrative Agent not later than 11:00 a.m. (A) three
(3) Business Days prior to any date of prepayment of Eurocurrency Rate Loans
denominated in Dollars, (B) four (4) Business Days (or five (5), in the case of
prepayment of Loans denominated in Special Notice Currencies) prior to any date
of prepayment of Eurocurrency Rate Loans denominated in Alternative Currencies,
and (C) on the date of prepayment of Base Rate Committed Loans; (ii) any
prepayment of Eurocurrency Rate Loans denominated in Dollars shall be in a
principal amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof; (iii) any prepayment of Eurocurrency Rate Loans denominated in
Alternative Currencies shall be in a minimum principal amount of $1,000,000 or a
whole multiple of $500,000 in excess thereof except that Eurocurrency Rate Loans
may be paid down to zero or to a multiple of $500,000 if the dollar amount
thereof has varied due to exchange rate changes; and (iv) any prepayment of Base
Rate Committed Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof or, in each case, if less, the entire
principal amount thereof then outstanding. Each such notice shall specify the
date and amount of such prepayment and the Type(s) of Committed Loans to be
prepaid and, if Eurocurrency Loans are to be prepaid, the Interest Period(s) of
such Loans. The Administrative Agent will promptly notify each Lender of its
receipt of each such notice, and of the amount of such Lender’s Applicable
Percentage of such prepayment. If such notice is given by the Company, the
applicable Borrower shall make such prepayment and the payment amount specified
in such notice shall be due and payable on the date specified therein. Any
prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued
interest on the amount prepaid, together with any additional amounts required
pursuant to Section 3.5. Each such prepayment shall be applied to the Committed
Loans of the Lenders in accordance with their respective Applicable Percentages.
     (b) The Company may, upon notice to the Swing Line Lender (with a copy to
the Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such
prepayment shall be in a minimum principal amount of $100,000. Each such notice
shall specify the date and amount of such prepayment. If such notice is given by
the Company, the Company shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.

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     (c) If the Administrative Agent notifies the Company at any time that the
Total Outstandings at such time exceed an amount equal to 105% of the Aggregate
Commitments then in effect, then, within two Business Days after receipt of such
notice, the Borrowers shall prepay Loans and/or the Company shall Cash
Collateralize the L/C Obligations in an aggregate amount sufficient to reduce
such Outstanding Amount as of such date of payment to an amount not to exceed
100% of the Aggregate Commitments then in effect; provided, however, that,
subject to the provisions of Section 2.3(g)(ii), the Company shall not be
required to Cash Collateralize the L/C Obligations pursuant to this
Section 2.5(c) unless after the prepayment in full of the Loans the Total
Outstandings exceed the Aggregate Commitments then in effect. The Administrative
Agent may, at any time and from time to time after the initial deposit of such
Cash Collateral, request that additional Cash Collateral be provided in order to
protect against the results of further exchange rate fluctuations in the amounts
based upon then-current market conditions; provided that any excess Cash
Collateral will be returned if exchange rates thereafter become favorable to the
Company, or if outstanding L/C Obligations are reduced below the Letter of
Credit Sublimit.
     (d) If the Administrative Agent notifies the Company at any time that the
Outstanding Amount of all Loans denominated in Alternative Currencies at such
time exceeds an amount equal to 105% of the Alternative Currency Sublimit then
in effect, then, within five (5) Business Days after receipt of such notice, the
Borrowers shall prepay Loans in an aggregate amount sufficient to reduce such
Outstanding Amount as of such date of payment to an amount not to exceed 100% of
the Alternative Currency Sublimit then in effect.
     Section 2.6 Termination or Reduction of Commitments. The Company may, upon
notice to the Administrative Agent, terminate the Aggregate Commitments, or from
time to time permanently reduce the Aggregate Commitments; provided that (i) any
such notice shall be received by the Administrative Agent not later than
11:00 a.m. five (5) Business Days prior to the date of termination or reduction,
(ii) any such partial reduction shall be in an aggregate amount of $10,000,000
or any whole multiple of $1,000,000 in excess thereof, (iii) the Company shall
not terminate or reduce the Aggregate Commitments if, after giving effect
thereto and to any concurrent prepayments hereunder, the Total Outstandings plus
the Alternative Currency Reserve (if any) would exceed the Aggregate
Commitments, and (iv) if, after giving effect to any reduction of the Aggregate
Commitments, the Alternative Currency Sublimit, the Letter of Credit Sublimit or
the Swing Line Sublimit exceeds the amount of the Aggregate Commitments, such
Sublimit shall be automatically reduced by the amount of such excess. The
Administrative Agent will promptly notify the Lenders of any such notice of
termination or reduction of the Aggregate Commitments. The amount of any such
Aggregate Commitment reduction shall not be applied to the Alternative Currency
Sublimit or the Letter of Credit Sublimit unless otherwise specified by the
Company. Any reduction of the Aggregate Commitments shall be applied to the
Commitment of each Lender according to its Applicable Percentage. All fees
accrued until the effective date of any termination of the Aggregate Commitments
shall be paid on the effective date of such termination.
     Section 2.7 Repayment of Loans.
     (a) Each Borrower shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Committed Loans made to such Borrower outstanding
on such date.

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     (b) At the request of the Administrative Agent, the Company shall repay
each Swing Line Loan on the earlier to occur of (i) the date ten (10) Business
Days after such Loan is made and (ii) the Maturity Date.
     Section 2.8 Interest.
     (a) Subject to the provisions of subsection (b) below, (i) each
Eurocurrency Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurocurrency
Rate for such Interest Period plus the Applicable Rate plus (in the case of a
Eurocurrency Rate Loan of any Lender which is lent from a Lending Office in the
United Kingdom or a Participating Member State) the Mandatory Cost; (ii) each
Base Rate Committed Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Rate; and (iii) each Swing Line Loan shall bear
interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Rate.
     (b)      (i) If any amount of principal of any Loan is not paid when due,
whether at stated maturity, by acceleration or otherwise, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
          (ii) If any amount (other than principal of any Loan) payable by any
Borrower under any Loan Document is not paid when due, whether at stated
maturity, by acceleration or otherwise, then upon the request of the Required
Lenders, such amount shall thereafter bear interest at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.
          (iii) Upon the request of the Required Lenders, while any Event of
Default exists, the Borrowers shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.
          (iv) Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
     (c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
     (d) For the purposes of the Interest Act (Canada), (i) whenever a rate of
interest or fee rate hereunder is calculated on the basis of a year (the “deemed
year”) that contains fewer days than the actual number of days in the calendar
year of calculation, such rate of interest or fee rate shall be expressed as a
yearly rate by multiplying such rate of interest or fee rate by the actual
number of days in the calendar year of calculation and dividing it by the number
of days in the deemed year, (ii) the principle of deemed reinvestment of
interest shall not apply to any interest

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calculation hereunder and (iii) the rates of interest stipulated herein are
intended to be nominal rates and not effective rates or yields.
     Section 2.9 Fees. In addition to certain fees described in subsections
(i) and (j) of Section 2.3:
     (a) Unused Fee. The Company shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a fee (the
“Unused Fee”) in Dollars equal to twenty-five (25) basis points per annum times
the average actual daily amount by which the Aggregate Commitments exceed the
sum of (i) the Outstanding Amount of Committed Loans and (ii) the Outstanding
Amount of L/C Obligations. The Unused Fee shall accrue at all times during the
Availability Period, including at any time during which one or more of the
conditions in Article IV is not met, and shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December,
commencing with the first such date to occur after the Closing Date, and on the
Maturity Date. Swingline Borrowings are not taken into account as usage in
calculating the Unused Fee.
     (b) Other Fees.
          (i) The Company shall pay to the Arranger and the Administrative Agent
for their own respective accounts, in Dollars, fees in the amounts and at the
times specified in the Fee Letter. Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever.
          (ii) The Company shall pay to the Lenders, in Dollars, such fees as
shall have been separately agreed upon in writing in the amounts and at the
times so specified. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
     Section 2.10 Computation of Interest and Fees. All computations of interest
for Base Rate Loans when the Base Rate is determined by Bank of America’s “prime
rate” shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed, or, in the case
of interest in respect of Committed Loans denominated in Alternative Currencies
as to which market practice differs from the foregoing, in accordance with such
market practice. Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.12(a),
bear interest for one (1) day. Each determination by the Administrative Agent of
an interest rate or fee hereunder shall be conclusive and binding for all
purposes, absent manifest error.
     Section 2.11 Evidence of Debt.
     (a) The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lenders to the
Borrowers and the interest and payments thereon. Any failure to so record or

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any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrowers hereunder to pay any amount owing with respect to
the Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender to a Borrower made through the Administrative Agent, such Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender’s Loans to such Borrower in addition to such
accounts or records. Each Lender may attach schedules to a Note and endorse
thereon the date, Type (if applicable), amount, currency and maturity of its
Loans and payments with respect thereto.
     (b) In addition to the accounts and records referred to in subsection (a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit and Swing Line Loans. In the event
of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.
     Section 2.12 Payments Generally; Administrative Agent’s Clawback.
     (a) General. All payments to be made by the Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein and except with respect to
principal of and interest on Loans denominated in an Alternative Currency, all
payments by the Borrowers hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the
applicable Administrative Agent’s Office in Dollars and in Same Day Funds not
later than 2:00 p.m. on the date specified herein. Except as otherwise expressly
provided herein, all payments by the Borrowers hereunder with respect to
principal and interest on Loans denominated in an Alternative Currency shall be
made to the Administrative Agent, for the account of the respective Lenders to
which such payment is owed, at the applicable Administrative Agent’s Office in
such Alternative Currency and in Same Day Funds not later than the Applicable
Time specified by the Administrative Agent on the dates specified herein.
Without limiting the generality of the foregoing, the Administrative Agent may
require that any payments due under this Agreement be made in the United States.
If, for any reason, any Borrower is prohibited by any Law from making any
required payment hereunder in an Alternative Currency, such Borrower shall make
such payment in Dollars in the Dollar Equivalent of the Alternative Currency
payment amount. The Administrative Agent will promptly distribute to each Lender
its Applicable Percentage (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender’s Lending
Office. All payments received by the Administrative Agent (i) after 2:00 p.m.,
in the case of payments in Dollars, or (ii) after the Applicable Time specified
by the Administrative Agent in the case of payments in an Alternative Currency,
shall in each case be deemed received on the next succeeding Business Day and
any applicable interest or fee shall continue to accrue. If any payment to be
made by any Borrower shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day, and such extension of time
shall be reflected in computing interest or fees, as the case may be.

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     (b) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Committed Borrowing of Eurocurrency Rate Loans (or, in the
case of any Committed Borrowing of Base Rate Loans, prior to 12:00 noon on the
date of such Committed Borrowing) that such Lender will not make available to
the Administrative Agent such Lender’s share of such Committed Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.2 (or, in the case of a Committed
Borrowing of Base Rate Loans, that such Lender has made such share available in
accordance with and at the time required by Section 2.2) and may, in reliance
upon such assumption, make available to the applicable Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Committed Borrowing available to the Administrative Agent, then the
applicable Lender and the applicable Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount in Same Day
Funds with interest thereon, for each day from and including the date such
amount is made available to such Borrower to but excluding the date of payment
to the Administrative Agent, at (A) in the case of a payment to be made by such
Lender, the Overnight Rate and (B) in the case of a payment to be made by such
Borrower, the interest rate applicable to Base Rate Loans. If such Borrower and
such Lender shall pay such interest to the Administrative Agent for the same or
an overlapping period, the Administrative Agent shall promptly remit to such
Borrower the amount of such interest paid by such Borrower for such period. If
such Lender pays its share of the applicable Committed Borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender’s
Committed Loan included in such Committed Borrowing. Any payment by such
Borrower shall be without prejudice to any claim such Borrower may have against
a Lender that shall have failed to make such payment to the Administrative
Agent.
          (i) Payments by Borrowers; Presumptions by Administrative Agent.
Unless the Administrative Agent shall have received notice from a Borrower prior
to the date on which any payment is due to the Administrative Agent for the
account of the Lenders or the L/C Issuer hereunder that such Borrower will not
make such payment, the Administrative Agent may assume that such Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the L/C Issuer, as the case may
be, the amount due. In such event, if such Borrower has not in fact made such
payment, then each of the Lenders or the L/C Issuer, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or the L/C Issuer, in Same Day Funds 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 Administrative
Agent, at the Overnight Rate.
     A notice of the Administrative Agent to any Lender or Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.
     (c) Failure to Satisfy Conditions Precedent. If any Lender makes available
to the Administrative Agent funds for any Loan to be made by such Lender to any
Borrower as provided in the foregoing provisions of this Article II, and such
funds are not made available to such Borrower by the Administrative Agent
because the conditions to the applicable Credit Extension set forth in
Article IV are not satisfied or waived in accordance with the terms hereof,

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the Administrative 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 Committed Loans, to fund participations in Letters of Credit
and Swing Line Loans and to make payments pursuant to Section 11.4(c) are
several and not joint. The failure of any Lender to make any Committed Loan, to
fund any such participation or to make any payment under Section 11.4(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 Committed Loan, to purchase its
participation or to make its payment under Section 11.4(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 Sharing of Payments by Lenders. 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 the Committed Loans made by
it, or the participations in L/C Obligations or in Swing Line Loans held by it
resulting in such Lender’s receiving payment of a proportion of the aggregate
amount of such Committed Loans or participations and accrued interest thereon
greater than its pro rata share thereof as provided herein, then the Lender
receiving such greater proportion shall (a) notify the Administrative Agent of
such fact, and (b) purchase (for cash at face value) participations in the
Committed Loans and subparticipations in L/C Obligations and Swing Line Loans of
the other 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 Committed Loans and other amounts owing them, provided that:
          (i) if any such participations or subparticipations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations or subparticipations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest; and
          (ii) the provisions of this Section shall not be construed to apply to
(x) any payment made by a Borrower pursuant to and in accordance with the
express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Committed Loans or subparticipations in L/C Obligations or Swing Line Loans to
any assignee or participant, other than to the Company or any Subsidiary thereof
(as to which the provisions of this Section shall apply).
     Each Loan Party 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 such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.

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     Section 2.14 Designated Borrowers.
     (a) The Company may at any time, upon not less than fifteen (15) Business
Days’ notice from the Company to the Administrative Agent (or such shorter
period as may be agreed by the Administrative Agent in its sole discretion),
designate any Subsidiary of the Company (an “Applicant Borrower”) as a
Designated Borrower to receive Loans in an Alternative Currency hereunder by
delivering to the Administrative Agent (which shall promptly deliver
counterparts thereof to each Lender) a duly executed notice and agreement in
substantially the form of Exhibit G (a “Designated Borrower Request and
Assumption Agreement”). The parties hereto acknowledge and agree that prior to
any Applicant Borrower becoming entitled to utilize the credit facilities
provided for herein the Administrative Agent and the Lenders shall have received
such supporting resolutions, incumbency certificates, opinions of counsel and
other documents or information, in form, content and scope reasonably
satisfactory to the Administrative Agent, as may be required by the
Administrative Agent or the Required Lenders in their sole discretion, and Notes
signed by such new Borrowers to the extent any Lenders so require. If the
Administrative Agent and the Required Lenders agree that an Applicant Borrower
shall be entitled to receive Loans in an Alternative Currency hereunder, then
promptly following receipt of all such requested resolutions, incumbency
certificates, opinions of counsel and other documents or information, the
Administrative Agent shall send a notice in substantially the form of Exhibit H
(a “Designated Borrower Notice”) to the Company and the Lenders specifying the
effective date upon which the Applicant Borrower shall constitute a Designated
Borrower for purposes hereof, whereupon each of the Lenders agrees to permit
such Designated Borrower to receive Loans hereunder, on the terms and conditions
set forth herein, and each of the parties agrees that such Designated Borrower
otherwise shall be a Borrower for all purposes of this Agreement; provided that
no Committed Loan Notice or Letter of Credit Application may be submitted by or
on behalf of such Designated Borrower until the date five (5) Business Days
after such effective date. For any Designated Borrower established under the
Laws of the United Kingdom or any other Foreign Obligor, if Administrative Agent
so requires, the Company shall complete the Administrative Agent’s customary
forms before any borrowing by such Designated Borrower.
     (b) The Obligations of the Company and each Designated Borrower that is a
Domestic Subsidiary shall be joint and several in nature. The Obligations of all
Designated Borrowers that are Foreign Subsidiaries shall be several in nature.
     (c) Each Subsidiary of the Company that becomes a “Designated Borrower”
pursuant to this Section 2.14 hereby irrevocably appoints the Company as its
agent for all purposes relevant to this Agreement and each of the other Loan
Documents, including (i) the giving and receipt of notices, (ii) the execution
and delivery of all documents, instruments and certificates contemplated herein
and all modifications hereto, and (iii) the receipt of the proceeds of any Loans
made by the Lenders, to any such Designated Borrower hereunder. Any
acknowledgment, consent, direction, certification or other action which might
otherwise be valid or effective only if given or taken by all Borrowers, or by
each Borrower acting singly, shall be valid and effective if given or taken only
by the Company, whether or not any such other Borrower joins therein. Any
notice, demand, consent, acknowledgement, direction, certification or other
communication delivered to the Company in accordance with the terms of this
Agreement shall be deemed to have been delivered to each Designated Borrower.

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     (d) The Company may from time to time, upon not less than fifteen
(15) Business Days’ notice from the Company to the Administrative Agent (or such
shorter period as may be agreed by the Administrative Agent in its sole
discretion), terminate a Designated Borrower’s status as such, provided that
there are no outstanding Loans payable by such Designated Borrower, or other
amounts payable by such Designated Borrower on account of any Loans made to it,
as of the effective date of such termination. The Administrative Agent will
promptly notify the Lenders of any such termination of a Designated Borrower’s
status.
     (e) Prior to any advance of a Loan for a Designated Borrower, the Company
shall execute and deliver to the Administrative Agent a Company Guaranty
guarantying all obligations of such Designated Borrower for the benefit of the
Lenders.
     Section 2.15 Extension of Maturity Date.
     (a) Not earlier than two (2) years prior to, nor later than thirty
(30) days prior to, the Maturity Date set forth herein, the Borrower may, upon
notice to the Administrative Agent (which shall promptly notify the Lenders),
request a one-year extension of the Maturity Date then in effect.
     (b) The Maturity Date shall be extended only if no Default has occurred and
is continuing under the Loan Documents. If so extended, the Maturity Date shall
be extended to the same date in the following year effective as of the Maturity
Date then in effect (such existing Maturity Date being the “Extension Effective
Date”). The Administrative Agent and the Borrower shall promptly confirm to the
Lenders such extension and the Extension Effective Date. As a condition
precedent to such extension, the Borrower shall deliver to the Administrative
Agent a certificate of each Loan Party dated as of the Extension Effective Date
(in sufficient copies for each Lender) signed by a Responsible Officer of such
Loan Party (i) certifying and attaching the resolutions adopted by such Loan
Party approving or consenting to such extension and (ii) in the case of the
Borrower, certifying that, before and after giving effect to such extension,
(A) the representations and warranties contained in Article VI and the other
Loan Documents are true and correct on and as of the Extension Effective Date,
except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they are true and correct as of such earlier
date, and except that for purposes of this Section 2.14, the representations and
warranties contained in subsections (a) and (b) of Section 6.5 shall be deemed
to refer to the most recent statements furnished pursuant to subsections (a) and
(b), respectively, of Section 7.1, and (B) no Default exists.
     (c) As an additional condition precedent to the extension of the Maturity
Date, the Borrower shall pay to the Administrative Agent for the benefit of the
Lenders an extension fee of twenty-five (25) basis points on the then applicable
Aggregate Commitments.
     (d) This Section shall supersede any provisions in Section 2.13 or Section
11.1 to the contrary.
     Section 2.16 Increase in Commitments.
     (a) Provided there exists no Default, upon notice to the Administrative
Agent (which shall promptly notify the Lenders), the Borrower may up to two
(2) times within three (3) years

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from the date of this Agreement, request an increase in the Aggregate
Commitments in a minimum of $25,000,000 and in multiples of $10,000,000 for each
increase and by an amount not exceeding $100,000,000 in the aggregate. At the
time of sending such a notice, the Borrower (in consultation with the
Administrative Agent) shall specify the time period within which each Lender is
requested to respond (which shall in no event be less than ten (10) Business
Days from the date of delivery of such notice to the Lenders). Each Lender shall
notify the Administrative Agent within such time period whether or not it agrees
to increase its Commitment and, if so, whether by an amount equal to, greater
than, or less than its Applicable Percentage of such requested increase. Any
Lender not responding within such time period shall be deemed to have declined
to increase its Commitment. The Administrative Agent shall notify the Borrower
and each Lender of the Lenders’ responses to each request made hereunder. To
achieve the full amount of a requested increase, the Borrower may also invite
additional Eligible Assignees to become Lenders pursuant to a joinder agreement
in form and substance satisfactory to the Administrative Agent and its counsel.
     (b) If the Aggregate Commitments are increased in accordance with this
Section, the Administrative Agent and the Borrower shall determine the effective
date (the “Increase Effective Date”) and the final allocation of such increase.
The Administrative Agent shall promptly notify the Borrower and the Lenders of
the final allocation of such increase and the Increase Effective Date. As a
condition precedent to such increase, the Borrower shall deliver to the
Administrative Agent a certificate of each Loan Party dated as of the Increase
Effective Date (in sufficient copies for each Lender) signed by a Responsible
Officer of such Loan Party (i) certifying and attaching the resolutions adopted
by such Loan Party approving or consenting to such increase, and (ii) in the
case of the Borrower, certifying that, before and after giving effect to such
increase, (A) the representations and warranties contained in Article VI and the
other Loan Documents are true and correct on and as of the Extension Effective
Date, except to the extent that such representations and warranties specifically
refer to an earlier date, in which case they are true and correct as of such
earlier date, and except that for purposes of this Section 2.15, the
representations and warranties contained in subsections (a) and (b) of
Section 6.5 shall be deemed to refer to the most recent statements furnished
pursuant to subsections (a) and (b), respectively, of Section 7.1, and (B) no
Default exists. The Borrower shall prepay any Committed Loans outstanding on the
Increase Effective Date (and pay any additional amounts required pursuant to
Section 3.5) to the extent necessary to keep the outstanding Committed Loans
ratable with any revised Applicable Percentages arising from any nonratable
increase in the Commitments under this Section.
     (c) Alternatively, any portion of the increase described in Section 2.16(a)
may be structured as a separate, pari passu term loan under terms and conditions
mutually satisfactory to the Company and the Administrative Agent. However, the
principal amount of any such term loan will not be included in the Letter of
Credit and the Swing Line Sublimits.
     (d) Conflicting Provisions. This Section shall supersede any provisions in
Section 2.13 or Section 11.1 to the contrary.
     Section 2.17 Collateral. As security for the payment of any and all of the
Obligations and for the Borrower’s performance of, and compliance with, all of
the terms, covenants, conditions, stipulations and agreements contained in the
Loan Documents, the Company and the

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other Loan parties hereby assign, grant and convey to the Lenders, and agree
that the Lenders shall have, to the extent permitted by law a perfected,
continuing security interest in, all of the Collateral pursuant to the Security
Agreements. The Company and the other Loan Parties further agree that the
Lenders shall have in respect of the Collateral all of the rights and remedies
of a secured party under the Virginia Uniform Commercial Code and under other
applicable Laws as well as those rights and provided in this Agreement and the
other Loan Documents. The Company covenants and agrees to execute and deliver or
to cause the other Loan Parties to execute and deliver such financing statements
and other instruments and filings as are necessary in the opinion of the
Administrative Agent to perfect such security interest. Notwithstanding the fact
that the proceeds of the Collateral constitute a part of the Collateral, the
Loan parties may not dispose of the Collateral, or any part thereof, other than
in the ordinary course of their business or as otherwise may be permitted by
this Agreement or other Security Agreements. The Company and the other Loan
Parties will supplement the Security Agreements at any time the Loan Parties
create any new Material Subsidiary, pledging to the Lenders their ownership
interests.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
     Section 3.1 Taxes.
     (a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the respective Borrowers 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 applicable
Borrower 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 Administrative Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Borrower shall make such deductions and (iii) such Borrower shall
timely pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
     (b) Payment of Other Taxes by the Borrowers. Without limiting the
provisions of subsection (a) above, each Borrower shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.
     (c) Indemnification by the Borrowers. Each Borrower shall indemnify the
Administrative Agent, each Lender and the L/C Issuer, within ten (10) 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 Administrative
Agent, such Lender or the L/C Issuer, 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 a Borrower by a Lender or
the L/C Issuer (with a copy to the

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Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest error.
     (d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Borrower to a Governmental Authority,
such Borrower shall deliver to the Administrative 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 Administrative 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
a Borrower 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 Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Company or the Administrative 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 Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Company or the Administrative Agent as will enable
the Company or the Administrative 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 a
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to Company and the Administrative 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 Administrative Agent, but only
if such Foreign Lender is legally entitled to do so), whichever of the following
is applicable:
          (i) duly completed copies of Internal Revenue Service 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 Internal Revenue Service 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 applicable Borrower 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 Internal Revenue
Service Form W-8BEN, or
          (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.
     Without limiting the obligations of the Lenders set forth above regarding
delivery of certain forms and documents to establish each Lender’s status for
U.S. withholding tax purposes,

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each Lender agrees promptly to deliver to the Administrative Agent or the
Company, as the Administrative Agent or the Company shall reasonably request, on
or prior to the Closing Date, and in a timely fashion thereafter, such other
documents and forms required by any relevant taxing authorities under the Laws
of any other jurisdiction, duly executed and completed by such Lender, as are
required under such Laws to confirm such Lender’s entitlement to any available
exemption from, or reduction of, applicable withholding taxes in respect of all
payments to be made to such Lender outside of the U.S. by the Borrowers pursuant
to this Agreement or otherwise to establish such Lender’s status for withholding
tax purposes in such other jurisdiction. Each Lender shall promptly (i) notify
the Administrative Agent of any change in circumstances which would modify or
render invalid any such claimed exemption or reduction, and (ii) take such steps
as shall not be materially disadvantageous to it, in the reasonable judgment of
such Lender, and as may be reasonably necessary (including the re-designation of
its Lending Office) to avoid any requirement of applicable Laws of any such
jurisdiction that any Borrower make any deduction or withholding for taxes from
amounts payable to such Lender. Additionally, each of the Borrowers shall
promptly deliver to the Administrative Agent or any Lender, as the
Administrative Agent or such Lender shall reasonably request, on or prior to the
Closing Date, and in a timely fashion thereafter, such documents and forms
required by any relevant taxing authorities under the Laws of any jurisdiction,
duly executed and completed by such Borrower, as are required to be furnished by
such Lender or the Administrative Agent under such Laws in connection with any
payment by the Administrative Agent or any Lender of Taxes or Other Taxes, or
otherwise in connection with the Loan Documents, with respect to such
jurisdiction.
     (f) Treatment of Certain Refunds. If the Administrative Agent, any Lender
or the L/C Issuer determines, in its sole discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by any
Borrower or with respect to which any Borrower has paid additional amounts
pursuant to this Section, it shall pay to such Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional amounts
paid, by such Borrower 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
Administrative Agent, such Lender or the L/C Issuer, 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 each Borrower, upon the
request of the Administrative Agent, such Lender or the L/C Issuer, agrees to
repay the amount paid over to such Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the L/C Issuer in the event the
Administrative Agent, such Lender or the L/C Issuer is required to repay such
refund to such Governmental Authority. This subsection shall not be construed to
require the Administrative Agent, any Lender or the L/C Issuer to make available
its tax returns (or any other information relating to its taxes that it deems
confidential) to any Borrower or any other Person.
     Section 3.2 Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurocurrency Rate Loans (whether denominated in Dollars or an Alternative
Currency), or to determine or charge interest rates based upon the Eurocurrency
Rate, or any Governmental Authority has imposed material restrictions on the
authority of such Lender to purchase or sell, or to take deposits of, Dollars or

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any Alternative Currency in the applicable interbank market, then, on notice
thereof by such Lender to the Company through the Administrative Agent, any
obligation of such Lender to make or continue Eurocurrency Rate Loans in the
affected currency or currencies or, in the case of Eurocurrency Rate Loans in
Dollars, to convert Base Rate Committed Loans to Eurocurrency Rate Loans, shall
be suspended until such Lender notifies the Administrative Agent and the Company
that the circumstances giving rise to such determination no longer exist. Upon
receipt of such notice, the Borrowers shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or, if applicable and such Loans are
denominated in Dollars, convert all such Eurocurrency Rate Loans of such Lender
to Base Rate Loans, either on the last day of the Interest Period therefor, if
such Lender may lawfully continue to maintain such Eurocurrency Rate Loans to
such day, or immediately, if such Lender may not lawfully continue to maintain
such Eurocurrency Rate Loans. Upon any such prepayment or conversion, the
Borrowers shall also pay accrued interest on the amount so prepaid or converted.
     Section 3.3 Inability to Determine Rates. If the Required Lenders determine
that for any reason in connection with any request for a Eurocurrency Rate Loan
or a conversion to or continuation thereof that (a) deposits (whether in Dollars
or an Alternative Currency) are not being offered to banks in the applicable
offshore interbank market for such currency for the applicable amount and
Interest Period of such Eurocurrency Rate Loan, (b) adequate and reasonable
means do not exist for determining the Eurocurrency Rate for any requested
Interest Period with respect to a proposed Eurocurrency Rate Loan (whether
denominated in Dollars or an Alternative Currency), or (c) the Eurocurrency Rate
for any requested Interest Period with respect to a proposed Eurocurrency Rate
Loan does not adequately and fairly reflect the cost to such Lenders of funding
such Eurocurrency Rate Loan, the Administrative Agent will promptly so notify
the Company and each Lender. Thereafter, the obligation of the Lenders to make
or maintain Eurocurrency Rate Loans in the affected currency or currencies shall
be suspended until the Administrative Agent (upon the instruction of the
Required Lenders) revokes such notice. Upon receipt of such notice, the Company
may revoke any pending request for a Borrowing of, conversion to or continuation
of Eurocurrency Rate Loans in the affected currency or currencies or, failing
that, will be deemed to have converted such request into a request for a
Committed Borrowing of Base Rate Loans in the amount specified therein.
     Section 3.4 Increased Costs; Reserves on Eurocurrency Rate Loans.
     (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 credit extended or participated in by,
any Lender (except (A) any reserve requirement contemplated by Section 3.4(e),
and (B) the requirements of the Bank of England and the Financial Services
Authority or the European Central Bank reflected in the Mandatory Cost, other
than as set forth below) or the L/C Issuer;
          (ii) subject any Lender or the L/C Issuer 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 Eurocurrency Rate Loan made by it, or
change the basis of taxation of payments to such Lender or the L/C Issuer in
respect thereof (except for Indemnified Taxes or Other Taxes covered by

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Section 3.1 and the imposition of, or any change in the rate of, any Excluded
Tax payable by such Lender or the L/C Issuer);
          (iii) the Mandatory Cost, as calculated hereunder, does not represent
the cost to any Lender of complying with the requirements of the Bank of England
and/or the Financial Services Authority or the European Central Bank in relation
to its making, funding or maintaining Eurocurrency Rate Loans; or
          (iv) impose on any Lender or the L/C Issuer or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurocurrency 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 or maintaining any Eurocurrency Rate Loan (or of maintaining
its obligation to make any such Loan), or to increase the cost to such Lender or
the L/C Issuer 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 L/C Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the L/C Issuer, the Company will
pay (or cause the applicable Designated Borrower to pay) to such Lender or the
L/C Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the L/C Issuer, as the case may be, for such
additional costs incurred or reduction suffered.
     (b) Capital Requirements. If any Lender or the L/C Issuer determines that
any Change in Law affecting such Lender or the L/C Issuer or any Lending Office
of such Lender or such Lender’s or the L/C Issuer’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 L/C Issuer’s capital or on the capital of such
Lender’s or the L/C Issuer’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 L/C Issuer, to a level below that which such Lender or the
L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s
holding company with respect to capital adequacy), then from time to time the
Company will pay (or cause the applicable Designated Borrower to pay) to such
Lender or the L/C Issuer, as the case may be, such additional amount or amounts
as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C
Issuer’s holding company for any such reduction suffered.
     (c) Certificates for Reimbursement. A certificate of a Lender or the L/C
Issuer setting forth the amount or amounts necessary to compensate such Lender
or the L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Company shall be
conclusive absent manifest error. The Company shall pay (or cause the applicable
Designated Borrower to pay) such Lender or the L/C Issuer, as the case may be,
the amount shown as due on any such certificate within ten (10) days after
receipt thereof.
     (d) Delay in Requests. Failure or delay on the part of any Lender or the
L/C Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a

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waiver of such Lender’s or the L/C Issuer’s right to demand such compensation,
provided that no Borrower shall be required to compensate a Lender or the L/C
Issuer pursuant to the foregoing provisions of this Section for any increased
costs incurred or reductions suffered more than six (6) months prior to the date
that such Lender or the L/C Issuer, as the case may be, notifies the Company of
the Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the L/C Issuer’s intention to claim compensation therefor (except
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the six (6) month period referred to above shall be extended
to include the period of retroactive effect thereof).
     (e) Additional Reserve Requirements. The Company shall pay (or cause the
applicable Designated Borrower to pay) to each Lender, (i) as long as such
Lender shall be required to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as “Eurocurrency liabilities”), additional interest on the unpaid
principal amount of each Eurocurrency Rate Loan equal to the actual costs of
such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), and (ii) as long
as such Lender shall be required to comply with any reserve ratio requirement or
analogous requirement of any central banking or financial regulatory authority
imposed in respect of the maintenance of the Commitments or the funding of the
Eurocurrency Rate Loans, such additional costs (expressed as a percentage per
annum and rounded upwards, if necessary, to the nearest five (5) decimal places)
equal to the actual costs allocated to such Commitment or Loan by such Lender
(as determined by such Lender in good faith, which determination shall be
conclusive), which in each case shall be due and payable on each date on which
interest is payable on such Loan, provided the Company shall have received at
least fifteen (15) days’ prior notice (with a copy to the Administrative Agent)
of such additional interest or costs from such Lender. If a Lender fails to give
notice fifteen (15) days prior to the relevant Interest Payment Date, such
additional interest or costs shall be due and payable fifteen (15) days from
receipt of such notice.
     Section 3.5 Compensation for Losses. Upon demand of any Lender (with a copy
to the Administrative Agent) from time to time, the Company shall promptly
compensate (or cause the applicable Designated Borrower to compensate) such
Lender for and hold such Lender harmless from any loss, cost or expense incurred
by it as a result of:
     (a) any continuation, conversion, payment or prepayment 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);
     (b) any failure by any Borrower (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 the applicable Designated Borrower;
     (c) any failure by any Borrower to make payment of any Loan or drawing
under any Letter of Credit (or interest due thereon) denominated in an
Alternative Currency on its scheduled due date or any payment thereof in a
different currency; or
     (d) any assignment of a Eurocurrency 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 11.13;

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including any loss of anticipated profits, any foreign exchange losses and any
loss or expense arising from the liquidation or reemployment of funds obtained
by it to maintain such Loan, from fees payable to terminate the deposits from
which such funds were obtained or from the performance of any foreign exchange
contract. The Company shall also pay (or cause the applicable Designated
Borrower to pay) any customary administrative fees charged by such Lender in
connection with the foregoing.
For purposes of calculating amounts payable by the Company (or the applicable
Designated Borrower) to the Lenders under this Section 3.5, each Lender shall be
deemed to have funded each Eurocurrency Rate Loan made by it at the Eurocurrency
Rate for such Loan by a matching deposit or other borrowing in the offshore
interbank market for such currency for a comparable amount and for a comparable
period, whether or not such Eurocurrency Rate Loan was in fact so funded.
     Section 3.6 Mitigation Obligations; Replacement of Lenders.
     (a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.4, or any Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.1, or if any Lender gives a notice pursuant to
Section 3.2, 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 3.1 or 3.4, as
the case may be, in the future, or eliminate the need for the notice pursuant to
Section 3.2, as applicable, and (ii) in each case, 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 (or to cause the applicable
Designated Borrower 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 3.4, or if any Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.1, the Company may replace such Lender in accordance with
Section 11.13 or may eliminate the Lender and reduce the Loan by the amount of
such Lender’s Commitment.
     Section 3.7 Survival. All of the Borrowers’ obligations under this
Article III shall survive termination of the Aggregate Commitments and repayment
of all other Obligations hereunder.
ARTICLE IV
GUARANTY
     Section 4.1 The Guaranty.
     Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Swap Contract, and the
Administrative Agent as hereinafter provided, as primary obligor and not as
surety, the prompt payment of the

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Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Guarantors hereby further
agree that if any of the Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension
or renewal.
     Notwithstanding any provision to the contrary contained herein or in any
other of the Loan Documents or Swap Contracts, the obligations of each Guarantor
under this Agreement and the other Loan Documents shall be limited to an
aggregate amount equal to the largest amount that would not render such
obligations subject to avoidance under the Debtor Relief Laws or any comparable
provisions of any applicable state law.
     Section 4.2 Obligations Unconditional.
     The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Loan Documents or Swap Contracts, or
any other agreement or instrument referred to therein, or any substitution,
release, impairment or exchange of any other guarantee of or security for any of
the Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 4.2 that the obligations of the Guarantors
hereunder shall be absolute and unconditional under any and all circumstances.
Each Guarantor agrees that such Guarantor shall have no right of subrogation,
indemnity, reimbursement or contribution against the Borrower or any other
Guarantor for amounts paid under this Article IV until such time as the
Obligations have been paid in full and the Commitment have expired or
terminated. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder,
which shall remain absolute and unconditional as described above:
          (i) at any time or from time to time, without notice to any Guarantor,
the time for any performance of or compliance with any of the Obligations shall
be extended, or such performance or compliance shall be waived;
          (ii) any of the acts mentioned in any of the provisions of any of the
Loan Documents, any Swap Contract between any Loan Party and any Lender, or any
Affiliate of a Lender, or any other agreement or instrument referred to in the
Loan Documents or such Swap Contracts shall be done or omitted;
          (iii) the maturity of any of the Obligations shall be accelerated, or
any of the Obligations shall be modified, supplemented or amended in any
respect, or any right under any of the Loan Documents, any Swap Contract between
any Loan Party and any Lender, or any

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    Affiliate of a Lender, or any other agreement or instrument referred to in
the Loan Documents or such Swap Contracts shall be waived or any other guarantee
of any of the Obligations or any security therefor shall be released, impaired
or exchanged in whole or in part or otherwise dealt with;

          (iv) any Lien granted to, or in favor of, the Administrative Agent or
any Lender or Lenders as security for any of the Obligations shall fail to
attach or be perfected; or
          (v) any of the Obligations shall be determined to be void or voidable
(including, without limitation, for the benefit of any creditor of any
Guarantor) or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of any Guarantor).
          (vi) With respect to its obligations hereunder, each Guarantor hereby
expressly waives diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that the Administrative Agent or any
Lender exhaust any right, power or remedy or proceed against any Person under
any of the Loan Documents, any Swap Contract between any Loan Party and any
Lender, or any Affiliate of a Lender, or any other agreement or instrument
referred to in the Loan Documents or such Swap Contracts, or against any other
Person under any other guarantee of, or security for, any of the Obligations.
     Section 4.3 Reinstatement.
     The obligations of the Guarantors under this Article IV shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Obligations is rescinded or must be
otherwise restored by any holder of any of the Obligations, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise, and each
Guarantor agrees that it will indemnify the Administrative Agent and each Lender
on demand for all reasonable costs and expenses (including, without limitation,
fees and expenses of counsel) incurred by the Administrative Agent or such
Lender in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.
     Section 4.4 Certain Additional Waivers.
     Each Guarantor hereby further agrees that such Guarantor shall have no
right of recourse to security for the Obligations, except through the exercise
of rights of subrogation pursuant to Section 4.2 and through the exercise of
rights of contribution pursuant to Section 4.6.
     Section 4.5 Remedies.
     The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Obligations may be declared to be forthwith due
and payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Obligations from
becoming

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automatically due and payable) as against any other Person and that, in the
event of such declaration (or the Obligations being deemed to have become
automatically due and payable), the Obligations (whether or not due and payable
by any other Person) shall forthwith become due and payable by the Guarantors
for purposes of Section 4.1. The Guarantors acknowledge and agree that their
obligations hereunder are secured in accordance with the terms of the Collateral
Documents and that the Lenders may exercise their remedies thereunder in
accordance with the terms thereof.
     Section 4.6 Rights of Contribution.
     The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor’s Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the Obligations until such time as the
Obligations have been paid in full and the Commitments have expired or
terminated, and none of the Guarantors shall exercise any right or remedy under
this Section 4.6 against any other Guarantor until such Obligations have been
paid in full and the Commitments have expired or terminated. For purposes of
this Section 4.6, (a) “Excess Payment” shall mean the amount paid by any
Guarantor in excess of its Ratable Share of any Guaranteed Obligations; (b)
“Ratable Share” shall mean, for any Guarantor in respect of any payment of
Obligations, the ratio (expressed as a percentage) as of the date of such
payment of Guaranteed Obligations of (i) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair salable value of all assets and other properties of all
of the Loan Parties exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Loan Parties hereunder) of the Loan
Parties; provided, however, that, for purposes of calculating the Ratable Shares
of the Guarantors in respect of any payment of Obligations, any Guarantor that
became a Guarantor subsequent to the date of any such payment shall be deemed to
have been a Guarantor on the date of such payment and the financial information
for such Guarantor as of the date such Guarantor became a Guarantor shall be
utilized for such Guarantor in connection with such payment; (c) “Contribution
Share” shall mean, for any Guarantor in respect of any Excess Payment made by
any other Guarantor, the ratio (expressed as a percentage) as of the date of
such Excess Payment of (i) the amount by which the aggregate present fair
salable value of all of its assets and properties exceeds the amount of all
debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (ii) the amount by which the aggregate present fair
salable value of all assets and other properties of the Loan Parties other than
the maker of such Excess Payment exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Loan Parties) of the Loan
Parties other than the maker of such Excess Payment; provided, however, that,
for purposes of calculating the Contribution Shares of the Guarantors in respect
of any Excess Payment, any Guarantor that became a Guarantor subsequent to the
date of any such Excess Payment shall be deemed to have been a Guarantor on the
date of such Excess Payment and the financial

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information for such Guarantor as of the date such Guarantor became a Guarantor
shall be utilized for such Guarantor in connection with such Excess Payment; and
(d) “Guaranteed Obligations” shall mean the Obligations guaranteed by the
Guarantors pursuant to this Article IV. This Section 4.6 shall not be deemed to
affect any right of subrogation, indemnity, reimbursement or contribution that
any Guarantor may have under Law against the Borrower in respect of any payment
of Guaranteed Obligations. Notwithstanding the foregoing, all rights of
contribution against any Guarantor shall terminate from and after such time, if
ever, that such Guarantor shall be relieved of its obligations in accordance
with Section 10.10.
     Section 4.7 Guarantee of Payment; Continuing Guarantee.
     The guarantee in this Article IV is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Obligations
whenever arising.
ARTICLE V
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
     Section 5.1 Conditions of Initial Credit Extension. The obligation of the
L/C Issuer and each Lender to make its initial Credit Extension hereunder is
subject to satisfaction of the following conditions precedent:
     (a) The Administrative Agent’s receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of governmental officials, a recent date before the Closing Date) and each in
form and substance satisfactory to the Administrative Agent, its legal counsel
and each of the Lenders:
          (i) executed counterparts of this Agreement, the Guaranty, the
Security Agreements and the other Loan Documents, sufficient in number for
distribution to the Administrative Agent, each Lender and the Company;
          (ii) a Note executed by the Borrowers in favor of each Lender
requesting a Note;
          (iii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party;
          (iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and that each of the Company and the Guarantors is validly existing, in good
standing and qualified to engage in business in each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification;

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          (v) a favorable opinion of Watt Tieder Hoffar & Fitzgerald counsel to
the Loan Parties, addressed to the Administrative Agent and each Lender as to
the matters set forth in Exhibit I and such other matters concerning the Loan
Parties and the Loan Documents as the Required Lenders may reasonably request;
          (vi) a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party and
the validity against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required;
          (vii) a certificate signed by a Responsible Officer of the Company
certifying (A) that the conditions specified in Section 5.2(a) and (b) have been
satisfied (B) that there has been no event or circumstance since the date of the
Audited Financial Statements that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect; and
(C) a calculation of the Consolidated Net Worth, the ratio of Total Funded
Indebtedness to Consolidated EBITDA and the ratio of Consolidated EBITDAR to
Fixed Charges as of the last day of the fiscal quarter of the Company most
recently ended prior to the Closing Date;
          (viii) evidence that all insurance required to be maintained pursuant
to the Loan Documents has been obtained and is in effect;
          (ix) evidence that the Existing Credit Agreement has been or
concurrently with the Closing Date is being terminated and all Liens securing
obligations under the Existing Credit Agreement have been or concurrently with
the Closing Date are being released;
          (x) all existing original stock certificates and four (4) stock powers
executed in blank for each share of stock pledged to the Lender’ as part of the
Collateral and copies of any shareholders agreements related to such stock;
          (xi) a list of all management agreements to which Sunrise Senior
Living Management, Inc., Sunrise Senior Living Services, Inc. or any other Loan
Party is a party as manager or operator of any Senior Living Facility and a
written certification by the Borrower stating which management agreements are
currently assigned to a lender or prohibit assignment to a lender by their terms
(the Borrower agrees that it will provide copies of any management agreements
requested by the Administrative Agent); and
          (xii) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender or
the Required Lenders reasonably may require.
     (b) Any fees required to be paid on or before the Closing Date shall have
been paid.
     (c) Unless waived by the Administrative Agent, the Company shall have paid
all fees, charges and disbursements of counsel to the Administrative Agent to
the extent invoiced prior to or on the Closing Date, plus such additional
amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be

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incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Company
and the Administrative Agent).
     (d) The Closing Date shall have occurred on or before November 30, 2005.
     (e) There shall not have occurred any material disruption of or material
adverse change in conditions in the financial banking or capital markets which
the Administrative Agent and BAS, in their sole discretion, deem material in
connection with syndication of the Credit Facility.
     (f) There shall not have occurred a Material Adverse Effect on the
business, assets, operations, condition (financial or otherwise) of the Borrower
or any other Loan Party or their respective Affiliates or Subsidiaries or in the
statements or information provided to the Administrative Agent regarding such
entities.
     (g) There shall not have occurred any action, suit, investigation or
proceeding, pending or threatened, in any court or before any arbitrator or
governmental authority that purports to affect the Borrower, the other Loan
Parties or their respective Affiliates or Subsidiaries in a materially adverse
manner or any transaction contemplated hereby, or that could reasonably be
expected to have a Material Adverse Effect on the Borrower, the other Loan
Parties or their respective affiliates or subsidiaries or any transaction
contemplated hereby or on the ability of the Borrower, the other Loan Parties or
their respective Affiliates or Subsidiaries to perform their obligations under
the documents to be executed in connection with the Credit Facility.
     Without limiting the generality of the provisions of Section 10.3, for
purposes of determining compliance with the conditions specified in this
Section 5.1, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
     Section 5.2 Conditions to all Credit Extensions. The obligation of each
Lender to honor any Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Committed Loans to the other Type, or a
continuation of Eurocurrency Rate Loans) is subject to the following conditions
precedent:
     (a) The representations and warranties of (i) the Borrowers contained in
Article VI and (ii) each Loan Party contained in each other Loan Document or in
any document furnished at any time under or in connection herewith or therewith,
shall be true and correct on and as of the date of such Credit Extension, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct as of such earlier
date, and except that for purposes of this Section 5.2, the representations and
warranties contained in subsections (a) and (b) of Section 6.5 shall be deemed
to refer to the most recent statements furnished pursuant to clauses (a) and
(b), respectively, of Section 7.1.
     (b) No Default shall exist, or would result from such proposed Credit
Extension or the application of the proceeds thereof.

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     (c) The Administrative Agent and, if applicable, the L/C Issuer or the
Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
     (d) If the applicable Borrower is a Designated Borrower, then the
conditions of Section 2.14 to the designation of such Borrower as a Designated
Borrower shall have been met to the satisfaction of the Administrative Agent.
     (e) In the case of a Credit Extension to be denominated in an Alternative
Currency, there shall not have occurred any change in national or international
financial, political or economic conditions or currency exchange rates or
exchange controls which in the reasonable opinion of the Administrative Agent,
the Required Lenders to include the Administrative Agent (in the case of any
Loans to be denominated in an Alternative Currency) or the L/C Issuer (in the
case of any Letter of Credit to be denominated in an Alternative Currency) would
make it impracticable for such Credit Extension to be denominated in the
relevant Alternative Currency.
     Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type or a
continuation of Eurocurrency Rate Loans) submitted by the Company shall be
deemed to be a representation and warranty that the conditions specified in
Section 5.2(a) and (b) have been satisfied on and as of the date of the
applicable Credit Extension.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
     Except as otherwise provided in Section 6.18, each Borrower represents and
warrants to the Administrative Agent and the Lenders that:
     Section 6.1 Existence, Qualification and Power; Compliance with Laws. Each
Loan Party and each Subsidiary thereof (a) is duly organized or formed, validly
existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses, authorizations, consents and approvals to
(i) own or lease its assets and carry on its business and (ii) execute, deliver
and perform its obligations under the Loan Documents to which it is a party,
(c) is duly qualified and is licensed and in good standing under the Laws of
each jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (d) is in
compliance with all Laws; except in each case referred to in clause (b)(i),
(c) or (d), to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect.
     Section 6.2 Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is
a party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order,

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injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law. Each
Loan Party and each Subsidiary thereof is in compliance with all Contractual
Obligations referred to in clause (b)(i), except to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect.
     Section 6.3 Governmental Authorization; Other Consents. No approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.
     Section 6.4 Binding Effect. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.
Section 6.5 Financial Statements; No Material Adverse Effect; No Internal
Control Event.
     (a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Company and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Company and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.
     (b) The unaudited consolidated financial statements of the Company and its
Subsidiaries dated June 30, 2005 and the related consolidated statements of
income or operations, Shareholders’ Equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of the Company
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments. Schedule 6.5 sets
forth all material indebtedness and other liabilities, direct or contingent, of
the Company and its consolidated Subsidiaries as of the date of such financial
statements, including liabilities for taxes, material commitments and
Indebtedness.
     (c) Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.
     Section 6.6 Litigation. Except as specifically disclosed in Schedule 6.6,
there are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of the Company after due and diligent investigation, threatened or
contemplated, at law, in equity, in arbitration or

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before any Governmental Authority, by or against the Company or any of its
Subsidiaries or against any of their properties or revenues that (a) purport to
affect or pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby, or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.
     Section 6.7 No Default. Neither the Company nor any Subsidiary is in
default under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
     Section 6.8 Ownership of Property; Liens. Each of the Company and each
Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of the Company and its Subsidiaries is subject to
no Liens, other than Liens permitted by Section 8.1.
     Section 6.9 Environmental Compliance. The Company and its Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Company has reasonably concluded
that except as specifically disclosed in Schedule 6.9, such Environmental Laws
and claims could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
     Section 6.10 Insurance. The properties of the Company and its Subsidiaries
are insured with insurance companies having an A.M. Best Rating of at least A-
and not Affiliates of the Company, in such amounts with such deductibles and
covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Company or the
applicable Subsidiary operates. Without limiting the generality of the
foregoing, such insurance shall include coverage for acts of terrorism.
     Section 6.11 Taxes. The Company and its Subsidiaries have filed all
Federal, state and other material tax returns and reports required to be filed,
and have paid all Federal, state and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings diligently conducted and for
which adequate reserves have been provided in accordance with GAAP. There is no
proposed tax assessment against the Company or any Subsidiary that would, if
made, have a Material Adverse Effect.
Section 6.12 ERISA Compliance.
     (a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under

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Section 401(a) of the Code has received a favorable determination letter from
the IRS or an application for such a letter is currently being processed by the
IRS with respect thereto and, to the best knowledge of the Company, nothing has
occurred which would prevent, or cause the loss of, such qualification. The
Company and each ERISA Affiliate have made all required contributions to each
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.
     (b) There are no pending or, to the best knowledge of the Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
     (c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Company nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Company nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.
     Section 6.13 Subsidiaries; Equity Interests. As of the Closing Date, the
Borrower has no Subsidiaries other than those specifically disclosed in Part
(a) of Schedule 6.13, has no equity investments in any other corporation or
entity other than those specifically disclosed in Part (b) of Schedule 6.13. As
of the Closing Date, the existing Guarantors are the only Material Subsidiaries
of the Loan Parties. Any Subsidiary which becomes a Material Subsidiary during
the term of this Agreement will be added as a Guarantor. The number of shares of
stock issued to the owner of each Material Subsidiary is fully and accurately
listed on Schedule 6.13.
Section 6.14 Margin Regulations; Investment Company Act; Public Utility Holding
Company Act.
     (a) No Borrower is engaged or will engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock.
     (b) None of the Company, any Person Controlling the Company, or any
Subsidiary (i) is a “holding company,” or a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company,” within the meaning of the Public Utility Holding Company
Act of 1935, or (ii) is or is required to be registered as an “investment
company” under the Investment Company Act of 1940.

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     Section 6.15 Disclosure. The Company has disclosed to the Administrative
Agent and the Lenders all agreements, instruments and corporate or other
restrictions to which it or any of its Subsidiaries is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. No report, financial statement,
certificate or other information furnished (whether in writing or orally) by or
on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of this
Agreement or delivered hereunder or under any other Loan Document (in each case,
as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Company represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
     Section 6.16 Compliance with Laws. Each of the Company and each Subsidiary
is in compliance in all material respects with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
     Section 6.17 Intellectual Property; Licenses, Etc. The Company and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, “IP Rights”) that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. To the best knowledge of the
Company, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Company or any Subsidiary infringes upon any rights held by any
other Person. Except as specifically disclosed in Schedule 6.17, no claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of the Company, threatened, which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
     Section 6.18 Representations as to Foreign Obligors. Each of the Company
and each Foreign Obligor represents and warrants to the Administrative Agent and
the Lenders that:
     (a) Such Foreign Obligor is subject to civil and commercial Laws with
respect to its obligations under this Agreement and the other Loan Documents to
which it is a party (collectively as to such Foreign Obligor, the “Applicable
Foreign Obligor Documents”), and the execution, delivery and performance by such
Foreign Obligor of the Applicable Foreign Obligor Documents constitute and will
constitute private and commercial acts and not public or governmental acts.
Neither such Foreign Obligor nor any of its property has any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) under the laws of the jurisdiction in which such Foreign Obligor
is organized and existing in respect of its obligations under the Applicable
Foreign Obligor Documents.

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     (b) The Applicable Foreign Obligor Documents are in proper legal form under
the Laws of the jurisdiction in which such Foreign Obligor is organized and
existing for the enforcement thereof against such Foreign Obligor under the Laws
of such jurisdiction, and to ensure the legality, validity, enforceability,
priority or admissibility in evidence of the Applicable Foreign Obligor
Documents. It is not necessary to ensure the legality, validity, enforceability,
priority or admissibility in evidence of the Applicable Foreign Obligor
Documents that the Applicable Foreign Obligor Documents be filed, registered or
recorded with, or executed or notarized before, any court or other authority in
the jurisdiction in which such Foreign Obligor is organized and existing or that
any registration charge or stamp or similar tax be paid on or in respect of the
Applicable Foreign Obligor Documents or any other document, except for (i) any
such filing, registration, recording, execution or notarization as has been made
or is not required to be made until the Applicable Foreign Obligor Document or
any other document is sought to be enforced and (ii) any charge or tax as has
been timely paid.
     (c) There is no tax, levy, impost, duty, fee, assessment or other
governmental charge, or any deduction or withholding, imposed by any
Governmental Authority in or of the jurisdiction in which such Foreign Obligor
is organized and existing either (i) on or by virtue of the execution or
delivery of the Applicable Foreign Obligor Documents or (ii) on any payment to
be made by such Foreign Obligor pursuant to the Applicable Foreign Obligor
Documents, except as has been disclosed to the Administrative Agent.
     (d) The execution, delivery and performance of the Applicable Foreign
Obligor Documents executed by such Foreign Obligor are, under applicable foreign
exchange control regulations of the jurisdiction in which such Foreign Obligor
is organized and existing, not subject to any notification or authorization
except (i) such as have been made or obtained or (ii) such as cannot be made or
obtained until a later date (provided that any notification or authorization
described in clause (ii) shall be made or obtained as soon as is reasonably
practicable).
     Section 6.19 Projected Financial Statements. The Borrower has furnished to
the Lender a projected combined balance sheet, income and cash flow statement of
the Company and its Subsidiaries, together with covenant compliance projections
for the period through 2008 (the “Financial Projections”). The Financial
Projections are correct and complete and represent the Company’s best estimate
of the consolidated financial condition of the Company and its Subsidiaries for
the period covered thereby. The Financial Projections are based upon available
information and assumptions that management of the Company believes are
reasonable.
     Section 6.20 Employee Relations. Except as disclosed on Schedule 6.20
attached hereto and made a part hereof, (a) neither the Borrower nor any
Subsidiary thereof nor any of the Borrower’s or Subsidiary’s employees is
subject to any collective bargaining agreement, (b) no petition for
certification or union election is pending with respect to the employees of the
Borrower or any Subsidiary and no union or collective bargaining unit has sought
such certification or recognition with respect to the employees of the Borrower,
(c) there are no strikes, slowdowns, work stoppages or controversies pending or,
to the best knowledge of the Borrower after due inquiry, threatened between the
Borrower and its employees, and (d) neither the Borrower nor any of its
Subsidiaries is subject to an employment contract, severance agreement,
commission contract, consulting agreement or bonus agreement. Hours worked and

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payments made to the employees of the Borrower have not been in violation of the
Fair Labor Standards Act or any other applicable law dealing with such matters.
All payments due from the Borrower or for which any claim may be made against
the Borrower, on account of wages and employee and retiree health and welfare
insurance and other benefits have been paid or accrued as a liability on its
books. The consummation of the transactions contemplated by this Agreement or
any of the other Financing Documents will not give rise to a right of
termination or right of re-negotiation on the part of any union under any
collective bargaining agreement to which the Borrower is a party or by which it
is bound.
     Section 6.21 Management Agreements. All of the existing agreements for
management or operation of a Senior Living Facility by any Loan Party or any of
their Subsidiaries, are listed on a list provided to the Administrative Agent.
Except as disclosed to the Administrative Agent, the negative pledge for the
benefit to the Administrative Agent on behalf of the Lenders with respect to
such management agreements as set forth in Section 8.1 hereof is not prohibited
by any financing arrangements or by the terms of the management agreements
themselves.
ARTICLE VII
AFFIRMATIVE COVENANTS
     So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Company shall, and shall (except in the
case of the covenants set forth in Sections 6.1, 6.2, and 6.3) cause each
Subsidiary to:
     Section 7.1 Financial Statements. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
     (a) within ten (10) Business Days after the same are available or filed
with the SEC, but in any event within ninety-one (91) days after the end of each
fiscal year of the Company a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, audited and accompanied by (i) a report and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Administrative Agent, which report and opinion shall be
prepared in accordance with generally accepted auditing standards and applicable
Securities Laws and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of
such audit and (ii) an attestation report of such Registered Public Accounting
Firm as to the Borrower’s internal controls pursuant to Section 404 of
Sarbanes-Oxley expressing a conclusion to which the Required Lenders do not
object; and
     (b) within ten (10) Business Days after the same are available or filed
with the SEC, but in any event within forty-six (46) days after the end of each
of the first three (3) fiscal quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Subsidiaries as at the end of
such fiscal quarter, and the related consolidated statements of

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income or operations, shareholders’ equity and cash flows for such fiscal
quarter and for the portion of the Company’s fiscal year then ended, setting
forth in each case in comparative form the figures for the corresponding fiscal
quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail, certified by a Responsible
Officer of the Company as fairly presenting the financial condition, results of
operations, shareholders’ equity and cash flows of the Company and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes.
As to any information contained in materials furnished pursuant to
Section 7.2(b), the Company shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Company to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.
     (c) Within forty-five (45) days after the end of each fiscal year,
financial projections for the new fiscal year by fiscal quarters.
     Section 7.2 Certificates; Other Information. Deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
     (a) concurrently with the delivery of the financial statements referred to
in Section 7.1(a) and (b) a duly completed Compliance Certificate signed by a
Responsible Officer of the Company;
     (b) promptly after any request by the Administrative Agent or any Lender,
copies of any detailed audit reports, management letters or recommendations
submitted to the board of directors (or the audit committee of the board of
directors) of the Company by independent accountants in connection with the
accounts or books of the Company or any Subsidiary, or any audit of any of them;
     (c) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Company, and copies of all annual, regular, periodic and
special reports and registration statements which the Company may file or be
required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;
     (d) promptly, and in any event within ten (10) Business Days after receipt
thereof by any Loan Party or any Subsidiary thereof, copies of each notice or
other correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of any Loan Party or any Subsidiary thereof; and
     (e) promptly, such additional information regarding the business, financial
or corporate affairs of the Company or any Subsidiary, or compliance with the
terms of the Loan Documents, as the Administrative Agent or any Lender may from
time to time reasonably request.

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     Documents required to be delivered pursuant to Section 7.1(a) or Section
7.1(b) or Section 7.2(d) (to the extent any such documents are included in
materials otherwise filed with the SEC) 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 at the website address listed on Schedule 11.2; 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 Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided that: (i) the Company shall deliver paper
copies of such documents to the Administrative 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 Administrative Agent or such Lender and
(ii) the Company shall notify the Administrative Agent and each Lender (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. Notwithstanding anything contained herein, in every
instance the Company shall be required to provide paper copies of the Compliance
Certificates required by (a)(a) to the Administrative Agent. Except for such
Compliance Certificates, the Administrative 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.
     Each Borrower hereby acknowledges that (a) the Administrative Agent and/or
the Arranger will make available to the Lenders and the L/C Issuer materials
and/or information provided by or on behalf of such Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials on
IntraLinks or another similar electronic system (the “Platform”) and (b) certain
of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to
receive material non-public information with respect to any Borrower or its
securities) (each, a “Public Lender”). Each Borrower hereby agrees that so long
as such Borrower is the issuer of any outstanding debt or equity securities that
are registered or issued pursuant to a private offering or is actively
contemplating issuing any such securities (w) all Borrower Materials that are to
be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative
Agent, the Arranger, the L/C Issuer and the Lenders to treat such Borrower
Materials as not containing any material non-public information with respect to
the Borrowers or their respective securities for purposes of United States
Federal and state securities laws (provided, however, that to the extent such
Borrower Materials constitute Information, they shall be treated as set forth in
Section 11.7); (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Investor;”
and (z) the Administrative Agent and the Arranger shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor.”
     Section 7.3 Notices. Promptly notify the Administrative Agent who will
thereafter forward a copy of such notice to each Lender:

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     (a) of the occurrence of any Default;
     (b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of the Company or any Subsidiary;
(ii) any dispute, litigation, investigation, proceeding or suspension between
the Company or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting the Company or any Subsidiary, including pursuant to any applicable
Environmental Laws;
     (c) of the occurrence of any ERISA Event;
     (d) of any material change in accounting policies or financial reporting
practices by the Company or any Subsidiary;
     (e) of the occurrence of any Internal Control Event;
     (f) of any judicial, administrative or arbitral proceeding pending against
any of the Borrowers or any judicial or administrative proceeding known by the
Borrowers to have been threatened against any of them in a written communication
which threatened proceeding, if adversely decided, could cause a Material
Adverse Effect in the Loan Parties taken in the aggregate; and
     (g) of the revocation, suspension, probation, restriction, limitation or
refusal to renew, or any administrative procedure then in process for the
revocation, suspension, probation, restriction, limitation, or refusal to renew,
of any License, or the decertification, revocation, suspension, probation,
restriction, limitation, or refusal to renew, or the pending, decertification,
revocation, suspension, probation, restriction, limitation, or refusal to renew
or any administrative procedure then in process for any participation or
eligibility in any third party payor program in which the Borrower or any of its
subsidiaries elects to participate, including, without limitation, Medicare,
Medicaid or other private insurer programs or any accreditation of the Borrower
or any of its subsidiaries, or the issuance or pending issuance of any License
for a period of less than twelve (12) months, as a consequence of sanctions
imposed by any Governmental Authority, or the assessment or pending assessment,
of any civil or criminal penalties by any Government Authority, any third party
payor or any accreditation organization or Person, which in any such case would
cause a Materially Adverse Effect on the financial condition or operations of
the Borrower or any of its Subsidiaries or an Affiliate as determined by the
Administrative Agent, in its sole but reasonable discretion.
     Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of the Company setting forth details of the occurrence
referred to therein and stating what action the Company has taken and proposes
to take with respect thereto. Each notice pursuant to Section 7.3(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
     Section 7.4 Payment of Obligations. Pay and discharge as the same shall
become due and payable, all its obligations and liabilities, including (a) all
tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being

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contested in good faith by appropriate proceedings diligently conducted and
adequate reserves in accordance with GAAP are being maintained by the Company or
such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a
Lien upon its property; and (c) all Indebtedness, as and when due and payable,
but subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness.
     Section 7.5 Preservation of Existence, Etc. (a) Preserve, renew and
maintain in full force and effect its legal existence and good standing under
the Laws of the jurisdiction of its organization except in a transaction
permitted by Section 7.4 or 7.5; (b) take all reasonable action to maintain all
rights, privileges, permits, licenses and franchises necessary or desirable in
the normal conduct of its business, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and
(c) preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
     Section 7.6 Maintenance of Properties. (a) Maintain, preserve and protect
all of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
(b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) use the standard of care typical in the
industry in the operation and maintenance of its facilities.
     Section 7.7 Maintenance of Insurance. Maintain with companies having an
A.M. Best Rating of at least A- which are not Affiliates of the Borrower,
insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons and providing that the insurer will
endeavor to give not less than thirty (30) days’ prior notice to the
Administrative Agent of termination, lapse or cancellation of such insurance.
Without limiting the generality of the foregoing, such insurance shall include
coverage for acts of terrorism.
     Section 7.8 Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect on the Loan Parties taken in the aggregate.
     Section 7.9 Books and Records. (a) Maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company or such Subsidiary, as the case
may be; and (b) maintain such books of record and account in material conformity
with all applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Company or such Subsidiary, as the case may be.
     Section 7.10 Inspection Rights. Permit representatives and independent
contractors of the Administrative Agent to visit and inspect any of its
properties or any Senior Living Facility

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managed by a Loan Party accompanied by a representative of the Borrower or other
Loan Party or the owner of the Senior Living Facility, to examine its corporate,
financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss its affairs, finances and accounts with its directors, officers,
and independent public accountants, all at the expense of the Borrower and all
at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower sufficient,
in the case of a visit to a Senior Living Facility to coordinate such visit with
a representative (which coordination will not be unreasonably delayed or
denied); provided, however, that when an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.
     Section 7.11 Use of Proceeds. Use the proceeds of the Credit Extensions for
general corporate purposes not in contravention of any Law or of any Loan
Document.
     Section 7.12 Conduct of Business and Compliance with Laws; Licensure. Do or
cause to be done all things necessary to obtain, enter into, preserve and to
keep in full force and effect its Licenses, Participation Agreements, and
operating agreements and management contracts which are necessary for the
operation of the Senior Living Facilities as contemplated by the Loan Parties,
engage in and continue to engage substantially only in the business of owning
and operating Senior Living Facilities and related services in compliance with
all applicable laws of the state in which the applicable Senior Living Facility
is located or any other Governmental Authority having jurisdiction over such
Senior Living Facility, and comply with all applicable Laws, including, without
limitation, regulations issued under the Omnibus Budget Reconciliation Act of
1987 (OBRA’87) (Pub.L.No. 100-203), as amended, and observe the valid
requirements of Governmental Authorities, and perform the terms of all
Participation Agreements to which it is a party, the noncompliance with or the
nonobservance of which might materially interfere with the performance of its
Obligations or the proper or prudent conduct of its business or the applicable
Property. In addition, the Borrowers covenant and agree that it will:
     (a) obtain and maintain in full force and effect all Licenses necessary to
the acquisition and/or ownership and/or operation of the Senior Living
Facilities including, without limitation, Licenses and other approvals related
to the storage, dispensation, use, prescription and disposal of drugs,
medications and other “controlled substances” and, to the extent offered by the
Borrower or its subsidiaries, the maintenance of cafeteria and other food and
beverage facilities or services, the failure to so obtain and maintain would
result in a Material Adverse Effect on the Borrower, its Subsidiaries or
Affiliates, in the aggregate;
     (b) administer, maintain and operate (or cause to be administered,
maintained and operated) each Senior Living Facility as a revenue-producing
facility;
     (c) to the extent the Borrower or its Subsidiaries participate in any such
programs, maintain and operate each Senior Living Facility to meet the standards
and requirements and to provide healthcare of such quality and in such manner as
would enable the Borrower or its Subsidiaries to participate in, and provide
services in connection with, recognized medical and healthcare insurance
programs;

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     (d) obtain, maintain and comply with all conditions for the continuance of,
all Licenses, including without limitation, Licenses which may at any time be
required by the state in which the applicable Senior Living Facility is located
or other appropriate governmental entity, necessary or desirable for the
operation of each Senior Living Facility as contemplated by the Loan Parties,
the failure to so obtain or maintain which would result in a Material Adverse
Effect on the Borrower, its Subsidiaries or Affiliates, in the aggregate; and
     (e) to the extent the Borrower or its Subsidiaries presently participate or
in the future will participate in such programs, obtain, maintain and comply
with all conditions for the continuance of certification from each applicable
Governmental Authority that the Borrower or its Subsidiaries meet all conditions
for participation in the Medicare and Medicaid programs.
     Section 7.13 Additional Guarantors. Notify the Administrative Agent at the
time that any Person becomes a Material Subsidiary, and promptly thereafter (and
in any event within 30 days), cause such Person to (a) become a Guarantor by
executing and delivering to the Administrative Agent a counterpart of the
Guaranty or such other document as the Administrative Agent shall deem
appropriate for such purpose, and (b) deliver to the Administrative Agent
documents of the types referred to in clauses (iii) and (iv) of Section 5.1(a)
and favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to in clause (a)), all in form, content and scope
reasonably satisfactory to the Administrative Agent. The foregoing
notwithstanding, if the Administrative Agent confirms in its sole discretion
that a Material Subsidiary is prohibited from guarantying the Credit Facility
pursuant to the terms of other financing arrangements, no such Guaranty shall be
required by the Lenders.
     Section 7.14 Financial Covenants. Each of the following financial covenants
will be measured as of the periods ending on the dates indicated below:
     (a) Consolidated Net Worth. The Borrower will at all times maintain, tested
as of the end of each of the Borrower’s fiscal quarters beginning with the
quarter ending September 30, 2005, a Consolidated Net Worth of not less than the
sum of $450,000,000 (which is eighty percent (80%) of Consolidated GAAP
shareholder equity as of the date hereof) plus seventy-five percent (75%) of the
net proceeds to the Borrower of any equity capital transaction received during
any subsequent quarter (except for all exercises of employee stock options,
issuance or sale of restricted stock and operation of the employee stock
purchase program), less $110,000,000 associated with stock repurchases.
     (b) Leverage Ratio. The Borrower will maintain, tested as of the end of
each of the Borrower’s fiscal quarters beginning with the quarter ending
September 30, 2005, a ratio of Total Funded Indebtedness to Consolidated EBITDA
so that it is not more than 4.25 to 1.0.
     (c) Fixed Charge Coverage Ratio. The Borrower will maintain, tested as of
the end of each of the Borrower’s fiscal quarters beginning with the quarter
ending September 30, 2005, a ratio of Consolidated EBITDAR to Consolidated Fixed
Charges of not less than 1.75 to 1.0.
ARTICLE VIII
NEGATIVE COVENANTS

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     So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Company shall not, nor shall it permit any
Subsidiary to, directly or indirectly:
     Section 8.1 Liens. Create, incur, assume or suffer to exist any Lien upon
any asset of the Loan Parties, any Subsidiary, Affiliate or any entity which is
the subject of a Development Joint Venture Investment except for the following
permitted Liens:
     (a) Liens pursuant to any Loan Document;
     (b) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
     (c) Liens securing judgments for the payment of money not constituting an
Event of Default under Section 9.1(h) or securing appeal or other surety bonds
related to such judgments;
     (d) Liens on real property and improvements constituting Senior Living
Facilities arising from the financing of such Senior Living Facility or
Facilities in the ordinary course of business including but not limited to
financing of construction or development which do not result in a default under
any financial covenant of the Borrower;
     (e) Assignment of an agreement for the management or operation of a Senior
Living Facility by any Loan Party, including Sunrise Senior Living Management,
Inc. or Sunrise Senior Living Services, Inc. in connection with the financing of
such Senior Living Facility; and
     (f) Liens listed on Schedule 7.1 attached hereto.
Section 8.2 Certain Investments.
     (a) Purchase, acquire hold or otherwise make Investments in the following
in excess of 40% of the Company’s consolidated total assets as determined under
GAAP:
          (i) Investments held by the Borrower or any Subsidiary consisting of
unimproved land held on its balance sheet for a period in excess of eighteen
(18) months;
          (ii) Investments held by the Borrower or any Subsidiary consisting of
Senior Living Facilities held on its balance sheet that are under construction
or for which a certificate of occupancy has not been issued or operations have
not commenced for a period in excess of eighteen (18) months;
          (iii) Development Joint Venture Investments;
     (b) The investments described in Section 8.2(a)(i) may not exceed ten
percent (10%) of the Borrower’s consolidated total assets as determined under
GAAP.
     (c) Purchase, acquire or hold Investments in marketable securities other
than marketable securities rated A or better (or equivalent) with maturities of
one (1) year or less.

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     Section 8.3 Indebtedness. The following restrictions on indebtedness shall
apply:
     (a) Excluding REIT Mezz Debt (as hereinafter defined) unsecured
indebtedness may not exceed $25,000,000; and
     (b) REIT Mezz Debt may not exceed $65,000,000. “REIT Mezz Debt” means
indebtedness incurred to the Sunrise REIT covering a portion of the development
costs of projects to be built by the Company or its Subsidiary expressly
subordinate to the Loan and subject to a call option in favor of the Company
upon issuance of Certificate of Occupancy for the applicable project.
     Section 8.4 Fundamental Changes. Merge, dissolve, liquidate, consolidate
with or into another Person, or Dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default exists or would result therefrom:
     (a) any Subsidiary may merge with (i) the Borrower, provided that the
Borrower shall be the continuing or surviving Person, or (ii) any one or more
other Subsidiaries, provided that when any Guarantor is merging with another
Subsidiary, the Guarantor shall be the continuing or surviving Person; and
     (b) any Subsidiary may Dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise) to the Borrower or to another
Subsidiary; provided that if the transferor in such a transaction is a
Guarantor, then the transferee must either be the Borrower or a Guarantor.
     Section 8.5 Dispositions. Make any Disposition or enter into any agreement
to make any Disposition, except:
     (a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
     (b) Dispositions of inventory in the ordinary course of business;
     (c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
     (d) Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary; provided that if the transferor of such property is a
Guarantor, the transferee thereof must either be the Borrower or a Guarantor;
     (e) Dispositions permitted by Section 8.4;
     (f) non-exclusive licenses of IP Rights in the ordinary course of business
and substantially consistent with past practice for terms not exceeding five
years;

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     (g) Dispositions by the Borrower and its Subsidiaries not otherwise
permitted under this Section 8.5; provided that (i) at the time of such
Disposition, no Default shall exist or would result from such Disposition and
(ii) the aggregate book value of all property Disposed of in reliance on this
clause (g) in any fiscal year shall not exceed $5,000,000; and
     (h) Dispositions of real property to a Development Joint Venture;
     provided, however, that any Disposition pursuant to clauses (a) through (h)
shall be for fair market value, except that the Company may cause a Subsidiary
to contribute the real property to a Development Joint Venture at cost.
     Section 8.6 Restricted Payments.
     Declare or make, directly or indirectly, any Restricted Payment, or incur
any obligation (contingent or otherwise) to do so, except that:
     (a) each Subsidiary may make Restricted Payments to the Borrower and to
wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of capital stock or other Equity Interests of such Subsidiary on a
pro rata basis based on their relative ownership interests);
     (b) the Borrower and each Subsidiary may declare and make dividend payments
or other distributions payable solely in the common stock or other common Equity
Interests of such Person;
     (c) the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire shares of its common stock or other common Equity Interests or warrants
or options to acquire any such shares with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common
Equity Interests;
     (d) the Borrower may declare or pay cash dividends to its stockholders
provided such dividends and redemptions do not exceed $50,000,000 in the
aggregate in any twelve-month period and purchase, redeem or otherwise acquire
shares of its capital stock or warrants, rights or options to acquire any such
shares for cash and provided that immediately after giving effect to such
proposed action, no Default would exist and provided that the Borrower may
redeem, retire, issue a tender offer for or otherwise acquire any or all of its
Convertible Debt so long as immediately after giving effect to such proposed
action, no Default would exist.
     Section 8.7 Change in Nature of Business. Engage in any material line of
business substantially different from those lines of business conducted by the
Company and its Subsidiaries on the date hereof or any business substantially
related or incidental thereto.
     Section 8.8 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

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apply to transactions between or among the Company and any of its wholly-owned
Subsidiaries or between and among any wholly-owned Subsidiaries.
     Section 8.9 Burdensome Agreements. Enter into any Contractual Obligation
(other than this Agreement or any other Loan Document) that (a) limits the
ability (i) of any Subsidiary to make Restricted Payments to the Company, any
Designated Borrower or any Guarantor or to otherwise transfer property to the
Company, any Designated Borrower or any Guarantor, (ii) of any Subsidiary to
Guarantee the Indebtedness of the Company or (iii) of the Company or any
Subsidiary to create, incur, assume or suffer to exist Liens on property of such
Person; provided, however, that this clause (iii) shall not prohibit any
negative pledge incurred or provided in favor of any holder of Indebtedness
permitted under Section 8.3 solely to the extent any such negative pledge
relates to the property financed by or the subject of such Indebtedness; or
(b) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person.
     Section 8.10 Use of Proceeds. Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally
incurred for such purpose.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
     Section 9.1 Events of Default. Any of the following shall constitute an
Event of Default:
     (a) Non-Payment. Any Borrower or any other Loan Party fails to pay (i) when
and as required to be paid herein, and in the currency required hereunder, any
amount of principal of any Loan or any L/C Obligation, or (ii) within three
(3) days after written notice that the same has become due, any interest on any
Loan or on any L/C Obligation, or any Unused Fees, L/C Fee or other fee due
hereunder, or (iii) within five (5) days after written notice that the same has
become due, any other amount payable hereunder or under any other Loan Document;
or
     (b) [INTENTIONALLY DELETED]
     (c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for thirty (30) days after written notice thereof; or
     (d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Company or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading when made or deemed made; or
     (e) Cross-Default. (i) The Company or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or

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otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness
hereunder and Indebtedness under Swap Contracts) having an aggregate principal
amount (including undrawn committed or available amounts and including amounts
owing to all creditors under any combined or syndicated credit arrangement) of
more than the Threshold Amount, or (B) fails to observe or perform any other
agreement or condition relating to any such Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, the effect of which default or other event
is to cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or
(ii) there occurs under any Swap Contract an Early Termination Date (as defined
in such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which the Company or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (B) any Termination Event (as so defined)
under such Swap Contract as to which the Company or any Subsidiary is an
Affected Party (as so defined) and, in either event, the Swap Termination Value
owed by the Company or such Subsidiary as a result thereof is greater than the
Threshold Amount; or
     (f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for sixty (60) calendar days; or any proceeding under any Debtor
Relief Law relating to any such Person or to all or any material part of its
property is instituted without the consent of such Person and continues
undismissed or unstayed for sixty (60) calendar days, or an order for relief is
entered in any such proceeding; or
     (g) Inability to Pay Debts; Attachment. (i) The Company or any Subsidiary
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution
or similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
forty-five (45) days after its issue or levy; or
     (h) Judgments. There is entered against the Company or any Subsidiary (i) a
final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of 10 consecutive days
during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect; or

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     (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Company or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
     (j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Loan Party or any other Person contests in any manner
the validity or enforceability of any Loan Document; or any Loan Party denies
that it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document; or
     (k) Change of Control. There occurs any Change of Control with respect to
the Company.
     (l) Licenses. There occurs any (a) involuntary, imposed or required
revocation, suspension, probation, restriction, limitation or refusal to renew,
or the pending revocation, suspension, probation, restriction, limitation, of,
or refusal to renew, of any license required for the operation; other than in
the ordinary course of business or to the extent that the Loan Parties deem such
action to be, in the exercise of prudent business judgment, in the best interest
of if any of the occurrences described in (a), (b) or (c) would have a Material
Adverse Effect on the business or financial condition of any of the Loan
Parties, any (b) decertification, revocation, suspension, probation,
restriction, limitation, or refusal to renew, or the pending decertification,
revocation, suspension, probation, restriction, limitation, or refusal to renew
any participation or eligibility in any third party payor program in which the
Loan Parties elect to participate, including, without limitation, the Medicaid
or Medicare programs; or (c) any issuance or pending issuance of any such
license for a period of less than twelve (12) months as a consequence of any
sanctions imposed by any Governmental Authority; or the assessment or pending
assessment, of any civil or criminal penalties by any Governmental Authority,
any third party payor or any accreditation organization or person if any such
occurrence will result in a Material Adverse Effect on the Borrower, its
Subsidiaries or Affiliates, in the aggregate. Without limiting the generality of
the foregoing, the failure of the Borrowers to obtain an operating license for
any Facility within sixty (60) days of the issuance of the certificate of
occupancy for such Senior Living Facility if such failure would have a Material
Adverse Effect on the business or financial condition of any of the Loan
Parties.
     Section 9.2 Remedies Upon Event of Default. If any Event of Default occurs
and is continuing, the Administrative Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions:
     (a) declare the commitment of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

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     (b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrowers;
     (c) require that the Company Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and
     (d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Company to Cash Collateralize the L/C Obligations as aforesaid
shall automatically become effective, in each case without further act of the
Administrative Agent or any Lender.
     Section 9.3 Application of Funds. After the exercise of remedies provided
for in Section 9.2 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 9.2), any amounts received
on account of the Obligations shall be applied by the Administrative Agent in
the following order:
     First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;
     Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of
Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges
and disbursements of counsel to the respective Lenders and the L/C Issuer and
amounts payable under Article III), ratably among them in proportion to the
respective amounts described in this clause Second payable to them;
     Third, to payment of that portion of the Obligations constituting accrued
and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and
other Obligations, ratably among the Lenders and the L/C Issuer in proportion to
the respective amounts described in this clause Third payable to them;
     Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders and the L/C
Issuer in proportion to the respective amounts described in this clause Fourth
held by them;

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     Fifth, to the Administrative Agent for the account of the L/C Issuer, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
     Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Company or as otherwise required by Law.
Subject to Section 2.3(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE X
ADMINISTRATIVE AGENT
Section 10.1 Appointment and Authority.
     Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of
America to act on its behalf as the Administrative Agent hereunder and under the
other Loan Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative 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 Administrative Agent, the Lenders and the L/C
Issuer, and neither any Borrower nor any other Loan Party shall have rights as a
third party beneficiary of any of such provisions.
     Section 10.2 Rights as a Lender. The Person serving as the Administrative
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
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative 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 Borrowers or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
     Section 10.3 Exculpatory Provisions. The Administrative 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
Administrative 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 Administrative 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

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expressly provided for herein or in the other Loan Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and
     (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 of the Borrowers or any of their
respective Affiliates that is communicated to or obtained by the Person serving
as the Administrative Agent or any of its Affiliates in any capacity.
     The Administrative 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
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Section 11.1 and Section 11.2) or (ii) in the
absence of its own gross negligence or willful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given to the Administrative Agent by the
Company, a Lender or the L/C Issuer.
     The Administrative 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 V or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
     Section 10.4 Reliance by Administrative Agent. The Administrative 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 Administrative
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 L/C
Issuer, the Administrative Agent may presume that such condition is satisfactory
to such Lender or the L/C Issuer unless the Administrative Agent shall have
received notice to the contrary from such Lender or the L/C Issuer prior to the
making of such Loan or the issuance of such Letter of Credit. The Administrative
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.

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     Section 10.5 Delegation of Duties. The Administrative 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
Administrative Agent. The Administrative 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
Administrative 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 Administrative Agent.
     Section 10.6 Resignation of Administrative Agent. The Administrative Agent
may at any time give notice of its resignation to the Lenders, the L/C Issuer
and the Company. Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, in consultation with the Company (and if no Event
of Default has occurred and is continuing, with the consent of the Company, to
appoint a successor from among the Lenders, which shall be a bank with an office
in the United States, or an Affiliate of any such bank with an office in the
United States. 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 Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may on behalf of the Lenders and the L/C Issuer,
appoint a successor Administrative Agent meeting the qualifications set forth
above; provided that if the Administrative 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 (1) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents (except that in the
case of any Collateral held by the Administrative Agent on behalf of the Lenders
or the L/C Issuer under any of the Loan Documents, the retiring Administrative
Agent shall continue to hold such Collateral until such time as a successor
Administrative Agent is appointed) and (2) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender and the L/C Issuer directly, until
such time as the Required Lenders appoint a successor Administrative Agent as
provided for above in this Section. Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
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 Section). The fees payable by the Company to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Company and such successor. After the
retiring Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 10.4 shall continue in
effect for the benefit of such retiring Administrative 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 Administrative Agent was acting as
Administrative Agent.
     Any resignation by Bank of America as Administrative Agent pursuant to this
Section shall also constitute its resignation as L/C Issuer and Swing Line
Lender. Upon the acceptance of a successor’s appointment as Administrative Agent
hereunder, (a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring

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L/C Issuer and Swing Line Lender, (b) the retiring L/C Issuer and Swing Line
Lender shall be discharged from all of their respective duties and obligations
hereunder or under the other Loan Documents, and (c) the successor L/C Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to the retiring L/C Issuer to effectively assume the obligations of
the retiring L/C Issuer with respect to such Letters of Credit.
     Section 10.7 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender and the L/C Issuer acknowledges that it has, independently and without
reliance upon the Administrative 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 L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative 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 10.8 No Other Duties, Etc. Anything herein to the contrary
notwithstanding, none of the Bookrunners, Arrangers or other titles as necessary
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 Administrative Agent, a Lender or the L/C
Issuer hereunder.
     Section 10.9 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on any Borrower)
shall be entitled and empowered, by intervention in such proceeding or otherwise
     (a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuer and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuer and the Administrative Agent
under Section 2.3(i), and Section 2.3(j), Section 2.9 and Section 10.4) allowed
in such judicial proceeding; and
     (b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall

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consent to the making of such payments directly to the Lenders and the L/C
Issuer, to pay to the Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Administrative Agent
and its agents and counsel, and any other amounts due the Administrative Agent
under Section 2.9 and Section 11.4.
     Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender or
the L/C Issuer any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.
     Section 10.10 Collateral and Guaranty Matters. The Lenders and the L/C
Issuer irrevocably authorize the Administrative Agent, at its option and in its
discretion,
     (a) to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit, (ii) that is sold or to be sold as part of or in connection
with any sale permitted hereunder or under any other Loan Document, or
(iii) subject to Section 11.1, if approved, authorized or ratified in writing by
the Required Lenders;
     (b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 8.1; and
     (c) to release any Subsidiary Guarantor from its obligations under the
Subsidiary Guaranty if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.
     Upon request by the Administrative Agent at any time, the Required Lenders
will confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Subsidiary Guarantor from its obligations under the Guaranty pursuant to
this Section 10.10.
ARTICLE XI
MISCELLANEOUS
     Section 11.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any other Loan Document, no consent to any departure by the
Borrower or any other Loan Party therefrom, no release of Collateral or
subordination of Liens thereon and no consent to Liens on assets of a Loan Party
or as otherwise restricted by the provisions of Section 9.1 hereof shall be
effective unless in writing signed by the Required Lenders and the Borrower or
the applicable Loan Party, as the case may be, and acknowledged by the
Administrative Agent, and each such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall:

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     (a) waive any condition set forth in Section 5.1(a) without the written
consent of each Lender;
     (b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 2.6) without the written consent of
such Lender;
     (c) postpone any date fixed by this Agreement or any other Loan Document
for any payment of principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby;
     (d) reduce the principal of, or the rate of interest specified herein on,
any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to
this Section 10.1) any fees or other amounts payable hereunder or under any
other Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of any Borrower to pay interest or Letter of Credit Fees at the
Default Rate or (ii) to amend any financial covenant hereunder (or any defined
term used therein) or the method of computation of any financial ratio even if
the effect of such amendment would be to reduce the rate of interest on any Loan
or L/C Borrowing or to reduce any fee payable hereunder;
     (e) change Section 2.13 or Section 8.3 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of each
Lender;
     (f) amend Section 1.5, Section 1.6 or the definition of “Alternative
Currency” without the written consent of each Lender;
     (g) change any provision of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder without the written
consent of each Lender; or
     (h) release any Guarantor without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; and
(iv) the Fee Letter may be amended, or rights or privileges thereunder waived,
in a writing executed only by the parties thereto. Notwithstanding anything to
the contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent
of such Lender.

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Section 11.2 Notices; Effectiveness; Electronic Communication.
     (a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (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, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
          (i) if to the Borrowers, the Administrative Agent, the L/C Issuer or
the Swing Line Lender, to the address, telecopier number, electronic mail
address or telephone number specified for such Person on Schedule 11.2; and
          (ii) if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified 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 sent (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 subsection (b) below, shall be effective as provided in such
subsection (b).
     (b) Electronic Communications. Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer pursuant to
Article II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative 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 Administrative 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.
     (c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE

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ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE
PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING 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 BORROWER MATERIALS OR
THE PLATFORM. In no event shall the Administrative Agent or any of its Related
Parties (collectively, the “Agent Parties”) have any liability to any Borrower,
any Lender, the L/C Issuer or any other Person for losses, claims, damages,
liabilities or expenses of any kind (whether in tort, contract or otherwise)
arising out of any Borrower’s or the Administrative Agent’s transmission of
Borrower Materials through the Internet, except to the extent that such losses,
claims, damages, liabilities or expenses are determined by a court of competent
jurisdiction by a final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Agent Party; provided, however,
that in no event shall any Agent Party have any liability to any Borrower, any
Lender, the L/C Issuer or any other Person for indirect, special, incidental,
consequential or punitive damages (as opposed to direct or actual damages).
     (d) Change of Address, Etc. Each of the Borrowers, the Administrative
Agent, the L/C Issuer and the Swing Line Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the other parties hereto. Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the Company, the Administrative Agent, the L/C Issuer and the Swing
Line Lender. In addition, each Lender agrees to notify the Administrative Agent
from time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.
     (e) Reliance by Administrative Agent, L/C Issuer and Lenders. The
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Committed Loan Notices and Swing
Line Loan Notices) purportedly given by or on behalf of any Borrower even if
(i) such notices were not made in a manner specified herein, were incomplete or
were not preceded or followed by any other form of notice specified herein, or
(ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Company shall indemnify the Administrative Agent, the
L/C Issuer, each Lender and the Related Parties of each of them from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of any Borrower. All telephonic
notices to and other telephonic communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.
     Section 11.3 No Waiver; Cumulative Remedies. No failure by any Lender or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, 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,

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remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
Section 11.4 Expenses; Indemnity; Damage Waiver.
     (a) Costs and Expenses. The Company shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative 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 contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the L/C
Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
L/C Issuer (including the fees, charges and disbursements of any counsel for the
Administrative Agent, any Lender or the L/C Issuer), 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 reasonable 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
Administrative Agent (and any sub-agent thereof), each Lender and the L/C
Issuer, 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, damages, liabilities and related expenses (including
the reasonable fees, charges and disbursements of any counsel for any
Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any
third party or by any Borrower or any other Loan 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, the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Administrative Agent (and
any sub-agent thereof) and its Related Parties only, the administration of this
Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the
use or proposed use of the proceeds therefrom (including any refusal by the L/C
Issuer 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
Hazardous Materials on or from any property owned or operated by any Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to
any Borrower 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 any other Loan 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 (x) 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 (y) result from a claim
brought by the

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Company or any other Loan Party against an Indemnitee for breach in bad faith of
such Indemnitee’s obligations hereunder or under any other Loan Document, if the
Company or such other Loan Party has obtained a final and nonappealable judgment
in its favor on such claim as determined by a court of competent jurisdiction.
     (c) Reimbursement by Lenders. To the extent that the Company for any reason
fails to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof), the L/C Issuer or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such
Lender’s Applicable 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 Administrative Agent (or any such sub-agent) or the L/C Issuer in
its capacity as such, or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.12(d).
     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable law, no Borrower shall assert, and 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 contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in subsection (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 contemplated hereby or
thereby.
     (e) Payments. All amounts due under this Section shall be payable not later
than ten Business Days after demand therefor.
     (f) Survival. The agreements in this Section shall survive the resignation
of the Administrative Agent and the L/C Issuer, the replacement of any Lender,
the termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.
     Section 11.5 Payments Set Aside. To the extent that any payment by or on
behalf of any Borrower is made to the Administrative Agent, the L/C Issuer or
any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises
its right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Administrative Agent, the L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect

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as if such payment had not been made or such setoff had not occurred, and
(b) each Lender and the L/C Issuer severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the applicable Overnight Rate from time to time in effect, in the
applicable currency of such recovery or payment. The obligations of the Lenders
and the L/C Issuer under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.
Section 11.6 Successors and Assigns.
     (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 no Borrower may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Administrative Agent and each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of subsection (b) of this Section, (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section, or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of subsection
(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 subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuer 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
(including for purposes of this subsection (b), participations in L/C
Obligations and in Swing Line Loans) at the time owing to it); provided that:
          (i) except 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 in
the case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the 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
Administrative 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 unless each
of the Administrative 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); provided, however, that concurrent
assignments to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single Eligible Assignee (or to an Eligible
Assignee and

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members of its Assignee Group) will be treated as a single assignment for
purposes of determining whether such minimum amount has been met;
          (ii) 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 Loans or the Commitment assigned, except that
this clause (ii) shall not apply to rights in respect of Swing Line Loans;
          (iii) any assignment of a Commitment must be approved by the
Administrative Agent, the L/C Issuer and the Swing Line Lender unless the Person
that is the proposed assignee is itself a Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and
          (iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee in the amount, if any, required as set forth in
Schedule 11.6, and the Eligible Assignee, if it shall not be a Lender, shall
deliver to the Administrative Agent an Administrative Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible 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 3.1, 3.4, 3.5, and 11.4 with respect
to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, each Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection 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
subsection (d) of this Section.
     (c) Register. The Administrative Agent, acting solely for this purpose as
an agent of the Borrowers, shall maintain at the Administrative Agent’s Office 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 and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrowers, the Administrative 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 inspection by each of the Borrowers and the L/C Issuer at any
reasonable time and from time to time upon reasonable prior notice. In addition,
at any time that a request for a consent for a material or substantive change to
the Loan Documents

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is pending, any Lender may request and receive from the Administrative Agent a
copy of the Register.
     (d) Participations. Any Lender may at any time, without the consent of, or
notice to, any Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Company or any of the Company’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 (including such Lender’s
participations in L/C Obligations and/or Swing Line 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 Borrowers, the
Administrative Agent, the Lenders and the L/C Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.
     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, waiver or other modification described in the first proviso to
Section 10.1 that affects such Participant. Subject to subsection (e) of this
Section, each Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.1, 3.4 and 3.5 to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to subsection (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 11.8 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.13 as though it were a Lender.
     (e) Limitation upon Participant Rights. A Participant shall not be entitled
to receive any greater payment under Section 3.1 or 3.4 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. A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.1 unless the Company is notified of the participation sold
to such Participant and such Participant agrees, for the benefit of the
Borrowers, to comply with Section 3.1(e) as though it were a Lender.
     (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 (including
under its Note(s), if any) 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.
     (g) 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

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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.
     (h) Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank
of America assigns all of its Commitment and Loans pursuant to subsection
(b) above, Bank of America may, (i) upon thirty (30) days’ notice to the Company
and the Lenders, resign as L/C Issuer and/or (ii) upon thirty (30) days’ notice
to the Company, resign as Swing Line Lender. In the event of any such
resignation as L/C Issuer or Swing Line Lender, the Company shall be entitled to
appoint from among the Lenders a successor L/C Issuer or Swing Line Lender
hereunder; provided, however, that no failure by the Company to appoint any such
successor shall affect the resignation of Bank of America as L/C Issuer or Swing
Line Lender, as the case may be. If Bank of America resigns as L/C Issuer, it
shall retain all the rights, powers, privileges and duties of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Committed
Loans or fund risk participations in Unreimbursed Amounts pursuant to
Section 2.3(c)). If Bank of America resigns as Swing Line Lender, it shall
retain all the rights of the Swing Line Lender provided for hereunder with
respect to Swing Line Loans made by it and outstanding as of the effective date
of such resignation, including the right to require the Lenders to make Base
Rate Committed Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.4(c). Upon the appointment of a successor L/C Issuer
and/or Swing Line Lender, (a) such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring L/C Issuer
or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to Bank of America to effectively assume the obligations of Bank of
America with respect to such Letters of Credit.
     Section 11.7 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders and the L/C Issuer 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 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 or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to a Borrower and its obligations, (g) with the
consent of the Company or (h) to the

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extent such Information (x) becomes publicly available other than as a result of
a breach of this Section or (y) becomes available to the Administrative Agent,
any Lender, the L/C Issuer or any of their respective Affiliates on a
nonconfidential basis from a source other than the Company.
     For purposes of this Section, “Information” means all information received
from the Company or any Subsidiary relating to the Company or any Subsidiary or
any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the L/C Issuer on a
nonconfidential basis prior to disclosure by the Company or any Subsidiary,
provided that, in the case of information received from the Company or any
Subsidiary 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.
     Each of the Administrative Agent, the Lenders and the L/C Issuer
acknowledges that (a) the Information may include material non-public
information concerning the Company or a Subsidiary, as the case may be, (b) it
has developed compliance procedures regarding the use of material non-public
information and (c) it will handle such material non-public information in
accordance with applicable Law, including Federal and state securities Laws.
     Section 11.8 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, upon the occurrence and during the continuance of any
Event of Default, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower or any other Loan Party, any such notice
being waived by the Borrower (on its own behalf and on behalf of each Loan
Party) to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing by, such Lender to or for the
credit or the account of the respective Loan Parties against any and all
Obligations owing to such Lender hereunder or under any other Loan Document, now
or hereafter existing, irrespective of whether or not the Administrative Agent
or such Lender shall have made demand under this Agreement or any other Loan
Document and although such Obligations may be contingent or unmatured or
denominated in a currency different from that of the applicable deposit or
indebtedness. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application.
     Section 11.9 Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Company. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate,

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and spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
     Section 11.10 Counterparts; Integration; 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. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.1, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
     Section 11.11 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
     Section 11.12 Severability. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
     Section 11.13 Replacement of Lenders. If any Lender requests compensation
under Section 3.4, or if any Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.1, if any Lender is a Defaulting Lender or if any other
circumstance exists hereunder that gives the Company the right to replace a
Lender as a party hereto, then the Company may, at its sole expense and effort,
upon notice to such Lender and the Administrative 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 11.6), 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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     (a) the Company shall have paid (or caused a Designated Borrower to pay) to
the Administrative Agent the assignment fee specified in Section 11.6(b);
     (b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.5) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Company or applicable Designated Subsidiary (in the case of all other amounts);
     (c) in the case of any such assignment resulting from a claim for
compensation under Section 3.4 or payments required to be made pursuant to
Section 3.1, such assignment will result in a reduction in such compensation or
payments thereafter; and
     (d) such assignment does not conflict with applicable Laws.
     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 11.14 Tax Forms.
     (a) (i) Each Lender that is not a “United States person” within the meaning
of Section 7701(a)(30) of the Code (a “Foreign Lender”) shall deliver to the
Administrative Agent, prior to receipt of any payment subject to withholding
under the Code (or upon accepting an assignment of an interest herein), two duly
signed completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Foreign Lender and entitling it to an exemption from, or
reduction of, withholding tax on all payments to be made to such Foreign Lender
by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Foreign Lender by the
Borrower pursuant to this Agreement) or such other evidence satisfactory to the
Borrower and the Administrative Agent that such Foreign Lender is entitled to an
exemption from, or reduction of, U.S. withholding tax, including any exemption
pursuant to Section 881(c) of the Code. Thereafter and from time to time, each
such Foreign Lender shall (A) promptly submit to the Administrative Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to the
Borrower and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by the Borrower pursuant to this Agreement,
(B) promptly notify the Administrative Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction, and
(C) take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any requirement of
applicable Laws that the Borrower make any deduction or withholding for taxes
from amounts payable to such Foreign Lender.

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          (ii) Each Foreign Lender, to the extent it does not act or ceases to
act for its own account with respect to any portion of any sums paid or payable
to such Lender under any of the Loan Documents (for example, in the case of a
typical participation by such Lender), shall deliver to the Administrative Agent
on the date when such Foreign Lender ceases to act for its own account with
respect to any portion of any such sums paid or payable, and at such other times
as may be necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two (2) duly signed completed copies
of the forms or statements required to be provided by such Lender as set forth
above, to establish the portion of any such sums paid or payable with respect to
which such Lender acts for its own account that is not subject to U.S.
withholding tax, and (B) two (2) duly signed completed copies of IRS Form W-8IMY
(or any successor thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such Lender.
          (iii) The Borrower shall not be required to pay any additional amount
to any Foreign Lender under Section 3.1 (A) with respect to any Taxes required
to be deducted or withheld on the basis of the information, certificates or
statements of exemption such Lender transmits with an IRS Form W-8IMY pursuant
to this Section 11.14(a) or (B) if such Lender shall have failed to satisfy the
foregoing provisions of this Section 11.14(a); provided that if such Lender
shall have satisfied the requirement of this Section 11.14(a) on the date such
Lender became a Lender or ceased to act for its own account with respect to any
payment under any of the Loan Documents, nothing in this Section 11.14(a) shall
relieve the Borrower of its obligation to pay any amounts pursuant to
Section 3.1 in the event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender or other Person for the
account of which such Lender receives any sums payable under any of the Loan
Documents is not subject to withholding or is subject to withholding at a
reduced rate.
          (iv) The Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of the
Loan Documents with respect to which the Borrower is not required to pay
additional amounts under this Section 11.14(a).
     (b) Upon the request of the Administrative Agent, each Lender that is a
“United States person” within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
     (c) If any Governmental Authority asserts that the Administrative Agent did
not properly withhold or backup withhold, as the case may be, any tax or other
amount from payments made to or for the account of any Lender, such Lender shall
indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any

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jurisdiction on the amounts payable to the Administrative Agent under this
Section, and costs and expenses (including Attorney Costs) of the Administrative
Agent. The obligation of the Lenders under this Section shall survive the
termination of the Aggregate Commitments, repayment of all other Obligations
hereunder and the resignation of the Administrative Agent.
     Section 11.15 Governing Law.
     (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE COMMONWEALTH OF VIRGINIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
     (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF VIRGINIA
SITTING IN FAIRFAX COUNTY OR OF THE UNITED STATES FOR THE EASTERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
     Section 11.16 USA PATRIOT Act Notice. Each Lender that is subject to the
Act (as hereinafter defined) and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrowers that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrowers, which information includes the name
and address of each Borrower and other information that will allow such Lender
or the Administrative Agent, as applicable, to identify such Borrower in
accordance with the Act.
     Section 11.17 Dispute Resolution.
     (a) Arbitration. Except to the extent expressly provided below, any Dispute
shall, upon the request of any party, be determined by binding arbitration in
accordance with the Federal Arbitration Act, Title 9, United States Code (or if
not applicable, the applicable state law), the then-current rules for
arbitration of financial services disputes of AAA and the “Special Rules” set
forth below. In the event of any inconsistency, the Special Rules shall control.
The filing of a court action is not intended to constitute a waiver of the right
of the Borrower or the Lenders, including the suing party, thereafter to require
submittal of the Dispute to arbitration.

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Any party to this Agreement may bring an action, including a summary or
expedited proceeding, to compel arbitration of any Dispute in any court having
jurisdiction over such action. For the purposes of this Section 11.17 only, the
terms “party” and “parties” shall include any parent corporation, subsidiary or
affiliate of any Lender involved in the servicing, management or administration
of any obligation described in or evidenced by this Agreement, together with the
officers, employees, successors and assigns of each of the foregoing.
     (b) Special Rules.
          (i) The arbitration shall be conducted in any U.S. state where real or
tangible personal property collateral is located, or if there is no such
collateral, in the City and County where Lender is located pursuant to its
address for notice purposes in this Agreement.
          (ii) The arbitration shall be administered by AAA, who will appoint an
arbitrator. If AAA is unwilling or unable to administer the arbitration, or if
AAA is unwilling or unable to enforce or legally precluded from enforcing any
and all provisions of this Dispute Resolution Section, then any party to this
Agreement may substitute another arbitration organization that has similar
procedures to AAA and that will observe and enforce any and all provisions of
this Dispute Resolution Section.. All Disputes shall be determined by one
arbitrator; however, if the amount in controversy in a Dispute exceeds Five
Million Dollars ($5,000,000), upon the request of any party, the Dispute shall
be decided by three arbitrators (for purposes of this Agreement, referred to
collectively as the “arbitrator”).
          (iii) All arbitration hearings will be commenced within ninety
(90) days of the demand for arbitration and completed within ninety (90) days
from the date of commencement; provided, however, that upon a showing of good
cause, the arbitrator shall be permitted to extend the commencement of such
hearing for up to an additional sixty (60) days.
          (iv) The judgment and the award, if any, of the arbitrator shall be
issued within thirty (30) days of the close of the hearing. The arbitrator shall
provide a concise written statement setting forth the reasons for the judgment
and for the award, if any. The arbitration award, if any, may be submitted to
any court having jurisdiction to be confirmed and enforced, and such
confirmation and enforcement shall not be subject to arbitration.
          (v) The arbitrator will give effect to statutes of limitations and any
waivers thereof in determining the disposition of any Dispute and may dismiss
one or more claims in the arbitration on the basis that such claim or claims is
or are barred. For purposes of the application of the statute of limitations,
the service on AAA under applicable AAA rules of a notice of Dispute is the
equivalent of the filing of a lawsuit.
          (vi) Any dispute concerning this arbitration provision, including any
such dispute as to the validity or enforceability of this provision, or whether
a Dispute is arbitrable, shall be determined by the arbitrator; provided,
however, that the arbitrator shall not be permitted to vary the express
provisions of these Special Rules or the Reservation of Rights in subsection
(c) below.
          (vii) The arbitrator shall have the power to award legal fees and
costs pursuant to the terms of this Agreement.

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          (viii) The arbitration will take place on an individual basis without
reference to, resort to, or consideration of any form of class or class action.
     (c) Reservations of Rights. Nothing in this Agreement shall be deemed to
(i) limit the applicability of any otherwise applicable statutes of limitation
and any waivers contained in this Agreement, or (ii) apply to or limit the right
of Lender (A) to exercise self help remedies such as (but not limited to)
setoff, or (B) to foreclose judicially or nonjudicially against any real or
personal property collateral, or to exercise judicial or nonjudicial power of
sale rights, (C) to obtain from a court provisional or ancillary remedies such
as (but not limited to) injunctive relief, writ of possession, prejudgment
attachment, or the appointment of a receiver, or (D) to pursue rights against a
party to this Agreement in a third-party proceeding in any action brought
against Lender in a state, federal or international court, tribunal or hearing
body (including actions in specialty courts, such as bankruptcy and patent
courts). Lender may exercise the rights set forth in clauses (A) through (D),
inclusive, before, during or after the pendency of any arbitration proceeding
brought pursuant to this Agreement. Neither the exercise of self help remedies
nor the institution or maintenance of an action for foreclosure or provisional
or ancillary remedies shall constitute a waiver of the right of any party,
including the claimant in any such action, to arbitrate the merits of the
Dispute occasioning resort to such remedies. No provision in the Loan Documents
regarding submission to jurisdiction and/or venue in any court is intended or
shall be construed to be in derogation of the provisions in any Loan Document
for arbitration of any Dispute.
     (d) Conflicting Provisions for Dispute Resolution. If there is any conflict
between the terms, conditions and provisions of this Section and those of any
other provision or agreement for arbitration or dispute resolution, the terms,
conditions and provisions of this Section shall prevail as to any Dispute
arising out of or relating to (i) this Agreement, (ii) any other Loan Document,
(iii) any related agreements or instruments, or (iv) the transaction
contemplated herein or therein (including any claim based on or arising from an
alleged personal injury or business tort). In any other situation, if the
resolution of a given Dispute is specifically governed by another provision or
agreement for arbitration or dispute resolution, the other provision or
agreement shall prevail with respect to said Dispute.
     Section 11.18 Time of the Essence. Time is of the essence of the Loan
Documents.
     Section 11.19 Waiver of Right to Trial by Jury.
     EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO ARBITRATION AND TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

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     Section 11.20 Judgment Currency. If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder or any other Loan
Document in one currency into another currency, the rate of exchange used shall
be that at which in accordance with normal banking procedures the Administrative
Agent could purchase the first currency with such other currency on the Business
Day preceding that on which final judgment is given. The obligation of each
Borrower in respect of any such sum due from it to the Administrative Agent or
the Lenders hereunder or under the other Loan Documents shall, notwithstanding
any judgment in a currency (the “Judgment Currency”) other than that in which
such sum is denominated in accordance with the applicable provisions of this
Agreement (the “Agreement Currency”), be discharged only to the extent that on
the Business Day following receipt by the Administrative Agent of any sum
adjudged to be so due in the Judgment Currency, the Administrative Agent may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency. If the amount of the Agreement Currency so purchased is
less than the sum originally due to the Administrative Agent from any Borrower
in the Agreement Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or the
Person to whom such obligation was owing against such loss. If the amount of the
Agreement Currency so purchased is greater than the sum originally due to the
Administrative Agent in such currency, the Administrative Agent agrees to return
the amount of any excess to such Borrower (or to any other Person who may be
entitled thereto under applicable law).
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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered under seal by their duly authorized representatives
as of the date and year first written above.

                  BORROWER:       SUNRISE SENIOR LIVING, INC.
 
           
 
  By:        /s/ Bradley B. Rush   (Seal)
 
           
 
      Bradley B. Rush    
 
      Chief Financial Officer    
 
                GUARANTORS:
 
                SUNRISE SENIOR LIVING MANAGEMENT, INC.
 
           
 
  By:        /s/ Bradley B. Rush   (Seal)
 
           
 
      Bradley B. Rush    
 
      Vice President    
 
                SUNRISE SENIOR LIVING INVESTMENTS, INC.
 
           
 
  By:        /s/ Bradley B. Rush   (Seal)
 
           
 
      Bradley B. Rush    
 
      Vice President    
 
                SUNRISE DEVELOPMENT, INC.
 
           
 
  By:        /s/ Bradley B. Rush   (Seal)
 
           
 
      Bradley B. Rush    
 
      Vice President    
 
                SUNRISE SENIOR LIVING SERVICES, INC.
 
           
 
  By:        /s/ Bradley B. Rush   (Seal)
 
           
 
      Bradley B. Rush    
 
      Vice President    

S-1

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                  BANK OF AMERICA, N.A., as Administrative Agent
 
           
 
  By:        /s/ Kristine Thennes    
 
           
 
      Name: Kristine Thennes
   
 
      Title: Vice President    

S-2

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                  BANK OF AMERICA, N.A., as a Lender, L/C Issuer and Swing Line
Lender
 
           
 
  By:        /s/ Michael J. Landini    
 
           
 
      Name: Michael J. Landini    
 
      Title: Senior Vice President    

S-3

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                  WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender
 
           
 
  By:        /s/ Frank S. Kaulback III    
 
           
 
      Name: Frank S. Kaulback III    
 
      Title: Senior Vice President    

S-4

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                  LASALLE BANK NATIONAL ASSOCIATION, as a Lender
 
           
 
  By:        /s/ Sam L. Dendrinos    
 
           
 
      Name: Sam L. Dendrinos    
 
      Title: First Vice President    

S-5

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                  HSBC BANK USA, N.A., as a Lender
 
           
 
  By:        /s/ Jeffrey M. Henry    
 
           
 
      Name: Jeffrey M. Henry    
 
      Title: Vice President    

S-6

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                  MANUFACTURERS AND TRADERS TRUST COMPANY, as a Lender
 
           
 
  By:        /s/ Sharon P. O’Brien    
 
           
 
      Name: Sharon P. O’Brien    
 
      Title: Vice President    

S-7

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                  PNC BANK, NATIONAL ASSOCIATION, as a Lender
 
           
 
  By:        /s/ Michael J. Elehwany    
 
           
 
      Name: Michael J. Elehwany    
 
      Title: Vice President    

S-8

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                  CHEVY CHASE BANK, F.S.B., as a Lender
 
           
 
  By:        /s/ Ellen-Elizabeth B. Lee    
 
           
 
      Name: Ellen-Elizabeth B. Lee    
 
      Title: Assistant Vice President    

S-9

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                  FARMERS & MECHANICS BANK, as a Lender
 
           
 
  By:        /s/ William W. Drummond    
 
           
 
      Name: William W. Drummond    
 
      Title: Vice President    

S-10

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                  FIRST HORIZON BANK a division of FIRST TENNESSEE BANK, N.A.,
as a Lender
 
           
 
  By:   /s/ Blake Bowers    
 
           
 
      Name: Blake Bowers    
 
      Title: Vice President    

S-11

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EXHIBIT A
FORM OF COMMITTED LOAN NOTICE
Date:                     , 200__
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
     Reference is made to that certain Credit Agreement, dated as of December 2,
2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), among Sunrise Senior Living, Inc., a Delaware
corporation (the “Company”), the Designated Borrowers from time to time party
thereto, the Lenders from time to time party thereto, and Bank of America, N.A.,
as Administrative Agent, L/C Issuer and Swing Line Lender.
     The Company hereby requests, on behalf of itself or, if applicable, the
Designated Borrower referenced in item 6 below (the “Applicable Designated
Borrower”) (select one):

      o A Borrowing of Committed Loans   o A conversion or continuation of Loans

     1. On ________ (a Business Day).
     2. In the amount of                     .
     3. Comprised of                     .
          [Type of Committed Loan requested]
4. In the following currency:
                                                            
     5. For Eurocurrency Rate Loans: with an Interest Period of ________
days/months or Cost of Funds Loan — (Loan in currency other than Dollars for a
seven-day Interest Period.
     6. On behalf of
                                                            [insert name of
applicable Designated Borrower].
     The Committed Borrowing, if any, requested herein complies with the
provisos to the first sentence of Section 2.1 of the Agreement.

         
 
  SUNRISE SENIOR LIVING, INC.    
 
       
 
  By:    
 
  Name:    
 
  Title:    

Exhibit A
Page 1

 

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EXHIBIT B
FORM OF SWING LINE LOAN NOTICE
Date:                     , 200___

     
To:
  Bank of America, N.A., as Swing Line Lender
 
  Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:
     Reference is made to that certain Credit Agreement, dated as of December 2,
2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), among Sunrise Senior Living, Inc., a Delaware
corporation (the “Company”), the Designated Borrowers from time to time party
thereto, the Lenders from time to time party thereto, and Bank of America, N.A.,
as Administrative Agent, L/C Issuer and Swing Line Lender.
     The undersigned hereby requests a Swing Line Loan:
     1. On                                        (a Business Day).
     2. In the amount of $                                        .
     The Swing Line Borrowing requested herein complies with the requirements of
the provisos to the first sentence of Section 2.4(a) of the Agreement.

         
 
  SUNRISE SENIOR LIVING, INC.    
 
       
 
  By:    
 
  Name:    
 
  Title:    

Exhibit B
Page 1

 

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EXHIBIT C
FORM OF NOTE
     FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay
to                                                              or registered
assigns (the “Lender”), in accordance with the provisions of the Agreement (as
hereinafter defined), the principal amount of each Loan from time to time made
by the Lender to the Borrower under that certain Credit Agreement, dated as of
December 2, 2005 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement;” the terms defined
therein being used herein as therein defined), among Sunrise Senior Living, Inc.
the Designated Borrowers from time to time party thereto, the Lenders from time
to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C
Issuer and Swing Line Lender.
     The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement.
Except as otherwise provided in Section 2.4(e) of the Agreement with respect to
Swing Line Loans, all payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in the currency in which such
Committed Loan was denominated and in Same Day Funds at the Administrative
Agent’s Office for such currency. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
     This Note is one of the Notes referred to in the Agreement, is entitled to
the benefits thereof and may be prepaid in whole or in part subject to the terms
and conditions provided therein. This Note is also entitled to the benefits of
the Guaranty and is secured by the Collateral. Upon the occurrence and
continuation of one or more of the Events of Default specified in the Agreement,
all amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable all as provided in the Agreement. Loans made
by the Lender shall be evidenced by one or more loan accounts or records
maintained by the Lender in the ordinary course of business. The Lender may also
attach schedules to this Note and endorse thereon the date, amount, currency and
maturity of its Loans and payments with respect thereto.
     The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
Exhibit C
Page 1

 

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     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE COMMONWEALTH OF VIRGINIA.

         
 
  SUNRISE SENIOR LIVING, INC.    
 
       
 
  OR    
 
       
 
  [APPLICABLE DESIGNATED BORROWER]    
 
       
 
  By:    
 
  Name:    
 
  Title:    

Exhibit C
Page 2

 

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LOANS AND PAYMENTS WITH RESPECT THERETO

                                          Amount of                 Currency    
  Principal or   Outstanding             and   End of   Interest   Principal    
    Type of   Amount of   Interest   Paid This   Balance   Notation Date   Loan
Made   Loan Made   Period   Date   This Date   Made By
 
                       

Exhibit C
Page 3

 

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EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date:                                         , 200__,
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
     Reference is made to that certain Credit Agreement, dated as of December 2,
2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), among Sunrise Senior Living, Inc., a Delaware
corporation (the “Company”), the Designated Borrowers from time to time party
thereto, the Lenders from time to time party thereto, and Bank of America, N.A.,
as Administrative Agent, L/C Issuer and Swing Line Lender.
     The undersigned Responsible Officer hereby certifies as of the date hereof
that he/she is the
                                                                                of
the Company, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Administrative Agent on the behalf of the Company, and that:
[Use following paragraph 1 for fiscal year-end financial statements]
     1. Attached hereto as Schedule 1 are the year-end audited financial
statements required by Section 7.1(a) of the Agreement for the fiscal year of
the Company ended as of the above date, together with the report and opinion of
an independent certified public accountant required by such section.
[Use following paragraph 1 for fiscal quarter-end financial statements]
     1. Attached hereto as Schedule 1 are the unaudited financial statements
required by Section 7.1(b) of the Agreement for the fiscal quarter of the
Company ended as of the above date. Such financial statements fairly present the
financial condition, results of operations and cash flows of the Company and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.
     2. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Company during the accounting period covered by the attached financial
statements.
     3. A review of the activities of the Company during such fiscal period has
been made under the supervision of the undersigned with a view to determining
whether during such fiscal period the Company performed and observed all its
Obligations under the Loan Documents, and
[select one:]
Exhibit D
Page 1

 

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     [to the best knowledge of the undersigned during such fiscal period, the
Company performed and observed each covenant and condition of the Loan Documents
applicable to it, and no Default has occurred and is continuing.]
—or—
     [the following covenants or conditions have not been performed or observed
and the following is a list of each such Default and its nature and status:]
     4. The representations and warranties of (i) the Borrowers contained in
Article V of the Agreement and (ii) each Loan Party contained in each other Loan
Document or in any document furnished at any time under or in connection with
the Loan Documents, are true and correct on and as of the date hereof, except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this Compliance Certificate, the representations
and warranties contained in subsections (a) and (b) of Section 6.5 of the
Agreement shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 7.1 of the Agreement,
including the statements in connection with which this Compliance Certificate is
delivered.
     5. The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date of this Certificate.
     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
                                        , 200 ___.

         
 
  SUNRISE SENIOR LIVING, INC.    
 
       
 
  By:    
 
  Name:    
 
  Title:    

Exhibit D
Page 2

 

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For the Quarter/Year ended                     , 200___(“Statement Date”)
SCHEDULE 2
to the Compliance Certificate
($ in 000’s)

I.   Consolidated Net Worth.

  A.   Actual Consolidated Net Worth at Statement Date:

  1.   Shareholders’ Equity (as of the last day of preceding quarter):     $

  B.   75% of increases in Shareholders’ Equity after date of Agreement from
issuance and sale of capital stock or other equity interests (including from
conversion of debt securities excluding all exercises of employee stock options,
issuance or sale of restricted stock and operations of employee stock purchase
program):                $     C.   Minimum required Consolidated Net Worth
(Lines I.A.1 + I.B):           $     D.   Excess (deficient) for covenant
compliance (Line I.A – I.C):           $

II.   Fixed Charge Coverage Ratio.

  A.   Consolidated EBITDAR for four consecutive fiscal quarters (or such
shorter period as provided in Section 6.13 of the Credit Agreement) ending on
above date (“Subject Period”):

  1.   Consolidated Net Income for Subject Period:            $     2.  
Consolidated Interest Expense for Subject Period:     $     3.   Provision for
income taxes for Subject Period:           $     4.   Depreciation expenses for
Subject Period:    $     5.   Amortization expenses for intangibles for Subject
Period:           $     6.   Rent Expense                 $     7.  
Consolidated EBITDAR (Lines II.A.1 + 2 + 3 + 4 + 5+6):          $

  B.   Consolidated Interest Expense for Subject Period:     $

             
 
  C.   Consolidated Interest Coverage Ratio (Line II.A.6 ¸
Line II.B):                        to 1.0
 
           
 
      Minimum required:   1.75 to 1.0

Exhibit D
Page 3

 

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                      Minimum             Consolidated             Interest
Coverage         Four Fiscal Quarters Ending   Ratio    
 
  Closing Date through                     , ___        
 
                      , ___through                     , ___        
 
                      , ___and each fiscal quarter        
 
  thereafter        

III.   Leverage Ratio.

  A.   Consolidated EBITDA for Subject Period
(Lines II.A.1+ 2+3+4+5 above):       $     B.   Total Funded Indebtedness at
Statement Date:       $

             
 
  C.   Leverage Ratio (Line III.A ¸ Line III.B):                        to 1.0
 
           
 
      Maximum permitted:   4.25 to 1.0

Exhibit D
Page 4

 

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EXHIBIT E
ASSIGNMENT AND ASSUMPTION
     This Assignment and Assumption (this “Assignment and Assumption”) is dated
as of the Effective Date set forth below and is entered into by and between
[Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
     For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor’s rights
and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, the Letters of Credit and the Swing Line Loans
included in such facilities) and (ii) to the extent permitted to be assigned
under applicable law, all claims, suits, causes of action and any other right of
the Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as, the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

1.   Assignor:                                                                2.
  Assignee:                                                              [and is
an Affiliate/Approved Fund of [identify Lender]]   3.   Borrower(s):
                                                               4.  
Administrative Agent: Bank of America, N.A., as the administrative agent under
the Credit Agreement   5.   Credit Agreement: Credit Agreement, dated as of
December 2, 2005, among Sunrise Senior Living, Inc., the Designated Borrowers
from time to time party thereto, the Lenders from time to time party thereto,
and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line
Lender

Exhibit E
Page 1

 

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     6. Assigned Interest :

                  Aggregate             Amount of   Amount of   Percentage    
Commitment/Loans   Commitment/Loans   Assigned of Facility Assigned   for all
Lenders*   Assigned*   Commitment/Loans
 
           
                    
  $                       $                                             %
 
           
                    
  $                       $                                             %
 
           
                    
  $                       $                                             %

7.   Trade Date:                                         ]

Effective Date:                                         , 20___[TO BE INSERTED
BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:

                                  ASSIGNOR                 [NAME OF ASSIGNOR]  
 
 
                   
 
          By:        
 
             
 
Title:    
 
                                ASSIGNEE                 [NAME OF ASSIGNEE]    
 
                   
 
          By:        
 
             
 
Title:    
 
                    Consented to and Accepted:                
 
                    BANK OF AMERICA, N.A., as                 Administrative
Agent                
 
                   
By:
                   
 
                   
 
  Name:                
 
  Title:                
 
                    Consented to:                
 
                    SUNRISE SENIOR LIVING, INC.                
 
                   
By:
                   
 
                   
 
  Name:                
 
  Title:                

Exhibit E
Page 2

 

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ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
[___________________]
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
          1. Representations and Warranties.
          1.1. Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Company, any of its Subsidiaries or Affiliates or any other Person obligated
in respect of any Loan Document or (iv) the performance or observance by the
Company, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.
          1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section ___thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached hereto is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
          2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest,
Annex 1
Page 1

 

--------------------------------------------------------------------------------

 

fees and other amounts) to the Assignor for amounts which have accrued to but
excluding the Effective Date and to the Assignee for amounts which have accrued
from and after the Effective Date.
          3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the Commonwealth of Virginia.
Annex 1
Page 2

 

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EXHIBIT F
FORM OF COMPANY GUARANTY
[TO BE PROVIDED UPON IDENTIFICATION OF ANY DESIGNATED BORROWER]
Exhibit F
Page 1

 

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EXHIBIT G
FORM OF DESIGNATED BORROWER
REQUEST AND ASSUMPTION AGREEMENT
Date: ___________, _____

     
To:
  Bank of America, N.A., as Administrative Agent
 
   
 
  Ladies and Gentlemen:

     This Designated Borrower Request and Assumption Agreement is made and
delivered pursuant to Section 2.14 of that certain Credit Agreement, dated as of
December 2, 2005 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”), among Sunrise
Senior Living, Inc. a Delaware corporation (the “Company”), the Designated
Borrowers from time to time party thereto, the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and
Swing Line Lender, and reference is made thereto for full particulars of the
matters described therein. All capitalized terms used in this Designated
Borrower Request and Assumption Agreement and not otherwise defined herein shall
have the meanings assigned to them in the Credit Agreement.
     Each of                                          (the “Designated
Borrower”) and the Company hereby confirms, represents and warrants to the
Administrative Agent and the Lenders that the Designated Borrower is a
Subsidiary of the Company.
     The documents required to be delivered to the Administrative Agent under
Section 2.14 of the Credit Agreement will be furnished to the Administrative
Agent in accordance with the requirements of the Credit Agreement.
     The parties hereto hereby confirm that with effect from the date hereof,
the Designated Borrower shall have obligations, duties and liabilities toward
each of the other parties to the Credit Agreement identical to those which the
Designated Borrower would have had if the Designated Borrower had been an
original party to the Credit Agreement as a Borrower. The Designated Borrower
confirms its acceptance of, and consents to, all representations and warranties,
covenants, and other terms and provisions of the Credit Agreement.
     The parties hereto hereby request that the Designated Borrower be entitled
to receive Loans under the Credit Agreement, and understand, acknowledge and
agree that neither the Designated Borrower nor the Company on its behalf shall
have any right to request any Loans for its account unless and until the date
five Business Days after the effective date designated by the Administrative
Agent in a Designated Borrower Notice delivered to the Company and the Lenders
pursuant to Section 2.14 of the Credit Agreement.
     This Designated Borrower Request and Assumption Agreement shall constitute
a Loan Document under the Credit Agreement.
Exhibit G
Page 1

 

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     THIS DESIGNATED BORROWER REQUEST AND ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF VIRGINIA.
     IN WITNESS WHEREOF, the parties hereto have caused this Designated Borrower
Request and Assumption Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year first above written.

                  [DESIGNATED BORROWER]    
 
           
 
  By:        
 
      Name:    
 
      Title:    
 
                SUNRISE SENIOR LIVING, INC.    
 
           
 
  By:        
 
      Name:    
 
      Title:    

Exhibit G
Page 2

 

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EXHIBIT H
FORM OF DESIGNATED BORROWER NOTICE
Date: ___________, _____

     
To:
  Sunrise Senior Living, Inc.
 
   
 
  The Lenders party to the Credit Agreement referred to below
 
   
 
  Ladies and Gentlemen:

     This Designated Borrower Notice is made and delivered pursuant to
Section 2.14 of that certain Credit Agreement, dated as of December 2, 2005 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Credit Agreement”), among Sunrise Senior Living, Inc., a
Delaware corporation (the “Company”), the Designated Borrowers from time to time
party thereto, the Lenders from time to time party thereto, and Bank of America,
N.A., as Administrative Agent, L/C Issuer and Swing Line Lender, and reference
is made thereto for full particulars of the matters described therein. All
capitalized terms used in this Designated Borrower Notice and not otherwise
defined herein shall have the meanings assigned to them in the Credit Agreement.
     The Administrative Agent hereby notifies Company and the Lenders that
effective as of the date hereof [                                        ] shall
be a Designated Borrower and may receive Loans for its account on the terms and
conditions set forth in the Credit Agreement.
     This Designated Borrower Notice shall constitute a Loan Document under the
Credit Agreement.

                  BANK OF AMERICA, N.A.,         as Administrative Agent    
 
           
 
  By:        
 
      Name:    
 
      Title:    

Exhibit H
Page 1

 

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EXHIBIT I
OPINION MATTERS
     The matters contained in the following Sections of the Credit Agreement
should be covered by the legal opinion on behalf of each Borrower:

  •   Section 6.1(a), (b) and (c)     •   Section 6.2     •   Section 6.3     •
  Section 6.4     •   Section 6.6     •   Section 6.14(b)

     Additionally, if as of the Closing Date, any Foreign Subsidiary shall have
been designated as a Designated Borrower pursuant to the Credit Agreement, the
legal opinion on behalf of such Foreign Subsidiary should cover such additional
matters as the Administrative Agent shall reasonably request.
Exhibit I
Page 1