EXHIBIT 10.1

FIRST AMENDMENT TO CREDIT AND GUARANTY AGREEMENT

This First Amendment to Credit and Guaranty Agreement (this “Amendment”) is made
as of this 1st day of February, 2016, by and among CTR PARTNERSHIP, L.P., a
Delaware limited partnership (the “Borrower”), CARETRUST REIT, INC., a Maryland
corporation (the “REIT Guarantor”), the other Guarantors identified herein,
KEYBANK NATIONAL ASSOCIATION, as Administrative Agent (the “Agent”), on behalf
of itself and certain other lenders (each a “Lender” and collectively, the
“Lenders”) and the Lenders party hereto. Unless otherwise defined herein, terms
defined in the Credit Agreement set forth below shall have the same meaning
herein.

W I T N E S S E T H:

WHEREAS, the Borrower, the REIT Guarantor and the other Guarantors party
thereto, the Agent and certain of the Lenders have entered into a certain Credit
and Guaranty Agreement dated as of August 5, 2015 (the “Credit Agreement”); and

WHEREAS, the Borrower, the Guarantors, the Agent and the Lenders have agreed to
amend the Credit Agreement as set forth herein.

NOW, THEREFORE, in consideration of the mutual promises and agreements herein
contained, the parties hereto hereby agree as follows:

1.         Amendment to Credit Agreement.

 

  (a)

The Credit Agreement is hereby amended in its entirety to reflect the
modifications identified in the document annexed hereto as Annex A.

 

  (b)

Schedule I to the Credit Agreement (Commitment Amounts) is hereby deleted in its
entirety and the Schedule I attached hereto is substituted in its stead.

2.         Representations and Warranties.

(a)         The Loan Parties hereby represent, warrant and covenant with Agent
and Lenders that, as of the date hereof:

(i)         All representations and warranties made in the Credit Agreement and
other Loan Documents are true and correct in all material respects on and as of
the Effective Date with the same effect as though made on and as of such date,
except to the extent that such representations and warranties expressly refer to
an earlier date, in which case they shall be true and correct in all material
respects of such earlier date (other than those representations and warranties
that are expressly qualified by a Material Adverse Effect or other materiality,
in which case such representations and warranties shall be true and correct in
all respects).

 

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(ii)         There exists no Default or Event of Default under any of the Loan
Documents.

 

3. Conditions to Effectiveness. This Amendment shall not be effective (the
“First Amendment Effective Date”) until each of the following conditions
precedent has been fulfilled to the reasonable satisfaction of the Agent:

 

  (a) This Amendment shall have been duly executed and delivered by the Loan
Parties, the Administrative Agent and the Lenders.

 

  (b) All action on the part of the Loan Parties necessary for the valid
execution, delivery and performance by the Loan Parties of this Amendment shall
have been duly and effectively taken. The Lenders shall have received such
customary corporate resolutions, certificates and other customary corporate
documents as the Agent shall reasonably request.

 

  (c) The Lenders shall have received customary opinions of counsel to the Loan
Parties.

 

  (d) After giving effect to this Amendment, no Default or Event of Default
shall have occurred and be continuing.

4.         This Amendment, which may be executed in multiple counterparts,
constitutes the entire agreement of the parties regarding the matters contained
herein and shall not be modified by any prior oral or written discussions.
Delivery of an executed counterpart of a signature page of this Amendment by
telecopy or other electronic imaging transmission (e.g. PDF by email) shall be
effective as delivery of a manually executed counterpart of this Amendment. The
Loan Parties hereby ratify, confirm and reaffirm all of the terms and conditions
of the Credit Agreement, and each of the other Loan Documents, and further
acknowledges and agrees that all of the terms and conditions of the Credit
Agreement shall remain in full force and effect except as expressly provided in
this Amendment. This Amendment constitutes a Loan Document for all purposes
under the Credit Agreement.

5.         Any determination that any provision of this Amendment or any
application hereof is invalid, illegal or unenforceable in any respect and in
any instance shall not affect the validity, legality or enforceability of such
provision in any other instance, or the validity, legality or enforceability of
any other provisions of this Amendment.

6.         This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.

[SIGNATURES ON FOLLOWING PAGE]

 

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It is intended that this Amendment take effect as an instrument under seal as of
the date first written above.

 

CTR PARTNERSHIP, L.P., a Delaware limited partnership   By:   CareTrust GP, LLC,
its general partner   By:   CareTrust REIT, Inc., its sole member   By:  

/s/ William Wagner

  Name:   William Wagner   Title:   CFO   CARETRUST REIT, INC., a Maryland
corporation   By:  

/s/ William Wagner

  Name:   William Wagner   Title:   CFO   CARETRUST GP, LLC, a Delaware limited
liability company   By:   CareTrust REIT, Inc., its sole member   By:  

/s/ William Wagner

  Name:   William Wagner   Title:   CFO   CARETRUST CAPITAL CORP., a Delaware
corporation   By:  

/s/ William Wagner

  Name:   William Wagner   Title:   CFO  

 

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CTR ARVADA PREFERRED, LLC, a
Delaware limited liability company   By:   CTR Partnership, L.P., its sole
member   By:   CareTrust GP, LLC, its general partner   By:   CareTrust REIT,
Inc., its sole member   By:  

/s/ William Wagner

  Name:   William Wagner   Title:   CFO  

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

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18TH PLACE HEALTH HOLDINGS LLC

49TH STREET HEALTH HOLDINGS LLC

4TH STREET HOLDINGS LLC

51ST AVENUE HEALTH HOLDINGS LLC

ANSON HEALTH HOLDINGS LLC

ARAPAHOE HEALTH HOLDINGS LLC

ARROW TREE HEALTH HOLDINGS LLC

AVENUE N HOLDINGS LLC

BIG SIOUX RIVER HEALTH HOLDINGS LLC

BOARDWALK HEALTH HOLDINGS LLC

BOGARDUS HEALTH HOLDINGS LLC

BURLEY HEALTHCARE HOLDINGS LLC

CASA LINDA RETIREMENT LLC

CHERRY HEALTH HOLDINGS LLC

CM HEALTH HOLDINGS LLC

COTTONWOOD HEALTH HOLDINGS LLC

DALLAS INDEPENDENCE LLC

DIXIE HEALTH HOLDINGS LLC

EMMETT HEALTHCARE HOLDINGS LLC

ENSIGN BELLFLOWER LLC

ENSIGN SOUTHLAND LLC

EVERGLADES HEALTH HOLDINGS LLC

EXPO PARK HEALTH HOLDINGS LLC

EXPRESSWAY HEALTH HOLDINGS LLC

FALLS CITY HEALTH HOLDINGS LLC

FIFTH EAST HOLDINGS LLC

FIG STREET HEALTH HOLDINGS LLC

FLAMINGO HEALTH HOLDINGS LLC

FORT STREET HEALTH HOLDINGS LLC

GAZEBO PARK HEALTH HOLDINGS LLC

GILLETTE PARK HEALTH HOLDINGS LLC

GOLFVIEW HOLDINGS LLC

GUADALUPE HEALTH HOLDINGS LLC

HILLENDAHL HEALTH HOLDINGS LLC

HILLVIEW HEALTH HOLDINGS LLC

IRVING HEALTH HOLDINGS LLC

IVES HEALTH HOLDINGS LLC

JEFFERSON RALSTON HOLDINGS LLC

JORDAN HEALTH PROPERTIES LLC

JOSEY RANCH HEALTHCARE HOLDINGS LLC

KINGS COURT HEALTH HOLDINGS LLC

LAFAYETTE HEALTH HOLDINGS LLC

LEMON RIVER HOLDINGS LLC

LOCKWOOD HEALTH HOLDINGS LLC

LONG BEACH HEALTH ASSOCIATES LLC

LOWELL HEALTH HOLDINGS LLC

LOWELL LAKE HEALTH HOLDINGS LLC

LUFKIN HEALTH HOLDINGS LLC

MEMORIAL HEALTH HOLDINGS LLC

 

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MESQUITE HEALTH HOLDINGS LLC

MISSION CCRC LLC

MOENIUM HOLDINGS LLC

NORTHSHORE HEALTHCARE HOLDINGS LLC

OLESON PARK HEALTH HOLDINGS LLC

OREM HEALTH HOLDINGS LLC

PAREDES HEALTH HOLDINGS LLC

POLK HEALTH HOLDINGS LLC

PRAIRIE HEALTH HOLDINGS LLC

PRICE HEALTH HOLDINGS LLC

QUEEN CITY HEALTH HOLDINGS LLC

QUEENSWAY HEALTH HOLDINGS LLC

RB HEIGHTS HEALTH HOLDINGS LLC

REGAL ROAD HEALTH HOLDINGS LLC

RENEE AVENUE HEALTH HOLDINGS LLC

RIO GRANDE HEALTH HOLDINGS LLC

SALMON RIVER HEALTH HOLDINGS LLC

SALT LAKE INDEPENDENCE LLC

SAN CORRINE HEALTH HOLDINGS LLC

SARATOGA HEALTH HOLDINGS LLC

SILVER LAKE HEALTH HOLDINGS LLC

SILVERADA HEALTH HOLDINGS LLC

SNOHOMISH HEALTH HOLDINGS LLC

SOUTH DORA HEALTH HOLDINGS LLC

STILLHOUSE HEALTH HOLDINGS LLC

TEMPLE HEALTH HOLDINGS LLC

TENTH EAST HOLDINGS LLC

TRINITY MILL HOLDINGS LLC

TROUSDALE HEALTH HOLDINGS LLC

TULALIP BAY HEALTH HOLDINGS LLC

VERDE VILLA HOLDINGS LLC

WAYNE HEALTH HOLDINGS LLC

WILLITS HEALTH HOLDINGS LLC

WILLOWS HEALTH HOLDINGS LLC

WISTERIA HEALTH HOLDINGS LLC,

each a Nevada limited liability company

 

By:

 

CTR Partnership, L.P., its sole member

By:

 

CareTrust GP, LLC, its general partner

By:

 

CareTrust REIT, Inc., its sole member

By:

 

/s/ William Wagner                    

Name:

 

William Wagner

Title:

 

CFO

 

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AGENT AND LENDERS:

KEYBANK NATIONAL

ASSOCIATION, as the Administrative

Agent, as the Issuing Bank, as the Swingline

Lender and as a Lender

By:

  /s/ Eric Hafertepen                            

Name:

 

Eric Hafertepen

Title:

 

  Vice President

 

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RAYMOND JAMES BANK, N.A., as a

Lender

By:

  /s/ James M. Armstrong                

Name:

 

James M. Armstrong

Title:

 

  Senior Vice President

 

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BMO HARRIS BANK, N.A., as a Lender

By:

  /s/ Lloyd Baron                                     

Name:

 

Lloyd Baron

Title:

 

  Director

 

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BARCLAYS BANK PLC, as a Lender

By:

  /s/ Bonnie Glenn                                

Name: Bonnie Glenn

Title: Vice President

 

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ROYAL BANK OF CANADA, as a Lender

By:

  /s/ Joshua Freedman                    

Name:

 

Joshua Freedman

Title:

 

   Authorized Signatory

 

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FIFTH THIRD BANK, as a Lender

By:

 

/s/ Thomas Avery                                

Name:

 

Thomas Avery

Title:

 

  Relationship Manager

 

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WELLS FARGO BANK N.A., as a Lender

By:

 

/s/ Darin Mullis                                

Name:

 

Darin Mullis

Title:

 

  Director

 

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FIRST BANK, A MISSOURI STATE CHARTERED BANK, as a Lender

By:

 

/s/ Richard Sutton                            

Name:

 

Richard Sutton

Title:

 

Senior Vice President

 

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ANNEX A

CREDIT AND GUARANTY AGREEMENT

dated as of August 5, 2015

as amended through February 1, 2016

among

CTR PARTNERSHIP, L.P.,

as Borrower

CARETRUST REIT, INC.,

as REIT Guarantor

THE OTHER GUARANTORS PARTY HERETO

THE LENDERS FROM TIME TO TIME PARTY HERETO

and

KEYBANK NATIONAL ASSOCIATION,

A NATIONAL BANKING ASSOCIATION

as Administrative Agent

KEYBANC CAPITAL MARKETS, RAYMOND JAMES BANK, N.A. AND BMO CAPITAL MARKETS

as Joint Lead Arrangers and Book Managers

RAYMOND JAMES BANK, N.A. AND BMO CAPITAL MARKETS

as Co-Syndication Agents

BARCLAYS BANK PLC AND RBC CAPITAL MARKETS

as Co-Documentation Agents

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TABLE OF CONTENTS

 

Article I DEFINITIONS; CONSTRUCTION

     1   

Section 1.1.

  Definitions      1   

Section 1.2.

  Classifications of Loans and Borrowings      53   

Section 1.3.

  Accounting Terms and Determination      53   

Section 1.4.

  Terms Generally      53   

Article II AMOUNT AND TERMS OF THE COMMITMENTS

     54   

Section 2.1.

  General Description of Facilities      54   

Section 2.2.

  Revolving Loans      54   

Section 2.3.

  Procedure for Revolving Borrowings      55   

Section 2.4.

  Swingline Commitment      55   

Section 2.5.

  Extension Option      57   

Section 2.6.

  Funding of Borrowings      58   

Section 2.7.

  Interest Elections      59   

Section 2.8.

  Optional Reduction and Termination of Commitments      60   

Section 2.9.

  Repayment of Loans      61   

Section 2.10.

  Evidence of Indebtedness      61   

Section 2.11.

  Optional Prepayments      63   

Section 2.12.

  Mandatory Prepayments      63   

Section 2.13.

  Interest on Loans      63   

Section 2.14.

  Fees      64   

Section 2.15.

  Computation of Interest and Fees      66   

Section 2.16.

  Inability to Determine Interest Rates      66   

Section 2.17.

  Illegality      67   

Section 2.18.

  Increased Costs      67   

Section 2.19.

  Funding Indemnity      69   

Section 2.20.

  Taxes      69   

Section 2.21.

  Payments Generally; Pro Rata Treatment; Sharing of Set-offs      72   

Section 2.22.

  Letters of Credit      74   

Section 2.23.

  Increase of Commitments; Additional Lenders      79   

Section 2.24.

  Mitigation of Obligations      84   

Section 2.25.

  Replacement of Lenders      84   

Section 2.26.

  Defaulting Lenders      84   

Section 2.27.

  Request for Extended Facilities      88    Article III CONDITIONS PRECEDENT TO
LOANS AND LETTERS OF CREDIT; ADDITIONS OF BORROWING BASE ASSETS      90   

Section 3.1.

  Conditions to Effectiveness      91   

Section 3.2.

  Conditions to Each Credit Event      94   

Section 3.3.

  Delivery of Documents      94   

Section 3.4.

  Removal of Borrowing Base Assets and Releases of Loan Parties      94   

Article IV REPRESENTATIONS AND WARRANTIES

     95   

Section 4.1.

  Due Organization and Good Standing      96   

 

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Section 4.2.

  Power and Authority, Due Authorization, Execution, Delivery and Enforceability
     96   

Section 4.3.

  Governmental and Third Party Consents and Approvals; No Conflicts      96   

Section 4.4.

  Financial Statements; Material Adverse Change      96   

Section 4.5.

  Litigation and Environmental Matters      97   

Section 4.6.

  Compliance with Laws      98   

Section 4.7.

  Investment Company Act      99   

Section 4.8.

  Taxes      99   

Section 4.9.

  Margin Regulations      99   

Section 4.10.

  ERISA      100   

Section 4.11.

  Ownership of Property      100   

Section 4.12.

  Accuracy of Disclosure      102   

Section 4.13.

  Labor Relations      102   

Section 4.14.

  Subsidiaries      102   

Section 4.15.

  Solvency      103   

Section 4.16.

  Insurance      103   

Section 4.17.

  Reserved      103   

Section 4.18.

  Real Property Assets; Leases      103   

Section 4.19.

  Assignment of Claims Act      104   

Section 4.20.

  Healthcare Matters      104   

Section 4.21.

  OFAC      108   

Section 4.22.

  Patriot Act      108   

Section 4.23.

  No Default      108   

Section 4.24.

  Intellectual Property      108   

Section 4.25.

  REIT Status      108   

Section 4.26.

  EEA Financial Institution      108   

Article V AFFIRMATIVE COVENANTS

     108   

Section 5.1.

  Financial Statements and Other Information      109   

Section 5.2.

  Notices of Material Events      111   

Section 5.3.

  Existence; Conduct of Business      114   

Section 5.4.

  Compliance with Laws      114   

Section 5.5.

  Payment of Taxes and Other Obligations      114   

Section 5.6.

  Books and Records      115   

Section 5.7.

  Visitation and Inspection      115   

Section 5.8.

  Maintenance of Properties      115   

Section 5.9.

  Insurance      116   

Section 5.10.

  Use of Proceeds; Margin Regulations      116   

Section 5.11.

  Casualty and Condemnation      116   

Section 5.12.

  Additional Subsidiaries      116   

Section 5.13.

  REIT Status      118   

Section 5.14.

  Further Assurances      118   

Section 5.15.

  Healthcare Matters      118   

Section 5.16.

  Environmental Matters      119   

Section 5.17.

  Borrowing Base Additions      120   

Section 5.18.

  Borrowing Base Assets      121   

Section 5.19.

  Borrowing Base Leases      121   

 

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Section 5.20.

  Borrowing Base Certificates      122   

Section 5.21.

  Eligible Ground Leases      122   

Section 5.22.

  Borrowing Base Covenants      123   

Section 5.23.

  Post-Closing Matters      124   

Article VI FINANCIAL COVENANTS

     124   

Section 6.1.

  Consolidated Leverage Ratio      125   

Section 6.2.

  Consolidated Fixed Charge Coverage Ratio      125   

Section 6.3.

  Consolidated Tangible Net Worth      125   

Section 6.4.

  Distribution Limitation      125   

Section 6.5.

  Secured Debt      125   

Section 6.6.

  Recourse Debt      125   

Article VII NEGATIVE COVENANTS

     126   

Section 7.1.

  Indebtedness and Preferred Equity      126   

Section 7.2.

  Liens      128   

Section 7.3.

  Fundamental Changes      130   

Section 7.4.

  Investments, Loans      130   

Section 7.5.

  Restricted Payments      132   

Section 7.6.

  Sale of Assets      133   

Section 7.7.

  Transactions with Affiliates      134   

Section 7.8.

  Restrictive Agreements      136   

Section 7.9.

  Sale and Leaseback Transactions      136   

Section 7.10.

  Hedging Transactions      137   

Section 7.11.

  Amendment to Organizational Documents      137   

Section 7.12.

  RESERVED      137   

Section 7.13.

  Business      137   

Section 7.14.

  Accounting Changes      137   

Section 7.15.

  Government Regulation      137   

Section 7.16.

  Limited Activities of GP LLC      138   

Article VIII EVENTS OF DEFAULT

     138   

Section 8.1.

  Events of Default      138   

Section 8.2.

  Application of Proceeds      141   

Article IX THE ADMINISTRATIVE AGENT

     142   

Section 9.1.

  Appointment of the Administrative Agent      143   

Section 9.2.

  Nature of Duties of the Administrative Agent      144   

Section 9.3.

  Lack of Reliance on the Administrative Agent      145   

Section 9.4.

  Certain Rights of the Administrative Agent      145   

Section 9.5.

  Reliance by the Administrative Agent      145   

Section 9.6.

  The Administrative Agent in its Individual Capacity      145   

Section 9.7.

  Successor Administrative Agent      145   

Section 9.8.

  Withholding Tax      146   

Section 9.9.

  The Administrative Agent May File Proofs of Claim      147   

Section 9.10.

  Authorization to Execute Other Loan Documents      148   

Section 9.11.

  Collateral and Guaranty Matters      148   

Section 9.12.

  Co-Documentation Agents; Co-Syndication Agent      149   

Section 9.13.

  Reserved      149   

Section 9.14.

  Bank Product Obligations and Hedging Obligations      149   

Article X MISCELLANEOUS

     149   

 

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Section 10.1.

  Notices      149   

Section 10.2.

  Waiver; Amendments      153   

Section 10.3.

  Expenses; Indemnification      156   

Section 10.4.

  Successors and Assigns      158   

Section 10.5.

  Governing Law; Jurisdiction; Consent to Service of Process.      163   

Section 10.6.

  WAIVER OF JURY TRIAL      164   

Section 10.7.

  Right of Set-off      164   

Section 10.8.

  Counterparts; Integration      164   

Section 10.9.

  Survival      165   

Section 10.10.

  Severability      165   

Section 10.11.

  Confidentiality      166   

Section 10.12.

  Interest Rate Limitation      167   

Section 10.13.

  Waiver of Effect of Corporate Seal      167   

Section 10.14.

  Patriot Act      167   

Section 10.15.

  No Advisory or Fiduciary Responsibility      168   

Section 10.16.

  Location of Closing      168   

Section 10.17.

  Reserved      168   

Section 10.18.

  Releases of Guaranty      168   

Section 10.19.

  Acknowledgment and Consent to Bail-In of EEA Financial Institutions      169
  

Article XI GUARANTY

     169   

Section 11.1.

  The Guaranty      170   

Section 11.2.

  Obligations Unconditional      170   

Section 11.3.

  Reinstatement      172   

Section 11.4.

  Certain Additional Waivers      172   

Section 11.5.

  Remedies      172   

Section 11.6.

  Rights of Contribution      172   

Section 11.7.

  Guarantee of Payment; Continuing Guarantee      172   

Section 11.8.

  Release of Subsidiary Loan Parties      173   

Section 11.9.

  Keepwell      173   

 

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Schedules

 

  Schedule I   -              Commitment Amounts   Schedule 4.11   -     
        Real Property   Schedule 4.14   -              Subsidiaries  
Schedule 4.18   -              Real Property Asset Matters                  Part
I                            Borrowing Base Assets                  Part II   
                        Other Real Property                  Part III   
                        Material Sub-leases   Schedule 4.19   -     
        Federal Assignment of Claims Act   Schedule 4.20   -     
        Healthcare Matters   Schedule 4.25   -              REIT Status  
Schedule 5.23   -              Post-Closing Matters   Schedule 7.1   -     
        Existing Indebtedness   Schedule 7.2   -              Existing Liens  
Schedule 7.4   -              Existing Investments   Schedule 7.8   -     
        Existing Leases with Restrictive Agreements

Exhibits

 

  Exhibit A   -      Form of Assignment and Acceptance   Exhibit B   -      Form
of Borrowing Base Certificate   Exhibit C   -      Form of Joinder Agreement  
Exhibit 2.3   -         Form of Notice of Revolving Borrowing   Exhibit 2.4   -
        Form of Notice of Swingline Borrowing   Exhibit 2.7   -         Form of
Notice of Continuation/Conversion   Exhibit 2.22   -         Form of Letter of
Credit Notice/Application  

Exhibit 3.1(b)(ii)

    

-

  

        Form of Secretary’s Certificate

 

Exhibit 3.1(b)(iv)

    

-

  

        Form of Officer’s Certificate

 

Exhibit 5.1(c)

    

-

  

        Form of Compliance Certificate

 

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CREDIT AND GUARANTY AGREEMENT

THIS CREDIT AND GUARANTY AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”) is made and entered into
as of August 5, 2015, as amended through February 1, 2016 by and among CTR
PARTNERSHIP, L.P., a Delaware limited partnership (the “Borrower”), CARETRUST
REIT, INC., a Maryland corporation (the “REIT Guarantor”), the other Guarantors
identified herein, the several banks and other financial institutions and
lenders from time to time party hereto (the “Lenders”) and KEYBANK NATIONAL
ASSOCIATION, in its capacity as administrative agent for the Lenders, as an
issuing bank and as swingline lender.

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Lenders establish a revolving
credit facility in an aggregate principal amount of up to $400,000,000 in favor
of the Borrower; and

WHEREAS, the Borrower has requested that the Lenders establish a term loan
facility on the First Amendment Effective Date (as defined below) in an
aggregate principal amount of $100,000,000 in favor of the Borrower; and

WHEREAS, subject to the terms and conditions of this Agreement, the Lenders, the
Issuing Banks and the Swingline Lender, to the extent of their respective
Commitments as defined herein, are willing severally to establish the requested
revolving credit facility, term loan facility, incremental term loan facility
(as applicable pursuant to Section 2.23), letter of credit subfacility and
swingline subfacility in favor of the Borrower;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Borrower, the Lenders, the Administrative Agent, the Issuing
Banks and the Swingline Lender agree as follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

Section 1.1.         Definitions. In addition to the other terms defined herein,
the following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):

“Acquisition” shall mean (i) any Investment by the REIT Guarantor or any of its
Subsidiaries in any other Person organized in the United States (with all or
substantially all of the assets of such Person and its Subsidiaries located in
the United States), pursuant to which such Person shall become a Subsidiary of
the REIT Guarantor or any of its Subsidiaries or shall be merged or otherwise
consolidated or combined with the REIT Guarantor or any of its Subsidiaries or
(ii) any acquisition by the REIT Guarantor or any of its Subsidiaries of the
assets of any Person (other than a Subsidiary of the REIT Guarantor) that
constitutes all or substantially all of the assets of such Person or a division
or business unit of such Person or any acquisition of one or more Real Property
Assets, whether through purchase, capital lease, exercise of an option to
purchase, merger or other business combination or transaction (and all or
substantially all of such assets, division or business

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unit are located in the United States). With respect to a determination of the
amount of an Acquisition, such amount shall include all consideration (including
any deferred payments) set forth in the applicable agreements governing such
Acquisition as well as the assumption of any Indebtedness in connection
therewith.

“Additional Lender” shall have the meaning set forth in Section 2.23.

“Adjusted Consolidated Debt” shall mean, as of any date of determination, the
sum of (i) all Consolidated Debt plus (ii) without duplication of Indebtedness
referred to in clause (i), the Consolidated Parties’ pro rata share of
Indebtedness attributable to interest in Unconsolidated Affiliates, in each case
as of such date.

“Adjusted Consolidated EBITDA” shall mean, for the Consolidated Parties for any
period.

(i)         Adjusted Consolidated Net Income for such period, plus,

(ii)         to the extent such amount was deducted (other than with respect to
clause (e) below) in calculating such Adjusted Consolidated Net Income (without
duplication): (a) Consolidated Interest Expense plus accretion or accrual of
discounted liabilities not constituting Indebtedness, expenses resulting from
the discounting of any outstanding Indebtedness in connection with the
application of purchase accounting in connection with any acquisition,
amortization of deferred financing fees, debt issuance costs, commissions, fees
and expenses, and expensing of bridge, commitment or other financing fees and
prepayment or redemption premiums; (b) provision for taxes based on income or
profits or capital gains, including federal, state, provincial, franchise,
excise and similar taxes and foreign withholding taxes; (c) depreciation and
amortization (including amortization or impairment write-offs of goodwill and
other intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period); (d) the amount of integration and other unusual fees,
costs and expenses deducted (and not added back) in such period in computing
Adjusted Consolidated Net Income, including any one-time direct transaction or
restructuring costs incurred in connection with equity issuance, Acquisitions,
Investments or Dispositions permitted pursuant to this Agreement, severance and
other restructuring, impairment and other one-time charges (in each case,
whether or not consummated), not to exceed for any four Fiscal Quarter period 10
percent (10%) of Adjusted Consolidated EBITDA (calculated before giving effect
to this clause (d)); (e) proceeds from any business interruption insurance;
(f) any non-cash compensation expense attributable to grants of stock options,
restricted stock or similar rights to officers, directors and employees of any
Consolidated Party; (g) other than any item covered by subsection (a) through
(f) above, all other unusual or non-recurring charges or items of loss or
expense, together with any related provision for taxes; (h) all other non-cash
items (other than straight-line rent) reducing Adjusted Consolidated Net Income
(other than items for which a cash expense has been actually paid), including
any impairment charge or asset write-offs or write-downs related to intangible
assets (including goodwill) and long-lived assets pursuant to GAAP; (i) any
losses resulting from mark to market accounting of Hedge Agreements or other
derivative instruments permitted pursuant

 

2

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to this Agreement (including, by virtue of a termination thereof); (j) costs,
fees, charges and other expenses related to the Loan Documents, the Existing
Credit Agreement and other Indebtedness not prohibited hereunder, the Spin Off
Transaction and the other Related Transactions; and (k) all payments made under
any Permitted Bond Hedge Transaction to the extent permitted pursuant to this
Agreement, less

(iii)         to the extent such amount was included in calculating such
Adjusted Consolidated Net Income (without duplication): (a) all non-cash items
(other than straight-line rent) increasing Adjusted Consolidated Net Income;
(b) all payments received under any Permitted Bond Hedge Transaction to the
extent permitted pursuant to this Agreement; (c) any non-recurring items of
income or gain; and (d) any gains resulting from mark to market accounting of
Hedge Agreements or other derivative instruments permitted pursuant to this
Agreement, all as determined on a consolidated basis for the Consolidated
Parties in conformity with GAAP, less

(iv)         Capital Reserves for such period.

For purposes of this definition, Adjusted Consolidated EBITDA shall be adjusted
to remove any impact from (A) straight line rent adjustments required under
GAAP, (B) amortization of intangibles pursuant to FASB ASC 805 and (C) the
amortization of deferred market rent into income pursuant to FAS 141;
notwithstanding the foregoing, (1) Adjusted Consolidated EBITDA for the
(12) month period ending March 31, 2015 shall be deemed to be the Adjusted
Consolidated EBITDA for the quarter ending March 31, 2015 annualized,
(2) Adjusted Consolidated EBITDA for the (12) month period ending June 30, 2015
shall be deemed to be the Adjusted Consolidated EBITDA for the six (6) months
ending June 30, 2015 annualized, and (3) Adjusted Consolidated EBITDA for the
(12) month period ending September 30, 2015 shall be deemed to be the Adjusted
Consolidated EBITDA for the nine (9) months ending September 30, 2015
annualized. The Administrative Agent and the Lenders agree that the Adjusted
Consolidated EBITDA for the three (3) month period ending March 31, 2015 was
$13,880,900.00.

“Adjusted Consolidated Net Income” shall mean, for any period, the sum without
duplication of (x) the aggregate net income (or loss) (before giving effect to
cash dividends on preferred stock of the REIT Guarantor or charges resulting
from the redemption of preferred stock of the REIT Guarantor) of the
Consolidated Parties for such period determined on a consolidated basis in
conformity with GAAP; and (y) without duplication, the Consolidated Parties’
Ownership Share of the aggregate net income (or loss) attributable to interests
in Unconsolidated Affiliates provided, however, that the following items shall
be excluded in computing Adjusted Consolidated Net Income, without duplication:
(i) the net income of any Person, other than the Consolidated Parties, except to
the extent of the amount of dividends or other distributions actually paid in
cash (or to the extent converted into cash) or Permitted Investments to the
Consolidated Parties by such Person during such period; (ii) solely for purposes
of calculating the Consolidated Fixed Charge Coverage Ratio, the undistributed
net income of any Subsidiary that is not a Loan Party to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
of such net income is not at the time of the last day of such period permitted
by the operation of the

 

3

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terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Subsidiary, unless
such restrictions with respect to the declaration and payment of dividends or
distributions have been properly waived; provided, however, that Adjusted
Consolidated Net Income will be increased by the amount of dividends or other
distributions or other payments made in cash (or to the extent converted into
cash) or Permitted Investments to any Consolidated Party by such Person during
such period, to the extent not already included therein; (iii) the cumulative
effect of a change in accounting principles; (iv) all after-tax gains or losses
attributable to asset sales and other Dispositions, together with any related
provision for taxes; (v) all extraordinary charges, gains or losses or expenses;
(vi) any gains or losses resulting from the early extinguishment of
indebtedness; (vii) any gains or losses attributable to the write-ups or
write-downs (as applicable) of assets or the sale of assets, in each case,
together with any related provision for taxes; (viii) the Consolidated Parties’
Ownership Share of the foregoing items and components attributable to interests
in Unconsolidated Affiliates and (ix) income and expenses allocated to minority
owners and other deductions for non-controlling or minority interests of the
Borrower (but not any other Subsidiary of the REIT Guarantor).

“Adjusted Funds From Operations” for any period shall mean the Adjusted
Consolidated Net Income for such period, plus depreciation and amortization of
real property (including furniture and equipment) and other real estate assets
and excluding (to the extent such amount was added or deducted, as applicable,
in calculating such Adjusted Consolidated Net Income): (i) gains or losses from
(a) the restructuring or refinancing of Indebtedness or (b) sales of properties;
(ii) non-cash asset impairment charges; (iii) non-cash charges related to
redemptions of preferred stock of the REIT Guarantor; (iv) any non-cash
compensation expense attributable to grants of stock options, restricted stock
or similar rights to officers, directors and employees of Consolidated Parties;
(v) the amortization of financing fees and the write-off of financing costs;
(vi) deferred rental income; (vii) any one-time direct transaction or
restructuring costs incurred in connection with acquisitions or dispositions;
(viii) any other non-cash charges associated with the sale or settlement of any
Hedging Transaction; and (ix) costs, fees, charges and other expenses related to
the Loan Documents, the Spin-Off Transaction and the other Related Transactions.

“Adjusted LIBOR” shall mean, with respect to each Interest Period for a
Eurodollar Loan, (i) the London interbank offered rate as administered by ICE
Benchmark Administration (or any other Person that takes over the administration
of such rate for U.S. Dollars) for a period equal in length to such Interest
Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that
displays such rate (or, in the event such rate does not appear on a Reuters page
or screen, on any successor or substitute page on such screen that displays such
rate, or on the appropriate page of such other information service that
publishes such rate from time to time as selected by the Administrative Agent in
its reasonable discretion; in each case the “LIBOR Screen Rate”) at
approximately 11:00 A.M. (London time) two (2) Business Days prior to the first
day of such Interest Period, with a maturity comparable to such Interest Period,
divided by (ii) a percentage equal to 100% minus the then stated maximum rate of
all reserve requirements (including any marginal, emergency, supplemental,
special or other reserves and without benefit of credits for proration,
exceptions or offsets that may be available from time to time) applicable to any
member bank of the Federal Reserve System in respect of Eurocurrency liabilities
as defined in Regulation D (or any successor category of liabilities under
Regulation

 

4

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D); provided, that if the rate referred to in clause (i) above is not available
at any such time for any reason, then the rate referred to in clause (i) shall
instead be the interest rate per annum, as determined by the Administrative
Agent, to be the arithmetic average of the rates per annum at which deposits in
U. S. Dollars in an amount equal to the amount of such Eurodollar Loan are
offered by major banks in the London interbank market to the Administrative
Agent at approximately 11:00 A.M. (London time), two (2) Business Days prior to
the first day of such Interest Period. If Adjusted LIBOR determined as provided
above would be less than zero, Adjusted LIBOR shall be deemed to be zero.

“Adjusted NOI” shall mean, with respect to any Real Property Asset not leased to
a third party under a triple-net lease, the Property NOI of such Real Property
Asset, less Capital Reserves.

“Administrative Agent” shall mean KeyBank National Association in its capacity
as administrative agent for the Lenders under any of the Loan Documents, or any
successor administrative agent.

“Administrative Questionnaire” shall mean, with respect to each Lender, an
administrative questionnaire in the form provided by the Administrative Agent
and submitted to the Administrative Agent duly completed by such Lender.

“Affiliate” shall mean, as to any Person, any other Person that directly, or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
under common Control with, such Person. For the purposes of this definition,
“Control” shall mean the power, directly or indirectly, either to (i) vote ten
percent (10%) or more of the securities having ordinary voting power for the
election of directors (or persons performing similar functions) of a Person or
(ii) direct or cause the direction of the management and policies of a Person,
whether through the ability to exercise voting power, by control or otherwise;
provided that, notwithstanding the foregoing, Ensign and its Subsidiaries shall
be deemed not to be Affiliates of the REIT Guarantor and its Subsidiaries. The
terms “Controlled by” and “under common Control with” have the meanings
correlative thereto.

“Aggregate Revolving Commitment Amount” shall mean the aggregate principal
amount of the Aggregate Revolving Commitments from time to time. On the First
Amendment Effective Date, the Aggregate Revolving Commitment Amount is
$400,000,000.

“Aggregate Revolving Commitments” shall mean, collectively, all Revolving
Commitments of all Lenders at any time outstanding.

“Agreement” shall have the meaning set forth in the introductory paragraph
hereof.

“Anti-Terrorism Order” shall mean Executive Order 13224, signed by President
George W. Bush on September 23, 2001.

“Applicable Distribution Period” shall mean, for each Fiscal Quarter, the
immediately prior four Fiscal Quarter period.

 

5

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“Applicable Lending Office” shall mean, for each Lender and for each Type of
Loan, the “Lending Office” of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan in the Administrative Questionnaire submitted
by such Lender or such other office of such Lender (or such Affiliate of such
Lender) as such Lender may from time to time specify to the Administrative Agent
and the Borrower as the office by which its Loans of such Type are to be made
and maintained.

“Applicable Margin” shall mean, as of any date, with respect to all Loans
outstanding on such date or the letter of credit fee, as the case may be, the
percentage per annum determined by reference to the applicable Consolidated
Leverage Ratio in effect on such date as set forth in the pricing grid below
(the “Pricing Grid”); provided that a change in the Applicable Margin resulting
from a change in the Consolidated Leverage Ratio shall be effective on the
second (2nd) Business Day after the Borrower delivers each of the financial
statements required by Section 5.1(a) and (b) and the Compliance Certificate
required by Section 5.1(d); provided, further, that if at any time the Borrower
shall have failed to deliver such financial statements and such Compliance
Certificate when so required, the Applicable Margin shall be at Level V as set
forth in the Pricing Grid until such time as such financial statements and
Compliance Certificate are delivered, at which time the Applicable Margin shall
be determined as provided above. Notwithstanding the foregoing, the Applicable
Margin from the Closing Date until the date by which the financial statements
and Compliance Certificate for the Fiscal Quarter ending June 30, 2015 are
required to be delivered shall be at Level IV as set forth in the Pricing Grid.
In the event that any financial statement or Compliance Certificate delivered
hereunder is shown to be inaccurate (regardless of whether this Agreement or the
Commitments are in effect when such inaccuracy is discovered), and such
inaccuracy, if corrected, would have led to the application of a higher
Applicable Margin based upon the Pricing Grid (the “Accurate Applicable Margin”)
for any period that such financial statement or Compliance Certificate covered,
then (i) the Borrower shall promptly deliver to the Administrative Agent a
correct financial statement or Compliance Certificate, as the case may be, for
such period, (ii) the Applicable Margin shall be adjusted such that after giving
effect to the corrected financial statement or Compliance Certificate, as the
case may be, the Applicable Margin shall be reset to the accurate Applicable
Margin based upon the Pricing Grid for such period and (iii) the Borrower shall
promptly pay to the Administrative Agent, for the account of the Lenders, the
accrued additional interest owing as a result of such Accurate Applicable Margin
for such period. The provisions of this definition shall not limit the rights of
the Administrative Agent and the Lenders with respect to Section 2.13(c) or
Article VIII.

Pricing Grid

 

Pricing    

Level

  

Consolidated

Leverage

Ratio

  

Applicable
Margin for
Revolving
Loans that

are

Eurodollar
Loans

   Applicable
Margin for
Revolving
Loans that are    
Base Rate
Loans    Applicable
Margin for
First
Amendment    
Term Loan
Eurodollar
Loans    Applicable
Margin for
First
Amendment
Term Loan
Base Rate
Loans

 

6

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I

  

Less than or equal

to 40%

  

1.75%

per annum

  

0.75%

per annum

  

1.95%

per annum

  

0.95%

per annum

II

  

Greater than 40%

and less than or

equal to 45%

  

1.85%

per annum

  

0.85%

per annum

  

2.05%

per annum

  

1.05%

per annum

III

  

Greater than 45%

and less than or

equal to 50%

  

1.95%

per annum

  

0.95%

per annum

  

2.15%

per annum

  

1.15%

per annum

IV

  

Greater than 50%

and less than or

equal to 55%

  

2.15%

per annum

  

1.15%

per annum

  

2.35%

per annum

  

1.35%

per annum

V

  

Greater than 55%

  

2.40%

per annum

 

  

1.40%

per annum

 

  

2.60%

per annum

 

  

1.60%

per annum

 

Notwithstanding the foregoing, in the event that, following the Closing Date,
the REIT Guarantor obtains a credit rating of BBB-/Baa3 or higher from S&P or
Moody’s (each such rating, an “Investment Grade Rating”) on its senior long term
unsecured debt, then at the election of the Borrower, which election shall be
irrevocable if made, then the Pricing Grid set forth above shall be replaced in
its entirety with, and the Applicable Margin shall thereafter be determined by
reference to, the grid set forth below (the “IGR Pricing Grid”). In the event
that the REIT Guarantor obtains two Investment Grade Ratings and the Borrower
elects to replace the Pricing Grid with the IGR Pricing Grid, then the
Applicable Margin shall be determined by reference to the IGR Pricing Grid as
follows: (i) if the lower of the two Investment Grade Ratings is one level below
the higher of the Investment Grade Ratings as set forth in the IGR Pricing Grid,
then the Applicable Margin shall be the higher of the two Investment Grade
Ratings, and (ii) if the lower of the two Investment Grade Ratings is two or
more levels below the higher of the Investment Grade Ratings as set forth in the
IGR Pricing Grid, then the Applicable Margin shall be the level of the IGR
Pricing Grid that is one level below the highest Investment Grade Rating
received by the REIT Guarantor.

IGR Pricing Grid

 

Pricing
Level   

Ratings:

S&P or

Moody’s

  

Applicable
Margin for
Revolving

Loans that are
Eurodollar
Loans

  

Applicable
Margin for
Revolving

Loans that are
Base Rate

Loans

  

Applicable
Margin for

First
Amendment
Term Loan
Eurodollar
Loans

  

Applicable
Margin for First
Amendment
Term Loan Base
Rate

Loans

I

  

At least A- or A3

  

0.875%

per annum

  

0.00%

per annum

  

1.40% per annum

  

0.40% per

annum

II

  

At least BBB+ or Baa1

  

0.925%

per annum

  

0.00%

per annum

  

1.45% per annum

  

0.45% per

annum

 

7

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III

  

At least BBB or

Baa2

  

1.05%

per annum

  

0.05%

per annum

  

1.55% per annum

  

0.55% per

annum

IV

  

At least BBB- or

Baa3

  

1.25%

per annum

  

0.25%

per annum

  

1.80% per annum

  

0.80% per

annum

V

  

Below BBB- and

Baa3

  

1.55%

per annum

  

0.55%

per annum

  

2.35% per annum

  

1.35% per

annum

“Applicable Unused Fee Percentage” shall mean an amount equal to (i) if the
average daily Revolving Credit Exposure is less than 50% of the Aggregate
Revolving Commitment Amount for the subject quarter, 0.25% per annum, and
(ii) if the average daily Revolving Credit Exposure is equal to or greater than
50% of the Aggregate Revolving Commitment Amount for the subject quarter,
0.15% per annum.

“Approved Fund” shall mean any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (i) a Lender, (ii) an Affiliate
of a Lender or (iii) an entity or an Affiliate of an entity that administers or
manages a Lender.

“Approved Managers” shall mean (a) any of the property managers proposed by the
Borrower that are preapproved by the Administrative Agent and the Lenders as of
the Closing Date or (b) any other property manager reasonably acceptable to the
Administrative Agent with experience managing properties which are substantially
similar to the applicable Borrowing Base Asset, and which is engaged to manage
one or more Real Property Assets constituting Borrowing Base Assets pursuant to
a management agreement between such Person or property manager and the
applicable Loan Party that owns (or ground leases) such Borrowing Base Asset.

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.4(b)) and accepted by the Administrative Agent, in the
form of Exhibit A attached hereto or any other form approved by the
Administrative Agent.

“Availability Period” shall mean the period from the Closing Date to but
excluding the Revolving Commitment Termination Date.

“Available Loan Amount” shall mean (a) the Borrowing Base Amount less (b) the
Total Unsecured Indebtedness of the Consolidated Group (excluding the
Obligations).

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

 

8

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“Bank Product Obligations” shall mean, collectively, all obligations and other
liabilities of any Loan Party to any Bank Product Provider arising with respect
to any Bank Products.

“Bank Product Provider” shall mean any Person that, at the time it provides any
Bank Product to any Loan Party, (i) is a Lender or an Affiliate of a Lender and
(ii) except when the Bank Product Provider is KeyBank and its Affiliates, has
provided prior written notice to the Administrative Agent which has been
acknowledged by the Borrower of (x) the existence of such Bank Product, (y) the
maximum dollar amount of obligations arising thereunder (the “Bank Product
Amount”) and (z) the methodology to be used by such parties in determining the
obligations under such Bank Product from time to time. In no event shall any
Bank Product Provider acting in such capacity be deemed a Lender for purposes
hereof to the extent of and as to Bank Products except that each reference to
the term “Lender” in Article IX and Section 10.3(b) shall be deemed to include
such Bank Product Provider. The Bank Product Amount may be changed from time to
time upon written notice to the Administrative Agent by the applicable Bank
Product Provider. No Bank Product Amount may be established at any time that a
Default or Event of Default exists.

“Bank Products” shall mean any of the following services provided to any Loan
Party by any Bank Product Provider: (i) any treasury or other cash management
services, including deposit accounts, automated clearing house (ACH) origination
and other funds transfer, depository (including cash vault and check deposit),
zero balance accounts and sweeps, return items processing, controlled
disbursement accounts, positive pay, lockboxes and lockbox accounts, account
reconciliation and information reporting, payables outsourcing, payroll
processing, trade finance services, investment accounts and securities accounts,
and (ii) card services, including credit cards (including purchasing cards and
commercial cards), prepaid cards, including payroll, stored value and gift
cards, merchant services processing, and debit card services.

“Bankruptcy Code” shall mean the United States Bankruptcy Code (11 U.S.C. § 101
et seq.) and any successor statute.

“Bankruptcy Event” shall mean, with respect to any Person, the occurrence of any
of the following: (i) the entry of a decree or order for relief by a court or
governmental agency in an involuntary case under any applicable Debtor Relief
Law or any other bankruptcy, insolvency or other similar law now or hereafter in
effect, or the appointment by a court or governmental agency of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
such Person or for any substantial part of its property or the ordering of the
winding up or liquidation of its affairs by a court or governmental agency and
such decree, order or appointment is not vacated or discharged within ninety
(90) days of its filing; or (ii) the commencement against such Person of an
involuntary case under any applicable Debtor Relief Law or any other bankruptcy,
insolvency or other similar law now or hereafter in effect, or of any case,
proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed for a period of ninety (90) consecutive days, or
the repossession or seizure by a creditor of such Person of a substantial part
of its property; or (iii) such Person shall commence a

 

9

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voluntary case under any applicable Debtor Relief Law or any other bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary case under any such law, or
consent to the appointment of or the taking possession by a receiver,
liquidator, assignee, creditor in possession, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its property
or make any general assignment for the benefit of creditors; or (iv) the filing
of a petition by such Person seeking to take advantage of any Debtor Relief Law
or any other applicable Requirement of Law, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
of debts, or (v) such Person shall fail to contest in a timely and appropriate
manner (and if not dismissed within ninety (90) days) or shall consent to any
petition filed against it in an involuntary case under such bankruptcy laws or
other applicable Requirement of Law or consent to any proceeding or action
relating to any bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts with respect to its assets or existence, or
(vi) such Person shall admit in writing an inability to pay its debts generally
as they become due.

“Base Rate” shall mean, for any day, a rate per annum equal to the greatest of
(a) the rate which the Wall Street Journal reports from time to time as the
prime lending rate, as in effect from time to time, (b) the Federal Funds Rate
in effect on such day plus 1/2 of one percent (.50%), and (c) one percent
(1%) per annum. Any change in the Base Rate due to a change in such prime
lending rate or the Federal Funds Rate shall be effective from and including the
effective date of such change in the prime lending rate or the Federal Funds
Rate, respectively.

“Borrower” shall have the meaning set forth in the introductory paragraph
hereof.

“Borrowing” shall mean a borrowing consisting of (i) Loans of the same Class and
Type, made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect, or (ii) a
Swingline Loan.

“Borrowing Base Amount” shall mean the lesser of (i) sixty percent (60%) of the
Property Value of all Borrowing Base Assets provided that, if the Borrower shall
have consummated a Material Acquisition, such ratio shall increase to sixty five
percent (65%) after giving effect to the inclusion of any such Real Property
Asset as a Borrowing Base Asset for the two consecutive Fiscal Quarter period
following such Material Acquisition, provided the Borrower shall not have the
right to increase to sixty five (65%) percent more than three (3) times during
the term of this Agreement; and (ii) the Interest Coverage Amount; provided,
however; that (I) at no time shall more than fifteen percent (15%) of the
Borrowing Base Amount be attributable to Borrowing Base Assets subject to
Eligible Ground Leases, and (II) except as otherwise specifically provided in
this Agreement, any Borrowing Base Asset that is a Suspended Borrowing Base
Asset shall not be included in the calculation of the Borrowing Base Amount or
the calculation of the percentages set forth in clauses (i) and (ii) of this
definition.

“Borrowing Base Asset” shall mean a Real Property Asset located in the United
States that the Borrower has designated as a Borrowing Base Asset in the most
recent Borrowing Base Certificate delivered to the Administrative Agent and
which, as of any date of determination, satisfies all of the following
requirements:

 

10

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(i)        such Real Property Asset is 100% owned by a Subsidiary Loan Party in
fee simple or ground leased pursuant to an Eligible Ground Lease;

(ii)        such Real Property Asset is not subject to any Lien (other than any
Permitted Encumbrance) or Negative Pledge (other than pursuant to an Eligible
Ground Lease);

(iii)        such Real Property Asset is free of all material mechanical and
structural defects (as evidenced by a property condition and structural report
reasonably acceptable to the Administrative Agent) and other adverse physical
conditions except for defects, conditions or matters individually or
collectively which are not material to the profitable operation of such Real
Property Asset;

(iv)        such Real Property Asset is utilized as a Healthcare Facility;

(v)        such Real Property Asset is leased to and operated by an Eligible
Tenant pursuant to Borrowing Base Lease (including any new lessee that is an
Eligible Tenant that has replaced with a tenant that no longer constitutes an
Eligible Tenant);

(vi)        (a) on the date such Real Property Asset is initially added as a
Borrowing Base Asset, no Hazardous Materials shall be located on or under such
Real Property Asset which constitute a material violation of any Environmental
Law, and no other environmental conditions shall exist in connection with such
Real Property Asset which constitute a material violation of any Environmental
Law; (b) if, at any time after the date of the initial addition of such Real
Property Asset as a Borrowing Base Asset, Hazardous Materials are located on or
under such Real Property Asset that constitute a material violation of any
Environmental Law, or any other environmental conditions exists in connection
with such Real Property Asset that constitutes a material violation of any
Environmental Law, in each case, to the extent that the REIT Guarantor or any of
its Subsidiaries has received notice from or a citation with respect to such
violation or condition from any Governmental Authority or such violation or
condition could reasonably be expected to result in material liability to the
REIT Guarantor or any of its Subsidiaries (a “Material Violation”), then such
Borrowing Base Asset shall, for all purposes under this Agreement, be designated
as a Suspended Borrowing Base Asset commencing on the date (the “Violation
Date”) (x) that the REIT Guarantor or any of its Subsidiaries receives such
notice or citation or (y) with respect to any Material Violation, a Responsible
Officer of any Loan Party has knowledge of such Material Violation, in each case
until the date that is ninety (90) days after the applicable Violation Date
unless on or prior to such ninetieth (90th) day the Loan Parties bring such Real
Property Asset into material compliance with all applicable Environmental Laws;

(vii)        the Administrative Agent, on behalf of the Lenders, shall have
received each of the Borrowing Base Asset Deliverables with respect to such Real
Property Asset;

 

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(viii)    no condemnation proceeding is pending as of the date such Real
Property Asset is initially added as a Borrowing Base Asset, and after the date
of such initial addition, no condemnation proceeding shall be initiated and
remain undismissed for a period of ninety (90) consecutive days, in each case
with respect to a material portion of such Real Property Asset;

(ix)      as of the date such Real Property Asset is initially added as a
Borrowing Base Asset, no casualty event shall have occurred with respect to the
improvements located on such Real Property Asset that has not been remediated in
all material respects as of such date and after the date of such initial
addition, no casualty event shall have occurred with respect to a material
portion of the improvements located on such Real Property Asset; provided that
in the event any such casualty event has occurred with respect to a material
portion of the improvements located on such Borrowing Base Asset, such Borrowing
Base Asset shall be designated as a Suspended Borrowing Base Asset from the date
of the occurrence of such casualty event until the date sixty (60) days after
the occurrence of such casualty event unless on or prior to such sixtieth
(60th) day, the sum of (x) the amount of funds the Borrower or the applicable
Loan Party has put into escrow plus (y) the amount of insurance proceeds that
have either been deposited into escrow or with respect to which the applicable
insurance company has acknowledged coverage are sufficient to remediate such
casualty event in all material respects; provided that, if such casualty event
is not in fact remediated in all material respects by a date not later than 180
days after the occurrence of such casualty event, such Borrowing Base Asset
shall cease to be a Borrowing Base Asset and cease to be a Suspended Borrowing
Base Asset;

(x)        [Reserved];

(xi)        [Reserved];

(xii) no event of default by the Borrower or the applicable Subsidiary Loan
Party (after the expiration of any applicable notice and/or cure period) shall
have occurred and be continuing under any other material lease or material
contract applicable to such Real Property Asset;

(xiii) such Real Property Asset has all appropriate licenses per the
jurisdiction in which it operates; provided that a Real Property Asset that is
acquired after the Closing Date may be added to the Borrowing Base prior to
receipt of the applicable state licensing in connection with a change of
ownership (“CHOW”) transfer, so long as each of the following conditions is
satisfied: (a) the applicable facility is licensed under the seller’s license
(or, in the case of an acquisition of a Person owning such Real Property Asset,
such Person’s license) leading up to and on the date of closing of the
acquisition of such facility or such Person (the “Acquisition Closing Date”);
(b) the applicable Loan Party has completed its application and reasonably
expects to receive a license effectively dated as of the applicable Acquisition
Closing Date; (c) the applicable Loan Party has consulted with local healthcare
counsel with expertise in this practice area, has confirmed with such counsel
that all necessary licenses have been obtained, and has provided

 

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Administrative Agent with either a legal opinion to that effect or a
certification from a Responsible Officer of the Borrower or the applicable Loan
Party of its compliance with the provisions in this clause (xiii); and (d) the
appropriate CHOW license is received not later than one hundred eighty
(180) days after the initial addition of such Real Property Asset to the
Borrowing Base; and

(xiv)    No required principal or interest payment, payments of real property
taxes (except taxes which are being contested in good faith and for which
adequate reserves have been established in accordance with GAAP) or payments of
premiums on insurance policies with respect to such Real Property Asset under
the applicable Borrowing Base Lease is past due beyond the earlier of the
applicable grace period with respect thereto, if any, and sixty (60) days;

“Borrowing Base Assets” shall mean a collective reference to all Borrowing Base
Assets in existence at any given time.

“Borrowing Base Asset Deliverables” shall mean, with respect to any Real
Property Asset which is proposed for qualification as a “Borrowing Base Asset”
hereunder, a collective reference to each of the following (with each such item
to be in form reasonably acceptable to the Administrative Agent) items to be
satisfied as a condition to such Real Property Asset initially becoming a
Borrowing Base Asset:

(xv)     a summary description of such Real Property Asset (including, without
limitation, the street address, size and type of property and such other
information as may be reasonably required by the Administrative Agent to
identify the location and material characteristics of such Real Property Asset
and, only if reasonably requested by the Administrative Agent, fully executed
copy of the Borrowing Base Lease with respect to such Real Property Asset and
copies of all existing material subleases of which any Responsible Officer of
any Loan Party has knowledge which would be required to be disclosed on Part III
of Schedule 4.18 hereof with respect to such Real Property Asset if approved as
a Borrowing Base Asset;

(xvi)     documents and other information reasonably requested by the
Administrative Agent to enable to Administrative Agent to confirm that the
Tenant under each Borrowing Base Lease with respect to such Real Property Asset
is an Eligible Tenant; it being understood that this clause (ii) shall not apply
to any Multi-Tenant Building;

(xvii)     copies of historical operating statements and a budget or other
projection for such Real Property Asset to the to the extent provided to the
Borrower by the applicable tenant or otherwise prepared in the ordinary course
by the Borrower;

(xviii)     copies of title reports or other evidence of the status of title
(with respect to the Borrowing Base Assets as of the Closing Date, such title
reports or other evidence of the status of title will be dated no earlier than
six (6) months prior to the Closing Date, provided the title reports provided
with respect to the Cross Healthcare Facilities shall be deemed to satisfy this
requirement) and lien search results performed on Real Property Asset, showing
evidence of title with respect to such Real Property Asset and

 

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that no Liens (other than Permitted Encumbrances) exist with respect to such
Real Property Asset, and lien search results performed on the applicable
Subsidiary Guarantor which owns such Real Property Asset, including bankruptcy,
tax, judgment and other lien searches, evidencing that there are no Liens (other
than Permitted Encumbrances) on the Real Property Assets of such Subsidiary
Guarantor;

(xix)    any documents, certificates and other deliverables required pursuant to
Section 5.12 hereof with respect to any new Subsidiary created to own such Real
Property Asset;

(xx)    an updated Borrowing Base Certificate calculating the Borrowing Base
Amount after giving effect to the inclusion of such Real Property Asset as a
Borrowing Base Asset;

(xxi)    a certificate of a Responsible Officer of the Borrower addressed to the
Administrative Agent and attaching a schedule that sets forth (a) the amount of
the annual rent payable by each Eligible Tenant under each such Borrowing Base
Lease with respect such Real Property Asset (and if such Borrowing Base Lease is
a master lease, an allocation of such rent to each such Eligible Tenant
reasonably determined by the Borrower, which allocation shall be reasonably
satisfactory to the Administrative Agent); (b) the increases, if any, in such
rent pursuant to the applicable Borrowing Base Lease; and (c)(x) with respect to
any Real Property Asset which is a Multi-Tenant Building or Subsidiary Operated
Facility, the Property NOI or (y) with respect to any other Real Property Asset,
the Net Revenues and Tenant EBITDAR, in each case under this clause (c) for each
of the most recent four (4) fiscal quarters ending prior to the date of the
initial addition of such Borrowing Base Assets or amounts reasonably determined
by Borrower if historical financial statements are not available.

“Borrowing Base Certificate” shall mean a certificate substantially in the form
of Exhibit B hereto delivered to the Administrative Agent pursuant to
Section 5.1, Section 6.21 or more frequently at the option of the Borrower and
(i) setting forth each Real Property Asset of the Loan Parties that is a
Borrowing Base Asset or a Suspended Borrowing Base Asset and certifying (subject
to the qualifications set forth in clause (ii) herein) (x) the Borrowing Base
Amount with respect to the Borrowing Base Assets and (y) the Borrowing Base
Amount (determined without regard to clause (II) of the definition of Borrowing
Base Amount) attributable to each such Suspended Borrowing Base Asset; and
(ii) certifying (in the Loan Parties’ good faith belief based upon its own
information and the information made available to any Loan Party by the
applicable Tenants, which information the Loan Parties believe in good faith to
be true and correct in all material respects) (a) as to the calculation of the
Borrowing Base Amount as of the date of such certificate and (b) that each Real
Property Asset (other than any Suspended Borrowing Base Asset) used in the
calculation of the Borrowing Base Amount meets each of the criteria for
qualification as a Borrowing Base Asset.

“Borrowing Base Lease” shall mean any Facility Lease entered into by a Loan
Party with an Eligible Tenant (or, in the case of a Multi-Tenant Building, a
Tenant) which is either (i) a commercial space lease or (ii) a triple net lease
such that such Eligible Tenant is required to pay all taxes, utilities,
insurance, maintenance, casualty insurance payments and

 

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other expenses with respect to the subject Real Property Asset (whether in the
form of reimbursements or rent) in addition to the base rental payments required
thereunder; provided, that each such Facility Lease shall meet the requirements
set forth in Section 5.19.

“Business Day” shall mean any day other than (i) a Saturday, Sunday or other day
on which commercial banks in Atlanta, Georgia are authorized or required by law
to close and (ii) if such day relates to a Borrowing of, a payment or prepayment
of principal or interest on, a conversion of or into, or an Interest Period for,
a Eurodollar Loan or a notice with respect to any of the foregoing, any day on
which banks are not open for dealings in Dollar deposits in the London interbank
market.

“Capital Lease Obligations” of any Person shall mean all obligations of such
Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) of real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP; provided that with respect to leases that are accounted
for by any Person as operating leases as of the Closing Date or are entered into
after the Closing Date and would have been accounted for as operating leases if
such lease had been in effect on the Closing Date such leases may, in the sole
discretion of the Borrower, be accounted for as operating leases and not as
Capital Lease Obligations.

“Capital Reserve” shall mean an amount per annum calculated as the sum of
(i) $350 per unit with respect to assisted living properties and independent
living properties not subject to a triple-net lease, and (ii) $.50 per square
foot with respect to medical office buildings and life science properties not
subject to a triple-net lease. For the avoidance of doubt, Capital Reserves
shall only apply to properties not subject to a triple-net lease.

“Capital Stock” shall mean all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other “equity security” (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Exchange Act).

“Capitalization Rate” shall mean (i) 9.75% for all government reimbursed assets
that are skilled nursing facilities (including any “campus” facilities) and are
not Ensign Assets; (ii) 9.00% for all government reimbursed assets that are
skilled nursing facilities (including any “campus” facilities) and are Ensign
Assets; (iii) 8.00% for all non-government reimbursed assets that are assisted
living facilities; (iv) 7.50% for all non-government reimbursed assets that are
independent living facilities or medical office buildings; and (v) 7.75% for
life science properties.

“Cash Collateralize” shall mean, in respect of any obligations, to pledge and
deposit with, or deliver to, the Administrative Agent cash collateral for such
obligations in Dollars with the Administrative Agent pursuant to documentation
in form and substance reasonably satisfactory

 

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to the Administrative Agent (and “Cash Collateralized” and “Cash
Collateralization” have the corresponding meanings).

“Change in Control” shall mean the occurrence of one or more of the following
events: (i) any sale, lease, exchange or other transfer (in a single transaction
or a series of related transactions) of all or substantially all of the assets
of the REIT Guarantor and its Subsidiaries to any Person or “group” (within the
meaning of the Exchange Act and the rules of the Securities and Exchange
Commission thereunder in effect on the date hereof); (ii) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
“group” (within the meaning of the Exchange Act and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of
thirty-five (35%) or more of the outstanding shares of the voting equity
interests of the REIT Guarantor; (iii) during any period of 24 consecutive
months, a majority of the members of the board of directors or other equivalent
governing body of the REIT Guarantor cease to be composed of individuals who are
Continuing Directors; (iv) GP LLC ceases to be the sole general partner of, and
the direct legal and beneficial owner of all of the general partnership
interests in, the Borrower; (v) the REIT Guarantor ceases to be the direct legal
and beneficial owner of all of the equity interests in GP LLC; or (vi) the REIT
Guarantor ceases to beneficially own, directly or indirectly, at least 50.1% of
the outstanding limited partnership interests in the Borrower; or (vii) the
Borrower ceases to beneficially own, directly or indirectly, all of the Capital
Stock of each direct and indirect Loan Party that owns or ground leases a
Borrowing Base Asset. It is understood and agreed that a Person shall not be
deemed to have beneficial ownership of Capital Stock subject to a stock purchase
agreement, merger agreement or similar agreement until the consummation of the
transactions contemplated by such agreement so long as Payment in Full of the
Obligations is a condition to the effectiveness of the acquisition contemplated
by such stock purchase agreement, merger agreement or similar agreement.

“Change in Law” shall mean (i) the adoption of any applicable law, rule or
regulation after the date of this Agreement, (ii) any change in any applicable
law, rule or regulation, or any change in the interpretation, implementation or
application thereof, by any Governmental Authority after the date of this
Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office)
or the Issuing Bank (or, for purposes of Section 2.18(b), by the Parent Company
of such Lender or such Issuing Bank, if applicable) with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement; provided that for
purposes of this Agreement, (a) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives in connection
therewith and (b) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted, implemented or issued.

“Class” when used in reference to any Loan or Borrowing, refers to whether such
Loan, or each of the Loans comprising such Borrowing, is a Revolving Loan, the
First Amendment Term Loan, a Swingline Loan, an Incremental Term Loan, or an
Extended Term Loan and,

 

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when used in reference to any Commitment, refers to whether such Commitment is a
Revolving Commitment, a First Amendment Term Loan Commitment, a Swingline
Commitment, an Incremental Term Loan Commitment, or an Extended Term Loan
Commitment.

“Closing Date” shall mean the date on which the conditions precedent set forth
in Section 3.1 and Section 3.2 have been satisfied or waived in accordance with
Section 10.2.

“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect
from time to time.

“Commitment” shall mean a Revolving Commitment, a Swingline Commitment, a Term
Loan Commitment or any combination thereof (as the context shall permit or
require).

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. §1 et
seq.), as amended from time to time, and any successor statute.

“Compliance Certificate” shall mean a certificate from the principal executive
officer or the principal financial officer of the Borrower in the form of, and
containing the certifications set forth in, the certificate attached hereto as
Exhibit 5.1(c).

“Consolidated Debt” shall mean, as of any date of determination, all
Indebtedness (other than any such Indebtedness that has been Discharged) of the
Consolidated Parties determined on a consolidated basis, but excluding Hedging
Obligations.

“Consolidated Fixed Charge Coverage Ratio” shall mean, with respect to any
period, the ratio of (i) Adjusted Consolidated EBITDA to (ii) Consolidated Fixed
Charges, in each case for such period.

“Consolidated Fixed Charges” shall mean, for any Person (or consolidated group
of Persons) for any period, (i) Consolidated Interest Expense payable in cash
for such Person (or consolidated group of Persons) for such period (excluding
upfront fees, premiums, arrangement fees, underwriting fees and similar fees),
plus (ii) scheduled principal payments of Consolidated Debt for such Person (or
consolidated group of Persons) made in cash or, as of the first day of such
period, required to be made in cash during such period (including, for purposes
hereof, payments required to be made in connection with scheduled reductions in
commitments, but excluding (a) any payment of principal under the Loan
Documents, (b) any “balloon”, bullet or similar principal payment that repays
such Indebtedness in full, (c) principal paid by any Subsidiary if the net
income of such Subsidiary is excluded in the calculation of Adjusted
Consolidated Net Income pursuant to clause (ii) of the definition thereof (but
only in the same proportion as the net income (or loss) of such Subsidiary is
excluded from the calculation of Adjusted Consolidated Net Income pursuant to
clause (ii) of the definition thereof) and (d) any payment of principal made
with the proceeds of Indebtedness permitted pursuant to this Agreement), as
determined on a consolidated basis in conformity with GAAP), (provided that any
such regularly scheduled principal payments described in this clause (ii) that
are not payable monthly (other than any “balloon”, bullet or similar principal
payment that repays such Indebtedness in full and any principal payments due on
the final maturity thereof) shall, for purposes of this definition, be treated
as if such payment

 

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were payable in equal monthly installments commencing on such payment date to
and including the month immediately prior to the date of the next such scheduled
payment or, if there is no such next scheduled payment, the maturity date
therefor), plus (iii) taxes based on income or profits or capital gains,
including federal, state, provincial, franchise, excise and similar taxes and
foreign withholding taxes and paid in cash during such period; plus (iv) cash
dividends and distributions paid on preferred stock, if any, of such Person (or
consolidated group of Persons) during such period (excluding (a) any dividends
and distributions paid to the REIT Guarantor or any of its Subsidiaries and
(b) any redemption of preferred stock financed with proceeds of Indebtedness
permitted to be incurred pursuant to this Agreement or Capital Stock permitted
pursuant to this Agreement), plus (v) the Consolidated Parties’ Ownership Share
of the foregoing items and components attributable to interests in
Unconsolidated Affiliates, in each case, on a consolidated basis determined in
accordance with GAAP; notwithstanding the foregoing, (1) Consolidated Fixed
Charges for the (12) month period ending March 31, 2015 shall be deemed to be
the Consolidated Fixed Charges for the quarter ending March 31, 2015 annualized,
(2) Consolidated Fixed Charges for the (12) month period ending June 30, 2015
shall be deemed to be the Consolidated Fixed Charges for the six (6) months
ending June 30, 2015 annualized, and (3) Consolidated Fixed Charges for the
(12) month period ending September 30, 2015 shall be deemed to be the
Consolidated Fixed Charges for the nine (9) months ending September 30, 2015,
annualized.

“Consolidated Interest Expense” shall mean, for any Person for any period, the
aggregate amount of interest expense in respect of Consolidated Debt during such
period, all as determined on a consolidated basis in conformity with GAAP
including (without duplication): (i) the interest portion of any deferred
payment obligations; (ii) all commissions, discounts and other fees and expenses
owed with respect to letters of credit and bankers’ acceptance financing;
(iii) the net cash costs associated with Hedging Transactions and Indebtedness
of such Person; and (iv) all but the principal component of rentals in respect
of Capital Lease Obligations paid, accrued or scheduled to be paid or to be
accrued by the Consolidated Parties; excluding, to the extent included in
interest expense above, (A) the amount of such interest expense of any
Subsidiary if the net income (or loss) of such Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause (ii) of the
definition thereof (but only in the same proportion as the net income (or loss)
of such Subsidiary is excluded from the calculation of Adjusted Consolidated Net
Income pursuant to clause (ii) of the definition thereof), as determined on a
consolidated basis in conformity with GAAP and (B)(I) accretion of accrual of
discounted liabilities not constituting Indebtedness, (II) any expense resulting
from the discounting of any outstanding Indebtedness in connection with the
application of purchase accounting in connection with any acquisition,
amortization of deferred financing fees, debt issuance costs, commissions, fees
and expenses, any expensing of bridge, commitment or other financing fees (but
not revolving loan commitment fees, including, without limitation, any fees
associated with the exercise of the option to increase the Commitments),
(V) prepayment and redemption premiums and (VI) non-cash costs associated with
Hedging Transactions; notwithstanding the foregoing, (1) Consolidated Interest
Expense for the (12) month period ending March 31, 2015 shall be deemed to be
the Consolidated Interest Expense for the quarter ending March 31, 2015
annualized, (2) Consolidated Interest Expense for the (12) month period ending
June 30, 2015 shall be deemed to be the Consolidated Interest Expense for the
six (6) months ending June 30, 2015 annualized, and (3) Consolidated Interest
Expense for the (12) month period ending

 

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September 30, 2015 shall be deemed to be the Consolidated Interest Expense for
the nine (9) months ending September 30, 2015, annualized.

“Consolidated Leverage Ratio” shall mean, as of any date of determination, the
ratio (expressed as a percentage) of (i) Adjusted Consolidated Debt to
(ii) Consolidated Total Asset Value, in each case as of such date.

“Consolidated Parties” shall mean the REIT Guarantor and its Consolidated
Subsidiaries, as determined in accordance with GAAP.

“Consolidated Subsidiary” shall mean, as of any date, any Subsidiary or other
entity the accounts of which would be consolidated with those of the REIT
Guarantor in its consolidated financial statements if such statements were
prepared as of such date.

“Consolidated Tangible Net Worth” shall mean, for the Consolidated Parties as of
any date of determination, (i) stockholders’ equity determined on a consolidated
basis plus (ii) accumulated depreciation and amortization expense minus
(iii) all amounts appearing on the assets side of any such balance sheet for
assets which would be classified as “goodwill” under GAAP, all determined on a
consolidated basis.

“Consolidated Total Asset Value” shall mean, as of any date of determination,
the sum of all the following of the Consolidated Parties, without duplication:
(i) with respect to Real Property Assets subject to a triple-net lease, (a) the
Net Revenue for such Real Property Asset, in each case for the most recently
completed four (4) Fiscal Quarters for which financial statements are, or are
required to have been, delivered to the Administrative Agent pursuant to
Section 5.1(a) or 5.1(b), divided by (b) the applicable Capitalization Rate,
plus (ii) with respect to Real Property Assets not subject to a triple-net
lease, (a) the Adjusted NOI for such Real Property Asset, in each case for the
most recently completed four (4) Fiscal Quarters for which financial statements
are, or are required to have been, delivered to the Administrative Agent
pursuant to Section 5.1(a) or 5.1(b), divided by (b) the applicable
Capitalization Rate, plus (iii) the GAAP book value of the Consolidated Parties’
unrestricted cash and cash equivalents as of the last day of the prior Fiscal
Quarter of the Consolidated Parties, plus (iv) the book value of land holdings
as of the last day of such prior Fiscal Quarter, plus (v) the book value of the
actual funded portion of Construction in Progress as of the last day of such
prior Fiscal Quarter, plus (vi) the book value of Unencumbered Mortgage
Receivables and preferred equity investments as of the last day of such prior
Fiscal Quarter, plus (vii) the Consolidated Parties’ Ownership Share of the
foregoing items and components attributable to interest in Unconsolidated
Affiliates, as of the last day of such Fiscal Quarter. In any determination of
Consolidated Total Asset Value hereunder, the Borrower may include Acquisitions
of Real Property Assets at cost for the first four Fiscal Quarters of such
calculation.

“Construction in Progress” shall mean any Real Property Asset which does not
have buildings or other improvements located thereon, but which is under
development for the construction of buildings, improvements or expansion which
will qualify as or will constitute a Healthcare Facility upon completion (or, to
the extent any buildings or improvements are located thereon, such buildings or
other improvements are under construction and the pending improvements are
non-operational, and no certificate(s) of occupancy have been issued with

 

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respect thereto), and/or the budgeted costs associated with the acquisition.
construction and/or expansion of such Real Property Asset, including, but not
limited to, the cost of acquiring such Real Property Asset as reasonably
determined by Borrower in good faith, as the context may require.

“Continuing Director” shall mean, with respect to any period, any individuals
(i) who were members of the board of directors or other equivalent governing
body of the REIT Guarantor on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body, or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body.

“Contractual Obligation” of any Person shall mean any provision of any security
issued by such Person or of any agreement, instrument or undertaking under which
such Person is obligated or by which it or any of the property in which it has
an interest is bound.

“Convertible Indebtedness” shall mean Indebtedness of the REIT Guarantor or the
Borrower permitted to be incurred under the terms of this Agreement that is
(i) convertible into common stock of the REIT Guarantor (and cash in lieu of
fractional shares) and/or cash (in an amount determined by reference to the
price of such common stock) or (ii) sold as units with call options, warrants or
rights to purchase (or substantially equivalent derivative transactions) that
are exercisable for common stock of the REIT Guarantor and/or cash (in an amount
determined by reference to the price of such common stock).

“Cross Healthcare Facilities” shall mean the three assisted living and memory
care facilities located in Pocatello, Idaho, and Idaho Falls, Idaho, as
applicable, acquired by the Borrower in November 2014.

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

“Default” shall mean any condition or event that, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

“Default Interest” shall have the meaning set forth in Section 2.13(c).

“Defaulting Lender” shall mean, subject to Section 2.26(c), any Lender that
(a) has failed to (i) fund all or any portion of its Loans within two
(2) Business Days of the date such Loans were required to be funded hereunder
unless such Lender notifies the Administrative Agent and the Borrower in writing
that such failure is the result of such Lender’s good-faith determination that
one or more conditions precedent to funding (each of which conditions precedent,
together with any applicable default, shall be specifically

 

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identified in such writing) has not been satisfied, or (ii) pay to the
Administrative Agent, the Issuing Bank, any Swingline Lender or any other Lender
any other amount required to be paid by it hereunder (including in respect of
its participation in Letters of Credit or Swingline Loans) within two
(2) Business Days of the date when due, (b) has notified the Borrower, the
Administrative Agent or the Issuing Bank or Swingline Lender in writing that it
does not intend to comply with its funding obligations hereunder, or has made a
public statement to that effect (unless such writing or public statement relates
to such Lender’s obligation to fund a Loan hereunder and states that such
position is based on such Lender’s good-faith determination that a condition
precedent to funding (which condition precedent, together with any applicable
default, shall be specifically identified in such writing or public statement)
cannot be satisfied), (c) has failed, within three (3) Business Days after
written request by the Administrative Agent or the Borrower, to confirm in
writing to the Administrative Agent and the Borrower that it will comply with
its prospective funding obligations hereunder (provided that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such
written confirmation by the Administrative Agent and the Borrower), (d) has, or
has a direct or indirect parent company that has, (i) become the subject of a
proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver,
custodian, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or assets, including the Federal Deposit Insurance Corporation or any
other state or federal or foreign regulatory authority acting in such a
capacity, or (e) has become the subject of a Bail-In Action; provided that a
Lender shall not be a Defaulting Lender solely by virtue of the ownership or
acquisition of any equity interest in that Lender or any direct or indirect
parent company thereof by a Governmental Authority so long as such ownership
interest does not result in or provide such Lender with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above
shall be conclusive and binding absent manifest error, and such Lender shall be
deemed to be a Defaulting Lender (subject to Section 2.26(b)) upon delivery of
written notice of such determination to the Borrower, each Issuing Bank, each
Swingline Lender and each Lender.

“Discharged” shall mean Indebtedness that has been defeased (pursuant to a
contractual or legal defeasance) or discharged pursuant to an irrevocable
deposit of amounts sufficient to satisfy such Indebtedness as it becomes due or
is irrevocably called for redemption (and regardless of whether such
Indebtedness constitutes a liability on the balance sheet of the obligors
thereof); provided, however, that Indebtedness shall be deemed Discharged if the
payment or deposit of all amounts required for defeasance or discharge or
redemption thereof have been made even if certain conditions thereto have not
been satisfied, so long as such conditions are reasonably expected to be
satisfied within ninety-one (91) days after such prepayment or deposit and are
in fact satisfied on or before such ninety first (91st) day.

“Disposition” or “Dispose” shall mean the sale, transfer, license, lease or
other disposition of any property by any Person, including any sale, assignment,
transfer or other

 

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disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith.

“Disqualified Institution” shall mean those Persons who are competitors of the
REIT Guarantor or any of its Subsidiaries and any affiliate of such competitors
that are, in each case, identified in writing to the Administrative Agent by the
Borrower from time to time (the writings described herein, collectively, the
“Disqualified Institutions List”); provided that any update or supplement to the
Disqualified Institutions List shall not apply retroactively to disqualify any
parties that have previously acquired an assignment or a participation in any
Commitment or Loan.

“Disqualified Institutions List” shall have the meaning assigned to such term in
the definition of Disqualified Institution.

“Dollar(s)” and the sign “$” shall mean lawful money of the United States.

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“E&P Purge” shall mean the dividend by the REIT Guarantor of cash and common
stock of the REIT Guarantor for the purpose of eliminating all earnings and
profits of the REIT Guarantor accumulated in any non-REIT year, within the
meaning of Section 857(a)(2) of the Code, in an aggregate amount to be
determined at the time such dividend is declared; provided that the cash portion
of the E&P Purge did not exceed twenty-five percent (25%) (or such greater
percentage as may be required by law) of the total amount of the E&P Purge
following the Spin-Off Transaction in connection with REIT Guarantor’s election
to be taxed as a REIT.

“Earlier LC Maturity Date” shall have the meaning set forth in Section 2.22(a).

“Earlier Swingline Maturity Date” shall have the meaning set forth in
Section 2.4(f).

“Eligible Ground Lease” shall mean, at any time, a ground lease (i) under which
a Loan Party is the lessee or holds equivalent rights and is the fee owner of,
or has a valid lease in, all existing improvements located thereon; (ii) that
has a remaining term of not less than thirty (30) years (including the initial
term and any additional extension options that are solely at the option of the
Loan Party); (iii) under which any required rental payment, principal or
interest payment or other payment due under such lease from the applicable Loan
Party to the ground

 

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lessor is not more than sixty (60) days past due and any required rental
payment, principal or interest payment or other payment due to the applicable
Loan Party under any sublease of the applicable real property lessor is not more
than sixty (60) days past due, (iv) where no party to such lease is subject to a
then continuing Bankruptcy Event (unless such lease has been assumed by such
party); (v) such ground lease (or a related document executed by the applicable
ground lessor) contains customary provisions protective of a first mortgage
lender to the ground lessee thereunder; and (vi) where the applicable Loan
Party’s interest in the underlying Real Property Asset or the ground lease is
not subject to any Lien other than (a) the Eligible Ground Lease itself, (b) any
fee mortgage (if such fee mortgagee has agreed not to disturb the rights and
interests of the applicable Loan Party pursuant to a non-disturbance agreement
reasonably satisfactory to the Administrative Agent), (c) any Permitted
Encumbrances, and (d) other encumbrances reasonably acceptable to the
Administrative Agent, in its discretion; and (vii) which is otherwise reasonably
acceptable to the Administrative Agent and the Required Lenders.

“Eligible Tenant” shall mean a Tenant with respect to a Borrowing Base Lease
which (i) is not in arrears on any required rental payment, principal or
interest payment, payments of real property taxes or payments of premiums on
insurance policies with respect to its lease beyond the later of (a) the
applicable grace period with respect thereto, if any, and (b) sixty (60) days;
and (ii) is not subject to a then-continuing Bankruptcy Event (unless (x) such
Tenant continues to make all required rental payment, principal or interest
payment, payments of real property taxes or payments of premiums on insurance
policies with respect to its lease or (y) another Tenant has assumed the
applicable Borrowing Base Lease).

“Ensign” shall mean The Ensign Group, Inc., a Delaware corporation.

“Ensign Assets” shall mean all of the Real Estate listed on Part B of Schedule
4.11.

“Ensign Master Lease” shall mean any master lease entered into by the Borrower
or any of its Subsidiaries with one or more of Wholly Owned Subsidiaries of
Ensign that operate Healthcare Facilities located on Real Property Assets that
are Ensign Assets, pursuant to which such Wholly Owned Subsidiaries of Ensign
lease from the Borrower or any of its Subsidiaries, as the case may be, the Real
Property Assets underlying such Healthcare Facilities, in each case in
substantially the form of such master leases delivered to the Administrative
Agent on or prior to the Closing Date with respect to the Ensign Assets that are
the Borrowing Base Assets as of the Closing Date, as the same may be modified in
accordance with Section 7.12, or otherwise reasonably acceptable to the
Administrative Agent.

“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, or binding agreements issued,
promulgated or entered into by or with any Governmental Authority relating in
any way to the pollution or protection of the environment, preservation or
reclamation of natural resources, the management, Release or threatened Release
of any Hazardous Material.

“Environmental Liability” shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of the REIT Guarantor or any of its Subsidiaries
directly or indirectly resulting from or based upon

 

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(i) any actual or alleged violation of any Environmental Law, (ii) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (iii) any actual or alleged exposure to any Hazardous
Materials, (iv) the Release or threatened Release of any Hazardous Materials or
(v) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time, and any successor statute thereto and
the regulations promulgated and rulings issued thereunder.

“ERISA Affiliate” shall mean any person that for purposes of Title I or Title IV
of ERISA or Section 412 of the Code would be deemed at any relevant time to be a
“single employer” or otherwise aggregated with the REIT Guarantor or any of its
Subsidiaries under Section 414(b), (c), (m) or (o) of the Code or Section 4001
of ERISA.

“ERISA Event” shall mean (i) any “reportable event” as defined in Section 4043
of ERISA with respect to a Plan (other than an event as to which the PBGC has
waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation
Section 4043 the requirement of Section 4043(a) of ERISA that it be notified of
such event); (ii) any failure to make a required contribution to any Plan that
would result in the imposition of a lien or other encumbrance or the provision
of security under Section 430 of the Code or Section 303 or 4068 of ERISA, or
the arising of such a lien or encumbrance, there being or arising any “unpaid
minimum required contribution” or “accumulated funding deficiency” (as defined
or otherwise set forth in Section 4971 of the Code or Part 3 of Subtitle B of
Title 1 of ERISA), whether or not waived, or any filing of any request for or
receipt of a minimum funding waiver under Section 412 of the Code or Section 303
of ERISA with respect to any Plan or Multiemployer Plan, or that such filing may
be made, or any determination that any Plan is, or is expected to be, in at-risk
status under Title IV of ERISA; (iii) any incurrence by the REIT Guarantor, any
of its Subsidiaries or any of their respective ERISA Affiliates of any liability
under Title IV of ERISA with respect to any Plan or Multiemployer Plan (other
than for premiums due and not delinquent under Section 4007 of ERISA); (iv) any
institution of proceedings, or the occurrence of an event or condition which
would reasonably be expected to constitute grounds for the institution of
proceedings by the PBGC, under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan; (v) any incurrence by the
REIT Guarantor, any of its Subsidiaries or any of their respective ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan, or the receipt by the REIT Guarantor, any
of its Subsidiaries or any of their respective ERISA Affiliates of any notice
that a Multiemployer Plan is in endangered or critical status under Section 305
of ERISA; (vi) any receipt by the REIT Guarantor, any of its Subsidiaries or any
of their respective ERISA Affiliates of any notice, or any receipt by any
Multiemployer Plan from the REIT Guarantor, any of its Subsidiaries or any of
their respective ERISA Affiliates of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA; (vii) engaging in a non-exempt prohibited transaction within the
meaning of Section 4975 of the Code or Section 406 of ERISA; or (viii) any
filing of a notice of intent to terminate any Plan if such

 

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termination would require material additional contributions in order to be
considered a standard termination within the meaning of Section 4041(b) of
ERISA, any filing under Section 4041(c) of ERISA of a notice of intent to
terminate any Plan, or the termination of any Plan under Section 4041(c) of
ERISA.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, bears interest at a rate
determined by reference to Adjusted LIBOR.

“Event of Default” shall have the meaning set forth in Section 8.1.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and in
effect from time to time.

“Excluded Subsidiary” shall mean any Subsidiary of the Borrower which is
prohibited by any debt instrument or any other written agreement with a
third-party financial institution executed by such Subsidiary from executing a
guaranty of the Obligations of the Borrower under the Loan Documents

“Excluded Swap Obligation” shall mean, with respect to the REIT Guarantor or any
Subsidiary Loan Party, any Swap Obligation if, and to the extent that, all or a
portion of the Guarantee of the REIT Guarantor or such Subsidiary Loan Party of,
or the grant by the REIT Guarantor or such Subsidiary Loan Party of a security
interest to secure, such Swap Obligation (or any Guarantee thereof) is or
becomes illegal under the Commodity Exchange Act or any rule, regulation or
order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of the REIT Guarantor’s or
such Subsidiary Loan Party’s failure for any reason to constitute an “eligible
contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the Guarantee of the REIT Guarantor or such
Subsidiary Loan Party or the grant of such security interest becomes effective
with respect to such Swap Obligation. If a Swap Obligation arises under a master
agreement governing more than one swap, such exclusion shall apply only to the
portion of such Swap Obligation that is attributable to swaps for which such
Guarantee or security interest is or becomes illegal.

“Excluded Taxes” shall mean, with respect to any Recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (i) income or
franchise taxes imposed on (or measured by) the Recipient’s net income by the
United States, or by the jurisdiction 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, (ii) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which such Recipient is located, and (iii) any withholding
taxes that (a) are imposed on amounts payable to such Recipient pursuant to a
law in effect at the time such Recipient becomes a Recipient under this
Agreement or designates a new lending office, except in each case to the extent
that amounts with respect to such taxes were payable either (x) to such
Recipient’s assignor immediately before such Recipient became a Recipient under
this Agreement, or (y) to such Recipient immediately before it designated a new
lending office, (b) are attributable to such Recipient’s failure to comply with
Section 2.20(e), or (c) are imposed under FATCA.

 

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“Existing Credit Agreement” shall mean the Credit and Guaranty Agreement dated
May 30, 2014, by and among the Borrower, the REIT Guarantor, the other
Guarantors party thereto, the Lenders party thereto, and SunTrust Bank, as
Administrative Agent for the Lenders.

“Extended Commitments” shall mean the Extended Term Loan Commitments and the
Extended Revolving Commitments.

“Extended Facility” shall mean any additional tranche established pursuant to
Section 2.27 reflecting an extension of the maturity date and, if applicable,
amortization schedule of any existing tranche.

“Extended Facility Agreement” shall mean an Extended Revolving Credit Facility
Agreement or an Extended Term Facility Agreement, as the context may require.

“Extended Facility Closing Date” shall mean, with regard to an Extended
Facility, the first date all the conditions precedent set forth in the
respective Extended Facility Agreement are satisfied or waived in accordance
with Section 10.2.

“Extended Facility Lender” shall mean, at any time, with regard to an Extended
Facility, any Lender that holds Loans or Commitments under such Extended
Facility at such time.

“Extended Revolving Commitments” shall have the meaning set forth in
Section 2.27.

“Extended Revolving Credit Facility” shall mean an Extended Facility designated
as an “Extended Revolving Credit Facility” by the Borrower and established
pursuant to an Extended Revolving Credit Facility Agreement.

“Extended Revolving Credit Facility Agreement” shall mean an agreement setting
forth the terms and conditions relating to an Extended Revolving Credit
Facility.

“Extended Term Facility” shall mean an Extended Facility designated as an
“Extended Term Facility” by the Borrower and established pursuant to an Extended
Term Facility Agreement.

“Extended Term Facility Agreement” shall mean an agreement setting forth the
terms and conditions relating to an Extended Term Facility.

“Extended Term Loan Commitment” shall have the meaning set forth in
Section 2.27.

“Extended Term Loans” shall have the meaning set forth in Section 2.27.

“Extending Revolving Lender” shall have the meaning set forth in Section 2.27.

“Extending Term Loan Lender” shall have the meaning set forth in Section 2.27.

“Extension” shall have the meaning set forth in Section 2.27.

“Extension Demand” shall have the meaning set forth in Section 5.21(d).

 

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“Extension Offer” shall have the meaning set forth in Section 2.27.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

“Facility Fee” shall mean an amount equal to the following based on the
applicable Investment Grade Rating as set forth in the grid below:

 

Ratings: S&P or

Moody’s

 

   Facility Fee

At least A- or A3

 

  

0.125% per annum

 

At least BBB+ or Baa1

 

  

0.15% per annum

 

At least BBB or Baa2

 

  

0.20% per annum

 

At least BBB- or Baa3

 

  

0.25% per annum

 

Below BBB- and Baa3

 

  

0.30% per annum

 

“Facility Lease” shall mean a lease or master lease with respect to any Real
Property Asset owned or leased by a Loan Party from the applicable Loan Party as
lessor, to Tenant, as lessee.

“FATCA” shall mean Sections 1471 through 1474 of the Code as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof and any agreement entered into
pursuant to Section 1471(b)(1) of the Code or any intergovernmental agreements
entered into in connection with the implementation of such Sections of the Code.

“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published by the
Federal Reserve Bank of New York on the next succeeding Business Day or, if such
rate is not so published for any Business Day, the Federal Funds Rate for such
day shall be the average (rounded upwards, if necessary, to the next 1/100 of
1%) of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent.

“Fee Letter” shall mean that certain fee letter, dated as of April 27, 2015, by
and among KeyBank, Keybanc Capital Markets, and the Borrower.

 

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“Financial Covenants” shall mean the covenants set forth in Article VI of this
Agreement.

“First Amendment” shall mean that certain First Amendment to Credit and Guaranty
Agreement dated as of February 1, 2016 among the Borrower, the Lenders party
thereto and the Administrative Agent.

“First Amendment Effective Date” shall have the meaning set forth in the First
Amendment.

“First Amendment Term Loan Commitment” shall mean, with respect to each First
Amendment Term Loan Lender, the commitment of such First Amendment Term Loan
Lender to make its portion of the First Amendment Term Loan to the Borrower in
an aggregate principal amount not exceeding the amount set forth with respect to
such First Amendment Term Loan Lender on Schedule I.

“First Amendment Term Loan Maturity Date” shall mean February 1, 2023.

“First Amendment Term Loan Lender” shall mean any Lender holding any portion of
the First Amendment Term Loan.

“First Amendment Term Loan” shall have the meaning set forth in Section 2.2(b)
hereof.

“Fiscal Quarter” shall mean any fiscal quarter of the Borrower.

“Fiscal Year” shall mean any fiscal year of the Borrower.

“Foreign Person” shall mean any Person that is not a U.S. Person.

“Foreign Subsidiary” shall mean each Subsidiary of the Borrower that is
organized under the laws of a jurisdiction other than one of the fifty states of
the United States or the District of Columbia.

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.3.

“Governmental Authority” shall mean the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government. “Governmental
Authority” shall include any agency, branch or other governmental body charged
with the responsibility, or vested with the authority to administer or enforce,
any Health Care Laws, including any Medicare or Medicaid contractors,
intermediaries or carriers.

“GP LLC” shall mean CareTrust GP, LLC, a Nevada limited liability company.

 

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“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly and including any
obligation, direct or indirect, of the guarantor (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (ii) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment
thereof, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or (iv) as an account party
in respect of any letter of credit or letter of guaranty issued in support of
such Indebtedness; provided that the term “Guarantee” shall not include
endorsements for collection or deposit in the ordinary course of business. The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made or, if not so stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith. The term “Guarantee”
used as a verb has a corresponding meaning.

“Guarantor” shall mean each of the REIT Guarantor and each of the Subsidiary
Loan Parties (other than the Borrower).

“Hazardous Materials” shall mean 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 due to their dangerous or deleterious properties or
characteristics.

“Healthcare Facility” shall mean any skilled nursing facility (including any
“campus” facility), assisted living facility or other similar health care
facility or any independent living facility, medical office building, life
sciences building, other office building or other similar health care related
property typically owned by healthcare real estate investment trusts.

“Health Care Laws” shall have the meaning set forth in Section 4.20(a).

“Health Care Permits” shall have the meaning set forth in Section 4.20(b).

“Hedging Obligations” of any Person shall mean any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired under (i) any and all Hedging Transactions,
(ii) any and all cancellations, buy backs, reversals, terminations or
assignments of any Hedging Transactions and (iii) any and all renewals,
extensions and modifications of any Hedging Transactions and any and all
substitutions for any Hedging Transactions.

“Hedging Transaction” of any Person shall mean (i) any transaction (including an
agreement with respect to any such transaction) now existing or hereafter
entered into by such

 

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Person that is a rate swap transaction, swap option, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option, spot transaction, credit
protection transaction, credit swap, credit default swap, credit default option,
total return swap, credit spread transaction, repurchase transaction, reverse
repurchase transaction, buy/sell-back transaction, securities lending
transaction, or any other similar transaction (including any option with respect
to any of these transactions) or any combination thereof, whether or not any
such transaction is governed by or subject to any master agreement, and (ii) 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.

“HIPAA” shall mean the (i) Health Insurance Portability and Accountability Act
of 1996; (ii) the Health Information Technology for Economic and Clinical Health
Act (Title XIII of the American Recovery and Reinvestment Act of 2009); and
(iii) any state and local laws regulating the privacy and/or security of
individually identifiable information, including state laws providing for
notification of breach of privacy or security of individually identifiable
information, in each case, with respect to the laws described in clauses (i),
(ii) and (iii) of this definition, as amended and in effect from time to time,
and any successor statutes thereto and the regulations promulgated thereunder.

“Immaterial Subsidiary” shall mean, as of any date of determination, any direct
or indirect Subsidiary of the REIT Guarantor having, when taken together with
all other then-existing Immaterial Subsidiaries (the “Immaterial Subsidiary
Threshold Amount”), (i) assets in an amount not in excess of five percent
(5.0%) of the total assets of the REIT Guarantor and its Subsidiaries determined
on a consolidated basis as of such date; or (i) revenues in an amount not in
excess of five percent (5.0%) of the total revenues of the REIT Guarantor and
its Subsidiaries on a consolidated basis for the most recently completed four
(4) Fiscal Quarters for which financial statements are, or are required to have
been, delivered to the Administrative Agent pursuant to Section 5.1(a) or
5.1(b).

“Increasing Lender” shall have the meaning set forth in Section 2.23.

“Incremental Commitment” shall have the meaning set forth in Section 2.23.

“Incremental Commitment Joinder” shall have the meaning set forth in
Section 2.23.

“Incremental Revolving Commitment” shall have the meaning set forth in
Section 2.23.

“Incremental Term Loan” shall have the meaning set forth in Section 2.23.

“Incremental Term Loan Commitment” shall have the meaning set forth in
Section 2.23.

 

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“Indebtedness” of any Person shall mean, at the time of determination, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person in respect of the
deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of business and excluding earn-outs except to
the extent such earn outs are required under GAAP to be reflected as a liability
on the balance sheet of such Person), (iv) all Capital Lease Obligations of such
Person, (v) all reimbursement obligations, contingent or otherwise, of such
Person in respect of letters of credit, acceptances or similar extensions of
credit (whether or not presented for payment), (vi) all Guarantees of such
Person of the type of Indebtedness described in clauses (i) through (v) above,
(vii) all Indebtedness of a third party secured by any Lien on property owned by
such Person, whether or not such Indebtedness has been assumed by such Person,
all obligations of such Person, contingent or otherwise, to purchase, redeem,
retire or otherwise acquire for value any Capital Stock of such Person
(excluding any such obligations (a) to purchase, redeem, retire or otherwise
acquire for value any Capital Stock on or prior to the date that is one hundred
eighty (180) days after the latest Maturity Date, after giving effect to the
exercise of the extension option pursuant to Section 2.5, in effect on the date
such obligations are incurred and (b) which the REIT Guarantor or any of its
Subsidiaries may, at its election, satisfy with the issuance of or exchange for
Capital Stock of the REIT Guarantor or the Borrower), (viii) all Off-Balance
Sheet Liabilities, (ix) all Hedging Obligations (which shall be deemed to have
any amount equal to the swap term value thereof at such time but in no event
shall be less than zero), and (x) such Person’s Ownership Share of the
Indebtedness of any Unconsolidated Affiliate of such Person. Indebtedness of any
Person shall include Indebtedness of any partnership or joint venture in which
such Person is a general partner or joint venture to the extent of such Person’s
Ownership Share of such partnership or joint venture (except if such
Indebtedness, or portion thereof, is recourse to such Person, in which case the
greater of such Person’s Ownership Share of such Indebtedness or the amount of
the recourse portion of the Indebtedness, shall be included as Indebtedness of
such Person). Notwithstanding the foregoing, Permitted Warrant Transactions
shall not constitute Indebtedness.

“Indemnified Taxes” shall mean Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document.

“Intangible Assets” shall mean all assets consisting of goodwill, patents, trade
names, trademarks, copyrights, franchises, experimental expense, organization
expense, unamortized debt discount and expense, deferred assets (other than
prepaid insurance and prepaid taxes), the excess of cost of shares acquired over
book value of related assets and such other assets as are properly classified as
“intangible assets” in accordance with GAAP.

“Interest Coverage Amount” means, at any time of determination, the maximum
principal amount of Loans that would be available to be borrowed such that the
Unsecured Interest Coverage Ratio (calculated on a pro forma basis, assuming
that all Real Property Assets anticipated to be acquired with the proceeds of
such Loans are included as Borrowing Base Assets for purposes of calculating the
Unsecured Interest Coverage Ratio as of the first day of the applicable
calculation period) would be equal to 2.00 to 1.00.

 

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“Interest Payment Date” shall mean (a) with respect to any Base Rate Loan, the
last Business Day of each fiscal quarter to occur during any period in which
such Loan is outstanding, (b) with respect to any Eurodollar Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Loan with an Interest Period of more than three
months’ duration, each day that would have been an Interest Payment Date had
successive Interest Periods of three months’ duration been applicable to such
Borrowing, (c) with respect to any Revolving Loan, the Revolving Commitment
Termination Date or such earlier date on which the Revolving Commitments are
terminated, (d) with respect to the First Amendment Term Loan, the First
Amendment Term Loan Maturity Date, and (e) with respect to any other Term Loan
incurred pursuant to Section 2.23 hereof, the applicable Maturity Date for such
Term Loan.

“Interest Period” shall mean with respect to any Eurodollar Borrowing, a period
of one, two, three or six months, or such other period that is twelve months or
less than one month that is agreed to by all relevant Lenders; provided that:

(xxii)    the initial Interest Period for such Borrowing shall commence on the
date of such Borrowing (including the date of any conversion from a Borrowing of
another Type), and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest Period
expires;

(xxiii)  if any Interest Period would otherwise end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless such Business Day falls in another calendar month, in which
case such Interest Period would end on the next preceding Business Day;

(xxiv)  any Interest Period which begins on the last Business Day of a calendar
month or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period shall end on the last Business
Day of such calendar month;

(xxv)    each principal installment of the Term Loans shall have an Interest
Period ending on or prior to each installment payment date and the remaining
principal balance (if any) of the Term Loans shall have an Interest Period
determined as set forth above; and

(xxvi)  no Interest Period may extend beyond the applicable Revolving Commitment
Termination Date, unless on such Revolving Commitment Termination Date the
aggregate outstanding principal amount of the Term Loans is equal to or greater
than the aggregate principal amount of Eurodollar Loans with Interest Periods
expiring after such date, and no Interest Period may extend beyond the final
Maturity Date.

“Investments” shall have the meaning set forth in Section 7.4.

“Issuing Bank” shall mean (i) KeyBank in its capacity as an issuer of Letters of
Credit and (ii) such other Lender or Affiliate of a Lender selected by the
Borrower and approved by

 

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the Administrative Agent (such approval not to be unreasonably withheld or
delayed) that agrees to act as an issuer of Letters of Credit (it being
understood that any other Lender that becomes an Issuing Bank may condition its
agreement to act in such capacity on a lesser sublimit within the LC Commitment
but that the Administrative Agent shall not have any responsibility for
monitoring the usage of such lesser sublimit), in each case, pursuant to
Section 2.22.

“Joinder Agreement” shall mean a joinder agreement in the form of Exhibit C to
be executed by each Subsidiary from time to time required to be a Subsidiary
Loan Party by Section 5.12, other than that Subsidiaries that are initial
Guarantors under this Agreement.

“KeyBank” shall mean KeyBank National Association.

“LC Commitment” shall mean that portion of the Aggregate Revolving Commitments
that may be used by the Borrower for the issuance of Letters of Credit in an
aggregate face amount not to exceed $30,000,000.

“LC Disbursement” shall mean a payment made by the Issuing Bank pursuant to a
Letter of Credit.

“LC Documents” shall mean all applications, agreements and instruments relating
to the Letters of Credit but excluding the Letters of Credit.

“LC Exposure” shall mean, at any time, the sum of (i) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (ii) the
aggregate amount of all LC Disbursements that have not been reimbursed by or on
behalf of the Borrower at such time. The LC Exposure of any Lender shall be its
Pro Rata Share of the total LC Exposure at such time.

“Lead Arrangers” shall mean Keybanc Capital Markets, Raymond James Bank, N.A.,
and BMO Capital Markets, each in its capacity as joint lead arranger in
connection with this Agreement.

“Lender-Related Hedge Provider” shall mean any Person that, at the time it
enters into a Hedging Transaction with any Loan Party, (i) is a Lender or an
Affiliate of a Lender and (ii) except when the Lender-Related Hedge Provider is
KeyBank or any of its Affiliates, has provided prior written notice to the
Administrative Agent which has been acknowledged by the Borrower of (x) the
existence of such Hedging Transaction and (y) the methodology to be used by such
parties in determining the obligations under such Hedging Transaction from time
to time. In no event shall any Lender-Related Hedge Provider acting in such
capacity be deemed a Lender for purposes hereof to the extent of and as to
Hedging Obligations except that each reference to the term “Lender” in Article
IX and Section 10.3(b) shall be deemed to include such Lender-Related Hedge
Provider.

“Lenders” shall have the meaning set forth in the introductory paragraph hereof
and shall include, where appropriate, the Swingline Lender, each Increasing
Lender, each Additional Lender that joins this Agreement pursuant to
Section 2.23, and each Extended Facility Lender.

 

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“Letter of Credit” shall mean any stand-by letter of credit issued pursuant to
Section 2.22 by any Issuing Bank for the account of the Borrower pursuant to the
LC Commitment.

“Licensed Personnel” shall mean any Person (including any physician) involved in
the delivery of health care or medical items, services or supplies, employed or
retained by the REIT Guarantor or any of its Subsidiaries.

“Lien” shall mean any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, or other arrangement
having the practical effect of any of the foregoing or any preference, priority
or other security agreement or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement
and any capital lease having the same economic effect as any of the foregoing).

“Loan Documents” shall mean, collectively, this Agreement, the LC Documents, the
Fee Letter, all Notices of Borrowing, all Notices of Conversion/Continuation,
all Compliance Certificates, any promissory notes issued hereunder and each
other instrument, agreement, document and writing executed in connection with
any of the foregoing that is identified by its terms as a “Loan Document”.

“Loan Parties” shall mean, collectively, the Borrower, the GP LLC, the REIT
Guarantor and the Subsidiary Loan Parties.

“Loans” shall mean all Revolving Loans, Swingline Loans, the First Amendment
Term Loan and any other Term Loans made pursuant to Section 2.23 hereof, in the
aggregate or any of them, as the context shall require, and shall include, where
appropriate, any loan made pursuant to Section 2.23 and Section 2.27.

“Material Acquisition” means an Acquisition (including the acquisition of assets
of any Person whose equity interests are acquired) after the Agreement Date, in
a single transaction or a series of related transactions, with a total cost that
is more than five percent (5%) of the Total Asset Value based on the most recent
Compliance Certificate submitted prior to such acquisition.

“Material Adverse Effect” shall mean, with respect to any event, act, condition
or occurrence of whatever nature, whether singularly or in conjunction with any
other event or events, act or acts, condition or conditions, occurrence or
occurrences whether or not related, resulting in a material adverse change in,
or a material adverse effect on, (i) the business, results of operations,
financial condition, assets, liabilities or properties of REIT Guarantor and its
Subsidiaries taken as a whole and after giving effect to the transactions
contemplated hereby, (ii) the ability of the Loan Parties, taken as a whole, to
perform any of their respective obligations under the Loan Documents, (iii) the
rights and remedies of the Administrative Agent, the Issuing Banks, the
Swingline Lender or the Lenders under any of the Loan Documents or (iv) the
legality, validity or enforceability of any of the Loan Documents.

“Material Borrowing Base Lease” shall mean, with respect to the Real Property
Assets of the REIT Guarantor and its Subsidiaries, any Borrowing Base Lease from
which the

 

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applicable Loan Party or Loan Parties derived in excess of five percent (5%) of
the aggregate revenues of the REIT Guarantor and its Subsidiaries with respect
to such Real Property Assets for the most recently completed four (4) Fiscal
Quarters for which financial statements are, or are required to have been,
delivered to the Administrative Agent pursuant to Section 5.1(a) or 5.1(b).

“Material Indebtedness” shall mean any Indebtedness (other than the Loans and
the Letters of Credit) of the Loan Parties or any of their Subsidiaries
individually or in an aggregate committed or outstanding principal amount
exceeding $10,000,000. For purposes of determining the amount of attributed
Indebtedness from Hedging Obligations, the “principal amount” of any Hedging
Obligations at any time shall be the Net Mark-to-Market Exposure of such Hedging
Obligations.

“Material Subsidiary” shall mean, as of any date, any direct or indirect
Subsidiary of the REIT Guarantor that is not an Immaterial Subsidiary or an
Excluded Subsidiary.

“Maturity Date” shall mean, (i) with respect to the First Amendment Term Loan,
the First Amendment Term Loan Maturity Date, (ii) with respect to any other
tranche of Term Loans (including any Incremental Term Loans, or Extended Term
Loans), the maturity dates specified therefor in the applicable Incremental
Commitment Joinder, or Extended Facility Agreement, as applicable and (iii) with
respect to the Revolving Commitments, the Revolving Commitment Termination Date.

“Measurement Period” shall mean the most recent four-Fiscal Quarter period.

“Medicaid” shall mean, collectively, the health care assistance program
established by Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) and
any statutes succeeding thereto, and all laws, rules, regulations, manuals,
orders or requirements pertaining to such program, including (a) all federal
statutes affecting such program; (b) all state statutes and plans for medical
assistance enacted in connection with such program and federal rules and
regulations promulgated in connection with such program; and (c) all applicable
provisions of all rules, regulations, manuals, orders and administrative,
reimbursement, and requirements of all Government Authorities promulgated in
connection with such program (whether or not having the force of law), in each
case as the same may be amended and in effect from time to time.

“Medicare” shall mean, collectively, the health insurance program for the aged
and disabled established by Title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.) and any statutes succeeding thereto, and all laws, rules,
regulations, manuals, orders or requirements pertaining to such program
including (a) all federal statutes (whether set forth in Title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.) or elsewhere) affecting such
program; and (b) all applicable provisions of all rules, regulations, manuals,
orders and administrative and reimbursement requirements of all Governmental
Authorities promulgated in connection with such program (whether or not having
the force of law), in each case as the same may be amended and in effect from
time to time.

“Modifications” shall mean any amendments, supplements, modifications, renewals,
replacements, consolidations, severances, substitutions and extensions of any
document or

 

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instrument from time to time; “Modify,” “Modified,” or related words shall have
meanings correlative thereto.

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

“Mortgage Receivables” shall mean any loan receivables or similar contracts or
arrangements for the payment of money, whether senior or subordinated (in right
of payment or otherwise), the obligations under which are secured or backed by
commercial real estate, which loan receivables may include commercial mortgage
pass-through certificates and commercial mortgagebacked bonds or similar
securities and the commercial mortgage loans and properties underlying or
backing them, or whole loans, whether senior or subordinated (in right of
payment or otherwise), secured by commercial real estate.

“Multi-Tenant Building” shall mean, as of any date, a Real Property Asset which
is an individual medical office building, life sciences building or other office
building.

“Multiemployer Plan” shall mean any “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA, which is contributed to by (or to which there is or
may be an obligation to contribute of) the REIT Guarantor, any of its
Subsidiaries or an ERISA Affiliate, and each such plan for the five-year period
immediately following the latest date on which the REIT Guarantor, any of its
Subsidiaries or an ERISA Affiliate contributed to or had an obligation to
contribute to such plan.

“Negative Pledge” shall mean any agreement (other than this Agreement or any
other Loan Document) that in whole or in part prohibits the creation of any Lien
on any assets of a Person; provided, however, that an agreement that establishes
a maximum ratio of unsecured debt to unencumbered assets, or of secured debt to
total assets, or that otherwise conditions a Person’s ability to encumber its
assets upon the maintenance of one or more specified ratios that limit such
Person’s ability to encumber its assets but that do not generally prohibit the
encumbrance of its assets, or the encumbrance of specific assets, shall not
constitute a “Negative Pledge” for purposes of this Agreement; and provided
further, however, that any provision under the Senior Notes Indenture and/or any
other document relating to the Senior Notes that would otherwise be included
within this definition of “Negative Pledge” shall not constitute a “Negative
Pledge” for purposes of this Agreement.

“Net Mark-to-Market Exposure” of any Person shall mean, as of any date of
determination with respect to any Hedging Obligation, the excess (if any) of all
unrealized losses over all unrealized profits of such Person arising from such
Hedging Obligation. “Unrealized losses” shall mean the fair market value of the
cost to such Person of replacing the Hedging Transaction giving rise to such
Hedging Obligation as of the date of determination (assuming such Hedging
Transaction were to be terminated as of that date), and “unrealized profits”
shall mean the fair market value of the gain to such Person of replacing such
Hedging Transaction as of the date of determination (assuming such Hedging
Transaction were to be terminated as of that date).

“Net Revenues” shall mean, with respect to any Real Property Asset subject to a
triple net lease, for the most recently completed four (4) Fiscal Quarter period
for which financial statements are, or are required to have been, delivered to
the Administrative Agent pursuant to

 

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Section 5.1(a) or 5.1(b), (i) the sum of (a) rental payments received in cash
during such period by the applicable Consolidated Party (whether in the nature
of base rent, minimum rent, percentage rent, additional rent or otherwise, but
exclusive of security deposits, earnest money deposits, advance rentals,
reserves for capital expenditures, charges, expenses or items required to be
paid or reimbursed by the Tenant thereunder and proceeds from a sale or other
disposition) pursuant to the Facility Leases applicable to such Real Property
Asset and in full force and effect on the date of such calculation and
(b) interest from loans made by such Borrower or Consolidated Party, as the case
may be, minus (ii) operating expenses of such Borrower or Consolidated Party, as
the case may be, allocated to such Real Property Asset on a standalone basis
(which shall not include, for the avoidance of doubt, any allocated costs of
corporate and administrative overhead of the REIT Guarantor and its
Subsidiaries); provided that, to the extent such expenses are required to be
paid by the Tenant under the applicable Facility Lease such expenses will not be
subtracted.

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

“Non-Public Information” shall mean any material non-public information (within
the meaning of United States federal and state securities laws) with respect to
the REIT Guarantor or any of its Subsidiaries or any of their respective
securities.

“Non-U.S. Plan” shall mean any plan, fund (including, without limitation, any
superannuation fund) or other similar program established, contributed to
(regardless of whether through direct contributions or through employee
withholding) or maintained outside the United States by the REIT Guarantor or
one or more of its Subsidiaries primarily for the benefit of employees of the
REIT Guarantor or such Subsidiaries residing outside the United States, which
plan, fund or other similar program provides, or results in, retirement income,
a deferral of income in contemplation of retirement, or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.

“Notice of Conversion/Continuation” shall have the meaning set forth in
Section 2.7(b).

“Notice of Revolving Borrowing” shall have the meaning set forth in Section 2.3.

“Notice of Swingline Borrowing” shall have the meaning set forth in Section 2.4.

“Notices of Borrowing” shall mean, collectively, the Notices of Revolving
Borrowing and the Notices of Swingline Borrowing.

“Obligations” shall mean (i) all amounts owing by the Loan Parties to the
Administrative Agent, any Issuing Bank, any Lender (including the Swingline
Lender) or any Lead Arranger pursuant to or in connection with this Agreement or
any other Loan Document or otherwise with respect to any Loan or Letter of
Credit, including, without limitation, all principal, interest (including any
interest accruing after the filing of any petition in bankruptcy or the
commencement of any insolvency, reorganization or like proceeding relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), reimbursement obligations, fees, expenses,
indemnification and

 

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reimbursement payments, costs and expenses, whether direct or indirect, absolute
or contingent, liquidated or unliquidated, now existing or hereafter arising
hereunder or thereunder, (ii) all Hedging Obligations (other than any Permitted
Bond Hedge Transactions and any Permitted Warrant Transactions) owed by any Loan
Party to any Lender-Related Hedge Provider, and (iii) all Bank Product
Obligations, together with all renewals, extensions, modifications or
refinancings of any of the foregoing. Notwithstanding the foregoing,
“Obligations” shall not include any Excluded Swap Obligations.

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

“Off-Balance Sheet Liabilities” of any Person shall mean (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any Synthetic Lease Obligation or (iii) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheet of such Person other than, in the case of this
clause (iii), any operating lease, including, for the avoidance of doubt, any
other lease that is treated as an operating lease pursuant to the definition of
Capital Lease Obligations or Section 1.3.

“OSHA” shall mean the Occupational Safety and Health Act of 1970, as amended and
in effect from time to time, and any successor statute thereto.

“Other Taxes” shall mean any and all present or future stamp, court or
documentary, intangible, recording, filing or similar Taxes that arise from any
payment made hereunder or under any other Loan Document or from the execution,
delivery, performance or enforcement or registration of, from the receipt or
perfection of a security interest under, or otherwise with respect to, this
Agreement or any other Loan Document.

“Ownership Share” shall mean, with respect to any Unconsolidated Affiliate of
any Person, the greater of (i) such Person’s the relative nominal direct and
indirect ownership interest, calculated as a percentage, in such Unconsolidated
Affiliate, or (ii) such Person’s the relative direct and indirect economic
interest, calculated as a percentage, in such Unconsolidated Affiliate
determined in accordance with the applicable provisions of the declaration of
trust, articles or certificate of incorporation, articles of organization,
partnership agreement, joint venture agreement or other applicable
organizational document of such Unconsolidated Affiliate.

“Parent Company” shall mean, with respect to a Lender, the “bank holding
company” as defined in Regulation Y, if any, of such Lender, and/or any Person
owning, beneficially or of record, directly or indirectly, a majority of the
shares of such Lender.

“Participant” shall have the meaning set forth in Section 10.4(d).

“Participant Register” shall have the meaning set forth in Section 10.4(d).

 

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“Patriot Act” shall mean the USA PATRIOT Improvement and Reauthorization Act of
2005 (Pub. L. 109-177 (signed into law March 9, 2006)), as amended and in effect
from time to time.

“Payment in Full” and “Paid in Full” shall mean the termination of all Revolving
Commitments and all other commitments of the Lenders to lend funds or extend
financial accommodations to the Borrower under the Loan Documents and the
payment in full, in immediately available funds, of all of the Obligations
(other than (i) contingent indemnification and expense reimbursement
Obligations, in each case, to the extent no claim giving rise thereto has been
asserted, (ii) Hedging Obligations and Bank Product Obligations to the extent
arrangements satisfactory to the Lender-Related Hedge Provider or Bank Product
Provider, as applicable, shall have been made) and (iii) contingent Obligations
with respect to which the deposit of Cash Collateral (in the case of LC
Exposure, which shall not exceed 103% of the face amount of the relevant Letters
of Credit and in the case of other Obligations, which shall not exceed 100% of
the amount thereof) (or, as an alternative to Cash Collateral in the case of any
LC Exposure, receipt by the Administrative Agent of a back-up letter of credit
reasonably satisfactory to the Administrative Agent and the applicable Issuing
Bank), in amounts and on terms and conditions and with parties reasonably
satisfactory to the Administrative Agent and each Indemnitee that is, or may be,
owed such Obligations has been provided).

“Payment Office” shall mean the office of the Administrative Agent located at
4910 Tiedeman Road, Brooklyn, OH 44144, Attention David Lenhart, or such other
location as to which the Administrative Agent shall have given written notice to
the Borrower and the other Lenders.

“PBGC” shall mean the U.S. Pension Benefit Guaranty Corporation referred to and
defined in ERISA, and any successor entity performing similar functions.

“Permitted Bond Hedge Transaction” shall mean any call or capped call option (or
substantively equivalent derivative transaction) on common stock of the REIT
Guarantor or the Borrower purchased by the REIT Guarantor or the Borrower in
connection with the issuance of any Convertible Indebtedness; provided that the
purchase price for such Permitted Bond Hedge Transaction, less the proceeds
received by the REIT Guarantor or the Borrower from the sale of any related
Permitted Warrant Transaction, does not exceed the net proceeds received by the
REIT Guarantor or the Borrower from the sale of such Convertible Indebtedness
issued in connection with the Permitted Bond Hedge Transaction.

“Permitted Encumbrances” shall mean:

(xxvii) Liens securing taxes, assessments and other charges or levies imposed by
any Governmental Authority (excluding any Lien imposed pursuant to any of the
provisions of ERISA), in each case, which are not yet delinquent (other than
those which are being contested in good faith and for which adequate reserves
have been established in accordance with GAAP);

(xxviii) Liens evidencing the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals, in each
case,

 

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imposed by law and incurred in the ordinary course of business or which are not
more than sixty (60) days past due or that are being contested in good faith by
appropriate proceedings and for which adequate reserves have been established in
accordance with GAAP or a bond or other assurance has been posted as required by
applicable Requirements of Law; provided that, if the discharge or satisfaction
thereof is the responsibility of a Tenant, such Liens shall be permitted so long
as they are discharged, bonded, stayed or contested in good faith and by
appropriate proceeding by the later of (x) the date that such Liens are sixty
(60) days past due or (y) the date ten (10) Business Days after a Responsible
Officer of a Loan Party has notice thereof;

(xxix) pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance, social security
and other similar laws or regulations;

(xxx) zoning restrictions, easements, licenses, rights-of-way, covenants,
encroachments, reservations and other rights, restrictions or encumbrances on
the use of and minor title deficiencies on or with respect to any Real Property
Assets, in each case which do not materially impair the use thereof for the
business of such Person or, with respect to any Borrowing Base Asset, materially
detract from the value of such property;

(xxxi) Liens listed as exceptions to the Title Policies (or updates thereto
(which updates shall be reasonably acceptable to Administrative Agent))
delivered in connection with this Agreement;

(xxxii) [Reserved];

(xxxiii) Liens arising pursuant to Facility Leases; and

(xxxiv) Liens arising pursuant to leases or subleases of any real property (and,
in the case of a Borrowing Base Asset permitted pursuant to the applicable
Facility Leases (if any) with respect to such Borrowing Base Asset);

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

“Permitted Refinancing Indebtedness” shall mean, with respect to any
Indebtedness, any modification, refinancing, refunding, renewal or extension of
such Indebtedness or any Permitted Refinancing Indebtedness thereof; provided
that (i) the principal amount of such Indebtedness is not increased at the time
of such modification, refinancing, refunding, renewal or extension except by an
amount equal to (x) the premium or other amount paid, (y) fees and expenses
reasonably incurred, in connection with such modification, refinancing,
refunding, renewal or extension and (z) by an amount equal to any existing
commitments unutilized thereunder and capitalized interest or reserves relating
thereto; (ii) such modification, refinancing, refunding, renewal or extension
with respect to the Indebtedness being modified, refinanced, refunded, renewed
or extended is not guaranteed by any Person other than, solely with respect to
Unsecured Indebtedness, a Loan Party; (iii) such modification, refinancing,

 

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refunding, renewal or extension has a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of the Indebtedness being
modified, refinanced, refunded, renewed or extended; (iv) such modification,
refinancing, refunding, renewal or extension has a final maturity date equal to
or later than the final maturity date of the Indebtedness being modified,
refinanced, refunded, renewed or extended; and (v) the terms relating to
collateral (if any) and subordination (if any), and other material terms taken
as a whole, of any such modification, refinancing, refunding, renewal or
extension, and of any agreement entered into and of any instrument issued in
connection therewith, are no less favorable in any material respect to the
applicable Loan Party or Subsidiary or the Lenders than the terms of any
agreement or instrument governing the Indebtedness being modification,
refinancing, refunding, renewal or extension, as determined by the Borrower in
good faith and evidenced by a certificate from a Responsible Officer.

“Permitted Investments” shall mean:

(xxxv) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States), in each case maturing within one year from the date of
acquisition thereof;

(xxxvi)        commercial paper, maturing not more than one year after the date
of acquisition thereof, issued by a corporation (other than an Affiliate of the
REIT Guarantor) organized and in existence under the laws of the United States
of America or any state or jurisdiction thereof with a rating at the time as of
which any investment therein is made of “P-2” (or higher) according to Moody’s
or “A-2” (or higher) according to S&P;

(xxxvii)        time deposit accounts, time deposits, certificates of deposit,
bankers’ acceptances and Eurodollar time deposits maturing within one year of
the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States or any state or
jurisdiction thereof, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $500 million and has outstanding debt
which is rated “A” (or such similar equivalent rating) or higher by at least one
“nationally recognized statistical rating organization” (within the meaning of
Rule 15c3-l(c)(2)(vi)(F) under the Exchange Act) or any money-market fund
sponsored by a registered broker dealer or mutual fund distributor;

(xxxviii)        fully collateralized repurchase agreements with a term of not
more than thirty (30) days for securities described in clauses (i) and
(ii) above and entered into with a financial institution satisfying the criteria
described in clause (iii) above;

(xxxix)securities with maturities of one year or less from the date of
acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least “A” by S&P or
Moody’s; and

 

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(xl)    mutual funds investing primarily in any one or more of the Permitted
Investments described in clauses (i) through (v) above (in each case, determined
at the time of acquisition thereof).

“Permitted Warrant Transaction” shall mean any call option, warrant or right to
purchase (or substantively equivalent derivative transaction) on common stock of
the REIT Guarantor sold by the REIT Guarantor substantially concurrently with
any purchase by the REIT Guarantor of a related Permitted Bond Hedge
Transaction.

“Person” shall mean any individual, partnership, firm, corporation, association,
joint venture, limited liability company, trust or other entity, or any
Governmental Authority.

“Plan” shall mean any “employee benefit plan” as defined in Section 3 of ERISA
(other than a Multiemployer Plan) maintained or contributed to by the REIT
Guarantor or any ERISA Affiliate or to which the REIT Guarantor or any ERISA
Affiliate has or may have an obligation to contribute, and each such plan that
is subject to Title IV of ERISA for the five-year period immediately following
the latest date on which the REIT Guarantor or any ERISA Affiliate maintained,
contributed to or had an obligation to contribute to (or is deemed under
Section 4069 of ERISA to have maintained or contributed to or to have had an
obligation to contribute to, or otherwise to have liability with respect to)
such plan.

“Prepayment Premium” shall mean, (i) with respect to any prepayment of the First
Amendment Term Loan by the Borrower on or before February 1, 2017, 2.0% of the
amount of such prepayment, (ii) with respect to any prepayment of the First
Amendment Term Loan by the Borrower after February 1, 2017 but on or before
February 1, 2018, 1.0% of the amount of such prepayment, and (iii) with respect
to any prepayment of the First Amendment Term Loan by the Borrower after
February 1, 2018, 0.0%.

“Proceeding” shall mean any investigation, inquiry, litigation, review, hearing,
suit, claim, audit, arbitration, proceeding or action (in each case, whether
civil, criminal, administrative, investigative or informal) commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental
Authority or arbitrator.

“Property Material Adverse Effect” shall mean, with respect to any event, act,
condition or occurrence of whatever nature, whether singularly or in conjunction
with any other event or events, act or acts, condition or conditions, occurrence
or occurrences whether or not related, resulting in a material adverse change
in, or a material adverse effect on, (i) an applicable individual Borrowing Base
Asset, or group of Borrowing Base Assets, taken as a whole; (ii) the use,
operation, value of or ability to sell or refinance (excluding, in the case of
the ability to sell or refinance, any event, act, condition or occurrence
affecting the industry or region in which the applicable Borrowing Base Asset,
or group of Borrowing Base Assets operates, the U.S. economy or the credit,
financial, banking or capital markets in general) an applicable individual
Borrowing Base Asset, or group of Borrowing Base Assets, taken as a whole;
(iii) a Material Adverse Effect.

“Property NOI” shall mean, for any Real Property Asset not subject to a
triple-net lease, the difference (if positive) between (i) the total rental
revenue and other revenues from the

 

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operation of such Real Property Asset, as the case may be, for such period
(excluding, for all purposes other than the calculation Consolidated Total Asset
Value, such revenues from Tenants which are subject to a then continuing
Bankruptcy Event (except to the extent such Tenant has assumed the applicable
lease) but including for all purposes any insurance proceeds received during
such period and constituting business interruption proceeds or paid in respect
of lost revenues or rental income with respect to such period), and (ii) all
expenses incurred by the applicable Loan Party or Subsidiary in connection with
the operation and maintenance of such Real Property Asset, as the case may be,
during such period (including, repairs, real estate and chattel taxes and bad
debt expenses and deemed management fee equal to five percent (5%) of the
aggregate revenues, but excluding all management fees actually paid) but before
payment or provision for corporate overhead expenses, debt service charges,
income taxes and depreciation, amortization and other non-cash expenses, all as
determined in accordance with GAAP.

“Property Value” shall mean, with respect to any Real Property Asset, the sum of
the following, without duplication, of the Borrower and its Subsidiaries for the
Fiscal Quarter most recently ended: (i) for a Real Property Asset under a
triple-net lease, the Net Revenue for such properties for the trailing four
Fiscal Quarter period most recently ended, divided by the applicable
Capitalization Rate, plus (ii) for a Real Property Asset not under a triple-net
lease, the Adjusted NOI for such properties for the trailing four Fiscal Quarter
period most recently ended, divided by the applicable Capitalization Rate. In
determining the Property Value, the Borrower may include Acquisitions (I) at
cost for the first four quarters of such calculation, or (II) by annualizing (as
applicable) the actual Net Revenue or Adjusted NOI for the period of ownership
and dividing by the applicable Capitalization Rate, for the first four quarters
of such calculation.

“Pro Rata Share” shall mean (i) with respect to any Class of Commitment or Loan
of any Lender at any time, a percentage, the numerator of which shall be such
Lender’s Commitment of such Class (or, if such Commitment has been terminated or
expired or the Loans have been declared to be due and payable, such Lender’s
Revolving Credit Exposure, First Amendment Term Loan, or other Term Loan, as
applicable), and the denominator of which shall be the sum of all Commitments of
such Class of all Lenders (or, if such Commitments have been terminated or
expired or the Loans have been declared to be due and payable, all Revolving
Credit Exposure, First Amendment Term Loans or other Term Loans, as applicable,
of all Lenders) and (ii) with respect to all Classes of Commitments and Loans of
any Lender at any time, the numerator of which shall be the sum of such Lender’s
Revolving Commitment (or, if such Revolving Commitment has been terminated or
expired or the Loans have been declared to be due and payable, such Lender’s
Revolving Credit Exposure) and First Amendment Term Loan and any other Term Loan
and the denominator of which shall be the sum of all Lenders’ Revolving
Commitments (or, if such Revolving Commitments have been terminated or expired
or the Loans have been declared to be due and payable, all Revolving Credit
Exposure of all Lenders funded under such Commitments) and all First Amendment
Term Loans and any other Term Loans.

 

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“Public Lender” shall mean any Lender who does not wish to receive Non-Public
Information and who may be engaged in investment and other market related
activities with respect to the Borrower, its Affiliates or any of their
securities or loans.

“Qualified ECP Guarantor” shall mean, in respect of any Swap Obligation, each
Loan Party that has total assets exceeding $10,000,000 at the time the relevant
Guarantee becomes effective with respect to such Swap Obligation or such other
person as constitutes an “eligible contract participant” under the Commodity
Exchange Act or any regulations promulgated thereunder and can cause another
person to qualify as an “eligible contract participant” at such time by entering
into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Real Estate” shall mean all real property owned or leased by REIT Guarantor and
its Subsidiaries.

“Real Property Asset” shall mean, a parcel of real or leasehold property located
in the United States, together with all improvements (if any) thereon (including
all tangible personal property owned by the person owning such real or leasehold
property) owned in fee simple or leased pursuant to an Eligible Ground Lease by
any Person. “Real Property Assets” shall mean, collectively, to all such Real
Property Assets.

“Recipient” shall mean, as applicable, (i) the Administrative Agent, (ii) any
Lender and (iii) the Issuing Bank.

“Recourse Debt” shall mean any Secured Debt, in respect of which recourse for
payment (exclusive of any “non-recourse debt” whereby the payee’s remedies are
limited to specific, identified assets of the payor which secure such debt, and
where the payor has no personal liability beyond the loss of such specified
asset other than liability for fraud, material misrepresentation, misapplication
of funds, environmental indemnities, voluntary bankruptcy, special purpose
entity covenants or covenants to maintain insurance and other typical exceptions
to non-recourse liability) is to any Loan Party.

“Register” shall have the meaning set forth in Section 10.4(c).

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

“Regulation T” shall mean Regulation T of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

“Regulation X” shall mean Regulation X of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

“Regulation Y” shall mean Regulation Y of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

 

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“REIT” shall mean a real estate investment trust as defined in Sections 856-860
of the Code.

“REIT Guarantor” shall have the meaning set forth in the introductory paragraph
hereof.

“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective managers, administrators, trustees,
partners, directors, officers, employees, agents, advisors or other
representatives of such Person and such Person’s Affiliates.

“Related Transaction Documents” shall mean the Loan Documents, the Spin-Off
Documents, all other agreements or instruments executed in connection with the
Related Transactions.

“Related Transactions” shall mean, collectively, the consummation of the
Spin-Off Transaction, the execution and delivery of all Related Transaction
Documents, the payment of the E&P Purge, the issuance of the Senior Notes, and
the payment of all fees, costs and expenses associated with all of the
foregoing.

“Release” shall mean any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal or leaching into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata).

“Rent Coverage Ratio” shall mean, as of any date of determination, with respect
to all Borrowing Base Assets for which Ensign is the Eligible Tenant under the
Borrowing Base Lease relating thereto, the ratio of (i) the sum of Tenant
EBITDAR of Ensign with respect to such Borrowing Base Asset, as Eligible Tenant
under each such Borrowing Base Lease with respect to such Borrowing Base Asset
for the most recently completed four fiscal quarter period, as determined from
the financial statements of such Tenant delivered, or required to be delivered
to the Administrative Agent, pursuant to Section 5.1(g) to (ii) the sum of the
annual rent payable by Ensign, as Eligible Tenant under each such Borrowing Base
Lease, for the same period, as such rent is set forth in the most recent rent
schedule delivered to the Administrative Agent pursuant to Section 5.1(c).

“Required First Amendment Term Loan Lenders” shall mean, at any time, Lenders
holding more than fifty percent (50%) of the aggregate outstanding First
Amendment Term Loans at such time; provided that to the extent that any Lender
is a Defaulting Lender, such Defaulting Lender and all of its First Amendment
Term Loans shall be excluded for purposes of determining Required First
Amendment Term Loan Lenders.

“Required Lenders” shall mean, at any time, Lenders holding more than fifty
percent (50%) of the aggregate outstanding Revolving Commitments, First
Amendment Term Loans and any other Term Loans at such time or, if the Lenders
have no Commitments outstanding, then Lenders holding more than fifty percent
(50%) of the aggregate outstanding Revolving Credit Exposure, First Amendment
Term Loans and any other Term Loans of the Lenders at such time; provided that
to the extent that any Lender is a Defaulting Lender, such Defaulting Lender and
all of its Revolving Commitments, Revolving Credit

 

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Exposure, First Amendment Term Loans and any other Term Loans shall be excluded
for purposes of determining Required Lenders.

“Required Revolving Lenders” shall mean, at any time, Lenders holding more than
fifty percent (50%) of the aggregate outstanding Revolving Commitments at such
time or, if the Lenders have no Revolving Commitments outstanding, then Lenders
holding more than fifty percent (50%) of the aggregate outstanding Revolving
Credit Exposure at such time; provided that to the extent that any Lender is a
Defaulting Lender, such Defaulting Lender and all of its Revolving Commitments
and Revolving Credit Exposure shall be excluded for purposes of determining
Required Revolving Lenders.

“Requirement of Law” for any Person shall mean the articles or certificate of
incorporation, bylaws, partnership certificate and agreement, or limited
liability company certificate of organization and agreement, as the case may be,
and other organizational and governing documents of such Person, and any law,
treaty, rule or regulation, or determination of a Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

“Responsible Officer” shall mean (i) with respect to certifying compliance with
the financial covenants set forth in Article VI, the chief financial officer,
the treasurer or controller of the REIT Guarantor or the Borrower and (ii) with
respect to all other provisions, any of the president, the chief executive
officer, the chief operating officer, the chief financial officer, the treasurer
or a vice president of the applicable Loan Party or such other representative of
the applicable Loan Party as may be designated in writing by any one of the
foregoing with the consent of the Administrative Agent.

“Restricted Payment” shall mean, for any Person, any dividend or distribution on
any class of its Capital Stock, or any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
retirement, defeasance or other acquisition of any shares of its Capital Stock,
any Indebtedness subordinated in right of payment to the Obligations or any
Guarantee thereof or any options, warrants or other rights to purchase such
Capital Stock or such Indebtedness, whether now or hereafter outstanding.

“Revolving Commitment” shall mean, with respect to each Lender, the commitment
of such Lender to make Revolving Loans to the Borrower and to acquire
participations in Letters of Credit and Swingline Loans in an aggregate
principal amount not exceeding the amount set forth with respect to such Lender
on Schedule I, as such schedule may be amended pursuant to Section 2.23 or
Section 2.28, or, in the case of a Person becoming a Lender after the Closing
Date, the amount of the assigned “Revolving Commitment” as provided in the
Assignment and Acceptance executed by such Person as an assignee, or the
Incremental Commitment Joinder executed by such Person, in each case as such
commitment may subsequently be increased or decreased pursuant to the terms
hereof. Unless the context shall otherwise require, the term “Revolving
Commitment” shall include any Extended Revolving Commitment.

“Revolving Commitment Termination Date” shall mean the earliest of (i)(a) with
respect to the Revolving Commitments (including any Incremental Revolving
Commitments) of the Revolving Lenders (other than any portion constituting
Extended Revolving

 

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Commitments), August 5, 2019, as such date may be extended pursuant to
Section 2.5, and (b) with respect to any Extended Revolving Commitments, the
maturity date specified therefor in the applicable Extended Facility Agreement,
(ii) the date on which the Revolving Commitments are terminated pursuant to
Section 2.8 and (iii) the date on which all amounts outstanding under this
Agreement have been declared or have automatically become due and payable
(whether by acceleration or otherwise).

“Revolving Credit Exposure” shall mean, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender’s Revolving Loans, LC
Exposure and Swingline Exposure.

“Revolving Lender” shall mean any Lender holding Revolving Loans or Revolving
Commitments.

“Revolving Loan” shall mean a loan made by a Lender (other than the Swingline
Lender) to the Borrower under its Revolving Commitment, which may either be a
Base Rate Loan or a Eurodollar Loan.

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

“Sanctioned Country” shall mean a country subject to a sanctions program
identified on the list maintained by OFAC and available at
http://www.treasury.gov/resource-center/sanctions/Pages/ default.aspx, or as
otherwise published from time to time.

“Sanctioned Person” shall mean (i) a Person named on the list of “Specially
Designated Nationals and Blocked Persons” maintained by OFAC available at
http://www.treasury.gov/resource- center/sanctions/SDN-List/Pages/default.aspx,
or as otherwise published from time to time, or (ii)(A) an agency of the
government of a Sanctioned Country, (B) an organization controlled by a
Sanctioned Country, or (C) a person resident in a Sanctioned Country, to the
extent subject to a sanctions program administered by OFAC.

“Secured Debt” shall mean, as of any date of determination, Adjusted
Consolidated Debt of the Consolidated Parties determined on a consolidated basis
in accordance with GAAP that is secured by a Lien on any asset owned or leased
by such Consolidated Party or any Unconsolidated Affiliate, as applicable;
provided, however, that any recourse Indebtedness that is secured only by a
pledge of ownership interests in a Consolidated Party or any Unconsolidated
Affiliate shall be deemed to be Unsecured Indebtedness.

“Senior Notes” shall mean, collectively, those certain senior unsecured notes
issued by the Borrower pursuant to the Senior Notes Indenture and any additional
senior note issuance pursuant to the Senior Note Indenture or similar indenture,
in each case, as amended, modified, restated or supplemented from time to time.

“Senior Notes Indenture” shall mean that certain Indenture, dated as of May 30,
2014, among the Borrower, CareTrust Capital Corp., the guarantors party thereto
and Wells Fargo Bank, National Association, as trustee, and any other similar
indenture, in each

 

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case, as the same may be amended, restated, supplemented, replaced or otherwise
modified from time to time.

“Solvent” shall mean, with respect to any Person on a particular date, that on
such date the fair value of the property of such Person is greater than the
total amount of liabilities, including subordinated and contingent liabilities,
of such Person; (ii) the present fair saleable value of the assets of such
Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts and liabilities, including subordinated
and contingent liabilities as they become absolute and matured; (iii) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature; and (iv) such Person is not engaged in a business or transaction, and is
not about to engage in a business or transaction, for which such Person’s
property would constitute an unreasonably small capital. The amount of
contingent liabilities (such as litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that
would reasonably be expected to become an actual or matured liability.

“Specified Representations” shall mean the representations and warranties set
forth in Sections 4.1(a) and (b), 4.2, 4.3(a), 4.3(b), 4.7, 4.9, 4.15, 4.17(a),
4.21, and 4.22.

“Specified Target Representations” shall have the meaning set forth in
Section 2.23(a)(iii).

“Spin-Off Dividend” shall mean the spin-off of the REIT Guarantor and its
Subsidiaries to Ensign’s shareholders.

“Spin-Off Documents” shall mean the Separation and Distribution Agreement, the
Ensign Guaranty, the Ensign Master Leases, the Opportunities Agreement, the
Employee Matters Agreement, the Tax Matters Agreement and the Transition
Services Agreement.

“Spin-Off Transaction” shall mean (i) the transfer by Ensign of (a) the Ensign
Assets and (b) the Transferred IL Facilities to the REIT Guarantor, (ii) the
Spin-Off Dividend and (iii) the series of corporate restructurings and other
transactions entered into in connection with the foregoing consummated on
June 1, 2014.

“Subsidiary” shall mean, with respect to any Person (the “parent”) at any date,
any corporation, partnership, joint venture, limited liability company,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent’s consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, partnership, joint venture, limited liability
company, association or other entity (i) of which securities or other ownership
interests representing more than fifty percent (50%) of the equity or more than
fifty percent (50%) of the ordinary voting power or, in the case of a
partnership, more than fifty percent (50%) of the general partnership interests
are, as of such date, owned, controlled or held, or that is, as of such date,
otherwise controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.

 

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Unless otherwise indicated, all references to “Subsidiary” hereunder shall mean
a Subsidiary of the REIT Guarantor.

“Subsidiary Loan Party” shall mean (i) each of the Subsidiaries set forth on
Schedule 4.14, and (ii) any Subsidiary which is required to become a Subsidiary
Loan Party pursuant to Section 5.12 that executes or becomes a party to this
Agreement, unless and until any such Subsidiary is released pursuant to
Section 9.11(c).

“Subsidiary Operated Facility” shall mean, as of any date, a Real Property Asset
which is operated by a Subsidiary of the REIT Guarantor as of such date.

“Suspended Borrowing Base Asset” shall mean, as of any date, any Real Property
Assets which as of such date is, pursuant to one of more requirements in the
definition of Borrowing Base Asset, designated as a Suspended Borrowing Base
Asset.

“Swap Obligation” shall mean, with respect to any Guarantor, any obligation to
pay or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding not to
exceed $30,000,000.

“Swingline Exposure” shall mean, with respect to each Lender, the principal
amount of the Swingline Loans in which such Lender is legally obligated either
to make a Base Rate Loan or to purchase a participation in accordance with
Section 2.4, which shall equal such Lender’s Pro Rata Share of all outstanding
Swingline Loans.

“Swingline Lender” shall mean KeyBank in its capacity as such, together with any
successor in such capacity.

“Swingline Loan” shall mean a loan made to the Borrower by the Swingline Lender
under the Swingline Commitment.

“Synthetic Lease” shall mean a lease transaction under which the parties intend
that the lease will be treated as an “operating lease” by the lessee pursuant to
Accounting Standards Codification Sections 840-10 and 840-20, as amended, and
(ii) the lessee will be entitled to various tax and other benefits ordinarily
available to owners (as opposed to lessees) of like property.

“Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of
(i) all remaining rental obligations of such Person as lessee under Synthetic
Leases which are attributable to principal and, without duplication, (ii) all
rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the lease
property at the end of the lease term.

 

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

“Tenant” shall mean any Person who is a lessee (or if a Loan Party holds a
leasehold interest, a sublessee) with respect to any lease held by a Loan Party
as lessor (or sublessor, as applicable) or as an assignee of the lessor (or
sublessor, as applicable) thereunder.

“Tenant EBITDAR” shall mean, without duplication, for Ensign, as Tenant under a
Borrowing Base Lease for the most recently completed four (4) fiscal quarter
period, as determined from the financial statements of such Tenant delivered, or
required to be delivered to the Administrative Agent, pursuant to
Section 5.1(g), the sum of, in each instance as applicable to the subject
Borrowing Base Asset, (i) net income of such Tenant, in each case, excluding any
non- recurring or extraordinary gains and losses, plus (ii) an amount which, in
the determination of net income for such fiscal quarter pursuant to clause
(i) above, has been deducted for or in connection with (a) interest expense
(plus, amortization of deferred financing costs, to the extent included in the
determination of interest expense under GAAP), (b) income taxes,
(c) depreciation and amortization, (d) rent expense paid to the Loan Parties (as
reasonably determined based on allocated rent expense in the case of a Master
Lease), and (e) allocated corporate overhead management fees, minus (iii) an
amount equal to five percent (5%) of the net revenue of such Tenant with respect
to each Borrowing Base Asset, all determined in accordance with GAAP.

“Term Loan” shall mean, individually or collectively as the context may require,
the First Amendment Term Loan and any other term loan made by a Lender to the
Borrower pursuant to Section 2.23 and Section 2.27.

“Term Loan Commitment” shall mean, with respect to each Lender, such Lender’s
First Amendment Term Loan Commitment, Incremental Term Loan Commitment, or
Extended Term Loan Commitment.

“Title Policies” shall mean the owner’s title insurance policies for each
Borrowing Base Asset.

“Total Unsecured Indebtedness” shall mean all Unsecured Indebtedness (including,
without limitation, the Obligations) of the Consolidated Parties.

“Trading with the Enemy Act” shall mean the Trading with the Enemy Act of the
United States of America (50 U.S.C. App. §§ 1 et seq.), as amended and in effect
from time to time.

“Type”, when used in reference to a Loan or a Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to Adjusted LIBOR or the Base Rate.

“Unconsolidated Affiliates” shall mean any corporation, partnership,
association, joint venture or other entity in each case which is not a
Consolidated Party and in which a

 

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Consolidated Party owns, directly or indirectly, any of the following, as
applicable: (a) in the case of a corporation, capital stock, (b) in the case of
an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (c) in the case of a partnership, partnership interests (whether general
or limited), (d) in the case of a limited liability company, membership
interests, and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.

“Unencumbered Mortgage Receivables” shall mean Mortgage Receivables that are not
pledged as collateral for, or otherwise subject to a Lien as security for, any
Indebtedness.

“Unfunded Pension Liability” of any Plan shall mean the amount, if any, by which
the value of the accumulated plan benefits under the Plan, determined on a plan
termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions).

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as
amended and in effect from time to time in the State of New York.

“United States” or “U.S.” shall mean the United States of America.

“Unsecured Indebtedness” shall mean all Indebtedness of a Person that is not
secured by a Lien on the assets of such Person.

“Unsecured Interest Expense” shall mean for a twelve (12) month period as of any
date of determination, the greater of (i) all actual projected interest expense
associated with the Total Unsecured Indebtedness and (ii) interest expense that
would be payable on such Total Unsecured Indebtedness assuming an interest rate
of 6.00% per annum.

“Unsecured Interest Coverage Ratio” shall mean, as of any date of determination,
the ratio of (x) Adjusted NOI of the Consolidated Parties of the aggregate
Borrowing Base Assets, plus Net Revenue of the aggregate Borrowing Base Assets,
subject to a triple net lease, in each instance for the trailing four Fiscal
Quarter period most recently ended to (y) Unsecured Interest Expense of the
Consolidated Parties.

“Unsecured Leverage Ratio” shall mean the ratio of Total Unsecured Indebtedness
of the Consolidated Parties to the Property Value of the Borrowing Base Assets.

“U.S. Person” shall mean any Person that is a “United States person” as defined
in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” shall have the meaning set forth in
Section 2.20(e)(ii).

“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained

 

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by multiplying the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (b) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment by (ii) the then outstanding principal amount of such Indebtedness.

“Wholly Owned” shall mean, with respect to any direct or indirect Subsidiary of
any Person, that 100% of the Capital Stock with ordinary voting power issued by
such Subsidiary (other than directors’ qualifying shares and investments by
foreign nationals mandated by applicable Requirement of Law) is beneficially
owned, directly or indirectly, by such Person.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

“Withholding Agent” shall mean the Borrower, any other Loan Party or the
Administrative Agent, as applicable.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which writedown and conversion powers are described in the EU Bail-In
Legislation Schedule.

 

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Section 1.2.            Classifications of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g.
“Revolving Loan”, “First Amendment Term Loan” or “Term Loan”) or by Type (e.g.
“Eurodollar Loan” or “Base Rate Loan”) or by Class and Type (e.g., “Revolving
Eurodollar Loan”). Borrowings also may be classified and referred to by Class
(e.g., “Revolving Borrowing”) or by Type (e.g. “Eurodollar Borrowing”) or by
Class and Type (e.g., “Revolving Eurodollar Borrowing”).

Section 1.3.            Accounting Terms and Determination. Unless otherwise
defined or specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP as in effect from time to time, applied, except as
otherwise indicated therein, on a basis consistent with the most recent audited
consolidated financial statement of the REIT Guarantor delivered pursuant to
Section 5.1(a); provided that if the Borrower notifies the Administrative Agent
that the Borrower wishes to amend any covenant in Article VI to eliminate the
effect of any change in GAAP on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend Article VI for such purpose), then the Borrower’s compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders (and each party hereto agrees to negotiate in good
faith with respect to such amendment). Notwithstanding any other provision
contained herein, (i) all terms of an accounting or financial nature used herein
shall be construed, and all computations of amounts and ratios referred to
herein shall be made, without giving effect to any election under Accounting
Standards Codification Section 825-10 (or any other Financial Accounting
Standard having a similar result or effect) to value any Indebtedness or other
liabilities of any Loan Party or any Subsidiary of any Loan Party at “fair
value”, as defined therein; and (ii) for purposes of this Agreement, any change
in GAAP requiring leases which were previously classified as operating leases or
would have been treated as an operating lease on the Closing Date to be treated
as capitalized leases shall be disregarded and such leases shall (unless
otherwise elected by the Borrower to be treated as either an operating lease or
a capital lease, at the sole discretion of the Borrower) continue to be, or
shall be, treated as operating leases consistent with GAAP as in effect
immediately before such change in GAAP became effective.

Section 1.4.            Terms Generally.

(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”. In the computation of periods of time
from a specified date to a later specified date, the word “from” means “from and
including” and the word “to” means “to but excluding”. Unless the context
requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as it was originally executed or as it
may

 

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from time to time be amended, restated, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and permitted assigns, (iii) the words
“hereof”, “herein” and “hereunder” and words of similar import shall be
construed to refer to this Agreement as a whole and not to any particular
provision hereof, (iv) all references to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles, Sections, Exhibits and
Schedules to this Agreement and (v) all references to a specific time shall be
construed to refer to the time in Atlanta, Georgia, unless otherwise indicated.

(b)      Notwithstanding anything to the contrary herein, for purposes of this
Agreement and any other Loan Document, the Borrower and all Wholly Owned
Subsidiaries of the Borrower shall be deemed to be Wholly Owned Subsidiaries of
the REIT Guarantor and, for the avoidance of doubt, all calculations and other
determinations herein and in any other Loan Document shall, unless otherwise
expressly noted, be made as if there are no minority interest holders in the
Borrower.

ARTICLE II

AMOUNT AND TERMS OF THE COMMITMENTS

Section 2.1.            General Description of Facilities. Subject to and upon
the terms and conditions herein set forth, (i) the Lenders hereby establish in
favor of the Borrower a revolving credit facility pursuant to which each Lender
severally agrees (to the extent of such Lender’s Revolving Commitment) to make
Revolving Loans to the Borrower in accordance with Section 2.2(a); (ii) the
First Amendment Term Loan Lenders hereby establish in favor of the Borrower a
term loan facility pursuant to which each First Amendment Term Loan Lender
severally agrees (to the extent of such Lender’s First Amendment Term Loan
Commitment) to make a First Amendment Term Loan in an amount equal to such First
Amendment Term Loan Lender’s First Amendment Term Loan Commitment to the
Borrower in accordance with Section 2.2(b); (iii) any Issuing Bank may issue
Letters of Credit in accordance with Section 2.22; (iv) the Swingline Lender may
make Swingline Loans in accordance with Section 2.4; and (v) each Lender agrees
to purchase a participation interest in the Letters of Credit and the Swingline
Loans pursuant to the terms and conditions hereof; provided that in no event
shall the aggregate principal amount of all outstanding Revolving Loans,
Swingline Loans and outstanding LC Exposure exceed the Aggregate Revolving
Commitment Amount in effect from time to time.

Section 2.2.        Revolving Loans and First Amendment Term Loan.

(a)        Revolving Loans. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Revolving Loans, ratably in
proportion to its Pro Rata Share of the Aggregate Revolving Commitments, to the
Borrower, from time to time during the Availability Period, in an aggregate
principal amount outstanding at any time that will not result in (a) such
Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving Commitment;
or (b) the aggregate Revolving Credit Exposures of all Lenders exceeding the
lesser of (i) the Aggregate Revolving Commitment Amount and (ii) the Available
Loan Amount minus the outstanding principal amount of any Term Loans. During the
Availability

 

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Period, subject to the terms and conditions set forth herein, the Borrower shall
be entitled to borrow, prepay and reborrow Revolving Loans in accordance with
the terms and conditions of this Agreement.

(b)        First Amendment Term Loan. Subject to the terms and conditions set
forth herein, from the First Amendment Effective Date through and including
February 28, 2016, each First Amendment Term Lender severally agrees to make a
loan (collectively, the “First Amendment Term Loan”) to the Borrower, which
First Amendment Term Loan shall be made in a single drawing by the Borrower, in
the amount of such Lender’s First Amendment Term Loan Commitment. Upon the
making of the First Amendment Term Loan, the First Amendment Term Loan
Commitments of the First Amendment Term Loan Lenders shall be terminated. Upon
repayment or prepayment of the First Amendment Term Loan as provided herein, no
amount of the First Amendment Term Loan may be re-borrowed.

Section 2.3.             Procedure for Revolving Borrowings. The Borrower shall
give the Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) of each Revolving Borrowing, substantially in the form of
Exhibit 2.3 attached hereto (a “Notice of Revolving Borrowing”), (x) prior to
1:00 p.m. one (1) Business Day prior to the requested date of each Base Rate
Borrowing and (y) prior to 1:00 p.m. three (3) Business Days prior to the
requested date of each Eurodollar Borrowing. Each Notice of Revolving Borrowing
shall be irrevocable and shall specify (i) the aggregate principal amount of
such Borrowing, (ii) the date of such Borrowing (which shall be a Business Day),
(iii) the Type of such Revolving Loan comprising such Borrowing and (iv) in the
case of a Eurodollar Borrowing, the duration of the initial Interest Period
applicable thereto (subject to the provisions of the definition of Interest
Period). Each Revolving Borrowing shall consist entirely of Base Rate Loans or
Eurodollar Loans, as the Borrower may request. The aggregate principal amount of
each Eurodollar Borrowing shall not be less than $5,000,000 or a larger multiple
of $250,000, and the aggregate principal amount of each Base Rate Borrowing
shall not be less than $1,000,000 or a larger multiple of $100,000; provided
that Base Rate Loans made pursuant to Section 2.4 or Section 2.22(d) may be made
in lesser amounts as provided therein. At no time shall the total number of
Eurodollar Borrowings outstanding at any time exceed eight (8). Promptly
following the receipt of a Notice of Revolving Borrowing in accordance herewith,
the Administrative Agent shall advise each Lender of the details thereof and the
amount of such Lender’s Revolving Loan to be made as part of the requested
Revolving Borrowing.

Section 2.4.            Swingline Commitment.

(a)        Subject to the terms and conditions set forth herein, the Swingline
Lender shall make Swingline Loans to the Borrower, from time to time during the
Availability Period, in an aggregate principal amount outstanding at any time
not to exceed the lesser of (i) the Swingline Commitment then in effect and
(ii) the difference between (A) the lesser of (I) the Aggregate Revolving
Commitment Amount and (II) the Available Loan Amount minus the outstanding
principal amount of any Term Loans and (B) the aggregate Revolving Credit
Exposures of all Lenders; provided that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an

 

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outstanding Swingline Loan. The Borrower shall be entitled to borrow, repay and
reborrow Swingline Loans in accordance with the terms and conditions of this
Agreement.

(b)        The Borrower shall give the Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) of each Swingline Borrowing,
substantially in the form of Exhibit 2.4 attached hereto (a “Notice of Swingline
Borrowing”), prior to 1:00 p.m. on the requested date of each Swingline
Borrowing. Each Notice of Swingline Borrowing shall be irrevocable and shall
specify (i) the principal amount of such Swingline Borrowing, (ii) the date of
such Swingline Borrowing (which shall be a Business Day) and (iii) the account
of the Borrower to which the proceeds of such Swingline Borrowing should be
credited. The Administrative Agent will promptly advise the Swingline Lender of
each Notice of Swingline Borrowing. The aggregate principal amount of each
Swingline Loan shall not be less than $100,000 or a larger multiple of $50,000,
or such other minimum amounts agreed to by the Swingline Lender and the
Borrower. The Swingline Lender will make the proceeds of each Swingline Loan
available to the Borrower in Dollars in immediately available funds at the
account specified by the Borrower in the applicable Notice of Swingline
Borrowing not later than 3:00 p.m. on the requested date of such Swingline
Borrowing.

(c)        The Swingline Lender, at any time and from time to time in its sole
discretion, may, but in no event no less frequently than once every ten
(10) Business Days, shall, on behalf of the Borrower (which hereby irrevocably
authorizes and directs the Swingline Lender to act on its behalf), give a Notice
of Revolving Borrowing to the Administrative Agent requesting the Lenders
(including the Swingline Lender) to make Base Rate Loans in an amount equal to
the unpaid principal amount of any Swingline Loan. Each Lender will make the
proceeds of its Base Rate Loan included in such Borrowing available to the
Administrative Agent for the account of the Swingline Lender in accordance with
Section 2.6, which will be used solely for the repayment of such Swingline Loan.

(d)        If for any reason a Base Rate Borrowing may not be (as determined in
the sole discretion of the Administrative Agent), or is not, made in accordance
with the foregoing provisions, then each Lender (other than the Swingline
Lender) shall purchase an undivided participating interest in such Swingline
Loan in an amount equal to its Pro Rata Share thereof on the date that such Base
Rate Borrowing should have occurred. On the date of such required purchase, each
Lender shall promptly transfer, in immediately available funds, the amount of
its participating interest to the Administrative Agent for the account of the
Swingline Lender.

(e)        Each Lender’s obligation to make a Base Rate Loan pursuant to
subsection (c) of this Section or to purchase participating interests pursuant
to subsection (d) of this Section shall be absolute and unconditional and shall
not be affected by any circumstance, including, without limitation, any set-off,
counterclaim, recoupment, defense or other right that such Lender or any other
Person may have or claim against the Swingline Lender, the Borrower or any other
Person for any reason whatsoever, the existence of a Default or an Event of
Default or the termination of any Lender’s Revolving Commitment, (iii) the
existence (or alleged existence) of any event or condition which has had or
could reasonably be expected to have a Material Adverse Effect, (iv) any breach
of this

 

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Agreement or any other Loan Document by any Loan Party, the Administrative Agent
or any Lender or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. If such amount is not in fact
made available to the Swingline Lender by any Lender, the Swingline Lender shall
be entitled to recover such amount on demand from such Lender, together with
accrued interest thereon for each day from the date of demand thereof (x) at the
Federal Funds Rate until the second Business Day after such demand and (y) at
the Base Rate at all times thereafter. Until such time as such Lender makes its
required payment, the Swingline Lender shall be deemed to continue to have
outstanding Swingline Loans in the amount of the unpaid participation for all
purposes of the Loan Documents. In addition, such Lender shall be deemed to have
assigned any and all payments made of principal and interest on its Loans and
any other amounts due to it hereunder to the Swingline Lender to fund the amount
of such Lender’s participation interest in such Swingline Loans that such Lender
failed to fund pursuant to this Section, until such amount has been purchased in
full.

(f)        If a Revolving Credit Termination Date (the “Earlier Swingline
Maturity Date”) shall have occurred at a time when another tranche or tranches
of Revolving Commitments is or are in effect with a longer Maturity Date, then,
on the Earlier Swingline Maturity Date, all then outstanding Swingline Loans
shall be repaid in full (and there shall be no adjustment to the participations
in such Swingline Loans as a result of the occurrence of the Earlier Swingline
Maturity Date); provided, however, that if on the occurrence of the Earlier
Swingline Maturity Date (after giving effect to any repayments of Revolving
Loans and any reallocation of Letter of Credit participations as contemplated in
Section 2.22(a)), there shall exist sufficient unutilized Extended Revolving
Commitments which will remain in effect after the occurrence of the Earlier
Swingline Maturity Date so that the respective outstanding Swingline Loans could
be incurred pursuant to such Extended Revolving Commitments, then there shall be
an automatic adjustment on the Earlier Swingline Maturity Date of the risk
participations of the Revolving Lenders under such Extended Revolving
Commitments pro rata according to such Revolving Lender’s Pro Rata Share of the
existing Extended Revolving Commitments and such outstanding Swingline Loans
shall be deemed to have been incurred solely pursuant to such Extended Revolving
Commitments and (ii) such Swingline Loans shall not be required to be repaid in
full on the Earlier Swingline Maturity Date.

Section 2.5.            Extension Option.

(a)        The Borrower shall have the option of extending the Revolving
Commitment Termination Date for two periods of six (6) months each (each such
option, the “Extension Option”), in each case subject to satisfaction of the
following conditions:

(i)        the Administrative Agent shall have received written notice of the
extension request at least sixty (60) days, but not more than one hundred-twenty
(120) days, prior to the Revolving Commitment Termination Date or the date to
which the Revolving Commitment Termination Date has been extended pursuant to
the first Extension Option;

 

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(ii)        the payment to the Administrative Agent for the ratable benefit of
the Lenders of an extension fee of 0.075% of the aggregate principal amount of
the Revolving Commitments so extended at the time of such extension;

(iii)        all of the representations and warranties in the Loan Documentation
shall be true and true and correct in all material respects (other than those
representations and warranties that are expressly qualified by a Material
Adverse Effect or other materiality, in which case such representations and
warranties shall be true and correct in all respects) as of the date of the
effectiveness of such extension (or, if such representation or warranty relates
to an earlier date, as of such earlier date);

(iv)        no Default or Event of Default shall have occurred and be
continuing, or would immediately result from, such extension of the Revolving
Commitment Termination Date;

(v)        each of the REIT Guarantor and any other Loan Parties shall have
ratified their obligations under the Loan Documents to which they are parties;

(vi)        the Borrower shall have paid all of Administrative Agent’s actual,
reasonable expenses incurred in respect of the extension, including reasonable
and documented out-of-pocket attorneys’ fees to the extent such fees and expense
are required to be paid pursuant to the Loan Documents; and

(vii)        the Administrative Agent shall have received a certificate signed
by a Responsible Officer of the Borrower certifying that each of the conditions
set forth in clauses (i) through (vi) has been satisfied and that the Borrower
is in compliance with all the financial covenants set forth in Article VI both
immediately before and immediately after giving effect to such extension (for
the most recently ended four (4) Fiscal Quarters for which financial statements
have been or were required to be delivered under Section 5.1(a) or (b).

(b)        On the date of the satisfaction of the conditions set forth in
Section 2.5(a) (so long as such date is prior to the Revolving Loan Commitment
Termination Date), the Revolving Loan Commitment Termination Date shall be
extended to February 5, 2020. Upon satisfaction of the conditions set forth in
Section 2.5(a) (so long as the date is prior to date to which the Revolving
Commitment Termination Date has been extended pursuant to the first Extension
Option), the Revolving Loan Commitment Termination Date shall be extended to
August 5, 2020.

Section 2.6.            Funding of Borrowings.

(a)        Each Lender will make available each Loan to be made by it hereunder
on the proposed date thereof by wire transfer in immediately available funds by
11:00 a.m. to the Administrative Agent at the Payment Office; provided that the
Swingline Loans will be made as set forth in Section 2.4. The Administrative
Agent will make such Loans available to the Borrower by promptly crediting the
amounts that it receives, in like funds by the close of business on such
proposed date, to an account maintained by the

 

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Borrower with the Administrative Agent or, at the Borrower’s option, by
effecting a wire transfer of such amounts to an account designated by the
Borrower to the Administrative Agent.

(b)        Unless the Administrative Agent shall have been notified by any
Lender prior to 5:00 p.m. one (1) Business Day prior to the date of a Borrowing
in which such Lender is to participate that such Lender will not make available
to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on such date, and the Administrative Agent, in
reliance on such assumption, may make available to the Borrower on such date a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Lender on the date of such Borrowing, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest (i) at the Federal Funds Rate
until the second Business Day after such demand and (ii) at the Base Rate at all
times thereafter. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent’s demand therefor, the Administrative
Agent shall promptly notify the Borrower, and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent together with interest at
the rate specified for such Borrowing. Nothing in this subsection shall be
deemed to relieve any Lender from its obligation to fund its Pro Rata Share of
any Borrowing hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any default by such Lender hereunder.

(c)        All Revolving Borrowings shall be made by the Lenders on the basis of
their respective Pro Rata Shares. No Lender shall be responsible for any default
by any other Lender in its obligations hereunder, and each Lender shall be
obligated to make its Loans provided to be made by it hereunder, regardless of
the failure of any other Lender to make its Loans hereunder.

Section 2.7.            Interest Elections.

(a)        Each Borrowing initially shall be of the Type specified in the
applicable Notice of Borrowing. Thereafter, the Borrower may elect to convert
such Borrowing into a different Type or to continue such Borrowing, all as
provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.

(b)        To make an election pursuant to this Section, the Borrower shall give
the Administrative Agent written notice (or telephonic notice promptly confirmed
in writing) of each Borrowing that is to be converted or continued, as the case
may be, substantially in the form of Exhibit 2.7 attached hereto (a “Notice of
Conversion/Continuation”) (x) prior to 1:00 p.m. one (1) Business Day prior to
the requested date of a conversion into a Base Rate Borrowing and (y) prior to
1:00 p.m. three (3) Business Days prior to a continuation of or conversion into
a Eurodollar Borrowing. Each such Notice of Conversion/Continuation shall be
irrevocable and shall specify (i) the Borrowing to which

 

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such Notice of Conversion/Continuation applies and, if different options are
being elected with respect to different portions thereof, the portions thereof
that are to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) shall be
specified for each resulting Borrowing), (ii) the effective date of the election
made pursuant to such Notice of Conversion/Continuation, which shall be a
Business Day, (iii) whether the resulting Borrowing is to be a Base Rate
Borrowing or a Eurodollar Borrowing, and (iv) if the resulting Borrowing is to
be a Eurodollar Borrowing, the Interest Period applicable thereto after giving
effect to such election, which shall be a period contemplated by the definition
of “Interest Period”. If any such Notice of Conversion/Continuation requests a
Eurodollar Borrowing but does not specify an Interest Period, the Borrower shall
be deemed to have selected an Interest Period of one month. The principal amount
of any resulting Borrowing shall satisfy the minimum borrowing amount for
Eurodollar Borrowings and Base Rate Borrowings set forth in Section 2.3.

(c)        If, on the expiration of any Interest Period in respect of any
Eurodollar Borrowing, the Borrower shall have failed to deliver a Notice of
Conversion/Continuation, then, unless such Borrowing is repaid as provided
herein, the Borrower shall be deemed to have elected to convert such Borrowing
to a Base Rate Borrowing. No Borrowing may be converted into, or continued as, a
Eurodollar Borrowing if a Default or an Event of Default exists, unless the
Administrative Agent and each of the Lenders shall have otherwise consented in
writing. No conversion of any Eurodollar Loan shall be permitted except on the
last day of the Interest Period in respect thereof.

(d)        Upon receipt of any Notice of Conversion/Continuation, the
Administrative Agent shall promptly notify each Lender of the details thereof
and of such Lender’s portion of each resulting Borrowing.

Section 2.8.            Optional Reduction and Termination of Commitments.

(a)        Unless previously terminated, all Revolving Commitments, Swingline
Commitments and LC Commitments shall terminate on the Revolving Commitment
Termination Date.

(b)        Upon at least three (3) Business Days’ prior written notice (or
telephonic notice promptly confirmed in writing) to the Administrative Agent
(which notice shall be irrevocable unless the Borrower provides in such notice
(in connection with a termination in whole) that it is conditional on the
occurrence of another financing or transaction, in which case such notice may be
revoked if such financing or transaction does not occur on a timely basis;
provided that the Borrower shall pay all amounts required to be paid pursuant to
Section 2.19 as a result of such revocation), the Borrower may, without premium
or penalty, reduce the Aggregate Revolving Commitments in part or terminate the
Aggregate Revolving Commitments in whole; provided that (i) any partial
reduction shall apply to reduce proportionately and permanently the Revolving
Commitment of each Lender, (ii) any partial reduction pursuant to this Section
shall be in an amount of at least $5,000,000 and any larger multiple of
$1,000,000, and (iii) no such reduction shall be permitted which would reduce
the Aggregate Revolving Commitment Amount to an amount less than the aggregate
outstanding Revolving Credit Exposure of all Lenders. Any such reduction in the
Aggregate Revolving Commitment Amount below the

 

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principal amount of the Swingline Commitment and the LC Commitment shall result
in a dollar-for-dollar reduction in the Swingline Commitment and the LC
Commitment.

(c)        With the written approval of the Administrative Agent, the Borrower
may terminate (on a non-ratable basis) the unused amount of the Revolving
Commitment of a Defaulting Lender, and in such event the provisions of
Section 2.26 will apply to all amounts thereafter paid by the Borrower for the
account of any such Defaulting Lender under this Agreement (whether on account
of principal, interest, fees, indemnity or other amounts); provided that such
termination will not be deemed to be a waiver or release of any claim that the
Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or
any other Lender may have against such Defaulting Lender.

Section 2.9.            Repayment of Loans.

(a)        The outstanding principal amount of all Revolving Loans shall be due
and payable (together with accrued and unpaid interest thereon) on the Revolving
Commitment Termination Date. Unless Base Rate Loans have been made pursuant to
Section 2.4(c), the outstanding principal amount of all Swingline Loans shall be
due and payable (together with accrued and unpaid interest thereon) on the
earlier to occur of (i) ten (10) Business Days after the date that such
Swingline Loan was advanced, or (ii) the Revolving Commitment Termination Date.

(b)        The outstanding principal amount of the First Amendment Term Loan
shall be due and payable (together with accrued and unpaid interest thereon) on
the First Amendment Term Loan Maturity Date.

(c)        The Borrower unconditionally promises to repay any Incremental Term
Loan on the applicable Maturity Date and on the applicable dates scheduled for
the repayment of principal of any Incremental Term Loan and in the amounts set
forth in the applicable Incremental Commitment Joinder.

Section 2.10.            Evidence of Indebtedness.

(a)        Each Lender shall maintain in accordance with its usual practice
appropriate records evidencing the Indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable thereon and paid to such Lender from
time to time under this Agreement. The Administrative Agent shall maintain
appropriate records in which shall be recorded (i) the Revolving Commitment and
the Term Loan Commitment of each Lender, (ii) the amount of each Loan made
hereunder by each Lender, the Class and Type thereof and, in the case of each
Eurodollar Loan, the Interest Period applicable thereto, (iii) the date of any
continuation of any Loan pursuant to Section 2.7, (iv) the date of any
conversion of all or a portion of any Loan to another Type pursuant to
Section 2.7, (v) the date and amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
in respect of the Loans and (vi) both the date and amount of any sum received by
the Administrative Agent hereunder from the Borrower in respect of the Loans and
each Lender’s Pro Rata Share thereof. The entries made in such records shall be
prima facie evidence absent manifest error of the existence and

 

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amounts of the obligations of the Borrower therein recorded; provided that the
failure or delay of any Lender or the Administrative Agent in maintaining or
making entries into any such record or any error therein shall not in any manner
affect the obligation of the Borrower to repay the Loans (both principal and
unpaid accrued interest) of such Lender in accordance with the terms of this
Agreement.

(b)        This Agreement evidences the obligation of the Borrower to repay the
Loans and is being executed as a “noteless” credit agreement. However, at the
request of any Lender (including the Swingline Lender) at any time, the Borrower
agrees that it will prepare, execute and deliver to such Lender a promissory
note payable to the order of such Lender (or, if requested by such Lender, to
such Lender and its registered assigns) and in a form approved by the
Administrative Agent. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment permitted
hereunder) be represented by one or more promissory notes in such form payable
to the order of the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).

 

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Section 2.11.            Optional Prepayments. The Borrower shall have the right
at any time and from time to time to prepay any Borrowing, in whole or in part,
without premium or penalty with respect to any Borrowing of Revolving Loans, and
subject to payment of the applicable Prepayment Premium (if any) with respect to
any prepayment of the First Amendment Term Loan, and in each case by giving
written notice (or telephonic notice promptly confirmed in writing) to the
Administrative Agent no later than in the case of any prepayment of any
Eurodollar Borrowing, 1:00 p.m. not less than three (3) Business Days prior to
the date of such prepayment, (ii) in the case of any prepayment of any Base Rate
Borrowing, 1:00 p.m. not less than one (1) Business Day prior to the date of
such prepayment, and (iii) in the case of any prepayment of any Swingline
Borrowing, prior to 1:00 p.m. on the date of such prepayment (or, in each case,
such later time as the Administrative Agent may agree in its reasonable
discretion). Each such notice shall be irrevocable (provided that (x) any such
notice in connection with the repayment of all Loans may be conditioned on the
occurrence of another financing or transaction, in which case such notice may be
revoked if such financing or transaction does not occur on a timely basis and
(y) the Borrower shall pay all amounts required to be paid pursuant to
Section 2.19 as a result of such revocation) and shall specify the proposed date
of such prepayment and the principal amount of each Borrowing or portion thereof
to be prepaid. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each affected Lender of the contents thereof and of such
Lender’s Pro Rata Share of any such prepayment. If such notice is given, the
aggregate amount specified in such notice shall be due and payable on the date
designated in such notice (unless revoked as provided above), together with
accrued interest to such date on the amount so prepaid in accordance with
Section 2.13(d); provided that if a Eurodollar Borrowing is prepaid on a date
other than the last day of an Interest Period applicable thereto, the Borrower
shall also pay all amounts required pursuant to Section 2.19. Each partial
prepayment of any Loan shall be in an amount that would be permitted in the case
of an advance of a Revolving Borrowing of the same Type pursuant to Section 2.2
or, in the case of a Swingline Loan, pursuant to Section 2.4. Each prepayment of
a Borrowing shall be applied ratably to the subject Loans as directed by the
Borrower.

Section 2.12.            Mandatory Prepayments. If at any time, the Revolving
Credit Exposure of all Lenders exceeds the lesser of (a) the Aggregate Revolving
Commitment Amount, as reduced pursuant to Section 2.8 or otherwise, and (b) the
Available Loan Amount (calculated, for purposes of this Section 2.12, as if any
Suspended Borrowing Base Asset constituted a Borrowing Base Asset that was not a
Suspended Borrowing Base Asset) minus the outstanding principal amount of the
Term Loans, then the Borrower shall immediately repay the Swingline Loans and
the Revolving Loans in an amount equal to such excess, together with all accrued
and unpaid interest on such excess amount and any amounts due under
Section 2.19. Each prepayment shall be applied as follows: first, to the
Swingline Loans to the full extent thereof; second, to the Base Rate Loans to
the full extent thereof; and third, to the Eurodollar Loans to the full extent
thereof, with the application to Revolving Loans and/or Term Loans to be as
directed by the Borrower. If such excess amount is greater than the outstanding
principal amount of the Loans, the Borrower shall Cash Collateralize its
reimbursement obligations with respect to all Letters of Credit in an amount
equal to such excess plus any accrued and unpaid fees thereon.

Section 2.13.            Interest on Loans.

 

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(a)        The Borrower shall pay, on the applicable Interest Payment Date,
interest on (i) each Base Rate Loan at the Base Rate plus the Applicable Margin
in effect from time to time and (ii) each Eurodollar Loan at Adjusted LIBOR for
the applicable Interest Period in effect for such Loan plus the Applicable
Margin in effect from time to time.

(b)        The Borrower shall pay interest on each Swingline Loan at the Base
Rate plus the Applicable Margin in effect from time to time.

(c)        Notwithstanding subsections (a) and (b) of this Section,
automatically upon the occurrence and during the continuance of an Event of
Default, the Borrower shall pay interest (“Default Interest”) with respect to
all overdue principal and interest and all other Obligations not paid when due
at the rate per annum equal to 200 basis points above the otherwise applicable
interest rate with respect thereto (i.e., for Eurodollar Loans at the rate per
annum equal to 200 basis points above the otherwise applicable interest rate for
such Eurodollar Loans for the then-current Interest Period until the last day of
such Interest Period, and thereafter, and with respect to all Base Rate Loans
and all other Obligations hereunder (other than Loans), at the rate per annum
equal to 200 basis points above the otherwise applicable interest rate for Base
Rate Loans). Notwithstanding the foregoing, automatically upon the occurrence
and during the continuance of an Event of Default under Sections 8.1(g), (h) or
(i) with respect to the REIT Guarantor or the Borrower, the Borrower shall pay
Default Interest in accordance with the preceding sentence with respect to all
Obligations whether or not overdue.

(d)        Interest on the principal amount of all Loans shall accrue from and
including the date such Loans are made to but excluding the date of any
repayment thereof. Interest on all outstanding Base Rate Loans and Swingline
Loans shall be payable on each Interest Payment Date, commencing on
September 30, 2015, and on the Revolving Commitment Termination Date. Interest
on all outstanding Eurodollar Loans shall be payable on the last day of each
Interest Payment Date applicable thereto. Interest on any Loan which is
converted into a Loan of another Type or which is repaid or prepaid shall be
payable on the date of such conversion or on the date of any such repayment or
prepayment (on the amount repaid or prepaid) thereof. All Default Interest shall
be payable on demand.

(e)        The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder and shall promptly notify the Borrower and the
Lenders of such rate in writing (or by telephone, promptly confirmed in
writing). Any such determination shall be prima facie evidence for all purposes,
absent manifest error.

Section 2.14.            Fees.

(a)        The Borrower shall pay to the Administrative Agent for its own
account fees in the amounts and at the times previously agreed upon in writing
by the Borrower and the Administrative Agent.

(b)        Until such time as the Applicable Margin shall be determined by
reference to the IGR Pricing Grid, the Borrower agrees to pay to the
Administrative Agent for

 

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the account of each Lender (other than a Defaulting Lender) a commitment fee,
which shall accrue at an amount equal to the Applicable Unused Fee Percentage
multiplied by the daily amount of the unused Revolving Commitment of such Lender
during the Availability Period. For purposes of computing the daily amount of
the unused Revolving Commitment, the Revolving Commitment of each Lender (other
than a Defaulting Lender) shall be deemed used to the extent of the outstanding
Revolving Loans and LC Exposure, but not Swingline Exposure, of such Lender.

(c)        From and after the date that the Applicable Margin shall be
determined by reference to the IGR Pricing Grid, the Borrower agrees to pay to
the Administrative Agent for the account of each Lender (other than a Defaulting
Lender) a facility fee equal to the average daily amount of the Revolving
Commitment of such Lender (whether or not utilized) times the applicable
Facility Fee (determined by reference to the Investment Grade Rating) for the
period from and including the date that the Applicable Margin shall first be
determined by reference to the IGR Pricing Grid to but excluding the date such
Revolving Commitment is terminated or reduced to zero or the Maturity Date.

(d)        The Borrower agrees to pay (i) to the Administrative Agent, for the
account of each Lender (subject to Sections 2.26(b)(iii)(B) and (C)), a letter
of credit fee with respect to its participation in each Letter of Credit, which
shall accrue at a rate per annum equal to the Applicable Margin for Eurodollar
Loans then in effect on the average daily amount of such Lender’s LC Exposure
attributable to such Letter of Credit during the period from and including the
date of issuance of such Letter of Credit to but excluding the date on which
such Letter of Credit expires or is drawn in full (including, without
limitation, any LC Exposure that remains outstanding after the Revolving
Commitment Termination Date) and (ii) to any Issuing Bank for its own account a
facing fee, which shall accrue at the rate separately agreed to by the Borrower
and such Issuing Bank on the average daily amount of the LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements) during the
Availability Period (or until the date that such Letter of Credit is irrevocably
cancelled, whichever is later), as well as such Issuing Bank’s standard fees
with respect to issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. Notwithstanding the foregoing, if
the Borrower, in accordance with Section 2.13(c), is obligated to pay Default
Interest with respect to all Obligations whether or not overdue, the fee payable
pursuant to this subsection (c) shall increase by two percent (2.00%) per annum.

(e)        The Borrower shall pay on the Closing Date to the Administrative
Agent and its affiliates all fees in the Fee Letter that are due and payable on
the Closing Date. The Borrower shall pay on the Closing Date to the Lenders all
upfront fees previously agreed in writing.

(f)        Accrued fees under subsections (b), (c) and (d) of this Section shall
be payable quarterly in arrears on the last day of each March, June, September
and December, commencing on June 30, 2015, and on the Revolving Commitment
Termination Date (and, if later, the date the Loans and LC Exposure shall be
repaid in their entirety); provided that any such fees accruing after the
Revolving Commitment Termination Date shall be payable on written demand.

 

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(g)        Anything herein to the contrary notwithstanding, during such period
as a Lender is a Defaulting Lender, such Defaulting Lender will not be entitled
to commitment fees accruing with respect to its Revolving Commitment during such
period pursuant to subsection (b) of this Section or letter of credit fees
accruing during such period pursuant to subsection (c) of this Section (without
prejudice to the rights of the Lenders other than Defaulting Lenders in respect
of such fees), provided that to the extent that a portion of the LC Exposure of
such Defaulting Lender is reallocated to the Non- Defaulting Lenders pursuant to
Section 2.26, such fees that would have accrued for the benefit of such
Defaulting Lender will instead accrue for the benefit of and be payable to such
Non-Defaulting Lenders, pro rata in accordance with their respective Revolving
Commitments, and (ii) to the extent any portion of such LC Exposure cannot be so
reallocated, such fees will instead accrue for the benefit of and be payable to
the applicable Issuing Bank (unless such LC Exposure has been fully Cash
Collateralized). The pro rata payment provisions of Section 2.21 shall
automatically be deemed adjusted to reflect the provisions of this subsection.

Section 2.15.            Computation of Interest and Fees. Interest hereunder
based on the prime lending rate shall be computed on the basis of a year of 365
days (or 366 days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest and all
fees hereunder shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding the
last day). Each determination by the Administrative Agent of an interest rate or
fee hereunder shall be made in good faith and, except for manifest error, shall
be prima facie evidence for all purposes.

Section 2.16.            Inability to Determine Interest Rates. If, prior to the
commencement of any Interest Period for any Eurodollar Borrowing:

(i)        the Administrative Agent shall have determined (which determination
shall be prima facie evidence upon the Borrower) that, by reason of
circumstances affecting the relevant interbank market, adequate means do not
exist for ascertaining Adjusted LIBOR for such Interest Period, or

(ii)        the Administrative Agent shall have received notice from the
Required Lenders that Adjusted LIBOR does not adequately and fairly reflect the
cost to such Lenders of making, funding or maintaining their Eurodollar Loans
for such Interest Period,

the Administrative Agent shall give written notice (or telephonic notice,
promptly confirmed in writing) to the Borrower and to the Lenders as soon as
practicable thereafter. Until the Administrative Agent shall notify the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, the obligations of the Lenders to make Eurodollar Loans or to continue or
convert outstanding Loans as or into Eurodollar Loans shall be suspended and
(ii) all such affected Loans shall be converted into Base Rate Loans on the last
day of the then current Interest Period applicable thereto unless the Borrower
prepays such Loans in accordance with this Agreement. Unless the Borrower
notifies the Administrative Agent at least one (1) Business Day before the date
of any Eurodollar Borrowing for which a Notice of Revolving Borrowing or a
Notice of Conversion/

 

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Continuation has previously been given that it elects not to borrow, continue or
convert to a Eurodollar Borrowing on such date, then such Borrowing shall be
made as, continued as or converted into a Base Rate Borrowing.

Section 2.17.            Illegality. If any Change in Law shall make it unlawful
or impossible for any Lender to make, maintain or fund any Eurodollar Loan
(generally or only with respect to Interest Periods of a particular length) and
such Lender shall so notify the Administrative Agent, the Administrative Agent
shall promptly give notice thereof to the Borrower and the other Lenders,
whereupon until such Lender notifies the Administrative Agent and the Borrower
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Lender to make Eurodollar Loans, or to continue or convert
outstanding Loans as or into Eurodollar Loans, shall be suspended to the extent
of such unlawfulness. In the case that making a Eurodollar Borrowing, such
Lender’s Loan shall be made as a Base Rate Loan as part of the same Borrowing
for the same Interest Period (or a Eurodollar Borrowing with an Interest Period
selected by the Borrower that can be lawfully maintained by such Lender) and, if
the affected Eurodollar Loan is then outstanding, such Loan shall be converted
to a Base Rate Loan either (i) on the last day of the then current Interest
Period applicable to such Eurodollar Loan if such Lender may lawfully continue
to maintain such Loan to such date or (ii) immediately if such Lender shall
determine that it may not lawfully continue to maintain such Eurodollar Loan to
such date. Notwithstanding the foregoing, the affected Lender shall, prior to
giving such notice to the Administrative Agent, designate a different Applicable
Lending Office if such designation would avoid the need for giving such notice
and if such designation would not otherwise be disadvantageous to such Lender in
the good faith exercise of its discretion.

Section 2.18.            Increased Costs.

(a)        If any Change in Law shall:

(i)        impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement that is not otherwise
included in the determination of Adjusted LIBOR hereunder against assets of,
deposits with or for the account of, or credit extended by or participated in,
any Lender (except any such reserve requirement reflected in Adjusted LIBOR) or
any Issuing Bank;

(ii)        impose on any Lender, any Issuing Bank or the eurodollar interbank
market any other condition, cost or expense affecting this Agreement or any
Eurodollar Loans made by such Lender or any Letter of Credit or any
participation therein; or

(iii)        subject any Recipient to any Taxes (other than Indemnified Taxes
and Excluded Taxes) on its loans, loan principal, letters of credit, commitments
or other obligations, or its deposits, reserves, other liabilities or capital
attributable thereto;

and the result of any of the foregoing is to increase the cost to such Lender or
Recipient of making, converting into, continuing or maintaining a Eurodollar
Loan or to increase the

 

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cost to such Lender or Recipient or any Issuing Bank of participating in or
issuing any Letter of Credit or to reduce the amount received or receivable by
such Lender or Recipient or any Issuing Bank hereunder (whether of principal,
interest or any other amount), then, from time to time, such Lender or Recipient
or the Issuing Bank may provide the Borrower (with a copy thereof to the
Administrative Agent) with written notice and demand with respect to such
increased costs or reduced amounts and within five (5) Business Days after
receipt of the certificate required under subsection (c) below, the Borrower
shall pay to such Lender or Recipient or any Issuing Bank, as the case may be,
such additional amounts as will compensate such Lender or Recipient or any
Issuing Bank for any such increased costs incurred or reduction suffered.

(b)        If any Lender or any Issuing Bank shall have determined that any
Change in Law regarding capital and liquidity requirements has or would have the
effect of reducing the rate of return on such Lender’s or the Issuing Bank’s
capital or assets (or on the capital or assets of the Parent Company of such
Lender or the Issuing Bank) as a consequence of its obligations hereunder or
under or in respect of any Letter of Credit to a level below that which such
Lender, such Issuing Bank or such Parent Company could have achieved but for
such Change in Law (taking into consideration such Lender’s or such Issuing
Bank’s policies or the policies of such Parent Company with respect to capital
adequacy and liquidity), then, from time to time, such Lender or such Issuing
Bank may provide the Borrower (with a copy thereof to the Administrative Agent)
with written notice and demand with respect to such reduced amounts, and within
five (5) Business Days after receipt of the certificate required under
subsection (c) below, the Borrower shall pay to such Lender or such Issuing
Bank, as the case may be, such additional amounts as will compensate such
Lender, such Issuing Bank or such Parent Company for any such reduction
suffered.

(c)        A certificate of such Lender or such Issuing Bank setting forth
(i) the amount or amounts necessary to compensate such Lender, such Issuing Bank
or the Parent Company of such Lender or such Issuing Bank, as the case may be,
specified in subsection (a) or (b) of this Section and (ii) a reasonably
detailed explanation of the applicable Change in Law, shall be delivered to the
Borrower (with a copy to the Administrative Agent) and shall be conclusive,
absent manifest error.

(d)        Failure or delay on the part of any Lender or any Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s or such Issuing Bank’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs incurred or reductions
suffered more than six (6) months prior to the date that such Lender or the
Issuing Bank notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Bank’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).

 

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Section 2.19.            Funding Indemnity. In the event of (a) the payment of
any principal of a Eurodollar Loan other than on the last day of the Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion or continuation of a Eurodollar Loan other than on the last
day of the Interest Period applicable thereto, or (c) the failure by the
Borrower to borrow, prepay, convert or continue any Eurodollar Loan on the date
specified in any applicable notice (regardless of whether such notice is
withdrawn or revoked), then, in any such event, the Borrower shall compensate
each Lender, within five (5) Business Days after written demand from such
Lender, for any loss, cost or expense attributable to such event. In the case of
a Eurodollar Loan, such loss, cost or expense shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (i) the amount of
interest that would have accrued on the principal amount of such Eurodollar Loan
if such event had not occurred at Adjusted LIBOR applicable to such Eurodollar
Loan for the period from the date of such event to the last day of the then
current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Eurodollar Loan) over (ii) the amount of interest that would accrue on the
principal amount of such Eurodollar Loan for the same period if Adjusted LIBOR
were set on the date such Eurodollar Loan was prepaid or converted or the date
on which the Borrower failed to borrow, convert or continue such Eurodollar
Loan. A certificate as to any additional amount payable under this Section
submitted to the Borrower by any Lender (with a copy to the Administrative
Agent) shall be prima facie evidence, absent manifest error.

Section 2.20.            Taxes.

(a)        Any and all payments by or on account of any obligation of the
Borrower or any other Loan Party hereunder or under any other Loan Document
shall be made free and clear of and without deduction or withholding for any
Indemnified Taxes or Other Taxes; provided that if any applicable law requires
the deduction or withholding of any Tax from any such payment, then the
applicable Withholding Agent shall make such deduction and timely pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law and, if such Tax is an Indemnified Tax or Other Tax, then the sum
payable by the Borrower or other Loan Party, as applicable, shall be increased
as necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this Section) the applicable Recipient shall receive an amount equal to
the sum it would have received had no such deductions or withholdings been made.

(b)        In addition, without limiting the provisions of subsection (a) of
this Section, the Borrower shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c)        The Borrower shall indemnify each Recipient, within five (5) Business
Days after written demand therefor, for the full amount of any Indemnified Taxes
or Other Taxes paid or payable by such Recipient (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) 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

 

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legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by the applicable Recipient shall be conclusive, absent manifest error.

(d)        As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower or any other Loan Party to a Governmental Authority,
the Borrower or other Loan Party, as applicable, shall deliver to the
Administrative Agent an 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)        Tax Forms.

(i)        Any Lender that is a U.S. Person shall deliver to the Borrower and
the Administrative Agent, on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), duly executed
originals of IRS Form W-9 certifying, to the extent such Lender is legally
entitled to do so, that such Lender is exempt from U.S. federal backup
withholding tax.

(ii)        Any Lender that is a Foreign Person and that is entitled to an
exemption from or reduction of withholding tax under the Code or any treaty to
which the United States is a party with respect to payments under this Agreement
shall deliver to the Borrower and the Administrative Agent, at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. Without limiting the generality of the
foregoing, each Lender that is a Foreign Person shall, to the extent it is
legally entitled to do so, (w) on or prior to the date such Lender becomes a
Lender under this Agreement, (x) on or prior to the date on which any such form
or certification expires or becomes obsolete, (y) after the occurrence of any
event requiring a change in the most recent form or certification previously
delivered by it pursuant to this subsection, and (z) from time to time upon the
reasonable request by the Borrower or the Administrative Agent, deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be
requested by the Borrower or the Administrative Agent), whichever of the
following is applicable:

(A)        if such Lender is claiming eligibility for benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, duly executed originals of IRS Form W-8BEN or
W-8BEN-E, or any successor form thereto, establishing an exemption from, or
reduction of, U.S. federal withholding tax pursuant to the “interest” article of
such tax treaty, and (y) with respect to any other applicable payments under any
Loan Document, duly executed originals of IRS Form W-8BEN or W-8BEN-E, or any
successor form thereto, establishing an exemption from, or reduction of, U.S.
federal

 

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withholding tax pursuant to the “business profits” or “other income” article of
such tax treaty;

(B)        duly executed originals of IRS Form W-8ECI, or any successor form
thereto, certifying that the payments received by such Lender are effectively
connected with such Lender’s conduct of a trade or business in the United
States;

(C)        if such Lender is claiming the benefits of the exemption for
portfolio interest under Section 871(h) or Section 881(c) of the Code, duly
executed originals of IRS Form W-8BEN or W-8BEN-E, or any successor form
thereto, together with a certificate (a “U.S. Tax Compliance Certificate”) upon
which such Lender certifies that (1) such Lender is not a bank for purposes of
Section 881(c)(3)(A) of the Code, or the obligation of the Borrower hereunder is
not, with respect to such Lender, a loan agreement entered into in the ordinary
course of its trade or business, within the meaning of that Section, (2) such
Lender is not a 10% shareholder of the Borrower within the meaning of
Section 871(h)(3) or Section 881(c)(3)(B) of the Code, (3) such Lender is not a
controlled foreign corporation that is related to the Borrower within the
meaning of Section 881(c)(3)(C) of the Code, and (4) the interest payments in
question are not effectively connected with a U.S. trade or business conducted
by such Lender; or

(D)        if such Lender is not the beneficial owner (for example, a
partnership or a participating Lender granting a typical participation), duly
executed originals of IRS Form W-8IMY, or any successor form thereto,
accompanied by IRS Form W-9, IRS Form W-8ECI, IRS Form W-8BEN or W-8BEN-E, a
U.S. Tax Compliance Certificate, and/or other certification documents from each
beneficial owner, as applicable.

(iii)        Each Lender agrees that if any form or certification it previously
delivered under this Section expires or becomes obsolete or inaccurate in any
respect and such Lender is not legally entitled to provide an updated form or
certification, it shall promptly notify the Borrower and the Administrative
Agent of its inability to update such form or certification.

(f)        If a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Administrative Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Borrower or the Administrative Agent such documentation prescribed by applicable
law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment.

 

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(g)        Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.20 (including by
the payment of additional amounts pursuant to this Section 2.20), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 2.20 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund). Such
indemnifying party, upon the request of such indemnified party, shall repay to
such indemnified party the amount paid over pursuant to this paragraph (g) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (g) in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (g) the payment
of which would place the indemnified party in a less favorable net after- Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

(h)        Survival. Each party’s obligations under this Section 2.20 shall
survive the resignation or replacement of the Administrative Agent or any
assignment of rights by, or the replacement of, a Lender, the termination of the
Commitments and the repayment, satisfaction or discharge of all obligations
under any Loan Document.

Section 2.21. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a)        The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.18, 2.19 or 2.20, or
otherwise) prior to 1:00 p.m. on the date when due, in immediately available
funds, free and clear of any defenses, rights of set-off, counterclaim, or
withholding or deduction of taxes. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
the Payment Office, except payments to be made directly to the applicable
Issuing Bank or the Swingline Lender as expressly provided herein and except
that payments pursuant to Sections 2.18, 2.19, 2.20 and 10.3 shall be made
directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be made payable for the period
of such extension. All payments hereunder shall be made in Dollars.

 

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(b)        If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
as follows: first, to all fees and reimbursable expenses of the Administrative
Agent then due and payable pursuant to any of the Loan Documents; second, to all
reimbursable expenses of the Lenders and all fees and reimbursable expenses of
the Issuing Banks then due and payable pursuant to any of the Loan Documents,
pro rata to the Lenders and the Issuing Banks based on their respective pro rata
shares of such fees and expenses; third, to all interest and fees then due and
payable hereunder, pro rata to the Lenders based on their respective pro rata
shares of such interest and fees; and fourth, to all principal of the Loans and
unreimbursed LC Disbursements then due and payable hereunder, pro rata to the
parties entitled thereto based on their respective pro rata shares of such
principal and unreimbursed LC Disbursements.

(c)        If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements or Swingline
Loans then due that would result in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Credit Exposure, Term Loans
and accrued interest and fees thereon (if applicable) than the proportion
received by any other Lender with respect to its Revolving Credit Exposure or
Term Loans (if applicable), then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Revolving Credit
Exposure and Term Loans (if applicable) of other Lenders to the extent necessary
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 Revolving Credit Exposure and Term Loans; provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this subsection shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Revolving Credit
Exposure or Term Loans to any assignee or participant, other than to the
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of
this subsection shall apply). The Borrower consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.

(d)        Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Banks hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing
Banks, as the case may be, the amount or amounts due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or

 

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such Issuing Bank, 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 Issuing Bank 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 greater of the Federal Funds Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.

Section 2.22.            Letters of Credit.

(a)        During the Availability Period, each Issuing Bank, in reliance upon
the agreements of the other Lenders pursuant to subsections (d) and (e) of this
Section, shall issue, at the request of the Borrower, Letters of Credit for the
account of the Borrower on the terms and conditions hereinafter set forth;
provided that (i) each Letter of Credit shall expire on the earlier of (A) the
date one (1) year after the date of issuance of such Letter of Credit (or, in
the case of any renewal or extension thereof (which may be an automatically
renewing or extending Letter of Credit), one (1) year after such renewal or
extension) and (B) the date that is five (5) Business Days prior to the latest
Revolving Commitment Termination Date (unless, at the time of issuance, the
Borrower agrees to Cash Collateralize the applicable LC Exposure on or prior to
the fifth (5th) Business Day prior to the latest Revolving Commitment
Termination Date); provided that any Letter of Credit may be automatically
extended (so long as the Issuing Bank shall have the right to prevent such
extension at least once in each year) for periods of up to one (1) year (but not
beyond the date that is five (5) Business Days prior to the latest Revolving
Commitment Termination Date unless, at the time of issuance, the Borrower agrees
to Cash Collateralize the applicable LC Exposure on or prior to the fifth
(5th) Business Day prior to the latest Revolving Commitment Termination Date);
(ii) each Letter of Credit shall be in a stated amount of at least $50,000; and
(iii) the Borrower may not request any Letter of Credit if, after giving effect
to such issuance, (A) the aggregate LC Exposure would exceed the LC Commitment
or (B) the aggregate Revolving Credit Exposure of all Lenders would exceed the
lesser of (I) the Aggregate Revolving Commitment Amount and (II) the Available
Loan Amount minus the outstanding principal amount of the Term Loans. Each
Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the applicable Issuing Bank without recourse a
participation in each Letter of Credit equal to such Lender’s Pro Rata Share of
the aggregate amount available to be drawn under such Letter of Credit on the
date of issuance. Each issuance of a Letter of Credit shall be deemed to utilize
the Revolving Commitment of each Lender by an amount equal to the amount of such
participation. If the Maturity Date in respect of any tranche of Revolving
Commitments occurs prior to the expiration of any Letter of Credit (such
maturity date, the “Earlier LC Maturity Date”), then (i) on such Earlier LC
Maturity Date, if one or more other tranches of Revolving Commitments in respect
of which the Maturity Date shall not have occurred are then in effect, such
Letters of Credit shall automatically be deemed to have been issued (including
for purposes of the obligations of the Revolving Lenders to purchase
participations therein and to make Revolving Loans and payments in respect
thereof pursuant to this Section) under (and ratably participated in by
Revolving Lenders pursuant to) the Revolving Commitments in respect of such
non-terminating tranches up to an aggregate amount not to exceed the aggregate
principal amount of the unutilized Revolving Commitments thereunder at such

 

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time (it being understood that no partial face amount of any Letter of Credit
may be so reallocated) and (ii) to the extent not reallocated pursuant to the
immediately preceding clause (i), the Borrower shall Cash Collateralize any such
Letter of Credit. Except to the extent of reallocations of participations
pursuant to the immediately preceding sentence, the occurrence of a Maturity
Date with respect to a given tranche of Revolving Commitments shall have no
effect upon (and shall not diminish) the percentage participations of the
Revolving Lenders in any Letter of Credit issued before such Maturity Date.

(b)        To request the issuance of a Letter of Credit (or any amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
give the applicable Issuing Bank and the Administrative Agent irrevocable
written notice in the form of the Letter of Credit Notice/Application attached
hereto as Exhibit 2.22 prior to 1:00 p.m. at least three (3) Business Days prior
to the requested date of such issuance specifying the date (which shall be a
Business Day) such Letter of Credit is to be issued (or amended, renewed or
extended, as the case may be), the expiration date of such Letter of Credit, the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. In addition to the satisfaction or waiver of the
conditions in Section 3.2, the issuance of such Letter of Credit (or any
amendment which increases the amount of such Letter of Credit) will be subject
to the further conditions that such Letter of Credit shall be in such form and
contain such terms as the applicable Issuing Bank shall approve and that the
Borrower shall have executed and delivered any additional applications,
agreements and instruments relating to such Letter of Credit as the Issuing Bank
shall reasonably require; provided that in the event of any conflict between
such applications, agreements or instruments and this Agreement, the terms of
this Agreement shall control.

(c)        At least two (2) Business Days prior to the issuance of any Letter of
Credit, the applicable Issuing Bank will confirm with the Administrative Agent
(by telephone or in writing) that the Administrative Agent has received such
notice, and, if not, such Issuing Bank will provide the Administrative Agent
with a copy thereof. Unless such Issuing Bank has received notice from the
Administrative Agent, on or before the Business Day immediately preceding the
date such Issuing Bank is to issue the requested Letter of Credit, directing
such Issuing Bank not to issue the Letter of Credit because such issuance is not
then permitted hereunder because of the limitations set forth in subsection
(a) of this Section or that one or more conditions specified in Section 3.2 are
not then satisfied, then, subject to the terms and conditions hereof, such
Issuing Bank shall, on the requested date, issue such Letter of Credit in
accordance with such Issuing Bank’s usual and customary business practices.

(d)        Each Issuing Bank shall examine all documents purporting to represent
a demand for payment under a Letter of Credit promptly following its receipt
thereof. The applicable Issuing Bank shall notify the Borrower and the
Administrative Agent in writing (or telephonic notice promptly confirmed in
writing) of such demand for payment and whether such Issuing Bank has made or
will make a LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse such Issuing Bank and the Lenders with respect to such LC
Disbursement. The Borrower shall be irrevocably and unconditionally obligated to
reimburse the Issuing Bank for any LC Disbursements paid by such Issuing Bank in
respect of such drawing, without

 

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presentment, demand or other formalities of any kind. Unless the Borrower shall
have notified applicable Issuing Bank and the Administrative Agent prior to 1:00
p.m. on the Business Day immediately following the date on which such drawing is
honored that the Borrower intends to reimburse the Issuing Bank for the amount
of such drawing in funds other than from the proceeds of Revolving Loans, the
Borrower shall be deemed to have timely given a Notice of Revolving Borrowing to
the Administrative Agent requesting the Lenders to make a Base Rate Borrowing on
such date in an exact amount due to such Issuing Bank; provided that for
purposes solely of such Borrowing, the conditions precedent set forth in
Section 3.2 hereof shall not be applicable. The Administrative Agent shall
notify the Lenders of such Borrowing in accordance with Section 2.3, and each
Lender shall make the proceeds of its Base Rate Loan included in such Borrowing
available to the Administrative Agent for the account of such Issuing Bank in
accordance with Section 2.6. The proceeds of such Borrowing shall be applied
directly by the Administrative Agent to reimburse such Issuing Bank for such LC
Disbursement.

(e)        If for any reason a Base Rate Borrowing may not be (as determined in
the sole discretion of the Administrative Agent), or is not, made in accordance
with the foregoing provisions, then each Lender (other than the applicable
Issuing Bank) shall be obligated to fund the participation that such Lender
purchased pursuant to subsection (a) of this Section in an amount equal to its
Pro Rata Share of such LC Disbursement on and as of the date which such Base
Rate Borrowing should have occurred. Each Lender’s obligation to fund its
participation shall be absolute and unconditional and shall not be affected by
any circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right that such Lender or any other Person may have
against the applicable Issuing Bank or any other Person for any reason
whatsoever, (ii) the existence of a Default or an Event of Default or the
termination of the Aggregate Revolving Commitments, (iii) any adverse change in
the condition (financial or otherwise) of the REIT Guarantor or any of its
Subsidiaries, (iv) any breach of this Agreement by the Borrower or any other
Lender, (v) any amendment, renewal or extension of any Letter of Credit or
(vi) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. On the date that such participation is required
to be funded, each Lender shall promptly transfer, in immediately available
funds, the amount of its participation to the Administrative Agent for the
account of the applicable Issuing Bank. Whenever, at any time after the
applicable Issuing Bank has received from any such Lender the funds for its
participation in a LC Disbursement, such Issuing Bank (or the Administrative
Agent on its behalf) receives any payment on account thereof, the Administrative
Agent or such Issuing Bank, as the case may be, will distribute to such Lender
its Pro Rata Share of such payment; provided that if such payment is required to
be returned for any reason to the Borrower or to a trustee, receiver,
liquidator, custodian or similar official in any bankruptcy proceeding, such
Lender will return to the Administrative Agent or such Issuing Bank any portion
thereof previously distributed by the Administrative Agent or such Issuing Bank
to it.

(f)        To the extent that any Lender shall fail to pay any amount required
to be paid pursuant to subsection (d) or (e) of this Section on the due date
therefor, such Lender shall pay interest to the applicable Issuing Bank (through
the Administrative Agent) on such amount from such due date to the date such
payment is made at a rate per annum

 

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equal to the Federal Funds Rate; provided that if such Lender shall fail to make
such payment to the applicable Issuing Bank within three (3) Business Days of
such due date, then, retroactively to the due date, such Lender shall be
obligated to pay interest on such amount at the rate set forth in
Section 2.13(c).

(g)        If any Event of Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Administrative Agent or
the Required Lenders demanding that its reimbursement obligations with respect
to the Letters of Credit be Cash Collateralized pursuant to this subsection, the
Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Issuing Banks and the
Lenders, an amount in cash equal to 103% of the aggregate LC Exposure of all
Lenders as of such date plus any accrued and unpaid fees thereon; provided that
such obligation to Cash Collateralize the reimbursement obligations of the
Borrower with respect to the Letters of Credit shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in Section 8.1(h) or (i). Such deposit shall
be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. The Borrower agrees to execute
any documents and/or certificates to effectuate the intent of this subsection.
Other than any interest earned on the investment of such deposits, which
investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower’s risk and expense, such deposits shall
not bear interest. Interest and profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the applicable Issuing Bank for LC
Disbursements for which it had not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated, with the consent of the Required Lenders, be applied to
satisfy other obligations of the Borrower under this Agreement and the other
Loan Documents. If the Borrower is required to Cash Collateralize its
reimbursement obligations with respect to the Letters of Credit as a result of
the occurrence of an Event of Default, such Cash Collateral so posted (to the
extent not so applied as aforesaid) shall be returned to the Borrower within
three (3) Business Days after all Events of Default have been cured or waived.

(h)        Upon the request of any Lender, but no more frequently than
quarterly, each Issuing Bank shall deliver (through the Administrative Agent) to
each Lender and the Borrower a report describing the aggregate Letters of Credit
issued by such Issuing Bank and then outstanding. Upon the request of any Lender
from time to time, the Issuing Bank shall deliver to such Lender any other
information reasonably requested by such Lender with respect to each Letter of
Credit issued by such Issuing Bank and then outstanding.

(i)        The Borrower’s obligation to reimburse LC Disbursements hereunder
shall be absolute, unconditional and irrevocable and shall be performed strictly
in accordance with the terms of this Agreement under all circumstances
whatsoever and irrespective of any of the following circumstances:

 

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(i)        any lack of validity or enforcement of any Letter of Credit or this
Agreement;

(ii)        the existence of any claim, set-off, defense or other right which
the Borrower or any Subsidiary or Affiliate of the Borrower may have at any time
against a beneficiary or any transferee of any Letter of Credit (or any Persons
or entities for whom any such beneficiary or transferee may be acting), any
Lender (including any Issuing Bank) or any other Person, whether in connection
with this Agreement or the Letter of Credit or any document related hereto or
thereto or any unrelated transaction;

(iii)        any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect;

(iv)        payment by any Issuing Bank under a Letter of Credit against
presentation of a draft or other document to such Issuing Bank that does not
comply with the terms of such Letter of Credit;

(v)        any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a right of set-off
against, the Borrower’s obligations hereunder; or

(vi)        the existence of a Default or an Event of Default.

Neither the Administrative Agent, any Issuing Bank, any Lender nor any Related
Party of any of the foregoing shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to above), or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the applicable Issuing
Bank; provided that the foregoing shall not be construed to excuse any Issuing
Bank from liability to the Borrower to the extent of any actual direct damages
(as opposed to special, indirect (including claims for lost profits or other
consequential damages), or punitive damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by such Issuing Bank’s failure to
exercise due care when determining whether drafts or other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence, bad faith or willful
misconduct on the part of any Issuing Bank (as finally determined by a court of
competent jurisdiction), such Issuing Bank shall be deemed to have exercised due
care in each such determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented that appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the applicable Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice

 

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or information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

(j)        Unless otherwise expressly agreed by the applicable Issuing Bank and
the Borrower when a Letter of Credit is issued and subject to applicable laws,
(i) each standby Letter of Credit shall be governed by the “International
Standby Practices 1998” (ISP98) (or such later revision as may be published by
the Institute of International Banking Law & Practice on any date any Letter of
Credit may be issued), and (ii) the Borrower shall specify the foregoing in each
letter of credit application submitted for the issuance of a Letter of Credit.

Section 2.23.        Increase of Commitments; Additional Lenders.

(a)        From time to time after the Closing Date and in accordance with this
Section, the Borrower and one or more Increasing Lenders or Additional Lenders
(each as defined below) may enter into an agreement to increase the aggregate
principal amount of the Revolving Commitments and/or establish one or more new
tranches of Incremental Term Loan Commitments hereunder (each such increase or
additional tranche, an “Incremental Commitment”) so long as the following
conditions are satisfied:

(i)        the aggregate principal amount of all such Incremental Commitments
made pursuant to this Section shall not exceed $250,000,000 (the principal
amount of each such Incremental Commitment, the “Incremental Commitment
Amount”), and each such Incremental Commitment shall be in a minimum amount of
$10,000,000 or increments of $5,000,000 in excess thereof;

(ii)        [Reserved];

(iii)        at the time of and immediately after giving effect to any such
Incremental Commitment, (x) no Event of Default shall exist; provided that in
the case of any Incremental Commitment obtained for the purposes of financing an
Acquisition or other Investment not prohibited by this Agreement, the Lenders
providing such Incremental Commitment and the Administrative Agent may agree
that such condition shall be limited to an absence of an Event of Default as of
the date of the execution of the definitive documentation with respect to such
Acquisition, (y) all representations and warranties of each Loan Party set forth
in the Loan Documents shall be true and correct in all material respects (other
than those representations and warranties that are expressly qualified by
Material Adverse Effect or other materiality, in which case such representations
and warranties shall be true and correct in all respects) as of the date of the
establishment of such Incremental Commitment (or, if such representation or
warranty relates to an earlier date, as of such earlier date); provided that in
the case of any Incremental Commitment obtained for the purposes of financing an
Acquisition or other Investment not prohibited by this Agreement, the Lenders
providing such Incremental Commitment may agree that the only representations
and warranties the making of which shall be a condition to such Incremental
Commitment (and the Incremental Term Loans or Revolving Loans provided

 

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thereunder) shall be (I) the Specified Representations and (II) the
representations and warranties made by or on behalf of the applicable target in
the purchase, acquisition or similar agreement governing such Acquisition or
other Investment as are material to the interests of the Lenders, but only to
the extent that the Borrower (or the Borrower’s applicable Affiliates or
Subsidiaries) has the right (determined without regard to any notice
requirement) not to consummate or the right to terminate (or cause the
termination of) the Borrower’s (or such Affiliates’ or Subsidiaries’)
obligations under such purchase, acquisition or other agreement as a result of a
breach of such representations or warranties in such purchase, acquisition or
other agreement (or the failure of such representations or warranties to be
accurate or to satisfy the closing conditions in such purchase, acquisition or
other agreement applicable to such representations or warranties) (such
representations and warranties, the “Specified Target Representations”) and
(z) to the extent there is a condition that no Material Adverse Effect exists as
of the date of the initial funding of such Incremental Commitment, such
condition shall be limited to the target of such Acquisition or Investment, in
such manner and to the extent required to be satisfied under the definitive
documentation with respect to such Acquisition;

(iv)        (x) any incremental Term Loans made pursuant to this Section (the
“Incremental Term Loans” and, the commitments with respect thereto, the
“Incremental Term Loan Commitments”) shall have a maturity date no earlier than
the Revolving Commitment Termination Date in effect at the time such Incremental
Term Loans are incurred and shall have a Weighted Average Life to Maturity no
shorter than that of any previously established Incremental Term Loans (without
giving effect to previous reductions in and previously made amortization
payments on such previously established Incremental Term Loans), and (y) any
incremental Revolving Commitments provided pursuant to this Section (the
“Incremental Revolving Commitments”) shall have identical terms (including
pricing and termination date; provided that upfront fees for any Incremental
Revolving Commitments will be permitted and shall be determined by the Borrower
and the Lenders providing such Incremental Revolving Commitments) to the
Revolving Commitments and be treated as the same Class as the Revolving
Commitments and the Borrower shall, after the establishment of any Incremental
Revolving Commitments pursuant to this Section, repay and incur Revolving Loans
ratably as between the Incremental Revolving Commitments and the Revolving
Commitments outstanding immediately prior to such increase (provided that such
repayment and incurrence may, with the Administrative Agent’s consent, be
effectuated through assignments among Lenders with Revolving Commitments, which
shall not require an Assignment and Acceptance and may be effectuated by the
Administrative Agent through changes in the Register and fundings from such
Lenders providing Incremental Commitments); provided, further, that Interest
Periods applicable to Incremental Term Loans or Revolving Loans advanced
pursuant to Incremental Revolving Commitments may, at the election of the
Administrative Agent and the Borrower, be made with Interest Period(s) identical
to the then remaining Interest Period(s) applicable to existing Term Loans of
the relevant Class or existing Revolving Loans of the applicable Class (and
allocated to such Interest Period(s) on a proportional basis); and

 

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(v)         the Borrower and its Subsidiaries shall be in compliance with each
of the Financial Covenants, calculated (x) in the case of Incremental Term Loan
Commitments, on the date the Incremental Term Loans provided thereunder are
funded or (x) in the case of Incremental Revolving Commitments, on the date such
Incremental Revolving Commitments become effective, in each case, as if all such
Incremental Term Loans had been made and all such Incremental Revolving
Commitments had been established (and fully funded) as of such date, as
applicable (including giving effect to any Acquisition consummated after the end
of the most recent Fiscal Quarter for which financial statements have been
delivered pursuant to Section 5.1(a) or (b) and on or prior to such date which
is funded with such Incremental Term Loans or Incremental Revolving
Commitments); provided that in the case of any Incremental Commitment obtained
for the purposes of financing an Acquisition or other Investment not prohibited
by this Agreement, the Lenders providing such Incremental Commitment may agree
that such pro forma compliance shall be tested as of the date of the execution
of the definitive documentation with respect to such Acquisition.

(b)         The Borrower shall provide at least ten (10) Business Days’ (or such
shorter period of time as may be agreed to by the Administrative Agent in its
sole discretion) written notice to the Administrative Agent (who shall promptly
provide a copy of such notice to each Lender) of any proposal to establish an
Incremental Commitment. The Borrower may also, but is not required to, specify
any fees offered to those Lenders (the “Increasing Lenders”) that agree to
increase the principal amount of their Revolving Commitments and/or provide
Incremental Term Loan Commitments, which fees may be variable based upon the
amount by which any such Lender is willing to increase the principal amount of
its Revolving Commitment and/or the principal amount of the Incremental Term
Loan Commitment such Lender is willing to provide, as applicable. No Lender (or
any successor thereto) shall have any obligation, express or implied, to offer
to increase the aggregate principal amount of its Revolving Commitment and/or
provide an Incremental Term Loan Commitment, and any decision by a Lender to
increase its Revolving Commitment and/or provide an Incremental Term Loan
Commitment shall be made in its sole discretion independently from any other
Lender. Only the consent of each Increasing Lender shall be required for an
increase in the aggregate principal amount of the Revolving Commitments and/or
the establishment of a tranche of Incremental Term Loan Commitments, as
applicable, pursuant to this Section. No Lender which declines to increase the
principal amount of its Revolving Commitment and/or provide an Incremental Term
Loan Commitment may be replaced with respect to its existing Revolving
Commitment and/or its Incremental Term Loans, as applicable, as a result thereof
without such Lender’s consent. The Borrower may accept some or all of the
offered amounts from existing Lenders or designate new lenders that are
acceptable to the Administrative Agent (any such consent (x) to be required only
to the extent required under Section 10.4(b) for an assignment of Loans or
Commitments of such Type to such new lender and (y) not to be unreasonably
withheld) and the Borrower as additional Lenders hereunder in accordance with
this Section (the “Additional Lenders”), which Additional Lenders may assume all
or a portion of such Incremental Commitment. The Borrower shall have discretion
to adjust the allocation of such Incremental Revolving Commitments and/or such
Incremental Term Loans among the Increasing Lenders and the Additional Lenders
(as it may elect). The sum of the increase in

 

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the principal amount of the Revolving Commitments and the aggregate principal
amount of the Incremental Term Loan Commitments of the Increasing Lenders plus
the principal amount of the Revolving Commitments and the aggregate principal
amount of the Term Loan Commitments of the Additional Lenders shall not in the
aggregate exceed the unsubscribed amount of the Incremental Commitment Amount.

(c)         Subject to subsections (a) and (b) of this Section, any increase
requested by the Borrower shall be effective upon delivery to the Administrative
Agent of each of the following documents:

(i)         an originally executed copy of an instrument of joinder (each, an
“Incremental Commitment Joinder”), in form and substance reasonably acceptable
to the Administrative Agent, executed by the Administrative Agent, by the
Borrower, by each Additional Lender and by each Increasing Lender, setting forth
the Incremental Revolving Commitments and/or Incremental Term Loan Commitments,
as applicable, of such Lenders and setting forth the agreement of each
Additional Lender to become a party to this Agreement and to be bound by all of
the terms and provisions hereof;

(ii)         such evidence of appropriate corporate authorization on the part of
the Borrower with respect to such Incremental Commitment and such opinions of
counsel for the Borrower with respect to such Incremental Commitment as the
Administrative Agent may reasonably request;

(iii)         a certificate of the Borrower signed by a Responsible Officer, in
form and substance reasonably acceptable to the Administrative Agent, certifying
that each of the conditions in subsection (a) of this Section has been
satisfied;

(iv)         to the extent requested by any Additional Lender or any Increasing
Lender, executed promissory notes evidencing such Incremental Revolving
Commitments and/or such Incremental Term Loans, issued by the Borrower in
accordance with Section 2.10; and

(v)         any other certificates or documents that the Administrative Agent
shall reasonably request in connection with and at the time of any such proposed
increase.

Upon the effectiveness of any such Incremental Commitment, the Commitments and
Pro Rata Share of each Lender will be adjusted to give effect to the Incremental
Revolving Commitments and/or the Incremental Term Loans, as applicable, and
Schedule I shall automatically be deemed amended accordingly.

(d)         If any Incremental Term Loan Commitments are to be established
pursuant to this Section, other than as set forth herein, all terms with respect
thereto shall be as set forth in the applicable Incremental Commitment Joinder,
the execution and delivery of which agreement shall be a condition to the
effectiveness of the establishment of the Incremental Term Loan Commitments.
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Section 10.2, the Administrative Agent and the Borrower are expressly permitted
to amend the Loan Documents to the extent necessary to give effect to any
increase in Revolving Commitments and/or establishment of a new Incremental Term
Loan Commitment pursuant to this Section and mechanical changes necessary or
advisable in connection therewith (including amendments to implement the
requirements in the preceding sentence or the foregoing clause (a)(iv)(y) of
this Section, amendments to ensure pro rata allocations of Eurodollar Loans and
Base Rate Loans between Loans incurred pursuant to this Section and Loans
outstanding immediately prior to any such incurrence and amendments to implement
ratable participation in Letters of Credit between the Incremental Revolving
Commitments and the Revolving Commitments outstanding immediately prior to any
such incurrence).

(e)         This Section 2.23 shall supersede any provisions in Section 2.21 or
10.2 to the contrary.

 

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Section 2.24.        Mitigation of Obligations. If any Lender requests
compensation under Section 2.18, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.20, 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 sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable under
Section 2.18 or Section 2.20, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all costs and expenses incurred by any Lender in connection with such
designation or assignment.

Section 2.25.        Replacement of Lenders. If (a) any Lender requests
compensation under Section 2.18, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.20 or any Lender has failed to approve an
amendment or waiver that requires the consent of all Lenders or all Lenders of a
particular Class or all affected Lenders (and such amendment or waiver has been
approved by Requisite Lenders or Lenders with a majority of the Commitments or
Loans of a particular Class or a majority of affected Lenders), or (b) any
Lender is a Defaulting Lender, then the Borrower 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 set forth in Section 10.4(b)), all of its interests, rights
(other than its existing rights to payments pursuant to Section 2.18 or 2.20, as
applicable) and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender) (a “Replacement
Lender”); provided that (i) the Borrower shall have received the prior written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld delayed or conditioned and shall not be required to the extent that the
Administrative Agent’s approval is not otherwise required pursuant to
Section 10.4, (ii) such Lender shall have received payment of an amount equal to
the outstanding principal amount of all Loans owed to it, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder from the
assignee (in the case of such outstanding principal and accrued interest) and
from the Borrower (in the case of all other amounts), and (iii) in the case of a
claim for compensation under Section 2.18 or payments required to be made
pursuant to Section 2.20, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply. If a Lender fails to execute an
Assignment and Assumption Acceptance giving effect to the assignment
contemplated under this Section 2.25, such Assignment and Acceptance may be
executed by the Borrower, the Administrative Agent and any Replacement Lender
and become effective without the consent of such replaced Lender.

Section 2.26.        Defaulting Lenders.

(a)         Cash Collateral.

 

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(i)        At any time that there shall exist a Defaulting Lender, within one
Business Day following the written request of the Administrative Agent or any
Issuing Bank (with a copy to the Administrative Agent) the Borrower shall Cash
Collateralize each Issuing Bank’s LC Exposure with respect to such Defaulting
Lender (determined after giving effect to Section 2.26(b)(iv) and any Cash
Collateral provided by such Defaulting Lender) in an amount not less than 103%
of such Issuing Bank’s LC Exposure with respect to such Defaulting Lender.

(ii)        The Borrower, and to the extent provided by any Defaulting Lender,
such Defaulting Lender, hereby grants to the Administrative Agent, for the
benefit of the Issuing Banks, and agrees to maintain, a first priority security
interest in all such Cash Collateral as security for the Defaulting Lenders’
obligation to fund participations in respect of Letters of Credit, to be applied
pursuant to clause (iii) below. If at any time the Administrative Agent
determines that Cash Collateral is subject to any right or claim of any Person
other than the Administrative Agent and the Issuing Banks as herein provided, or
that the total amount of such Cash Collateral is less than the minimum amount
required pursuant to clause (i) above, the Borrower will, promptly upon written
demand by the Administrative Agent, pay or provide to the Administrative Agent
additional Cash Collateral in an amount sufficient to eliminate such deficiency
(after giving effect to any Cash Collateral provided by the Defaulting Lender).

(iii)        Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under this Section 2.26(a) or
Section 2.26(b) in respect of Letters of Credit shall be applied to the
satisfaction of the Defaulting Lender’s obligation to fund participations in
respect of Letters of Credit or LC Disbursements (including, as to Cash
Collateral provided by a Defaulting Lender, any interest accrued on such
obligation) for which the Cash Collateral was so provided, prior to any other
application of such property as may otherwise be provided for herein.

(iv)        Cash Collateral (or the appropriate portion thereof) provided to
reduce any Issuing Bank’s LC Exposure shall no longer be required to be held as
Cash Collateral pursuant to this Section 2.26(a) following (A) the elimination
of the applicable LC Exposure (including by the termination of Defaulting Lender
status of the applicable Lender), or (ii) the determination by the
Administrative Agent and each Issuing Bank that there exists excess Cash
Collateral; provided that, subject to Section 2.26(b) through (d), the Person
providing Cash Collateral and each Issuing Bank may agree that Cash Collateral
shall be held to support future anticipated LC Exposure or other obligations and
provided further that to the extent that such Cash Collateral was provided by
the Borrower, such Cash Collateral shall remain subject to the security interest
granted pursuant to the Loan Documents.

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

 

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(i)      Such Defaulting Lender’s right to approve or disapprove any amendment,
waiver or consent with respect to this Agreement shall be restricted as set
forth in the definition of Required Lenders and in Section 10.2.

(ii)      Any payment of principal, interest, fees or other amounts received by
the Administrative Agent for the account of such Defaulting Lender (whether
voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or
received by the Administrative Agent from a Defaulting Lender pursuant to
Section 10.7 shall be applied at such time or times as may be determined by the
Administrative Agent as follows: first, to the payment of any amounts owing by
such Defaulting Lender to the Administrative Agent hereunder; second, to the
payment on a pro rata basis of any amounts owing by such Defaulting Lender to
each Issuing Bank or the Swingline Lender hereunder; third, to Cash
Collateralize the Issuing Banks’ LC Exposure with respect to such Defaulting
Lender in accordance with Section 2.26(a); fourth, as the Borrower may request
(so long as no Default or Event of Default exists), to the funding of any Loan
in respect of which such Defaulting Lender has failed to fund its portion
thereof as required by this Agreement, as determined by the Administrative
Agent; fifth, if so determined by the Administrative Agent and the Borrower, to
be held in a deposit account and released pro rata in order to (x) satisfy such
Defaulting Lender’s potential future funding obligations with respect to Loans
under this Agreement and (y) Cash Collateralize the Issuing Banks’ future LC
Exposure with respect to such Defaulting Lender with respect to future Letters
of Credit issued under this Agreement, in accordance with Section 2.26(a);
sixth, to the payment of any amounts owing to the Lenders, the Issuing Banks or
the Swingline Lender as a result of any judgment of a court of competent
jurisdiction obtained by any Lender, any Issuing Bank or the Swingline Lender
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; seventh, so long as no Default or Event of
Default exists, to the payment of any amounts owing to the Borrower as a result
of any judgment of a court of competent jurisdiction obtained by the Borrower
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; and eighth, to such Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal amount of any Loans or LC
Disbursements in respect of which such Defaulting Lender has not fully funded
its appropriate share, and (y) such Loans were made or the related Letters of
Credit were issued at a time when the conditions set forth in Section 3.2 were
satisfied or waived, such payment shall be applied solely to pay the Loans of,
and LC Disbursements owed to, all Non-Defaulting Lenders on a pro rata basis
prior to being applied to the payment of any Loans of, or LC Disbursements owed
to, such Defaulting Lender until such time as all Loans and funded and unfunded
participations in respect of Letters of Credit and Swingline Loans are held by
the Lenders pro rata in accordance with the Commitments without giving effect to
sub-section (iv) below. Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by
a Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.26(b)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

 

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(iii)        (A) No Defaulting Lender shall be entitled to receive any
Commitment Fee pursuant to Section 2.14(b) or Section 2.14(c) for any period
during which that Lender is a Defaulting Lender (and the Borrower shall not be
required to pay any such fee that otherwise would have been required to have
been paid to that Defaulting Lender).

(B)        Each Defaulting Lender shall be entitled to receive letter of credit
fees pursuant to Section 2.14(d) for any period during which that Lender is a
Defaulting Lender only to the extent allocable to that portion of its LC
Exposure for which it has provided Cash Collateral pursuant to Section 2.26(a).

(C)        With respect to any letter of credit fee not required to be paid to
any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall
(x) pay to each Non-Defaulting Lender that portion of any such fee otherwise
payable to such Defaulting Lender with respect to such Defaulting Lender’s
participation in Letters of Credit or Swingline Loans that has been reallocated
to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to each
Issuing Bank and the Swingline Lender, as applicable, the amount of any such fee
otherwise payable to such Defaulting Lender to the extent allocable to such
Issuing Bank’s LC Exposure or Swingline Lender’s Swingline Exposure with respect
to such Defaulting Lender that has not been Cash Collateralized, and (z) not be
required to pay the remaining amount of any such fee.

(iv)        All or any part of such Defaulting Lender’s participation in Letters
of Credit and Swingline Loans shall be reallocated among the Non-Defaulting
Lenders in accordance with their respective Pro Rata Shares of the Revolving
Commitments (calculated without regard to such Defaulting Lender’s Revolving
Commitment) but only to the extent that (x) the conditions set forth in
Section 3.2 are satisfied at the time of such reallocation (and, unless the
Borrower shall have otherwise notified the Administrative Agent at such time,
the Borrower shall be deemed to have represented and warranted that such
conditions are satisfied at such time), and (y) such reallocation does not cause
the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed
such Non-Defaulting Lender’s Revolving Commitment. No reallocation hereunder
shall constitute a waiver or release of any claim of any party hereunder against
a Defaulting Lender arising from that Lender having become a Defaulting Lender,
including any claim of a Non-Defaulting Lender as a result of such
Non-Defaulting Lender’s increased exposure following such reallocation.

(v)        If the reallocation described in clause (iv) above cannot, or can
only partially, be effected, the Borrower shall, without prejudice to any right
or remedy available to it hereunder or under law, (x) first, prepay Swingline
Loans in an amount equal to the Swingline Lender’s Swingline Exposure with
respect to such Defaulting Lender and (y) second, Cash Collateralize the Issuing
Banks’ LC Exposure with respect to such Defaulting Lender in accordance with the
procedures set forth in Section 2.26(a).

(c)         Defaulting Lender Cure. If the Borrower, the Administrative Agent,
Swingline Lender and Issuing Banks agree in writing that a Lender is no longer a
Defaulting Lender, the Administrative Agent will so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein (which

 

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may include arrangements with respect to any Cash Collateral), that Lender will,
to the extent applicable, purchase at par that portion of outstanding Loans of
the other Lenders or take such other actions as the Administrative Agent may
determine to be necessary to cause the Loans and funded and unfunded
participations in Letters of Credit and Swingline Loans to be held pro rata by
the Lenders in accordance with the applicable Commitments (without giving effect
to Section 2.26(b)(iv)), whereupon such Lender will cease to be a Defaulting
Lender; provided that no adjustments will be made retroactively with respect to
fees accrued or payments made by or on behalf of the Borrower while that Lender
was a Defaulting Lender; and provided, further, that except to the extent
otherwise expressly agreed by the affected parties, no change hereunder from
Defaulting Lender to Lender will constitute a waiver or release of any claim of
any party hereunder arising from that Lender’s having been a Defaulting Lender.

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

Section 2.27.        Request for Extended Facilities. Notwithstanding anything
to the contrary in this Agreement, pursuant to one or more offers (each, an
“Extension Offer”) made from time to time by the Borrower to all Lenders of
Incremental Term Loans with a like Maturity Date (as specified in the applicable
Incremental Commitment Joinder therefor) or all Lenders with Revolving
Commitments of the same Class, in each case on a pro rata basis (based on the
outstanding amount of the respective Loans or the aggregate amount of the
Commitments, as the case may be, with the same Maturity Date) and on the same
terms to each such Lender, the Borrower may from time to time offer (but no
Lender is obligated to accept such offer) to extend the maturity date, increase
the interest rate or fees payable in respect of such Loans and/or Commitments
(and related outstandings) and/or modify the amortization schedule in respect of
such Lender’s Incremental Term Loans for any Incremental Term Loans (each, an
“Extension”, and each group of Loans or Commitments, as applicable, in each case
as so extended, as well as the original Loans and Commitments (in each case not
so extended), being a tranche; any Extended Term Loans shall constitute a
separate tranche of Term Loans from the tranche of Term Loans from which they
were converted, and any Extended Revolving Commitments shall constitute a
separate tranche of Revolving Commitments from the tranche of Revolving
Commitments from which they were converted), all as set forth in greater detail
in an Extended Facility Agreement so long as the terms set forth below are
satisfied:

(i)        (A) no Event of Default shall have occurred and be continuing at the
time an Extension Offer is delivered to the Lenders or at the time of the
Extended Facility Closing Date and (B) all representations and warranties of
each Loan Party set forth in the Loan Documents shall be true and correct in all
material respects (other than those representations and warranties that are
expressly qualified by Material Adverse Effect or other materiality, in which
case such representations and warranties shall be true and correct in all
respects) as of

 

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the Extended Facility Closing Date (or, if such representation or warranty
relates to an earlier date, as of such earlier date);

(ii)      except as to interest rates, fees and final maturity, the Revolving
Commitment of any Lender (an “Extending Revolving Lender”) extended pursuant to
an Extension (an “Extended Revolving Commitment”), and the related outstandings,
shall be a Revolving Commitment (or related Revolving Loan outstandings, as the
case may be) with the same terms as the original Revolving Commitments (and
related Revolving Loan outstandings); provided that (x) subject to the
provisions of Sections 2.22(a) and 2.4(f) to the extent dealing with Letters of
Credit and Swingline Loans which mature or expire after a Maturity Date when
there exist Extended Revolving Commitments with a longer Maturity Date, all
Letters of Credit and Swingline Loans shall be participated in on a pro rata
basis by all Lenders with Revolving Commitments in accordance with their Pro
Rata Share of the Aggregate Revolving Commitment Amount (and except as provided
in Sections 2.22(a) and 2.4(f), without giving effect to changes thereto on an
earlier Maturity Date with respect to Swingline Loans and Letters of Credit
theretofore incurred or issued) and all Borrowings under Revolving Commitments
and repayments thereunder shall be made on a pro rata basis (except for
(A) payments of interest and fees at different rates on Extended Revolving
Commitments (and related outstandings) and (B) repayments required upon the
Maturity Date for the non-extending Revolving Commitments) and (y) at no time
shall there be Revolving Commitments hereunder (including Extended Revolving
Commitments and any original Revolving Commitments) which have more than five
different Maturity Dates;

(iii)      except as to interest rates, fees, amortization, final maturity date,
premium, required prepayment dates and participation in prepayments, the Term
Loans of any Lender (an “Extending Term Loan Lender”) extended pursuant to any
Extension (“Extended Term Loans”) shall have the same terms as the tranche of
Term Loans subject to such Extension Offer except to the extent that such terms
are less favorable to the Extending Term Loan Lenders than to the Lenders of the
non-extended Term Loans or apply solely to periods after the Maturity Date of
the non-extended Term Loans;

(iv)      the final maturity date for any Extended Term Loans shall be no
earlier than the then latest Maturity Date, after giving effect to the exercise
of the extension option pursuant to Section 2.5, hereunder or under any existing
Extended Facility Agreement and the amortization schedule applicable to such
Extended Term Loans for periods prior to the maturity date of the Term Loans
extended thereby may not be increased from any then existing amortization
schedule applicable to Term Loans;

(v)      the Weighted Average Life to Maturity of any Extended Term Loans shall
be no shorter than the remaining Weighted Average Life to Maturity of the Term
Loans extended thereby;

(vi)      any Extended Term Loans may participate on a pro rata basis or a less
than pro rata basis (but not greater than a pro rata basis) in any voluntary or

 

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mandatory repayments or prepayments hereunder, in each case as specified in the
respective Extended Facility Agreement;

(vii)      if the aggregate principal amount of applicable Term Loans
(calculated on the face amount thereof) or Revolving Commitments, as the case
may be, in respect of which applicable Lenders holding Term Loans or Lenders
holding Revolving Commitments, as the case may be, shall have accepted the
relevant Extension Offer shall exceed the maximum aggregate principal amount of
applicable Term Loans or Revolving Commitments, as the case may be, offered to
be extended by Borrower pursuant to such Extension Offer, then the applicable
Incremental Term Loans or Revolving Loans, as the case may be, of the applicable
Lenders holding Term Loans or Lenders holding Revolving Commitments, as the case
may be, shall be extended ratably up to such maximum amount based on the
respective principal amounts (but not to exceed actual holdings of record) with
respect to which such Lenders holding Term Loans or Lenders holding Revolving
Commitments, as the case may be, have accepted such Extension Offer;

(viii)      all documentation in respect of such Extension shall be consistent
with the foregoing;

(ix)      any Extended Facility requested by the Borrower shall be in a minimum
amount of $20,000,000; and

(x)      the Administrative Agent and the lenders party thereto shall enter into
an Extended Revolving Credit Facility Agreement or an Extended Term Facility
Agreement, as the case may be, and the conditions precedent set forth therein
shall have been satisfied or waived in accordance with its terms.

Subject to compliance with the terms of this Section 2.27, the Administrative
Agent, each Issuing Bank and the Lenders hereby consent to the Extensions and
the other transactions contemplated by this Section 2.27 (including, for the
avoidance of doubt, payment of any interest, fees or premium in respect of any
Extended Term Loans and/or Extended Revolving Commitments on such terms as may
be set forth in the relevant Extended Facility Agreement) and hereby waive the
requirements of any provision of this Agreement (including, without limitation,
Sections 2.21, 10.2, or any other provisions regarding the sharing of payments)
or any other Loan Document that may otherwise prohibit any such Extension or any
other transaction contemplated by this Section 2.27. The Lenders hereto agree
that the Extended Facility Lenders party to any Extended Facility Agreement may,
from time to time, make amendments to such Extended Facility Agreement or to
this Agreement and the other Loan Documents to give effect to the Extended
Facility Agreement without the consent of any other Lenders so long as such
Extended Facility Agreement, as amended, complies with the terms set forth in
this Section 2.27.

ARTICLE III

CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT; ADDITIONS

OF BORROWING BASE ASSETS

 

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Section 3.1.         Conditions to Effectiveness. The obligations of the Lenders
(including the Swingline Lender) to make Loans and the obligation of each
Issuing Bank to issue any Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 10.2 or otherwise permitted to be satisfied after the
Closing Date pursuant to Section 5.23):

(a)      The Administrative Agent shall have received payment of all fees,
expenses and other amounts due and payable on or prior to the Closing Date,
including, without limitation, reimbursement or payment of all reasonable and
documented out-of-pocket expenses of the Administrative Agent, the Lead
Arrangers and their Affiliates (including reasonable and documented fees,
charges and disbursements of one primary counsel to the Administrative Agent,
one local counsel in each applicable jurisdiction and any special regulatory
counsel) required to be reimbursed or paid by the Borrower hereunder, under any
other Loan Document and under any agreement with the Administrative Agent or the
Lead Arrangers, in each case, to the extent that a detailed invoice is delivered
to the Borrower at least two (2) Business Days prior to the Closing Date.

(b)      The Administrative Agent (or its counsel) shall have received the
following, each to be in form satisfactory to the Administrative Agent:

(i)      a counterpart of this Agreement signed by or on behalf of each party
hereto or written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this Agreement) that
such party has signed a counterpart of this Agreement;

(ii)      a certificate of the Secretary or Assistant Secretary of each Loan
Party in the form of Exhibit 3.1(b)(ii), attaching and certifying copies of
(A) such Loan Party’s articles or certificate of incorporation, formation,
organization or limited partnership, or other registered organizational
documents, certified as of a recent date by the Secretary of State of the
jurisdiction of organization of such Loan Party; (B) such Loan Party’s bylaws,
limited liability company agreement or partnership agreement, as applicable;
(C) the resolutions of such Loan Party’s board of directors, managers, members,
general partner or other equivalent governing body, authorizing the execution,
delivery and performance of the Loan Documents to which it is a party,
(D) certificates of good standing or existence, as applicable, from the
Secretary of State of the jurisdiction of incorporation or organization of such
Loan Party and each other jurisdiction where such Loan Party which owns a
Borrowing Base Asset is required to be qualified to do business as a foreign
company, in each case as of a recent date, and (E) a certificate of incumbency
containing the name, title and true signature of each officer of such Loan Party
executing the Loan Documents to which such Loan Party is a party;

(iii)      favorable written opinions of (A) Kirkland and Ellis LLP, counsel to
the Loan Parties; and (B) DLA Piper LLP, a Maryland counsel to the Loan Parties,
and (C) Albright, Stoddard, Warnick & Albright, Nevada counsel to the Loan
Parties, each addressed to the Administrative Agent, the Issuing Bank and each
of the Lenders, and covering such matters relating to the Loan Parties, the Loan

 

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Documents and the transactions contemplated therein as the Administrative Agent
or the Required Lenders shall reasonably request;

(iv)      a certificate in the form of Exhibit 3.1(b)(iv), dated the Closing
Date and signed by a Responsible Officer, certifying that after giving effect to
the transactions contemplated hereby, (A) no Default or Event of Default has
occurred and is continuing on the Closing Date, (B) all representations and
warranties of each Loan Party set forth in the Loan Documents are true and
correct in all material respects (other than those representations and
warranties that are expressly qualified by Material Adverse Effect or other
materiality, in which case such representations and warranties shall be true and
correct in all respects), (C) since March 31, 2015, there has been no change
which has had or could reasonably be expected to have a Material Adverse Effect
and (D) the condition set forth in clauses (b)(vi) and (b)(vii) below has been
satisfied;

(v)      all material consents, approvals, authorizations, registrations and
filings and orders required to be made or obtained under any Requirement of Law,
or by any Material Indebtedness of any Loan Party, in each case, as of the
Closing Date, in connection with the execution, delivery, performance, validity
and enforceability of the Loan Documents or any of the transactions contemplated
thereby shall have been obtained and shall be in full force and effect and all
applicable waiting periods shall have expired, and no investigation or inquiry
by any governmental authority regarding the Commitments or any transaction being
financed with the proceeds thereof shall be ongoing;

(vi)      copies of (A) pro forma consolidated financial statements for the REIT
Guarantor and its Subsidiaries for the fiscal year ended December 31, 2014,
including in each case the related statements of income, shareholders’ equity
and cash flows, in form and substance reasonably satisfactory to the Lead
Arrangers; and (B) financial projections on a quarterly basis for the Fiscal
Year ending December 31, 2015 and annually thereafter through December 31, 2018;

(vii)      a duly completed and executed Compliance Certificate, including
calculations of the financial covenants set forth in Article VI hereof as of
March 31, 2015, calculated on a pro forma basis after giving effect to the
transactions contemplated hereby as if the same had occurred as of the first day
of the four (4) Fiscal Quarter period ending on March 31, 2015 (and setting
forth in reasonable detail such calculations);

(viii)      a certificate, dated the Closing Date and signed by the chief
financial officer of the REIT Guarantor and the Borrower confirming that after
giving effect to the execution and delivery of the Loan Documents and the
consummation of the transactions contemplated hereby, each of (A) the REIT
Guarantor, (B) the Borrower and (C) the Loan Parties and their Subsidiaries, on
a consolidated basis, are Solvent;

(ix)      copies of UCC, tax and judgment lien search reports in all necessary
jurisdictions of the Loan Parties, as requested by the Administrative Agent,

 

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indicating that there are no existing Liens with respect to the Loan Parties
other than Permitted Encumbrances, Liens set forth on Schedule 7.2 and Liens to
be released on the Closing Date;

(x)      copies of a duly executed payoff letter, in form and substance
satisfactory to the Administrative Agent, executed by the administrative agent
under the Existing Credit Agreement, together with (a) UCC-3 or other
appropriate termination statements, mortgage discharges and terminations, in
each case in form and substance satisfactory to the Administrative Agent,
releasing all liens of the lenders under the Existing Credit Agreement upon any
of the personal property of the Borrower and its Subsidiaries granted pursuant
to the Existing Credit Agreement and related financing documents,
(b) cancellations and releases, in form and substance satisfactory to the
Administrative Agent, releasing all liens of the lenders under the Existing
Credit Agreement upon any of the Real Estate of the Borrower and its
Subsidiaries granted pursuant to the Existing Credit Agreement and related
financing documents, and (c) any other releases, terminations or other documents
reasonably required by the Administrative Agent to evidence the payoff of
Indebtedness owed to the lenders issued or incurred pursuant to the Existing
Credit Agreement and related financing documents;

(xi)      [Reserved];

(xii)      each of the Borrowing Base Asset Deliverables with respect to each
Real Property Asset listed on Part I of Schedule 4.18; and

(xiii)      a Borrowing Base Certificate, dated as of the Closing Date and
signed by a Responsible Officer of the Borrower or the REIT Guarantor,
substantially in the form of Exhibit B; and

(xiv)      at least three (3) days prior to the Closing Date, all documentation
and other information with respect to the Borrower and each other Loan Party
that the Administrative Agent or any Lender reasonably determines is required by
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including, without limitation the Patriot Act,
to the extent reasonably requested by the Administrative Agent at least ten
(10) days before the Closing Date.

Without limiting the generality of the provisions of this Section, for purposes
of determining compliance with the conditions specified in this Section, each
Lender that has signed this Credit Agreement shall be deemed to have consented
to, approved of, accepted or been satisfied with each document or other matter
required thereunder to be consented to, 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.

 

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Section 3.2.        Conditions to Each Credit Event. The obligation of each
Lender to make a Loan on the occasion of any Borrowing and of each Issuing Bank
to issue, amend, renew or extend any Letter of Credit is subject to
Section 2.26(c) and the satisfaction of the following conditions:

(a)      at the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default or Event of Default shall exist;

(b)      at the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, all representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct in all material respects, unless
such representation or warranty expressly relates to an earlier date, in which
case such representations or warranty shall be true and correct in all material
respects as of such earlier date (other than those representations and
warranties that are expressly qualified by a Material Adverse Effect or other
materiality, in which case such representations and warranties shall be true and
correct in all respects);

(c)      at the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, the aggregate Revolving Credit Exposures of all Lenders shall not
exceed the lesser of (i) the Aggregate Revolving Commitment Amount and (ii) the
Available Loan Amount minus the outstanding principal amount of any Term Loans;
and

(d)      the Borrower shall, to the extent applicable, have delivered the
required Notice of Borrowing.

Each Borrowing and each issuance, amendment, renewal or extension of any Letter
of Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in subsections (a),
(b) and (c) of this Section.

Section 3.3.      Delivery of Documents. All of the Loan Documents,
certificates, legal opinions and other documents and papers referred to in this
Article, unless otherwise specified, shall be delivered to the Administrative
Agent for the account of each of the Lenders and shall be in form and substance
satisfactory in all respects to the Administrative Agent.

Section 3.4.        Removal of Borrowing Base Assets and Releases of Loan
Parties.

(a)      The Loan Parties may remove any Real Property Asset from the Borrowing
Base Assets hereunder, and obtain release of any Subsidiary Loan Party in
connection therewith from the Obligations hereunder through satisfaction of each
of the following conditions:

(i)      the Borrower shall deliver to the Administrative Agent, not less than
five (5) Business Days (or such shorter period as is agreed to by the

 

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Administrative Agent in its sole discretion) prior to the date of such requested
removal or release, as applicable, a written request for removal or release, as
applicable, of the applicable Loan Party or Borrowing Base Asset;

(ii)      the Borrower shall deliver, together with such request for removal or
release, as applicable, a Borrowing Base Certificate and a Compliance
Certificate showing that on the date of such removal or release, as applicable,
and after giving effect to such removal or release, as applicable, and any
corresponding payment of the Loans, (A) the Loan Parties will be in compliance
with the Financial Covenants; and (B) the aggregate Revolving Credit Exposures
of all Lenders shall not exceed the lesser of (I) the Aggregate Revolving
Commitment Amount and (II) the Available Loan Amount minus the outstanding
principal amount of any Term Loans;

(iii)      a Responsible Officer of the Borrower shall certify in writing to the
Administrative Agent that no Default or Event of Default shall exist immediately
after giving effect to the applicable removal or release, as applicable, any
payment of the Loans that will be made on or prior to the date of such removal
or release, as applicable, and any addition of any Borrowing Base Asset to occur
on or prior to the date of such removal or release, as applicable; and

(iv)      after giving effect to any such removal of a Borrowing Base Assets,
the Borrower shall remain in compliance with the requirements of Section 5.22
below.

To the extent all such conditions to removal or release, as applicable, are
satisfied or waived, the Administrative Agent will promptly deliver, as soon as
reasonably practical and, in any event, within ten (10) Business Days of the
request by any Loan Party made on or after the date such conditions to removal
or release, as applicable, are satisfied or waived, to the applicable Loan
Party, such documentation as such Loan Party reasonably requests to evidence the
removal of the Borrowing Base Asset from the Borrowing Base Amount and the
release of such Loan Party, to the extent such Loan Party is not a Material
Subsidiary, as the case may be, from the Obligations.

(b)      Whenever the Administrative Agent on behalf of the Lenders is required
to (or is authorized by the Required Lenders to) provide a release of a Loan
Party or removal of a Borrowing Base Asset under this Agreement, the
Administrative Agent shall provide such release promptly and, to the extent the
release of such Loan Party or removal of such Borrowing Base Asset is being
requested in connection with any Disposition permitted under this Agreement,
provided that the Administrative Agent has received at least ten (10) Business
Days prior written notice of the requirements for such removal or release, as
applicable, the Administrative Agent shall deliver such documentation necessary
to evidence and effectuate such removal or release, as applicable, substantially
concurrently with the closing of such Disposition.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

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Each of the Loan Parties represents and warrants, after giving effect to the
transactions contemplated hereby, to the Administrative Agent, each Lender and
each Issuing Bank as follows:

Section 4.1.        Due Organization and Good Standing. Each of the Loan Parties
(a) is duly organized, validly existing and in good standing as a corporation,
partnership or limited liability company under the laws of the jurisdiction of
its organization, (b) has all requisite power and authority to carry on its
business as now conducted, and (c) is duly qualified to do business, and is in
good standing, in each jurisdiction where such qualification is required, except
where a failure to be so qualified could not reasonably be expected to result in
a Material Adverse Effect.

Section 4.2.         Power and Authority, Due Authorization, Execution, Delivery
and Enforceability. The execution, delivery and performance by each Loan Party
of the Loan Documents to which it is a party are within such Loan Party’s
organizational powers and have been duly authorized by all necessary
organizational and, if required, shareholder, partner or member action. This
Agreement has been duly executed and delivered by the Borrower and constitutes,
and each other Loan Document to which any Loan Party is a party, when executed
and delivered by such Loan Party, will constitute, valid and binding obligations
of the Borrower or such Loan Party (as the case may be), enforceable against it
in accordance with their respective terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity.

Section 4.3.        Governmental and Third Party Consents and Approvals; No
Conflicts. The execution, delivery and performance by each Loan Party of the
Loan Documents to which it is a party (a) do not require any consent or approval
of, registration or filing with, or any action by, any Governmental Authority,
except those as have been obtained or made and are in full force and effect,
(b) will not violate any Requirement of Law applicable to the REIT Guarantor or
any of its Subsidiaries or any judgment, order or ruling of any Governmental
Authority, (c) will not violate or result in a default under any Contractual
Obligation of the REIT Guarantor or any of its Subsidiaries or any of its assets
or give rise to a right thereunder to require any payment to be made by the REIT
Guarantor or any of its Subsidiaries (other than payments in accordance with the
Loan Documents) and (d) will not result in the creation or imposition of any
Lien on any asset of the REIT Guarantor or any of its Subsidiaries, except, in
each case, as would not reasonably be expected to result in a Material Adverse
Effect.

Section 4.4.        Financial Statements; Material Adverse Change.

(a)      [Reserved].

(b)      The financial statements delivered pursuant to Section 5.1(a) and
(b) fairly present the consolidated financial condition of the REIT Guarantor
and its Subsidiaries as of such dates and the consolidated results of operations
for such periods in conformity with GAAP consistently applied (except as noted
therein), subject to year-end audit adjustments and the absence of footnotes in
the case of the financial statements delivered pursuant to Section 5.1(b).

 

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(c)      Since March 31, 2015, there have been no changes with respect to the
REIT Guarantor and its Subsidiaries which have had or could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.

Section 4.5.        Litigation and Environmental Matters.

(a)      No litigation, investigation or proceeding of or before any arbitrators
or Governmental Authorities is pending against or, to the knowledge of the
Borrower, threatened in writing against or affecting the Consolidated Parties
(i) as to which there is a reasonable possibility of an adverse determination
that could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect or (ii) which could reasonably be expected
to result in the invalidity or unenforceability of this Agreement or any other
Loan Document.

(b)      Except as could not reasonably be expected to have a Material Adverse
Effect:

(i)      To the knowledge of the Responsible Officers of the Loan Parties, each
of the Borrowing Base Assets and all operations with respect to each of the
Borrowing Base Assets and the Real Property Assets owned by the Loan Parties are
in compliance with all applicable Environmental Laws in all material respects
and there are no conditions relating to the Borrowing Base Assets, the other
Real Property Assets owned by the Loan Parties or the businesses of the Loan
Parties that are likely to give rise to any liability to any Loan Party under
any applicable Environmental Laws.

(ii)      To the knowledge of the Responsible Officers of the Loan Parties, none
of the Borrowing Base Assets or other Real Property Assets owned by the Loan
Parties contains, or has previously contained, any Hazardous Materials at, on or
under such property in amounts or concentrations that constitutes a violation
of, or could give rise to liability of any Loan Party under, applicable
Environmental Laws.

(iii)      To the knowledge of the Responsible Officers of the Loan Parties, no
Loan Party has received any written or verbal notice of, or inquiry from any
Governmental Authority regarding, any violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Borrowing Base
Assets, any of the other Real Property Assets owned by the Loan Parties or the
businesses of the Loan Parties, nor does any Responsible Officer of any Loan
Party have knowledge or reason to believe that any such notice will be received
or is being threatened.

(iv)      To the knowledge of the Responsible Officers of the Loan Parties, no
Loan Party has generated, treated, stored or disposed of Hazardous Materials at,
on or under any of the Borrowing Base Assets or any of the other Real Property
Assets owned by the Loan Parties in violation of, or in a manner that could give
rise to liability under, any applicable Environmental Law. To the knowledge of
the Responsible Officers of the Loan Parties, Hazardous Materials have not been
transported or disposed of from the Borrowing Base Assets or the other Real
Property Assets owned by the Loan Parties, in each case by or on behalf of any
Loan

 

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Party, in violation of, or in a manner that is likely to give rise to liability
under, any applicable Environmental Law.

(v)      To the knowledge of the Responsible Officers of the Loan Parties, no
judicial proceeding or governmental or administrative action is pending or
threatened, under any Environmental Law to which any Loan Party is or will be
named as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
the Loan Parties, the Borrowing Base Assets, the other Real Property Assets
owned by the Loan Parties or the businesses of the Loan Parties.

Section 4.6.        Compliance with Laws.

(a)      Each of the Consolidated Parties is in compliance with all Requirements
of Law and all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (i) such Requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (ii) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

(b)      To the knowledge of the Responsible Officers of the Loan Parties, each
of the Borrowing Base Assets, and the uses of the Borrowing Base Assets, are in
compliance in all material respects with all Requirements of Law and all orders,
writs, injunctions and decrees applicable to the Borrowing Base Assets
(including, without limitation, building and zoning laws and Health Care Laws),
except in such instances in which (i) such Requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (ii) the failure to comply therewith, either
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

(c)      No Loan Party is in default after all applicable notice and cure
periods under or with respect to any Contractual Obligation that individually or
in the aggregate could reasonably be expected to have a Material Adverse Effect.

 

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Section 4.7.        Investment Company Act. None of the Loan Parties is (a) an
“investment company” or is “controlled” by an “investment company”, as such
terms are defined in, or subject to regulation under, the Investment Company Act
of 1940, as amended and in effect from time to time, or (b) otherwise subject to
any other regulatory scheme limiting its ability to incur debt or requiring any
approval or consent from, or registration or filing with, any Governmental
Authority in connection therewith.

Section 4.8.        Taxes. The REIT Guarantor and its Subsidiaries and each
other Person for whose taxes the REIT Guarantor or any of its Subsidiaries could
become liable have timely filed or caused to be filed all Federal income tax
returns and all other material tax returns that are required to be filed by
them, and have paid all taxes shown to be due and payable on such returns or on
any assessments made against it or its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental
Authority, except where the same are currently being contested in good faith by
appropriate proceedings and for which the REIT Guarantor or such Subsidiary, as
the case may be, has set aside on its books adequate reserves in accordance with
GAAP, or except where the failure to do so would not reasonably be expected to
have a Material Adverse Effect.

Section 4.9.        Margin Regulations. None of the proceeds of any of the Loans
or Letters of Credit will be used, directly or indirectly, for “purchasing” or
“carrying” any “margin stock” within the respective meanings of each of such
terms under Regulation U or for any purpose that violates the provisions of
Regulation T, Regulation U or Regulation X. Neither the REIT Guarantor nor any
of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying “margin stock”.

 

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Section 4.10.        ERISA. Except as would not reasonably be expected to have a
Material Adverse Effect, each Plan is in substantial compliance in form and
operation with its terms and with ERISA and the Code (including, without
limitation, the Code provisions compliance with which is necessary for any
intended favorable tax treatment) and all other applicable laws and regulations.
Each Plan (and each related trust, if any) which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service to the effect that it meets the requirements
of Sections 401(a) and 501(a) of the Code covering all applicable tax law
changes, or is comprised of a master or prototype plan that has received a
favorable opinion letter from the Internal Revenue Service, and, except as would
not reasonably be expected to have a Material Adverse Effect, nothing has
occurred since the date of such determination that would adversely affect such
determination (or, in the case of a Plan with no determination, nothing has
occurred that would adversely affect the issuance of a favorable determination
letter or otherwise adversely affect such qualification). No ERISA Event has
occurred or is reasonably expected to occur that would be reasonably expected to
have a Material Adverse Effect. There exists no Unfunded Pension Liability in
excess of $15,000,000 with respect to any Plan that would reasonably be expected
to result in liability to a Loan Party. There are no actions, suits or claims
pending against or involving a Plan (other than routine claims for benefits) or,
to the knowledge of the REIT Guarantor, any of its Subsidiaries or any ERISA
Affiliate, threatened in writing, which would reasonably be expected to be
asserted successfully against any Plan and, if so asserted successfully, would
reasonably be expected either singly or in the aggregate to result in a Material
Adverse Effect. Except as would not reasonably be expected either individually
or in the aggregate to have a Material Adverse Effect, the REIT Guarantor, each
of its Subsidiaries and each ERISA Affiliate have made all contributions to or
under each Plan and Multiemployer Plan required by law within the applicable
time limits prescribed thereby, by the terms of such Plan or Multiemployer Plan,
respectively, or by any contract or agreement requiring contributions to a Plan
or Multiemployer Plan. No Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has applied for or received an extension of any
amortization period within the meaning of Section 412 of the Code or Section 303
or 304 of ERISA. None of the REIT Guarantor, any of its Subsidiaries or any
ERISA Affiliate have ceased operations at a facility so as to become subject to
the provisions of Section 4068(a) of ERISA, withdrawn as a substantial employer
so as to become subject to the provisions of Section 4063 of ERISA or ceased
making contributions to any Plan subject to Section 4064(a) of ERISA to which it
made contributions. None of the REIT Guarantor or any of its Subsidiaries has
established, contributes to or maintains any Non-U.S. Plan.

Section 4.11.        Ownership of Property.

(a)        Each of the Consolidated Parties has good title to, or valid
leasehold interests in or other right to occupy, all of its real and personal
property material to the operation of its business (including, in any case, each
of the Borrowing Base Assets), in each case free and clear of Liens prohibited
by this Agreement. The real and personal property of each of the Consolidated
Parties is subject to no Liens, other than Liens permitted pursuant to
Section 7.2.

 

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(b)        As of the Closing Date, (i) all Real Property owned or leased by the
Borrower and its Subsidiaries is set forth on Schedule 4.11; and (ii) all Ensign
Assets are listed on Part B of Schedule 4.11.

 

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Section 4.12.        Accuracy of Disclosure. None of the reports (including,
without limitation, all reports that the REIT Guarantor or the Borrower is
required to file with the Securities and Exchange Commission), financial
statements, certificates or other information furnished by or on behalf of the
REIT Guarantor or the Borrower to the Administrative Agent or any Lender in
connection with the negotiation or syndication of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by any other information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein, taken as a whole in light of the circumstances under which they were
made, not materially misleading; provided that, with respect to projected
financial information, the Borrower represents only that such projected
information was prepared in good faith based upon assumptions believed to be
reasonable at the time, it being understood and agreed that such projected
information is subject to contingencies and assumptions, many of which are not
within the control of the Borrower, and no assurances can be given that any
projections will be realized, and any divergences from projected results may be
material.

Section 4.13.        Labor Relations. There are no strikes, lockouts or other
labor disputes or grievances against the REIT Guarantor or any of its
Subsidiaries, or, to the Borrower’s knowledge, threatened in writing against or
affecting the REIT Guarantor or any of its Subsidiaries, and no unfair labor
practice charges or grievances are pending against the REIT Guarantor or any of
its Subsidiaries, or, to the Borrower’s knowledge, threatened in writing against
any of them before any Governmental Authority, in each case, that would, either
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. All payments due from the REIT Guarantor or any of its
Subsidiaries pursuant to the provisions of any collective bargaining agreement
have been paid or accrued as a liability on the books of the REIT Guarantor or
any such Subsidiary, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

Section 4.14.        Subsidiaries. As of the Closing Date and as of each date on
which such schedule is subsequently updated pursuant to the terms hereof through
the delivery of a Compliance Certificate in connection with the delivery of
financial statements pursuant to Section 5.1(a), Schedule 4.14 correctly sets
forth the correct legal name, tax identification number and the jurisdiction of
formation of the Loan Parties. Except as set forth on Schedule 4.14, as of the
Closing Date: (i) no Loan Party (other than the REIT Guarantor) has issued to
any third party any securities convertible into any equity interest in such Loan
Party, or any options, warrants or other rights to acquire any securities
convertible into any such equity interest, and (ii) the outstanding Capital
Stock of each Loan Party (other than the REIT Guarantor) is owned by the Persons
indicated on Schedule 4.14, is validly issued, fully paid and non-assessable,
and is free and clear of all Liens (other than Liens permitted pursuant to this
Agreement), warrants, options and rights of others of any kind whatsoever. Each
Person owning a Borrowing Base Asset and each Subsidiary directly or indirectly
owning any Capital Stock of any other Loan Party is a Loan Party hereunder. Each
Loan Party (other than the REIT Guarantor and the Borrower) is a Wholly Owned
Subsidiary of the Borrower.

 

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Section 4.15.        Solvency. After giving effect to the execution and delivery
of the Loan Documents and the making of the Loans under this Agreement, the REIT
Guarantor, the Borrower and the Loan Parties and their Subsidiaries, on a
consolidated basis, are Solvent.

Section 4.16.        Insurance.

The Real Property Assets of the REIT Guarantor and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
REIT Guarantor (except with respect to Real Property Assets that do not
constitute Borrowing Base Assets and except with respect to captive insurance
companies of any Tenant or any self-insurance of any Tenant maintained in
compliance with the applicable Facility Lease), 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 REIT Guarantor or the applicable Subsidiary operates.

Section 4.17.        Reserved.

Section 4.18.        Real Property Assets; Leases.

(a)        Part I of Schedule 4.18 is a true and complete, in all material
respects as of the Closing Date, list of (i) the street address of each
Borrowing Base Asset; (ii) the Loan Party which owns, as applicable, each such
Borrowing Base Asset; (iii) the facility type of each such Borrowing Base Asset;
(iv) if applicable, the Borrowing Base Leases with respect to such Borrowing
Base Asset, together with the name and address of the applicable Tenant; and
(v) the type of interest (fee or leasehold) held by each Loan Party in its
respective Borrowing Base Asset. As of the Closing Date each parcel of real
property identified on Part I of Schedule 4.18 is a Real Property Asset that
qualifies as a Borrowing Base Asset pursuant to the terms hereof.

(b)        As of the Closing Date, Part II of Schedule 4.18 is a true and
complete, in all material respects, list as of (i) the street address of each
other Real Property Asset owned by any Loan Party or leased pursuant to an
Eligible Ground Lease; (ii) the applicable Loan Party which owns or leases each
such other Real Property Asset; (iii) the facility type of each such other Real
Property Asset; (iv) the lease(s) to which each such other Real Property Asset
is subject; and (v) the name and address of the Tenants with respect to each
such other Real Property Asset.

(c)        As of the Closing Date, Part III of Schedule 4.18 sets forth all
subleases known by a Borrower to exist with respect to the Facility Leases
relating to any of the Borrowing Base Assets (other than any Multi-Tenant
Buildings), the termination of which could reasonably be expected to result in a
material adverse effect on the applicable Tenant’s ability to continue to make
scheduled payments to the applicable Loan Party under the applicable Facility
Lease, together with the applicable Tenant with respect thereto, the remaining
term of the sublease and whether or not such Tenant is current on payments due
thereunder.

 

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(d)        Part IV of Schedule 4.18 is a listing of the termination date of each
Borrowing Base Lease and the respective Borrowing Base Asset(s) subject to such
Borrowing Base Lease.

(e)        To the knowledge of the Responsible Officers of the Loan Parties,
each of the facilities located on the Borrowing Base Assets owned by the Loan
Parties complies with the requirements of Section 5.8 of this Agreement. To the
knowledge of the Responsible Officers of the Loan Parties, no condemnation or
condemnation proceeding has been instituted and remained undismissed for a
period in excess of ninety (90) consecutive days, in each case, with respect to
a material portion of any Real Property Asset listed as a Borrowing Base Asset
on Part I of Schedule 4.18. To the knowledge of the Responsible Officers of the
Loan Parties, no material casualty event has occurred with respect to the
improvements located on any Real Property Asset listed as a Borrowing Base Asset
on Part I of Schedule 4.18 which has not been (or, if applicable) will not be
able to be) fully remediated with available insurance proceeds.

Section 4.19.        Assignment of Claims Act. Except as set forth on Schedule
4.19 as of the Closing Date, no Loan Party is a party to any contract or
agreement that is subject to the Federal Assignment of Claims Act, as amended
(31 U.S.C. Section 3727) or any similar state or local law.

Section 4.20.        Healthcare Matters.

(a)        Compliance with Health Care Laws. Without limiting the generality of
Section4.6 hereof or any other representation or warranty made herein, each Loan
Party and, to the knowledge of the Responsible Officers of the Loan Parties,
each Tenant under an Ensign Master Lease and each Eligible Tenant, is in
compliance with applicable provisions of federal and state laws governing
Medicare and any state Medicaid programs and any statutes or any regulations
promulgated pursuant to such laws, including, without limitation, Sections
1320a-7, 1320a-7a, 1320a-7b and 1395nn of Title 42 of the United States Code,
the False Claims Act (31 U.S.C. Section 3729 et seq.), the Health Insurance
Portability and Accountability Act of 1996 (42 U.S.C. § 1320d et seq.), as
amended by the Health Information, Technology for Economic and Clinical Health
Act of 2009 (collectively, “HIPAA”), all criminal laws relating to health care
fraud and abuse, including but not limited to 18 U.S.C. Sections 286 and 287,
and the health care fraud criminal provisions under HIPAA, the exclusion laws
(42 U.S.C. 1320a-7), Medicare (Title XVIII of the Social Security Act), Medicaid
(Title XIX of the Social Security Act) and related state or local statutes or
regulations promulgated under such laws (“Health Care Laws”), except to the
extent such non-compliance would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

(i)        To the knowledge of the Responsible Officers of the Loan Parties, no
Eligible Tenant has engaged in activities which are, as applicable, cause for
false claims liability, civil penalties or mandatory or permissive exclusion
from Medicare, Medicaid or any other state or federal healthcare program. None
of the Loan Parties nor, to the knowledge of the Responsible Officers of the
Loan Parties, no Eligible Tenant and none of the respective employees, officers
or directors of the Loan Parties or any Eligible Tenant, has been excluded,
suspended or debarred from

 

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participation in any state or federal health care program or, to the knowledge
of the Responsible Officers of the Loan Parties, is subject to a governmental
inquiry, investigation, proceeding, or other similar action that could
reasonably be expected to result in debarment, suspension, or exclusion from
government health care programs. To the knowledge of the Responsible Officers of
the Loan Parties, the business practices of each Tenant under an Ensign Master
Lease and each Eligible Tenant are in compliance with, as applicable to their
respective businesses, federal or state laws regarding physician ownership of
(or financial relationship with) and referral to entities providing healthcare
related goods or services, or laws requiring disclosure of financial interests
held by physicians in entities to which they may refer patients for the
provisions of health care related goods or services, except to the extent such
non-compliance would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. To the knowledge of the Responsible
Officers of the Loan Parties, except as set forth on Schedule 4.20, there are no
Medicare, Medicaid or any other recoupment or recoupments of any governmental or
private health care payor being sought, requested, claimed, or threatened,
against any Tenant under an Ensign Master Lease and any Eligible Tenant, which,
individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Effect.

(ii)        Except as listed on Schedule 4.20, no Loan Party and, to the
knowledge of the Responsible Officers of the Loan Parties, no Eligible Tenant is
a party to any corporate integrity agreements, deferred prosecution agreements,
monitoring agreements, consent decrees, settlement orders or similar agreements
imposed by a governmental entity.

(iii)        In accordance with applicable Health Care Laws and except where
such noncompliance has not had or would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, to the knowledge of
the Responsible Officers of the Loan Parties, each Tenant under an Ensign Master
Lease and each Eligible Tenant has: (i) verified that all employees, independent
contractors and other suppliers, including physicians, advanced practice nurses,
dentists, therapists and physician assistants providing clinical services have
valid and current licenses, permits and credentials, (ii) conducted criminal
background checks on all such persons, and (iii) verified that none of such
persons is included on an applicable federal, state or other applicable listing
of excluded persons, including the HHS/OIG List of Excluded
Individuals/Entities, prior to their employment or engagement as contractors, as
applicable, and have continued to conduct such verifications on all such persons
thereafter, as required by such applicable Health Care Laws.

(iv)        Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, to the knowledge of the Responsible
Officers of the Loan Parties, (i) all cost reports, other reports, data, claims
and information required to be filed by any Tenant under an Ensign Master Lease
or any Eligible Tenant in connection with any applicable state or federal
healthcare program (“Program”) have been timely filed and were true and complete

 

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at the time filed (or were corrected in or supplemented by a subsequent filing
if so required); (ii) there are no claims, actions or appeals pending (and to
the knowledge of the Responsible Officers of the Loan Parties, no Tenant under
an Ensign Master Lease and no Eligible Tenant has made any filing or submission
that would result in any claims, actions or appeals) before any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority (including governmental fiscal agents) with respect to any Program
reports or claims filed by a Tenant under an Ensign Master Lease or an Eligible
Tenant on or before the date hereof, or with respect to any disallowances by any
regulatory body, administrative agency, governmental body or other authority
(including governmental fiscal agents) in connection with any audit or any
claims; (iii) no validation review, survey, inspection or program integrity
review related to any Tenant under an Ensign Master Lease or any Eligible Tenant
has been conducted by any regulatory body, administrative agency, governmental
body or other authority (including governmental fiscal agents) in connection
with any Program within the past three (3) years, and no such reviews are
scheduled, pending, threatened against or affecting any Tenant under an Ensign
Master Lease or any Eligible Tenant.

(v)        To the knowledge of the Responsible Officers of the Loan Parties,
each Tenant under an Ensign Master Lease and each Eligible Tenant has paid or
caused to be paid or will pay in connection with its next quarterly credit
balance all known and undisputed material refunds that have become due,
overpayments or adjustments, except to the extent such failure to pay has not
had or would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. As of the date of this Agreement, to the
knowledge of the Responsible Officers of the Loan Parties, no Eligible Tenant
has received any written notice of denial of material payment, recoupment, or
overpayment from any Program or other third-party payor in excess of One Million
Dollars ($1,000,000).

(b)        Health Care Permits.

(i)        Each Loan Party and, to the knowledge of the Responsible Officers of
the Loan Parties, each Tenant under an Ensign Master Lease and each Eligible
Tenant has such permits, licenses, franchises, certificates and other approvals
or authorizations of Governmental Authorities as are necessary under applicable
law or regulations to own its properties and conduct its business (including
without limitation such permits as are required under such federal, state and
other Health Care Laws, and under similar licensure laws and such insurance laws
and regulations, as are applicable thereto) (“Health Care Permits”), if the
failure to obtain such permits, licenses, franchises, certificates and other
approvals or authorizations could reasonably be expected to result in a Material
Adverse Effect.

(ii)        To the knowledge of the Responsible Officers of the Loan Parties,
each Tenant under an Ensign Master Lease and each Eligible Tenant has all
Medicare, Medicaid and related agency supplier billing number(s) and related
documentation necessary to receive reimbursement, to the extent applicable, from
Medicare and/or Medicaid for any item or service furnished by such Person in any

 

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jurisdiction where it conducts business except to the extent the failure to
obtain billing number(s) or related documentation could reasonably be expected
to result in a Material Adverse Effect. To the knowledge of the Responsible
Officers of the Loan Parties, no Tenant under an Ensign Master Lease and no
Eligible Tenant is currently subject to suspension, revocation, renewal or
denial of its Medicare and/or Medicaid certification, supplier billing
number(s), or Medicare and/or Medicaid participation agreement(s), except in the
case of such Tenants not party to a Material Borrowing Base Lease, to the extent
such suspension, revocation, renewal or denial would not reasonably be expected
to result in a Material Adverse Effect.

 

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Section 4.21.        OFAC. Neither any Loan Party nor any of its Subsidiaries or
Affiliates (a) is a Sanctioned Person, (b) has more than ten percent (10%) of
its assets in Sanctioned Countries, or derives more than ten percent (10%) of
its operating income from investments in, or transactions with, Sanctioned
Persons or Sanctioned Countries. No part of the proceeds of any Loans hereunder
will be used directly or indirectly to fund any operations in, finance any
investments or activities in or make any payments to a Sanctioned Person or a
Sanctioned Country or for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended and in effect from time
to time.

Section 4.22.        Patriot Act. Neither any Loan Party nor any of its
Subsidiaries is an “enemy” or an “ally of the enemy” within the meaning of
Section 2 of the Trading with the Enemy Act or any enabling legislation or
executive order relating thereto. Neither any Loan Party nor any or its
Subsidiaries is in violation of (a) the Trading with the Enemy Act, (b) any of
the foreign assets control regulations of the United States Treasury Department
(31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto or (c) the Patriot Act. None of the Loan
Parties (i) is a blocked person described in Section 1 of the Anti-Terrorism
Order or (ii) to the best of its knowledge, engages in any dealings or
transactions, or is otherwise associated, with any such blocked person.

Section 4.23.        No Default. No Default has occurred and is continuing.

Section 4.24.        Intellectual Property. Each of the REIT Guarantor and its
Subsidiaries owns or has the right to use all patents, trademarks, copyrights,
service marks, and trade names, and rights with respect to the foregoing,
necessary to conduct its business as now conducted and as proposed to be
conducted, without any conflict with the patents, trademarks, copyrights,
service marks, and trade names, and rights with respect to the foregoing, of any
other Person that would reasonably be expected to result in a Material Adverse
Effect.

Section 4.25.        REIT Status. Except as otherwise set forth on Schedule
4.25, the REIT Guarantor is organized and will operate in conformity with the
requirements for qualification and taxation as a REIT, and its proposed method
of operation will enable the REIT Guarantor to meet the requirements for
qualification and taxation as a REIT.

Section 4.26.        EEA Financial Institution.

None of the Borrower, the REIT Guarantor or any other Guarantor is an EEA
Financial Institution.

ARTICLE V

AFFIRMATIVE COVENANTS

The Loan Parties covenant and agree that until Payment in Full of the
Obligations:

 

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Section 5.1.        Financial Statements and Other Information. The REIT
Guarantor and the Borrower will deliver to the Administrative Agent (for
distribution to each Lender) prompt written notice of the following:

(a)        not later than ten (10) days following the filing of the REIT
Guarantor’s Form 10-K with the Securities and Exchange Commission, and in any
event within ninety (90) days after the end of each Fiscal Year of the REIT
Guarantor, a copy of the annual audited report for such Fiscal Year for the REIT
Guarantor and its Subsidiaries, containing a consolidated balance sheet of the
REIT Guarantor and its Subsidiaries as of the end of such Fiscal Year and the
related consolidated statements of income, stockholders’ equity and cash flows
(together with all footnotes thereto) of the REIT Guarantor and its Subsidiaries
for such Fiscal Year, setting forth in each case in comparative form the figures
for the previous Fiscal Year, all in reasonable detail and reported on by
independent public accountants of nationally recognized standing (without a
“going concern” or like qualification, exception or explanation and without any
qualification or exception as to the scope of such audit (other than any “going
concern” or similar qualification or exception related to the maturity of the
Obligations, the Senior Notes or any other Indebtedness not prohibited
hereunder)) to the effect that such financial statements present fairly in all
material respects the financial condition and the results of operations of the
REIT Guarantor and its Subsidiaries for such Fiscal Year on a consolidated basis
in accordance with GAAP and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;

(b)        not later than ten (10) days following the filing of the REIT
Guarantor’s Form 10-Q with the Securities and Exchange Commission, and in any
event within sixty (60) days after the end of each Fiscal Quarter of each of the
first three (3) Fiscal Quarters of each Fiscal Year of the REIT Guarantor (or if
the REIT Guarantor is not required to file periodic reports under Section 13(a)
or Section 15(d) of the Exchange Act, then sixty (60) days after the end of each
of the first three (3) Fiscal Quarters in each Fiscal Year), an unaudited
consolidated balance sheet of the REIT Guarantor and its Subsidiaries as of the
end of such Fiscal Quarter and the related unaudited consolidated statements of
income of the REIT Guarantor and its Subsidiaries for such Fiscal Quarter and
the then elapsed portion of such Fiscal Year, setting forth in each case in
comparative form the figures for the corresponding Fiscal Quarter and the
corresponding portion of the REIT Guarantor’s previous Fiscal Year;

(c)        within sixty (60) days after the end of each of the first three
(3) Fiscal Quarters of each Fiscal Year of the REIT Guarantor and no later than
ninety (90) days after the end of the fourth (4th) Fiscal Quarter of each Fiscal
Year of the REIT Guarantor, (i) a schedule setting forth, for the four
(4) Fiscal Quarter period ending on the last date of such Fiscal Quarter,
(A) the aggregate Adjusted NOI for all Real Property Assets that are Borrowing
Base Assets for each category of facilities set forth in the definition of
Capitalization Rate; (B) the aggregate Net Revenues for all Real Property Assets
that are Borrowing Base Assets for each category of facilities set forth in the
definition of Capitalization Rate; (C) the Adjusted NOI for each Real Property
Asset that is a Borrowing Base Asset; and (D) the Net Revenues with respect to
each Borrowing Base Asset; and (ii) the amount of the annual rent payable by
each Eligible Tenant with respect to each Borrowing Base Asset (other than any
Multi-Tenant

 

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Buildings and Subsidiary Operated Facilities (with such Adjusted NOI, such Net
Revenues and such rent payments to be determined in a manner consistent with
Adjusted NOI, Net Revenues and rent payments set forth in the Borrowing Base
Deliverables with respect to the applicable Borrowing Base Asset);

(d)        concurrently with the delivery of the financial statements referred
to in subsections (a) and (b) of this Section, a Compliance Certificate signed
by the principal executive officer or the principal financial officer of the
Borrower (i) certifying that such financial statements fairly present the
financial condition, results of operations, shareholders’ equity and cash flows
of REIT Guarantor and its Subsidiaries on a consolidated basis in accordance
with GAAP, in the case of quarterly financial statements subject only to normal
year-end audit adjustments and the absence of footnotes, (ii) certifying as to
whether there exists a Default or Event of Default on the date of such
certificate and, if a Default or an Event of Default then exists, specifying the
details thereof and the action which the Borrower has taken or proposes to take
with respect thereto, (iii) setting forth in reasonable detail calculations
demonstrating whether the Borrower is in compliance with the financial covenants
set forth in Article VI (beginning with the first full Fiscal Quarter following
the Closing Date), (iv) specifying any change in the identity of the
Subsidiaries as of the end of such Fiscal Year or Fiscal Quarter from the
Subsidiaries identified to the Lenders on the Closing Date or as of the most
recent Fiscal Year or Fiscal Quarter, as the case may be, and (v) stating
whether any change in GAAP or the application thereof has occurred since the
date of the mostly recently delivered audited financial statements of the REIT
Guarantor and its Subsidiaries that impacts such financial statements, and, if
any change has occurred, specifying the effect of such change on the financial
statements accompanying such Compliance Certificate;

(e)        concurrently with the delivery of the financial statements referred
to in subsections (a) and (b) of this Section, (i) a Borrowing Base Certificate
calculated as of the end of the immediately prior Fiscal Quarter, duly completed
and executed by a Responsible Officer of the Borrower or the REIT Guarantor;
provided, however, the Borrower may, at its option, provide an updated Borrowing
Base Certificate more frequently than quarterly; and (ii) a Rent Coverage Ratio
calculation concerning each of the Borrowing Base Assets with respect to which
Ensign is the Eligible Tenant under the applicable Borrowing Base Lease;

(f)        within sixty (60) days after the end of the calendar year, (i) a
budget for REIT Guarantor and its Subsidiaries for the succeeding Fiscal Year,
containing a projected income statement, balance sheet and statement of cash
flows and (ii) a projected operating statement for each Real Property Asset that
is a Borrowing Base Asset;

(g)        [Reserved];

(h)        promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed with the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any or all functions of said Commission, or with any national securities
exchange, or distributed by the REIT Guarantor or the Borrower to its
equityholders generally, as the case may be;

 

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(i)        promptly following any reasonable request therefor, such other
information with respect to the Real Property Assets and/or the Borrowing Base
Assets as the Administrative Agent or any Lender through the Administrative
Agent, may reasonably request and as is reasonably available to the REIT
Guarantor or any of its Subsidiaries (provided that no such information shall be
required to be provided if providing such information would violate
confidentiality agreements or result in a loss of attorney-client privilege or a
claim of attorney work product with respect to such information so long as the
REIT Guarantor notifies the Administrative Agent that such information is being
withheld and the reason therefor); and

(j)        promptly following any request therefor, such other information
regarding the results of operations, business affairs and financial condition of
the REIT Guarantor or any of its Subsidiaries as the Administrative Agent may
reasonably request (provided that no such information shall be required to be
provided if providing such information would violate confidentiality agreements
or result in a loss of attorney-client privilege or a claim of attorney work
product with respect to such information so long as the REIT Guarantor notifies
the Administrative Agent that such information is being withheld and the reason
therefor).

So long as the REIT Guarantor is required to file periodic reports under
Section 13(a) or Section 15(d) of the Exchange Act, the Borrower shall be deemed
to have satisfied its obligation to deliver the financial statements referred to
in clauses (a), (b) and (h) upon the filing of such reports with the Securities
and Exchange Commission.

Section 5.2.        Notices of Material Events. The REIT Guarantor and the
Borrower will deliver to the Administrative Agent (for distribution to each
Lender) prompt written notice of the following:

(a)        the occurrence of any Default or Event of Default;

(b)        the filing or commencement of, or any material development in, any
action, suit, proceeding, audit, claim, demand, order or dispute with, by or
before any arbitrator or Governmental Authority against or, to the knowledge of
any Responsible Officer of the Loan Parties, affecting the REIT Guarantor, any
of its Subsidiaries or, to the knowledge of any Loan Party, any Tenant under an
Ensign Master Lease or any Eligible Tenant that (i) seeks injunctive or similar
relief, or (ii) alleges potential or actual violations of any Health Care Law by
the REIT Guarantor, any of its Subsidiaries or, to the knowledge of the
Responsible Officers of the Loan Parties, any Tenant under an Ensign Master
Lease or any Eligible Tenant or its Licensed Personnel, which, in each case
above, if adversely determined, could, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect;

(c)        the occurrence of any event or any other development by which the
REIT Guarantor or any of its Subsidiaries (i) fails to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) becomes subject to any
Environmental Liability, (iii) receives notice of any claim with respect to any
Environmental Liability, or (iv) becomes aware of any basis

 

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for any Environmental Liability, in each case which, either individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect;

(d)        promptly and in any event within fifteen (15) days after (i) becoming
aware that any ERISA Event has occurred that, either individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,
a certificate of the chief financial officer of the Borrower describing such
ERISA Event and the action, if any, proposed to be taken with respect to such
ERISA Event and a copy of any notice filed with the PBGC or the IRS pertaining
to such ERISA Event and any notices received by the REIT Guarantor, such
Subsidiary or such ERISA Affiliate from the PBGC or any other governmental
agency with respect thereto, and (ii) becoming aware (A) that there has been a
material increase in Unfunded Pension Liabilities (not taking into account Plans
with negative Unfunded Pension Liabilities) since the date the representations
hereunder are given or deemed given, or from any prior notice, as applicable
that could reasonably be expected to result in liability to a Loan Party, (B) of
the incurrence of any material Withdrawal Liability, (C) of the adoption of, or
the commencement of contributions to, any Plan subject to Section 412 of the
Code by the REIT Guarantor, any of its Subsidiaries or any ERISA Affiliate, or
(D) of the adoption of any amendment to a Plan subject to Section 412 of the
Code which results in a material increase in contribution obligations of the
REIT Guarantor, any of its Subsidiaries or any ERISA Affiliate, a detailed
written description thereof from the chief financial officer of the Borrower;

(e)        the occurrence of any event of default, or the receipt by the REIT
Guarantor or any of its Subsidiaries of any written notice of an alleged event
of default, with respect to any Material Indebtedness of the REIT Guarantor or
any of its Subsidiaries;

(f)        [Reserved];

(g)        any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect;

(h)        at least fifteen (15) days prior thereto (or such shorter period as
the Administrative Agent may agree to), notice of any change (i) in any Loan
Party’s legal name (but, for the avoidance of doubt, excluding any trade names),
(ii) in any Loan Party’s chief executive office, (iii) in any Loan Party’s
organizational existence or (iv) in any Loan Party’s federal taxpayer
identification number or organizational number or jurisdiction of organization;

(i)        at least fifteen (15) days prior thereto (or such shorter period as
the Administrative Agent may agree to) notice of any change in the headquarters
location of the Loan Parties, with a copy of the underlying lease; and

(j)        no later than ten (10) Business Days after any Responsible Officer of
the Borrower or any of its Subsidiaries has actual knowledge of:

(i)        any claim to recover any alleged overpayments (other than any such
claim made against the REIT Guarantor or any of its Subsidiaries that relates to
a period during which the REIT Guarantor or such Subsidiary did not

 

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operate the respective facility) with respect to any receivables in excess of
$10,000,000;

(ii)        any non-routine and material inspection of any facility of the REIT
Guarantor or any of its Subsidiaries or, to the knowledge of the Responsible
Officers of the Loan Parties, any Eligible Tenant by any Governmental Authority;
and

(iii)        notice of the occurrence of any material reportable event or
similar term as defined in any corporate integrity agreement, corporate
compliance agreement or deferred prosecution agreement pursuant to which the
REIT Guarantor or any of its Subsidiaries or, to the knowledge of the
Responsible Officers of the Loan Parties, any Eligible Tenant has to make a
submission to any Governmental Authority or other Person under the terms of such
agreement, if any.

Each notice or other document delivered under this Section 5.2 shall be
accompanied by a written statement of a Responsible Officer setting forth the
details of the event or development requiring such notice or other document and
any action taken or proposed to be taken with respect thereto (which, in the
case of any event or development with respect to a Tenant, shall be limited to
such notices and documentation in the possession of the Loan Parties and limited
to the actions taken or proposed to be taken that a Responsible Officer of a
Loan Party has actual knowledge of).

 

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Section 5.3.         Existence; Conduct of Business. The Loan Parties will, and
will cause each of their Subsidiaries to, do or cause to be done all things
necessary to (i) maintain in full force and effect its legal existence and
(ii) preserve, renew and maintain its respective rights, licenses, permits,
privileges, franchises, patents, copyrights, trademarks and trade names material
to the conduct of its business (except, in the case of this clause (ii), as
would not reasonably be expected to result in a Material Adverse Effect);
provided that nothing in this Section shall prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 7.3.

Section 5.4.         Compliance with Laws. The Loan Parties will, and will cause
each of their Subsidiaries to, comply with all laws, rules, regulations and
requirements of any Governmental Authority applicable to its business and
properties, including, without limitation, all Environmental Laws, ERISA, Health
Care Laws and OSHA, except where the failure to do so, either individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect; provided that to the extent a Loan Party is unable to comply with the
provisions of this Section 5.4 due to a Tenant’s act or omission with respect to
any Borrowing Base Asset such violation shall not constitute a Default or Event
of Default so long as the Borrower (a) delivers a new Borrowing Base Certificate
removing the applicable Borrowing Base Asset within ten (10) Business Days of a
Responsible Officer of the Borrower becoming aware of such violation; and
(b) make any prepayment required pursuant to Section 2.12 in connection with
such removal and after giving effect to such removal and payment (and the
addition of any other Borrowing Base Asset on or prior to such date), the Loan
Parties are in compliance with this Section 5.4.

Section 5.5.         Payment of Taxes and Other Obligations. The Loan Parties
will, and will cause each of their Subsidiaries to, pay and discharge (or cause
to be paid or discharged) all tax liabilities, assessments and governmental
charges or levies all lawful claims which, if unpaid, would by law become a Lien
(other than a Permitted Encumbrance) upon it or its properties or assets
(including, without limitation, each Real Property Asset owned by the REIT
Guarantor or any Subsidiary), unless (a) the same are being contested in good
faith by appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by such Loan Party or Subsidiary or (b) the failure to pay
any such payment could not reasonably be expected to result in a Material
Adverse Effect; provided that to the extent a Loan Party is unable to comply
with the provisions of this Section 5.5 due to a Tenant’s act or omission with
respect to any Borrowing Base Asset such violation shall not constitute a
Default or Event of Default so long as the Borrower (a) delivers a new Borrowing
Base Certificate removing the applicable Borrowing Base Asset within ten
(10) Business Days of a Responsible Officer of the Borrower becoming aware of
such violation; and (b) make any prepayment required pursuant to Section 2.12 in
connection with such removal and after giving effect to such removal and payment
(and the addition of any other Borrowing Base Asset on or prior to such date),
the Loan Parties are in compliance with this Section 5.5.

 

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Section 5.6.         Books and Records. The Loan Parties will, and will cause
each of their Subsidiaries to, keep proper books of record and account in which
full, true and correct entries shall be made of all dealings and transactions in
relation to its business and activities to the extent necessary to prepare the
consolidated financial statements of the REIT Guarantor in conformity with GAAP.

Section 5.7.         Visitation and Inspection. The Loan Parties will, and will
cause each of their Subsidiaries to, permit any representative or independent
contractor of the Administrative Agent or any Lender to visit and inspect its
properties, to examine its books and records and to make copies and take
extracts therefrom, and to discuss its affairs, finances and accounts with any
of its officers and with its independent certified public accountants, all at
such reasonable times as the Administrative Agent or any Lender may reasonably
request after reasonable prior notice to the Borrower; provided that (a) so long
as no Event of Default shall have occurred and be continuing, the Administrative
Agent and the Lenders shall not make more than one such visit and inspection in
any Fiscal Year; (b) if an Event of Default has occurred and is continuing, no
prior notice shall be required and the limitation on the number of visits and
inspections shall no longer apply; (c) any such inspection and examination,
copies and discussions shall not be permitted to the extent it would violate
confidentiality agreements or result in a loss of attorney- client privilege or
claim of attorney work product so long as the Borrower notifies the
Administrative Agent of such limitation and the reason therefor; and (d) any
such inspection and examination, copies and discussions shall be subject to the
terms of any applicable lease.

Section 5.8.         Maintenance of Properties. The Loan Parties will, and will
cause each of their Subsidiaries to (a) protect and preserve, or cause to be
protected and preserved all Real Property Assets and maintain, or cause to be
maintained, in good repair, working order and condition all Real Property Assets
(ordinary wear and tear, force majeure, casualty and condemnations events
excepted) in accordance with applicable Facility Leases and (b) from time to
time make, or cause to be made, all needed and appropriate repairs, renewals,
replacements and additions to such Real Property Assets, so that the business
carried on in connection therewith may be conducted at all times in accordance
with applicable Facility Leases (to the extent the Loan Parties are required to
do so under the applicable Facility Lease); provided that to the extent a Loan
Party is unable to comply with the provisions of this Section 5.8 due to a
Tenant’s act or omission with respect to any Borrowing Base Asset such violation
shall not constitute a Default or Event of Default so long as the Borrower
(i) delivers a new Borrowing Base Certificate removing the applicable Borrowing
Base Asset within thirty (30) days of a Responsible Officer of the Borrower
becoming aware of such violation; and (ii) make any prepayment required pursuant
to Section 2.12 in connection with such removal and after giving effect to such
removal and payment (and the addition of any other Borrowing Base Asset on or
prior to such date), the Loan Parties are in compliance with this Section 5.8.

 

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Section 5.9.         Insurance. The Loan Parties will, and will cause each of
their Subsidiaries to, maintain with financially sound and reputable insurance
companies which are not Affiliates of any Loan Party insurance with respect to
its properties and business, and the properties and business of the REIT
Guarantor and its Subsidiaries, against loss or damage of the kinds customarily
insured against by companies in the same or similar businesses operating in the
same or similar locations and will, upon request of the Administrative Agent
(which request shall be given no more than once in any Fiscal Year, unless an
Event of Default has occurred and is continuing), furnish to each Lender a
certificate of a Responsible Officer setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries in accordance with
this Section; provided that to the extent a Loan Party is unable to comply with
the provisions of this Section 5.9 due to a Tenant’s act or omission with
respect to any Borrowing Base Asset such violation shall not constitute a
Default or Event of Default so long as the Borrower (x) delivers a new Borrowing
Base Certificate removing the applicable Borrowing Base Asset within ten
(10) Business Days of a Responsible Officer of the Borrower becoming aware of
such violation; and (y) make any prepayment required pursuant to Section 2.12 in
connection with such removal and after giving effect to such removal and payment
(and the addition of any other Borrowing Base Asset on or prior to such date),
the Loan Parties are in compliance with this Section 5.9.

Section 5.10.         Use of Proceeds; Margin Regulations. The Borrower shall
use the proceeds of any Revolving Borrowing and Term Loan hereunder for general
corporate purposes not in contravention of any Requirement of Law or of any Loan
Document, including, but not limited to the acquisition of Real Property Assets
or companies owning Real Property Assets, funding working capital, dividends and
capital expenditures and any other purposes not prohibited by the Loan Documents
(it being understood and agreed that no Loan Party shall use such proceeds,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U) or to extend credit to others for the purpose of purchasing or carrying
margin stock or to refund indebtedness originally incurred for such purpose).
All Letters of Credit will be used for general corporate purposes.

Section 5.11.         Casualty and Condemnation. The Loan Parties will, and will
cause each of their Subsidiaries to, (a) furnish to the Administrative Agent and
the Lenders prompt written notice of any casualty or other insured damage to any
material portion of any Borrowing Base Assets or the commencement of any action
or preceding for the taking of any material portion of any Borrowing Base Assets
or any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) ensure that the net cash proceeds of
any such event (whether in the form of insurance proceeds, condemnation awards
or otherwise) are collected and applied in accordance with clause (ix) of the
definition of Borrowing Base Asset.

Section 5.12.         Additional Subsidiaries.

(a) As a condition to the inclusion of any Borrowing Base Asset in the Borrowing
Base Amount, the REIT Guarantor and the Borrower shall (i) cause (x) the
Subsidiary that owns such Borrowing Base Asset (which shall be a Person
organized under

 

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the laws of any state of the United States or the District of Columbia) to
become a Guarantor hereunder through the execution and delivery to the
Administrative Agent of a Joinder Agreement and (y) each Subsidiary that is not
a Loan Party that owns, directly or indirectly, any Capital Stock of any
Subsidiary which becomes a guarantor pursuant to clause (x) above to become a
Guarantor hereunder through the execution and delivery to the Administrative
Agent of a Joinder Agreement, in each case under this clause (i), on or before
the date on which a Real Property Asset owned by any such Subsidiary is
initially included as a Borrowing Base Asset pursuant to a Borrowing Base
Certificate; and (ii) cause each such Subsidiary to deliver such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including, without limitation, certified resolutions and
other organizational and authorizing documents of such Subsidiary, favorable
opinions of counsel to such Subsidiary (which shall cover, among other things,
the legality, validity, binding effect and enforceability of the documentation
referred to above in a customary manner), all of which shall be reasonably
satisfactory to the Administrative Agent, and such other information required in
order for the Administrative Agent and the Lenders to comply with PATRIOT Act,
OFAC and other “know- your-customer” diligence requirements.

(b)         Upon the acquisition, incorporation or other creation of any other
direct or indirect Material Subsidiary of the REIT Guarantor if such Subsidiary
is a U.S. Person, other than a U.S. Person substantially all of whose assets are
one or more Foreign Subsidiaries, or at any time that any Immaterial Subsidiary
becomes a Material Subsidiary, if such Subsidiary is a U.S. Person, other than a
U.S. Person substantially all of whose assets are one or more Foreign
Subsidiaries, then in either such case the Borrower shall (i) cause such
Material Subsidiary (and each Subsidiary that is not a Loan Party that owns,
directly or indirectly, any Capital Stock of any such Material Subsidiary) to
become a Guarantor hereunder through the execution and delivery to the
Administrative Agent of a Joinder Agreement not later than thirty (30) days
after such acquisition, incorporation or other creation (or such longer period
as may be agreed to in writing by the Administrative Agent), and (ii) cause such
Material Subsidiary to deliver such other documentation as the Administrative
Agent may reasonably request in connection with the foregoing, including,
without limitation, certified resolutions and other organizational and
authorizing documents of such Material Subsidiary, favorable opinions of counsel
to such Material Subsidiary (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above in a customary manner), all of which shall be reasonably
satisfactory to the Administrative Agent, and such other information required in
order for the Administrative Agent and the Lenders to comply with PATRIOT Act,
OFAC and other “know- your-customer” diligence requirements.

 

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Section 5.13.         REIT Status Except as otherwise disclosed on Schedule
4.25, the REIT Guarantor (a) will, and will cause each of its Subsidiaries to,
be organized and operate its business at all times so as to satisfy all
requirements necessary to qualify and maintain the REIT Guarantor’s
qualification as a REIT, and (b) will maintain adequate records so as to comply
with all record-keeping requirements relating to its qualification as a real
estate investment trust as required by the Code and applicable regulations of
the Department of the Treasury promulgated thereunder and will properly prepare
and timely file (taking into account any valid extensions) with the IRS all
returns and reports required thereby.

Section 5.14.         Further Assurances. The Loan Parties will, and will cause
each of their Subsidiaries to, execute any and all further documents, agreements
and instruments, and take all such further actions, which may be required under
any applicable Requirement of Law, or which the Administrative Agent or the
Required Lenders may reasonably request, to effectuate the transactions
contemplated by the Loan Documents, all at the expense of the Loan Parties.

Section 5.15.         Healthcare Matters.

(a)         Without limiting or qualifying Section 5.4, or any other provision
of this Agreement, the Loan Parties will, and will cause their applicable
Subsidiaries to, be in compliance with all applicable Health Care Laws relating
to the operation of such Person’s business, except where the failure to do so,
either individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

(b)         Except where the failure to do so or noncompliance could not
reasonably be expected to result in a Material Adverse Effect, the Loan Parties
will, and will cause each of their Subsidiaries to:

(i)         obtain, maintain and preserve, and take all necessary action to
timely renew, all Health Care Permits (including, as applicable, Health Care
Permits necessary for it to be eligible to receive payment and compensation from
and to participate in Medicare, Medicaid or any other third party payors), if
any, which are necessary or useful for any Loan Party or Subsidiary thereof to
obtain or maintain in the proper conduct of its business;

(ii)         solely to the extent applicable to the Loan Parties and their
Subsidiaries, be and remain in compliance with all requirements for
participation in, and for licensure required to provide the goods or services
that are reimbursable under, Medicare, Medicaid and other third party payor
programs;

(iii)         cause all Licensed Personnel of the Loan Parties, if any, to be in
compliance with all applicable Health Care Laws in the performance of their
duties to or for the Loan Parties, and to maintain in full force and effect all
professional licenses and other Health Care Permits required to perform such
duties; and

(iv)         keep and maintain all records required to be maintained by any
Governmental Authority or otherwise under any Health Care Law applicable to the
Loan Parties.

 

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(c)         Except where the failure to do so or noncompliance could not
reasonably be expected to result in a Material Adverse Effect, the Loan Parties
will use commercially reasonable efforts to enforce the obligations of the
Tenants under the Facility Lease (other than with respect to any Multi- Tenant
Building) with respect to Health Care Laws or Health Care Permits.

(d)         The Loan Parties will, and will cause their applicable Subsidiaries
to, to the extent required by any Governmental Authority pursuant to applicable
Health Care Laws or any agreement, order or decree, maintain a corporate and
healthcare regulatory compliance program (“CCP”) addressing compliance with all
applicable Health Care Laws relating to the operation of the Loan Parties’ and
their Subsidiaries’ businesses, to the extent that the failure to do so, either
individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Effect. Such CCP may include, in each case, to the extent
applicable to the Loan Parties’ and their Subsidiaries’ businesses, the
following components: (i) standards of conduct and procedures that describe
compliance policies regarding applicable Health Care Laws, with an emphasis on
prevention of fraud and abuse; (ii) a specific officer within high-level
personnel identified as having overall responsibility for compliance with such
standards and procedures; (iii) training and education programs which
effectively communicate the compliance standards and procedures to employees and
agents, including, without limitation, fraud and abuse laws and illegal billing
practices; (iv) auditing and monitoring systems and reasonable steps for
achieving compliance with such standards and procedures, including, without
limitation, publicizing a report system to allow employees and other agents to
anonymously report criminal or suspect conduct and potential compliance
problems; (v) disciplinary guidelines and consistent enforcement of compliance
policies, including, without limitation, discipline of individuals responsible
for the failure to detect violations of the CCP; and (vi) mechanisms to
appropriately respond to detected violations of the CCP. The Loan Parties will,
and will cause their applicable Subsidiaries to, modify such CCPs from time to
time, as may be necessary to ensure continuing compliance with all applicable
Health Care Laws, to the extent that the failure to do so, either individually
or in the aggregate, would reasonably be expected to result in a Material
Adverse Effect. Upon request and reasonable prior notice, the Administrative
Agent shall be permitted to review any such CCP.

Section 5.16.         Environmental Matters.

(a)         The Loan Parties will, and will cause their applicable Subsidiaries
and the Tenants to, (i) comply with all Environmental Laws in respect of the
Borrowing Base Assets except to the extent such non-compliance could not
reasonably be expected to result in a Material Adverse Effect; and (ii) promptly
take all actions reasonably necessary to prevent the imposition of any Liens
(other than Permitted Encumbrances) on any of the Borrowing Base Assets arising
out of or related to any Environmental Laws.

(b)         In respect of any Borrowing Base Asset and to the extent the
following could reasonably be expected to result in a Material Adverse Effect,
if any Loan Party shall (i) receive notice that any violation of any
Environmental Law may have been committed by such Person, (ii) receive notice
that any administrative or judicial complaint or order has been filed or is
about to be filed against any Loan Party alleging violations of

 

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any Environmental Law or requiring any such Person to take any action in
connection with the release of any Hazardous Materials or (iii) receive any
notice from a Governmental Authority or private party alleging that any such
Loan Party may be liable or responsible for costs associated with a response to
or cleanup of a release of a Hazardous Materials or any damages caused thereby,
the Loan Parties shall provide the Administrative Agent with a copy of such
notice within ten (10) days after the receipt thereof by such Loan Party.

(c)         At the request of the Administrative Agent, (x) in the event the
Administrative Agent has a reasonable basis to believe that Hazardous Materials
in a quantity or condition that violates Environmental Laws in any material
respect are present on any Borrowing Base Assets and that such Hazardous
Materials could reasonably be expected to result in a Material Adverse Effect,
or (y) to the extent an Event of Default has occurred and is continuing, the
Borrower shall provide to the Administrative Agent within sixty (60) days after
such request, at the expense of the Borrower, an environmental site assessment
report for any Borrowing Base Asset described in such request (which, in the
case of any circumstance described in clause (x), shall be limited to the
affected Borrowing Base Asset), prepared by an environmental consulting firm
reasonably acceptable to the Administrative Agent, indicating the presence or
absence of Hazardous Materials and the estimated cost of any compliance or
required removal or remedial action in connection with any Hazardous Materials
on such Borrowing Base Asset to cause such property to be in compliance with
Environmental Laws; without limiting the generality of the foregoing, if the
Administrative Agent reasonably determines at any time that a material risk
exists that any such report will not be provided within the time referred to
above, the Administrative Agent may retain an environmental consulting firm to
prepare such report at the expense of the Loan Parties, and the Loan Parties
hereby grant and agree to cause any Subsidiary that owns any property described
in such request to grant at the time of such request to the Administrative
Agent, the Lenders, such firm and any agents or representatives thereof
reasonable access, subject to the rights of Tenants, to enter onto their
respective properties to undertake such an assessment.

Notwithstanding the foregoing, to the extent a Loan Party is unable to comply
with the provisions of this Section 5.16 due to a Tenant’s act or omission with
respect to any Borrowing Base Asset such violation shall not constitute a
Default or Event of Default so long as the Borrower (A) delivers a new Borrowing
Base Certificate removing the applicable Borrowing Base Asset within thirty
(30) days of a Responsible Officer of the Borrower becoming aware of such
violation; and (B) make any prepayment required pursuant to Section 2.12 in
connection with such removal and after giving effect to such removal and payment
(and the addition of any other Borrowing Base Asset on or prior to such date),
the Loan Parties are in compliance with this Section 5.16.

Section 5.17.         Borrowing Base Additions. The Borrower may, at any time
after the Closing Date, include additional Real Property Assets as Borrowing
Base Assets to the extent the following conditions are satisfied:

(a)         such additional Real Property Asset satisfies the requirements set
forth in the definition of Borrowing Base Asset, including, without limitation,
delivery of each of the Borrowing Base Asset Deliverables with respect thereto;
and

 

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(b)         such additional Real Property Asset is otherwise acceptable to the
Administrative Agent in its reasonable discretion; provided that (i) the
Administrative Agent shall use reasonable efforts to approve or disapprove such
additional Real Property Asset within ten (10) Business Days after the date on
which (A) the Administrative Agent received a written request from the Borrower
requesting the addition of such Real Property Asset; (B) all Borrowing Base
Asset Deliverables; and (C) to the extent available to the REIT Guarantor or its
Subsidiaries, all reasonably requested information reasonably deemed necessary
by the Administrative Agent to confirm compliance with the requirements for such
Real Property Asset to be a Borrowing Base Asset have been delivered, and a
failure to approve or disapprove the additional Real Property Asset in such ten
(10) Business Day period shall be deemed to mean that such additional Real
Property Asset has been approved and (ii) to the extent any such additional Real
Property Asset is denied approval, the Administrative Agent shall specify the
reasons in writing to the Borrower for such denial.

Section 5.18.         Borrowing Base Assets.

(a)         The Borrower shall deliver to the Administrative Agent, promptly
following a Responsible Officer of any Loan Party obtaining knowledge of a
Borrowing Base Asset ceasing to qualify as such, a pro forma Borrowing Base
Certificate (which certificate shall include an update to the information set
forth on Schedule 4.18) demonstrating that, upon giving effect to the removal
from the calculation of the Borrowing Base Amount of the Property Value and
Interest Coverage Amount attributable to such former Borrowing Base Asset, the
Borrowers shall be in compliance with Section 2 hereof.

(b)         The Loan Parties shall not include any Real Property Asset as a
Borrowing Base Asset on any schedule, Borrowing Base Certificate or Compliance
Certificate delivered in connection with this Credit Agreement unless (i) such
Real Property Asset meets the definition of Borrowing Base Asset or is a
Suspended Borrowing Base Asset (as is specifically identified as such) and Loan
Parties have otherwise satisfied the requirements set forth in this Agreement
and (ii) such Real Property Asset continues to qualify as a Borrowing Base Asset
or is a Suspended Borrowing Base Asset (as is specifically identified as such)
as of the date of such inclusion.

Section 5.19.         Borrowing Base Leases.

(a)         All Borrowing Base Leases (and all renewals thereof) executed after
the Closing Date (other than extensions or renewals of existing Material
Borrowing Base Leases pursuant to options provided therein and the Ensign Master
Leases in each case in accordance with the terms of the applicable Borrowing
Base Lease) shall provide for rental rates obtained through arm’s-length
negotiations, shall be on commercially reasonable terms, and shall not contain
any terms which could reasonably be expected to have a Property Material Adverse
Effect. Each Loan Party that has entered into a Borrowing Base Lease: (A) shall
not collect any rent under such Lease more than one (1) month in advance (other
than security deposits); (B) shall not execute any other assignment of lessor’s
interest in such Lease or the rent thereunder; (C) shall promptly furnish
Administrative Agent with a copy of such Borrowing Base Lease (other than leases
of Multi-Tenant Buildings) upon execution thereof; (D) shall observe and perform
the material obligations imposed upon the lessor under such Leases in a
commercially reasonable manner; and (E) shall enforce the

 

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obligations of the lessee thereunder to be observed or performed in a
commercially reasonable manner that does not result in any Property Material
Adverse Effect.

(b)         The Loan Parties will, and will cause their Subsidiaries to, cause
each Tenant with respect to each Borrowing Base Asset (other than a Multi-Tenant
Building or a Subsidiary Operated Facility) to deliver each quarterly or annual
financial statement of such Tenant or the parent company of such Tenant required
to be delivered pursuant to the applicable Borrowing Base Lease; provided that
the failure of a Tenant to deliver any such financial statement shall not
constitute a Default or Event of Default so long as the Borrower (i) delivers a
new Borrowing Base Certificate removing the applicable Borrowing Base Asset
within ten (10) Business Days of a Responsible Officer of the Borrower becoming
aware of such violation; and (ii) makes any prepayment required pursuant to
Section 2.12 in connection with such removal and after giving effect to such
removal and payment (and the addition of any other Borrowing Base Asset on or
prior to such date), the Loan Parties are in compliance with this
Section 5.19(c).

Section 5.20.         Borrowing Base Certificates. A Responsible Officer of the
REIT Guarantor or the Borrower shall deliver an updated Borrowing Base
Certificate upon (a) any amendment to any Borrowing Base Lease (other than
Leases with respect to Multi-Tenant Buildings) to the extent permitted by
Section 7.13 hereof and (b) any material casualty or condemnation event, in
either case, to the extent that such amendment or casualty event or condemnation
event has caused, or could reasonably be expected to cause such Real Property
Asset to cease to qualify as a Borrowing Base Asset.

Section 5.21.         Eligible Ground Leases. With respect to any Eligible
Ground Lease related to any Borrowing Base Asset, the Loan Parties will, and
will cause their Subsidiaries to, for so long as such Eligible Ground Lease is
related to a Borrowing Base Asset:

(a)        (i) pay all rents, additional rents and other sums required to be
paid by the applicable Loan Party, as tenant under and pursuant to the
provisions of the Eligible Ground Lease as and when such rent or other sums are
due and payable; (ii) promptly and faithfully observe, perform and comply with
all the material terms, covenants and provisions of the Eligible Ground Leases
on its part to be observed, performed and complied with, at the times set forth
therein and to do all things necessary to preserve unimpaired its material
rights thereunder; (iii) not do, permit, suffer or refrain from doing anything,
the result of which could be a material default under any of the terms thereof
beyond the giving of any required notice and the expiration of any applicable
cure period or a breach of any of the terms thereof (it being agreed that any
default that would permit any party thereto other than the applicable Loan Party
to terminate its operating covenant shall be deemed to be material); (iv) not
cancel, surrender, or Modify any of the material terms thereof and not to
release any party thereto (other than the applicable Loan Party) from any
material obligation imposed upon it thereby; and (v) give the Administrative
Agent prompt written notice of any material default by anyone thereunder of
which the applicable Loan Party becomes aware and promptly deliver to the
Administrative Agent copies of each notice of material default.

 

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(b)         Except as otherwise provided in this Agreement (including but not
limited to clause (d) below), with respect to any Borrowing Base Asset that is
the subject of an Eligible Ground Lease, the applicable Loan Party shall not,
without the prior consent of the Administrative Agent, surrender the leasehold
estate created by such Eligible Ground Lease or terminate or cancel such
Eligible Ground Lease or Modify such Eligible Ground Lease, in any material
respect, either orally or in writing.

(c)         The applicable Loan Party shall exercise each individual option, if
any, to extend or renew the term of the Eligible Ground Lease with respect to a
Borrowing Base Asset with a term that expires less than ten (10) years after the
then-existing latest Maturity Date, after giving effect to the exercise of the
extension option pursuant to Section 2.5, upon written demand (the “Extension
Demand”) by the Administrative Agent made at any time within one (1) year of the
last day upon which any such option may be exercised, and if the applicable Loan
Party shall fail to exercise such option at such time, the applicable Loan Party
hereby expressly authorizes and appoints the Administrative Agent its
attorney-in-fact to exercise any such option in the name of and upon behalf of
the applicable Loan Party, which power of attorney shall be irrevocable and
shall be deemed to be coupled with an interest; provided that the applicable
Loan Party shall not be required to exercise such option, and the Administrative
Agent will not exercise such option, so long as the Borrower (i) delivers a new
Borrowing Base Certificate removing the applicable Borrowing Base Asset on or
prior to the date that is the later of (x) the date on which such extension
option may be exercised and (y) ten (10) Business Days after delivery by the
Administrative Agent of the Extension Demand; and (ii) makes any prepayment
required pursuant to Section 2.12 in connection with such removal (determined
after giving effect to the addition of any other Borrowing Base Asset on or
prior to such date). The applicable Loan Party shall not subordinate or consent
to the subordination of the Eligible Ground Lease to any mortgage, security
deed, lease or other interest on or in the landlord’s interest in all or any
part of the Real Property Asset, except as required under the terms of such
Eligible Ground Lease, unless, in each such case, the written consent of the
Administrative Agent shall have been first had and obtained, which approval
shall not unreasonably be withheld.

Section 5.22.         Borrowing Base Covenants. The Borrower shall at all times
comply with the following, tested as of date of any Borrowing and as of the
close of each Fiscal Quarter:

(a)         the minimum weighted average remaining lease term of all such
Borrowing Base Assets shall be at least five (5) years;

(b)         the Borrower shall maintain a minimum of twenty (20) Borrowing Base
Assets with a minimum aggregate Property Value of not less than $250,000,000;

(c)         No more than fifteen percent (15%) of the Borrowing Base Amount be
attributable to Borrowing Base Assets subject to Eligible Ground Leases;
provided that a breach of this provision shall not constitute an Event of
Default under this Agreement but shall result in the amount in excess of fifteen
percent (15%) being excluded when calculating the Borrowing Base Amount;

 

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(d)        a minimum 75% of the Property Value of the Borrowing Base Assets must
come from skilled nursing facilities, assisted living facilities and independent
living facilities; and

(e)        the Rent Coverage Ratio shall be at least 1.50 to 1.0.

Section 5.23.         Post-Closing Matters. The Loan Parties will, and will
cause each Subsidiary to, satisfy the requirements set forth on Schedule 5.23 on
or before the date specified for such requirement or such later date as agreed
to by the Administrative Agent in its sole discretion.

ARTICLE VI

FINANCIAL COVENANTS

The Loan Parties covenant and agree that until Payment in Full of the
Obligations:

 

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Section 6.1.         Consolidated Leverage Ratio. The Loan Parties shall cause
the Consolidated Leverage Ratio, as of the last day of each Fiscal Quarter, to
be less than sixty percent (60%); provided that, if the Borrower shall have
consummated a Material Acquisition, then the Loan Parties shall cause the
Consolidated Leverage Ratio, as of the last day of each Fiscal Quarter for the
two consecutive Fiscal Quarter period following such Material Acquisition, to be
less than sixty-five percent (65%), such surge to be limited to three (3) such
increases during the term of the Facility.

Section 6.2.         Consolidated Fixed Charge Coverage Ratio. The Loan Parties
shall cause the Consolidated Fixed Charge Coverage Ratio for the Measurement
Period with respect to each Fiscal Quarter to be equal to or greater than 1.75
to 1.00.

Section 6.3.         Consolidated Tangible Net Worth. The Loan Parties shall
cause the Consolidated Tangible Net Worth as of the last day of each Fiscal
Quarter to be equal to or greater than the sum of (i)$166,887,750.00 plus
(ii) an amount equal to seventy-five percent (75%) of the net cash proceeds
received by the REIT Guarantor from any issuance or sale of shares of its
Capital Stock (other than Convertible Indebtedness and any Permitted Warrant
Transactions) during the period following the Closing Date and ending as of the
last day of the Fiscal Quarter for which such calculation is being performed.

Section 6.4.         Distribution Limitation. The Loan Parties shall cause the
aggregate cash distributions to the REIT Guarantor’s shareholders made by the
REIT Guarantor during the Applicable Distribution Period (including, without
limitation, any Restricted Payments made to repurchase any common shares of the
REIT Guarantor) to not exceed ninety-five percent (95%) of the aggregate
cumulative Adjusted Funds From Operations accrued on and after the Closing Date
and through such Applicable Distribution Period (or such greater amount as is
required for the REIT Guarantor to maintain REIT status or to avoid any excise
tax and income tax imposed on the REIT Guarantor) (it being understood that,
notwithstanding anything to the contrary contained in this Section 6.4, the REIT
Guarantor may (a) distribute to the REIT Guarantor’s shareholders any and all
cash proceeds received by the REIT Guarantor or the Borrower in connection with
any issuance or sale of shares of Capital Stock of the REIT Guarantor (other
than Convertible Indebtedness) and (b) make unlimited distributions to the REIT
Guarantor’s shareholders payable solely in the form of common stock of the REIT
Guarantor); provided that no such cash distribution will be permitted so long as
any Event of Default under Section 8.1(a) or (b) or, with respect to the REIT
Guarantor or the Borrower, Section 8.1(g), (h) or (i) has occurred and is
continuing.

Section 6.5.         Secured Debt.The Loan Parties shall cause the aggregate
principal amount of all Secured Debt as of the last day of each Fiscal Quarter
to be less than or equal to thirty percent (30.0%) of the Consolidated Total
Asset Value.

Section 6.6.         Recourse Debt. The Loan Parties shall cause the aggregate
principal amount of all Recourse Debt (other than Indebtedness pursuant to the
Loan Documents) as of the last day of each Fiscal Quarter to be less than or
equal to ten percent (10.0%) of the Consolidated Total Asset Value.

 

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ARTICLE VII

NEGATIVE COVENANTS

The Loan Parties covenant and agree that until Payment in Full of the
Obligations:

Section 7.1.         Indebtedness and Preferred Equity. The Loan Parties will
not, and will not permit any of their Subsidiaries to, create, incur, assume or
suffer to exist any Indebtedness, except:

(a)         Indebtedness created pursuant to the Loan Documents;

(b)         Indebtedness of the Loan Parties and their Subsidiaries existing on
the date hereof and set forth on Schedule 7.1 and Permitted Refinancing
Indebtedness with respect thereto;

(c)         Indebtedness of the Borrower or any of its Subsidiaries incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations (it being understood that the
completion of the construction or development of additional beds at existing
facilities or new facilities shall constitute the acquisition of property), and
any Indebtedness assumed in connection with the acquisition of any such assets
or secured by a Lien on any such assets (provided that such Indebtedness is
incurred prior to or within ninety (90) days after such acquisition or the
completion of such construction or improvements), and extensions, renewals,
refinancings or replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof (immediately prior to giving effect to such
extension, renewal, refinancing or replacement other than in an amount not to
exceed unpaid interest and fees and expenses incurred in connection therewith)
or shorten the maturity or the weighted average life thereof; provided that the
aggregate principal amount of such Indebtedness does not exceed $20,000,000 at
any one time outstanding;

(d)         Indebtedness among the Loan Parties and their Subsidiaries; provided
that any such Indebtedness that is owed to a Loan Party by a Subsidiary that is
not a Loan Party must be permitted pursuant to Section 7.4 (other than
Section 7.4(d));

(e)         Guarantees by the REIT Guarantor or any of its Subsidiaries of
Indebtedness otherwise permitted to be incurred by the REIT Guarantor or any of
its Subsidiaries under this Section 7.1; provided that any such Guarantee by a
Loan Party for the benefit of a Subsidiary that is not a Loan Party shall be
subject to Section 7.4 (other than Section 7.4(d));

(f)         [reserved];

(g)         Hedging Obligations permitted by Section 7.10;

(h)         Secured Debt, whether incurred or assumed in connection with any
Acquisition or otherwise; provided that after immediately giving effect thereto
and to any Acquisition consummated after the end of the most recent Fiscal
Quarter for which financial statements have been delivered pursuant to
Section 5.1(a) or (b) and on or prior to

 

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such date, the Loan Parties are in compliance with the Financial Covenants on a
pro forma basis (and Permitted Refinancing Indebtedness with respect thereto);

(i)         other unsecured Indebtedness; provided that, immediately after
giving effect thereto and to any Acquisition consummated after the end of the
most recent Fiscal Quarter for which financial statements have been delivered
pursuant to Section 5.1(a) or (b) and on or prior to such date, the Loan Parties
are in compliance with the Financial Covenants on a pro forma basis (and
Permitted Refinancing Indebtedness with respect thereto);

(j)         Indebtedness in respect of workers’ compensation claims,
self-insurance obligations, performance bonds, surety appeal or similar bonds,
completion guarantees and letters of credit arising in the ordinary course of
its business;

(k)         cash management obligations and other Indebtedness in respect of
netting services, automatic clearing house arrangements, overdraft protections
and similar arrangements in each case in connection with deposit accounts
incurred in the ordinary course;

(l)         Indebtedness arising in connection with endorsement of instruments
for deposit in the ordinary course of business;

(m)         Indebtedness consisting of the financing of insurance premiums in
the ordinary course of business; and

(n)         other Indebtedness not to exceed $1,000,000 in the aggregate at any
time outstanding.

The Loan Parties will not, and will not permit any Subsidiary to, issue any
preferred stock or other preferred equity interest that (i) matures or is
mandatorily redeemable pursuant to a sinking fund obligation or otherwise
(except to the extent such maturity or redemption may be satisfied, at the
option of the REIT Guarantor or such Subsidiary, as the case may be, with the
issuance of or exchange for Capital Stock or the REIT Guarantor or any of its
Subsidiaries), (ii) is or may become redeemable or repurchaseable by such Loan
Party or such Subsidiary at the option of the holder thereof, in whole or in
part (excluding any such option which the REIT Guarantor or any of its
Subsidiaries may be satisfied, at the option of the REIT Guarantor or such
Subsidiary, as the case may be, with the issuance of or exchange for Capital
Stock of the REIT Guarantor), or (iii) is convertible or exchangeable at the
option of the holder thereof for Indebtedness or preferred stock or any other
preferred equity interest described in this paragraph (other than any preferred
stock or any other preferred equity interest which the REIT Guarantor or any of
its Subsidiaries will satisfy with the issuance of or exchange for Capital Stock
of the REIT Guarantor or the Borrower), on or prior to, in the case of clause
(i), (ii) or (iii), the date that is one hundred eighty (180) days after the
later of the then latest Revolving Commitment Termination Date and the then
latest Maturity Date, after giving effect to the exercise of the extension
option pursuant to Section 2.5, in effect at the time such preferred stock or
other preferred equity interest is issued, unless immediately after giving
effect thereto and to any Acquisition consummated after the end of the most
recent Fiscal Quarter for which financial statements

 

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have been delivered pursuant to Section 5.1(a) or (b) and on or prior to such
date, the Loan Parties are in compliance with the Financial Covenants on a pro
forma basis.

Section 7.2.         Liens. The Loan Parties will not, and will not permit any
of their Subsidiaries to, create, incur, assume or suffer to exist any Lien on
any of its assets or property now owned or hereafter acquired, except:

(a)         [Reserved];

(b)         Permitted Encumbrances;

(c)         customary rights of set-off, revocation, refund or chargeback under
deposit agreements or under the Uniform Commercial Code or common law of banks
or other financial institutions where the Borrower or any of its Subsidiaries
maintains deposits (other than deposits intended as cash collateral) in the
ordinary course of business;

(d)         judgment and attachment liens (and surety bonds related thereto) not
giving rise to an Event of Default or Liens created by or existing from any
litigation or legal proceeding that are currently being contested in good faith
by appropriate proceedings with respect to which adequate reserves are being
maintained in accordance with GAAP;

(e)         Liens on any property or asset of the Loans Parties or any of their
Subsidiaries existing on the date hereof and set forth on Schedule 7.2;

(f)         purchase money Liens upon or in any fixed or capital assets to
secure the purchase price or the cost of construction or improvement of such
fixed or capital assets or to secure Indebtedness incurred solely for the
purpose of financing the acquisition, construction or improvement of such fixed
or capital assets (including Liens securing any Capital Lease Obligations);
provided that (i) any such Lien secures Indebtedness permitted by
Section 7.1(c), (ii) any such Lien attaches to such asset concurrently or within
ninety (90) days after the acquisition or the completion of the construction or
improvements thereof (or, in the case of an extension, refinancing, replacement
or renewal, at the time of such extension, refinancing, replacement or renewal),
(iii) any such Lien does not extend to any other asset other than accessions to
such asset and reasonable extensions of such asset, including cash revenues
generated by, or derived from, such asset and other than proceeds of such
Indebtedness pending disbursement, and (iv) the Indebtedness secured thereby
does not exceed the cost (including interest costs) of acquiring, constructing
or improving such fixed or capital assets;

(g)         Liens on any property or asset of the Loans Parties or any of their
Subsidiaries (other than Borrowing Base Assets, the equity interests held
directly or indirectly by the REIT Guarantor in any Loan Party or the equity
interests held directly or indirectly by the Borrower in any Subsidiary Loan
Party) securing Indebtedness permitted pursuant to Section 7.1(c), (d) or
(h) and, with respect to any such Indebtedness, Hedging Obligations entered into
in connection with such Indebtedness and secured by the same collateral as such
Indebtedness;

 

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(h)         Liens arising by virtue of deposits made in the ordinary course of
business to secure liability for premiums to insurance carriers; and

(i)         deposits to secure the performance of bids, trade contracts, leases
and licenses, statutory obligations, surety bonds (other than bonds related to
judgments or litigations), performance bonds and other obligations of a like
nature incurred in the ordinary course of business;

(j)         Liens arising out of conditional sale, title retention, consignment
or similar arrangements for the sale of goods not prohibited by this Agreement
and entered into by the REIT Guarantor or any of its Subsidiaries in the
ordinary course of business;

(k)         Liens on cash and Permitted Investments deposited to discharge,
redeem or defease Indebtedness that was permitted to so be repaid;

(l)        (i) Liens solely on any cash earnest money deposits made by the REIT
Guarantor or any of its Subsidiaries and (ii) restrictions on transfers of
assets that are subject to sale or transfer pursuant to purchase and sale
arrangements, in each case under this clause (l) in connection with any letter
of intent or purchase agreement in respect of an Acquisition, Investment or
Disposition permitted by this Agreement;

(m)         licenses and sub-licenses of Intellectual Property in the ordinary
course of business;

(n)         Liens on or in any fixed or capital assets to secure the purchase
price or the cost of construction or improvement of such fixed or capital assets
or to secure Indebtedness incurred solely for the purpose of financing the
acquisition, construction or improvement of such fixed or capital assets
(including Liens securing any Capital Lease Obligations); provided that (i) any
such Lien secures Indebtedness permitted by Section 7.1(c), (ii) any such Lien
attaches to such asset concurrently or within ninety (90) days after the
acquisition or the completion of the construction or improvements thereof (or,
in the case of an extension, refinancing, replacement or renewal, at the time of
such extension, refinancing, replacement or renewal), (iii) any such Lien does
not extend to any other asset other than accessions to such asset and reasonable
extensions of such asset, including cash reserves generated by, or derived from,
such asset and other than cash used to fund such Indebtedness pending
disbursement, and (iv) the Indebtedness secured thereby does not exceed the cost
(including interest costs) of acquiring, constructing or improving such fixed or
capital assets;

(o)         in the case of any non-Wholly Owned Subsidiary, any put and call
arrangements or restrictions on Disposition related to its Capital Stock set
forth in its organizational documents or any related joint venture or similar
agreement. Liens on insurance policies and proceeds and premiums thereof or
related thereto, securing Indebtedness permitted under Section 7.1(o);

(p)         extensions, renewals, or replacements of any Lien referred to in
subsections (e), (f) and (g) of this Section; provided that the principal amount
of the Indebtedness secured thereby is not increased (other than in an amount
not to exceed

 

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unpaid interest, fees and premiums, and expenses incurred in connection
therewith) and that any such extension, renewal or replacement is limited to the
assets originally encumbered thereby; and

(q)        other Liens securing obligations not to exceed $1,000,000 in the
aggregate at any time outstanding.

Section 7.3.         Fundamental Changes . The Loan Parties will not, and will
not permit any of their Subsidiaries to, merge into or consolidate into any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, lease, transfer or otherwise dispose of (in a single transaction or a
series of transactions) all or substantially all of the assets of the REIT
Guarantor and its Subsidiaries, taken as a whole (in each case, whether now
owned or hereafter acquired) (in each case, whether now owned or hereafter
acquired) or liquidate or dissolve; provided that if, at the time thereof and
immediately after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing, (a) the REIT Guarantor may merge or consolidate
with any Subsidiary (other than the Borrower) if the REIT Guarantor is the
surviving Person; (b) the Borrower may merge or consolidate with any Subsidiary
if the Borrower is the surviving Person; (c) any Subsidiary may merge or
consolidate with any other Subsidiary, provided that if any Subsidiary party to
such merger or consolidation is a Loan Party, then either a Loan Party is the
surviving Person or the surviving Person immediately becomes a Loan Party;
(d) any Subsidiary may sell, transfer, lease or otherwise dispose of all or
substantially all of its assets to the Borrower or to another Subsidiary;
provided that if the transferor Subsidiary is a Loan Party, then the transferee
must be the Borrower or a Loan Party; (e) any Subsidiary (other than a Loan
Party) may liquidate or dissolve if the Borrower determines in good faith that
such liquidation or dissolution is in the best interests of the Borrower and is
not materially disadvantageous to the Lenders; (f) any Subsidiary may merge or
consolidate in connection with the consummation of any Acquisition or other
Investment permitted by Section 7.4 or a Disposition permitted by Section 7.6;
provided that if such Subsidiary is a Loan Party, then, unless such merger or
consolidation is in connection with a permitted Disposition, either a Loan Party
is the surviving Person or the surviving Person immediately becomes a Loan Party
and (g) the REIT Guarantor, Borrower or any Subsidiary may make any Investment
or Disposition otherwise permitted under Section 7.4 or 7.6, as applicable.

Section 7.4.         Investments, Loans. The Loan Parties will not, and will not
permit any of their Subsidiaries to, purchase, hold or acquire (including
pursuant to any merger with any Person that was not a wholly owned Subsidiary
prior to such merger) any Capital Stock, evidence of Indebtedness or other
securities (including any option, warrant, or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person (all of the foregoing being collectively called
“Investments”), or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person that constitute a business unit,
except:

(a)         cash and Permitted Investments;

 

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(b)        Investments (other than Permitted Investments) existing on the date
hereof and set forth on Schedule 7.4 (including Investments in Subsidiaries
existing on the Closing Date);

(c)        Investments by (i) the REIT Guarantor or any Subsidiary in any Loan
Party; or (ii) any Subsidiary that is not a Loan Party in any other Consolidated
Party;

(d)        Guarantees by the REIT Guarantor and its Subsidiaries constituting
Indebtedness permitted by Section 7.1;

(e)        Acquisitions of personal property in the ordinary course of business
to the extent required to continue to operate the Loan Parties’ businesses
permitted pursuant to Section 7.13;

(f)        Investments in Real Property Assets or in the Capital Stock of any
Person that owns or leases Real Property Assets that are Healthcare Facilities,
provided that:

(i)        any such Investments in Real Property Assets under this clause
(f) consisting of unimproved land shall not exceed five percent (5.0%) of
Consolidated Total Asset Value;

(ii)        any Investments under this clause (f) consisting of preferred
equity, mortgage loans (other than leases structured as mortgages due to
reimbursement requirements), mezzanine loans and notes receivable shall not
exceed twenty percent (20.0%) of Consolidated Total Asset Value;

(iii)        any Investments under this clause (f) in Unconsolidated Affiliates
shall not exceed fifteen percent (15.0%) of Consolidated Total Asset Value; and

(iv)        any Investments under this clause (f) consisting of Construction in
Progress shall not exceed fifteen percent (15.0%) of Consolidated Total Asset
Value;

provided further that the aggregate value of Investments described in subsection
(f)(i) through (iv) shall not exceed twenty-five percent (25.0%) of Consolidated
Total Asset Value, with a violation of this maximum value not constituting an
Event of Default hereunder but rather resulting in such excess value being
excluded when calculating Consolidated Total Asset Value under this Agreement;

(g)        (i) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses in
accordance with GAAP and (ii) moving, entertainment and travel expenses, drawing
accounts and similar expenditures made to officers, directors and employees in
the ordinary course of business not to exceed $2,000,000 in the aggregate at any
time outstanding;

(h)        Investments received in satisfaction of judgments or in settlements
of debt or compromises of obligations incurred in the ordinary course of
business;

 

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(i)         any Investment consisting of prepaid expenses, negotiable
instruments held for collection and lease, endorsements for deposit or
collection in the ordinary course of business, utility or workers compensation,
performance and similar deposits entered into as a result of the operations of
the business in the ordinary course of business;

(j)         pledges or deposits by a Person under workers compensation laws,
unemployment insurance laws or similar legislation, or deposits in connection
with bids, tenders, contracts (other than for the payment of Indebtedness) or
leases to which such Person is a party, or deposits as security for contested
taxes or import duties or for the payment of rent, in each case incurred in the
ordinary course of business;

(k)         [Reserved];

(l)         Licenses and sublicenses of Intellectual Property in the ordinary
course of business;

(m)         Hedging Obligations permitted under Section 7.10; and

(n)         other Investments not to exceed $1,000,000 in the aggregate at any
time outstanding.

The amount of any Investment shall be deemed to be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment but determined net of all payments received with respect to such
Investment whether constituting sale proceeds thereof, dividends, distributions,
interest, return of capital or otherwise, and the amount of any Investment
constituting a Guarantee shall be reflective of the principal amount subject to
such Guarantee from time to time.

Section 7.5.         Restricted Payments. The Loan Parties will not, and will
not permit any of their Subsidiaries to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, except:

(i)        Restricted Payments payable by any Loan Party or any Subsidiary
solely in interests of any class of its common equity and Restricted Payments
payable by the Borrower solely in interests of any class of its common equity
and/or any class of common equity of the REIT Guarantor;

(ii)        Restricted Payments made by any Subsidiary to the REIT Guarantor or
to another Subsidiary; provided that, on at least a pro rata basis with any
other shareholders if such Subsidiary is not Wholly Owned by the REIT Guarantor
and other Wholly Owned Subsidiaries of the REIT Guarantor, such Restricted
Payments shall be made on a pro rata basis to all holders of Capital Stock of
such Subsidiary, according to the respective Capital Stock held by such holder,
and any elections by such holder (other than any Subsidiary) to receive less
than pro rata Restricted Payments;

(iii)        So long as no Default or Event of Default shall have occurred and
be continuing, any regularly scheduled payment of interest with respect to any

 

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Indebtedness subordinated in right of payment to the Obligations and payments of
principal, interest, fees and premiums thereon funded with the proceeds of
Permitted Refinancing Indebtedness permitted pursuant to Section 7.1;

(iv)         [Reserved];

(v)         Restricted Payments made pursuant to an exchange of or conversion
into Capital Stock of the REIT Guarantor;

(vi)         the making of cash payments in connection with any conversion or
purchase of Convertible Indebtedness in an aggregate amount since the Closing
Date not to exceed the sum of (a) the principal amount of such Convertible
Indebtedness and any accrued and unpaid interest thereon plus (b) any payments
received by the REIT Guarantor pursuant to the exercise, settlement, unwinding
or termination of any related Permitted Bond Hedge Transaction;

(vii)         (a) any payments in connection with a Permitted Bond Hedge
Transaction and (b) the exercise, settlement, unwinding or termination of any
related Permitted Warrant Transaction by (I) delivery of shares of common stock
of the REIT Guarantor upon settlement thereof, (II) by (A) set-off against the
related Permitted Bond Hedge Transaction or payment of an early termination
amount thereof in common stock upon any early termination thereof or (III) by a
cash payment not to exceed the amount received upon any exercise, settlement,
unwinding or termination of a related Permitted Bond Hedge Transaction;

(viii)         the REIT Guarantor and its Subsidiaries may make Restricted
Payments to allow the payment of cash in lieu of the issuance of fractional
shares upon the exercise of options or, warrants or rights or upon the
conversion or exchange of or into Capital stock; and

(ix)        Restricted Payments by the REIT Guarantor permitted or required
pursuant to Section 6.4.

Section 7.6.         Sale of Assets. The Loan Parties will not, and will not
permit any of their Subsidiaries to make any Disposition, except:

(a)         Disposition of (i) obsolete or worn out property or other property
not necessary or useful for operations disposed of in the ordinary course of
business; and (ii) inventory, fixtures, furniture and equipment, in each case
disposed of in the ordinary course of business;

(b)         Disposition of cash and Permitted Investments in the ordinary course
of business;

(c)         Dispositions of equipment or other property to the extent that
(i) such equipment or other property is exchanged for credit against the
purchase price of similar replacement equipment or other property or (ii) the
proceeds of such Disposition are reasonably promptly applied to the purchase
price of such replacement equipment or other

 

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property; provided, that if the Property disposed of is a Borrowing Base Asset
it is removed from the calculation of the Borrowing Base Amount;

(d)         Dispositions of property by any Subsidiary to a Loan Party or to a
Wholly Owned Subsidiary; provided, that (i) if the transferor of such property
is a Secured Loan Party, the transferee thereof must be a Secured Loan Party;
and (ii) if the transferor of such property is a Loan Party (other than a
Secured Loan Party), the transferee thereof must be a Loan Party;

(e)         Dispositions consisting of Investments permitted by Section 7.4 or
Restricted Payments permitted pursuant to Section 7.5;

(f)         real estate leases entered into in the ordinary course of business;

(g)         voluntary termination of (i) assets or contracts (other than
Borrowing Base Leases, unless, after giving effect to such termination, no
Default or Event of Default shall exist) in the ordinary course of business and
(ii) Hedging Obligations;

(h)         other Dispositions by the Consolidated Parties so long as the fair
market value of all such Dispositions pursuant to this clause (h) does not
exceed $1,000,000 in the aggregate in any single Fiscal Year; and

(i)         Dispositions by the Consolidated Parties not otherwise permitted
under this Section 7.6; provided, that (i) at the time of such Disposition, no
Default or Event of Default exists and is continuing (that would not be cured by
such Disposition) or would result from such Disposition and after giving effect
thereto, the Loan Parties are in compliance with the Financial Covenants as of
the date of such Disposition.

Section 7.7.         Transactions with Affiliates. The Loan Parties will not,
and will not permit any of their Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except:

(a)         in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties;

(b)         transactions between or among the REIT Guarantor and its
Subsidiaries in the ordinary course of business;

(c)         the payment of customary fees and reasonable out of pocket costs to
Approved Managers;

(d)         employment and severance arrangements between the REIT Guarantor or
any of its Subsidiaries and their respective officers and employees in the
ordinary course of business and transactions pursuant to stock option plans and
employee benefit plans and arrangements;

 

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(e)        the payment of customary fees and reasonable out of pocket costs to,
and indemnities provided on behalf of, directors, managers, officers, employees
and consultants of the REIT Guarantor and its Subsidiaries in the ordinary
course of business to the extent attributable to the ownership, management or
operation of the REIT Guarantor and its Subsidiaries; and

(f)        any Restricted Payment permitted by Section 7.5.

 

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Section 7.8.        Restrictive Agreements. The Loan Parties will not, and will
not permit any of their Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any agreement (including any lease of Real Estate) that
prohibits, restricts or imposes any condition upon (a) the ability of the Loan
Parties or any of their Subsidiaries to create, incur or permit any Lien as
security for the Obligations upon any of its assets or properties, whether now
owned or hereafter acquired, or (b) the ability of any of the REIT Guarantor’s
Subsidiaries to pay dividends or other distributions with respect to its Capital
Stock, to make or repay loans or advances to the REIT Guarantor or any other
Subsidiary thereof, to Guarantee Indebtedness of the REIT Guarantor or any other
Subsidiary thereof or to transfer any of its property or assets to the REIT
Guarantor or any other Subsidiary thereof; provided that (i) the foregoing shall
not apply to restrictions or conditions imposed by law or by this Agreement or
any other Loan Document; (ii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is sold and such sale is permitted hereunder;
(iii) the foregoing shall not apply to restrictions contained in the leases of
Real Estate listed on Schedule 7.8 as in effect as of the Closing Date; (iv) the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions and conditions apply only to the property or assets securing such
Indebtedness or the Persons liable for such Indebtedness (or Capital Stock of
such Persons); (v) clause (a), and to the extent that it relates to a dividend
or distribution of the lease or any interest therein, clause (b) shall not apply
to customary provisions in leases restricting the assignment thereof; (vi) the
foregoing shall not apply to restrictions contained in Indebtedness permitted
pursuant to Section 7.1(e) or (j) to the extent relating to assets or Persons
acquired after the Closing Date if such restrictions and conditions apply only
to the property or assets securing such Indebtedness; (vii) the foregoing shall
not apply to restrictions contained in leases of Real Estate binding upon the
tenants thereunder (or guarantors thereof); (viii) the foregoing shall not apply
to restrictions contained in any other Indebtedness permitted pursuant to
Sections 7.1(d) or (k), to the extent the restrictions thereunder are no more
restrictive, in any material respect, taken as a whole, than such restrictions
contained herein, taken as a whole; (ix) the foregoing shall not apply to
restrictions contained in any other Indebtedness permitted pursuant to Sections
7.1(c), to the extent the restrictions thereunder are no more restrictive, in
any material respect, taken as a whole, than such restrictions contained in such
Indebtedness on the Closing Date, taken as a whole; (x) the foregoing shall not
apply to customary restrictions in joint venture arrangements and management
contracts; and (xi) the foregoing shall not apply to customary non- assignment
provisions in contracts or other customary restrictions arising under licenses
and other contracts entered into in the ordinary course of business; provided
that such restrictions are limited to assets subject to such licenses and
contracts.

Section 7.9.        Sale and Leaseback Transactions. The Loan Parties will not,
and will not permit any of their Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred (each, a “Sale/Leaseback Transaction”).

 

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Section 7.10.        Hedging Transactions. The Loan Parties will not, and will
not permit any of their Subsidiaries to, enter into any Hedging Transaction,
other than (i) Hedging Transactions entered into in the ordinary course of
business to hedge or mitigate risks to which the Loan Parties or any of their
Subsidiaries is exposed in the conduct of its business or the management of its
liabilities, including, without limitation, any Hedging Transaction entered into
in order to hedge against fluctuations in interest rates or currency values that
arise in connection with any Borrowing or any Indebtedness permitted pursuant to
Section 7.1, (ii) Permitted Bond Hedge Transactions and (iii) Permitted Warrant
Transactions. Solely for the avoidance of doubt, the Loan Parties acknowledge
that a Hedging Transaction entered into for speculative purposes or of a
speculative nature (which shall be deemed to include any Hedging Transaction
(other than a Permitted Bond Hedge Transaction or a Permitted Warrant
Transaction) under which any Loan Party or any of their Subsidiaries is or may
become obliged to make any payment (a) in connection with the purchase by any
third party of any Capital Stock or any Indebtedness or (b) as a result of
changes in the market value of any Capital Stock or any Indebtedness) is not a
Hedging Transaction entered into in the ordinary course of business to hedge or
mitigate risks.

Section 7.11.        Amendment to Organizational Documents. The Loan Parties
will not, and will not permit any of their Subsidiaries to, amend, modify or
waive any of its rights under its certificate of incorporation, bylaws or other
organizational documents in any manner that would have an adverse effect on the
Lenders, the Administrative Agent, the Loan Parties or any of their
Subsidiaries.

Section 7.12.        RESERVED.

Section 7.13.        Business. The Loan Parties will not, and will not permit
any of their Subsidiaries to, engage in any business other than businesses of
the type conducted by the Loan Party and their Subsidiaries on the date hereof
and businesses similar, reasonably related, incidental, ancillary or
complementary thereto. For the avoidance of doubt, “back office services”,
including, without limitation, the provision of payroll services, shall be
deemed complementary to the business of the Loan Parties.

Section 7.14.        Accounting Changes. The Loan Parties will not, and will not
permit any of their Subsidiaries to change the fiscal year of any Loan Party or
of any of their Subsidiaries, except to change the fiscal year of a Subsidiary
to conform its fiscal year to that of the REIT Guarantor.

Section 7.15.        Government Regulation. The Loan Parties will not, and will
not permit any of their Subsidiaries to, be or become subject at any time to any
law, regulation or list of any Governmental Authority of the United States
(including, without limitation, the OFAC list) that prohibits or limits the
Lenders or the Administrative Agent from making any advance or extension of
credit to the Borrower or from otherwise conducting business with the Loan
Parties.

 

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Section 7.16.        Limited Activities of GP LLC. GP LLC shall not engage in
any business activities other than maintaining its existence, owning and
maintaining the general partnership interests in the Borrower and activities
related or incidental thereto and performing its obligations under the Loan
Documents, the Senior Notes (and the agreements related thereto) and the other
agreements contemplated hereby (including any documentation with respect to
Indebtedness of GP LLC permitted hereunder) and activities related or incidental
thereto.

ARTICLE VIII

EVENTS OF DEFAULT

Section 8.1.        Events of Default. If any of the following events (each, an
“Event of Default”) shall have occurred and be continuing:

(a)         any Loan Party shall fail to pay any principal of any Loan or of any
reimbursement obligation in respect of any LC Disbursement, when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment or otherwise;

(b)         any Loan Party shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount payable under subsection (a) of this
Section or an amount related to a Bank Product Obligation) payable under this
Agreement or any other Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five
(5) days;

(c)         any representation or warranty made by the Loan Parties in or in
connection with this Agreement or any other Loan Document (including the
Schedules attached hereto and thereto), or in any amendments or modifications
hereof or waivers hereunder, or in any certificate, report, financial statement
or other document submitted to the Administrative Agent or the Lenders by any
Loan Party or any representative of any Loan Party pursuant to or in connection
with this Agreement or any other Loan Document shall prove to be incorrect in
any material respect (other than any representation or warranty that is
expressly qualified by a Material Adverse Effect or other materiality, in which
case such representation or warranty shall prove to be incorrect in any respect)
when made or submitted;

(d)        any Loan Party shall fail to observe or perform any covenant or
agreement contained in Section 5.3 (with respect to the legal existence of the
REIT Guarantor or the Borrower), Section 5.10, Section 5.13, Section 5.19,
Section 5.22, Section 5.23 or Article VI or VII;

(e)        (i) any Loan Party shall fail to observe or perform any covenant or
agreement contained in Section 5.1 or 5.2, and such failure shall remain
unremedied for fifteen days after the earlier of (x) any Responsible Officer of
any Loan Party becoming aware of such failure, or (y) notice thereof having been
given to the Borrower by the Administrative Agent or any Lender, or (ii) any
Loan Party shall fail to observe or perform any covenant or agreement contained
in this Agreement (other than those referred to in subsections (a), (b), (d) and
(e)(i) of this Section) or any other Loan Document or related to

 

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any Bank Product Obligation, and such failure shall remain unremedied for thirty
(30) days after the earlier of (x) any Responsible Officer of any Loan Party
becoming aware of such failure, or (y) notice thereof having been given to the
Borrower by the Administrative Agent or any Lender;

(f)        any Loan Party or any of their Subsidiaries (whether as primary
obligor or as guarantor or other surety) shall fail to pay any principal of, or
premium or interest on, any Material Indebtedness that is outstanding, when and
as the same shall become due and payable (whether at scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, and without waiver,
specified in the agreement or instrument evidencing or governing such
Indebtedness; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any Material Indebtedness and shall continue
after the applicable grace period, if any, and without waiver, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, the maturity of such Indebtedness; or any Material Indebtedness
shall be declared to be due and payable, or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or any offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case prior to the stated
maturity thereof (in each case, excluding (i) any prepayment or redemption
requirements in connection with a Disposition permitted under this Agreement of
assets that secure Material Indebtedness to the extent such Material
Indebtedness is repaid in connection with such sale and (ii) any offer to prepay
or redeem Indebtedness of any Person or securing any assets acquired in an
Acquisition permitted pursuant to this Agreement); provided that any event or
condition (x) causing or permitting the holders of any convertible Indebtedness
to cause such Indebtedness to be converted into common stock of the REIT
Guarantor (and cash in lieu of fractional shares) and/or cash (in an amount
determined by reference to the price of such common stock) or (y) requiring an
offer to prepay or redeem convertible Indebtedness, or requiring convertible
Indebtedness to be redeemed or prepaid, in each case, shall not constitute an
Event of Default pursuant to this clause (f); provided, further, that if any
default or other event described in this clause (f) shall be cured or waived by
the holder of such Material Indebtedness, then the Default or Event of Default
that occurred under this clause (f) by reason of such default or other event
under such Material Indebtedness shall be deemed likewise to have been cured or
waived hereunder.

(g)        the REIT Guarantor, the Borrower or any of their Material
Subsidiaries shall (i) commence a voluntary case or other proceeding or file any
petition seeking liquidation, reorganization or other relief under any federal,
state or foreign bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a custodian, trustee, receiver, liquidator
or other similar official of it or any substantial part of its property,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (i) of this
subsection, (iii) apply for or consent to the appointment of a custodian,
trustee, receiver, liquidator or other similar official for any the REIT
Guarantor, the Borrower or any such Material Subsidiary or for a substantial
part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general

 

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assignment for the benefit of creditors, or (vi) take any action for the purpose
of effecting any of the foregoing;

(h)        an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the REIT Guarantor, the Borrower or any of their Material
Subsidiaries or its debts, or any substantial part of its assets, under any
federal, state or foreign bankruptcy, insolvency or other similar law now or
hereafter in effect or (ii) the appointment of a custodian, trustee, receiver,
liquidator or other similar official for the REIT Guarantor, the Borrower or any
of their Material Subsidiaries or for a substantial part of its assets, and in
any such case, such proceeding or petition shall remain undismissed for a period
of sixty (60) days or an order or decree approving or ordering any of the
foregoing shall be entered;

(i)        the REIT Guarantor, the Borrower or any of their Material
Subsidiaries shall become unable to pay, shall admit in writing its inability to
pay, or shall fail to pay, its debts as they become due;

(j)        any event of default by any Loan Party under any Material Borrowing
Base Lease shall occur and such event of default shall continue beyond the
applicable grace period, if any, specified in such Material Borrowing Base
Lease;

(k)        any payment event of default by any Eligible Tenant shall occur under
any Ensign Master Lease and such payment event of default shall continue after
the applicable grace period, if any, and without waiver, specified in such
Ensign Master Lease;

(l)        (i) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with other ERISA Events that have
occurred, could reasonably be expected to result in liability to the Loan
Parties and their Subsidiaries in an aggregate amount exceeding $15,000,000,
(ii) there is or arises an Unfunded Pension Liability (not taking into account
Plans with negative Unfunded Pension Liability) in an aggregate amount exceeding
$15,000,000 that could reasonably be expected to result in liability to a Loan
Party, or (iii) there is or arises any potential Withdrawal Liability in an
aggregate amount exceeding $15,000,000 that could reasonably be expected to
result in liability to a Loan Party;

(m)         any final, non-appealable judgment or order for the payment of money
in excess of $15,000,000 in the aggregate, to the extent not adequately covered
by insurance as to which a solvent and unaffiliated insurance company has not
contested or denied coverage, shall be rendered by a court of competent
jurisdiction against any Loan Party or any of their Subsidiaries, and there
shall be a period of sixty (60) consecutive days during which (i) a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect or (ii) such judgment or order shall remain
undischarged, unvacated or unbonded;

(n)        any final, non-appealable, non-monetary judgment or order shall be
rendered by a court of competent jurisdiction against any Loan Party or any of
their Subsidiaries that could reasonably be expected, either individually or in
the aggregate for all such events, to have a Material Adverse Effect, and there
shall be a period of sixty (60)

 

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consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect;

(o)         a Change in Control shall occur or exist; or

(p)        (i) there shall occur any revocation, suspension, termination,
recission, exclusion, non-renewal or forfeiture or any similar final
administrative action with respect to one or more Health Care Permits held by
any Loan Party, any of its Subsidiaries, if any, or any Tenant under an Ensign
Master Lease or any Eligible Tenant that could reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect, or (ii)(x)
any Loan Party, any of its Subsidiaries or any Tenant under an Ensign Master
Lease or any Eligible Tenant shall be named in any action, fully or partially
unsealed, in which the United States has affirmatively intervened, alleging
violation of the federal False Claims Act or any other applicable law and
(y) any Loan Party or any Tenant under an Ensign Master Lease or any Eligible
Tenant shall have offered, agreed or paid to, or received a final judgment
requiring payment to, any Governmental Authority for payment of any fine,
penalty or overpayment, in each case, which could reasonably be expected to have
a Material Adverse Effect;

then, and in every such event (other than an event with respect to the REIT
Guarantor or the Borrower described in subsection (g), (h) or (i) of this
Section) and at any time thereafter during the continuance of such event, the
Administrative Agent may, and upon the written request of the Required Lenders
shall, by notice to the Borrower, take any or all of the following actions, at
the same or different times: terminate the Commitments, whereupon the Commitment
of each Lender shall terminate immediately, declare the principal of and any
accrued interest on the Loans, and all other Obligations owing hereunder, to be,
whereupon the same shall become, due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower, (iii) exercise all remedies contained in any
other Loan Document and (iv) exercise any other remedies available at law or in
equity; provided that, if an Event of Default specified in either subsection
(g), (h) or (i) with respect to the REIT Guarantor or the Borrower shall occur,
the Commitments shall automatically terminate and the principal of the Loans
then outstanding, together with accrued interest thereon, and all fees and all
other Obligations shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Loan Parties.

Section 8.2.        Application of Proceeds. All amounts received by the
Administrative Agent or any Lender after an Event of Default arises shall be
applied as follows:

(a)        first, to the fees and other reimbursable expenses of the
Administrative Agent, the Swingline Lender and the Issuing Bank then due and
payable pursuant to any of the Loan Documents, until the same shall have been
paid in full;

(b)        second, to all reimbursable expenses, if any, of the Lenders then due
and payable pursuant to any of the Loan Documents, until the same shall have
been paid in full;

 

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(c)        third, to the fees and interest then due and payable under the terms
of this Agreement, until the same shall have been paid in full;

(d)        fourth, to the aggregate outstanding principal amount of the Loans,
the LC Exposure, the Bank Product Obligations and the Net Mark-to-Market
Exposure of the Hedging Obligations that constitute Obligations, until the same
shall have been paid in full, allocated pro rata among the Secured Parties based
on their respective pro rata shares of the aggregate amount of such Loans, LC
Exposure, Bank Product Obligations and Net Mark-to-Market Exposure of such
Hedging Obligations;

(e)        fifth, to additional cash collateral for the aggregate amount of all
outstanding Letters of Credit until the aggregate amount of all cash collateral
held by the Administrative Agent pursuant to this Agreement is at least 103% of
the LC Exposure after giving effect to the foregoing clause fifth; and

(f)        sixth, to the extent any amounts remain, to the Borrower or as
otherwise provided by a court of competent jurisdiction.

All amounts allocated pursuant to the foregoing clauses second through fourth to
the Lenders as a result of amounts owed to the Lenders under the Loan Documents
shall be allocated among, and distributed to, the Lenders pro rata based on
their respective Pro Rata Shares; provided that all amounts allocated to that
portion of the LC Exposure comprised of the aggregate undrawn amount of all
outstanding Letters of Credit pursuant to clauses fourth and fifth shall be
distributed to the Administrative Agent, rather than to the Lenders, and held by
the Administrative Agent in an account in the name of the Administrative Agent
for the benefit of the Issuing Bank and the Lenders as cash collateral for the
LC Exposure, such account to be administered in accordance with Section 2.22(g).
All cash collateral for LC Exposure shall be applied to satisfy drawings under
the Letters of Credit as they occur; if any amount remains on deposit on cash
collateral after all letters of credit have either been fully drawn or expired,
such remaining amount shall be applied to other Obligations, if any, in the
order set forth above.

Notwithstanding the foregoing, Bank Product Obligations and Hedging Obligations
shall be excluded from the application described above if the Administrative
Agent has not received written notice thereof, together with such supporting
documentation as the Administrative Agent may request, from the Bank Product
Provider or the Lender-Related Hedge Provider, as the case may be. Each Bank
Product Provider or Lender-Related Hedge Provider that has given the notice
contemplated by the preceding sentence shall, by such notice, be deemed to have
acknowledged and accepted the appointment of the Administrative Agent pursuant
to the terms of Article IX hereof for itself and its Affiliates as if a “Lender”
party hereto.

ARTICLE IX

THE ADMINISTRATIVE AGENT

 

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Section 9.1. Appointment of the Administrative Agent.

(a)        Each Lender irrevocably appoints KeyBank as the Administrative Agent
and authorizes it to take such actions on its behalf and to exercise such powers
as are delegated to the Administrative Agent under this Agreement and the other
Loan Documents, together with all such actions and powers that are reasonably
incidental thereto. The Administrative Agent may perform any of its duties
hereunder or under the other Loan Documents by or through any one or more
sub-agents or attorneys-in-fact appointed by the Administrative Agent. The
Administrative Agent and any such sub- agent or attorney-in-fact may perform any
and all of its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions set forth in this Article
shall apply to any such sub-agent, attorney-in-fact or Related Party and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as the
Administrative Agent.

(b)        The Issuing Bank shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith until
such time and except for so long as the Administrative Agent may agree at the
request of the Required Lenders to act for the Issuing Bank with respect
thereto; provided that the Issuing Bank shall have all the benefits and
immunities (i) provided to the Administrative Agent in this Article with respect
to any acts taken or omissions suffered by the Issuing Bank in connection with
Letters of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term “Administrative Agent” as used in this Article
included the Issuing Bank with respect to such acts or omissions and (ii) as
additionally provided in this Agreement with respect to the Issuing Bank.

 

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Section 9.2.        Nature of Duties of the Administrative Agent. The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default or an Event of Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except those discretionary rights and powers
expressly contemplated by the Loan Documents that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.2), 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, including for the avoidance of doubt any action that
may be in violation of the automatic stay under any Debtor Relief Law or that
may effect a forfeiture, modification or termination of property of a Defaulting
Lender in violation of any Debtor Relief Law, and (c) except as expressly set
forth in the Loan Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Loan Parties or any of their Subsidiaries that is communicated
to or obtained by 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, its sub-agents or its attorneys-in-fact with the consent or at
the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 10.2) or in the absence of its own gross negligence, bad faith or
willful misconduct. The Administrative Agent shall not be responsible for the
negligence or misconduct of any sub-agents or attorneys-in-fact selected by it
with reasonable care. The Administrative Agent shall not be deemed to have
knowledge of any Default or Event of Default unless and until written notice
thereof (which notice shall include an express reference to such event being a
“Default” or “Event of Default” hereunder) is given to the Administrative Agent
by any Loan Party or any Lender, and 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 any 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
and conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article III or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent may consult with legal counsel (including counsel for
the Loan Parties) concerning all matters pertaining to such duties.

 

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Section 9.3.        Lack of Reliance on the Administrative Agent. Each of the
Lenders, the Swingline Lender and the Issuing Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Issuing
Bank or any other Lender 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 of the Lenders, the Swingline Lender and the Issuing Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Issuing Bank or any other Lender and based on such
documents and information as it has deemed appropriate, continue to make its own
decisions in taking or not taking any action under or based on this Agreement,
any related agreement or any document furnished hereunder or thereunder.

Section 9.4.        Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any action or actions (including the failure to act) in connection
with this Agreement, the Administrative Agent shall be entitled to refrain from
such act or taking such act unless and until it shall have received instructions
from such Lenders, and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders where required by the
terms of this Agreement.

Section 9.5.        Reliance by the 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, posting or other
distribution) believed by it to be genuine and to have been signed, sent or made
by the proper Person. The Administrative Agent may also rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person and shall not incur any liability for relying thereon. The Administrative
Agent may consult with legal counsel (including counsel for the Loan Parties),
independent public 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
such counsel, accountants or experts.

Section 9.6.        The Administrative Agent in its Individual Capacity. The
bank serving as the Administrative Agent shall have the same rights and powers
under this Agreement and any other Loan Document in its capacity as a Lender as
any other Lender and may exercise or refrain from exercising the same as though
it were not the Administrative Agent; and the terms “Lenders”, “Required
Lenders”, “Required Revolving Lenders”, “Required First Amendment Term Loan
Lenders” or any similar terms shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity. The bank
acting as the Administrative Agent and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Loan
Parties or any Subsidiary or Affiliate of the Loan Parties as if it were not the
Administrative Agent hereunder.

Section 9.7.         Successor Administrative Agent.

 

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(a)        The Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative Agent,
subject to approval by the Borrower provided that no Default or Event of Default
shall exist at such time. If no successor Administrative Agent shall have been
so appointed, and shall have accepted such appointment within thirty (30) days
after the retiring Administrative Agent gives notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States or any state thereof or a bank which maintains an office in
the United States, having a combined capital and surplus of at least
$500,000,000.

(b)        Upon the acceptance of its appointment as the Administrative Agent
hereunder by a successor, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents. If, within forty-five (45) days after written notice is
given of the retiring Administrative Agent’s resignation under this Section, no
successor Administrative Agent shall have been appointed and shall have accepted
such appointment, then on such 45th day (i) the retiring Administrative Agent’s
resignation shall become effective, (ii) the retiring Administrative Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Required Lenders shall thereafter perform all duties of the
retiring Administrative Agent under the Loan Documents until such time as the
Required Lenders appoint a successor Administrative Agent as provided above.
After any retiring Administrative Agent’s resignation hereunder, the provisions
of this Article shall continue in effect for the benefit of such retiring
Administrative Agent and its representatives and agents in respect of any
actions taken or not taken by any of them while it was serving as the
Administrative Agent.

(c)        In addition to the foregoing, if a Lender becomes, and during the
period it remains, a Defaulting Lender, and if any Default has arisen from a
failure of the Borrower to comply with Section 2.26(a), then the Issuing Bank
and the Swingline Lender may, upon prior written notice to the Borrower and the
Administrative Agent, resign as Issuing Bank or as Swingline Lender, as the case
may be, effective at the close of business Atlanta, Georgia time on a date
specified in such notice (which date may not be less than five (5) Business Days
after the date of such notice).

Section 9.8.        Withholding Tax.

(a) To the extent required by any applicable law, the Administrative Agent may
withhold from any interest payment to any Lender an amount equivalent to any
applicable withholding tax. If the Internal Revenue Service or any authority of
the United States or any other jurisdiction asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not delivered or was
not properly executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstances that rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason),
such

 

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Lender shall indemnify the Administrative Agent (to the extent that the
Administrative Agent has not already been reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so) fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax or otherwise,
including penalties and interest, together with all expenses incurred, including
legal expenses, allocated staff costs and any out of pocket expenses.

(b)        Without duplication of any indemnity provided under subsection (a) of
this Section, each Lender shall also indemnify the Administrative Agent, within
ten (10) days after written demand therefor, for (i) any Indemnified Taxes
attributable to such Lender (to the extent that the Administrative Agent has not
already been reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to
comply with the provisions of Section 10.4(d) relating to the maintenance of a
Participant Register and (iii) any Excluded Taxes attributable to such Lender,
in each case, that are payable or paid by the Administrative Agent in connection
with any Loan Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to any Lender by the Administrative Agent
shall be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this subsection.

Section 9.9.        The Administrative Agent May File Proofs of Claim.

(a)        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 any Revolving Credit
Exposure 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 the Borrower) shall be entitled and empowered, by intervention in
such proceeding or otherwise:

(i)        to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans or Revolving Credit Exposure
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 Issuing Bank and the Administrative Agent (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Lenders, the Issuing Bank and the Administrative Agent and its agents and
counsel and all other amounts due the Lenders, the Issuing Bank and the
Administrative Agent under Section 10.3) allowed in such judicial proceeding;
and

(ii)        to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same.

 

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(b) Any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the Issuing Bank to make such payments to the Administrative
Agent and, if the Administrative Agent shall consent to the making of such
payments directly to the Lenders and the Issuing Bank, 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 10.3.

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
Issuing Bank 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 9.10.        Authorization to Execute Other Loan Documents. Each Lender
hereby authorizes the Administrative Agent to execute on behalf of all Lenders
all Loan Documents other than this Agreement.

Section 9.11.        Collateral and Guaranty Matters. The Lenders irrevocably
authorize the Administrative Agent, at its option and discretion to effectuate
the releases and subordination agreements contemplated by Section 10.18.

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release any Loan
Party from its obligations under the applicable Loan Documents pursuant to
Section 10.18. In each case as specified in Section 10.18, the Administrative
Agent is authorized by the Lenders and the Borrower, at the Borrower’s expense,
to execute and deliver to the applicable Loan Party such documents as such Loan
Party may reasonably request to evidence the release such Loan Party from its
obligations under the applicable Loan Documents, in each case in accordance with
the terms of the Loan Documents and Section 10.18.

 

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Section 9.12.        Co-Documentation Agents; Co-Syndication Agents. Each Lender
hereby designates Barclays Bank PLC and RBC Capital Markets as Co-Documentation
Agents and agrees that the Co-Documentation Agents shall have no duties or
obligations under any Loan Documents to any Lender or any Loan Party. Each
Lender hereby designates Raymond James Bank, N.A. and BMO Capital Markets as
Co-Syndication Agents and agrees that the Co-Syndication Agents shall have no
duties or obligations under any Loan Documents to any Lender or any Loan Party.

Section 9.13.        Reserved.

Section 9.14. Bank Product Obligations and Hedging Obligations Notwithstanding
any other provision of this Article to the contrary, the Administrative Agent
shall not be required to verify the payment of, or that other satisfactory
arrangements have been made with respect to, Bank Product Obligations and
Hedging Obligations unless the Administrative Agent has received written notice
of such Obligations, together with such supporting documentation as the
Administrative Agent may request, from the applicable Bank Product Provider or
Lender-Related Hedge Provider, as the case may be.

ARTICLE X

MISCELLANEOUS

Section 10.1.        Notices.

(a)        Written Notices.

(i)        Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications to any
party herein to be effective shall be in writing and shall be delivered by hand
or overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:

 

To the Loan Parties:

 

CTR Partnership, L.P.

905 Calle Amanecer, Suite 300

San Clemente, CA 92673

Attention: William Wagner

Telecopy Number: (949) 540-3002

 

CareTrust REIT, Inc.

905 Calle Amanecer, Suite 300

San Clemente, CA 92673

Attention: William Wagner

Telecopy Number: (949) 540-3002

With a copy to:

 

Kirkland and Ellis LLP

333 South Hope Street

Los Angeles, CA 90071

Attention: David M. Nemecek, P.C.

Telecopy Number: (213) 808-8107

 

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To the Administrative Agent:

 

Email: david.nemecek@kirkland.com

 

KeyBank National Association

1200 Abernathy Road NE, Suite 1550

Atlanta, Georgia 30328

Attention: Eric Hafertepen

Telecopy Number: 770-510-2138

 

KeyBank Real Estate Capital – Healthcare Services

Mailcode: OH–01–51-0311

4910 Tiedeman Road

Brooklyn, Ohio 44144

Attention: Marc Drummond

 

KeyBank National Association

1301 Fifth Avenue, 25th Floor (Rainier Tower)

Mail Code WA-31-13-2513

Seattle, WA 98101

Attention: William Chalmers

 

KeyBank National Association

1301 Fifth Avenue, 25th Floor (Rainier Tower)

Mail Code WA-31-13-2513

Seattle, WA 98101

Attention: Bellini Lacey

 

With a copy to:

 

Riemer & Braunstein LLP

Three Center Plaza

Boston, MA 02108

Attention: Kevin J. Lyons

Telecopy Number: (617) 880-3456

Email: klyons@riemerlaw.com

To the Issuing Bank:

 

KeyBank National Association

1200 Abernathy Road NE, Suite 1550

Atlanta, Georgia 30328

Attention: Eric Hafertepen

Telecopy Number: 770-510-2138

 

KeyBank Real Estate Capital – Healthcare Services

Mailcode: OH–01–51-0311

4910 Tiedeman Road

Brooklyn, Ohio 44144

 

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Attention: Marc Drummond

 

KeyBank National Association

1301 Fifth Avenue, 25th Floor (Rainier Tower)

Mail Code WA-31-13-2513

Seattle, WA 98101

Attention: William Chalmers

 

KeyBank National Association

1301 Fifth Avenue, 25th Floor (Rainier Tower)

Mail Code WA-31-13-2513

Seattle, WA 98101

Attention: Bellini Lacey

 

To the Swingline Lender:

 

KeyBank National Association

1200 Abernathy Road NE, Suite 1550

Atlanta, Georgia 30328

Attention: Eric Hafertepen

 

Telecopy Number: 770-510-2138

KeyBank Real Estate Capital – Healthcare Services

Mailcode: OH–01–51-0311

4910 Tiedeman Road

Brooklyn, Ohio 44144

Attention: Marc Drummond

 

KeyBank National Association

1301 Fifth Avenue, 25th Floor (Rainier Tower)

Mail Code WA-31-13-2513

Seattle, WA 98101

Attention: William Chalmers

 

KeyBank National Association

1301 Fifth Avenue, 25th Floor (Rainier Tower)

Mail Code WA-31-13-2513

Seattle, WA 98101

Attention: Bellini Lacey

To any other Lender:

  the address set forth in the Administrative Questionnaire or the Assignment
and Acceptance executed by such Lender

 

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Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All such notices
and other communications shall be effective upon actual receipt by the relevant
Person or, if delivered by overnight courier service, upon the first Business
Day after the date deposited with such courier service for overnight (next-day)
delivery or, if sent by telecopy, upon transmittal in legible form by facsimile
machine or, if mailed, upon the third Business Day after the date deposited into
the mail or, if delivered by hand, upon delivery; provided that notices
delivered to the Administrative Agent, the Issuing Bank or the Swingline Lender
shall not be effective until actually received by such Person at its address
specified in this Section.

(ii)        Any agreement of the Administrative Agent, the Issuing Bank or any
Lender herein to receive certain notices by telephone or facsimile is solely for
the convenience and at the request of the Borrower. The Administrative Agent,
the Issuing Bank and each Lender shall be entitled to rely on the authority of
any Person purporting to be a Person authorized by the Borrower to give such
notice and the Administrative Agent, the Issuing Bank and the Lenders shall not
have any liability to the Borrower or other Person on account of any action
taken or not taken by the Administrative Agent, the Issuing Bank or any Lender
in reliance upon such telephonic or facsimile notice. The obligation of the
Borrower to repay the Loans and all other Obligations hereunder shall not be
affected in any way or to any extent by any failure of the Administrative Agent,
the Issuing Bank or any Lender to receive written confirmation of any telephonic
or facsimile notice or the receipt by the Administrative Agent, the Issuing Bank
or any Lender of a confirmation which is at variance with the terms understood
by the Administrative Agent, the Issuing Bank and such Lender to be contained in
any such telephonic or facsimile notice.

(b)        Electronic Communications.

(i)        Notices and other communications to the Lenders and the Issuing Bank
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 Issuing Bank pursuant to Article II unless such Lender, the
Issuing Bank, as applicable, and the Administrative Agent have agreed to receive
notices under any Section thereof by electronic communication and have agreed to
the procedures governing such communications. The Administrative Agent or the
Borrower 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.

(ii)        Unless the Administrative Agent otherwise prescribes, (A) 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

 

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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 (B) 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 (A) of notification that such notice or
communication is available and identifying the website address therefor.

(c)        Certification of Public Information. The Borrower and each Lender
acknowledge that certain of the Lenders may be Public Lenders and, if documents
or notices required to be delivered pursuant to Section 5.1 or Section 5.2
otherwise are being distributed through Syndtrak, Intralinks or any other
Internet or intranet website or other information platform (the “Platform”), any
document or notice that the Borrower has indicated contains Non-Public
Information shall not be posted on that portion of the Platform designated for
such Public Lenders. The Borrower agrees to clearly designate all information
provided to the Administrative Agent by or on behalf of the Borrower which is
suitable to make available to Public Lenders. If the Borrower has not indicated
whether a document or notice delivered pursuant to Section 5.1 or Section 5.2
contains Non-Public Information, the Administrative Agent reserves the right to
post such document or notice solely on that portion of the Platform designated
for Lenders who wish to receive Non-Public Information.

(d)        Private Side Information Contacts. Each Public Lender agrees to cause
at least one individual at or on behalf of such Public Lender to at all times
have selected the “Private Side Information” or similar designation on the
content declaration screen of the Platform in order to enable such Public Lender
or its delegate, in accordance with such Public Lender’s compliance procedures
and applicable law, including Unites States federal and state securities laws,
to make reference to information that is not made available through the “Public
Side Information” portion of the Platform and that may contain Non-Public
Information with respect to the REIT Guarantor, its Affiliates or any of their
securities or loans for purposes of United States federal or state securities
laws. In the event that any Public Lender has determined for itself not to
access any information disclosed through the Platform or otherwise, such Public
Lender acknowledges that (i) other Lenders may have availed themselves of such
information and (ii) neither any Loan Party nor the Administrative Agent has any
responsibility for such Public Lender’s decision to limit the scope of the
information it has obtained in connection with this Agreement and the other Loan
Documents.

Section 10.2.        Waiver; Amendments.

(a)        No failure or delay by the Administrative Agent, the Issuing Bank or
any Lender in exercising any right or power hereunder or under any other Loan
Document, and no course of dealing between the Borrower and the Administrative
Agent or any Lender, shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power hereunder
or thereunder. The rights and remedies of the Administrative Agent, the Issuing

 

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Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies provided by law. No waiver of
any provision of this Agreement or of any other Loan Document or consent to any
departure by the Loan Parties therefrom shall in any event be effective unless
the same shall be permitted by subsection (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or the issuance of a Letter of Credit shall not be construed as
a waiver of any Default or Event of Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default or Event of Default at the time.

(b)        No amendment or waiver of any provision of this Agreement or of the
other Loan Documents (other than the Fee Letter), nor consent to any departure
by the any Loan Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Loan Parties and the Required Lenders, or
the Loan Parties and the Administrative Agent with the consent of the Required
Lenders, and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided
that, in addition to the consent of the Required Lenders, no amendment, waiver
or consent shall:

(i)        increase the Commitment of any Lender without the written consent of
such Lender;

(ii)        reduce the principal amount of any Loan or LC Disbursement or reduce
the rate of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender directly affected thereby (provided that any
change to the calculation of the Consolidated Leverage Ratio or the component
definitions used therein shall not require consent of each Lender directly
affected thereby and shall only be subject to Required Lender approval);

(iii)        postpone the date fixed for any payment (other than any mandatory
prepayment) of any principal of, or interest on, any Loan or LC Disbursement or
any fees hereunder or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date for the termination or reduction of any Commitment,
without the written consent of each Lender directly affected thereby (provided
that any change to the calculation of the Consolidated Leverage Ratio or the
component definitions used therein shall not require consent of each Lender
directly affected thereby and shall only be subject to Required Lender
approval);

(iv)        change Section 2.21(b) or (c) or Section 8.2 in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender directly affected thereby;

(v)        change any of the provisions of this subsection (b) or the percentage
set forth in the definition of “Required Lenders” or any other provision hereof
specifying the percentage of Lenders which are required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the consent of each Lender; or

 

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(vi)        release all or substantially all of the guarantors, or limit the
liability of all or substantially all such guarantors, under any guaranty
agreement guaranteeing any of the Obligations, without the written consent of
each Lender;

provided, further, that (x) no such amendment, waiver or consent shall amend,
modify or otherwise affect the rights, duties or obligations of the
Administrative Agent, the Swingline Lender or the Issuing Bank without the prior
written consent of such Person, (y) no amendment, waiver or consent shall,
unless signed by the Loan Parties and the Required Revolving Lenders, or the
Loan Parties and the Administrative Agent with the consent of the Required
Revolving Lenders:

(1)        amend or waive compliance with the conditions precedent to the
obligations of the Revolving Lenders to make any Revolving Loan or LC
Disbursement;

(2)        amend or waive non-compliance with any provision of Section 2.12;

(3)        waive any Default or Event of Default for the purpose of satisfying
the conditions precedent to the obligations of the Revolving Lenders to make any
Revolving Loan or LC Disbursement; or

(4)        change any of the provisions of this clause (y);

and (z) no amendment, waiver or consent shall, unless signed by the Loan Parties
and the Required First Amendment Term Loan Lenders, or the Loan Parties and the
Administrative Agent with the consent of the Required First Amendment Term Loan
Lenders:

(1)        amend or waive compliance with the conditions precedent to the
obligations of the First Amendment Term Loan Lenders to make the First Amendment
Term Loan; or

(2)        change any of the provisions of this clause (z);

provided, further, that no such amendment, waiver or consent shall change the
percentage contained (i) in the definition of “Required Revolving Lenders” or
any other provision hereof specifying the percentage of Revolving Lenders which
are required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the consent of each
Revolving Lender or (ii) in the definition of “Required First Amendment Term
Loan Lenders” or any other provision hereof specifying the percentage of First
Amendment Term Loan Lenders which are required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
without the consent of each First Amendment Term Loan Lender.

(c)        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, and amounts payable to such Lender hereunder may not be permanently
reduced, without the

 

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consent of such Lender (other than reductions in fees and interest in which such
reduction does not disproportionately affect such Lender). Notwithstanding
anything contained herein to the contrary, this Agreement may be amended and
restated without the consent of any Lender (but with the consent of the Loan
Parties and the Administrative Agent) if, upon giving effect to such amendment
and restatement, such Lender shall no longer be a party to this Agreement (as so
amended and restated), the Commitments of such Lender shall have terminated (but
such Lender shall continue to be entitled to the benefits of Sections 2.18,
2.19, 2.20 and 10.3), such Lender shall have no other commitment or other
obligation hereunder and such Lender shall have been paid in full all principal,
interest and other amounts owing to it or accrued for its account under this
Agreement.

(d)        Notwithstanding the foregoing, this Agreement may be amended (or
amended and restated) with the written consent of the Required Lenders,
Administrative Agent and Borrower (a) to add one or more additional credit
facilities to this Agreement and to permit extensions of credit from time to
time outstanding thereunder and the accrued interest and fees in respect thereof
to share ratably in the benefits of this Agreement and the other Loan Documents
with the Term Loans and the Revolving Loans and the accrued interest and fees in
respect thereof and (b) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders and, as applicable,
Required Revolving Lenders or Required First Amendment Term Loan Lenders.

(e)        Notwithstanding anything to the contrary herein, any Loan Document
may be waived, amended, supplemented or modified pursuant to an agreement or
agreements in writing entered into by the Borrower and the Administrative Agent
(without the consent of any Lender) solely to effect administrative changes that
are not adverse to any Lender or to correct administrative errors or omissions
or to cure an ambiguity, defect or error. Notwithstanding anything to the
contrary herein, additional extensions of credit consented to by the Required
Lenders shall be permitted hereunder on a ratable basis with the existing Loans
(including sharing of mandatory prepayments) and, with respect of Loans of the
same Class, voluntary prepayments.

Section 10.3.        Expenses; Indemnification.

(a)        The Loan Parties shall pay (i) all reasonable, documented
out-of-pocket costs and expenses of the Administrative Agent, the Lead Arrangers
and their Affiliates, including the reasonable and documented fees, charges and
disbursements of one outside counsel for the Administrative Agent, the Lead
Arrangers and their Affiliates, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents and any amendments, modifications or waivers thereof (whether or not
the transactions contemplated in this Agreement or any other Loan Document shall
be consummated), (ii) all reasonable, documented out-of-pocket expenses incurred
by the Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and
(iii) all documented out-of-pocket costs and expenses, which shall be limited,
in the case of outside counsel, to the reasonable fees, charges and
disbursements of one outside counsel to the Administrative Agent and the
Lenders, any local counsel in any applicable jurisdiction and any special
regulatory counsel (and, solely in the case of a conflict of interest, one

 

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additional of each such counsel for each group of similarly situated Lenders)
incurred by the Administrative Agent, the Issuing Bank or any Lender in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made or any Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

(b)        The Loan Parties shall indemnify the Administrative Agent (and any
sub-agent thereof), each Lender and the Issuing Bank, 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 (excluding
lost profits), claims, penalties, damages, liabilities and related expenses
(including the reasonable and documented out-of-pocket fees, charges and
disbursements of one primary counsel for the Indemnitees, taken as a whole, one
local counsel for the Indemnitees in each applicable jurisdiction and any
special regulatory counsel (and, solely in the case of a conflict of interest,
one additional of each such counsel for each group of similarly situated
Indemnitees)), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the 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 or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the Issuing
Bank 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 the Loan
Parties or any of their Subsidiaries, or any Environmental Liability related in
any way to the Loan Parties or any of their 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 any 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, penalties,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and non-appealable judgment to have resulted from (w) the
gross negligence, bad faith or willful misconduct of such Indemnitee, (x) a
material breach of such Indemnitee’s obligations hereunder or under any other
Loan Document, (y) unless an Event of Default shall be in existence, settlement
without the written consent of the Borrower (not to be unreasonably withheld,
conditioned or delayed) or (z) arise out of any claim, litigation, investigation
or proceeding brought by such Indemnitee against another Indemnitee (other than
any claim, litigation, investigation or proceeding brought by or against the
Administrative Agent acting in its capacity as such. No Indemnitee shall be
liable for any damages arising from the use by others of any information or
other materials obtained through Syndtrak, Intralinks or any other Internet or
intranet website, except as a result of such Indemnitee’s gross negligence, bad
faith or willful misconduct as determined by a court of competent jurisdiction
in a final and non-appealable judgment.

 

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(c)        The Loan Parties shall pay, and hold the Administrative Agent, the
Issuing Bank and each of the Lenders harmless from and against, any and all
present and future stamp, documentary, and other similar taxes with respect to
this Agreement and any other Loan Documents or any payments due thereunder, and
save the Administrative Agent, the Issuing Bank and each Lender harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission to pay such taxes.

(d)        To the extent that the Loan Parties fail to pay any amount required
to be paid to the Administrative Agent, the Issuing Bank or the Swingline Lender
under subsection (a), (b) or (c) hereof, each Lender severally agrees to pay to
the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case
may be, such Lender’s pro rata share (in accordance with its respective
Revolving Commitment (or Revolving Credit Exposure, as applicable) and Term Loan
determined as of the time that the unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified payment, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent, the
Issuing Bank or the Swingline Lender in its capacity as such.

(e)        To the extent permitted by applicable law, each party hereto waives,
and agrees not to assert, any claim against any other party hereto, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to actual or direct 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 therein, any Loan
or any Letter of Credit or the use of proceeds thereof.

(f)        All amounts due under this Section shall be payable promptly after
written demand therefor.

Section 10.4.        Successors and Assigns.

(a)        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 the Borrower may not 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 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 and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

(b)        Any Lender may at any time assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its

 

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Commitments, Loans and other Revolving Credit Exposure at the time owing to it);
provided that any such assignment shall be subject to the following conditions:

(i)         Minimum Amounts.

(A)        in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitments, Loans and other Revolving Credit Exposure at the
time owing to it or in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund, no minimum amount need be assigned; and

(B)         in any case not described in subsection (b)(i)(A) of this Section,
the aggregate amount of the Commitment (which for this purpose includes Loans
and Revolving Credit Exposure outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the Loans
and Revolving Credit Exposure of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent or, if “Trade Date”
is specified in the Assignment and Acceptance, as of the Trade Date) shall not
be less than $1,000,000 with respect to Term Loans and $5,000,000 with respect
to Revolving Loans and the Revolving Commitments and in minimum increments of
$1,000,000, unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld, conditioned or delayed).

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

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

(A)         the consent of the Borrower (such consent not to be unreasonably
withheld, conditioned or delayed) shall be required unless (x) an Event of
Default has occurred and is continuing at the time of such assignment or
(y) (1) in the case of Term Loans such assignment is to a Lender, an Affiliate
of such Lender or an Approved Fund of such Lender, or (2) in the case of
Revolving Commitments or Revolving Loans, such assignment is to a Lender holding
Revolving Commitments or an Affiliate of such Lender or an Approved Fund of such
Lender;

 

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(B)         the consent of the Administrative Agent (such consent not to be
unreasonably withheld, conditioned or delayed) shall be required unless such
assignment is of a Term Loan to a Lender, an Affiliate of such Lender or an
Approved Fund of such Lender; and

(C)         the consent of the Issuing Bank (such consent not to be unreasonably
withheld, conditioned or delayed) shall be required for any assignment that
increases the obligation of the assignee to participate in exposure under one or
more Letters of Credit (whether or not then outstanding), and the consent of the
Swingline Lender (such consent not to be unreasonably withheld, conditioned or
delayed) shall be required for any assignment in respect of the Revolving
Commitments unless such assignment is to a Lender holding Revolving Commitments
or Revolving Loans, an Affiliate of such Lender or an Approved Fund of such
Lender.

(iv)         Assignment and Acceptance. The parties to each assignment shall
deliver to the Administrative Agent (A) a duly executed Assignment and
Acceptance, (B) a processing and recordation fee of $3,500 (except with respect
to any assignment by a Lender to one of its Affiliates), (C) an Administrative
Questionnaire unless the assignee is already a Lender and (D) the documents
required under Section 2.20(e).

(v)         No Assignment to the Borrower. No such assignment shall be made to
the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

(vi)         No Assignment to Natural Persons, Defaulting Lenders or
Disqualified Institutions. No such assignment shall be made to a natural person,
a Defaulting Lender or a Disqualified Institution.

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 Acceptance, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Acceptance, 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 Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.18, 2.19, 2.20 and 10.3 with
respect to facts and circumstances occurring prior to the effective date of such
assignment; provided that, except to the extent otherwise expressly agreed by
the affected parties, no assignment by a Defaulting Lender will constitute a
waiver or release of any claim of any party hereunder arising from such Lender’s
having been a Defaulting 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. If the consent of the Borrower to an assignment
is required hereunder (including a consent to an assignment which does not meet
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thresholds specified above), the Borrower shall be deemed to have given its
consent unless it shall object thereto by written notice to the Administrative
Agent within ten (10) Business Days after notice thereof has actually been
delivered by the assigning Lender (through the Administrative Agent) to the
Borrower.

(c)         The Administrative Agent, acting solely for this purpose as an agent
of the Borrower, shall maintain at one of its offices in Atlanta, Georgia a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans and Revolving Credit Exposure owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”).
Information contained in the Register with respect to any Lender shall be
available for inspection by such Lender at any reasonable time and from time to
time upon reasonable prior notice; information contained in the Register shall
also be available for inspection by the Borrower at any reasonable time and from
time to time upon reasonable prior notice. In establishing and maintaining the
Register, the Administrative Agent shall serve as the Borrower’s agent solely
for tax purposes and solely with respect to the actions described in this
Section, and the Borrower hereby agrees that, to the extent KeyBank serves in
such capacity, KeyBank and its officers, directors, employees, agents,
sub-agents and affiliates shall constitute “Indemnitees”.

(d)         Any Lender may at any time, without the consent of, or notice to,
the Borrower, the Administrative Agent, the Swingline Lender or the Issuing
Bank, sell participations to any Person (other than a natural person, a
Disqualified Institution, the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent, the Issuing
Bank, the Swingline Lender and the other Lenders 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, modification or waiver with respect to the following to the
extent affecting such Participant: (i) increase the Commitment of such Lender;
(ii) reduce the principal amount of any Loan or LC Disbursement or reduce the
rate of interest thereon, or reduce any fees payable hereunder (excluding the
right of any Participant to consent to changes in the calculation of the
Consolidated Leverage Ratio or the component definitions thereof);
(iii) postpone the date fixed for any payment of any principal of, or interest
on, any Loan or LC Disbursement or any fees hereunder or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date for the
termination or reduction of any Commitment (excluding the right of any
Participant to consent to changes in the calculation of the Consolidated
Leverage Ratio or the component definitions thereof); (iv) change
Section 2.21(b) or (c) in a manner that would alter

 

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the pro rata sharing of payments required thereby; (v) change any of the
provisions of Section 10.2(b) or the definition of “Required Lenders”, “Required
Revolving Lenders” or “Required First Amendment Term Loan Lenders” or any other
provision hereof specifying the number or percentage of Lenders which are
required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder; or (vi) release all or
substantially all of the guarantors, or limit the liability of all or
substantially all such guarantors, under any guaranty agreement guaranteeing any
of the Obligations;. Subject to subsection (e) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.18,
2.19, and 2.20 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to subsection (b) of this Section; provided that
such Participant agrees to be subject to Section 2.24 as though it were a
Lender. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 10.7 as though it were a Lender; provided that such
Participant agrees to be subject to Section 2.21 as though it were a Lender.

Each Lender that sells a participation shall, acting solely for this purpose as
a non- fiduciary agent of the Borrower, maintain a register in the United States
on which it enters the name and address of each Participant and the principal
amounts (and stated interest) of each Participant’s interest in the Loans or
other obligations under the Loan Documents (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion
of the Participant Register to any Person (including the identity of any
Participant or any information relating to a Participant’s interest in any
commitments, loans, letters of credit or other obligations under any Loan
Document) except to the extent that such disclosure is necessary to establish
that such commitment, loan, letter of credit or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive, absent
manifest error, and such Lender shall treat each person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary.

(e)         A Participant shall not be entitled to receive any greater payment
under Sections 2.18 and 2.20 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 Borrower’s
prior written consent. A Participant shall not be entitled to the benefits of
Section 2.20 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 2.20(e) and (f) as though it were a Lender.

(f)         Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including, without limitation, 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)         The Administrative Agent shall not have any responsibility for
ensuring that an assignee of, or a participant in, a Loan or Revolving
Commitment is not a

 

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Disqualified Institution, and shall not have any liability in the event that
Loans or Revolving Commitments, or a participation therein, are transferred to
any Disqualified Institution.

(h)         For the avoidance of doubt, the addition of any Person to the
Disqualified Institution List shall solely apply prospectively and shall have no
effect with respect to any assignment or participation that occurs or any Loans,
Commitments or Revolving Credit Exposure acquired by such Person, in each case
prior to the date such Person is added to the Disqualified Institution List.

Section 10.5.         Governing Law; Jurisdiction; Consent to Service of
Process.

(a)         This Agreement and the other Loan Documents and any claim,
controversy, dispute or cause of action (whether in contract or tort or
otherwise) based upon, arising out of or relating to this Agreement or any other
Loan Document (except, as to any other Loan Document, as expressly set forth
therein) and the transactions contemplated hereby and thereby shall be construed
in accordance with and be governed by the law of the State of New York.

(b)         Each of the Loan Parties hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of the
United States District Court for the Southern District of New York, and of the
Supreme Court of the State of New York sitting in New York county, and of any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document or the transactions
contemplated hereby or thereby, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such District Court or New York state court or, to the extent
permitted by applicable law, such appellate court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, the Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against any Loan Party or its
properties in the courts of any jurisdiction.

(c)         Each of the Loan Parties irrevocably and unconditionally waives any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding described in subsection (b) of this Section and
brought in any court referred to in subsection (b) of this Section. Each of the
parties hereto irrevocably waives, to the fullest extent permitted by applicable
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

(d)         Each party to this Agreement irrevocably consents to the service of
process in the manner provided for notices in Section 10.1. Nothing in this
Agreement or in any other Loan Document will affect the right of any party
hereto to serve process in any other manner permitted by law.

 

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Section 10.6.         WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 10.7.         Right of Set-off. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, each Lender and the Issuing Bank shall have the right, at any time or
from time to time upon the occurrence and during the continuance of an Event of
Default, without prior notice to any Loan Party, any such notice being expressly
waived by the Loan Parties to the extent permitted by applicable law, to set off
and apply against all deposits (general or special, time or demand, provisional
or final) of the Loan Parties at any time held or other obligations at any time
owing by such Lender and the Issuing Bank to or for the credit or the account of
the Loan Parties against any and all Obligations held by such Lender or the
Issuing Bank, as the case may be, irrespective of whether such Lender or the
Issuing Bank shall have made demand hereunder and although such Obligations may
be unmatured. Each Lender and the Issuing Bank agrees promptly to notify the
Administrative Agent and the Borrower after any such set-off and any application
made by such Lender or the Issuing Bank, as the case may be; provided that the
failure to give such notice shall not affect the validity of such set-off and
application. Each Lender and the Issuing Bank agrees to apply all amounts
collected from any such set-off to the Obligations before applying such amounts
to any other Indebtedness or other obligations owed by the Loan Parties and any
of its Subsidiaries to such Lender or the Issuing Bank.

Section 10.8.         Counterparts; Integration. This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. This Agreement, the Fee Letter, the
other Loan Documents, and any separate letter agreements relating to any fees
payable to the Administrative Agent and its Affiliates constitute the entire
agreement among the parties hereto and thereto and their affiliates regarding
the subject matters hereof and thereof and supersede all prior agreements and
understandings, oral or written, regarding such subject matters. Delivery of an
executed counterpart to this Agreement or any other Loan Document by facsimile
transmission or by electronic mail in pdf format shall be as effective as
delivery of a manually executed counterpart hereof.

 

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Section 10.9.         Survival. All covenants, agreements, representations and
warranties made by the Loan Parties herein and in the certificates, reports,
notices or other instruments delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
other Loan Documents and the making of any Loans and issuance of any Letters of
Credit, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent, the Issuing Bank or
any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.18, 2.19, 2.20, and 10.3 and Article IX shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.

Section 10.10.         Severability. Any provision of this Agreement or any
other Loan Document held to be illegal, invalid or unenforceable in any
jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of
such illegality, invalidity or unenforceability without affecting the legality,
validity or enforceability of the remaining provisions hereof or thereof; and
the illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

 

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Section 10.11.         Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of any
information relating to the Loan Parties or any of their Subsidiaries or any of
their respective businesses, to the extent designated in writing as confidential
and provided to it by the Loan Parties or any of their Subsidiaries, other than
any such information that is available to the Administrative Agent, the Issuing
Bank or any Lender on a non-confidential basis prior to disclosure by the Loan
Parties or any of their Subsidiaries, except that such information may be
disclosed (i) to any Related Party of the Administrative Agent, the Issuing Bank
or any such Lender including, without limitation, accountants, legal counsel and
other advisors who need to know such information in connection with the
transactions contemplated hereby and are informed of the confidential nature of
such information, (ii) pursuant to the order of any court or administrative
agency or in any pending legal or administrative proceeding, or otherwise as
required by applicable law or regulation or compulsory legal process (in which
case such disclosing party agrees to inform the Borrower reasonably promptly
thereof prior to such disclosure to the extent not prohibited by law, rule or
regulation), (iii) to the extent requested by any regulatory agency or authority
purporting to have jurisdiction over such disclosing party or its Affiliates
(including any self-regulatory authority such as the National Association of
Insurance Commissioners) (in which case such disclosing party agrees to inform
the Borrower reasonably promptly thereof prior to such disclosure to the extent
not prohibited by law, rule or regulation), (iv) to the extent that such
information becomes publicly available other than as a result of a breach of
this Section, or which becomes available to the Administrative Agent, the
Issuing Bank, any Lender or any Related Party of any of the foregoing on a
non-confidential basis from a source other than the Loan Parties or any of their
Subsidiaries that is not, to such disclosing party’s knowledge, subject to
confidentiality obligations to the Loan Parties and their Subsidiaries, (v) in
connection with the exercise of any remedy hereunder or under any other Loan
Documents or any suit, action or proceeding relating to this Agreement or any
other Loan Documents or the enforcement of rights hereunder or thereunder,
(vi) subject to execution by such Person of an agreement containing provisions
substantially the same as those of this Section (or language substantially
similar to this paragraph, including provisions customary in the syndicated loan
market), to (A) any assignee of or Participant in, or any prospective assignee
of or Participant in, any of such disclosing party’s rights or obligations under
this Agreement, or (B) any direct or indirect actual or prospective contractual
counterparty (and its Related Parties) to any swap, derivative or similar
product, (vii) to the CUSIP Service Bureau or any similar organization, for
purposes of establishing a “due diligence” defense, (ix) to the extent that such
information is independently developed by such disclosing party (other than with
confidential information provided to such disclosing party by the Loan Parties
and their Subsidiaries), (x) to industry trade organizations, general
information with respect to this Agreement that is customary for inclusion in
league table measurements or (xi) with the consent of the Borrower. Any Person
required to maintain the confidentiality of any information as provided for 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 its own
confidential information.

 

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Section 10.12.         Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which may be treated as
interest on such Loan under applicable law (collectively, the “Charges”), shall
exceed the maximum lawful rate of interest (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by a Lender holding such
Loan in accordance with applicable law, the rate of interest payable in respect
of such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest and
Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Rate to
the date of repayment (to the extent permitted by applicable law), shall have
been received by such Lender.

Section 10.13.         Waiver of Effect of Corporate Seal. The Loan Parties
represent and warrant that none of them is required to affix its corporate seal
to this Agreement or any other Loan Document pursuant to any Requirement of Law,
agrees that this Agreement is delivered by the Loan Parties under seal and waive
any shortening of the statute of limitations that may result from not affixing
the corporate seal to this Agreement or such other Loan Documents.

Section 10.14.         Patriot Act. The Administrative Agent and each Lender
hereby notifies the Loan Parties that, pursuant to the requirements of the
Patriot Act, it is required to obtain, verify and record information that
identifies each Loan Party, which information includes the name and address of
such Loan Party and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify such Loan Party in accordance
with the Patriot Act.

 

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Section 10.15.        No Advisory or Fiduciary Responsibility. In connection
with all aspects of each transaction contemplated hereby (including in
connection with any amendment, waiver or other modification hereof or of any
other Loan Document), each of the Loan Parties acknowledges and agrees and
acknowledges its Affiliates’ understanding that (i)(A) the services regarding
this Agreement provided by the Administrative Agent and/or the Lenders are
arm’s-length commercial transactions between the Loan Parties and their
respective Affiliates, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, (B) each of the Loan Parties have consulted their
own legal, accounting, regulatory and tax advisors to the extent they have
deemed appropriate, and (C) each if the Loan Parties is capable of evaluating
and understanding, and understands and accepts, the terms, risks and conditions
of the transactions contemplated hereby and by the other Loan Documents; (ii)(A)
each of the Administrative Agent and the Lenders is and has been acting solely
as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for the Borrower, any other Loan Party or any of their respective
Affiliates, or any other Person, and (B) neither the Administrative Agent nor
any Lender has any obligation to the Borrower, any other Loan Party or any of
their Affiliates with respect to the credit facilities contemplated hereby
except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) the Administrative Agent, the Lenders and their respective
Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Borrower, the other Loan Parties and
their respective Affiliates, and each of the Administrative Agent and the
Lenders has no obligation to disclose any of such interests to the Borrower, any
other Loan Party or any of their respective Affiliates. To the fullest extent
permitted by law, each of the Borrower and the other Loan Parties hereby waives
and releases any claims that it may have against the Administrative Agent or any
Lender with respect to any breach or alleged breach of agency or fiduciary duty
in connection with any aspect of any transaction contemplated hereby.

Section 10.16.        Location of Closing. Each Lender and each Issuing Bank
acknowledges and agrees that it has delivered, with the intent to be bound, its
executed counterparts of this Agreement to the Administrative Agent, c/o
Riemer & Braunstein LLP, Seven Times Square Tower, 25th floor, New York, New
York 10036. The Loan Parties acknowledge and agree that they have delivered,
with the intent to be bound, its executed counterparts of this Agreement and
each other Loan Document, together with all other documents, instruments,
opinions, certificates and other items required under Section 3.1, to the
Administrative Agent, c/o Riemer & Braunstein LLP, Seven Times Square Tower,
25th floor, New York, New York 10036.

Section 10.17.        Reserved.

Section 10.18.        Releases of Guaranty. The Administrative Agent agrees with
the Borrower that the Administrative Agent shall:

(a)        effectuate the releases contemplated by Section 3.4 and Section 11.8;
and

 

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(b)        release any Loan Party from its obligations under the applicable
Collateral Documents (and release any Liens on the assets of each Person) if
such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder.

(c)        In connection with the foregoing, the Administrative Agent shall, at
the Borrower’s expense, execute, deliver and record such documents and
instruments as may be reasonably necessary or advisable to effectuate or confirm
such releases.

Section 10.19.        Acknowledgment and Consent to Bail-In of EEA Financial
Institutions.

Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any Lender that is an EEA Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the writedown and conversion powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

(a)        the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any Lender that is an EEA Financial Institution; and

(b)        the effects of any Bail-In Action on any such liability, including,
if applicable:

(i)        a reduction in full or in part or cancellation of any such liability;

(ii)        a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii)        the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

ARTICLE XI

GUARANTY

 

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Section 11.1.        The Guaranty. Each of the Guarantors hereby jointly and
severally guarantees to each Lender and the Administrative Agent as hereinafter
provided, as primary obligor and not as surety, the prompt payment of the
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, if any Guarantor is deemed to have been rendered
insolvent as a result of its guarantee obligations under this Section 11.1 and
not to have received reasonable equivalent value in exchange therefor, then, in
such an event, the liability of such Guarantor under this Section 11.1 shall be
limited to the maximum amount of the Obligations of the Borrower that such
Guarantor may guaranty without rendering the obligations of such Guarantor under
this Section 11.1 void or voidable under any fraudulent conveyance or fraudulent
transfer law.

Section 11.2.        Obligations Unconditional. The obligations of the
Guarantors under Section 11.1 are joint and several, absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Loan Documents, 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 11.2 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 XI until
such time as the Obligations have been Paid in Full. 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 the Guarantor hereunder, which shall remain absolute and
unconditional as described above:

(a)        at any time or from time to time, without notice to the 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;

(b)        any of the acts mentioned in any of the provisions of any of the Loan
Documents or any documents or agreement with respect to Hedging Obligations or
Bank Product Obligations of any Loan Party to any Lender, or any Affiliate of a
Lender, or any

 

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other agreement or instrument referred to in the Loan Documents or such other
documents or agreement shall be done or omitted;

(c)        the maturity of any of the Obligations shall be accelerated in
accordance with the Loan Documents, or any of the Obligations shall be modified,
supplemented, waived or amended in any respect in accordance with the Loan
Documents, or any right under any of the Loan Documents or any documents or
agreement with respect to Hedging Obligations or Bank Product Obligations of any
Loan Party to any Lender, or any Affiliate of a Lender, or any other agreement
or instrument referred to in the Loan Documents or any such agreement or
document shall be waived in accordance with the Loan Documents 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;

(d)        any of the Obligations shall be determined to be void or voidable
(including, without limitation, for the benefit of any creditor of the
Guarantor) or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of the Guarantor); or

(e)        any other circumstance whatsoever which might otherwise constitute a
legal or equitable discharge or defense of a surety or guarantor.

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 or any documents or agreement with respect to Hedging
Obligations or Bank Product Obligations of any Loan Party to any Lender, or any
Affiliate of a Lender, or any other agreement or instrument referred to in the
Loan Documents or any such documents or agreement or against any other Person
under any other guarantee of any of the Obligations.

 

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Section 11.3.        Reinstatement. The obligations of the Guarantors under this
Article XI 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 written demand for all reasonable
costs and expenses (including, without limitation, the fees, charges and
disbursements 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 11.4.        Certain Additional Waivers. Each Guarantor 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 11.2
and through the exercise of rights of contribution pursuant to Section 11.6.

Section 11.5.        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 8.2 (and shall
be deemed to have become automatically due and payable in the circumstances
provided in said Section 8.2) for purposes of Section 11.1 notwithstanding any
stay, injunction or other prohibition preventing such declaration (or preventing
the Obligations from becoming 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 11.1.

Section 11.6.        Rights of Contribution. The Guarantors agree among
themselves that, in connection with payments made hereunder, each Guarantor
shall have contribution rights against the other Guarantors as permitted under
applicable law. Such contribution rights shall be subordinate and subject in
right of payment to the obligations of such Guarantors under the Loan Documents
and no Guarantor shall exercise such rights of contribution until all
Obligations have been Paid in Full and the Commitments have terminated.

Section 11.7.        Guarantee of Payment; Continuing Guarantee. The guarantee
in this Article XI is a guaranty of payment and not of collection, is a
continuing guarantee, and shall apply to all Obligations whenever arising.

 

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Section 11.8.        Release of Subsidiary Loan Parties. Within five
(5) Business Days following the written request by a Responsible Officer of the
Borrower, the Administrative Agent, on behalf of the Lenders, shall release a
Subsidiary Loan Party from its obligations under the Guaranty to the extent that
the following conditions are satisfied to the reasonable satisfaction of the
Administrative Agent: (a) there is no Event of Default existing under the
Agreement either at the time of such request or at the time such Subsidiary Loan
Party is released; and (b) such Responsible Officer of the Borrower delivers to
Administrative Agent a certificate in form and substance reasonably satisfactory
to the Administrative Agent stating that (i) such request is being made in
connection with such Subsidiary Loan Party ceasing for any reason to be a
guarantor of all of the Indebtedness permitted pursuant to Section 7.1(c); and
(ii) such Subsidiary Loan Party will also be released from its guaranty
obligations with respect to all Indebtedness under Section 7.1(c).

Section 11.9.        Keepwell. Each Qualified ECP Guarantor hereby jointly and
severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other Loan
Party to honor all of its obligations under this Guaranty in respect of Swap
Obligations (provided, however, that each Qualified ECP Guarantor shall only be
liable under this Article XI for the maximum amount of such liability that can
be hereby incurred without rendering its obligations under this Article XI, or
otherwise under this Guaranty, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount).
The obligations of each Qualified ECP Guarantor under this Section shall remain
in full force and effect until Payment in Full has occurred. Each Qualified ECP
Guarantor intends that this Article XI constitute, and this Article XI shall be
deemed to constitute, a “keepwell, support, or other agreement” for the benefit
of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.

(remainder of page left intentionally blank)

 

173

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

 

  CTR PARTNERSHIP, L.P., a Delaware limited partnership   By:   CareTrust GP,
LLC, its general partner     By:     CareTrust REIT, Inc., its sole member    
By:     Name:     Title:   CARETRUST REIT, INC., a Maryland corporation   By:  
    Name:       Title:       CARETRUST GP, LLC, a Delaware limited liability
company   By:   CareTrust REIT, Inc., its sole member   By:       Name:      
Title:       CARETRUST CAPITAL CORP., a Delaware corporation   By:       Name:  
    Title:    

 

[Signature Page to Credit and Guaranty Agreement]

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

CTR ARVADA PREFERRED, LLC, a Delaware limited liability company

By:

  CTR Partnership, L.P., its sole member

By:

  CareTrust GP, LLC, its general partner

By:

  CareTrust REIT, Inc., its sole member

By:

 

 

Name:

 

Title:

 

 

 

[Signature Page to Credit and Guaranty Agreement]

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18TH PLACE HEALTH HOLDINGS LLC

49TH STREET HEALTH HOLDINGS LLC

4TH STREET HOLDINGS LLC

51ST AVENUE HEALTH HOLDINGS LLC

ANSON HEALTH HOLDINGS LLC

ARAPAHOE HEALTH HOLDINGS LLC

ARROW TREE HEALTH HOLDINGS LLC

AVENUE N HOLDINGS LLC

BIG SIOUX RIVER HEALTH HOLDINGS LLC

BOARDWALK HEALTH HOLDINGS LLC

BOGARDUS HEALTH HOLDINGS LLC

BURLEY HEALTHCARE HOLDINGS LLC

CASA LINDA RETIREMENT LLC

CHERRY HEALTH HOLDINGS LLC

CM HEALTH HOLDINGS LLC

COTTONWOOD HEALTH HOLDINGS LLC

DALLAS INDEPENDENCE LLC

DIXIE HEALTH HOLDINGS LLC

EMMETT HEALTHCARE HOLDINGS LLC

ENSIGN BELLFLOWER LLC

ENSIGN SOUTHLAND LLC

EVERGLADES HEALTH HOLDINGS LLC

EXPO PARK HEALTH HOLDINGS LLC

EXPRESSWAY HEALTH HOLDINGS LLC

FALLS CITY HEALTH HOLDINGS LLC

FIFTH EAST HOLDINGS LLC

FIG STREET HEALTH HOLDINGS LLC

FLAMINGO HEALTH HOLDINGS LLC

FORT STREET HEALTH HOLDINGS LLC

GAZEBO PARK HEALTH HOLDINGS LLC

GILLETTE PARK HEALTH HOLDINGS LLC

GOLFVIEW HOLDINGS LLC

GUADALUPE HEALTH HOLDINGS LLC

HILLENDAHL HEALTH HOLDINGS LLC

HILLVIEW HEALTH HOLDINGS LLC

IRVING HEALTH HOLDINGS LLC

IVES HEALTH HOLDINGS LLC

JEFFERSON RALSTON HOLDINGS LLC

JORDAN HEALTH PROPERTIES LLC

JOSEY RANCH HEALTHCARE HOLDINGS LLC

KINGS COURT HEALTH HOLDINGS LLC

LAFAYETTE HEALTH HOLDINGS LLC

LEMON RIVER HOLDINGS LLC

LOCKWOOD HEALTH HOLDINGS LLC

LONG BEACH HEALTH ASSOCIATES LLC

LOWELL HEALTH HOLDINGS LLC

LOWELL LAKE HEALTH HOLDINGS LLC

LUFKIN HEALTH HOLDINGS LLC

MEMORIAL HEALTH HOLDINGS LLC

 

[Signature Page to Credit and Guaranty Agreement]

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MESQUITE HEALTH HOLDINGS LLC

MISSION CCRC LLC

MOENIUM HOLDINGS LLC

NORTHSHORE HEALTHCARE HOLDINGS LLC

OLESON PARK HEALTH HOLDINGS LLC

OREM HEALTH HOLDINGS LLC

PAREDES HEALTH HOLDINGS LLC

POLK HEALTH HOLDINGS LLC

PRAIRIE HEALTH HOLDINGS LLC

PRICE HEALTH HOLDINGS LLC

QUEEN CITY HEALTH HOLDINGS LLC

QUEENSWAY HEALTH HOLDINGS LLC

RB HEIGHTS HEALTH HOLDINGS LLC

REGAL ROAD HEALTH HOLDINGS LLC

RENEE AVENUE HEALTH HOLDINGS LLC

RIO GRANDE HEALTH HOLDINGS LLC

SALMON RIVER HEALTH HOLDINGS LLC

SALT LAKE INDEPENDENCE LLC

SAN CORRINE HEALTH HOLDINGS LLC

SARATOGA HEALTH HOLDINGS LLC

SILVER LAKE HEALTH HOLDINGS LLC

SILVERADA HEALTH HOLDINGS LLC

SNOHOMISH HEALTH HOLDINGS LLC

SOUTH DORA HEALTH HOLDINGS LLC

STILLHOUSE HEALTH HOLDINGS LLC

TEMPLE HEALTH HOLDINGS LLC

TENTH EAST HOLDINGS LLC

TRINITY MILL HOLDINGS LLC

TROUSDALE HEALTH HOLDINGS LLC

TULALIP BAY HEALTH HOLDINGS LLC

VERDE VILLA HOLDINGS LLC

WAYNE HEALTH HOLDINGS LLC

WILLITS HEALTH HOLDINGS LLC

WILLOWS HEALTH HOLDINGS LLC

WISTERIA HEALTH HOLDINGS LLC,

each a Nevada limited liability company

 

By:

  CTR Partnership, L.P., its sole member

By:

  CareTrust GP, LLC, its general partner

By:

  CareTrust REIT, Inc., its sole member

By:

 

 

Name:

 

Title:

 

 

[Signature Page to Credit and Guaranty Agreement]

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KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent, as the Issuing Bank,
as the Swingline Lender and as a Lender

By:

 

Name:

 

Title:

 

 

[Signature Page to Credit and Guaranty Agreement]

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RAYMOND JAMES BANK, N.A., as a Lender

By:

 

Name:

 

Title:

 

 

[Signature Page to Credit and Guaranty Agreement]

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BMO HARRIS BANK, N.A., as a Lender

By:

 

Name:

 

Title:

 

 

[Signature Page to Credit and Guaranty Agreement]

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BARCLAYS BANK PLC, as a Lender

By:

 

Name:

 

Title:

 

 

[Signature Page to Credit and Guaranty Agreement]

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

ROYAL BANK OF CANADA, as a Lender

By:

 

Name:

 

Title:

 

 

[Signature Page to Credit and Guaranty Agreement]

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

FIFTH THIRD BANK, as a Lender

By:

 

Name:

 

Title:

 

 

[Signature Page to Credit and Guaranty Agreement]

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

WELLS FARGO BANK N.A., as a Lender

By:

 

Name:

 

Title:

 

 

[Signature Page to Credit and Guaranty Agreement]

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FIRST BANK, A MISSOURI STATE

CHARTERED BANK, as a Lender

By:

 

Name:

 

Title:

 

 

[Signature Page to Credit and Guaranty Agreement]

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SCHEDULE I

Commitment Amounts

 

Lender  

Revolving

Commitment Amount    

 

 

 

KeyBank National Association

 

 

 

 

 

 

$50,000,000.00

 

 

  

 

 

Raymond James Bank, N.A.

 

 

 

 

 

 

$50,000,000.00

 

 

  

 

 

BMO Harris Bank, N.A.

 

 

 

 

 

 

$50,000,000.00

 

 

  

 

 

Barclays Bank PLC

 

 

 

 

 

 

$60,000,000.00

 

 

  

 

 

Royal Bank of Canada

 

 

 

 

 

 

$40,000,000.00

 

 

  

 

 

Fifth Third Bank

 

 

 

 

 

 

$25,000,000.00

 

 

  

 

 

Wells Fargo Bank, N.A.

 

 

 

 

 

 

$75,000,000.00

 

 

  

 

 

First Bank

 

 

 

 

 

 

$10,000,000.00

 

 

  

 

 

Healthcare Financial Solutions, LLC

 

 

 

 

 

 

$40,000,000.00

 

 

  

 

 

Total:

 

 

 

 

 

 

$400,000,000.00

 

 

  

 

  Lender  

First Amendment Term    
Loan

Commitment Amount    

 

 

 

KeyBank National Association

 

 

 

 

 

 

$25,000,000.00

 

 

  

 

 

Raymond James Bank, N.A.

 

 

 

 

 

 

$15,000,000.00

 

 

  

 

 

BMO Harris Bank, N.A.

 

 

 

 

 

 

$25,000,000.00

 

 

  

 

 

Fifth Third Bank

 

 

 

 

 

 

$25,000,000.00

 

 

  

 

 

Healthcare Financial Solutions, LLC

 

 

 

 

 

 

$10,000,000.00

 

 

  

 

 

Total:

 

 

 

 

 

 

$100,000,000.00