EXHIBIT 10.1

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

DATED AS OF OCTOBER 14, 2014,

 

AMONG

 

LTC PROPERTIES, INC.,

 

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

 

BANK OF MONTREAL,

AS ADMINISTRATIVE AGENT AND L/C ISSUER,

 

KEYBANK NATIONAL ASSOCIATION,

AS SYNDICATION AGENT

 

AND

 

ROYAL BANK OF CANADA AND WELLS FARGO BANK, NATIONAL ASSOCIATION,

AS CO-DOCUMENTATION AGENTS

 

 

BMO CAPITAL MARKETS, KEYBANC CAPITAL MARKETS INC., RBC CAPITAL MARKETS AND WELLS
FARGO SECURITIES, LLC,

AS CO-LEAD ARRANGERS AND JOINT BOOK RUNNERS

 

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TABLE OF CONTENTS

 

SECTION

 

HEADING

 

PAGE

 

 

 

 

 

SECTION 1.

 

DEFINITIONS; INTERPRETATION

 

1

 

 

 

 

 

Section 1.1.

 

Definitions

 

1

Section 1.2.

 

Interpretation

 

23

Section 1.3.

 

Change in Accounting Principles

 

23

 

 

 

 

 

SECTION 2.

 

THE CREDIT FACILITY

 

24

 

 

 

 

 

Section 2.1.

 

Revolving Credit Commitments

 

24

Section 2.2.

 

Letters of Credit

 

24

Section 2.3.

 

Applicable Interest Rates

 

28

Section 2.4.

 

Minimum Borrowing Amounts; Maximum Eurodollar Loans

 

30

Section 2.5.

 

Manner of Borrowing Loans and Designating Applicable Interest Rates

 

30

Section 2.6.

 

Maturity of Loans

 

32

Section 2.7.

 

Prepayments

 

32

Section 2.8.

 

Default Rate

 

33

Section 2.9.

 

Evidence of Indebtedness

 

33

Section 2.10.

 

Funding Indemnity

 

34

Section 2.11.

 

Commitment Terminations

 

35

Section 2.12.

 

Substitution of Lenders

 

35

Section 2.13.

 

Increase in Revolving Credit Commitments

 

35

Section 2.14.

 

Defaulting Lenders

 

36

Section 2.15.

 

Cash Collateral for Fronting Exposure

 

39

Section 2.16.

 

Extension of the Revolving Credit Termination Date

 

39

 

 

 

 

 

SECTION 3.

 

FEES

 

40

 

 

 

 

 

Section 3.1.

 

Fees

 

40

 

 

 

 

 

SECTION 4.

 

PLACE AND APPLICATION OF PAYMENTS

 

41

 

 

 

 

 

Section 4.1.

 

Place and Application of Payments

 

41

Section 4.2.

 

Account Debit

 

42

 

 

 

 

 

SECTION 5.

 

RELEASE OF GUARANTORS UNDER PRIOR CREDIT AGREEMENT

 

42

 

 

 

 

 

SECTION 6.

 

REPRESENTATIONS AND WARRANTIES

 

43

 

 

 

 

 

Section 6.1.

 

Organization and Qualification

 

43

Section 6.2.

 

Subsidiaries

 

43

Section 6.3.

 

Authority and Validity of Obligations

 

43

Section 6.4.

 

Use of Proceeds; Margin Stock

 

44

 

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

 

Section 6.5.

 

Financial Reports

 

44

Section 6.6.

 

No Material Adverse Change

 

44

Section 6.7.

 

Full Disclosure

 

44

Section 6.8.

 

Trademarks, Franchises, and Licenses

 

44

Section 6.9.

 

Governmental Authority and Licensing

 

45

Section 6.10.

 

Good Title

 

45

Section 6.11.

 

Litigation and Other Controversies

 

45

Section 6.12.

 

Taxes

 

45

Section 6.13.

 

Approvals

 

45

Section 6.14.

 

Affiliate Transactions

 

45

Section 6.15.

 

Investment Company

 

46

Section 6.16.

 

ERISA

 

46

Section 6.17.

 

Compliance with Laws

 

46

Section 6.18.

 

Other Agreements

 

47

Section 6.19.

 

OFAC

 

47

Section 6.20.

 

No Default

 

47

Section 6.21.

 

Solvency

 

47

Section 6.22.

 

No Broker Fees

 

47

Section 6.23.

 

Stock of the Borrower

 

47

Section 6.24.

 

Condition of Property; Casualties; Condemnation

 

48

Section 6.25.

 

Legal Requirements, and Zoning

 

48

 

 

 

 

 

SECTION 7.

 

CONDITIONS PRECEDENT

 

48

 

 

 

 

 

Section 7.1.

 

All Credit Events

 

48

Section 7.2.

 

Initial Credit Event

 

49

 

 

 

 

 

SECTION 8.

 

COVENANTS

 

50

 

 

 

 

 

Section 8.1.

 

Maintenance of Business

 

50

Section 8.2.

 

Maintenance of Properties

 

51

Section 8.3.

 

Taxes and Assessments

 

51

Section 8.4.

 

Insurance

 

51

Section 8.5.

 

Financial Reports

 

51

Section 8.6.

 

Inspection

 

53

Section 8.7.

 

Office of Foreign Asset Control

 

53

Section 8.8.

 

Liens

 

54

Section 8.9.

 

Investments, Acquisitions, Loans and Advances

 

54

Section 8.10.

 

Mergers, Consolidations and Sales

 

55

Section 8.11.

 

Maintenance of Subsidiaries

 

56

Section 8.12.

 

Reserved

 

56

Section 8.13.

 

ERISA

 

56

Section 8.14.

 

Compliance with Laws and Contractual Obligations

 

57

Section 8.15.

 

Burdensome Contracts With Affiliates

 

58

Section 8.16.

 

No Changes in Fiscal Year

 

58

Section 8.17.

 

Compliance with OFAC Sanctions Programs

 

58

Section 8.18.

 

Change in the Nature of Business

 

58

 

ii

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Section 8.19.

 

Use of Loan Proceeds

 

58

Section 8.20.

 

No Restrictions

 

59

Section 8.21.

 

Financial Covenants

 

59

Section 8.22.

 

Note Agreement Notices

 

60

Section 8.23.

 

Modification of Material Contracts

 

60

Section 8.24.

 

Limitations on Guaranties of Indebtedness

 

60

 

 

 

 

 

SECTION 9.

 

EVENTS OF DEFAULT AND REMEDIES

 

60

 

 

 

 

 

Section 9.1.

 

Events of Default

 

60

Section 9.2.

 

Non-Bankruptcy Defaults

 

62

Section 9.3.

 

Bankruptcy Defaults

 

63

Section 9.4.

 

Collateral for Undrawn Letters of Credit

 

64

Section 9.5.

 

Notice of Default

 

65

 

 

 

 

 

SECTION 10.

 

CHANGE IN CIRCUMSTANCES

 

65

 

 

 

 

 

Section 10.1.

 

Change of Law

 

65

Section 10.2.

 

Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR

 

65

Section 10.3.

 

Increased Cost and Reduced Return

 

65

Section 10.4.

 

Lending Offices

 

67

Section 10.5.

 

Discretion of Lender as to Manner of Funding

 

67

 

 

 

 

 

SECTION 11.

 

THE ADMINISTRATIVE AGENT

 

67

 

 

 

 

 

Section 11.1.

 

Appointment and Authority

 

67

Section 11.2.

 

Rights as a Lender

 

68

Section 11.3.

 

Action by Administrative Agent; Exculpatory Provisions

 

68

Section 11.4.

 

Reliance by Administrative Agent

 

69

Section 11.5.

 

Delegation of Duties

 

70

Section 11.6.

 

Resignation of Administrative Agent

 

70

Section 11.7.

 

Non-Reliance on Administrative Agent and Other Lenders

 

71

Section 11.8.

 

L/C Issuer

 

71

Section 11.9.

 

Intentionally Deleted

 

72

Section 11.10.

 

Designation of Additional Agents

 

72

Section 11.11.

 

Authorization of Administrative Agent to File Proofs of Claim

 

72

 

 

 

 

 

SECTION 12.

 

MISCELLANEOUS

 

73

 

 

 

 

 

Section 12.1.

 

Taxes

 

73

Section 12.2.

 

Other Taxes

 

76

Section 12.3.

 

No Waiver, Cumulative Remedies

 

76

Section 12.4.

 

Non-Business Days

 

77

Section 12.5.

 

Survival of Representations

 

77

Section 12.6.

 

Survival of Indemnities

 

77

 

iii

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Section 12.7.

 

Sharing of Payments by Lenders

 

77

Section 12.8.

 

Notices

 

78

Section 12.9.

 

Counterparts

 

78

Section 12.10.

 

Successors and Assigns

 

78

Section 12.11.

 

Amendments

 

83

Section 12.12.

 

Headings

 

83

Section 12.13.

 

Costs and Expenses; Indemnification

 

83

Section 12.14.

 

Set-off

 

85

Section 12.15.

 

Entire Agreement

 

85

Section 12.16.

 

Governing Law

 

85

Section 12.17.

 

Severability of Provisions

 

85

Section 12.18.

 

Excess Interest

 

86

Section 12.19.

 

Construction

 

86

Section 12.20.

 

Lender’s and L/C Issuer’s Obligations Several

 

86

Section 12.21.

 

Submission to Jurisdiction; Waiver of Jury Trial

 

86

Section 12.22.

 

USA Patriot Act

 

87

Section 12.23.

 

Confidentiality

 

87

Section 12.24.

 

Amendment and Restatement; No Novation

 

88

Section 12.25.

 

Equalization of Loans and Commitments

 

88

 

 

 

 

 

Signature Page

 

 

 

1

 

 

 

 

 

EXHIBIT A

—

Notice of Payment Request

 

 

EXHIBIT B

—

Notice of Borrowing

 

 

EXHIBIT C

—

Notice of Continuation/Conversion

 

 

EXHIBIT D

—

Revolving Note

 

 

EXHIBIT E

—

Compliance Certificate

 

 

EXHIBIT F

—

Assignment and Assumption

 

 

EXHIBIT G

—

Commitment Amount Increase Request

 

 

EXHIBIT H-1

—

Form of U.S. Tax Compliance Certificate

 

 

EXHIBIT H-2

—

Form of U.S. Tax Compliance Certificate

 

 

EXHIBIT H-3

—

Form of U.S. Tax Compliance Certificate

 

 

EXHIBIT H-4

—

Form of U.S. Tax Compliance Certificate

 

 

SCHEDULE 1

—

Commitments

 

 

 

iv

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AMENDED AND RESTATED CREDIT AGREEMENT

 

This Amended and Restated Credit Agreement is entered into as of October 14,
2014, by and among LTC PROPERTIES, INC., a Maryland corporation (the
“Borrower”), the several financial institutions from time to time party to this
Agreement, as Lenders, and BANK OF MONTREAL, a Canadian chartered bank, as
Administrative Agent and L/C Issuer as provided herein.  All capitalized terms
used herein without definition shall have the same meanings herein as such terms
are defined in Section 1.1 hereof.

 

PRELIMINARY STATEMENT

 

WHEREAS, the Borrower, certain direct and indirect Subsidiaries of the Borrower,
as Guarantors (the “Subsidiary Guarantors”) the financial institutions party
thereto as “Lenders” and Bank of Montreal, Chicago Branch, as Administrative
Agent and the L/C Issuer, previously entered into a Credit Agreement dated as of
April 18, 2011 (as amended by the First Amendment to Credit Agreement dated as
of May 25, 2012 and as heretofore further extended, renewed, amended, modified,
amended and restated or supplemented, the “Prior Credit Agreement”).

 

WHEREAS, the Borrower has requested that (i) the maturity date under the Prior
Credit Agreement be extended, (ii) the amount of the credit afforded to the
Borrower be increased, (iii) the Subsidiary Guarantors be released from their
guaranty obligations, and (iv) certain other amendments be made to the Prior
Credit Agreement, and the Administrative Agent, the L/C Issuer and the Lenders
have agreed to such requests on the terms and conditions set forth in this
Agreement, which, for the sake of clarity and convenience, amends and restates
the Prior Credit Agreement in its entirety.

 

NOW, THEREFORE, in consideration of their mutual Agreements contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby amend and restate the Prior
Credit Agreement in its entirety as follows:

 

SECTION 1.                                             DEFINITIONS;
INTERPRETATION.

 

Section 1.1.                                           Definitions.  The
following terms when used herein shall have the following meanings:

 

“Adjusted LIBOR” is defined in Section 2.3(b) hereof.

 

“Administrative Agent” means Bank of Montreal, in its capacity as Administrative
Agent hereunder, and any successor in such capacity pursuant to Section 11.6
hereof.

 

“Administrative Questionnaire” means an Administrative Questionnaire by each
Lender in a form supplied by the Administrative Agent.

 

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

 

“Affiliate” means any Person directly or indirectly controlling or controlled
by, or under direct or indirect common control with, another Person.  A Person
shall be deemed to control another Person for purposes of this definition if
such Person possesses, directly or indirectly, the power to direct, or cause the
direction of, the management and policies of the other Person, whether through
the ownership of voting securities, common directors, trustees or officers, by
contract or otherwise; provided that, in any event for purposes of this
definition, any Person that owns, directly or indirectly, 20% or more of the
securities having the ordinary voting power for the election of directors or
governing body of a corporation or 20% or more of the partnership or other
ownership interest of any other Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or other Person.

 

“Agreement” means this Credit Agreement, as the same may be extended, renewed,
amended, modified, amended and restated or supplemented from time to time
pursuant to the terms hereof.

 

“ALF’s” is defined in the definition of Capitalization Rate.

 

“Applicable Margin” means, with respect to Revolving Loans, Reimbursement
Obligations, and the Commitment Fee and letter of credit fees payable under
Section 3.1 hereof, until the first Pricing Date, the rates per annum shown
opposite Level II below, and thereafter from one Pricing Date to the next the
Applicable Margin means the rates per annum determined in accordance with the
following schedule:

 

LEVEL

 

RATIO OF TOTAL
INDEBTEDNESS TO 
TOTAL
ASSET VALUE FOR 
SUCH
PRICING DATE

 

APPLICABLE 
MARGIN
FOR BASE RATE 
LOANS
AND 
REIMBURSEMENT
OBLIGATIONS 
SHALL BE:

 

APPLICABLE MARGIN 
FOR
EURODOLLAR LOANS 
AND
LETTER OF CREDIT 
FEE SHALL BE:

 

APPLICABLE 
MARGIN
FOR COMMITMENT 
FEE
SHALL BE:

 

IV

 

Greater than 0.45 to 1.0

 

0.75

%

1.75

%

0.35

%

III

 

Less than or equal to 0.45 to 1.0, but greater than 0.35 to 1.0

 

0.50

%

1.50

%

0.35

%

II

 

Less than or equal to 0.35 to 1.0 but greater than 0.25 to 1.0

 

0.25

%

1.25

%

0.30

%

I

 

Less than or equal to 0.25 to 1.0

 

0.15

%

1.15

%

0.25

%

 

2

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For purposes hereof, the term “Pricing Date” means, for any Fiscal Quarter of
the Borrower ending on or after December 31, 2014, the date on which the
Administrative Agent is in receipt of the Borrower’s most recent financial
statements and current Compliance Certificate (and, in the case of the year-end
financial statements, audit report) for the Fiscal Quarter then ended, pursuant
to Section 8.5 hereof.  The Applicable Margin shall be established based on the
ratio of Total Indebtedness to Total Asset Value for the most recently completed
Fiscal Quarter and the Applicable Margin established on a Pricing Date shall
remain in effect until the next Pricing Date.  If the Borrower has not delivered
its financial statements, including a Compliance Certificate, by the date such
financial statements (and, in the case of the year-end financial statements,
audit report) are required to be delivered under Section 8.5 hereof, until such
financial statements and audit report are delivered, the Applicable Margin shall
be the highest Applicable Margin (i.e., Level IV shall apply).  If the Borrower
subsequently delivers such financial statements before the next Pricing Date,
the Applicable Margin established by such late delivered financial statements
shall take effect from the date of delivery until the next Pricing Date.  In all
other circumstances, the Applicable Margin established by such financial
statements shall be in effect from the Pricing Date that occurs immediately
after the end of the Fiscal Quarter covered by such financial statements until
the next Pricing Date.  Each determination of the Applicable Margin made by the
Administrative Agent in accordance with the foregoing shall be conclusive and
binding on the Borrower and the Lenders if reasonably determined.

 

“Application” is defined in Section 2.2(b) hereof.

 

“Approved Fund” means any Fund that has been approved by Borrower (such approval
not to be unreasonably withheld or delayed and such approval not to be required
if an Event of Default has occurred and is continuing) and is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

 

“Assets Under Development” means any real property under construction other than
Redevelopment Assets.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 12.10 hereof), and accepted by the Administrative Agent, in
substantially the form of Exhibit F or any other form approved by the
Administrative Agent.

 

“Authorized Representative” means those persons shown on the list of officers
provided by the Borrower pursuant to Section 7.2 hereof or on any update of any
such list provided by the Borrower to the Administrative Agent, or any further
or different officers of the Borrower so named by any Authorized Representative
of the Borrower in a written notice to the Administrative Agent.

 

“Base Rate” is defined in Section 2.3(a) hereof.

 

“Base Rate Loan” means a Revolving Loan bearing interest at a rate specified in
Section 2.3(a) hereof.

 

3

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“Borrower” is defined in the introductory paragraph of this Agreement.

 

“Borrowing” means the total of Revolving Loans of a single type advanced,
continued for an additional Interest Period, or converted from a different type
into such type on a single date and, in the case of Eurodollar Loans, for a
single Interest Period.  Borrowings of Revolving Loans are made and maintained
ratably from each of the Lenders according to their Revolver Percentages.  A
Borrowing is “advanced” on the day Lenders advance funds comprising such
Borrowing to the Borrower, is “continued” on the date a new Interest Period for
the same type of Revolving Loans commences for such Borrowing, and is
“converted” when such Borrowing is changed from one type of Revolving Loans to
the other, all as determined pursuant to Section 2.5 hereof.

 

“Business Day” means any day (other than a Saturday or Sunday) on which banks
are not authorized or required to close in Chicago, Illinois and, if the
applicable Business Day relates to the advance or continuation of, or conversion
into, or payment of a Eurodollar Loan, on which banks are dealing in U.S. Dollar
deposits in the interbank eurodollar market in London, England and Nassau,
Bahamas.

 

“Capital Lease” means any Lease of Property which in accordance with GAAP is
required to be capitalized on the balance sheet of the lessee.

 

“Capitalization Rate” means (a) 8.0% for assisted living facilities (“ALF’s”),
(b) 10.0% for skilled nursing facilities (“SNF’s”) and (c) 11.5% for schools
owned by the Borrower or a Subsidiary on the Closing Date. The Capitalization
Rates for continuum of care facilities will be 9% for facilities where <50% of
beds are classified as SNF beds, and shall otherwise be 10%.

 

“Capitalized Lease Obligation” means, for any Person, the amount of the
liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.

 

“Cash Collateralize” means, to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer or Lenders, as
collateral for L/C Obligations or obligations of Lenders to fund participations
in respect of L/C Obligations, cash or deposit account balances subject to a
first priority perfected security interest in favor of the Administrative Agent
or, if the Administrative Agent and the L/C Issuer shall agree in their sole
discretion, other credit support, in each case pursuant to documentation in form
and substance reasonably satisfactory to the Administrative Agent and the L/C
Issuer.  “Cash Collateral” shall have a meaning correlative to the foregoing and
shall include the proceeds of such cash collateral and other credit support.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. §§9601 et seq., and any future
amendments.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following:  (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change

 

4

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

 

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

 

“Change of Control” means any of (a) the acquisition by any “person” or “group”
(as such terms are used in sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) at any time of beneficial ownership of 50% or more of
the outstanding capital stock or other equity interests of the Borrower on a
fully-diluted basis, (b) any “Change of Control” (or words of like import), as
defined in any agreement or indenture relating to any issue of Indebtedness for
Borrowed Money in excess of 5% of the Total Asset Value shall occur or
(c) during any twelve (12) month period on or after the date hereof, individuals
who at the beginning of such period constituted the Board of Directors of the
Borrower (together with any new directors whose election by the Board of
Directors or whose nomination for election by the shareholders of the Borrower
was approved by a vote of at least a majority of the members of the Board of
Directors then in office who either were members of the Board of Directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
members of the Board of Directors then in office.

 

“Closing Date” means the date of this Agreement or such later Business Day upon
which each condition described in Section 7.2 shall be satisfied or waived in a
manner acceptable to the Administrative Agent in its discretion.

 

“Code” means the Internal Revenue Code of 1986, as amended, and any successor
statute thereto.

 

“Collateral Account” is defined in Section 9.4 hereof.

 

“Commitment Fee” is defined in Section 3.1(a).

 

“Commonly Controlled Entity” means an entity, whether or not incorporated, that
is under common control with the Borrower within the meaning of Section 4001 of
ERISA or that is part of a group that includes the Borrower and is treated as a
single employer under Section 414(b), (c) or (m) of the Code.

 

“Compliance Certificate” is defined in Section 8.5(c) hereof.

 

5

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

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profit Taxes.

 

“Controlled Group” means all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.

 

“Credit Event” means the advancing of any Revolving Loan, or the issuance of, or
extension of the expiration date or increase in the amount of, any Letter of
Credit.

 

“Debt Service” means, for any Fiscal Quarter, the sum of (a) Interest Expense
and (b) the greater of (i) zero or (ii) scheduled principal amortization paid on
Secured Debt (exclusive of any balloon payments or prepayments of principal paid
on such Secured Debt), less amortized principal payments received on the
Borrower’s and its Subsidiaries’ mortgage loans receivable (exclusive of any
balloon payments or prepayments of principal received on the Borrower’s and its
Subsidiaries’ mortgage loans receivable).

 

“Debtor Relief Laws” means 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 Laws of the United States or other
applicable jurisdictions from time to time in effect.

 

“Default” means any event or condition the occurrence of which would, with the
passage of time or the giving of notice, or both, constitute an Event of
Default.

 

“Defaulting Lender” means, subject to Section 2.14(b), any Lender that (a) has
failed to (i) fund all or any portion of its Revolving Loans within two
(2) Business Days of the date such Revolving 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 determination that
one or more conditions precedent to funding (each of which conditions precedent,
together with any applicable default, shall be specifically identified in such
writing) has not been satisfied, or (ii) pay to the Administrative Agent, the
L/C Issuer or any other Lender any other amount required to be paid by it
hereunder (including in respect of its participation in Letters of Credit)
within two (2) Business Days of the date when due, (b) has notified the
Borrower, the Administrative Agent or the L/C Issuer 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 Revolving Loan hereunder and states that such
position is based on such Lender’s determination that a condition precedent to
funding (which condition precedent, together with any applicable default, shall
be specifically identified in such writing or public statement) cannot be
satisfied), (c) has failed, within three (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), or (d) has, or has a
direct or indirect parent company

 

6

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that has, (i) become the subject of a proceeding under any Debtor Relief Law, or
(ii) had appointed for it a receiver, custodian, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or assets, including the
Federal Deposit Insurance Corporation or any other state or federal regulatory
authority acting in such a capacity; provided that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender.  Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under any one or more of 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 2.14(b)) upon delivery of written
notice of such determination to the Borrower, the L/C Issuer and each Lender.

 

“Designated Disbursement Account” means the account of the Borrower maintained
with the Administrative Agent or its Affiliate and designated in writing to the
Administrative Agent as the Borrower’s Designated Disbursement Account (or such
other account as the Borrower and the Administrative Agent may otherwise agree).

 

“EBITDA” means, for any period, determined on a consolidated basis of the
Borrower and its Subsidiaries, in accordance with GAAP, the sum of net income
(or loss) plus: (i) depreciation and amortization expense, (ii) interest
expense, (iii) income tax expense, (iv) extraordinary, unrealized or
non-recurring losses, including impairment charges and reserves, minus: 
(v) funds received by the Borrower or a Subsidiary as rent but which are
reserved for capital expenses; (vi) unrealized gains on the sale of assets; and
(vii) income tax benefits.

 

“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund, and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent, (ii) the L/C Issuer, and (iii) unless an Event
of Default has occurred and is continuing, the Borrower (each such approval not
to be unreasonably withheld or delayed).

 

“Eligible Line of Business” means any business engaged in as of the date of this
Agreement by the Borrower or any of its Subsidiaries or any business reasonably
related thereto.

 

“Eligible Property NOI” means, for any given period, the aggregate Property NOI
attributable to the Unencumbered Assets and Qualified Mortgage Loans.

 

“Environmental Claim” means any investigation, notice, violation, demand,
allegation, action, suit, injunction, judgment, order, consent decree, penalty,
fine, lien, proceeding or claim (whether administrative, judicial or private in
nature) arising (a) pursuant to, or in connection with an actual or alleged
violation of, any Environmental Law, (b) in connection with any Hazardous
Material, (c) from any abatement, removal, remedial, corrective or response
action in connection with a Hazardous Material, Environmental Law or order of a
Governmental

 

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Authority or (d) from any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.

 

“Environmental Law” means any current or future Legal Requirement pertaining to
(a) the protection of health, safety and the indoor or outdoor environment,
(b) the conservation, management or use of natural resources and wildlife,
(c) the protection or use of surface water or groundwater, (d) the management,
manufacture, possession, presence, use, generation, transportation, treatment,
storage, disposal, Release, threatened Release, abatement, removal, remediation
or handling of, or exposure to, any Hazardous Material or (e) pollution
(including any Release to air, land, surface water or groundwater), and any
amendment, rule, regulation, order or directive issued thereunder.

 

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
or any successor statute thereto.

 

“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a
member of the Borrower’s Controlled Group, or is under common control with the
Borrower, within the meaning of Sections 414 and 4001 of the Code and the
regulations promulgated and rulings issued thereunder.

 

“Eurodollar Loan” means a Revolving Loan bearing interest at the rate specified
in Section 2.3(b) hereof.

 

“Eurodollar Reserve Percentage” is defined in Section 2.3(b) hereof.

 

“Event of Default” means any event or condition identified as such in
Section 9.1 hereof.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Revolving Loan or Revolving
Credit Commitment pursuant to a law in effect on the date on which (i) such
Lender acquires such interest in the Revolving Loan or Revolving Credit
Commitment (other than pursuant to an assignment request by the Borrower under
Section 2.12 hereof) or (ii) such Lender changes its lending office, except in
each case to the extent that, pursuant to Section 12.1 amounts with respect to
such Taxes were payable either to such Lender’s assignor immediately before such
Lender became a party hereto or to such Lender immediately before it changed its
lending office, (c) Taxes attributable to such Recipient’s

 

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failure to comply with Section 12.1(g), and (d) any U.S. federal withholding
Taxes imposed under FATCA.

 

“Extension Fee” means an extension fee payable by the Borrower for a one year
extension pursuant to Section 2.16 hereof in an amount equal to 0.10% of the
aggregate Revolving Credit Commitments then in effect

 

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

 

“Federal Funds Rate” means the fluctuating interest rate per annum described in
part (i) of clause (b) of the definition of Base Rate appearing in
Section 2.3(a) hereof.

 

“Fiscal Quarter” means each of the three month periods ending on March 31,
June 30, September 30 and December 31.

 

“Fiscal Year” means the twelve month period ending on December 31.

 

“Fixed Charges” means, for any Fiscal Quarter, Debt Service for such quarter,
plus Preferred Dividends for such quarter, plus $400 per bed per annum for any
Property on which the Lease of such Property does not require the tenant to pay
for all capital expenditures.

 

“Former Plan” means any employee benefit plan in respect of which the Borrower
or a Commonly Controlled Entity has engaged in a transaction described in
Section 4069 or Section 4212(c) of ERISA.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, with
respect to the L/C Issuer, such Defaulting Lender’s Revolver Percentage of the
outstanding L/C Obligations with respect to Letters of Credit issued by the L/C
Issuer other than L/C Obligations as to which such Defaulting Lender’s
participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof.

 

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

 

“Funds From Operations” means, for any period reported, as determined on a
consolidated basis for the Borrower and its Subsidiaries, the sum of net income
or (loss), plus:  (i) depreciation and amortization expense; (ii) realized
losses from extraordinary or non-recurring items; (iii) realized losses on sales
of real estate or other assets; (iv) impairment charges or other loss reserves;
and (v) provisions for income taxes for such period, minus:  (i) gains (whether
realized or unrealized) on sales of real estate or other assets; and,
(ii) income tax benefits for such period.

 

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“Funds Transfer and Deposit Account Liability” means the liability of the
Borrower or any Subsidiary owing to any of the Lenders, or any Affiliates of
such Lenders, arising out of (a) the execution or processing of electronic
transfers of funds by automatic clearing house transfer, wire transfer or
otherwise to or from deposit accounts of the Borrower and/or any Subsidiary now
or hereafter maintained with any of the Lenders or their Affiliates, (b) the
acceptance for deposit or the honoring for payment of any check, draft or other
item with respect to any such deposit accounts, and (c) any other deposit,
disbursement, and cash management services afforded to the Borrower or any
Subsidiary by any of such Lenders or their Affiliates.

 

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

 

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

 

“Gross Book Value” means book value without giving effect to depreciation.

 

“Hazardous Material” means any substance, chemical, compound, product, solid,
gas, liquid, waste, byproduct, pollutant, contaminant or material which is
hazardous or toxic, and includes, without limitation, (a) asbestos,
polychlorinated biphenyls and petroleum (including crude oil or any fraction
thereof) and (b) any material classified or regulated as “hazardous” or “toxic”
or words of like import pursuant to an Environmental Law.

 

“Hazardous Material Activity” means any activity, event or occurrence involving
a Hazardous Material, including, without limitation, the manufacture,
possession, presence, use, generation, transportation, treatment, storage,
disposal, Release, threatened Release, abatement, removal, remediation, handling
of or corrective or response action to any Hazardous Material.

 

“Hedging Liability” means the liability of the Borrower or any Subsidiary to any
of the Lenders, or any Affiliates of such Lenders, in respect of any interest
rate, foreign currency, and/or commodity swap, exchange, cap, collar, floor,
forward, future or option agreement, or any other similar interest rate,
currency or commodity hedging arrangement, as the Borrower or such Subsidiary,
as the case may be, may from time to time enter into with any one or more of the
Lenders party to this Agreement or their Affiliates.

 

“Hostile Acquisition” means the acquisition of the capital stock or other equity
interests of a Person through a tender offer or similar solicitation of the
owners of such capital stock or other equity interests which has not been
approved (prior to such acquisition) by resolutions of

 

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the Board of Directors of such Person or by similar action if such Person is not
a corporation, or as to which such approval has been withdrawn.

 

“Indebtedness for Borrowed Money” means for any Person (without duplication)
(a) all indebtedness created, assumed or incurred in any manner by such Person
representing money borrowed (including by the issuance of debt securities),
(b) all indebtedness for the deferred purchase price of property or services
(other than trade accounts payable arising in the ordinary course of business
and contingent liabilities related to potential earn out payments which do not
meet the balance sheet recognition requirements of Accounting Standards
Codification No. 450 —Contingencies), (c) all indebtedness secured by any Lien
upon Property of such Person, whether or not such Person has assumed or become
liable for the payment of such indebtedness, (d) all Capitalized Lease
Obligations of such Person, and (e) all obligations of such Person on or with
respect to letters of credit, bankers’ acceptances and other extensions of
credit whether or not representing obligations for borrowed money.

 

“Indemnified Taxes” means (a) all Taxes other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of Borrower
under any Loan Document and (b) to the extent not otherwise described in (a),
Other Taxes.

 

“Insolvency” means, with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.

 

“Interest Expense” means, with respect to a Person for any period of time, the
interest expense whether paid, accrued or capitalized (without deduction of
consolidated interest income) of such Person for such period.  Interest Expense
shall exclude any amortization of (i) deferred financing fees, including the
write-off such fees relating to the early retirement of such related
Indebtedness for Borrowed Money, and (ii) debt discounts (but only to the extent
such discounts do not exceed 3.0% of the initial face principal amount of such
debt).

 

“Interest Payment Date” means (a) with respect to any Eurodollar Loan, the last
day of each Interest Period with respect to such Eurodollar Loan and on the
maturity date and, if the applicable Interest Period is longer than three
(3) months, on each day occurring every three (3) months after the commencement
of such Interest Period and (b) with respect to any Base Rate Loan, the last day
of every Fiscal Quarter and on the maturity date.

 

“Interest Period” means the period commencing on the date a Borrowing of
Eurodollar Loans is advanced, continued, or created by conversion and ending 1,
2, 3, or 6 months thereafter, provided, however, that:

 

(i)                            no Interest Period shall extend beyond the
Revolving Credit Termination Date;

 

(ii)                              whenever the last day of any Interest Period
would otherwise be a day that is not a Business Day, the last day of such
Interest Period shall be extended to the next succeeding Business Day, provided
that, if such extension would cause the last day of an Interest Period for a
Borrowing of Eurodollar Loans to occur in the following calendar

 

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month, the last day of such Interest Period shall be the immediately preceding
Business Day; and

 

(iii)                               for purposes of determining an Interest
Period for a Borrowing of Eurodollar Loans, a month means a period starting on
one day in a calendar month and ending on the numerically corresponding day in
the next calendar month; provided, however, that if there is no numerically
corresponding day in the month in which such an Interest Period is to end or if
such an Interest Period begins on the last Business Day of a calendar month,
then such Interest Period shall end on the last Business Day of the calendar
month in which such Interest Period is to end.

 

“L/C Issuer” means Bank of Montreal, in its capacity as the issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in
Section 2.2(h) hereof.

 

“L/C Obligations” means the aggregate undrawn face amounts of all outstanding
Letters of Credit and all unpaid Reimbursement Obligations.

 

“L/C Participation Fee” is defined in Section 3.1(b).

 

“L/C Sublimit” means $10,000,000, as reduced pursuant to the terms hereof.

 

“Lease” means any lease, tenancy agreement, contract or other agreement for the
use or occupancy of a Property or any portion thereof.

 

“Legal Requirement” means any treaty, convention, statute, law, regulation,
ordinance, license, permit, governmental approval, injunction, judgment, order,
consent decree or other requirement of any Governmental Authority, whether
federal, state, or local.

 

“Lenders” means and includes Bank of Montreal, Key Bank National Association and
the other financial institutions from time to time party to this Agreement,
including any new Lender pursuant to Section 2.13 hereof and each assignee
Lender pursuant to Section 12.10 hereof.

 

“Lending Office” is defined in Section 10.4 hereof.

 

“Letter of Credit” is defined in Section 2.2(a) hereof.

 

“LIBOR” is defined in Section 2.3(b) hereof.

 

“Lien” means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.

 

“Loan Documents” means this Agreement, the Notes (if any), the Applications and
each other instrument or document to be delivered hereunder or thereunder or
otherwise in connection therewith.

 

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“Material Adverse Effect” means a material and adverse effect on (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower and its Subsidiaries taken as a whole, (b) the
ability of the Borrower to perform its obligations under the Loan Documents to
which it is a party or (c) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Administrative Agent or the Lenders
thereunder; provided, however, that the sale of assets of one or more
Subsidiaries in accordance with the terms of this Agreement shall not be deemed
in and of itself to cause a Material Adverse Effect absent the presence of the
factors set forth above.

 

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash
Collateral consisting of cash or deposit account balances, an amount equal to
103% of the Fronting Exposure of the L/C Issuer with respect to Letters of
Credit issued and outstanding at such time and (b) otherwise, an amount
determined by the Administrative Agent and the L/C Issuer in their sole
discretion.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means a Plan that is a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA.

 

“Multiple Employer Plan” means a single employer plan, as defined in
Section 4001(a)(15) of ERISA and subject to Title IV thereof, that (a) is
maintained by the Borrower or an ERISA Affiliate and at least one Person other
than the Borrower and its ERISA Affiliates or (b) was so maintained previously,
but is not currently maintained by the Borrower or its ERISA Affiliates, and in
respect of which the Borrower or an ERISA Affiliate would still have liability
under Section 4063, 4064 or 4069 of ERISA in the event such plan has been or
were to be terminated.

 

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

 

“Note” and “Notes” each is defined in Section 2.9 hereof.

 

“Note Purchase Agreement” means the (i) Second Amended and Restated Note
Purchase and Private Shelf Agreement dated as of October 30, 2013, as extended,
renewed, amended, modified, amended and restated or supplemented in its
entirety, and any refinancing or replacement of any series of notes issued and
outstanding thereunder and (ii) Note Purchase Agreement dated as of July 19,
2012, as extended, renewed, amended, modified, amended and restated or
supplemented in its entirety, and any refinancing or replacement of and series
of notes issued and outstanding thereunder.

 

“Noteholders” means the holders of any series of notes issued under the Note
Purchase Agreement, including, without limitation (i) the 5.26% Series A-1
Senior Notes due July 14, 2015 in the aggregate original principal amount of
$25,000,000, (ii) the 5.74% Series A-2 Senior Notes Due January 14, 2019 in the
aggregate original principal amount of $25,000,000, (iii) the 4.80% Series B
Senior Notes due July 20, 2021 in the aggregate original principal amount of

 

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$50,000,000, (iv) the 5.03% Senior Notes due July 19, 2024 in the aggregate
original principal amount of $85,800,000, (v) the 3.99% Series C Senior Notes
due November 20, 2021 in the aggregate principal amount of $70,000,000 and
(vi) the 4.50% Series D Senior Notes due July 31, 2026 in the aggregate original
principal amount of $30,000,000.

 

“Obligations” means all obligations of the Borrower to pay principal and
interest on the Revolving Loans, all Reimbursement Obligations owing under the
Applications, all fees and charges payable hereunder, and all other payment
obligations of the Borrower or any of its Subsidiaries arising under or in
relation to any Loan Document, in each case whether now existing or hereafter
arising, due or to become due, direct or indirect, absolute or contingent, and
howsoever evidenced, held or acquired.

 

“OFAC” means the United States Department of Treasury Office of Foreign Assets
Control.

 

“OFAC Event” means the event specified in Section 8.17 hereof.

 

“OFAC Sanctions Programs” means all laws, regulations, and Executive Orders
administered by OFAC, including without limitation, the Bank Secrecy Act,
anti-money laundering laws (including, without limitation, the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Pub. L. 107-56 (a/k/a the USA Patriot Act)), and
all economic and trade sanction programs administered by OFAC, any and all
similar United States federal laws, regulations or Executive Orders, and any
similar laws, regulators or orders adopted by any State within the United
States.

 

“OFAC SDN List” means the list of the Specially Designated Nationals and Blocked
Persons maintained by OFAC.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Revolving Loan or Loan
Document).

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.12).

 

“Participating Interest” is defined in Section 2.2(e) hereof.

 

“Participating Lender” is defined in Section 2.2(e) hereof.

 

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“PBGC” means the Pension Benefit Guaranty Corporation or any Person succeeding
to any or all of its functions under ERISA.

 

“Permitted Acquisition” means any investment or acquisition with respect to
which all of the following conditions shall have been satisfied:

 

(a)                            the investment or acquisition is with respect to
real property or improvements on real property located in, or of a business with
its primary operations in, the United States of America; and

 

(b)                            the acquisition shall not be a Hostile
Acquisition; and

 

(c)                             the investment or acquisition is with respect to
an asset or business associated with an Eligible Line of Business, which may
include, but is not limited to, sale/leaseback transactions, mortgage loans,
lines of credit or other financings, etc.; and

 

(d)                            after giving effect to the investment or
acquisition, no Event of Default shall exist, including with respect to the
financial covenants contained in Section 8.21 hereof, provided, however, that if
such investment or acquisition together with any other investments or
acquisitions made during such Fiscal Quarter have an aggregate cost exceeding
20% of the Total Asset Value of the Borrower and its Subsidiaries as of the last
day of the most recently ended Fiscal Quarter for which financial statements
have been delivered pursuant to Section 8.5 hereof, then for such investment or
acquisition, the Borrower shall provide to the Administrative Agent an executed
Compliance Certificate showing Borrower’s pro forma compliance with the
covenants contained in Section 8.21 after giving effect to the proposed
investment or acquisition, including giving effect in terms of additional asset
value, liabilities incurred, if any, additional revenues and expenses associated
therewith which have been contemplated and have been projected into the expected
operating results and financial position of the Borrower for the Fiscal Quarter
in which the investment or acquisition occurs.

 

“Permitted Lien” means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding has been commenced: 
(a) Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 8.3; (b) Liens imposed by law, such
as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and
other similar Liens arising in the ordinary course of business securing
obligations that are not overdue or that are being contested in good faith and
by proper proceedings and as to which appropriate reserves are being maintained;
(c) pledges or deposits to secure obligations under workers’ compensation laws
or similar legislation or to secure public or statutory obligations;
(d) easements, rights of way and other encumbrances on title to real property
that do not materially and adversely affect the value of such property or the
use of such property for its present purposes; (e) deposits to secure the
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of like nature incurred in the ordinary course of business;
(f) Liens in favor of the United States of America for amounts paid to the
Borrower or any Subsidiary as progress payments under government contracts
entered into by it;

 

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(g) attachment, judgment and other similar Liens arising in connection with
court, reference or arbitration proceedings, provided that the same have been in
existence less than 20 days, that the same have been discharged or that
execution or enforcement thereof has been stayed pending appeal; and (h) Liens
on Properties not constituting Unencumbered Assets.

 

“Person” means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof.

 

“Plan” means any employee pension benefit plan covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code that
either (a) is maintained by a member of the Controlled Group for employees of a
member of the Controlled Group or (b) is maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which a member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
plan years made contributions.

 

“Preferred Dividends” means any dividend paid (or payable) as the case may be,
in cash on any preferred equity security issued by the Borrower.

 

“Property” or “Properties” means, as to any Person, all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent balance sheet of such Person and its subsidiaries
under GAAP.

 

“Property Expenses” means, with respect to any Unencumbered Asset, the costs
(including, but not limited to, payroll, taxes, assessments, insurance,
utilities, landscaping and other similar charges) of operating and maintaining
any Unencumbered Asset, which are the responsibility of the Borrower or the
applicable Subsidiary that are not paid directly by the tenant, but excluding
depreciation, amortization, interest costs and maintenance capital expenditures
to the extent such Unencumbered Asset is under a triple net lease.

 

“Property Income” means (i) for Unencumbered Assets, cash rents (excluding, as
an abundance of caution, non-cash straight-line rent) and other cash revenues
received by the Borrower or a Subsidiary in the ordinary course of business for
any Unencumbered Asset, but excluding security deposits and prepaid rent except
to the extent applied in satisfaction of tenants’ obligations for rent plus
(ii) for Qualified Mortgage Loans, interest and fee payments received by the
Borrower or a Subsidiary with respect to a Qualified Mortgage Loan (exclusive of
any balloon payments or prepayments of principal paid on such Qualified Mortgage
Loan).

 

“Property NOI” means, with respect to any property for the four most recently
ended Fiscal Quarters (without duplication) the aggregate amount of (i) Property
Income for such period minus (ii) Property Expenses for such period.

 

“Qualified Mortgage Loan” means, as of any date of determination, any mortgage
loan that is held or owned by the Borrower or any Subsidiary (i) listed on
Exhibit A to Schedule I of the Compliance Certificate on the Closing Date and
(ii) thereafter, listed on Exhibit A to

 

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Schedule I of the Compliance Certificate after such mortgage loan’s designation
by the Borrower as a Qualified Mortgage Loan, so long as Borrower shall fully
comply with the requirements of Section 8.5(c) with regards to reporting of such
Qualified Mortgage Loan that meets the following criteria:

 

(a)                            Secured by a first mortgage or a first deed of
trust on Senior Housing Assets in favor of the Borrower or such Subsidiary and
such Senior Housing Asset is not subject to any other Lien or negative pledge
(other than Permitted Liens);

 

(b)                            The underlying Senior Housing Asset is currently
in service (not under development);

 

(c)                             The underlying Senior Housing Asset is located
in the United States and the loan documents pertaining to the mortgage or deed
of trust are governed by the law of a state of the United States;

 

(d)                            Neither the mortgage loan, nor the right to
receive payments thereunder, is subject to any Lien (other than Permitted Liens)
or to any negative pledge;

 

(e)                             If such mortgage loan is owned by a Subsidiary,
none of the Borrower’s beneficial ownership interest in such Subsidiary is
subject to any Lien (other than Permitted Liens or Liens in favor of the
Borrower) or to any negative pledge;

 

(f)                           The underlying Property, based on the Borrower or
its Subsidiary’s actual knowledge, is free of all material structural defects or
major architectural deficiencies, material title defects, material environmental
conditions or other adverse matters which, individually or collectively,
materially impair the value of such Property; and

 

(g)                             The mortgagor or grantor with respect to such
mortgage loan is not delinquent sixty (60) days or more in interest or principal
payments due thereunder.

 

“RCRA” means the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments
of 1984, 42 U.S.C. §§6901 et seq., and any future amendments.

 

“Recipient” means (a) the Administrative Agent, (b) any Lender, and (c) the L/C
Issuer, as applicable.

 

“Redevelopment Assets” means any real estate under major redevelopment.

 

“Reimbursement Obligation” is defined in Section 2.2(c) hereof.

 

“REIT” means a real estate investment trust under Sections 856-860 of the Code.

 

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

 

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, migration, dumping, or disposing
into the indoor or outdoor environment, including, without limitation, the
abandonment or discarding of barrels, drums, containers, tanks or other
receptacles containing or previously containing any Hazardous Material.

 

“Reorganization” means, with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the 30-day notice period is waived
under subsection .13, .14, .16, .18, .19 or .20 of PBGC Reg. §4043.

 

“Required Lenders” means, as of the date of determination thereof, Lenders whose
outstanding Revolving Loans and interests in Letters of Credit and Unused
Revolving Credit Commitments constitute more than 50% of the sum of the total
outstanding Revolving Loans, interests in Letters of Credit, and Unused
Revolving Credit Commitments of the Lenders.  The Unused Revolving Credit
Commitment, the aggregate principal amount of outstanding Revolving Loans and
the outstanding participation in L/C Obligations of each Defaulting Lender shall
be disregarded in determining Required Lenders at any time.

 

“Revolver Percentage” means, for each Lender, the percentage of the Revolving
Credit Commitments represented by such Lender’s Revolving Credit Commitment or,
if the Revolving Credit Commitments have been terminated, the percentage held by
such Lender (including through participation interests in Reimbursement
Obligations) of the aggregate principal amount of all Revolving Loans and
L/C Obligations then outstanding.

 

“Revolving Credit” means the credit facility for making Revolving Loans and
issuing Letters of Credit described in Sections 2.1 and 2.2 hereof.

 

“Revolving Credit Commitment” means, as to any Lender, the obligation of such
Lender to make Revolving Loans and to participate in Letters of Credit issued
for the account of the Borrower hereunder in an aggregate principal or face
amount at any one time outstanding not to exceed the amount set forth opposite
such Lender’s name on Schedule 1 attached hereto and made a part hereof, as the
same may be reduced or modified at any time or from time to time pursuant to the
terms hereof.  The Borrower and the Lenders acknowledge and agree that the
Revolving Credit Commitments of the Lenders aggregate $400,000,000 on the date
hereof.

 

“Revolving Credit Termination Date” means the Stated Revolving Credit
Termination Date, as the same may be extended pursuant to Section 2.16 hereof,
or such earlier date on which the Revolving Credit Commitments are terminated in
whole pursuant to Section 2.11, 9.2 or 9.3 hereof.

 

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“Revolving Loan” is defined in Section 2.1 hereof and, as so defined, includes a
Base Rate Loan or a Eurodollar Loan, each of which is a “type” of Revolving Loan
hereunder.

 

“Rolling Period” means, as of any date, the four Fiscal Quarters ending on or
immediately preceding such date.

 

“S&P” means Standard & Poor’s Ratings Services Group, a Standard & Poor’s
Financial Services LLC business.

 

“Secured Debt” means as of any date of determination, the aggregate principal
amount of all indebtedness outstanding of the Borrower and its Subsidiaries,
evidenced by notes, bonds debentures or similar instruments and capital lease
obligations that are secured by a Lien.

 

“Senior Housing Assets” means any Property on which the improvements consist
only of one or more of the following:  (a) senior apartments, (b) independent
living facilities, (c) congregate communities, (d) assisted living facilities,
(e) nursing homes, (f) hospitals, (g) memory care communities, (h) medical
office buildings and (i) other Property primarily used for senior citizen
residences or health care services, together with other improvements incidental
thereto.

 

“Single Employer Plan” means any Plan that is covered by Title IV of ERISA but
is not a Multiemployer Plan.

 

“SNF’s” is defined in the definition of Capitalization Rate.

 

“Stated Revolving Credit Termination Date” means October 14, 2018.

 

“Stock” means shares of capital stock, beneficial or partnership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation or equivalent entity, whether voting or non-voting, and includes,
without limitation, common stock, but excluding any preferred stock or other
preferred equity security.

 

“Stock Equivalents” means all securities (other than Stock) convertible into or
exchangeable for Stock at the option of the holder, and all warrants, options or
other rights to purchase or subscribe for any stock, whether or not presently
convertible, exchangeable or exercisable.

 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, 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, limited liability company, partnership, association or any other
entity of which more than 50% of the outstanding Voting Stock or, in the case of
a partnership, more than the 50% of the general partnership interests are at the
time directly or indirectly owned by such parent or by any one or more other
entities which are themselves subsidiaries of such

 

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parent.  Unless otherwise expressly noted herein, the term “Subsidiary” means a
Subsidiary of the Borrower or of any of its direct or indirect Subsidiaries.

 

“Tangible Net Worth” means for each applicable period, total stockholders’
equity on the Borrower’s consolidated balance sheet as reported in its Form 10-K
or 10-Q less all amounts appearing on the assets side of its consolidated
balance sheet representing an intangible asset under GAAP.

 

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

 

“Total Asset Value” means the book value, without giving effect to depreciation,
of all assets of the Borrower and its Subsidiaries at such time; less (a) the
amount, if any, of the Borrower’s investment in any unconsolidated subsidiary,
joint venture or other similar entity, and (b) all amounts appearing on the
assets side of its consolidated balance sheet separately identifiable as
intangible assets under GAAP.

 

“Total Indebtedness” means, as of any date of determination and without
duplication, all Indebtedness for Borrowed Money of the Borrower and its
Subsidiaries.

 

“Unconsolidated Affiliates” means an Affiliate of the Borrower whose financial
statements are not required to be consolidated with the financial statements of
the Borrower in accordance with GAAP.

 

“Unencumbered Asset Subsidiary” means any Subsidiary that owns an asset that is
included in the calculation of the financial covenants contained in Sections
8.21(c) and (f)  hereof.

 

“Unencumbered Asset Value” means an amount equal to the sum of:

 

(a)                            for all Unencumbered Assets owned by the Borrower
or a Wholly-owned Subsidiary for more than twenty-four months prior to the date
of determination, the quotient of (i) the Property NOI from such Unencumbered
Assets divided by (ii) the Capitalization Rate, plus

 

(b)                            for all Unencumbered Assets not owned by the
Borrower or a Wholly-owned Subsidiary for twenty-four months or less prior to
the date of determination, the Gross Book Value of any such Unencumbered Asset;
plus

 

(c)                             for all Unencumbered Assets owned for more than
twenty-four months prior to the date of determination by any Subsidiary that is
not a Wholly-owned Subsidiary, the result of (A) the quotient of (i) the
Property NOI from such Unencumbered Asset divided by (ii) the Capitalization
Rate, multiplied by (B) the percentage of Equity Interests in such
non-Wholly-owned Subsidiary owned by the Borrower as of such date of
determination; plus

 

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(d)                           for all Unencumbered Assets owned for twenty-four
months or less prior to the date of determination by any Subsidiary that is not
a Wholly-owned Subsidiary, the result of (i) the Gross Book Value of such
Unencumbered Asset, multiplied by (ii) the percentage of Equity Interests in
such non-Wholly-owned Subsidiary owned by the Borrower as of such date of
determination; plus

 

(e)                             for all Qualified Mortgage Loans owned by the
Borrower or a Wholly-owned Subsidiary, the book value of such Qualified Mortgage
Loans as of the date of such determination; plus

 

(f)                           for all Qualified Mortgage Loans owned by any
Subsidiary that is not a Wholly-owned Subsidiary, the result of (i) the book
value of such Qualified Mortgage Loans as of the date of such determination,
multiplied by (ii) the percentage of Equity Interests in such non-Wholly-owned
Subsidiary owned by the Borrower as of such date of determination; provided,
that the Unencumbered Asset Value of all Qualified Mortgage Loans under clause
(e) and clause (f) hereof shall at no time exceed, in the aggregate at any one
time outstanding, 30% of the Unencumbered Asset Value of the Borrower and its
Subsidiaries at such time.

 

“Unencumbered Assets” means, those unencumbered Properties (each an
“Unencumbered Asset”) owned by the Borrower or a Subsidiary, and (i) listed on
Exhibit A to Schedule I of the Compliance Certificate on the Closing Date and 
(ii) thereafter, listed on Exhibit A to Schedule I of the Compliance Certificate
after such properties’ designation by the Borrower as an Unencumbered Asset, so
long as Borrower shall fully comply with the requirements of Section 8.5(c) with
regards to reporting of such Unencumbered Asset that meet the following
criteria:

 

(a)                            Is real property 100% owned in fee simple by the
Borrower or a Subsidiary;

 

(b)                            Currently in service (not under development) and
generates cash rental income to the Borrower or such Subsidiary ;

 

(c)                             Senior Housing Asset or school located in the
United States;

 

(d)                            If such Property is owned by the Borrower,
(i) neither the Borrower’s beneficial ownership interest in such Property nor
the Property is subject to any Lien (other than Permitted Liens and Liens in
favor of the Agent and the Noteholders (but only to the extent the Obligations
hereunder are simultaneously secured by such Liens on terms and provisions,
including an intercreditor agreement, satisfactory to the Required Lenders)) or
to any negative pledge, other than the negative pledge set forth herein or in
the Note Purchase Agreement and (ii) the Borrower has the unilateral right to
(x) sell, transfer or otherwise dispose of such Property and (y) to create a
Lien on such Property as security for indebtedness of the Borrower (other than
restrictions imposed by the negative pledge set forth herein or in the Note
Purchase Agreement);

 

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(e)                             If such Property is owned by a Subsidiary,
(i) none of the Borrower’s beneficial ownership interest in such Subsidiary or
the Property is subject to any Lien (other than Permitted Liens and Liens in
favor of the Borrower) or to any negative pledge, other than the negative pledge
set forth herein or in the Note Purchase Agreement and (ii) the Subsidiary has
the unilateral right to (x) sell, transfer or otherwise dispose of such Property
and (y) to create a Lien on such Property as security for indebtedness of the
Borrower or such Subsidiary (other than restrictions imposed by the negative
pledge set forth herein or in the Note Purchase Agreement);

 

(f)                           Such Property, based on Borrower’s or the
Subsidiary’s actual knowledge, is free of all material structural defects or
major architectural deficiencies, material title defects, material environmental
conditions or other adverse matters which, individually or collectively,
materially impair the value of such Property; and

 

(g)                             The lessee of such Property under its Lease is
not more than 60 days past due with respect to any monthly minimum rent payment
obligations under such Lease.

 

“Unfunded Vested Liabilities” means, for any Plan at any time, the amount (if
any) by which the present value of all vested nonforfeitable accrued benefits
under such Plan exceeds the fair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent valuation date for such
Plan, but only to the extent that such excess represents a potential liability
of a member of the Controlled Group to the PBGC or the Plan under Title IV of
ERISA.

 

“Unsecured Debt” means, with respect to a Person as of any given date, the
aggregate principal amount of all Total Indebtedness of such Person outstanding
at such date that is not Secured Debt (excluding Total Indebtedness associated
with Unconsolidated Affiliates that is not guaranteed by the Borrower or a
Subsidiary of the Borrower) and in the case of the Borrower shall include
(without duplication) Total Indebtedness that does not constitute Secured Debt.

 

“Unused Revolving Credit Commitments” means, at any time, the difference between
the Revolving Credit Commitments then in effect and the aggregate outstanding
principal amount of Revolving Loans and L/C Obligations.

 

“U.S. Dollars” and “$” each means the lawful currency of the United States of
America.

 

“Voting Stock” of any Person means capital stock or other equity interests of
any class or classes (however designated) having ordinary power for the election
of directors or other similar governing body of such Person, other than stock or
other equity interests having such power only by reason of the happening of a
contingency.

 

“Welfare Plan” means a “welfare plan” as defined in Section 3(1) of ERISA.

 

“Wholly-owned Subsidiary” means a Subsidiary of which all of the issued and
outstanding shares of capital stock (other than directors’ qualifying shares as
required by law) or other equity interests are owned by the Borrower and/or one
or more Wholly-owned Subsidiaries within the meaning of this definition.

 

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“Withholding Agent” means the Borrower and the Administrative Agent.

 

Section 1.2.                                           Interpretation.   The
foregoing definitions are equally applicable to both the singular and plural
forms of the terms defined.  Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms.  The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.”  The word “will” shall be construed to have the
same meaning and effect as the word “shall.”  Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person’s successors and assigns, (c) the words
“herein,” “hereof” and “hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement, (e) any reference to any law or regulation
herein shall, unless otherwise specified, refer to such law or regulation as
amended, modified or supplemented from time to time, and (f) the words “asset”
and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.  All references to time of day
herein are references to Chicago, Illinois, time unless otherwise specifically
provided.  Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with GAAP except where such principles
are inconsistent with the specific provisions of this Agreement.  The Borrower
covenants and agrees with the Lenders that whether or not the Borrower may at
any time adopt Accounting Standards Codification 825 or account for assets and
liabilities acquired in an acquisition on a fair value basis pursuant to
Accounting Standards Codification 805, all determinations of compliance with the
terms and conditions of this Agreement shall be made on the basis that the
Borrower has not adopted Accounting Standards Codification 825 or Accounting
Standards Codification 805.

 

Section 1.3.                                           Change in Accounting
Principles.  If, after the date of this Agreement, there shall occur any change
in GAAP from those used in the preparation of the financial statements referred
to in Section 6.5 hereof and such change shall result in a change in the method
of calculation of any financial covenant, standard or term found in this
Agreement, either the Borrower or the Required Lenders may by notice to the
Lenders and the Borrower, respectively, require that the Lenders and the
Borrower negotiate in good faith to amend such covenants, standards, and terms
so as equitably to reflect such change in accounting principles, with the
desired result being that the criteria for evaluating the financial condition of
the Borrower and its Subsidiaries shall be the same as if such change had not
been made.  No delay by the Borrower or the Required Lenders in requiring such
negotiation shall limit their right to so require such a negotiation at any time
after such a change in accounting principles.  Until any such covenant,
standard, or term is amended in accordance with this Section 1.3, financial
covenants shall be computed and determined in accordance with GAAP in effect
prior to such change in accounting principles.  Without limiting the generality
of the foregoing, the Borrower shall neither be

 

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deemed to be in compliance with any financial covenant hereunder nor out of
compliance with any financial covenant hereunder if such state of compliance or
noncompliance, as the case may be, would not exist but for the occurrence of a
change in accounting principles after the date hereof.

 

SECTION 2.                                             THE CREDIT FACILITY.

 

Section 2.1.                                           Revolving Credit
Commitments.  Subject to the terms and conditions hereof, each Lender, by its
acceptance hereof, severally agrees to make a loan or loans (individually a
“Revolving Loan” and collectively for all the Lenders, the “Revolving Loans”) in
U.S. Dollars to the Borrower from time to time on a revolving basis up to the
amount of such Lender’s Revolving Credit Commitment, subject to any reductions
thereof pursuant to the terms hereof, before the Revolving Credit Termination
Date.  The sum of the aggregate principal amount of Revolving Loans and
L/C Obligations at any time outstanding shall not exceed the Revolving Credit
Commitments in effect at such time.  Each Borrowing of Revolving Loans shall be
made ratably by the Lenders in proportion to their respective Revolver
Percentages.  As provided in Section 2.5 hereof, the Borrower may elect that
each Borrowing of Revolving Loans be either Base Rate Loans or Eurodollar
Loans.  Revolving Loans may be repaid and the principal amount thereof
reborrowed before the Revolving Credit Termination Date, subject to the terms
and conditions hereof.

 

Section 2.2.                                           Letters of Credit. 
(a) General Terms.  Subject to the terms and conditions hereof, as part of the
Revolving Credit, the L/C Issuer shall issue standby and commercial letters of
credit (each a “Letter of Credit”) for the account of the Borrower or for the
account of the Borrower and one or more of its Subsidiaries in an aggregate
undrawn face amount up to the L/C Sublimit.  The sum of the aggregate principal
amount of Revolving Loans and L/C Obligations at any time outstanding shall not
exceed the Revolving Credit Commitments in effect at such time.  Each Letter of
Credit shall be issued by the L/C Issuer, but each Lender shall be obligated to
reimburse the L/C Issuer for such Lender’s Revolver Percentage of the amount of
each drawing thereunder and, accordingly, each Letter of Credit shall constitute
usage of the Revolving Credit Commitment of each Lender pro rata in an amount
equal to its Revolver Percentage of the L/C Obligations then outstanding.

 

(b)                                      Applications.  At any time before the
Revolving Credit Termination Date, the L/C Issuer shall, at the request of the
Borrower, issue one or more Letters of Credit in U.S. Dollars, in a form
satisfactory to the L/C Issuer, with expiration dates no later than the earlier
of 12 months from the date of issuance (or which are cancelable not later than
12 months from the date of issuance and each renewal) or 30 days prior to the
Revolving Credit Termination Date, in an aggregate face amount as set forth
above, upon the receipt of an application duly executed by the Borrower and, if
such Letter of Credit is for the account of one of its Subsidiaries, such
Subsidiary for the relevant Letter of Credit in the form then customarily
prescribed by the L/C Issuer for the Letter of Credit requested (each an
“Application”).  The Borrower agrees that if on the date 30 days prior to the
Revolving Credit Termination Date any Letters of Credit remain outstanding the
Borrower shall then deliver to the Administrative Agent, without notice or
demand, Cash Collateral in an amount equal to 103% of the aggregate amount of
each Letter of Credit then outstanding (which shall be held by the
Administrative Agent pursuant to the terms

 

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of Section 9.4).  Notwithstanding anything contained in any Application to the
contrary:  (i) the Borrower shall pay fees in connection with each Letter of
Credit as set forth in Section 3.1 hereof, (ii) except as otherwise provided
herein or in Section 2.7, Section 2.14 or Section 2.15 hereof, unless an Event
of Default exists, the L/C Issuer will not call for the funding by the Borrower
of any amount under a Letter of Credit before being presented with a drawing
thereunder, and (iii) if the L/C Issuer is not timely reimbursed for the amount
of any drawing under a Letter of Credit on the date such drawing is paid, the
Borrower’s obligation to reimburse the L/C Issuer for the amount of such drawing
shall bear interest (which the Borrower hereby promises to pay) from and after
the date such drawing is paid at a rate per annum equal to the sum of the
Applicable Margin plus the Base Rate from time to time in effect (computed on
the basis of a year of 365 or 366 days, as the case may be, and the actual
number of days elapsed).  If the L/C Issuer issues any Letter of Credit with an
expiration date that is automatically extended unless the L/C Issuer gives
notice that the expiration date will not so extend beyond its then scheduled
expiration date, unless the Administrative Agent or the Required Lenders
instruct the L/C Issuer otherwise, the L/C Issuer will give such notice of
non-renewal before the time necessary to prevent such automatic extension if
before such required notice date:  (i) the expiration date of such Letter of
Credit if so extended would be after the Revolving Credit Termination Date,
(ii) the Revolving Credit Commitments have been terminated, or (iii) a Default
or an Event of Default exists and either the Administrative Agent or the
Required Lenders (with notice to the Administrative Agent) have given the L/C
Issuer instructions not to so permit the extension of the expiration date of
such Letter of Credit.  The L/C Issuer agrees to issue amendments to the
Letter(s) of Credit increasing the amount, or extending the expiration date,
thereof at the request of the Borrower subject to the conditions of Section 7
hereof and the other terms of this Section 2.2. Notwithstanding anything
contained herein to the contrary, the L/C Issuer shall be under no obligation to
issue, extend or amend any Letter of Credit if a default of any Lender’s
obligations to fund under Section 2.2(c) exists or any Lender is at such time a
Defaulting Lender hereunder, unless the L/C Issuer has entered into arrangements
with Borrower or such Lender satisfactory to the L/C Issuer to eliminate the L/C
Issuer’s risk with respect to such Lender.

 

(c)                                      The Reimbursement Obligations.  Subject
to Section 2.2(b) hereof, the obligation of the Borrower to reimburse the L/C
Issuer for all drawings under a Letter of Credit (a “Reimbursement Obligation”)
shall be governed by the Application related to such Letter of Credit, except
that reimbursement shall be made by no later than 2:00 p.m. (Chicago time) on
the date when each drawing is to be paid if the Borrower has been informed of
such drawing by the L/C Issuer on or before 11:30 a.m. (Chicago time) on the
date when such drawing is to be paid or, if notice of such drawing is given to
the Borrower after 11:30 a.m. (Chicago time) on the date when such drawing is to
be paid, by no later than 12:00 Noon (Chicago time) on the following Business
Day, in immediately available funds at the Administrative Agent’s principal
office in Chicago, Illinois or such other office as the Administrative Agent may
designate in writing to the Borrower (who shall thereafter cause to be
distributed to the L/C Issuer such amount(s) in like funds).  If the Borrower
does not make any such reimbursement payment on the date due and the
Participating Lenders fund their participations therein in the manner set forth
in Section 2.2(e) below, then all payments thereafter received by the
Administrative Agent in discharge of any of the relevant Reimbursement
Obligations shall be distributed in accordance with Section 2.2(e) below.

 

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(d)                                      Obligations Absolute.  The Borrower’s
obligation to reimburse L/C Obligations as provided in subsection (c) of this
Section shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement and the relevant
Application under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit or this
Agreement, or any term or provision therein, (ii) 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, (iii) payment by the L/C Issuer under a Letter of Credit against
presentation of a draft or other document that does not strictly comply with the
terms of such Letter of Credit, or (iv) 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 setoff against, the Borrower’s obligations hereunder. None of
the Administrative Agent, the Lenders, or the L/C Issuer 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 in the
preceding sentence), 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 L/C Issuer; provided
that the foregoing shall not be construed to excuse the L/C Issuer from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential 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 the L/C Issuer’s failure to exercise care when determining
whether drafts and 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 or willful misconduct on the part of the L/C Issuer (as
determined by a court of competent jurisdiction by final and nonappealable
judgment), the L/C Issuer shall be deemed to have exercised 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
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the L/C Issuer may, in its sole discretion, either accept and
make payment upon such documents without responsibility for further
investigation, regardless of any notice 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.

 

(e)                                      The Participating Interests.  Each
Lender (other than the Lender acting as the L/C Issuer in issuing the relevant
Letter of Credit), by its acceptance hereof, severally agrees to purchase from
the L/C Issuer, and the L/C Issuer hereby agrees to sell to each such Lender (a
“Participating Lender”), an undivided percentage participating interest (a
“Participating Interest”), to the extent of its Revolver Percentage, in each
Letter of Credit issued by, and each Reimbursement Obligation owed to, the L/C
Issuer.  Upon any failure by the Borrower to pay any Reimbursement Obligation at
the time required on the date the related drawing is to be paid, as set forth in
Section 2.2(c) above, or if the L/C Issuer is required at any time to return to
the Borrower or to a trustee, receiver, liquidator, custodian or other Person
any portion of any payment of any Reimbursement Obligation, each Participating
Lender shall, not later than the Business Day it receives a certificate in the
form of Exhibit A hereto from the L/C Issuer (with a

 

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copy to the Administrative Agent) to such effect, if such certificate is
received before 1:00 p.m. (Chicago time), or not later than 1:00 p.m. (Chicago
time) the following Business Day, if such certificate is received after such
time, pay to the Administrative Agent for the account of the L/C Issuer an
amount equal to such Participating Lender’s Revolver Percentage of such unpaid
or recaptured Reimbursement Obligation together with interest on such amount
accrued from the date the related payment was made by the L/C Issuer to the date
of such payment by such Participating Lender at a rate per annum equal to: 
(i) from the date the related payment was made by the L/C Issuer to the date two
(2) Business Days after payment by such Participating Lender is due hereunder,
the Federal Funds Rate for each such day and (ii) from the date two (2) Business
Days after the date such payment is due from such Participating Lender to the
date such payment is made by such Participating Lender, the Base Rate in effect
for each such day.  Each such Participating Lender shall thereafter be entitled
to receive its Revolver Percentage of each payment received in respect of the
relevant Reimbursement Obligation and of interest paid thereon, with the L/C
Issuer retaining its Revolver Percentage thereof as a Lender hereunder.  The
several obligations of the Participating Lenders to the L/C Issuer under this
Section 2.2 shall be absolute, irrevocable, and unconditional under any and all
circumstances whatsoever and shall not be subject to any set-off, counterclaim
or defense to payment which any Participating Lender may have or have had
against the Borrower, the L/C Issuer, the Administrative Agent, any Lender or
any other Person whatsoever.  Without limiting the generality of the foregoing,
such obligations shall not be affected by any Default or Event of Default or by
any reduction or termination of any Revolving Credit Commitment of any Lender,
and each payment by a Participating Lender under this Section 2.2 shall be made
without any offset, abatement, withholding or reduction whatsoever.

 

(f)                                      Indemnification.  The Participating
Lenders shall, to the extent of their respective Revolver Percentages, indemnify
the L/C Issuer (to the extent not reimbursed by the Borrower) against any cost,
expense (including reasonable counsel fees and disbursements), claim, demand,
action, loss or liability (except such as result from the L/C Issuer’s gross
negligence or willful misconduct as determined by a court of competent
jurisdiction by final and nonappealable judgment) that the L/C Issuer may suffer
or incur in connection with any Letter of Credit issued by it.  The obligations
of the Participating Lenders under this Section 2.2(f) and all other parts of
this Section 2.2 shall survive termination of this Agreement and of all
Applications, Letters of Credit, and all drafts and other documents presented in
connection with drawings thereunder.

 

(g)                                       Manner of Requesting a Letter of
Credit.  The Borrower shall provide at least five (5) Business Days’ advance
written notice to the Administrative Agent of each request for the issuance of a
Letter of Credit, such notice in each case to be accompanied by an Application
for such Letter of Credit properly completed and executed by the Borrower and,
in the case of an extension or amendment or an increase in the amount of a
Letter of Credit, a written request therefor, in a form acceptable to the
Administrative Agent and the L/C Issuer, in each case, together with the fees
called for by this Agreement.  The Administrative Agent shall promptly notify
the L/C Issuer of the Administrative Agent’s receipt of each such notice (and
the L/C Issuer shall be entitled to assume that the conditions precedent to any
such issuance, extension, amendment or increase have been satisfied unless
notified to the contrary by the Administrative Agent or the Required Lenders)
and the L/C Issuer shall promptly notify the Administrative Agent and the
Lenders of the issuance of the Letter of Credit so requested.

 

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(h)                                      Replacement of the L/C Issuer.  The L/C
Issuer may be replaced at any time by written agreement among the Borrower, the
Administrative Agent, the replaced L/C Issuer and the successor L/C Issuer.  The
Administrative Agent shall notify the Lenders of any such replacement of the L/C
Issuer.  At the time any such replacement shall become effective, the Borrower
shall pay all unpaid fees accrued for the account of the replaced L/C Issuer. 
From and after the effective date of any such replacement (i) the successor
L/C Issuer shall have all the rights and obligations of the L/C Issuer under
this Agreement with respect to Letters of Credit to be issued thereafter and
(ii) references herein to the term “L/C Issuer” shall be deemed to refer to such
successor or to any previous L/C Issuer, or to such successor and all previous
L/C Issuers, as the context shall require.  After the replacement of a
L/C Issuer hereunder, the replaced L/C Issuer shall remain a party hereto and
shall continue to have all the rights and obligations of a L/C Issuer under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.

 

Section 2.3.                                           Applicable Interest
Rates.  (a) Base Rate Loans.  Each Base Rate Loan made or maintained by a Lender
shall bear interest (computed on the basis of a year of 365 or 366 days, as the
case may be, and the actual days elapsed) on the unpaid principal amount thereof
from the date such Revolving Loan is advanced, or created by conversion from a
Eurodollar Loan, until maturity (whether by acceleration or otherwise) at a rate
per annum equal to the sum of the Applicable Margin plus the Base Rate from time
to time in effect, payable by the Borrower on each Interest Payment Date and at
maturity (whether by acceleration or otherwise).

 

“Base Rate” means, for any day, the rate per annum equal to the greatest of: 
(a) the rate of interest announced or otherwise established by the
Administrative Agent from time to time as its prime commercial rate, or its
equivalent, for U.S. Dollar loans to borrowers located in the United States as
in effect on such day, with any change in the Base Rate resulting from a change
in said prime commercial rate to be effective as of the date of the relevant
change in said prime commercial rate (it being acknowledged and agreed that such
rate may not be the Administrative Agent’s best or lowest rate), (b) the sum of
(i) the rate determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the rates per annum
quoted to the Administrative Agent at approximately 10:00 a.m. (Chicago time)
(or as soon thereafter as is practicable) on such day (or, if such day is not a
Business Day, on the immediately preceding Business Day) by two or more Federal
funds brokers selected by the Administrative Agent for sale to the
Administrative Agent at face value of Federal funds in the secondary market in
an amount equal or comparable to the principal amount for which such rate is
being determined, plus (ii) 1/2 of 1%, and (c) the LIBOR Quoted Rate for such
day plus 1.00%.  As used herein, the term “LIBOR Quoted Rate” means, for any
day, the rate per annum equal to the quotient of (i) the rate per annum (rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point) for deposits in U.S. Dollars for a one-month interest period which
appears on the LIBOR01 Page as of 11:00 a.m. (London, England time) on such day
(or, if such day is not a Business Day, on the immediately preceding Business
Day) divided by (ii) one (1) minus the Eurodollar Reserve Percentage.

 

(b)                                      Eurodollar Loans.  Each Eurodollar Loan
made or maintained by a Lender shall bear interest during each Interest Period
it is outstanding (computed on the basis of a year of

 

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360 days and actual days elapsed) on the unpaid principal amount thereof from
the date such Revolving Loan is advanced or continued, or created by conversion
from a Base Rate Loan, until maturity (whether by acceleration or otherwise) at
a rate per annum equal to the sum of the Applicable Margin plus the Adjusted
LIBOR applicable for such Interest Period, payable by the Borrower on each
Interest Payment Date and at maturity (whether by acceleration or otherwise).

 

“Adjusted LIBOR” means, for any Borrowing of Eurodollar Loans, a rate per annum
determined in accordance with the following formula:

 

Adjusted LIBOR

=

LIBOR

 

 

1 - Eurodollar Reserve Percentage

 

“Eurodollar Reserve Percentage” means the maximum reserve percentage, expressed
as a decimal, at which reserves (including, without limitation, any emergency,
marginal, special, and supplemental reserves) are imposed by the Board of
Governors of the Federal Reserve System (or any successor) on “eurocurrency
liabilities”, as defined in such Board’s Regulation D (or any successor
thereto), subject to any amendments of such reserve requirement by such Board or
its successor, taking into account any transitional adjustments thereto.  For
purposes of this definition, the relevant Revolving Loans shall be deemed to be
“eurocurrency liabilities” as defined in Regulation D without benefit or credit
for any prorations, exemptions or offsets under Regulation D. The Eurodollar
Reserve Percentage shall be adjusted automatically on and as of the effective
date of any change in any such reserve percentage.

 

“LIBOR” means, for an Interest Period for a Borrowing of Eurodollar Loans,
(a) the LIBOR Index Rate for such Interest Period, if such rate is available,
and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of
the rates of interest per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) at which deposits in U.S. Dollars in immediately available funds
are offered to the Administrative Agent at 11:00 a.m. (London, England time) two
(2) Business Days before the beginning of such Interest Period by three (3) or
more major banks in the interbank eurodollar market selected by the
Administrative Agent for delivery on the first day of and for a period equal to
such Interest Period and in an amount equal or comparable to the principal
amount of the Eurodollar Loan scheduled to be made as part of such Borrowing.

 

“LIBOR Index Rate” means, for any Interest Period, the rate per annum (rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point) for deposits in U.S. Dollars for a period equal to such Interest Period,
which appears on the LIBOR01 Page as of 11:00 a.m. (London, England time) on the
day two (2) Business Days before the commencement of such Interest Period.

 

“LIBOR01 Page” means the display designated as “LIBOR01 Page” on the Reuters
Service (or on any successor or substitute page of such service, or any
successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market).

 

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(c)                                      Rate Determinations.  The
Administrative Agent shall determine each interest rate applicable to the
Revolving Loans and the Reimbursement Obligations hereunder, and its
determination thereof shall be conclusive and binding except in the case of
manifest error.

 

Section 2.4.                                           Minimum Borrowing
Amounts; Maximum Eurodollar Loans.  Each Borrowing of Base Rate Loans advanced
under the Revolving Credit shall be in an amount not less than $100,000.  Each
Borrowing of Eurodollar Loans advanced, continued or converted under the
Revolving Credit shall be in an amount equal to $1,000,000 or such greater
amount which is an integral multiple of $500,000.  Without the Administrative
Agent’s consent, there shall not be more than five (5) Borrowings of Eurodollar
Loans outstanding hereunder at any one time.

 

Section 2.5.                                           Manner of Borrowing Loans
and Designating Applicable Interest Rates.  (a) Notice to the Administrative
Agent.  The Borrower shall give notice to the Administrative Agent by no later
than 11:00 a.m. (Chicago time):  (i) at least three (3) Business Days before the
date on which the Borrower requests the Lenders to advance a Borrowing of
Eurodollar Loans and (ii) on the date the Borrower requests the Lenders to
advance a Borrowing of Base Rate Loans.  The Revolving Loans included in each
Borrowing shall bear interest initially at the type of rate specified in such
notice of a new Borrowing.  Thereafter, subject to the terms and conditions
hereof, the Borrower may from time to time elect to change or continue the type
of interest rate borne by each Borrowing or, subject to the minimum amount
requirement for each outstanding Borrowing set forth in Section 2.4 hereof, a
portion thereof, as follows:  (i) if such Borrowing is of Eurodollar Loans, on
the last day of the Interest Period applicable thereto, the Borrower may
continue part or all of such Borrowing as Eurodollar Loans or convert part or
all of such Borrowing into Base Rate Loans or (ii) if such Borrowing is of Base
Rate Loans, on any Business Day, the Borrower may convert all or part of such
Borrowing into Eurodollar Loans for an Interest Period or Interest Periods
specified by the Borrower.  The Borrower shall give all such notices requesting
the advance, continuation or conversion of a Borrowing to the Administrative
Agent by telephone, telecopy, or other telecommunication device acceptable to
the Administrative Agent (which notice shall be irrevocable once given and, if
by telephone, shall be promptly confirmed in writing in a manner acceptable to
the Administrative Agent), substantially in the form attached hereto as
Exhibit B (Notice of Borrowing) or Exhibit C (Notice of
Continuation/Conversion), as applicable, or in such other form acceptable to the
Administrative Agent.  Notice of the continuation of a Borrowing of Eurodollar
Loans for an additional Interest Period or of the conversion of part or all of a
Borrowing of Base Rate Loans into Eurodollar Loans must be given by no later
than 11:00 a.m. (Chicago time) at least three (3) Business Days before the date
of the requested continuation or conversion.  All such notices concerning the
advance, continuation or conversion of a Borrowing shall specify the date of the
requested advance, continuation or conversion of a Borrowing (which shall be a
Business Day), the amount of the requested Borrowing to be advanced, continued
or converted, the type of Revolving Loans to comprise such new, continued or
converted Borrowing and, if such Borrowing is to be comprised of Eurodollar
Loans, the Interest Period applicable thereto.  No Borrowing of Eurodollar Loans
shall be advanced, continued, or created by conversion if any Default or Event
of Default then exists.  The Borrower agrees that the Administrative Agent may
rely on any such telephonic, telecopy or other telecommunication notice given by
any person the Administrative Agent in good faith believes is an Authorized
Representative without the

 

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necessity of independent investigation, and in the event any such notice by
telephone conflicts with any written confirmation such telephonic notice shall
govern if the Administrative Agent has acted in reliance thereon.

 

(b)             Notice to the Lenders.  The Administrative Agent shall give
prompt telephonic, telecopy or other telecommunication notice to each Lender of
any notice from the Borrower received pursuant to Section 2.5(a) above and, if
such notice requests the Lenders to make Eurodollar Loans, the Administrative
Agent shall give notice to the Borrower and each Lender by like means of the
interest rate applicable thereto promptly after the Administrative Agent has
made such determination.

 

(c)             Borrower’s Failure to Notify.  If the Borrower fails to give
notice pursuant to Section 2.5(a) above of the continuation or conversion of any
outstanding principal amount of a Borrowing of Eurodollar Loans before the last
day of its then current Interest Period within the period required by
Section 2.5(a) and such Borrowing is not prepaid in accordance with Section 2.7,
such Borrowing shall automatically be converted into a Borrowing of Base Rate
Loans.  In the event the Borrower fails to give notice pursuant to
Section 2.5(a) above of a Borrowing equal to the amount of a Reimbursement
Obligation and has not notified the Administrative Agent by 12:00 noon (Chicago
time) on the day such Reimbursement Obligation becomes due that it intends to
repay such Reimbursement Obligation through funds not borrowed under this
Agreement, the Borrower shall be deemed to have requested a Borrowing of Base
Rate Loans under the Revolving Credit on such day in the amount of the
Reimbursement Obligation then due, which Borrowing shall be applied to pay the
Reimbursement Obligation then due.

 

(d)             Disbursement of Loans.  Not later than 1:00 p.m. (Chicago time)
on the date of any requested advance of a new Borrowing, subject to Section 7
hereof, each Lender shall make available its Revolving Loan comprising part of
such Borrowing in funds immediately available at the principal office of the
Administrative Agent in Chicago, Illinois (or at such other location in the
United States as the Administrative Agent shall designate in writing to the
Borrower).  The Administrative Agent shall make the proceeds of each new
Borrowing available to the Borrower at the Administrative Agent’s principal
office in Chicago, Illinois (or at such other location in the United States as
the Administrative Agent shall designate in writing to the Borrower), by
depositing or wire transferring such proceeds to the credit of the Borrower’s
Designated Disbursement Account or as the Borrower and the Administrative Agent
may otherwise agree.

 

(e)             Administrative Agent Reliance on Lender Funding.  Unless the
Administrative Agent shall have been notified by a Lender prior to (or, in the
case of a Borrowing of Base Rate Loans, by 1:00 p.m. (Chicago time) on) the date
on which such Lender is scheduled to make payment to the Administrative Agent of
the proceeds of a Revolving Loan (which notice shall be effective upon receipt)
that such Lender does not intend to make such payment, the Administrative Agent
may assume that such Lender has made such payment when due and the
Administrative Agent may in reliance upon such assumption (but shall not be
required to) make available to the Borrower the proceeds of the Revolving Loan
to be made by such Lender and, if any Lender has not in fact made such payment
to the Administrative Agent, such Lender shall, on demand, pay to the
Administrative Agent the amount made available to the Borrower

 

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attributable to such Lender together with interest thereon in respect of each
day during the period commencing on the date such amount was made available to
the Borrower and ending on (but excluding) the date such Lender pays such amount
to the Administrative Agent at a rate per annum equal to:  (i) from the date the
related advance was made by the Administrative Agent to the date two
(2) Business Days after payment by such Lender is due hereunder, the Federal
Funds Rate for each such day and (ii) from the date two (2) Business Days after
the date such payment is due from such Lender to the date such payment is made
by such Lender, the Base Rate in effect for each such day.  If such amount is
not received from such Lender by the Administrative Agent immediately upon
demand, the Borrower will, on demand, repay to the Administrative Agent the
proceeds of the Revolving Loan attributable to such Lender with interest thereon
at a rate per annum equal to the interest rate applicable to the relevant
Revolving Loan, but without such payment being considered a payment or
prepayment of a Revolving Loan under Section 2.10 hereof so that the Borrower
will have no liability under such Section with respect to such payment.

 

Section 2.6.              Maturity of Loans.  Each Revolving Loan, both for
principal and interest not sooner paid, shall mature and be due and payable by
the Borrower on the Revolving Credit Termination Date.

 

Section 2.7.              Prepayments.  (a) Optional.  The Borrower may prepay
at any time or from time to time in whole or in part (but, if in part, then: 
(i) if such Borrowing is of Base Rate Loans, in an amount not less than
$100,000, (ii) if such Borrowing is of Eurodollar Loans, in an amount not less
than $500,000, and (iii) in each case, in an amount such that the minimum amount
required for a Borrowing pursuant to Section 2.4 hereof remains outstanding)
without premium or penalty (subject to Section 2.10 hereof) any Borrowing of
Eurodollar Loans at any time upon three (3) Business Days prior notice by the
Borrower to the Administrative Agent or, in the case of a Borrowing of Base Rate
Loans, notice delivered by the Borrower to the Administrative Agent no later
than 10:00 a.m. (Chicago time) on the date of prepayment (or, in any case, such
shorter period of time then agreed to by the Administrative Agent), such
prepayment to be made by the payment of the principal amount to be prepaid and,
in the case of any Eurodollar Loans, accrued interest thereon to the date fixed
for prepayment plus any amounts due the Lenders under Section 2.10 hereof.

 

(b)             Mandatory.  (i) The Borrower shall, on each date the Revolving
Credit Commitments are reduced pursuant to Section 2.11 hereof, prepay the
Revolving Loans and, if necessary, Cash Collateralize the L/C Obligations by the
amount, if any, necessary to reduce the sum of the aggregate principal amount of
Revolving Loans and L/C Obligations then outstanding to the amount to which the
Revolving Credit Commitments have been so reduced.

 

(ii)             Unless the Borrower otherwise directs, prepayments of Revolving
Loans under this Section 2.7(b) shall be applied first to Borrowings of Base
Rate Loans until payment in full thereof with any balance applied to Borrowings
of Eurodollar Loans in the order in which their Interest Periods expire.  Each
prepayment of Revolving Loans under this Section 2.7(b) shall be made by the
payment of the principal amount to be prepaid and, in the case of any Eurodollar
Loans, accrued interest thereon to the date of prepayment together with any
amounts due the

 

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Lenders under Section 2.10 hereof.  Each Cash Collateralization of
L/C Obligations shall be held by the Administrative Agent in accordance with
Section 9.4 hereof.

 

(c)             Any amount of Revolving Loans paid or prepaid before the
Revolving Credit Termination Date may, subject to the terms and conditions of
this Agreement, be borrowed, repaid and borrowed again.

 

Section 2.8.              Default Rate.  Notwithstanding anything to the
contrary contained herein, while any Event of Default exists or after
acceleration, the Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount of all
Revolving Loans and Reimbursement Obligations, and letter of credit fees at a
rate per annum equal to:

 

(a)         for any Base Rate Loan, the sum of 2.0% plus the Applicable Margin
plus the Base Rate from time to time in effect;

 

(b)         for any Eurodollar Loan, the sum of 2.0% plus the rate of interest
in effect thereon at the time of such default until the end of the Interest
Period applicable thereto and, thereafter, at a rate per annum equal to the sum
of 2.0% plus the Applicable Margin for Base Rate Loans plus the Base Rate from
time to time in effect;

 

(c)          for any Reimbursement Obligation, the sum of 2.0% plus the amounts
due under Section 2.2 with respect to such Reimbursement Obligation; and

 

(d)         for any Letter of Credit, the sum of 2.0% plus the letter of credit
fee due under Section 3.1 with respect to such Letter of Credit; and

 

(e)          for any other amount owing hereunder not covered by clauses
(a) through (d) above, the sum of 2% plus the Applicable Margin for Base Rate
Loans plus the Base Rate from time to time in effect;

 

provided, however, that in the absence of acceleration, any adjustments pursuant
to this Section shall be made at the election of the Administrative Agent,
acting at the request or with the consent of the Required Lenders, with written
notice to the Borrower.  While any Event of Default exists or after
acceleration, interest shall be paid on demand of the Administrative Agent at
the request or with the consent of the Required Lenders.

 

Section 2.9.              Evidence of Indebtedness.  (a) Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Revolving
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

 

(b)             The Administrative Agent shall also maintain accounts in which
it will record (i) the amount of each Revolving Loan made hereunder and the
Interest Period with respect thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from

 

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the Borrower to each Lender hereunder and (iii) the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender’s share
thereof.

 

(c)             The entries maintained in the accounts maintained pursuant to
paragraphs (a) and (b) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Obligations in accordance with their terms.

 

(d)             Any Lender may request that its Revolving Loans be evidenced by
a promissory note in the form of Exhibit D (collectively, the “Notes” and
individually as a “Note”).  In such event, the Borrower shall prepare, execute
and deliver to such Lender a Note payable to such Lender or its registered
assigns in the amount of its Revolving Credit Commitment.  Thereafter, the
Revolving Loans evidenced by such Note or Notes and interest thereon shall at
all times (including after any assignment pursuant to Section 12.10) be
represented by one or more Notes payable to the order of the payee named therein
or any assignee pursuant to Section 12.10, except to the extent that any such
Lender or assignee subsequently returns any such Note for cancellation and
requests that such Revolving Loans once again be evidenced as described in
subsections (a) and (b) above.

 

Section 2.10.               Funding Indemnity.  If any Lender shall incur any
loss, cost or expense (including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or re-employment of deposits or other
funds acquired by such Lender to fund or maintain any Eurodollar Loan or the
relending or reinvesting of such deposits or amounts paid or prepaid to such
Lender) as a result of:

 

(a)         any payment, prepayment or conversion of a Eurodollar Loan on a date
other than the last day of its Interest Period,

 

(b)         any failure (because of a failure to meet the conditions of
Section 7 or otherwise) by the Borrower to borrow or continue a Eurodollar Loan,
or to convert a Base Rate Loan into a Eurodollar Loan, on the date specified in
a notice given pursuant to Section 2.5(a) hereof,

 

(c)          any failure by the Borrower to make any payment of principal on any
Eurodollar Loan when due (whether by acceleration or otherwise), or

 

(d)         any acceleration of the maturity of a Eurodollar Loan as a result of
the occurrence of any Event of Default hereunder,

 

then, upon the demand of such Lender, the Borrower shall pay to such Lender such
amount as will reimburse such Lender for such loss, cost or expense.  If any
Lender makes such a claim for compensation, it shall provide to the Borrower,
with a copy to the Administrative Agent, a certificate setting forth the amount
of such loss, cost or expense in reasonable detail (including an explanation of
the basis for and the computation of such loss, cost or expense) and the amounts
shown on such certificate shall be deemed prime facie correct.

 

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Section 2.11.               Commitment Terminations.  (a) Optional Revolving
Credit Terminations.  The Borrower shall have the right at any time and from
time to time, upon five (5) Business Days prior written notice to the
Administrative Agent (or such shorter period of time agreed to by the
Administrative Agent), to terminate the Revolving Credit Commitments without
premium or penalty and in whole or in part, any partial termination to be (i) in
an amount not less than $1,000,000 and (ii) allocated ratably among the Lenders
in proportion to their respective Revolver Percentages, provided that the
Revolving Credit Commitments may not be reduced to an amount less than the sum
of the aggregate principal amount of Revolving Loans and L/C Obligations then
outstanding.  Any termination of the Revolving Credit Commitments below the
L/C Sublimit then in effect shall reduce the L/C Sublimit by a like amount.  The
Administrative Agent shall give prompt notice to each Lender of any such
termination of the Revolving Credit Commitments.

 

(b)             Any termination of the Revolving Credit Commitments pursuant to
this Section may not be reinstated.

 

Section 2.12.               Substitution of Lenders.  In the event (a) the
Borrower receives a claim from any Lender for compensation under Section 10.3 or
12.1 hereof, (b) the Borrower receives notice from any Lender of any illegality
pursuant to Section 10.1 hereof, (c) any Lender is then a Defaulting Lender or
such Lender is a Subsidiary or Affiliate of a Person who has been deemed
insolvent or becomes the subject of a bankruptcy or insolvency proceeding or a
receiver or conservator has been appointed for any such Person, or (d) a Lender
fails to consent to an amendment or waiver requested under Section 12.11 hereof
at a time when the Required Lenders have approved such amendment or waiver (any
such Lender referred to in clause (a), (b), (c), or (d) above being hereinafter
referred to as an “Affected Lender”), the Borrower may, in addition to any other
rights the Borrower may have hereunder or under applicable law, require, at its
expense, any such Affected Lender to assign, at par, without recourse, all of
its interest, rights, and obligations hereunder (including all of its Revolving
Credit Commitments and the Revolving Loans and participation interests in
Letters of Credit and other amounts at any time owing to it hereunder and the
other Loan Documents) to an Eligible Assignee specified by the Borrower,
provided that (i) such assignment shall not conflict with or violate any law,
rule or regulation or order of any court or other Governmental Authority,
(ii) the Borrower shall have paid to the Affected Lender all monies (together
with amounts due such Affected Lender under Section 2.10 hereof as if the
Revolving Loans owing to it were prepaid rather than assigned) other than such
principal owing to it hereunder, and (iii) the assignment is entered into in
accordance with, and subject to the consents required by, Section 12.10 hereof
(provided any assignment fees and reimbursable expenses due thereunder shall be
paid by the Borrower).

 

Section 2.13.               Increase in Revolving Credit Commitments.  The
Borrower may, on any Business Day prior to the Revolving Credit Termination
Date, with the written consent of the Administrative Agent (which consent shall
not be unreasonably withheld or delayed), increase the aggregate amount of the
Revolving Credit Commitments by delivering a Commitment Amount Increase Request
substantially in the form attached hereto as Exhibit G or in such other form
acceptable to the Administrative Agent (the “Commitment Amount Increase”) at
least five (5) Business Days prior to the desired effective date of such
increase identifying one or more additional Lenders (or additional Revolving
Credit Commitments for existing Lender(s)) and the

 

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amount of its Revolving Credit Commitment (or additional amount of its Revolving
Credit Commitment(s)); provided, however, that (i) any increase of the aggregate
amount of the Revolving Credit Commitments shall not cause the aggregate amount
of the Revolving Credit Commitments to exceed $600,000,000, unless otherwise
approved by the Required Lenders, (ii) any increase of the aggregate amount of
the Revolving Credit Commitments shall be in an amount not less than $5,000,000,
(iii) no Default or Event of Default shall have occurred and be continuing at
the time of the request or the effective date of the Commitment Amount Increase
and (iv) all representations and warranties contained in Section 6 hereof shall
be true and correct at the time of such request and on the effective date of
such Commitment Amount Increase.  The effective date of the Commitment Amount
Increase shall be agreed upon by the Borrower and the Administrative Agent. 
Each existing or new Lender consenting to make available the additional
Revolving Credit Commitments contemplated by the Commitment Amount Increase
shall notify the Administrative Agent of such consent at any time prior to the
desired effective date of such Commitment Amount Increase.  Upon the
effectiveness thereof, (i) the new Lender(s) (or, if applicable, existing
Lender(s)) shall advance Revolving Loans in an amount sufficient such that after
giving effect to its advance each Lender shall have outstanding its Revolver
Percentage of Revolving Loans and (ii) each Lender shall be deemed to have a
Participation Interest, based on the then current Revolver Percentages, in each
Letter of Credit issued by, and each Reimbursement Obligation owed to, the L/C
Issuer.  It shall be a condition to such effectiveness that (i) if any
Eurodollar Loans are outstanding under the Revolving Credit on the date of such
effectiveness, such Eurodollar Loans shall be deemed to be prepaid on such date
and the Borrower shall pay any amounts owing to the Lenders pursuant to
Section 2.10 hereof and (ii) the Borrower shall not have terminated any portion
of the Revolving Credit Commitments pursuant to Section 2.11 hereof.  The
Borrower agrees to pay any reasonable expenses of the Administrative Agent
relating to any Commitment Amount Increase.  Notwithstanding anything herein to
the contrary, (i) no Lender shall have any obligation to increase its Revolving
Credit Commitment and no Lender’s Revolving Credit Commitment shall be increased
without its consent thereto, and each Lender may at its option, unconditionally
and without cause, decline to increase its Revolving Credit Commitment and
(ii) this Section shall supersede any provisions in Sections 12.7 and 12.11 to
the contrary.

 

Section 2.14.               Defaulting Lenders.

 

(a)            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:

 

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

 

(ii)          Defaulting Lender Waterfall. 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
Section 9 or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 12.14 shall be applied at such time or
times as may be determined by the Administrative

 

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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 the L/C Issuer
hereunder; third, to Cash Collateralize the L/C Issuer’s Fronting Exposure with
respect to such Defaulting Lender in accordance with Section 2.15; fourth, as
the Borrower may request (so long as no Default or Event of Default exists), to
the funding of any Revolving 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 Revolving Loans under this Agreement and (y) Cash Collateralize
the L/C Issuer’s future Fronting Exposure with respect to such Defaulting Lender
with respect to future Letters of Credit issued under this Agreement, in
accordance with Section 2.15; sixth, to the payment of any amounts owing to the
Lenders or the L/C Issuer as a result of any judgment of a court of competent
jurisdiction obtained by any Lender or the L/C Issuer 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 Revolving Loans or
L/C Obligations in respect of which such Defaulting Lender has not fully funded
its appropriate share, and (y) such Revolving Loans were made or the related
Letters of Credit were issued at a time when the conditions set forth in
Section 7.1 were satisfied or waived, such payment shall be applied solely to
pay the Revolving Loans of, and L/C Obligations owed to, all Non-Defaulting
Lenders on a pro rata basis prior to being applied to the payment of any
Revolving Loans of, or L/C Obligations owed to, such Defaulting Lender until
such time as all Revolving Loans and funded and unfunded participations in L/C
Obligations are held by the Lenders pro rata in accordance with the Revolving
Credit Commitments under the Revolving Credit without giving effect to
Section 2.14(a)(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 2.14(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

 

(iii)          Certain Fees.

 

(A)         No Defaulting Lender shall be entitled to receive any Commitment Fee
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 L/C
Participation Fees for any period during which that Lender is a Defaulting
Lender

 

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only to the extent allocable to its Revolver Percentage of the stated amount of
Letters of Credit for which it has provided Cash Collateral pursuant to
Section 2.15.

 

(C)         With respect to any Commitment Fee or L/C Participation 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 L/C Obligations that has been reallocated
to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the L/C
Issuer the amount of any such fee otherwise payable to such Defaulting Lender to
the extent allocable to the L/C Issuer’s Fronting Exposure to such Defaulting
Lender, and (z) not be required to pay the remaining amount of any such fee.

 

(iv)          Reallocation of Participations to Reduce Fronting Exposure.  All
or any part of such Defaulting Lender’s participation in L/C Obligations shall
be reallocated among the Non-Defaulting Lenders in accordance with their
respective Revolver Percentages (calculated without regard to such Defaulting
Lender’s  Revolving Credit Commitment) but only to the extent that such
reallocation does not cause the aggregate Revolving Credit Exposure of any
Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Credit
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)         Cash Collateral.  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, Cash
Collateralize the L/C Issuer’s Fronting Exposure in accordance with the
procedures set forth in Section 2.15.

 

(b)             Defaulting Lender Cure.  If the Borrower, the Administrative
Agent and the L/C Issuer 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 may include arrangements with respect to any
Cash Collateral), that Lender will, to the extent applicable, purchase at par
that portion of outstanding Revolving Loans of the other Lenders or take such
other actions as the Administrative Agent may determine to be necessary to cause
the Revolving Loans and funded and unfunded participations in Letters of Credit
to be held pro rata by the Lenders in accordance with the Revolving Credit
Commitments under the Revolving Credit (without giving effect to
Section 2.14(a)(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.

 

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(c)             New Letters of Credit.  So long as any Lender is a Defaulting
Lender, the L/C Issuer shall not be required to issue, extend, renew or increase
any Letter of Credit unless it is satisfied that it will have no Fronting
Exposure after giving effect thereto.

 

Section 2.15.               Cash Collateral for Fronting Exposure. At any time
that there shall exist a Defaulting Lender, within one (1) Business Day
following the written request of the Administrative Agent or the L/C Issuer
(with a copy to the Administrative Agent) the Borrower shall Cash Collateralize
the L/C Issuer’s Fronting Exposure with respect to such Defaulting Lender
(determined after giving effect to Section 2.14(a)(iv) and any Cash Collateral
provided by such Defaulting Lender) in an amount not less than the Minimum
Collateral Amount.

 

(a)            Grant of Security Interest.  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 L/C Issuer, 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 L/C
Obligations, to be applied pursuant to clause (b) 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 L/C Issuer as
herein provided, or that the total amount of such Cash Collateral is less than
the Minimum Collateral Amount, the Borrower will, promptly upon 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).

 

(b)             Application.  Notwithstanding anything to the contrary contained
in this Agreement, Cash Collateral provided under this Section 2.15 or
Section 2.14 in respect of Letters of Credit shall be applied to the
satisfaction of the Defaulting Lender’s obligation to fund participations in
respect of L/C Obligations (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.

 

(c)             Termination of Requirement.  Cash Collateral (or the appropriate
portion thereof) provided to reduce the L/C Issuer’s Fronting Exposure shall no
longer be required to be held as Cash Collateral pursuant to this
Section 2.15(c) following (i) the elimination of the applicable Fronting
Exposure (including by the termination of Defaulting Lender status of the
applicable Lender), or (ii) the determination by the Administrative Agent and
the L/C Issuer that there exists excess Cash Collateral; provided that, subject
to Section 2.14, the Person providing Cash Collateral and the L/C Issuer may
agree that Cash Collateral shall be held to support future anticipated Fronting
Exposure or other obligation.

 

Section 2.16              Extension of the Stated Revolving Credit Termination
Date. Borrower may, by notice to Administrative Agent (which shall promptly
deliver a copy to each of the Lenders) given not more than ninety (90) days and
not less than thirty (30) days prior to the Stated Revolving Credit Termination
Date, request that Lenders extend the Stated Revolving Credit Termination Date
for one additional one-year period.  If (w) Borrower timely delivers such notice
to Administrative Agent, (x) no Default or Event of Default has occurred and is
continuing, (y) all representations and warranties contained in Section 6 hereof
are true and

 

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correct in all material respects (except in the case of a representation or
warranty qualified by materiality, in which case such representation or warranty
shall be true and correct in all respects) on the date the notice is delivered
and on the Stated Revolving Credit Termination Date except for representations
and warranties that relate to a prior date, which shall have been true and
correct in all material respects (except in the case of a representation or
warranty qualified by materiality in which case such representation or warranty
shall be true and correct in all respects) as of the applicable date on which
they were made, and (z) the Administrative Agent receives for the benefit of the
Lenders (to be allocated pro rata based on each Lender’s Revolving Credit
Commitments of the date of the Stated Revolving Credit Terminated Date
extension) the Extension Fee, then the Stated Revolving Credit Termination Date
shall be extended to the first anniversary of the Stated Revolving Credit
Termination Date.  Should the Stated Revolving Credit Termination Date be
extended in accordance with the terms and conditions of the preceding sentence,
the terms and conditions of this Agreement will apply during any such extension
period. Notwithstanding anything herein to the contrary, this Section shall
supersede any provisions in Sections 12.7 and 12.11 to the contrary.

 

SECTION 3.                                             FEES.

 

Section 3.1.              Fees.  (a) Revolving Credit Commitment Fee.  The
Borrower shall pay to the Administrative Agent for the ratable account of the
Lenders in accordance with their Revolver Percentages a commitment fee (the
“Commitment Fee”) at the rate per annum equal to the Applicable Margin (computed
on the basis of a year of 360 days and the actual number of days elapsed) on the
average daily Unused Revolving Credit Commitments.  Such Commitment Fee shall be
payable quarterly in arrears on the last day of each March, June, September, and
December in each year (commencing on the first such date occurring after the
date hereof) and on the Revolving Credit Termination Date, unless the Revolving
Credit Commitments are terminated in whole on an earlier date, in which event
the Commitment Fee for the period to the date of such termination in whole shall
be paid on the date of such termination.

 

(b)             Letter of Credit Fees.  On the date of issuance or extension, or
increase in the amount, of any Letter of Credit pursuant to Section 2.2 hereof,
the Borrower shall pay to the L/C Issuer for its own account a fronting fee
equal to 0.125% of the face amount of (or of the increase in the face amount of)
such Letter of Credit.  Quarterly in arrears, on the last day of each March,
June, September, and December, commencing on the first such date occurring after
the date hereof, the Borrower shall pay to the Administrative Agent, for the
ratable benefit of the Lenders in accordance with their Revolver Percentages, a
letter of credit fee (the “L/C Participation Fee”) at a rate per annum equal to
the Applicable Margin (computed on the basis of a year of 360 days and the
actual number of days elapsed) in effect during each day of such quarter applied
to the daily average face amount of Letters of Credit outstanding during such
quarter.  In addition, the Borrower shall pay to the L/C Issuer for its own
account the L/C Issuer’s standard issuance, drawing, negotiation, amendment,
assignment, cancellation, transfer and other administrative fees for each Letter
of Credit as established by the L/C Issuer from time to time.

 

(c)             Administrative Agent Fees.  The Borrower shall pay to the
Administrative Agent, for its own use and benefit, the fees agreed to between
the Administrative Agent and the

 

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Borrower in a fee letter dated August 21, 2014, or as otherwise agreed to in
writing between them.

 

SECTION 4.                                             PLACE AND APPLICATION OF
PAYMENTS.

 

Section 4.1.                                           Place and Application of
Payments.  All payments of principal of and interest on the Revolving Loans and
the Reimbursement Obligations, and of all other Obligations payable by the
Borrower under this Agreement and the other Loan Documents, shall be made by the
Borrower to the Administrative Agent by no later than 12:00 Noon (Chicago time)
on the due date thereof at the office of the Administrative Agent in
Chicago, Illinois (or such other location in the United States as the
Administrative Agent may designate in writing to the Borrower) for the benefit
of the Lender(s) or the L/C Issuer entitled thereto.  Any payments received
after such time shall be deemed to have been received by the Administrative
Agent on the next Business Day.  All such payments shall be made in
U.S. Dollars, in immediately available funds at the place of payment, in each
case without set-off or counterclaim.  The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest on Revolving Loans and on Reimbursement Obligations in
which the Lenders have purchased Participating Interests ratably to the Lenders
and like funds relating to the payment of any other amount payable to any Lender
to such Lender, in each case to be applied in accordance with the terms of this
Agreement.  If the Administrative Agent causes amounts to be distributed to the
Lenders in reliance upon the assumption that the Borrower will make a scheduled
payment and such scheduled payment is not so made, each Lender shall, on demand,
repay to the Administrative Agent the amount distributed to such Lender together
with interest thereon in respect of each day during the period commencing on the
date such amount was distributed to such Lender and ending on (but excluding)
the date such Lender repays such amount to the Administrative Agent, at a rate
per annum equal to:  (i) from the date the distribution was made to the date two
(2) Business Days after payment by such Lender is due hereunder, the Federal
Funds Rate for each such day and (ii) from the date two (2) Business Days after
the date such payment is due from such Lender to the date such payment is made
by such Lender, the Base Rate in effect for each such day.

 

Anything contained herein to the contrary notwithstanding (including, without
limitation, Section 2.7(b) hereof), all payments and collections received in
respect of the Obligations by the Administrative Agent or any of the Lenders
after acceleration or the final maturity of the Obligations or termination of
the Revolving Credit Commitments as a result of an Event of Default shall be
remitted to the Administrative Agent and distributed as follows:

 

(a)                            first, to the payment of any outstanding costs
and expenses incurred by the Administrative Agent in protecting, preserving or
enforcing rights under the Loan Documents, and in any event including all costs
and expenses of a character which the Borrower has agreed to pay the
Administrative Agent under Section 12.13 hereof (such funds to be retained by
the Administrative Agent for its own account unless it has previously been
reimbursed for such costs and expenses by the Lenders, in which event such
amounts shall be remitted to the Lenders to reimburse them for payments
theretofore made to the Administrative Agent);

 

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(b)                            second, to the payment of any outstanding
interest and fees due under the Loan Documents to be allocated pro rata in
accordance with the aggregate unpaid amounts owing to each holder thereof;

 

(c)                             third, to the payment of principal on the
Revolving Loans, unpaid Reimbursement Obligations, together with amounts to be
held by the Administrative Agent as collateral security for any outstanding
L/C Obligations pursuant to Section 9.4 hereof (until the Administrative Agent
is holding an amount of cash equal to the then outstanding amount of all such
L/C Obligations), and Hedging Liability, the aggregate amount paid to, or held
as collateral security for, the Lenders and the L/C Issuer and, in the case of
Hedging Liability, their Affiliates to be allocated pro rata in accordance with
the aggregate unpaid amounts owing to each holder thereof;

 

(d)                            fourth, to the payment of all other unpaid
Obligations and all other indebtedness, obligations, and liabilities of the
Borrower and its Subsidiaries evidenced by the Loan Documents (including,
without limitation, Funds Transfer and Deposit Account Liability) to be
allocated pro rata in accordance with the aggregate unpaid amounts owing to each
holder thereof; and

 

(e)                             finally, to the Borrower or whoever else may be
lawfully entitled thereto.

 

Section 4.2.                                           Account Debit.  The
Borrower hereby irrevocably authorizes the Administrative Agent to charge any of
the Borrower’s deposit accounts maintained with the Administrative Agent or any
of its Affiliates for the amounts from time to time necessary to pay any then
due Obligations; provided that the Borrower acknowledges and agrees that the
Administrative Agent shall not be under an obligation to do so and the
Administrative Agent shall not incur any liability to the Borrower or any other
Person for the Administrative Agent’s failure to do so.

 

SECTION 5.                                             RELEASE OF GUARANTORS
UNDER PRIOR CREDIT AGREEMENT.

 

The Administrative Agent and the Lenders party hereto hereby agree that (a) all
Guaranties (as defined in the Prior Credit Agreement) provided by the Material
Subsidiaries (as defined in the Prior Credit Agreement) in accordance with
Section 5.1 of the Prior Credit Agreement shall, upon satisfaction of (or waiver
with respect to) the conditions of Section 7.2 hereof, be terminated and of no
further force and effect as of the Closing Date, (b) such Material Subsidiaries
shall have no further obligations, duties or liabilities under such Guaranties
and (c) the Administrative Agent and the Lenders party hereto hereby release,
waive and forever discharge such Material Subsidiaries from all obligations,
duties or liabilities of whatever nature arising under or in connection with
such Guaranties. The Administrative Agent further agrees to furnish to such
Material Subsidiaries any additional releases and/or termination statements and
such other and further documents, instruments and agreements as may reasonably
be requested by such Material Subsidiaries, in order to effect and evidence more
fully the release contained herein and the matters covered hereby.

 

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SECTION 6.                                             REPRESENTATIONS AND
WARRANTIES.

 

The Borrower represents and warrants to the Administrative Agent, the Lenders,
and the L/C Issuer as follows:

 

Section 6.1.                                           Organization and
Qualification.  The Borrower is duly organized, validly existing, and in good
standing as a corporation under the laws of the State of Maryland, has full and
adequate power to own its Property and conduct its business as now conducted,
and is duly licensed or qualified and in good standing in each jurisdiction in
which the nature of the business conducted by it or the nature of the Property
owned or leased by it requires such licensing or qualifying.

 

Section 6.2.                                           Subsidiaries.  Each
Subsidiary is duly organized, validly existing, and in good standing under the
laws of the jurisdiction in which it is organized, has full and adequate power
to own its Property and conduct its business as now conducted, and is duly
licensed or qualified and in good standing in each jurisdiction in which the
nature of the business conducted by it or the nature of the Property owned or
leased by it requires such licensing or qualifying.  All of the outstanding
shares of capital stock and other equity interests of each Subsidiary are
validly issued and outstanding and fully paid and nonassessable and all such
shares and other equity interests owned by the Borrower or another Subsidiary
are owned, beneficially and of record, by the Borrower or such Subsidiary free
and clear of all Liens.  Neither the Borrower nor any of its Subsidiaries has
committed or is obligated to issue Stock Equivalents in any of the Borrower’s
Subsidiaries to any Person not owned by the Borrower or its Subsidiaries.

 

Section 6.3.                                           Authority and Validity of
Obligations.  The Borrower has full right and authority to enter into this
Agreement and the other Loan Documents executed by it, to make the borrowings
herein provided for, to issue its Notes in evidence thereof, and to perform all
of its obligations hereunder and under the other Loan Documents executed by it. 
The Loan Documents delivered by the Borrower have been duly authorized,
executed, and delivered by the Borrower and constitute valid and binding
obligations of the Borrower enforceable against it in accordance with their
terms, except as enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors’ rights generally and
general principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law); and this
Agreement and the other Loan Documents do not, nor does the performance or
observance by the Borrower or any Unencumbered Asset Subsidiary of any of the
matters and things herein or therein provided for, (a) contravene or constitute
a default under any provision of law or any judgment, injunction, order or
decree binding upon the Borrower or any Unencumbered Asset Subsidiary or any
provision of the organizational documents (e.g., charter, certificate or
articles of incorporation and by-laws, certificate or articles of association
and operating agreement, partnership agreement, or other similar organizational
documents) of the Borrower or any Unencumbered Asset Subsidiary, (b) contravene
or constitute a default under any covenant, indenture or agreement of or
affecting the Borrower or any Unencumbered Asset Subsidiary or any of its
Property, or (c) result in the creation or imposition of any Lien on any
Property of the Borrower or any Unencumbered Asset Subsidiary.

 

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Section 6.4.                                           Use of Proceeds; Margin
Stock.  The Borrower shall use the proceeds of the Revolving Credit for
refinancing its existing indebtedness, for its general working capital purposes
and for such other legal and proper purposes as are consistent with all
applicable laws.  The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Revolving Loan or any other
extension of credit made hereunder will be used to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock.  Margin stock (as hereinabove defined)
constitutes less than 25% of the assets of the Borrower which are subject to any
limitation on sale, pledge or other restriction hereunder.

 

Section 6.5.                                           Financial Reports.  The
consolidated balance sheet of the Borrower and its Subsidiaries as at
December 31, 2013, and the related consolidated statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for the Fiscal Year
then ended, and accompanying notes thereto, which financial statements are
accompanied by the audit report of Ernst & Young, LLP, independent public
accountants, and the unaudited interim consolidated balance sheet of the
Borrower and its Subsidiaries as at December 31, 2013, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the 12 months then ended, heretofore furnished
to the Administrative Agent and the Lenders, fairly present the consolidated
financial condition of the Borrower and its Subsidiaries as at said dates and
the consolidated results of their operations and cash flows for the periods then
ended in conformity with GAAP applied on a consistent basis.  Neither the
Borrower nor any Subsidiary has contingent liabilities which are material to it
other than as indicated on such financial statements or, with respect to future
periods, on the financial statements furnished pursuant to Section 8.5 hereof.

 

Section 6.6.                                           No Material Adverse
Change.  Since December 31, 2013, there has been no event which could reasonably
be expected to have a Material Adverse Effect on the Borrower or its
Subsidiaries, taken as a whole.

 

Section 6.7.                                           Full Disclosure.  The
statements and information furnished to the Administrative Agent and the Lenders
in connection with the negotiation of this Agreement and the other Loan
Documents and the commitments by the Lenders to provide all or part of the
financing contemplated hereby do not contain any untrue statements of a material
fact or omit a material fact necessary to make the material statements contained
herein or therein not misleading, the Administrative Agent and the Lenders
acknowledging that as to any projections furnished to the Administrative Agent
and the Lenders, the Borrower only represents that the same were prepared in
good faith on the basis of information and estimates the Borrower believed to be
reasonable at the time.

 

Section 6.8.                                           Trademarks, Franchises,
and Licenses.  The Borrower and its Subsidiaries own, possess, or have the right
to use all necessary patents, licenses, franchises, trademarks, trade names,
trade styles, copyrights, trade secrets, know how, and confidential commercial
and proprietary information to conduct their businesses as now conducted,
without known conflict with any patent, license, franchise, trademark, trade
name, trade style, copyright or other proprietary right of any other Person.

 

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Section 6.9.                                           Governmental Authority
and Licensing.  The Borrower and its Subsidiaries have received all licenses,
permits, and approvals of all Governmental Authorities, if any, necessary to
conduct their businesses, in each case where the failure to obtain or maintain
the same could reasonably be expected to have a Material Adverse Effect.  No
investigation or proceeding which, if adversely determined, could reasonably be
expected to result in revocation or denial of any material license, permit or
approval is pending or, to the knowledge of the Borrower, threatened.

 

Section 6.10.                                            Good Title.  The
Borrower and its Subsidiaries have good and defensible title (or valid leasehold
interests) to their assets as reflected on the most recent consolidated balance
sheet  of the Borrower and its Subsidiaries furnished to the Administrative
Agent and the Lenders (except for sales of assets permitted by Section 8.10
hereof), subject to no Liens other than such thereof as are permitted by
Section 8.8 hereof.

 

Section 6.11.                                            Litigation and Other
Controversies.  There is no litigation or governmental or arbitration proceeding
or labor controversy pending, nor to the knowledge of the Borrower threatened,
against the Borrower or any Subsidiary or any of their Property which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

Section 6.12.                                            Taxes.  All tax returns
required to be filed by the Borrower or any Subsidiary in any jurisdiction have,
in fact, been filed, and all taxes, assessments, fees, and other governmental
charges upon the Borrower or any Subsidiary or upon any of its Property, income
or franchises, which are shown to be due and payable in such returns, have been
paid, except such taxes, assessments, fees and governmental charges, if any, as
are being contested in good faith and by appropriate proceedings which prevent
enforcement of the matter under contest and as to which adequate reserves
established in accordance with GAAP have been provided or where the failure to
so file or pay would not cause a Material Adverse Effect on the Borrower and its
Subsidiaries taken as a whole.  The Borrower does not know of any proposed
additional tax assessment against it or its Subsidiaries for which adequate
provisions in accordance with GAAP have not been made on their accounts. 
Adequate provisions in accordance with GAAP for taxes on the books of the
Borrower and each Subsidiary have been made for all open years, and for its
current fiscal period.

 

Section 6.13.                                            Approvals.  No
authorization, consent, license or exemption from, or filing or registration
with, any court or governmental department, agency or instrumentality, nor any
approval or consent of any other Person, is or will be necessary to the valid
execution, delivery or performance by the Borrower or any Subsidiary of any Loan
Document, except for such approvals which have been obtained prior to the date
of this Agreement and remain in full force and effect.

 

Section 6.14.                                            Affiliate
Transactions.  Neither the Borrower nor any Subsidiary is a party to any
contracts or agreements with any of its Affiliates (other than with Wholly-owned
Subsidiaries) on terms and conditions which are less favorable to the Borrower
or such Subsidiary than would be usual and customary in similar contracts or
agreements between Persons not affiliated with each other.

 

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Section 6.15.                                            Investment Company. 
Neither the Borrower nor any Subsidiary is an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

 

Section 6.16.                                            ERISA.  During the
5-year period before each date as of which this representation is made or deemed
made with respect to any Plan (or, with respect to (f) and (h) below, as of the
date on which such representation is made or deemed made), none of the following
events or conditions, either individually or in the aggregate, has occurred and
could reasonably be expected to have a Material Adverse Effect:  (a) a
Reportable Event; (b) an “accumulated funding deficiency” (within the meaning of
Section 412 of the Code or Section 302 of ERISA); (c) noncompliance with the
applicable provisions of ERISA or the Code; (d) termination of a Single Employer
Plan; (e) a Lien on the property of the Borrower or any Subsidiary in favor of
the PBGC or a Plan; (f) a complete or partial withdrawal from a Multiemployer
Plan by the Borrower or any Commonly Controlled Entity; (g) a liability of the
Borrower or a Commonly Controlled Entity under ERISA if the Borrower or such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the annual valuation date most closely preceding the date on which
this representation is made or deemed made; (h) the Reorganization or Insolvency
of any Multiemployer Plan; and (i) an event or condition with respect to which
the Borrower or any Commonly Controlled Entity could reasonably be expected to
incur any liability in respect of a Former Plan.  Neither the Borrower nor any
Subsidiary maintains or participates in any Defined Benefit Plan or Multiple
Employer Plan.

 

Section 6.17.                                            Compliance with Laws. 
(a) The Borrower and its Subsidiaries are in compliance with the requirements of
all federal, state and local laws, rules and regulations applicable to or
pertaining to their Property or business operations (including, without
limitation, the Occupational Safety and Health Act of 1970, the Americans with
Disabilities Act of 1990, and laws and regulations establishing quality criteria
and standards for air, water, land and toxic or hazardous wastes and
substances), where any such non-compliance, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

 

(b)                                    Without limiting the representations and
warranties set forth in Section 6.17(a) above, except for such matters,
individually or in the aggregate, which could not reasonably be expected to
result in a Material Adverse Effect, the Borrower represents and warrants that
to the actual knowledge of each respectively that the Borrower and its
Subsidiaries, and each of the Properties owned by them: (i) comply in all
material respects with all applicable Environmental Laws; (ii) the tenants of
the Borrower and its Subsidiaries have obtained all governmental approvals
required for the operation of the Properties under any applicable Environmental
Law; (iii) the Borrower and its Subsidiaries have no actual knowledge of any
other Person who has, caused any Release, threatened Release or disposal of any
Hazardous Material at, on, about, or off any of the Properties in any material
quantity and, to the actual the knowledge of the Borrower, none of the
Properties are adversely affected by any Release, threatened Release or disposal
of a Hazardous Material originating or emanating from any other property;
(iv) none of the Properties contain or have contained any:  (1) underground
storage tanks in which any Hazardous Material is being or has been treated,
stored or disposed of on any Property owned by the Borrower or any Subsidiary,
in each case in any manner not in

 

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compliance in all material respects with all applicable Environmental Laws,
(2) material amounts of asbestos containing building material, (3) landfills or
dumps, (4) hazardous waste management facility as defined pursuant to RCRA or
any comparable state law, or (5) site on or nominated for the National Priority
List promulgated pursuant to CERCLA or any state remedial priority list
promulgated or published pursuant to any comparable state law; (v) the Borrower
and its Subsidiaries have not used a material quantity of any Hazardous Material
and have conducted no Hazardous Material Activity at any of the Properties;
(vi) the Borrower and its Subsidiaries have no material liability for response
or corrective action, natural resource damage or other harm pursuant to CERCLA,
RCRA or any comparable state law; (vii) the Borrower and its Subsidiaries are
not subject to, have no notice or actual knowledge of and are not required to
give any notice of any Environmental Claim involving the Borrower or any
Subsidiary or any of their Properties, and there are no conditions or
occurrences at any of their Properties which could reasonably be anticipated to
form the basis for an Environmental Claim against the Borrower or any Subsidiary
or such Property; (viii) none of the Properties are subject to any, and the
Borrower has no actual knowledge of any imminent restriction on the ownership,
occupancy, use or transferability of their Properties in connection with any
(1) Environmental Law or (2) Release, threatened Release or disposal of a
Hazardous Material; and (ix) there are no conditions or circumstances at any of
their Properties which pose an unreasonable risk to the environment or the
health or safety of Persons.

 

Section 6.18.                                            Other Agreements. 
Neither the Borrower nor any Subsidiary is in default under the terms of any
covenant, indenture or agreement of or affecting such Person or any of its
Property, which default if uncured could reasonably be expected to have a
Material Adverse Effect.

 

Section 6.19.                                            OFAC.  (a) The Borrower
is in compliance with the requirements of all OFAC Sanctions Programs applicable
to it, (b) each Subsidiary of the Borrower is in compliance with the
requirements of all OFAC Sanctions Programs applicable to such Subsidiary,
(c) the Borrower has provided to the Administrative Agent, the L/C Issuer, and
the Lenders all information regarding the Borrower and its Affiliates and
Subsidiaries  necessary for the Administrative Agent, the L/C Issuer, and the
Lenders to comply with all applicable OFAC Sanctions Programs, and (d) to the
best of the Borrower’s knowledge, neither the Borrower nor any of its Affiliates
or Subsidiaries is, as of the date hereof, named on the current OFAC SDN List.

 

Section 6.20.                                            No Default.  No Default
or Event of Default has occurred and is continuing.

 

Section 6.21.                                            Solvency.  The Borrower
and its Subsidiaries are solvent, able to pay their debts as they become due,
and have sufficient capital to carry on their business as currently conducted.

 

Section 6.22.                                            No Broker Fees.  No
broker’s or finder’s fee or commission will be payable with respect hereto or
any of the transactions contemplated hereby.

 

Section 6.23.                                            Stock of the Borrower. 
As of the Closing Date, the entire authorized capital stock of the Borrower
consists of (i) Series C Cumulative Convertible Preferred Stock,

 

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2,000,000 shares; and (ii) Common Stock, 34,844,551 shares; all of which are
duly and validly issued and outstanding, fully paid and nonassessable as of the
Closing Date.  The issuance and sale of such Stock of the Borrower of the
Borrower either (i) has been registered under applicable federal and state
securities laws or (ii) was issued pursuant to an exemption therefrom.  The
Borrower meets the requirements for taxation as a REIT under the Code.

 

Section 6.24.                                            Condition of Property;
Casualties; Condemnation.  As of the Closing Date, to the actual knowledge of
the Borrower or its Unencumbered Asset Subsidiaries, each Property owned by
them, in all material respects (a) is in good repair, working order and
condition, normal wear and tear excepted, (b) is free of structural defects,
(c) is not subject to material deferred maintenance and (d) has and will have
all building systems contained therein in good repair, working order and
condition, normal wear and tear excepted.  To the actual knowledge of the
Borrower or of any of its Unencumbered Asset Subsidiaries, none of the
Properties owned by them is currently materially and adversely affected as a
result of any fire, explosion, earthquake, flood, drought, windstorm, accident,
strike or other labor disturbance, embargo, requisition or taking of property or
cancellation of contracts, permits or concessions by a Governmental Authority,
riot, activities of armed forces or acts of God or of any public enemy.  No
condemnation or other like proceedings that has had, or could reasonably be
expected to result in, a Material Adverse Change, are pending and served nor, to
the actual knowledge of the Borrower, threatened against any Property owned by
it in any manner whatsoever.  No casualty has occurred to any such Property that
could reasonably be expected to have a Material Adverse Effect.

 

Section 6.25.                                            Legal Requirements and
Zoning.  To the actual knowledge of the Borrower and its Subsidiaries, the use
and operation of each Property owned by the Borrower and its Subsidiaries
constitutes a legal use under applicable zoning regulations (as the same may be
modified by special use permits or the granting of variances) and complies in
all material respects with all Legal Requirements, and does not violate in any
material respect any material approvals, material restrictions of record or any
material agreement affecting any such Property (or any portion thereof).

 

SECTION 7.                                             CONDITIONS PRECEDENT.

 

Section 7.1.                                           All Credit Events.  At
the time of each Credit Event hereunder:

 

(a)                            each of the representations and warranties set
forth herein and in the other Loan Documents shall be and remain true and
correct in all material respects (except in the case of a representation or
warranty qualified by materiality, in which case such representation or warranty
shall be true and correct in all respects) as of said time, except to the extent
the same expressly relate to an earlier date (in which case the same shall be
true and correct as of such earlier date);

 

(b)                            the Borrower shall be in compliance with all of
the terms and conditions hereof and of the other Loan Documents, and no Default
or Event of Default shall have occurred and be continuing or would occur as a
result of such Credit Event;

 

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(c)                             in the case of a Borrowing the Administrative
Agent shall have received the notice required by Section 2.5 hereof, in the case
of the issuance of any Letter of Credit the L/C Issuer shall have received a
duly completed Application for such Letter of Credit together with any fees
called for by Section 3.1 hereof, and, in the case of an extension or increase
in the amount of a Letter of Credit, a written request therefor in a form
acceptable to the L/C Issuer together with fees called for by Section 3.1
hereof; and

 

(d)                            such Credit Event shall not violate any order,
judgment or decree of any court or other authority or any provision of law or
regulation applicable to the Administrative Agent, the L/C Issuer, or any Lender
(including, without limitation, Regulation U of the Board of Governors of the
Federal Reserve System) as then in effect.

 

Each request for a Borrowing hereunder and each request for the issuance of,
increase in the amount of, or extension of the expiration date of, a Letter of
Credit shall be deemed to be a representation and warranty by the Borrower on
the date on such Credit Event as to the facts specified in
subsections (a) through (c), both inclusive, of this Section; provided, however,
that the Lenders may continue to make advances under the Revolving Credit, in
the sole discretion of the Lenders with Revolving Credit Commitments,
notwithstanding the failure of the Borrower to satisfy one or more of the
conditions set forth above and any such advances so made shall not be deemed a
waiver of any Default or Event of Default or other condition set forth above
that may then exist.

 

Section 7.2.                                           Initial Credit Event. 
Before or concurrently with the initial Credit Event:

 

(a)                            the Administrative Agent shall have received this
Agreement duly executed by the Borrower and the Lenders;

 

(b)                            if requested by any Lender, the Administrative
Agent shall have received for such Lender such Lender’s duly executed Note of
the Borrower dated the date hereof and otherwise in compliance with the
provisions of Section 2.9 hereof;

 

(c)                             the Administrative Agent shall have received
evidence of insurance required to be maintained under the Loan Documents;

 

(d)                            the Administrative Agent shall have received
copies of the Borrower’s articles of incorporation and bylaws (or comparable
organizational documents) and any amendments thereto, certified in each instance
by its Secretary or Assistant Secretary;

 

(e)                             the Administrative Agent shall have received
copies of resolutions of the Borrower’s Board of Directors authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby, together with specimen signatures of the
persons authorized to execute such documents on the Borrower’s behalf, all
certified in each instance by its Secretary or Assistant Secretary;

 

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(f)                           the Administrative Agent shall have received
copies of the certificates of good standing for the Borrower (dated no earlier
than 30 days prior to the date hereof) from the office of the secretary of the
state of its incorporation or organization and of each state in which it is
qualified to do business as a foreign corporation or organization;

 

(g)                             the Administrative Agent shall have received a
list of the Borrower’s Authorized Representatives;

 

(h)                            the Administrative Agent shall have received for
itself and for the Lenders the initial fees called for by Section 3.1 hereof;

 

(i)                            the Administrative Agent shall have received
UCC searches with respect to Borrower as debtor and UCC termination statements
for any existing UCC financing statements that are not Permitted Liens;

 

(j)                           the Administrative Agent shall have received the
favorable written opinion of counsel to the Borrower, in form and substance
reasonably satisfactory to the Administrative Agent;

 

(k)                            each of the Lenders shall have received,
sufficiently in advance of the Closing Date, all documentation and other
information requested by any such Lender required by bank regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including without limitation, the United States Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) including,
without limitation, the information described in Section 12.22; and the
Administrative Agent shall have received a fully executed Internal Revenue
Service Form W-9 (or its equivalent) for the Borrower and its Subsidiaries; and

 

(l)                            the Administrative Agent shall have received such
other agreements, instruments, documents, certificates, and opinions as the
Administrative Agent may reasonably request.

 

SECTION 8.                                             COVENANTS.

 

The Borrower agrees that, so long as any credit is available to or in use by the
Borrower hereunder, except to the extent compliance in any case or cases is
waived in writing pursuant to the terms of Section 12.11 hereof:

 

Section 8.1.                                           Maintenance of Business. 
(i) The Borrower shall, and shall cause each Unencumbered Asset Subsidiary to,
preserve and maintain its existence, except as otherwise provided in
Section 8.10 hereof.  The Borrower shall, and shall cause each Unencumbered
Asset Subsidiary to, preserve and keep in force and effect all licenses,
permits, franchises, approvals, patents, trademarks, trade names, trade styles,
copyrights, and other proprietary rights necessary to the proper conduct of its
business.

 

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(ii)                                        (a) The Common Stock of the Borrower
shall at all times be duly listed on the New York Stock Exchange, Inc., the
American Stock Exchange or the National Association of Securities Dealers
Automated Quotation and (b) the Borrower shall timely file all reports required
to be filed by it with the New York Stock Exchange, Inc., the American Stock
Exchange or the National Association of Securities Dealers Automated Quotation
and the Securities and Exchange Commission.

 

Section 8.2.                                           Maintenance of
Properties.  The Borrower and each Unencumbered Asset Subsidiary shall cause
each of its tenants to, maintain, preserve, and keep all of the Borrower’s and
each Unencumbered Asset Subsidiaries’ Property in working order and condition
(ordinary wear and tear excepted) and to maintain the value of such Property in
all material respects, except to the extent that, in the reasonable business
judgment of such Person, any such Property is no longer necessary for the proper
conduct of the business of such Person.

 

Section 8.3.                                           Taxes and Assessments. 
The Borrower and each Unencumbered Asset Subsidiary shall, and shall cause its
tenants to, duly pay and discharge, all taxes, rates, assessments, fees, and
governmental charges upon or against the Borrower, Unencumbered Asset Subsidiary
or tenant or the Borrower’s or Unencumbered Asset Subsidiaries’ Property, to the
extent that individually or collectively would materially impair the value of
such Property, and in each case before the same become delinquent and before
penalties accrue thereon, unless and to the extent that the same are being
contested in good faith and by appropriate proceedings which prevent enforcement
of the matter under contest and adequate reserves are provided therefor.

 

Section 8.4.                                           Insurance.  The Borrower
and each Unencumbered Asset Subsidiary shall maintain, or cause its tenants to
maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
Persons similarly situated and operating like Properties.  The Borrower shall,
upon the request of the Administrative Agent, furnish to the Administrative
Agent and the Lenders certificates of insurance setting forth in summary form
the nature and extent of the insurance maintained on the Properties.

 

Section 8.5.                                           Financial Reports.  The
Borrower shall, and shall cause each consolidated Subsidiary to, maintain a
standard system of accounting in accordance with GAAP and shall furnish to the
Administrative Agent, each Lender, the L/C Issuer and each of their duly
authorized representatives such information respecting the business and
financial condition of the Borrower and each consolidated Subsidiary as the
Administrative Agent or such Lender may reasonably request; and without any
request, shall furnish to the Administrative Agent, the Lenders and the L/C
Issuer the following:

 

(a)                            as soon as available, and in any event within
45 days after the close of each of the first three (3) Fiscal Quarters of each
Fiscal Year of the Borrower a copy of the consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as of the last day of such Fiscal
Quarter and the consolidated statements of income, and cash flows of the
Borrower and its consolidated Subsidiaries for the Fiscal Quarter and for the
fiscal year-to-date period then ended, each in reasonable detail showing in
comparative form the figures for the corresponding date and period in the
previous Fiscal Year, prepared by

 

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the Borrower in accordance with GAAP and certified to by its chief financial
officer or another officer of the Borrower acceptable to the Administrative
Agent (the delivery of the Borrower’s Form 10-Q shall satisfy this requirement);

 

(b)                            as soon as available, and in any event within
90 days after the close of each Fiscal Year of the Borrower, a copy of the
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
of the last day of the Fiscal Year then ended and the consolidated statements of
income, retained earnings, and cash flows of the Borrower and its consolidated
Subsidiaries for the Fiscal Year then ended, and accompanying notes thereto,
each in reasonable detail showing in comparative form the figures for the
previous Fiscal Year, accompanied in the case of the consolidated financial
statements by an unqualified opinion of Ernst & Young, LLP or another firm of
independent public accountants of recognized national standing, selected by the
Borrower and reasonably satisfactory to the Administrative Agent and the
Required Lenders, to the effect that the consolidated financial statements have
been prepared in accordance with GAAP and present fairly in accordance with GAAP
the consolidated financial condition of the Borrower and its consolidated
Subsidiaries as of the close of such Fiscal Year and the results of their
operations and cash flows for the Fiscal Year then ended and that an examination
of such accounts in connection with such financial statements has been made in
accordance with generally accepted auditing standards and, accordingly, such
examination included such tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances (the
delivery of the Borrower’s Form 10-K shall satisfy this requirement);

 

(c)                             with each of the financial statements furnished
to the Lenders pursuant to subsections (a) and (b) hereof, a written certificate
(“Compliance Certificate”) in the form attached hereto as Exhibit E signed by
the chief financial officer of the Borrower or another officer of the Borrower
acceptable to the Administrative Agent to the effect that to the best of such
officer’s knowledge and belief no Default or Event of Default has occurred
during the period covered by such statements or, if any such Default or Event of
Default has occurred during such period, setting forth a description of such
Default or Event of Default and specifying the action, if any, taken by the
Borrower or any Subsidiary to remedy the same.  Such certificate shall also set
forth the calculations supporting such statements in respect of Section 8.21
hereof; and

 

(d)                            promptly after receipt thereof, any additional
written reports, management letters or other detailed information contained in
writing concerning significant aspects of the Borrower’s or any consolidated
Subsidiary’s operations and financial affairs given to it by its independent
public accountants;

 

(e)                            promptly after the sending or filing thereof,
copies of each financial statement, report, notice or proxy statement sent by
the Borrower or any Subsidiary to its stockholders or other equity holders, and
copies of each regular, periodic or special report, registration statement or
prospectus (including all Form 10-K, Form 10-Q and Form 8-K reports) filed by
the Borrower or any Subsidiary with any securities exchange or the Securities
and Exchange Commission or any successor agency;

 

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(f)                             as soon as available, and in any event within
90 days after the end of each Fiscal Year of the Borrower, a copy of the
Borrower’s consolidated projections for the then current Fiscal Year of
revenues, expenses and balance sheet on a quarter-by-quarter basis, with such
projections in reasonable detail prepared by the Borrower and in form
satisfactory to the Administrative Agent (which shall include a summary of all
significant assumptions made in preparing such business plan);

 

(g)                            notice of any Change of Control of the Borrower;
and

 

(h)                           promptly after knowledge thereof shall have come
to the attention of any responsible officer of the Borrower, written notice of
(i) any threatened or pending litigation or governmental or arbitration
proceeding or labor controversy against the Borrower or any Subsidiary or any of
their Property which could reasonably be expected to have a Material Adverse
Effect or (ii) the occurrence of any Default or Event of Default hereunder; and

 

(i)                               as soon as available, and in any event within
90 days after the close of each Fiscal Year of the Borrower, a list that
identifies each Subsidiary as of the date thereof, whether such Subsidiary is an
Unencumbered Asset Subsidiary, the jurisdiction of its organization, the
percentage of issued and outstanding shares of each class of its capital stock
or other equity interests owned by the Borrower and the other Subsidiaries and,
if such percentage is not 100% (excluding directors’ qualifying shares as
required by law), a description of each class of its authorized capital stock
and other equity interests and the number of shares of each class issued and
outstanding.

 

Unless otherwise expressly requested by a Lender, documents required to be
delivered pursuant to Sections 8.5(a), (b), (c), (d), (e), (f) or (i) may be
delivered via electronic communication to any Lender.

 

Section 8.6.                                           Inspection.  The Borrower
shall, and shall cause each consolidated Subsidiary to, permit the
Administrative Agent, each Lender, the L/C Issuer and each of their duly
authorized representatives and agents to visit and inspect any of its Property,
corporate books, and financial records, to examine and make copies of its books
of accounts and other financial records, and to discuss its affairs, finances,
and accounts with, and to be advised as to the same by, its officers, employees
and independent public accountants (and by this provision the Borrower hereby
authorizes such accountants to discuss with the Administrative Agent, such
Lenders and the L/C Issuer the finances and affairs of the Borrower and its
consolidated Subsidiaries) at such reasonable times and intervals as the
Administrative Agent or any such Lender or the L/C Issuer may designate and, so
long as no Default or Event of Default exists, with reasonable prior notice to
the Borrower.

 

Section 8.7.                                           Office of Foreign Asset
Control.  Neither Borrower nor any Subsidiary is (or will be) a Person with whom
a Lender is restricted from doing business under regulations of the Office of
Foreign Asset Control (“OFAC”) of the Department of the Treasury of the United
States of America (including, those Persons named on OFAC’s Specially Designated
and Blocked Persons list) or under any statute, executive order (including, the
September 24, 2001

 

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Executive Order Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism), or other governmental action
and is not and shall not engage in any dealings or transactions or otherwise be
associated with such Persons.  In addition, Borrower hereby agrees to provide to
any Lender with any additional information that the Lender deems necessary from
time to time in order to ensure compliance with all applicable Laws concerning
money laundering and similar activities.

 

Section 8.8.                                           Liens.  The Borrower
shall not, nor shall it permit any Subsidiary to, create, incur or permit to
exist any Lien of any kind on any Property owned by any such Person; provided,
however, that the foregoing shall not apply to nor operate to prevent any
Permitted Liens.

 

Section 8.9.                                           Investments,
Acquisitions, Loans and Advances.  The Borrower shall not, nor shall it permit
any Subsidiary to (i) directly or indirectly, make, retain or have outstanding
any investments (whether through the purchase of stock or obligations or
otherwise) in any Person, real property or improvements on real property, or any
loans, advances, lines of credit, mortgage loans or other financings (including
pursuant to sale/leaseback transactions) to any other Person, or (ii) acquire
any real property, improvements on real property or all or any substantial part
of the assets or business of any other Person or division thereof; provided,
however, that the foregoing shall not apply to nor operate to prevent:

 

(a)                           investments in direct obligations of the United
States of America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of America,
provided that any such obligations shall mature within one year of the date of
issuance thereof;

 

(b)                           investments in commercial paper rated at least P-1
by Moody’s and at least A-1 by S&P maturing within one year of the date of
issuance thereof;

 

(c)                            investments in certificates of deposit issued by
any Lender or by any United States commercial bank having capital and surplus of
not less than $100,000,000 which have a maturity of one year or less;

 

(d)                           investments in repurchase obligations with a term
of not more than seven (7) days for underlying securities of the types described
in subsection (a) above entered into with any bank meeting the qualifications
specified in subsection (c) above, provided all such agreements require physical
delivery of the securities securing such repurchase agreement, except those
delivered through the Federal Reserve Book Entry System;

 

(e)                            investments in money market funds that invest
solely, and which are restricted by their respective charters to invest solely,
in investments of the type described in the immediately preceding
subsections (a), (b), (c), and (d) above;

 

(f)                             the Borrower’s investments from time to time in
its Subsidiaries, and investments made from time to time by a Subsidiary in one
or more of its Subsidiaries;

 

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(g)                            intercompany advances made from time to time
among the Borrower and its Subsidiaries in the ordinary course of business to
finance working capital needs;

 

(h)                           investments in Permitted Acquisitions, other than
those described in clauses (j), (k) or (l) below;

 

(i)                               investments held by the Borrower and its
Subsidiaries as of the date of this Agreement;

 

(j)                              investments in joint ventures which are
Permitted Acquisitions and are in an amount not to exceed in the aggregate at
any one time outstanding 15% of the Total Asset Value of the Borrower and its
Subsidiaries at such time;

 

(k)                           investments in Assets Under Development which are
Permitted Acquisitions and are in an amount not to exceed in the aggregate at
any one time outstanding 20% of the Total Asset Value of the Borrower and its
Subsidiaries at such time;

 

(l)                               investments in Redevelopment Assets which are
Permitted Acquisitions and are in an amount not to exceed in the aggregate at
any one time outstanding 20% of the Total Asset Value of the Borrower and its
Subsidiaries at such time;

 

(m)                       investments received in connection with a workout of
any obligation owed to Borrower or its Subsidiaries; and

 

(n)                           investments other than those otherwise permitted
under this Section in an amount not to exceed in the aggregate at any one time
outstanding 15% of the Total Asset Value of the Borrower and its Subsidiaries at
such time.

 

Investments made after the date of this Agreement and of the type described in
clauses (j), (k), (l) and (n) immediately preceding shall at no time exceed in
the aggregate at any one time outstanding 30% of the Total Asset Value of the
Borrower and its Subsidiaries at such time.  In determining the amount of
investments, acquisitions, loans, and advances permitted under this Section,
investments and acquisitions shall always be taken at the original cost thereof
(regardless of any subsequent appreciation or depreciation therein), and loans
and advances shall be taken at the principal amount thereof then remaining
unpaid.

 

Section 8.10.                                            Mergers, Consolidations
and Sales.  The Borrower will not merge or consolidate with or into, or convey,
transfer or otherwise dispose of (whether in one transaction or a series of
transactions) any of its Property (whether now owned or hereafter acquired) to,
or acquire all or substantially all of the assets of, any Person, or permit any
Subsidiary to do so; provided, however, that the Borrower may merge or
consolidate with another Person, including a Subsidiary, if (A) the Borrower is
the surviving corporation, (B) the Borrower will be in pro forma compliance with
all provisions of this Agreement upon and after such merger or consolidation and
(C) the Borrower will not engage in any material line of business substantially

 

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different from that engaged in on the Closing Date and; provided, further, that
so long as no Default or Event of Default exists this Section shall not apply to
nor operate to prevent:

 

(a)                           the sale, transfer or other disposition of
Property of the Borrower and its Subsidiaries to one another in the ordinary
course of its business;

 

(b)                           sales of shares of capital stock or other equity
interests by Borrower or, to the extent permitted by Section 8.11, its
Subsidiaries;

 

(c)                            the sale, transfer or other disposition of any
tangible personal property that, in the reasonable business judgment of the
Borrower or its Subsidiary, has become obsolete or worn out, and which is
disposed of in the ordinary course of business; and

 

(d)                           the sale, transfer or other disposition of
Property of the Borrower or any Subsidiary (including any disposition of
Property as part of a sale and leaseback transaction); provided however, that if
the Gross Book Value of such sale, transfer or disposition during any Fiscal
Quarter exceeds $10,000,000 and together with any other sales, transfers or
dispositions made during such Fiscal Quarter in the aggregate exceed
$100,000,000, then for such sales, transfers or dispositions, the Borrower shall
provide to the Administrative Agent a Compliance Certificate with covenant
calculations for the covenants contained in Section 8.21 showing that after
giving effect to such sales, transfers or dispositions the Borrower shall be in
pro forma compliance with such covenants for the Fiscal Quarter in which the
sale, transfer or disposition occurs.

 

Section 8.11.                                            Maintenance of
Unencumbered Asset Subsidiaries.  The Borrower shall not assign, sell or
transfer, nor shall it permit any Unencumbered Asset Subsidiary to issue,
assign, sell or transfer, any shares of capital stock or other equity interests
of a Unencumbered Asset Subsidiary; provided, however, that the foregoing shall
not operate to prevent (a) Liens on the capital stock or other equity interests
of Unencumbered Asset Subsidiaries granted to the Administrative Agent, (b) the
issuance, sale, and transfer to any person of any shares of capital stock of a
Subsidiary solely for the purpose of qualifying, and to the extent legally
necessary to qualify, such person as a director of such Unencumbered Asset
Subsidiary, and (c) any transaction permitted by Section 8.10 above.

 

Section 8.12.                                            Reserved.

 

Section 8.13.                                            ERISA.  The Borrower
shall, and shall cause each Subsidiary to, promptly pay and discharge all
obligations and liabilities arising under ERISA of a character which if unpaid
or unperformed could reasonably be expected to result in the imposition of a
Lien against any of its Property.  The Borrower shall, and shall cause each
Subsidiary to, promptly notify the Administrative Agent and each Lender of: 
(a) the occurrence of any Reportable Event with respect to a Plan, (b) receipt
of any notice from the PBGC of its intention to seek termination of any Plan or
appointment of a trustee therefor, (c) its intention to terminate or withdraw
from any Plan, and (d) the occurrence of any event with respect to any Plan
which would result in the incurrence by the Borrower or any Subsidiary of any
material liability, fine or penalty, or any

 

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material increase in the contingent liability of the Borrower or any Subsidiary
with respect to any post-retirement Welfare Plan benefit.

 

Section 8.14.                                            Compliance with Laws
and Contractual Obligations.  (a) The Borrower shall, and shall cause each
Subsidiary to, comply in all respects with (i) the requirements of all federal,
state, and local laws, rules, regulations, ordinances and orders applicable to
or pertaining to its Property or business operations and (ii) all contractual
obligations, except, in each case where any such non-compliance, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect or result in a Lien upon any of its Property.

 

(b)                                      Without limiting the agreements set
forth in Section 8.14(a) above, for each of its owned Properties, respectively,
the Borrower shall, and shall cause each Subsidiary to require that each tenant
and subtenant, if any, of any of the Properties or any part thereof, at all
times, do the following to the extent the failure to do so, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect:
(i) comply in all material respects with all applicable Environmental Laws;
(ii) obtain and maintain in full force and effect all material governmental
approvals required by any applicable Environmental Law for operations at each of
the Properties; (iii) cause to be cured any material violation by it or at any
of the Properties of applicable Environmental Laws; (iv) not allow the presence
or operation at any of the Properties of any (1) landfill or dump or
(2) hazardous waste management facility or solid waste disposal facility as
defined pursuant to RCRA or any comparable state law; (v) not manufacture, use,
generate, transport, treat, store, release, dispose or handle any Hazardous
Material at any of the Properties except in the ordinary course of its business
and in de minimis amounts; (vi) within ten (10) Business Days notify the
Administrative Agent in writing of and provide any reasonably requested
documents upon learning of any of the following in connection with the Borrower
or any Subsidiary or any of the Properties:  (1) any material liability for
response or corrective action, natural resource damage or other harm pursuant to
CERCLA, RCRA or any comparable state law; (2) any material Environmental Claim;
(3) any material violation of an Environmental Law or material Release,
threatened Release or disposal of a Hazardous Material; (4) any restriction on
the ownership, occupancy, use or transferability arising pursuant to any
(x) Release, threatened Release or disposal of a Hazardous Material or
(y) Environmental Law; or (5) any environmental, natural resource, health or
safety condition, which could reasonably be expected to have a Material Adverse
Effect; (vii) conduct at its expense any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or abate any material Release,
threatened Release or disposal of a Hazardous Material as required by any
applicable Environmental Law, (viii) abide by and observe any restrictions on
the use of the Properties imposed by any Governmental Authority as set forth in
a deed or other instrument affecting the Borrower’s or any Subsidiary’s interest
therein; (ix) promptly provide or otherwise make available to the Administrative
Agent any reasonably requested environmental record concerning the Properties
which the Borrower or any Subsidiary possesses or can reasonably obtain; and
(x) perform, satisfy, and implement any operation or maintenance actions
required by any Governmental Authority or Environmental Law, or included in any
no further action letter or covenant not to sue issued by any Governmental
Authority under any Environmental Law.

 

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Section 8.15.                                            Burdensome Contracts
With Affiliates.  The Borrower shall not, nor shall it permit any Subsidiary to,
enter into any contract, agreement or business arrangement with any of its
Affiliates (other than with Wholly-owned Subsidiaries) on terms and conditions
which are less favorable to the Borrower or such Subsidiary than would be usual
and customary in similar contracts, agreements or business arrangements between
Persons not affiliated with each other.

 

Section 8.16.                                            No Changes in Fiscal
Year.  The Fiscal Year of the Borrower and its consolidated Subsidiaries ends on
December 31st of each year; and the Borrower shall not, nor shall it permit any
consolidated Subsidiary to, change its Fiscal Year from its present basis.

 

Section 8.17.                                            Compliance with OFAC
Sanctions Programs.  (a) The Borrower shall at all times comply with the
requirements of all OFAC Sanctions Programs applicable to the Borrower and shall
cause each of its Subsidiaries to comply with the requirements of all OFAC
Sanctions Programs applicable to such Subsidiary.

 

(b)                                      The Borrower shall provide the
Administrative Agent, the L/C Issuer, and the Lenders any information regarding
the Borrower, its Affiliates, and its Subsidiaries necessary for the
Administrative Agent, the L/C Issuer, and the Lenders to comply with all
applicable OFAC Sanctions Programs; subject however, in the case of Affiliates,
to the Borrower’s ability to provide information applicable to them.

 

(c)                                      If the Borrower obtains actual
knowledge or receives any written notice that the Borrower, any Affiliate or any
Subsidiary is named on the then current OFAC SDN List (such occurrence, an “OFAC
Event”), the Borrower shall promptly (i) give written notice to the
Administrative Agent, the L/C Issuer, and the Lenders of such OFAC Event, and
(ii) comply with all applicable laws with respect to such OFAC Event (regardless
of whether the party included on the OFAC SDN List is located within the
jurisdiction of the United States of America), including the OFAC Sanctions
Programs, and the Borrower hereby authorizes and consents to the Administrative
Agent, the L/C Issuer, and the Lenders taking any and all steps the
Administrative Agent, the L/C Issuer, or the Lenders deem necessary, in their
sole but reasonable discretion, to avoid violation of all applicable laws with
respect to any such OFAC Event, including the requirements of the OFAC Sanctions
Programs (including the freezing and/or blocking of assets and reporting such
action to OFAC).

 

Section 8.18.                                            Change in the Nature of
Business.  The Borrower shall not, nor shall it permit any Subsidiary to, engage
in any business or activity if as a result the general nature of the business of
the Borrower and its Subsidiaries would be changed in any material respect from
the general nature of the business engaged in by it as of the Closing Date.  As
of the Closing Date, the general nature of the business of the Borrower and its
Subsidiaries is primarily the business of the acquisition, financing and
ownership of Senior Housing Assets and other business activities incidental
thereto.

 

Section 8.19.                                            Use of Loan Proceeds. 
The Borrower shall use the credit extended under this Agreement solely for the
purposes set forth in, or otherwise permitted by, Section 6.4 hereof.

 

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Section 8.20.                                            No Restrictions. 
Except as provided herein, the Borrower shall not, nor shall it permit any
Subsidiary (except for bankruptcy remote subsidiaries established in connection
with (i) any securitization or participation transaction or with any Permitted
Lien or (ii) any ownership of fee simple real estate Properties not exceeding
$200,000,000 individually or in the aggregate) to, directly or indirectly create
or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of the Borrower or any
Subsidiary to:  (a) pay dividends or make any other distributions on any
Subsidiary’s capital stock or other equity interests owned by the Borrower or
any other Subsidiary, (b) pay any indebtedness owed to the Borrower or any other
Subsidiary, (c) make loans or advances to the Borrower or any other Subsidiary,
(d) transfer any of its Property to the Borrower or any other Subsidiary,
provided, however, that the foregoing does not apply to any limitation on
transfers of property that is subject to a Permitted Lien or (e)  guarantee the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability
and/or grant Liens on its assets to the Administrative Agent as required by the
Loan Documents.

 

Section 8.21.                                            Financial Covenants. 
(a) Maximum Total Indebtedness to Total Asset Value Ratio.  As of the last day
of each Fiscal Quarter of the Borrower, the Borrower shall not permit the ratio
of Total Indebtedness to Total Asset Value to be greater than 0.50 to 1.00.

 

(b)                                      Maximum Secured Debt to Total Asset
Value Ratio.  As of the last day of each Fiscal Quarter of the Borrower, the
Borrower shall not permit the ratio of Secured Debt to Total Asset Value to be
greater than 0.35 to 1.00.

 

(c)                                      Maximum Unsecured Debt to Unencumbered
Asset Value.  As of the last day of each Fiscal Quarter of the Borrower, the
Borrower shall not permit the ratio of Unsecured Debt of the Borrower and its
Subsidiaries to Unencumbered Asset Value to be greater than 0.60 to 1.00.

 

(d)                                      Minimum EBITDA to Fixed Charges Ratio. 
As of the last day of each Rolling Period of the Borrower, the Borrower shall
not permit the ratio of EBITDA for such Rolling Period to Fixed Charges for such
Rolling Period to be less than 1.50 to 1.00.

 

(e)                                      Maintenance of Net Worth.  The Borrower
shall at all times maintain a Tangible Net Worth of not less than the sum of
(a) $472,485,456 plus (b) 75% of the aggregate net proceeds received by the
Borrower or any of its Subsidiaries after the Closing Date in connection with
any offering of Stock or Stock Equivalents of the Borrower or the Subsidiaries
that results in an increase of Tangible Net Worth, to the extent such Stock or
Stock Equivalents are included in stockholders’ equity on the Borrower’s
consolidated balance sheet (but excluding such offerings or issuances used to
repay existing forms of Stock and Stock Equivalents).

 

(f)                                      Minimum Eligible Property NOI to
Interest Expense on Unsecured Debt Ratio.  As of the last day of each Rolling
Period of the Borrower, the Borrower shall not permit the ratio of Eligible
Property NOI for such Rolling Period to Interest Expense on Unsecured Debt for
such Rolling Period to be less than 2.00 to 1.00.

 

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Section 8.22.                                            Note Agreement
Notices.  On or before the date 20 calendar days after the Closing Date, the
Borrower shall cause to be delivered to the Administrative Agent a certified
copy of a notice to each Noteholder which, to the Administrative Agent’s
reasonable satisfaction, notifies each Noteholder of the provisions of the
financial covenants and the definitions set forth in Sections 1.1 and 8.21
hereof.

 

Section 8.23.                                            Modification of
Material Contracts.  Neither Borrower nor any Subsidiary shall enter into an
amendment or modification of any contract or agreement which could reasonably be
expected to have a Material Adverse Effect.

 

Section 8.24.                                            Limitations on
Guaranties of Indebtedness.  Concurrent with any Person becoming a guarantor or
other obligor under any Indebtedness for Borrowed Money of the Borrower, the
Borrower shall cause such Person to execute and deliver to the Administrative
Agent, for the benefit of the Lenders, a guaranty of the Obligations, Hedging
Liability and Funds Transfer and Deposit Account Liability hereunder, together
with such other instruments, documents, certificates, and opinions reasonably
required by the Administrative Agent in connection therewith, each of the above
being in form and substance customary and appropriate for financings of this
type so that after giving effect thereto, the Obligations, Hedging Liability and
Funds Transfer and Deposit Account Liability hereunder rank at least pari passu
in payment priority with all other unsecured Indebtedness for Borrowed Money.

 

SECTION 9.                                             EVENTS OF DEFAULT AND
REMEDIES.

 

Section 9.1.                                           Events of Default.  Any
one or more of the following shall constitute an “Event of Default” hereunder:

 

(a)                            default in the payment when due of all or any
part of the principal on any Revolving Loan (whether at the stated maturity
thereof or at any other time provided for in this Agreement) or of any
Reimbursement Obligation payable hereunder or under any other Loan Document;

 

(b)                            default within three (3) Business Days of when
due in the payment of all or any part of the interest on any Revolving Loan
(whether at the stated maturity thereof or at any other time provided for in
this Agreement) or of any fee or other Obligation payable hereunder or under any
other Loan Document;

 

(c)                             default in the observance or performance of any
covenant set forth in Sections 8.1, 8.8, 8.9, 8.10, 8.11, 8.21, 8.22, 8.23 or
8.24 hereof;

 

(d)                            default in the observance or performance of any
other provision hereof or of any other Loan Document which is not remedied
within 30 days after the earlier of (i) the date on which such failure shall
first become known to any officer of the Borrower or (ii) written notice thereof
is given to the Borrower by the Administrative Agent;

 

(e)                             any representation or warranty made herein or in
any other Loan Document or in any certificate furnished to the Administrative
Agent or the Lenders

 

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pursuant hereto or thereto or in connection with any transaction contemplated
hereby or thereby proves untrue in any material respect as of the date of the
issuance or making or deemed making thereof;

 

(f)                           any event occurs or condition exists (other than
those described in subsections (a) through (e) above) which is specified as an
event of default under any of the other Loan Documents, or any of the Loan
Documents shall for any reason not be or shall cease to be in full force and
effect or is declared to be null and void;

 

(g)                             default shall occur under any Indebtedness for
Borrowed Money issued, assumed or guaranteed by the Borrower or any Subsidiary
aggregating in excess of 3% of the Total Asset Value or under any indenture,
agreement or other instrument under which the same may be issued, and such
default shall continue for a period of time sufficient to permit the
acceleration of the maturity of any such Indebtedness for Borrowed Money
(whether or not such maturity is in fact accelerated); provided that if such
default results solely from a payment not paid when due, there shall be a five
(5) day cure period so long as the maturity date with respect to the subject
Indebtedness for Borrowed Money has not been accelerated;

 

(h)                            any judgment or judgments, writ or writs or
warrant or warrants of attachment, or any similar process or processes, shall be
entered or filed against the Borrower or any Subsidiary, or against any of its
Property, in an aggregate amount in excess of $25,000,000 (except to the extent
fully covered by insurance pursuant to which the insurer has accepted liability
therefor in writing), and which remains undischarged, unvacated, unbonded or
unstayed for a period of 30 days;

 

(i)                            the Borrower or any Subsidiary, or any member of
its Controlled Group, shall fail to pay when due an amount or amounts
aggregating in excess of $25,000,000 which it shall have become liable to pay to
the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate
a Plan or Plans having aggregate Unfunded Vested Liabilities in excess of
$25,000,000 (collectively, a “Material Plan”) shall be filed under Title IV of
ERISA by the Borrower or any Subsidiary, or any other member of its Controlled
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any Material Plan or a proceeding shall be
instituted by a fiduciary of any Material Plan against the Borrower or any
Subsidiary, or any member of its Controlled Group, to enforce Section 515 or
4219(c)(5) of ERISA and such proceeding shall not have been dismissed within
30 days thereafter; or a condition shall exist by reason of which the PBGC would
be entitled to obtain a decree adjudicating that any Material Plan must be
terminated;

 

(j)                           any Change of Control in respect of the Borrower
shall occur;

 

(k)                            the Borrower or any Unencumbered Asset Subsidiary
shall (i) have entered involuntarily against it an order for relief under the
United States Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally

 

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as they become due, (iii) make an assignment for the benefit of creditors,
(iv) apply for, seek, consent to or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
substantial part of its Property, (v) institute any proceeding seeking to have
entered against it an order for relief under the United States Bankruptcy Code,
as amended, to adjudicate it insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (vi) take any
corporate action in furtherance of any matter described in parts (i) through
(v) above, or (vii) fail to contest in good faith any appointment or proceeding
described in Section 9.1(l) hereof;

 

(l)                            a custodian, receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower or any
Unencumbered Asset Subsidiary, or any substantial part of any of its Property,
or a proceeding described in Section 9.1(k)(v) shall be instituted against the
Borrower or any Unencumbered Asset Subsidiary, and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 60 days;

 

(m)                            there shall be a determination from the
applicable Governmental Authority from which no appeal can be taken that the
Borrower’s tax status as a REIT has been lost; or

 

(n)                            the Borrower at any time hereafter fails to cause
the Common Stock of the Borrower to be duly listed on the New York Stock
Exchange, Inc., the American Stock Exchange or the National Association of
Securities Dealers Automated Quotation.

 

Section 9.2.                                           Non-Bankruptcy Defaults. 
When any Event of Default other than those described in subsection (k) or (l) of
Section 9.1 hereof has occurred and is continuing, the Administrative Agent
shall, by written notice to the Borrower:  (a) if so directed by the Required
Lenders, terminate the remaining Revolving Credit Commitments and all other
obligations of the Lenders hereunder on the date stated in such notice (which
may be the date thereof); (b) if so directed by the Required Lenders declare the
principal of and the accrued interest on all outstanding Revolving Loans to be
forthwith due and payable and thereupon all outstanding Revolving Loans,
including both principal and interest thereon, shall be and become immediately
due and payable together with all other amounts payable under the Loan Documents
without further demand, presentment, protest or notice of any kind; and (c) if
so directed by the Required Lenders, demand that the Borrower deliver to the
Administrative Agent Cash Collateral in an amount equal to 103% of the aggregate
amount of each Letter of Credit then outstanding, and the Borrower agrees to
immediately provide such Cash Collateral and acknowledges and agrees that the
Lenders would not have an adequate remedy at law for failure by the Borrower to
honor any such demand and that the Administrative Agent, for the benefit of the
Lenders, shall have the right to require the Borrower to specifically perform
such undertaking whether or not any drawings or other demands for payment have
been made under any Letter of Credit.  The Administrative Agent, after giving
notice to the Borrower pursuant to Section 9.1(d) or this

 

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Section 9.2, shall also promptly send a copy of such notice to the other
Lenders, but the failure to do so shall not impair or annul the effect of such
notice.

 

Section 9.3.                                           Bankruptcy Defaults. 
(a)  When any Event of Default described in subsections (k) or (l) of
Section 9.1 with respect to the Borrower has occurred and is continuing, then
all outstanding Revolving Loans shall immediately become due and payable
together with all other amounts payable under the Loan Documents without
presentment, demand, protest or notice of any kind, the obligation of the
Lenders to extend further credit pursuant to any of the terms hereof shall
immediately terminate and the Borrower shall immediately deliver to the
Administrative Agent Cash Collateral in an amount equal to 103% of the aggregate
amount of each Letter of Credit then outstanding, the Borrower acknowledging and
agreeing that the Lenders would not have an adequate remedy at law for failure
by the Borrower to honor any such demand and that the Lenders, and the
Administrative Agent on their behalf, shall have the right to require the
Borrower to specifically perform such undertaking whether or not any draws or
other demands for payment have been made under any of the Letters of Credit.  In
addition, the Administrative Agent may exercise on behalf of itself, the Lenders
and the L/C Issuer all rights and remedies available to it, the Lenders and the
L/C Issuer under the Loan Documents or under applicable law or in equity when
any such Event of Default has occurred and is continuing.

 

(b)                                      At any time that there shall exist a
Defaulting Lender, within one Business Day following the written request of the
Administrative Agent or the L/C Issuer (with a copy to the Administrative Agent)
the Borrower shall Cash Collateralize the L/C Issuer’s Fronting Exposure with
respect to such Defaulting Lender (determined after giving effect to
Section 2.14(a)(iv) and any Cash Collateral provided by such Defaulting Lender)
in an amount not less than the Minimum Collateral Amount.

 

(i)                            Grant of Security Interest.  The Borrower, and to
the extent provided by any Defaulting Lender, such Defaulting Lender, hereby
grant to the Administrative Agent, for the benefit of the L/C Issuer, and agree
to maintain, a first priority security interest in all such Cash Collateral as
security for such Defaulting Lender’s obligation to fund participations in
respect of L/C Obligations, to be applied pursuant to clause (ii) 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 L/C
Issuer as herein provided (other than Permitted Liens), or that the total amount
of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower
shall, promptly upon 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).

 

(ii)                              Application.  Notwithstanding anything to the
contrary contained in this Agreement, Cash Collateral provided under this
Section 9.3 or Section 2.15 in respect of Letters of Credit shall be applied to
the satisfaction of the Defaulting Lender’s obligation to fund participations in
respect of L/C Obligations (including, as to Cash Collateral provided by a
Defaulting Lender, any interest accrued on such obligation) for which the

 

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Cash Collateral was so provided, prior to any other application of such property
as may otherwise be provided for herein.

 

(iii)                               Termination of Requirement.  Cash Collateral
(or the appropriate portion thereof) provided to reduce the L/C Issuer’s
Fronting Exposure shall no longer be required to be held as Cash Collateral
pursuant to this Section 9.3(c) following (A) the elimination of the applicable
Fronting Exposure (including by the termination of Defaulting Lender status of
the applicable Lender), or (B) the determination by the Administrative Agent and
the L/C Issuer that there exists excess Cash Collateral; provided that, subject
to Section 2.15 the Person providing Cash Collateral and the L/C Issuer may
agree that Cash Collateral shall be held to support future anticipated Fronting
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.

 

Section 9.4.                                           Collateral for Undrawn
Letters of Credit.  (a) If the provision of any Cash Collateral in respect of
any or all outstanding Letters of Credit is required under Section 2.7(b),
Section 2.14, Section 2.15, Section 9.2 or Section 9.3 above, the Borrower shall
forthwith provide such Cash Collateral, to be held by the Administrative Agent
as provided in subsection (b) below.

 

(b)                                      All Cash Collateral delivered pursuant
to subsection (a) above shall be held by the Administrative Agent in one or more
separate collateral accounts (each such account, and the credit balances,
properties, and any investments from time to time held therein, and any
substitutions for such account, any certificate of deposit or other instrument
evidencing any of the foregoing and all proceeds of and earnings on any of the
foregoing being collectively called the “Collateral Account”) as security for,
and for application by the Administrative Agent (to the extent available) to,
the reimbursement of any payment under any Letter of Credit then or thereafter
made by the L/C Issuer, and to the payment of the unpaid balance of all other
Obligations (and to all Hedging Liability and Funds Transfer and Deposit Account
Liability).  The Collateral Account shall be held in the name of and subject to
the exclusive dominion and control of the Administrative Agent for the benefit
of the Administrative Agent, the Lenders, and the L/C Issuer.  If and when
requested by the Borrower, the Administrative Agent shall invest funds held in
the Collateral Account from time to time in direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America with a remaining maturity of one
year or less, provided that the Administrative Agent is irrevocably authorized
to sell investments held in the Collateral Account when and as required to make
payments out of the Collateral Account for application to amounts due and owing
from the Borrower to the L/C Issuer, the Administrative Agent or the Lenders;
provided, however, that, subject to the terms of Sections 2.14 and 2.15 hereof,
(i) if the Borrower shall have made payment of all obligations referred to in
subsection (a) above required under Section 2.7(b) hereof, if any, at the
request of the Borrower the Administrative Agent shall release to the Borrower
amounts held in the Collateral Account so long as at the time of the release and
after giving effect thereto no Default or Event of Default exists, and (ii) if
the Borrower shall have made payment of all obligations referred to in
subsection (a) above required under Section 9.2 or 9.3 hereof, so long as no
Letters of Credit, Revolving Credit Commitments, Revolving Loans or

 

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other Obligations, Hedging Liability, or Funds Transfer and Deposit Account
Liability remain outstanding, at the request of the Borrower, the Administrative
Agent shall release to the Borrower any remaining amounts held in the Collateral
Account.

 

Section 9.5.                                           Notice of Default.  The
Administrative Agent shall give notice to the Borrower under
Section 9.1(d) hereof promptly upon being requested to do so by any Lender and
shall thereupon notify all the Lenders thereof.

 

SECTION 10.                                      CHANGE IN CIRCUMSTANCES.

 

Section 10.1.                                            Change of Law. 
Notwithstanding any other provisions of this Agreement or any other Loan
Document, if at any time any Change in Law makes it unlawful for any Lender to
make or continue to maintain any Eurodollar Loans or to perform its obligations
as contemplated hereby, such Lender shall promptly give notice thereof to the
Borrower and such Lender’s obligations to make or maintain Eurodollar Loans
under this Agreement shall be suspended until it is no longer unlawful for such
Lender to make or maintain Eurodollar Loans.  The Borrower shall prepay on
demand the outstanding principal amount of any such affected Eurodollar Loans,
together with all interest accrued thereon and all other amounts then due and
payable to such Lender under this Agreement; provided, however, subject to all
of the terms and conditions of this Agreement, the Borrower may then elect to
borrow the principal amount of the affected Eurodollar Loans from such Lender by
means of Base Rate Loans from such Lender, which Base Rate Loans shall not be
made ratably by the Lenders but only from such affected Lender.

 

Section 10.2.                                            Unavailability of
Deposits or Inability to Ascertain, or Inadequacy of, LIBOR.  If on or prior to
the first day of any Interest Period for any Borrowing of Eurodollar Loans:

 

(a)                            the Administrative Agent determines that deposits
in U.S. Dollars (in the applicable amounts) are not being offered to it in the
interbank eurodollar market for such Interest Period, or that by reason of
circumstances affecting the interbank eurodollar market adequate and reasonable
means do not exist for ascertaining the applicable LIBOR, or

 

(b)                            the Required Lenders advise the Administrative
Agent that (i) LIBOR as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Lenders of funding their
Eurodollar Loans for such Interest Period or (ii) that the making or funding of
Eurodollar Loans become impracticable,

 

then the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Lenders, whereupon until the Administrative Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer exist,
the obligations of the Lenders to make Eurodollar Loans shall be suspended.

 

Section 10.3.                                            Increased Cost and
Reduced Return.  (a)  Increased Costs Generally.  If any Change in Law shall:

 

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(i)                            impose, modify or deem applicable any reserve,
special deposit, compulsory loan, insurance charge or similar requirement
against assets of, deposits with or for the account of, or credit extended or
participated in by, any Lender (except any reserve requirement reflected in the
Adjusted LIBOR) or the L/C Issuer;

 

(ii)                              subject any Recipient to any Taxes (other than
(A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the
definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan
principal, letters of credit, commitments, or other obligations, or its
deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)                               impose on any Lender or the L/C Issuer or
the London interbank market any other condition, cost or expense (other than
Taxes) affecting this Agreement or Revolving Loans made by such Lender or any
Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, converting to, continuing or
maintaining any Revolving Loan or of maintaining its obligation to make any such
Revolving Loan, or to increase the cost to such Lender, the L/C Issuer or such
other Recipient of participating in, issuing or maintaining any Letter of Credit
(or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender, the L/C Issuer or other Recipient hereunder (whether of principal,
interest or any other amount) then, upon request of such Lender, the L/C Issuer
or other Recipient, the Borrower will pay to such Lender, the L/C Issuer or
other Recipient, as the case may be, such additional amount or amounts as will
compensate such Lender, the L/C Issuer or other Recipient, as the case may be,
for such additional costs incurred or reduction suffered.

 

(b)                                      Capital Requirements.  If any Lender or
the L/C Issuer determines that any Change in Law affecting such Lender or the
L/C Issuer or any lending office of such Lender or such Lender’s or the L/C
Issuer’s holding company, if any, regarding capital or liquidity requirements,
has or would have the effect of reducing the rate of return on such Lender’s or
the L/C Issuer’s capital or on the capital of such Lender’s or the L/C Issuer’s
holding company, if any, as a consequence of this Agreement, the Revolving
Credit Commitments of such Lender or the Revolving Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the L/C Issuer, to a level below that which such Lender or the
L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s
holding company with respect to capital adequacy), then from time to time,
within 15 days after demand by such Lender or the L/C Issuer (with a copy to the
Administrative Agent), the Borrower will pay to such Lender or the L/C Issuer,
as the case may be, such additional amount or amounts as will compensate such
Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company
for any such reduction suffered.

 

(c)                                      Certificates for Reimbursement.  A
certificate of a Lender or the L/C Issuer setting forth the amount or amounts
necessary to compensate such Lender or the L/C Issuer or its holding company, as
the case may be, as specified in subsection (a) or (b) of this Section and

 

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delivered to the Borrower, shall be conclusive absent manifest error.  The
Borrower shall pay such Lender or the L/C Issuer, as the case may be, the amount
shown as due on any such certificate within ten (10) days after receipt thereof.

 

(d)                                      Delay in Requests.  Failure or delay on
the part of any Lender or the L/C Issuer to demand compensation pursuant to this
Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right
to demand such compensation; provided that the Borrower shall not be required to
compensate a Lender or the L/C Issuer pursuant to this Section for any increased
costs incurred or reductions suffered more than nine (9) months prior to the
date that such Lender or the L/C Issuer, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions,
and of such Lender’s or the L/C Issuer’s intention to claim compensation
therefor (except that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the nine-month period referred to above shall
be extended to include the period of retroactive effect thereof).

 

Section 10.4.                                            Lending Offices.  Each
Lender may, at its option, elect to make its Revolving Loans hereunder at the
branch, office or Affiliate specified on the appropriate signature page hereof
(each a “Lending Office”) for each type of Revolving Loan available hereunder or
at such other of its branches, offices or affiliates as it may from time to time
elect and designate in a written notice to the Borrower and the Administrative
Agent.  To the extent reasonably possible, a Lender shall designate an
alternative branch or funding office with respect to its Eurodollar Loans to
reduce any liability of the Borrower to such Lender under Section 10.3 hereof or
to avoid the unavailability of Eurodollar Loans under Section 10.2 hereof, so
long as such designation is not otherwise disadvantageous to the Lender.

 

Section 10.5.                                            Discretion of Lender as
to Manner of Funding.  Notwithstanding any other provision of this Agreement,
each Lender shall be entitled to fund and maintain its funding of all or any
part of its Revolving Loans in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations hereunder
with respect to Eurodollar Loans shall be made as if each Lender had actually
funded and maintained each Eurodollar Loan through the purchase of deposits in
the interbank eurodollar market having a maturity corresponding to such
Revolving Loan’s Interest Period, and bearing an interest rate equal to LIBOR
for such Interest Period.

 

SECTION 11.                                      THE ADMINISTRATIVE AGENT.

 

Section 11.1.                                            Appointment and
Authority.  Each of the Lenders and the L/C Issuer hereby irrevocably appoints
Bank of Montreal to act on its behalf as the Administrative Agent hereunder and
under the other Loan Documents and authorizes the Administrative Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto.  The provisions of this
Section 11 are solely for the benefit of the Administrative Agent, the Lenders
and the L/C Issuer, and the Borrower shall not have rights as a third-party
beneficiary of any of such provisions.  It is understood and agreed that the use
of the term “agent” herein or in any other Loan Documents (or any other similar
term) with reference to the Administrative Agent is not intended to connote any
fiduciary or other implied (or express)

 

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obligations arising under agency doctrine of any applicable law.  Instead such
term is used as a matter of market custom, and is intended to create or reflect
only an administrative relationship between contracting parties.

 

Section 11.2.                                            Rights as a Lender. 
The Person serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as the Administrative
Agent hereunder in its individual capacity.  Such Person and its Affiliates may
accept deposits from, lend money to, own securities of, act as the financial
advisor or in any other advisory capacity for, and generally engage in any kind
of business with, the Borrower or any Subsidiary or other Affiliate thereof as
if such Person were not the Administrative Agent hereunder and without any duty
to account therefor to the Lenders.

 

Section 11.3.                                            Action by
Administrative Agent; Exculpatory Provisions; . (a) The Administrative Agent
shall not have any duties or obligations except those expressly set forth herein
and in the other Loan Documents, and its duties hereunder shall be
administrative in nature.  Without limiting the generality of the foregoing, the
Administrative Agent and its Related Parties:

 

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

 

(ii)                              shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Administrative Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders as shall
be expressly provided for herein or in the other Loan Documents), provided that
the Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law, 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.  The Administrative Agent shall in all cases be fully justified in
failing or refusing to act hereunder or under any other Loan Document unless it
first receives any further assurances of its indemnification from the Lenders
that it may require, including prepayment of any related expenses and any other
protection it requires against any and all costs, expense, and liability which
may be incurred by it by reason of taking or continuing to take any such action;
and

 

(iii)                               shall not, except as expressly set forth
herein and in the other Loan Documents, have any duty or responsibility to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Affiliates that is

 

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communicated to or obtained by the Person serving as the Administrative Agent or
any of its Affiliates in any capacity.

 

(b)                                      Neither the Administrative Agent nor
any of its Related Parties shall be liable for any action taken or not taken by
the Administrative Agent under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby or thereby (i) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Administrative Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in Sections 9.2, 9.3, 9.4 and 12.11), or (ii) in the absence of its own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction by final and nonappealable judgment.  Any such action taken or
failure to act pursuant to the foregoing shall be binding on all Lenders.  The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until notice describing such Default is given to the Administrative Agent in
writing by the Borrower, a Lender, or the L/C Issuer.

 

(c)                                      Neither the Administrative Agent nor
any of its Related Parties shall be responsible for or have any duty or
obligation to any Lender or the L/C Issuer or participant or any other Person to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or (v) the satisfaction
of any condition set forth in Section 7.1 or 7.2 or elsewhere herein, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

Section 11.4.                                            Reliance by
Administrative Agent.  The Administrative Agent shall be entitled to rely upon,
and shall be fully protected in relying and shall not incur any liability for
relying upon, any notice, request, certificate, communication, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person.  The Administrative Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
Person, and shall be fully protected in relying and shall not incur any
liability for relying thereon.  In determining compliance with any condition
hereunder to the making of a Revolving Loan, or the issuance, extension, renewal
or increase of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume
that such condition is satisfactory to such Lender or the L/C Issuer unless the
Administrative Agent shall have received notice to the contrary from such Lender
or the L/C Issuer prior to the making of such Revolving Loan or the issuance of
such Letter of Credit.  The Administrative Agent may consult with legal counsel
(who may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

 

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Section 11.5.                                            Delegation of Duties. 
The Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any
one or more sub-agents appointed by the Administrative Agent.  The
Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties.  The exculpatory provisions of this Section shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the Facilities as well as activities as Administrative Agent. 
The Administrative Agent shall not be responsible for the negligence or
misconduct of any sub-agents except to the extent that a court of competent
jurisdiction determines in a final and nonappealable judgment that the
Administrative Agent acted with gross negligence or willful misconduct in the
selection of such sub-agents.

 

Section 11.6.                                            Resignation of
Administrative Agent.  (a) The Administrative Agent may at any time give notice
of its resignation to the Lenders, the L/C Issuer and the Borrower.  Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor, which shall be
a bank with an office in the United States of America, or an Affiliate of any
such bank with an office in the United States of America.  If no such successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Administrative Agent
gives notice of its resignation (or such earlier day as shall be agreed by the
Required Lenders) (the “Resignation Effective Date”), then the retiring
Administrative Agent may (but shall not be obligated to), on behalf of the
Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the
qualifications set forth above.  Whether or not a successor has been appointed,
such resignation shall become effective in accordance with such notice on the
Resignation Effective Date.

 

(b)                                      If the Person serving as Administrative
Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof,
the Required Lenders may, to the extent permitted by applicable law, by notice
in writing to the Borrower and such Person remove such Person as Administrative
Agent and, in consultation with the Borrower, appoint a successor. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days (or such earlier day as shall be agreed
by the Required Lenders) (the “Removal Effective Date”), then such removal shall
nonetheless become effective in accordance with such notice on the Removal
Effective Date.

 

(c)                                      With effect from the Resignation
Effective Date or the Removal Effective Date (as applicable) (i) the retiring or
removed Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents and (ii) except for any indemnity
payments owed to the retiring or removed Administrative Agent, all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided for above.  Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring or removed Administrative Agent (other than any rights to
indemnity payments or other amounts owed to the

 

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retiring or removed Administrative Agent), and the retiring or removed
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents.  The fees payable by the Borrower
to a successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor. 
After the retiring or removed Administrative Agent’s resignation or removal
hereunder and under the other Loan Documents, the provisions of this Section 11
and Section 12.13 shall continue in effect for the benefit of such retiring or
removed Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring or removed Administrative Agent was acting as Administrative
Agent.

 

Section 11.7.                                            Non-Reliance on
Administrative Agent and Other Lenders.  Each Lender and the L/C Issuer
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each Lender and
the L/C Issuer also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document or
any related agreement or any document furnished hereunder or thereunder.

 

Section 11.8.                                            L/C Issuer   The L/C
Issuer shall act on behalf of the Lenders with respect to any Letters of Credit
issued by it and the documents associated therewith.  The L/C Issuer shall each
have all of the benefits and immunities (i) provided to the Administrative Agent
in this Section 11 with respect to any acts taken or omissions suffered by the
L/C Issuer in connection with Letters of Credit issued by it or proposed to be
issued by it and the Applications pertaining to such Letters of Credit as fully
as if the term “Administrative Agent”, as used in this Section 11, included the
L/C Issuer with respect to such acts or omissions and (ii) as additionally
provided in this Agreement with respect to the L/C Issuer.  Any resignation by
the Person then acting as Administrative Agent pursuant to Section 11.6 shall
also constitute its resignation or the resignation of its Affiliate as the L/C
Issuer except as it may otherwise agree.  If such Person then acting as the L/C
Issuer so resigns, it shall retain all the rights, powers, privileges and duties
of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as
of the effective date of its resignation as the L/C Issuer and all L/C
Obligations with respect thereto, including the right to require the Lenders to
make Revolving Loans or fund risk participations in Reimbursement Obligations
pursuant to Section 2.2.  Upon the appointment by the Borrower of a successor
L/C Issuer hereunder (which successor shall in all cases be a Lender other than
a Defaulting Lender), (i) such successor shall succeed to and become vested with
all of the rights, powers, privileges and duties of the retiring L/C Issuer
(other than any rights to indemnity payments or other amounts that remain owing
to the retiring L/C Issuer), and (ii) the retiring L/C Issuer shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents other than with respect to its outstanding Letters of Credit, and
(iii) upon the request of the resigning L/C Issuer, the successor L/C Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other

 

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arrangements satisfactory to the resigning L/C Issuer to effectively assume the
obligations of the resigning L/C Issuer with respect to such Letters of Credit.

 

Section 11.9.                                            Intentionally Deleted.

 

Section 11.10.                                             Designation of
Additional Agents.  The Administrative Agent shall have the continuing right,
for purposes hereof, at any time and from time to time to designate one or more
of the Lenders (and/or its or their Affiliates) as “syndication agents,”
“documentation agents,” “book runners,” “lead arrangers,” “arrangers,” or other
designations for purposes hereto, but such designation shall have no substantive
effect, and such Lenders and their Affiliates shall have no additional powers,
duties or responsibilities as a result thereof.

 

Section 11.11.                                             Authorization of
Administrative Agent to File Proofs of Claim  In case of the pendency of any
proceeding under any Debtor Relief Law or any other judicial proceeding relative
to the Borrower, the Administrative Agent (irrespective of whether the principal
of any Revolving Loan or L/C Obligation shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

 

(a)                            to file and prove a claim for the whole amount of
the principal and interest owing and unpaid in respect of the Revolving Loans,
L/C Obligations and all other Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of Lenders, the L/C Issuer and the Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Lenders, the L/C Issuer and the Administrative Agent and their respective
agents and counsel and all other amounts due the Lenders, the L/C Issuer and the
Administrative Agent under the Loan Documents including, but not limited to,
Sections 2.10, 3.1, 10.3 and 12.13) allowed in such judicial proceeding; and

 

(b)                            to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 3.1
and 12.13.  Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment
or composition affecting the Obligations or the rights of any Lender or the L/C
Issuer or to authorize the Administrative Agent to vote in respect of the claim
of any Lender or the L/C Issuer in any such proceeding.

 

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SECTION 12.                                      MISCELLANEOUS.

 

Section 12.1.                                            Taxes.  (a)  Certain
Defined Terms.  For purposes of this Section, the term “Lender” includes the L/C
Issuer and the term “applicable law” includes FATCA.

 

(b)                                      Payments Free of Taxes.  Any and all
payments by or on account of any obligation of the Borrower under any Loan
Document shall be made without deduction or withholding for any Taxes, except as
required by applicable law.  If any applicable law (as determined in the good
faith discretion of an applicable Withholding Agent) requires the deduction or
withholding of any Tax from any such payment by a Withholding Agent, then the
applicable Withholding Agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the Borrower shall be
increased as necessary so that after such deduction or withholding has been made
(including such deductions and withholdings applicable to additional sums
payable under this Section) the applicable Recipient receives an amount equal to
the sum it would have received had no such deduction or withholding been made.

 

(c)                                      Payment of Other Taxes by the
Borrower.  The Borrower shall timely pay to the relevant Governmental Authority
in accordance with applicable law, or at the option of the Administrative Agent
timely reimburse it for the payment of, any Other Taxes.

 

(d)                                      Indemnification by the Borrower.  The
Borrower shall indemnify each Recipient, within ten (10) days after demand
therefor, for the full amount of any Indemnified Taxes (including Indemnified
Taxes imposed or asserted on or attributable to amounts payable under this
Section) payable or paid by such Recipient or required to be withheld or
deducted from a payment to such Recipient and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender (with a copy to the Administrative Agent),
or by the Administrative Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error.

 

(e)                                      Indemnification by the Lenders.  Each
Lender shall severally indemnify the Administrative Agent, within ten (10) days
after demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable
to such Lender (but only to the extent that the Borrower has not already
indemnified the Administrative Agent for such Indemnified Taxes or Other Taxes
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 12.10(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

 

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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 (e).

 

(f)                                      Evidence of Payments.  As soon as
practicable after any payment of Taxes by the Borrower to a Governmental
Authority pursuant to this Section, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

 

(g)                                       Status of Lenders.  (i) Any Lender
that is entitled to an exemption from or reduction of withholding Tax with
respect to payments made under any Loan Document shall deliver to the Borrower
and the Administrative Agent, at the time or times reasonably requested by the
Borrower or the Administrative Agent, such properly completed and executed
documentation 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.  In addition, any Lender, if reasonably requested by the
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements.  Notwithstanding anything to the contrary in
the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in
Section 12.1(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in
the Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

 

(ii)                                       Without limiting the generality of
the foregoing,

 

(A)                            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),
executed originals of IRS Form W-9 certifying that such Lender is exempt from
U.S. federal backup withholding tax;

 

(B)                            any Foreign Lender shall, to the extent it is
legally entitled to do so, deliver to the Borrower and the Administrative Agent
(in such number of copies as shall be requested by the recipient) on or prior to
the date on which such Foreign Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the reasonable request of the Borrower or the
Administrative Agent), whichever of the following is applicable:

 

(i)                            in the case of a Foreign Lender claiming the
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, executed originals of
IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal
withholding Tax

 

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pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

 

(ii)                              executed originals of IRS Form W-8ECI;

 

(iii)                               in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under Section 881(c) of the
Code, (x) a certificate substantially in the form of Exhibit H-1 to the effect
that such Foreign Lender is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

 

(iv)                             to the extent a Foreign Lender is not the
beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS
Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in
the form of Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit H-4 on behalf of each such direct and indirect partner;

 

(C)                            any Foreign Lender shall, to the extent it is
legally entitled to do so, deliver to the Borrower and the Administrative Agent
(in such number of copies as shall be requested by the recipient) on or prior to
the date on which such Foreign Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the reasonable request of the Borrower or the
Administrative Agent), executed originals of any other form prescribed by
applicable law as a basis for claiming exemption from or a reduction in U.S.
federal withholding Tax, duly completed, together with such supplementary
documentation as may be prescribed by applicable law to permit the Borrower or
the Administrative Agent to determine the withholding or deduction required to
be made; and

 

(D)                            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

 

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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.  Solely for purposes of this clause (D), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.

 

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

 

(h)                                      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 (including by the payment of additional amounts pursuant to this
Section), 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 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 subsection (h) (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 subsection (h), in no event will the
indemnified party be required to pay any amount to an indemnifying party
pursuant to this subsection (h) 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 subsection 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.

 

(i)                                      Survival.  Each party’s obligations
under this Section 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 Revolving Credit Commitments and the repayment,
satisfaction or discharge of all obligations under any Loan Document.

 

Section 12.2.                                            Other Taxes.  The
Borrower agrees to pay on demand, and indemnify and hold the Administrative
Agent, the Lenders, and the L/C Issuer harmless from, any Other Taxes payable in
respect of this Agreement or any other Loan Document, including interest and
penalties, in the event any such taxes are assessed, irrespective of when such
assessment is made and whether or not any credit is then in use or available
hereunder.

 

Section 12.3.                                            No Waiver, Cumulative
Remedies.  No delay or failure on the part of the Administrative Agent, the L/C
Issuer, or any Lender, or on the part of the holder or holders of any of the
Obligations, in the exercise of any power or right under any Loan Document shall

 

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operate as a waiver thereof or as an acquiescence in any default, nor shall any
single or partial exercise of any power or right preclude any other or further
exercise thereof or the exercise of any other power or right.  The rights and
remedies hereunder of the Administrative Agent, the L/C Issuer, the Lenders, and
of the holder or holders of any of the Obligations are cumulative to, and not
exclusive of, any rights or remedies which any of them would otherwise have.

 

Section 12.4.                                            Non-Business Days.  If
any payment hereunder becomes due and payable on a day which is not a Business
Day, the due date of such payment shall be extended to the next succeeding
Business Day on which date such payment shall be due and payable.  In the case
of any payment of principal falling due on a day which is not a Business Day,
interest on such principal amount shall continue to accrue during such extension
at the rate per annum then in effect, which accrued amount shall be due and
payable on the next scheduled date for the payment of interest.

 

Section 12.5.                                            Survival of
Representations.  All representations and warranties made herein or in any other
Loan Document or in certificates given pursuant hereto or thereto shall survive
the execution and delivery of this Agreement and the other Loan Documents, and
shall continue in full force and effect with respect to the date as of which
they were made as long as any credit is in use or available hereunder.

 

Section 12.6.                                            Survival of
Indemnities.  All indemnities and other provisions relative to reimbursement to
the Lenders and the L/C Issuer of amounts sufficient to protect the yield of the
Lenders and the L/C Issuer with respect to the Revolving Loans and Letters of
Credit, including, but not limited to, Sections 2.10, 10.3, and 12.13 hereof,
shall survive the termination of this Agreement and the other Loan Documents and
the payment of the Obligations.

 

Section 12.7.                                            Sharing of Payments by
Lenders.  If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Revolving Loans or other obligations hereunder resulting in such Lender
receiving payment of a proportion of the aggregate amount of its Revolving Loans
and accrued interest thereon or other such obligations greater than its pro rata
share thereof as provided herein, then the Lender receiving such greater
proportion shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in the Revolving Loans and
such other obligations of the other Lenders, or make such other adjustments as
shall be equitable, so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans and other amounts owing
them; 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 Section shall not be
construed to apply to (x) any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement (including the application
of funds arising from the existence of a Defaulting Lender), or (y) any payment
obtained by a Lender as consideration for the

 

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assignment of or sale of a participation in any of its Revolving Loans or
participations in L/C Obligations to any assignee or participant, other than to
the Borrower or any Subsidiary thereof (as to which the provisions of this
Section 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 setoff 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.

 

Section 12.8.                                            Notices.  Except as
otherwise specified herein, all notices hereunder and under the other Loan
Documents shall be in writing (including, without limitation, notice by
telecopy) and shall be given to the relevant party at its address or telecopier
number set forth below, or such other address or telecopier number as such party
may hereafter specify by notice to the Administrative Agent and the Borrower
given by courier, by United States certified or registered mail, by telecopy or
by other telecommunication device capable of creating a written record of such
notice and its receipt.  Notices under the Loan Documents to any Lender shall be
addressed to its address or telecopier number set forth on its Administrative
Questionnaire; and notices under the Loan Documents to the Borrower, the
Administrative Agent, or the L/C Issuer shall be addressed to its respective
address or telecopier number set forth below:

 

to the Borrower:

 

to the Administrative Agent and L/C Issuer:

 

 

 

LTC Properties, Inc.

 

Bank of Montreal

2829 Townsgate Road, Suite 350

 

115 South LaSalle Street

Westlake Village, California 91361

 

Chicago, Illinois 60603

Attention:    Chief Financial Officer

 

Attention:    Lloyd Baron

Telephone:  (805) 981-8655

 

Telephone:  (312) 461-6812

Telecopy:    (805) 981-8663

 

Telecopy:     (312) 293-8409

 

Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or in the relevant Administrative Questionnaire and a
confirmation of such telecopy has been received by the sender, (ii) if given by
mail, five (5) days after such communication is deposited in the mail, certified
or registered with return receipt requested, addressed as aforesaid or (iii) if
given by any other means, when delivered at the addresses specified in this
Section or in the relevant Administrative Questionnaire; provided that any
notice given pursuant to Section 2 hereof shall be effective only upon receipt.

 

Section 12.9.                                            Counterparts.  This
Agreement may be executed in any number of counterparts, and by the different
parties hereto on separate counterpart signature pages, and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

 

Section 12.10.                                             Successors and
Assigns.  (a)      Successors and Assigns Generally.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto

 

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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 paragraph (b) of this Section, (ii) by way of participation in
accordance with the provisions of paragraph (d) of this Section, or (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
paragraph (e) of this Section (and any other attempted assignment or transfer by
any party hereto shall be null and void).  Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in paragraph (d) of this Section and, to the extent
expressly contemplated hereby, the Related Parties of each of the 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 Eligible Assignees all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Revolving
Credit Commitment and the Revolving Loans at the time owing to it); provided
that any such assignment shall be subject to the following conditions:

 

(i)                            Minimum Amounts.  (A) In the case of an
assignment of the entire remaining amount of the assigning Lender’s Revolving
Credit Commitment and the Revolving Loans and participation interest in
L/C Obligations 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 Revolving Credit Commitment (which for this
purpose includes Revolving Loans and participation interest in L/C Obligations
outstanding thereunder) or, if the applicable Revolving Credit Commitment is not
then in effect, the principal outstanding balance of the Revolving Loans and
participation interest in L/C Obligations 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
“Effective Date” is specified in the Assignment and Acceptance, as of the
Effective Date specified in such Assignment and Acceptance) shall not be less
than $5,000,000, unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise consents
(each such consent not to be unreasonably withheld 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 Revolving Loan or the Revolving Credit Commitment.

 

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(iii)                               Required Consents.  No consent shall be
required for any assignment except to the extent required by
Section 12.10(b)(i)(B) and, in addition:

 

(A)                            the consent of the Borrower (such consent not to
be unreasonably withheld or delayed) shall be required unless (x) an Event of
Default has occurred and is continuing at the time of such assignment or
(y) such assignment is to a Lender, an Affiliate of a Lender or an Approved
Fund; provided that the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the
Administrative Agent within five (5) Business Days after having received notice
thereof; and provided, further, that the Borrower’s consent shall not be
required during the primary syndication of the Revolving Credit;

 

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

 

(C)                            the consent of the L/C Issuer (such consent not
to be unreasonably withheld 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).

 

(iv)                             Assignment and Acceptance.  The parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500 (except
no fee shall be required for an assignment by a Lender to an Approved Fund
related to such Lender), and the assignee, if it is not a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire.

 

(v)                            No Assignment to Borrower.  No such assignment
shall be made to (a) the Borrower or any of its Subsidiaries or any Affiliate of
the Borrower or any Subsidiary or (b) to any Defaulting Lender or any of its
Subsidiaries, or any Person who, upon becoming a Lender hereunder would
constitute a Defaulting Lender or a Subsidiary thereof.

 

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

 

(vii)                               Certain Additional Payments.  In connection
with any assignment of rights and obligations of any Defaulting Lender
hereunder, no such assignment shall be effective unless and until, in addition
to the other conditions thereto set forth herein, the parties to the assignment
shall make such additional payments to the Administrative Agent in an aggregate
amount sufficient, upon distribution thereof as appropriate (which may be
outright payment, purchases by the assignee of participations or
subparticipations, or other compensating actions, including funding, with the
consent of

 

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the Borrower and the Administrative Agent, the applicable pro rata share of
Revolving Loans previously requested but not funded by the Defaulting Lender, to
each of which the applicable assignee and assignor hereby irrevocably consent),
to (x) pay and satisfy in full all payment liabilities then owed by such
Defaulting Lender to the Administrative Agent, the L/C Issuer and each other
Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as
appropriate) its full pro rata share of all Revolving Loans and participations
in Letters of Credit in accordance with its Revolver Percentage. 
Notwithstanding the foregoing, in the event that any assignment of rights and
obligations of any Defaulting Lender hereunder shall become effective under
applicable law without compliance with the provisions of this paragraph, then
the assignee of such interest shall be deemed to be a Defaulting Lender for all
purposes of this Agreement until such compliance occurs.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 12.7 and 12.13 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 that 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 paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (d) of this Section.

 

(c)                                      Register.  The Administrative Agent,
acting solely for this purpose as an agent of the Borrower, shall maintain at
one of its offices in Chicago, Illinois a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Revolving Credit Commitments of, and principal amounts (and
stated interest) of the Revolving Loans owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”).  The entries in the Register
shall be conclusive absent manifest error, and the Borrower, the Administrative
Agent and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement.  The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

 

(d)                                       Participations.  Any Lender may at any
time, without the consent of, or notice to, the Borrower or the Administrative
Agent, sell participations to any Person (other than a natural Person or the
Borrower or 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 Revolving Credit Commitments and/or
the Revolving Loans owing to it);

 

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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 L/C Issuer and Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.  For the avoidance of doubt, each Lender shall
be responsible for the indemnity under Section 11.8 with respect to any payments
made by such Lender to its Participant(s).

 

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in Section 12.11 that
expressly relate to amendments requiring the unanimous consent of the Lenders in
the Revolving Credit.  The Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.10, 10.3 and 12.1 (subject to the
requirements and limitations therein, including the requirements under
Section 12.1(g) (it being understood that the documentation required under
Section 12.1(g) shall be delivered to the participating Lender)) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section; provided that such Participant
(A) agrees to be subject to the provisions of Sections 2.12 and 10.4 as if it
were an assignee under paragraph (b) of this Section; and (B) shall not be
entitled to receive any greater payment under Sections 10.3 or 12.1, with
respect to any participation, than its participating Lender would have been
entitled to receive, except to the extent such entitlement to receive a greater
payment results from a Change in Law that occurs after the Participant acquired
the applicable participation.  Each Lender that sells a participation agrees, at
the Borrower’s request and expense, to use reasonable efforts to cooperate with
the Borrower to effectuate the provisions of Section 2.12 with respect to any
Participant.  To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 12.14 as though it were a Lender; provided
that such Participant agrees to be subject to Section 12.7 as though it were a
Lender.  Each Lender that sells a participation shall, acting solely for this
purpose as an agent of the Borrower, maintain a register 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 Revolving 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 (including the identity of any Participant or any
information relating to a Participant’s interest in any commitments, loans,
letters of credit or its other obligations under any Loan Document) to any
Person 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.  For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

 

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

 

Section 12.11.                                             Amendments.  Any
provision of this Agreement or the other Loan Documents may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by (a) the
Borrower, (b) the Required Lenders, and (c) if the rights or duties of the
Administrative Agent or the L/C Issuer are affected thereby, the Administrative
Agent or the L/C Issuer, as applicable; provided that:

 

(i)                            no amendment or waiver pursuant to this
Section 12.11 shall (A) increase any Revolving Credit Commitment of any Lender
without the consent of such Lender or (B) reduce the amount of or postpone the
date for any scheduled payment of any principal of or interest on any Revolving
Loan or of any Reimbursement Obligation or of any fee payable hereunder without
the consent of the Lender to which such payment is owing or which has committed
to make such Revolving Loan or Letter of Credit (or participate therein)
hereunder; and

 

(ii)                              no amendment or waiver pursuant to this
Section 12.11 shall, unless signed by each Lender, extend the Revolving Credit
Termination Date, change the definition of Required Lenders, amend the waterfall
provisions of Section 4.1 hereof, change the provisions of this Section 12.11 or
affect the number of Lenders required to take any action hereunder or under any
other Loan Document.

 

Section 12.12.                                             Headings. 
Section headings used in this Agreement are for reference only and shall not
affect the construction of this Agreement.

 

Section 12.13.                                             Costs and Expenses;
Indemnification.  (a) The Borrower agrees to pay all reasonable costs and
expenses of the Administrative Agent in connection with the preparation,
negotiation, syndication, and administration of the Loan Documents, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, in connection with the preparation and execution of the
Loan Documents, and any amendment, waiver or consent related thereto, whether or
not the transactions contemplated herein are consummated.  The Borrower agrees
to pay to the Administrative Agent, the L/C Issuer, and each Lender, and any
other holder of any Obligations outstanding hereunder, all costs and expenses
reasonably incurred or paid by the Administrative Agent, the L/C Issuer, such
Lender, or any such holder, including reasonable attorneys’ fees and
disbursements and court costs, in connection with any Default or Event of
Default hereunder or in connection with the enforcement of any of the Loan
Documents (including all such costs and expenses incurred in connection with any
proceeding under the United States Bankruptcy Code involving the Borrower as a
debtor thereunder).  The Borrower further agrees to indemnify the Administrative
Agent, the L/C Issuer, each Lender, and any security trustee therefor, and their
respective directors, officers, employees, agents, financial advisors, and
consultants (each such Person being called an “Indemnitee”) against all losses,
claims, damages, penalties, judgments,

 

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liabilities and expenses (including, without limitation, all reasonable fees and
disbursements of counsel for any such Indemnitee and all reasonable expenses of
litigation or preparation therefor, whether or not the Indemnitee is a party
thereto, or any settlement arrangement arising from or relating to any such
litigation) which any of them may pay or incur arising out of or relating to any
Loan Document or any of the transactions contemplated thereby or the direct or
indirect application or proposed application of the proceeds of any Revolving
Loan or Letter of Credit, other than those which arise from the gross negligence
or willful misconduct of the party claiming indemnification.  The Borrower, upon
demand by the Administrative Agent, the L/C Issuer, or a Lender at any time,
shall reimburse the Administrative Agent, the L/C Issuer, or such Lender for any
legal or other expenses (including, without limitation, all reasonable fees and
disbursements of counsel for any such Indemnitee) incurred in connection with
investigating or defending against any of the foregoing (including any
settlement costs relating to the foregoing) except if the same is directly due
to the gross negligence or willful misconduct of the Indemnitee.  The Borrower
hereby agrees to indemnify the Administrative Agent and the Lenders against, and
agrees that it will hold the Administrative Agent and the Lenders harmless from,
any claim, demand, or liability for any such broker’s or finder’s fees alleged
to have been incurred in connection herewith and any expenses (including
reasonable attorneys’ fees) arising in connection with any such claim, demand,
or liability.  To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or the other Loan Documents or any agreement or instrument
contemplated hereby or thereby, the transactions contemplated hereby or thereby,
any Revolving Loan or Letter of Credit or the use of the proceeds thereof.  The
obligations of the Borrower under this Section shall survive the termination of
this Agreement.

 

(b)                                      The Borrower unconditionally agrees to
forever indemnify, defend and hold harmless, and covenants not to sue for any
claim for contribution against, each Indemnitee for any damages, costs, loss or
expense, including without limitation, response, remedial or removal costs and
all reasonable fees and disbursements of counsel for any such Indemnitee,
arising out of any of the following:  (i) any presence, release, threatened
release or disposal of any hazardous or toxic substance or petroleum by the
Borrower or any Subsidiary or otherwise occurring on or with respect to its
Property (whether owned or leased), (ii) the operation or violation of any
Environmental Law, whether federal, state, or local, and any regulations
promulgated thereunder, by the Borrower or any Subsidiary or otherwise occurring
on or with respect to its Property (whether owned or leased), (iii) any claim
for personal injury or property damage in connection with the Borrower or any
Subsidiary or otherwise occurring on or with respect to its Property (whether
owned or leased), and (iv) the inaccuracy or breach of any environmental
representation, warranty or covenant by the Borrower or any Subsidiary made
herein or in any other Loan Document evidencing or securing any Obligations or
setting forth terms and conditions applicable thereto or otherwise relating
thereto, except for damages arising from the willful misconduct or gross
negligence of the relevant Indemnitee.  This indemnification shall survive the
payment and satisfaction of all Obligations and the termination of this
Agreement, and shall remain in force beyond the expiration of any applicable
statute of limitations and payment or satisfaction in full of any single claim
under this indemnification.

 

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This indemnification shall be binding upon the successors and assigns of the
Borrower and shall inure to the benefit of each Indemnitee and its successors
and assigns.

 

Section 12.14.                                             Set-off.  If an Event
of Default shall have occurred and be continuing, each Lender, the L/C Issuer,
and each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by applicable law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final, in whatever currency) at any time held, and other obligations (in
whatever currency) at any time owing, by such Lender, the L/C Issuer or any such
Affiliate, to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement or any other Loan Document to such Lender or the L/C Issuer or their
respective Affiliates, irrespective of whether or not such Lender, the L/C
Issuer or Affiliate shall have made any demand under this Agreement or any other
Loan Document and although such obligations of the Borrower may be contingent or
unmatured or are owed to a branch, office or Affiliate of such Lender or the L/C
Issuer different from the branch, office or Affiliate holding such deposit or
obligated on such indebtedness; provided that in the event that any Defaulting
Lender shall exercise any such right of setoff, (x) all amounts so set off shall
be paid over immediately to the Administrative Agent for further application in
accordance with the provisions of Section 2.14 and, pending such payment, shall
be segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent, the L/C Issuer, and the
Lenders, and (y) the Defaulting Lender shall provide promptly to the
Administrative Agent a statement describing in reasonable detail the Obligations
owing to such Defaulting Lender as to which it exercised such right of setoff. 
The rights of each Lender, the L/C Issuer and their respective Affiliates under
this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender, the L/C Issuer or their respective
Affiliates may have.  Each Lender and the L/C Issuer agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application; provided that the failure to give such notice shall not affect the
validity of such setoff and application.

 

Section 12.15.                                             Entire Agreement. 
The Loan Documents constitute the entire understanding of the parties thereto
with respect to the subject matter thereof and any prior agreements, whether
written or oral, with respect thereto are superseded hereby.

 

Section 12.16.                                             Governing Law.  This
Agreement and the other Loan Documents (except as otherwise specified therein),
and the rights and duties of the parties hereto, shall be construed and
determined in accordance with the internal laws of the State of New York.

 

Section 12.17.                                             Severability of
Provisions.  Any provision of any Loan Document which is unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.  All rights, remedies and powers provided in this Agreement and
the other Loan Documents may be exercised only to the extent that the exercise
thereof does not violate any applicable mandatory provisions of law, and all the
provisions of this Agreement and other Loan Documents are intended to be subject
to all applicable mandatory provisions of law which may be controlling and to be
limited to the extent

 

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necessary so that they will not render this Agreement or the other Loan
Documents invalid or unenforceable.

 

Section 12.18.                                             Excess Interest. 
Notwithstanding any provision to the contrary contained herein or in any other
Loan Document, no such provision shall require the payment or permit the
collection of any amount of interest in excess of the maximum amount of interest
permitted by applicable law to be charged for the use or detention, or the
forbearance in the collection, of all or any portion of the Revolving Loans or
other obligations outstanding under this Agreement or any other Loan Document
(“Excess Interest”).  If any Excess Interest is provided for, or is adjudicated
to be provided for, herein or in any other Loan Document, then in such event
(a) the provisions of this Section shall govern and control, (b) the Borrower
shall not be obligated to pay any Excess Interest, (c) any Excess Interest that
the Administrative Agent or any Lender may have received hereunder shall, at the
option of the Administrative Agent, be (i) applied as a credit against the then
outstanding principal amount of Obligations hereunder and accrued and unpaid
interest thereon (not to exceed the maximum amount permitted by applicable law),
(ii) refunded to the Borrower, or (iii) any combination of the foregoing,
(d) the interest rate payable hereunder or under any other Loan Document shall
be automatically subject to reduction to the maximum lawful contract rate
allowed under applicable usury laws (the “Maximum Rate”), and this Agreement and
the other Loan Documents shall be deemed to have been, and shall be, reformed
and modified to reflect such reduction in the relevant interest rate, and
(e) the Borrower shall not have any action against the Administrative Agent or
any Lender for any damages whatsoever arising out of the payment or collection
of any Excess Interest.  Notwithstanding the foregoing, if for any period of
time interest on any of the Borrower’s Obligations is calculated at the Maximum
Rate rather than the applicable rate under this Agreement, and thereafter such
applicable rate becomes less than the Maximum Rate, the rate of interest payable
on the Borrower’s Obligations shall remain at the Maximum Rate until the Lenders
have received the amount of interest which such Lenders would have received
during such period on the Borrower’s Obligations had the rate of interest not
been limited to the Maximum Rate during such period.

 

Section 12.19.                                             Construction.  The
parties acknowledge and agree, to the extent permitted by law, that the Loan
Documents shall not be construed more favorably in favor of any party hereto
based upon which party drafted the same, it being acknowledged that all parties
hereto contributed substantially to the negotiation of the Loan Documents.  The
provisions of this Agreement relating to Subsidiaries shall only apply during
such times as the Borrower has one or more Subsidiaries.

 

Section 12.20.                                             Lender’s and
L/C Issuer’s Obligations Several.  The obligations of the Lenders and the L/C
Issuer hereunder are several and not joint.  Nothing contained in this Agreement
and no action taken by the Lenders or the L/C Issuer pursuant hereto shall be
deemed to constitute the Lenders and the L/C Issuer a partnership, association,
joint venture or other entity.

 

Section 12.21.                                             Submission to
Jurisdiction; Waiver of Jury Trial.  The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York,
New York for

 

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purposes of all legal proceedings arising out of or relating to this Agreement,
the other Loan Documents or the transactions contemplated hereby or thereby. 
The Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.  THE
BORROWER, THE ADMINISTRATIVE AGENT, THE L/C ISSUER, AND THE LENDERS HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY.

 

Section 12.22.                                             USA Patriot Act. 
Each Lender and the L/C Issuer that is subject to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”) hereby notifies the Borrower that pursuant to the requirements of
the Act, it is required to obtain, verify, and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the L/C Issuer to
identify the Borrower in accordance with the Act.

 

Section 12.23.                                             Confidentiality. 
Each of the Administrative Agent, the Lenders, and the L/C Issuer severally
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors to the extent any such Person has a need to know such
Information (it being understood that the Persons to whom such disclosure is
made will first be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(A) any assignee of or participant in, or any prospective assignee of or
participant in, any of its rights or obligations under this Agreement or (B) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower or any Subsidiary and its obligations,
(g) with the prior written consent of the Borrower, (h) to the extent such
Information (A) becomes publicly available other than as a result of a breach of
this Section or (B) becomes available to the Administrative Agent, any Lender or
the L/C Issuer on a non-confidential basis from a source other than the Borrower
or any Subsidiary or any of their directors, officers, employees or agents,
including accountants, legal counsel and other advisors, (i) to rating agencies
if requested or required by such agencies in connection with a rating relating
to the Revolving Loans or Revolving Credit Commitments hereunder, or (j) to
entities which compile and publish information about the syndicated loan market,
provided that only basic information about the pricing and structure of the
transaction evidenced hereby may be disclosed pursuant to this subsection (j). 
For purposes of this Section, “Information” means all information received from
the Borrower or any of the Subsidiaries or from any other Person on behalf of
the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any
of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the L/C Issuer on a
non-confidential basis prior to

 

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disclosure by the Borrower or any of its Subsidiaries or from any other Person
on behalf of the Borrower or any of the Subsidiaries.

 

Section 12.24.                                             Amendment and
Restatement; No Novation.  From and after the date of this Agreement, all
references to the Prior Credit Agreement in any Loan Document or in any other
instrument or document shall, unless otherwise explicitly stated therein, be
deemed to refer to this Agreement.  This Agreement shall become effective as of
the date hereof, and supersede all provisions of the Prior Credit Agreement as
of such date, upon the execution of this Agreement by each of the parties hereto
and fulfillment of the conditions precedent contained in Section 7.2 hereof. 
This Agreement shall constitute for all purposes an amendment and restatement of
the Prior Credit Agreement and not a new agreement and all obligations
outstanding under the Prior Credit Agreement shall, subject to Section 12.25
hereof, continue to be outstanding hereunder and shall not constitute a novation
of the indebtedness or other obligations outstanding under the Prior Credit
Agreement.

 

Section 12.25.                                             Equalization of Loans
and Commitments.  Upon the satisfaction of the conditions precedent set forth in
Section 7.2 hereof, all loans outstanding under the Prior Credit Agreement shall
remain outstanding as the initial Borrowing of Revolving Loans under this
Agreement and, in connection therewith, the Borrower shall be deemed to have
prepaid all outstanding Eurodollar Loans on the Closing Date and shall pay to
each Lender who is currently a party to the Prior Credit Agreement any
compensation due such Lender under Section 2.10 of the Prior Credit Agreement as
a result thereof (to the extent invoiced prior to the Closing Date and if not
waived by any Lender under the Prior Credit Agreement).  On the Closing Date,
the Lenders each agree to make such purchases and sales of interests in the
outstanding Revolving Loans between themselves so that each Lender is then
holding its relevant Revolver Percentage of outstanding Revolving Loans.  Such
purchases and sales shall be arranged through the Administrative Agent and each
Lender hereby agrees to execute such further instruments and documents, if any,
as the Administrative Agent may reasonably request in connection therewith.

 

[SIGNATURE PAGES TO FOLLOW]

 

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This Credit Agreement is entered into between us for the uses and purposes
hereinabove set forth as of the date first above written.

 

 

 

“BORROWER”

 

 

 

LTC PROPERTIES, INC.

 

 

 

 

 

 

 

By

/s/ Wendy Simpson

 

 

Name:

Wendy Simpson

 

 

Title:

Chief Executive Officer and President

 

 

 

 

 

 

 

By

/s/ Pamela Shelley-Kessler

 

 

Name:

Pamela J. Shelley-Kessler

 

 

Title:

Executive Vice President, Chief Financial Officer and Secretary

 

 

 

“ADMINISTRATIVE AGENT AND L/C ISSUER”

 

 

 

 

 

BANK OF MONTREAL, as L/C Issuer and as Administrative Agent

 

 

 

 

By

/s/ Lloyd Baron

 

 

Name

Lloyd Baron

 

 

Title

Vice President

 

[Signature Page to Amended and Restated Credit Agreement]

 

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“LENDERS”

 

 

 

BANK OF MONTREAL, as a Lender

 

 

 

 

 

 

 

By

/s/ Lloyd Baron

 

 

Name

Lloyd Baron

 

 

Title

Vice President

 

[Signature Page to Amended and Restated Credit Agreement]

 

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KEYBANK NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

 

 

By

/s/ Laura Conway

 

 

Name

Laura Conway

 

 

Title

Vice President

 

 

 

 

[Signature Page to Amended and Restated Credit Agreement]

 

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

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

 

 

By

/s/ Christopher M. Johnson

 

 

Name

Christopher M. Johnson

 

 

Title

Assistant Vice President

 

 

 

[Signature Page to Amended and Restated Credit Agreement]

 

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ROYAL BANK OF CANADA, as a Lender

 

 

 

 

 

 

 

By

/s/ Dan Le Page

 

 

Name

Dan Le Page

 

 

Title

Authorized Signatory

 

[Signature Page to Amended and Restated Credit Agreement]

 

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

 

 

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Lender

 

 

 

 

 

 

 

By

/s/ Thomas Randolph

 

 

Name

Thomas Randolph

 

 

Title

Managing Director

 

 

 

 

 

 

 

By

/s/ Amy Trapp

 

 

Name

Amy Trapp

 

 

Title

Managing Director

 

[Signature Page to Amended and Restated Credit Agreement]

 

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

 

 

MUFG UNION BANK, N.A., as a Lender

 

 

 

 

 

 

 

By

/s/ Joanne Si

 

 

Name

Y. Joanne Si

 

 

Title

Vice President

 

[Signature Page to Amended and Restated Credit Agreement]

 

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