Exhibit 10.1

 

 

PUBLISHED CUSIP NUMBER: 91359FAG7

CREDIT AGREEMENT

Dated as of March 27, 2018

by and among

UNIVERSAL HEALTH REALTY INCOME TRUST,

THE LENDERS PARTY HERETO

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent

BANK OF AMERICA, N.A.,

as Syndication Agent

FIFTH THIRD BANK,

JPMORGAN CHASE BANK, N.A.

and

SUNTRUST BANK,

as Co-Documentation Agents

WELLS FARGO SECURITIES, LLC,

and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Joint Lead Arrangers and Joint Bookrunners

 

 

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TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS

     1  

Section 1.1     Defined Terms

     1  

Section 1.2     Other Definitional Provisions

     26  

Section 1.3     Accounting Terms

     26  

Section 1.4     Execution of Documents

     27  

Section 1.5     Time References

     27  

ARTICLE II LOANS; AMOUNTS AND TERMS

     27  

Section 2.1     Revolving Loans

     27  

Section 2.2     Revolving Facility Increase

     29  

Section 2.3     Letters of Credit

     30  

Section 2.4     Fees

     34  

Section 2.5     Commitment Reductions

     35  

Section 2.6     Prepayments

     35  

Section 2.7     Default Rate and Payment Dates

     36  

Section 2.8     Conversion Options

     37  

Section 2.9     Swingline Loan Subfacility

     37  

Section 2.10   Computation of Interest and Fees; Usury

     39  

Section 2.11   Pro Rata Treatment and Payments

     40  

Section 2.12   Non-Receipt of Funds by the Agent

     42  

Section 2.13   Inability to Determine Interest Rate

     43  

Section 2.15   Compensation for Losses

     45  

Section 2.16   Taxes

     46  

Section 2.17   Indemnification; Nature of Issuing Lender’s Duties

     49  

Section 2.18   Illegality

     50  

Section 2.19   Mitigation; Replacement of Lenders

     51  

Section 2.20   Cash Collateral

     52  

Section 2.21   Defaulting Lenders

     53  

Section 2.22   Extension of Maturity Date

     55  

ARTICLE III REPRESENTATIONS AND WARRANTIES

     56  

Section 3.1     Corporate Existence

     56  

Section 3.2     Subsidiaries; Unconsolidated Affiliates

     56  

Section 3.3     Authority, Etc

     56  

Section 3.4     Binding Effect Of Documents, Etc.

     57  

Section 3.5     No Events Of Default, Etc.

     57  

Section 3.6     Title to Properties; Leases

     57  

Section 3.7     Financial Statements

     57  

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

     58  

Section 3.9     Permits; Patents; Copyrights

     58  

Section 3.10   Litigation

     58  

Section 3.11   Compliance With Other Instruments, Laws, Etc.

     58  

Section 3.12   Tax Status; REIT Status

     58  

Section 3.13   Investment Company Act

     59  

Section 3.14   Absence of Financing Statements, Etc.

     59  

 

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Section 3.15   Certain Transactions

     59  

Section 3.16   Pension Plans

     59  

Section 3.17   Margin Regulations

     59  

Section 3.18   Environmental Matters

     60  

Section 3.19   Use of Proceeds

     61  

Section 3.20   Indebtedness

     61  

Section 3.21   Solvency

     61  

Section 3.22   Investments

     61  

Section 3.23   Labor Matters

     61  

Section 3.24   Accuracy and Completeness of Information

     61  

Section 3.25   Material Contracts

     62  

Section 3.26   Insurance

     62  

Section 3.27   Anti-Terrorism; Anti-Corruption and Sanctions

     62  

Section 3.28   Security Documents

     62  

ARTICLE IV CONDITIONS PRECEDENT

     63  

Section 4.1     Conditions Precedent to Closing

     63  

Section 4.2     Conditions To Loans

     65  

ARTICLE V COVENANTS OF THE COMPANY

     66  

Section 5.1     Punctual Payment

     66  

Section 5.2     Legal Existence, Etc.

     67  

Section 5.3     Financial Statements, Etc.

     67  

Section 5.4     Health Care Facilities - Financial Statements, Etc.

     69  

Section 5.5     Financial Covenants

     70  

Section 5.6     [Reserved]

     70  

Section 5.7     [Reserved]

     70  

Section 5.8     [Reserved]

     70  

Section 5.9     Indebtedness

     70  

Section 5.10   Security Interests and Liens; Negative Pledge

     72  

Section 5.11   No Further Negative Pledge; No Restrictive Agreements

     72  

Section 5.12   Guarantees

     73  

Section 5.13   Notice of Litigation And Judgments

     73  

Section 5.14   Notice of Defaults; Material Adverse Effect

     73  

Section 5.15   Notices With Regard to Health Care Operators

     74  

Section 5.16   Books and Records

     74  

Section 5.17   Maintenance of Properties

     74  

Section 5.18   Insurance

     74  

Section 5.19   Taxes

     75  

Section 5.20   Compliance With Laws, Contracts, and Licenses

     75  

Section 5.21   Access

     75  

Section 5.22   ERISA Compliance

     76  

Section 5.23   Reserves

     76  

Section 5.24   Distributions

     76  

Section 5.25   Investments

     76  

Section 5.26   Mortgage Loans

     77  

Section 5.27   Construction Loans

     77  

Section 5.28   Environmental Audits

     78  

 

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Section 5.29   Merger, Consolidation and Disposition of Assets

     78  

Section 5.30   Sale and Leaseback

     79  

Section 5.31   Use of Proceeds

     79  

Section 5.32   Fiscal Year; Organizational Documents; Material Contracts

     79  

Section 5.33   Guarantors

     79  

Section 5.34   Pledged Assets

     80  

Section 5.35   Further Assurances

     80  

Section 5.36   Transactions with Affiliates

     80  

ARTICLE VI [RESERVED]

     80  

ARTICLE VII EVENTS OF DEFAULT; ACCELERATION

     80  

Section 7.1     Events of Default

     80  

Section 7.2     Acceleration; Remedies

     83  

ARTICLE VIII THE ADMINISTRATIVE AGENT

     83  

Section 8.1     Appointment and Authority

     83  

Section 8.2     Nature of Duties

     83  

Section 8.3     Exculpatory Provisions

     84  

Section 8.4     Reliance by Agent

     84  

Section 8.5     Notice of Default

     85  

Section 8.6     Non-Reliance on Agent and Other Lenders

     85  

Section 8.7     Indemnification

     85  

Section 8.8     Agent in Its Individual Capacity

     86  

Section 8.9     Successor Agent

     86  

Section 8.10   Collateral and Guaranty Matters

     87  

Section 8.11   Bank Products

     87  

ARTICLE IX MISCELLANEOUS

     87  

Section 9.1     Amendments, Waivers and Consents

     87  

Section 9.2     Notices

     89  

Section 9.3     No Waiver; Cumulative Remedies

     91  

Section 9.4     Survival of Representations and Warranties

     91  

Section 9.5     Payment of Expenses and Taxes; Indemnity

     92  

Section 9.6     Successors and Assigns; Participations

     93  

Section 9.7     Right of Set-off; Sharing of Payments

     97  

Section 9.8     Table of Contents and Section Headings

     98  

Section 9.9     Counterparts; Effectiveness; Electronic Execution

     98  

Section 9.10   Severability

     99  

Section 9.11   Integration

     99  

Section 9.12   Governing Law

     99  

Section 9.13   Consent to Jurisdiction; Service of Process and Venue

     99  

Section 9.14   Confidentiality

     100  

Section 9.15   Acknowledgments

     101  

Section 9.16   Waivers of Jury Trial

     101  

Section 9.17   Patriot Act Notice

     101  

Section 9.18   Resolution of Drafting Ambiguities

     101  

Section 9.19   Continuing Agreement

     102  

Section 9.20   Press Releases and Related Matters

     102  

 

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Section 9.21   No Advisory or Fiduciary Responsibility

     102  

Section 9.22   Responsible Officers

     103  

Section 9.23   Acknowledgment and Consent to Bail-In of EEA Financial
Institutions

     103  

Section 9.24   Certain ERISA Matters

     103  

 

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EXHIBITS AND SCHEDULES

 

Exhibit 1.1(a)   Form of Account Designation Letter Exhibit 1.1(b)   Form of
Assignment and Assumption Exhibit 1.1(c)   Form of Bank Product Provider Notice
Exhibit 1.1(d)   Form of Notice of Borrowing Exhibit 1.1(e)   Form of Notice of
Conversion/Extension Exhibit 1.1(f)   Form of Subsidiary Guaranty Exhibit 2.1(a)
  Form of Funding Indemnity Letter Exhibit 2.1(e)   Form of Revolving Note
Exhibit 2.6(a)   Form of Notice of Prepayment Exhibit 2.9(d)   Form of Swingline
Note Exhibit 4.1(p)   Form of Solvency Certificate Exhibit 4.1(t)   Form of
Patriot Act Certificate Exhibit 5.3(d)   Form of Compliance Certificate
Schedule 1.1   Existing Letters of Credit Schedule 2.1(a)   Commitments
Schedule 3.1   Corporate Existence Schedule 3.2   Subsidiaries; Unconsolidated
Affiliates; Capital Structure Schedule 3.6   Title to Properties; Leases
Schedule 3.18   Environmental Matters Schedule 3.25   Material Contracts
Schedule 3.26   Insurance Schedule 5.9   Indebtedness Schedule 5.10(f)   Liens
Schedule 5.25(e)   Existing Investments

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT is made as of March 27, 2018 among UNIVERSAL HEALTH REALTY
INCOME TRUST, a real estate investment trust organized under the laws of the
State of Maryland and having its principal place of business at 367 South Gulph
Road, King of Prussia, Pennsylvania 19406 (the “Company”), the financial
institutions from time to time party hereto (individually, a “Lender” and
collectively, the “Lenders”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
administrative agent for the Lenders (the “Agent”).

BACKGROUND

A. The Company has requested that the Lenders provide a $300 million revolving
credit facility for the purposes hereinafter set forth;

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

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

ARTICLE I

DEFINITIONS

Section 1.1 Defined Terms.

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

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

“Acquisition Property” shall mean any improved, income producing Property owned
by the Company or any of its Subsidiaries for fewer than four complete fiscal
quarters, unless the Company has made a one-time election in writing to the
Agent to treat such Property as a Health Care Facility (and no longer treat such
Property as an Acquisition Property).

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

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

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

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

“Anti-Corruption Laws” shall mean all laws, rules, and regulations of any
jurisdiction applicable to the Company or its Subsidiaries from time to time
concerning or relating to bribery or corruption, including, without limitation,
the United States Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder and the U.K. Bribery Act 2010 and the rules and
regulations thereunder.

“Anti-Money Laundering Laws” shall mean any and all laws, statutes, regulations
or obligatory government orders, decrees, ordinances or rules applicable to a
Credit Party, its Subsidiaries or Affiliates related to terrorism financing or
money laundering, including any applicable provision of the Patriot Act and The
Currency and Foreign Transactions Reporting Act (also known as the “Bank Secrecy
Act,” 31 U.S.C. §§ 5311-5330 and 12U.S.C. §§ 1818(s), 1820(b) and 1951-1959).

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

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

 

Level

  

Total Leverage Ratio

   Base Rate
Margin   

LIBOR Rate

Margin

  

Letter of

Credit Fee

  

Facility

Fee

I    less than 35%    10.0 bps    110.0 bps    110.0 bps    15.0 bps II   
greater than or equal to 35% but less than 40%    15.0 bps    115.0 bps   
115.0 bps    20.0 bps III    greater than or equal to 40% but less than 45%   
20.0 bps    120.0 bps    120.0 bps    20.0 bps IV    greater than or equal to
45% but less than 50%    25.0 bps    125.0 bps    125.0 bps    25.0 bps V   
greater than or equal to 50% but less than 55%    30.0 bps    130.0 bps    130.0
bps    30.0 bps VI    greater than or equal to 55%    35.0 bps    135.0 bps   
135.0 bps    35.0 bps

The Applicable Margin shall, in each case, be determined and adjusted quarterly
on the date five (5) Business Days after the date on which the Agent has
received from the Company the financial information and the certifications
required to be delivered to the Agent and the Lenders in accordance

 

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with the provisions of Sections 5.3(a), (b), (d) and (e) (each an “Interest Rate
Determination Date”). Such Applicable Margin shall be effective from such
Interest Rate Determination Date until the next such Interest Rate Determination
Date. The initial Applicable Margins shall be based on Level III and shall
remain at such level until the first Interest Rate Determination Date occurring
after the delivery of the officer’s compliance certificate pursuant to
Section 5.3(d) for the quarter ended March 31, 2018. After the Closing Date, if
the Company shall fail to provide the financial information or certifications in
accordance with the provisions of Sections 5.3(a), (b), (d) and (e), the
Applicable Margin shall, on the date five (5) Business Days after the date by
which the Company was so required to provide such financial information or
certifications to the Agent and the Lenders, be based on Level VI until such
time as such information or certifications or corrected information or corrected
certificates are provided, whereupon the Level shall be determined by the then
current Total Leverage Ratio. In the event that any financial information or
certification provided to the Agent in accordance with the provisions of
Sections 5.3(a), (b), (d) and (e) is shown to be inaccurate (regardless of
whether this Agreement or the Commitments are in effect when such inaccuracy is
discovered), and such inaccuracy, if corrected, would have led to the
application of a higher Applicable Margin for any period (an “Applicable
Period”) than the Applicable Margin applied for such Applicable Period, the
Company shall immediately (a) deliver to the Agent a corrected compliance
certificate for such Applicable Period, (b) determine the Applicable Margin for
such Applicable Period based upon the corrected compliance certificate, and
(c) immediately pay to the Agent for the benefit of the Lenders the accrued
additional interest and other fees owing as a result of such increased
Applicable Margin for such Applicable Period, which payment shall be promptly
distributed by the Agent to the Lenders entitled thereto. It is acknowledged and
agreed that nothing contained herein shall limit the rights of the Agent and the
Lenders under the Loan Documents, including their rights under Sections 2.7 and
7.1.

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

“Applicable Swingline Lender” shall mean one of the Swingline Lenders chosen by
the Company for a specific Swingline Loan.

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

“Arrangers” shall mean WFS and Merrill Lynch, Pierce, Fenner & Smith
Incorporated or its designated affiliate, in their capacity as joint lead
arrangers and joint bookrunners, and their respective successors.

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

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

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

 

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“Bank of America” shall mean Bank of America, N.A., a national banking
association, together with its successors and/or assigns.

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

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

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

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

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

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

 

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manifest error) (A) that it is unable to ascertain the Federal Funds Effective
Rate, for any reason, including the inability or failure of the Agent to obtain
sufficient quotations in accordance with the terms above or (B) that the Prime
Rate or LIBOR no longer accurately reflects an accurate determination of the
prevailing Prime Rate or LIBOR, the Agent may select a reasonably comparable
replacement index or source to use as one of the bases for determining the Base
Rate, until the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in any of the foregoing will become
effective on the effective date of such change in the Federal Funds Effective
Rate, the Prime Rate or LIBOR for an Interest Period of one (1) month.
Notwithstanding anything contained herein to the contrary, (x) to the extent
that the provisions of Section 2.13 shall be in effect in determining LIBOR, the
Base Rate shall be the greater of (i) the Prime Rate in effect on such day and
(ii) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and
(y) in the event that the Base Rate is less than zero (0), the Base Rate shall
be deemed to be zero (0).

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

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

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

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

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

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

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

“Change in Law” shall mean the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation, implementation or application thereof by
any Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer

 

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Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith and (y) all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities, in each case pursuant to Basel
III, shall in each case be deemed to be a “Change in Law”, regardless of the
date enacted, adopted or issued.

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

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

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

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

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

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

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et
seq.).

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

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

“Construction-in-Process” shall mean cash expenditures for land and improvements
with respect to Development Properties determined in accordance with GAAP.

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

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

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

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

 

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

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

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

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

 

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“Development Property” shall mean any Property owned by the Company or any of
its Consolidated Subsidiaries on which the construction of new buildings
constituting a Health Care Facility has been commenced and is continuing (or has
recently been completed until such time as the Company has made an election in
writing to the Agent to treat such Property as a Health Care Facility (and no
longer treat such Property as a Development Property)).

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

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

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

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

“EBITDA” shall mean, for any fiscal period, with respect to the Company and its
Consolidated Subsidiaries, the sum of (i) Net Income for such period plus
(ii) expenses for interest on Indebtedness and for Facility Fees, Letter of
Credit Fees and any other fees in connection with the borrowing of money or the
maintenance of letters of credit by such Person, plus (iii) depreciation and
amortization plus (iv) transaction costs and write-offs of fees and expenses
relating to the transactions contemplated under this Agreement, in each case
determined for such period in accordance with GAAP but excluding, in any event,
the impact of gains and losses from extraordinary items, write-offs of
straight-line rent related to sold assets, asset sales (including the sale of
real estate) or write-ups/write-downs and forgiveness of indebtedness. The
Company’s and its Consolidated Subsidiaries’ pro rata share (based on their
percentage ownership interest) of the foregoing components for Unconsolidated
Affiliates will be included in the calculation of EBITDA.

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

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

“EEA Resolution Authority” shall mean any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any credit
institution or investment firm established in any EEA Member Country.

 

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

“Eligible Ground Lease” shall mean, at any time, a lease (a) under which the
Company or a Guarantor is the lessee or holds equivalent rights and is the fee
owner of the improvements or has a valid lease in existing improvements located
thereon, (b) except as otherwise noted in the proviso below, that has a
remaining term of not less than thirty (30) years (including the initial term
and any additional extension options that are solely at the option of such
Credit Party), (c) under which any required rental payment, principal or
interest payment or other payment due under such lease from the Company or from
such Guarantor to the ground lessor is not more than sixty (60) days past due
and any required rental payment, principal or interest payment or other payment
due to the Company or such Guarantor under any sublease of the applicable real
property lessor is not more than sixty (60) days past due, (d) where no party to
such lease is subject to a then continuing Bankruptcy Event, and (e) such ground
lease (or a related document executed by the applicable ground lessor) contains
customary provisions protective of any lender to the lessee; provided that, a
ground lease with a remaining term of less than thirty (30) years but greater
than twenty (20) years (in each case, including the initial term and any
additional extension options that are solely at the option of such Credit Party)
(each a “Specified Ground Lease”) shall nonetheless be deemed to satisfy the
requirement of clause (b) above but in no event shall the portion of
Unencumbered Asset Value attributable to all Unencumbered Assets which are
subject to Specified Ground Leases exceed 10% of Unencumbered Asset Value at any
time.

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

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

“Equity Issuance” shall mean any issuance by the Company or any Subsidiary to
any Person of (a) shares of its Equity Interests, (b) any shares of its Equity
Interests pursuant to the exercise of options or warrants, (c) any shares of its
Equity Interests pursuant to the conversion of any debt securities to equity or
(d) any options or warrants relating to its Equity Interests.

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

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

 

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

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

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

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

“Excluded Swap Obligation” shall mean, with respect to any Credit Party, any
Swap Obligation if, and to the extent that, all or a portion of the liability of
such Credit Party for or the guarantee of such Credit Party of, or the grant by
such Credit Party of a security interest to secure, such Swap Obligation (or any
liability or guarantee thereof) is or becomes illegal under the Commodity
Exchange Act or any rule, regulation or order of the Commodity Futures Trading
Commission (or the application or official interpretation of any thereof) by
virtue of such Credit Party’s failure for any reason to constitute an “eligible
contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the liability for or the guarantee of such
Credit Party or the grant of such security interest becomes effective with
respect to such Swap Obligation (such determination being made after giving
effect to any applicable keepwell, support or other agreement for the benefit of
the applicable Credit Party, including under Section 15 of the Subsidiary
Guaranty). If a Swap Obligation arises under a master agreement governing more
than one swap, such exclusion shall apply only to the portion of such Swap
Obligation that is attributable to swaps for which such guarantee or security
interest is or becomes illegal for the reasons identified in the immediately
preceding sentence of this definition.

“Excluded Subsidiary” shall mean (a) each of those Subsidiaries identified as an
Excluded Subsidiary on sub-part A of Schedule 3.2 attached hereto, (b) any other
Subsidiary that is acquired or formed following the Closing Date and designated
by the Company at any time thereafter as an Excluded Subsidiary or (c) any
Subsidiary that was a Subsidiary Guarantor but is subsequently designated by the
Company as an Excluded Subsidiary pursuant to the terms of Section 5.33(b), in
the case of each of clauses (a), (b) and (c) only to the extent such Subsidiary
(i) is organized as a single purpose entity, (ii) owns directly one or more
Health Care Facilities and (iii) is a party to, or in connection with being
designated as an Excluded Subsidiary will incur, Non-Recourse Debt (including
Non-Recourse Debt of the type described in clause (y) of the definition thereof)
the terms of which do (or will) not permit such Subsidiary to be a Guarantor
hereunder or would cause such Subsidiary to be in default of such obligation as
a result of becoming a Guarantor hereunder; provided, further that, upon any
Subsidiary Guarantor being designated as an Excluded Subsidiary in accordance
with the provisions of Section 5.33(b), (x) such Subsidiary shall be released
from all of its obligations under the Subsidiary Guaranty and the Pledge
Agreement and shall no longer be a Subsidiary Guarantor hereunder or under the
other Loan Documents and (y) the Equity Interests of such Subsidiary shall be
released from the pledge under the Pledge Agreement.

“Excluded Taxes” shall mean 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 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,

 

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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) backup withholding tax imposed under
Section 3406 of the Code on amounts payable to a Lender other than a Foreign
Lender, (c) in the case of a Foreign Lender (other than an assignee pursuant to
a request by the Company under Section 2.19(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender pursuant to an Applicable Law
in effect at the time such Foreign Lender becomes a party hereto (or designates
a new Lending Office), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new Lending
Office (or assignment), to receive additional amounts from the Company with
respect to such withholding tax pursuant to Section 2.16, (d) is attributable to
such Foreign Lender’s failure or inability (other than as a result of a Change
in Law) to comply with Section 2.16(e) and (e) any United States federal
withholding Taxes imposed under FATCA.

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

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

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

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

“FCPA” has the meaning set forth in Section 3.27(b).

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

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

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

“Fee Letters” shall mean each of (i) the letter agreement dated February 16,
2018, addressed to the Company from Wells Fargo and WFS, as amended, modified,
extended, restated, replaced, or supplemented from time to time and (ii) the
letter agreement dated February 16, 2018, addressed to the Company from Bank of
America and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as amended,
modified, extended, restated, replaced, or supplemented from time to time.

 

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“Fixed Charge Coverage Ratio” shall mean, as of any date of determination, the
ratio of (i) EBITDA for the four consecutive fiscal quarter period then ended to
(ii) Total Fixed Charges for the four consecutive fiscal quarter period then
ended.

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

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

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

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

“GAAP” shall mean generally accepted accounting principles as in effect from
time to time in the United States, applied in a manner consistent with those
used in preparing the financial statements delivered to the Agent prior to the
Closing Date, subject, however, in the case of determination of compliance with
the financial covenants set forth in Section 5.5 to the provisions of
Section 1.3.

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

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

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

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

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

 

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

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

(a) all debt and similar monetary obligations, whether direct or indirect,
including, without limitation, all obligations of such Person for borrowed money
or with respect to deposits or advances of any kind and all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments;

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

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

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

(e) all indebtedness, liabilities and other obligations of such Person in
respect of capitalized leases of real and personal property;

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

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

(h) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business); and

(i) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person or any warrant, right or option to acquire such Equity
Interest, valued, in the case of a redeemable preferred interest, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends.

 

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

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

“Interest Expense” shall mean for any fiscal period for the Company and its
Consolidated Subsidiaries on a consolidated basis, an amount equal to the sum of
the following with respect to Total Indebtedness: (i) total interest expense,
accrued in accordance with GAAP plus (ii) all capitalized interest determined in
accordance with GAAP (but excluding costs in connection with development
projects until such time as such costs are expensed in accordance with GAAP),
plus (iii) the amortization of deferred financing costs.

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

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

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

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

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

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

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

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

 

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(v) no more than ten (10) LIBOR Rate Loans may be in effect at any time;
provided that, for purposes hereof, LIBOR Rate Loans with different Interest
Periods shall be considered as separate LIBOR Rate Loans, even if they shall
begin on the same date and have the same duration, although borrowings,
extensions and conversions may, in accordance with the provisions hereof, be
combined at the end of existing Interest Periods to constitute a new LIBOR Rate
Loan with a single Interest Period.

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

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

“Issuing Lenders” shall mean Wells Fargo and Bank of America, in each case,
together with any successor.

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

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

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

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

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

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

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

 

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“LIBOR” shall mean, subject to the implementation of a Replacement Rate in
accordance with Section 2.13(b), for any interest rate calculation with respect
to a LIBOR Rate Loan, the rate of interest per annum determined on the basis of
the rate for deposits in Dollars for a period equal to the applicable Interest
Period as published by the ICE Benchmark Administration Limited, a United
Kingdom company, or a comparable or successor quoting service approved by the
Agent, at approximately 11:00 a.m. (London time) two (2) London Banking Days
prior to the first day of the applicable Interest Period. If, for any reason,
such rate is not so published then “LIBOR” shall be determined by the Agent to
be the arithmetic average of the rate per annum at which deposits in Dollars
would be offered by first class banks in the London interbank market to the
Agent at approximately 11:00 a.m. (London time) two (2) London Banking Days
prior to the first day of the applicable Interest Period for a period equal to
such Interest Period. Each calculation by the Agent of LIBOR shall be conclusive
and binding for all purposes, absent manifest error.

Notwithstanding the foregoing, (x) in no event shall LIBOR (including, without
limitation, any Replacement Rate with respect thereto) be less than 0% and
(y) unless otherwise specified in any amendment to this Agreement entered into
in accordance with Section 2.13(b), in the event that a Replacement Rate with
respect to LIBOR is implemented then all references herein to LIBOR shall be
deemed references to such Replacement Rate.

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

 

   LIBOR Rate =   LIBOR            1.00 - Eurodollar Reserve Percentage   

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

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

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

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

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

“Loan Documents” shall mean collectively, this Agreement, the Notes, the
Subsidiary Guaranty, the LOC Documents, the Fee Letters and the Security
Documents and any document or instrument delivered pursuant to or in connection
with this Agreement or the LOC Documents (including, without limitation, any
guaranty delivered in connection with this Agreement), each as amended and in
effect from time to time.

 

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

“LOC Commitment Percentage” shall mean, with respect to Wells Fargo, 50% of the
LOC Committed Amount, and with respect to Bank of America, 50% of the LOC
Committed Amount.

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

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

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

“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank Eurodollar market.

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

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

“Material Acquisition” shall mean any acquisition with total consideration in
excess of 10% of Total Asset Value (measured prior to giving effect to such
acquisition).

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

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

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

 

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“Maturity Date” shall mean, the date that is four (4) years following the
Closing Date; provided that, if the Company elects the extension option under
Section 2.22, upon satisfaction of the conditions set forth in such
Section 2.22, the Maturity Date shall be extended as set forth in Section 2.22;
provided, however, if such date is not a Business Day, the Maturity Date shall
be the next preceding Business Day.

“Maximum Leverage Level” shall have the meaning set forth in Section 5.5(b).

“Maximum Unencumbered Leverage Level” shall have the meaning set forth in
Section 5.5(e).

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

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

“Net Cash Proceeds” shall mean the aggregate cash or Cash Equivalents proceeds
received by the Company or any Subsidiary in respect of any Equity Issuance, net
of (a) direct costs (including, without limitation, legal, accounting and
investment banking fees, and sales commissions) (b) taxes paid or payable as a
result thereof; it being understood that “Net Cash Proceeds” shall include,
without limitation, any cash or Cash Equivalents received upon the sale or other
disposition of any non-cash consideration received by the Company or any
Subsidiary in any Equity Issuance.

“Net Income” shall mean for any fiscal period of the Company, the net income (or
loss), after income taxes, of the Company and its Consolidated Subsidiaries on a
consolidated basis as determined in accordance with GAAP.

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

“Non-Recourse Debt” shall mean (x) in the case of any Person other than an
Excluded Subsidiary or an Unconsolidated Affiliate, Indebtedness of the Company
or its Subsidiaries which is at all times non-recourse in nature to the Company
or any of its Subsidiaries, except to the extent of any recourse to an asset of
the Company or a Subsidiary purchased or otherwise financed by such Indebtedness
(including, without limitation, Indebtedness of multi-member limited liability
companies in which the Company or any of its Subsidiaries has an ownership
interest, but only to the extent that such Indebtedness remains non-recourse to
the Company or any of its Subsidiaries (other than, in the event such
multi-member limited liability company is a Subsidiary, such Subsidiary), (y) in
the case of an Excluded Subsidiary, Indebtedness of such Excluded Subsidiary
which is at all times non-recourse in nature to the Company or its Subsidiaries
(except such Excluded Subsidiary or assets of such Excluded Subsidiary) or
(z) in the case of an Unconsolidated Affiliate, Indebtedness of such
Unconsolidated Affiliate which is at all times non-recourse in nature to the
Company or its Subsidiaries.

“Normalized Adjusted FFO” shall mean, for any fiscal period with respect to the
Company, “funds from operations” as defined in accordance with the resolutions
adopted by the Board of Governors of the National Association of Real Estate
Investment Trusts as in effect from time to time; provided that Normalized
Adjusted FFO shall at all times exclude (a) charges for impairment losses from
property sales, (b) stock-based compensation, (c) write-offs or reserves of
straight-line rent related to sold assets, (d) amortization of debt costs, and
(e) non-recurring charges, including without limitation acquisition expenses,
non-cash charges related to the write-off of deferred equity and financing
costs.

 

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

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

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

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

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

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

“Other Non-Guarantor Subsidiary” shall mean any Subsidiary of the Company which
is not required to be a Guarantor hereunder pursuant to Section 5.33(a).

“Other Connection Taxes” shall mean, 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 Loan or Loan Document).

“Other Taxes” shall mean all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant to
Section 2.19).

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

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

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

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

 

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

“PBGC” shall mean the Pension Benefit Guaranty Corporation or any successor
agency.

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

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

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

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

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

“Pro Forma Basis” shall mean, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the
four-quarter period ending as of the most recent quarter end preceding the date
of such transaction for which financial statement information is available;
provided, for purposes of Section 5.9(c), 5.9(h) and 5.25(e), the rental income
for any newly-acquired Health Care Facility which is used for purposes of such
calculation shall be based on the amounts contractually due under any related
leases that are then in effect; provided, further, that any such calculations
made on a Pro Forma Basis shall be adjusted by (A) excluding from Total Asset
Value and Unencumbered Asset Value, the actual value of any assets sold by the
Company or any of its Subsidiaries since the last day of the prior fiscal
quarter and (B) adding to Total Asset Value and Unencumbered Asset Value, the
undepreciated GAAP book value (after any impairments) of any Acquisition
Properties acquired (or to be acquired with any borrowing) by (x) in the case of
Total Asset Value, the Company or any of its Subsidiaries or (y) in the case of
Unencumbered Asset Value, the Company or any Guarantor, in each case since the
last day of the most recently ended fiscal quarter for which financial statement
information is available.

“Property” shall mean any parcel of real property, and improvements thereon,
which is owned, leased or operated by the Company or its Consolidated
Subsidiaries and which is located in the United States of America or the
District of Columbia or any Specified Jurisdiction.

“Recipient” shall mean (a) the Agent, (b) any Lender or (c) any Issuing Lender,
as applicable.

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

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

 

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

“Replacement Rate” shall have the meaning set forth in Section 2.13(b).

“Required Lenders” shall mean, as of any date of determination, Lenders holding
at least a majority of the Revolving Commitments or, if the Revolving
Commitments have been terminated or there are no Revolving Commitments then
outstanding, the outstanding Loans and Participation Interests; provided,
however, that if any Lender shall be a Defaulting Lender at such time, then
there shall be excluded from the determination of Required Lenders, Obligations
(including Participation Interests) owing to such Defaulting Lender and such
Defaulting Lender’s Commitments.

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

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

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

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

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

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

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

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

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

 

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

“Sanctions” shall mean any and all economic or financial sanctions, sectoral
sanctions, secondary sanctions, trade embargoes and anti-terrorism laws,
including but not limited to those imposed, administered or enforced from time
to time by the U.S. government (including those administered by OFAC or the U.S.
Department of State), the United Nations Security Council, the European Union,
Her Majesty’s Treasury, or other relevant sanctions authority with jurisdiction
over any Lender, the Company or any of its Subsidiaries or Affiliates.

“Sanctioned Country” shall mean at any time, a country or territory which is
itself the subject or target of any Sanctions (including, as of the Closing
Date, Cuba, Iran, North Korea, Sudan, Syria and Crimea).

“Sanctioned Person” shall mean, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC (including,
without limitation, OFAC’s Specially Designated Nationals and Blocked Persons
List and OFAC’s Consolidated Non-SDN List), the U.S. Department of State, the
United Nations Security Council, the European Union, Her Majesty’s Treasury, or
other relevant sanctions authority, (b) any Person operating, organized or
resident in a Sanctioned Country or (c) any Person owned or controlled by any
such Person or Persons described in clauses (a) and (b), including a Person that
is deemed by OFAC to be a Sanctions target based on the ownership of such legal
entity by Sanctioned Peron(s).

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

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

“Secured Leverage Ratio” shall mean, as of any date of determination, the ratio
of (i) the portion of Total Indebtedness outstanding as of such date which is
secured in any manner by a Lien but excluding, in any event, (x) Indebtedness of
Unconsolidated Affiliates and (y) the Obligations hereunder to (ii) Total Asset
Value as of such date but excluding, in any event, the Company’s and its
Consolidated Subsidiaries’ pro rata share (based on their percentage ownership
interest) of assets held by Unconsolidated Affiliates.

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

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

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

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

 

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“Specified Jurisdiction” shall mean any of Germany, the United Kingdom,
Australia, Canada and Puerto Rico or such other countries or such other
territories of the United States as are proposed from time to time in writing by
the Company to the Agent and approved by the Agent.

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

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

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

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

“Swingline Commitment Percentage” shall mean, with respect to Wells Fargo, 50%
of the Swingline Committed Amount, and with respect to Bank of America, 50% of
the Swingline Committed Amount.

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

“Swingline Lenders” shall mean Wells Fargo and Bank of America, in each case,
together with any successor..

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

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

“Tangible Net Worth” shall mean the aggregate of the capital stock (but
excluding treasury stock and capital stock subscribed and unissued) and surplus
(including earned surplus, capital surplus and the balance of the current profit
and loss account not transferred to surplus) of the Company and its

 

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Consolidated Subsidiaries as the same properly appears on a balance sheet of the
Company prepared in accordance with GAAP, less the sum of the total book value
of all assets of the Company and its Consolidated Subsidiaries which would be
treated as intangibles under GAAP including without limitation, such items as
good will, leasehold improvements, trademarks, trade names, service marks, brand
names, copyrights, patents and licenses, and rights with respect to the
foregoing.

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

“Total Asset Value” shall mean as of any date of determination, the sum of all
of the following of the Company and its Consolidated Subsidiaries on a
consolidated basis determined in accordance with GAAP applied on a consistent
basis, without duplication: (a) the undepreciated cost (after taking into
account any impairments) of the Health Care Facilities (other than a Development
Property or an Acquisition Property), plus (b) the undepreciated cost (after
taking into account any impairments) of all Construction-in-Process for
Development Properties plus (c) the undepreciated cost (after taking into
account any impairments) of all Acquisition Properties; provided that (i) not
more than 5% of Total Asset Value, in the aggregate, may be attributable to
Properties located in Specified Jurisdictions; (ii) the portion of Total Asset
Value that is attributable to all Development Properties pursuant to clause
(b) above shall not exceed 20% of Total Asset Value; and (iii) the portion of
Total Asset Value that is attributable to Development Properties pursuant to
clause (b) above that are less than 50% (by rentable area) pre-leased to one or
more tenants which will occupy such space (x) shall not exceed 7.5% of Total
Asset Value and (y) shall only be included in Total Asset Value if such
Development Properties are being developed in conjunction with a UHS hospital
request to develop a building and which are located on a UHS hospital campus or
a UHS satellite campus. The Company’s and its Consolidated Subsidiaries’ pro
rata share (based on their percentage ownership interest) of assets held by
Unconsolidated Affiliates will be included in Total Asset Value calculations
consistent with the above described treatment for assets owned by the Company
and its Consolidated Subsidiaries.

“Total Fixed Charges” shall mean for any fiscal period for the Company and its
Consolidated Subsidiaries on a consolidated basis, an amount equal to the sum of
(i) Interest Expense, plus (ii) regularly scheduled installments of principal
payable with respect to Total Indebtedness (excluding balloon payments due at
maturity), plus (iii) all dividend payments due to the holders of any preferred
Equity Interests in the Company and all distributions due to the holders of any
limited partnership interests in the Company other than limited partner
distributions based on the per share dividend paid on the common shares of
beneficial interest of the Company (including in each case (i) through (iii),
without duplication, the Company’s and its Consolidated Subsidiaries’ pro rata
share (based on their percentage ownership interest) thereof for Unconsolidated
Affiliates).

“Total Indebtedness” shall mean all Indebtedness of the Company and its
Consolidated Subsidiaries on a consolidated basis (including, without
limitation, Non-Recourse Debt of the Company and its Consolidated Subsidiaries)
plus, without duplication, the Company’s and its Consolidated Subsidiaries’ pro
rata share (based on their percentage ownership interest) of all Indebtedness of
Unconsolidated Affiliates determined in accordance with GAAP. Notwithstanding
the use of GAAP, the calculation of Total Indebtedness shall not include any
fair value adjustments to the carrying value of liabilities to record such
liabilities at fair value pursuant to electing the fair value option election
under FASB 825-10-25 (formerly known as FAS 159, The Fair Value Option for
Financial Assets and Financial Liabilities) or other FASB standards allowing
entities to elect fair value option for financial liabilities. Therefore, the
amount of liabilities that is included in the calculation of Total Indebtedness
shall be the historical cost basis, which generally is the contractual amount
owed adjusted for amortization or accretion of any premium or discount (but
without any fair value adjustments).

 

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“Total Leverage Ratio” shall mean, as of any date of determination, the ratio of
Total Indebtedness as of such date to Total Asset Value as of such date.

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

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

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

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

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

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

“Unconsolidated Affiliate” shall mean, in respect of the Company and its
Consolidated Subsidiaries, any other Person in whom the Company or such
Consolidated Subsidiary holds an Investment in the Equity Interests of such
Person, which Investment is accounted for in the financial statements of the
Company and its Consolidated Subsidiaries on an equity basis of accounting and
whose financial results would not be consolidated under GAAP with the financial
results of the Company.

“Unencumbered Asset” shall mean a Property that meets each of the following
criteria and is designated as an Unencumbered Asset by the Company (i) the
Property is either 100% fee owned or ground leased under an Eligible Ground
Lease by the Company or a Guarantor; (ii) the Property is improved as a Health
Care Facility with one or more completed buildings of a type generally
consistent with the Company’s business strategy and is not a Development
Property (except as provided in clause (vii) below); (iii) the Property (and the
Equity Interests therein, if owned by the Company or a Guarantor) is not
directly or indirectly subject to any Lien (other than certain permitted
encumbrances to be agreed upon) or any negative pledge; (iv) to the best of the
Company’s knowledge, the Property is free of any material environmental
liabilities and is in material compliance with all Environmental Laws; (v) the
Property is free of any material defects, (vi) the Property is located in the
United States or, subject to the limitations set forth in the definition of
Unencumbered Asset Value, any Specified Jurisdiction , and (vii) if such
Property is a Development Property and construction of improvements has
commenced, there has been no interruption of construction for more than ninety
(90) consecutive days (other than as a result of a force majeure event that has
not continued for more than one hundred and eighty (180) days).

“Unencumbered Asset Value” shall mean, as to the Company and the Guarantors,
with respect to Unencumbered Assets, the sum, without duplication, of (a) the
undepreciated cost (after taking into account any impairments) of each
Unencumbered Asset (other than a Development Property or an Acquisition
Property), plus (b) the undepreciated cost (after taking into account any
impairments) of all Construction-in-Process for Development Properties that are
Unencumbered Assets plus (c) the undepreciated cost (after taking into account
any impairments) of all Acquisition Properties that are Unencumbered Assets;
provided that (i) not more than 5% of Unencumbered Asset Value, in the

 

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aggregate, may be attributable to Properties located in Specified Jurisdictions;
(ii) the portion of Unencumbered Asset Value that is attributable to all
Development Properties pursuant to clause (b) above shall not exceed 20% of
Unencumbered Asset Value; and (iii) the portion of Unencumbered Asset Value that
is attributable to Development Properties pursuant to clause (b) above that are
less than 50% (by rentable area) pre-leased to one or more tenants which will
occupy such space (x) shall not exceed 7.5% of Unencumbered Asset Value and
(y) shall only be included in Unencumbered Asset Value if such Development
Properties are being developed in conjunction with a UHS hospital request to
develop a building and which are located on a UHS hospital campus or a UHS
satellite campus,

“Unencumbered Leverage Ratio” shall mean, as of any date of determination the
ratio of (i) the sum of (a) that portion of Total Indebtedness which is not
secured in any manner by any Lien (but excluding Indebtedness of Unconsolidated
Affiliates) plus (b) the Obligations owing hereunder to (ii) Unencumbered Asset
Value of the Company and the Guarantors.

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

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

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

Section 1.2 Other Definitional Provisions.

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

Section 1.3 Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in

 

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conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the most
recently delivered audited consolidated financial statements of the Company,
except as otherwise specifically prescribed herein.

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

Section 1.4 Execution of Documents.

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

Section 1.5 Time References.

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

ARTICLE II

LOANS; AMOUNTS AND TERMS

Section 2.1 Revolving Loans.

(a) Revolving Commitment. During the Commitment Period, subject to the terms and
conditions hereof, each Lender severally, but not jointly, agrees to make
revolving credit loans in Dollars (“Revolving Loans”) to the Company from time
to time in an aggregate principal amount of up to THREE HUNDRED MILLION DOLLARS
($300,000,000) (as increased from time to time as provided in Section 2.2 and as
such aggregate maximum amount may be reduced from time to time as provided in
Section 2.6, the “Revolving Committed Amount”) for the purposes hereinafter set
forth (such facility, the “Revolving Facility”); provided, however, that
(i) with regard to each Lender individually, the sum of such Lender’s Revolving
Commitment Percentage of the aggregate principal amount of outstanding Revolving
Loans plus such Lender’s Revolving Commitment Percentage of outstanding
Swingline Loans plus such Lender’s Revolving Commitment Percentage of
outstanding LOC Obligations shall not exceed such Lender’s Revolving Commitment
and (ii) with regard to the Lenders collectively, the sum of the aggregate
principal amount of outstanding Revolving Loans plus outstanding Swingline Loans
plus outstanding LOC Obligations shall not exceed the Revolving Committed Amount
then in effect. Revolving Loans may consist of Base Rate Loans or LIBOR Rate
Loans, or a combination thereof, as the Company may request, and may be repaid
and reborrowed in accordance with the provisions hereof; provided, however, the
Revolving Loans made on the Closing Date or any of the three (3) Business Days
following the Closing Date, may only consist of Base Rate Loans unless the
Company delivers a funding indemnity letter, substantially in the form of
Exhibit 2.1(a), reasonably acceptable to the Agent not less than three
(3) Business Days prior to the Closing Date.

 

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(b) Revolving Loan Borrowings.

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

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

(iii) Advances. Each Lender will make its Revolving Commitment Percentage of
each Revolving Loan borrowing available to the Agent for the account of the
Company at the office of the Agent specified in Section 9.2, or at such other
office as the Agent may designate in writing, by 1:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice of Borrowing, in
Dollars and in funds immediately available to the Agent. Such borrowing will
then be made available to the Company by the Agent by crediting the account of
the Company on the books of such office (or such other account that the Company
may designate in writing to the Agent) with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received by the
Agent.

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

 

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

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

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

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

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

Section 2.2 Revolving Facility Increase.

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

(b) Terms and Conditions. The following terms and conditions shall apply to any
Revolving Facility Increase: (i) no Default or Event of Default shall exist
immediately prior to or after giving effect to such Revolving Facility Increase,
(ii) the terms and documentation of such Revolving Facility Increase (other than
the Applicable Margin and fees, which shall be determined as set forth below in
clause (c)) shall be the same as the existing Revolving Facility, (iii) any
loans made pursuant to a Revolving Facility Increase shall constitute Credit
Party Obligations and will be secured and guaranteed with the other Credit Party
Obligations on a pari passu basis, (iv) any Lenders providing such Revolving
Facility Increase shall be entitled to the same voting rights as the existing
Lenders and shall be entitled to receive proceeds of prepayments on the same
basis as the existing Lenders, (v) any such Revolving Facility Increase shall be
in a minimum principal amount of $10,000,000 and integral multiples of
$1,000,000 in excess thereof (or the remaining amount of the Incremental
Increase Amount, if less), (vi) the proceeds of any such Revolving Facility
Increase will be used for the purposes set forth in Section 3.19, (vii) the
Company shall execute a Revolving Note, in favor of any new Lender or any
existing Lender requesting a Revolving Note, to evidence its Revolving
Commitment to the extent increased pursuant to this Section, (viii) the
conditions to Extensions of Credit in Section 4.2 shall have been satisfied,
(ix) the Agent shall have received (A) upon request of the Agent, an opinion or
opinions of counsel for the Credit Parties, addressed to the and the Lenders, in
form and substance acceptable to the Agent substantially similar to those
opinions delivered to the Agent on the Closing Date, (B) any authorizing
corporate documents as the Agent may reasonably request and (C) if applicable, a
duly executed Notice of Borrowing, and (x) the Agent shall have received from
the Company an officer’s certificate, in form and substance reasonably
satisfactory to the Agent, demonstrating that, after giving effect to any such
Revolving Facility Increase on a Pro Forma Basis, the Company will be in
compliance with the financial covenants set forth in Section 5.5.

 

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

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

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

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

Section 2.3 Letters of Credit.

(a) Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which each Issuing Lender
may reasonably require which are not inconsistent with this Agreement, during
the Commitment Period the applicable Issuing Lender shall issue, and the Lenders
shall participate in, Letters of Credit for the account of the Company from time
to time upon request in a form acceptable to the applicable Issuing Lender;
provided, however, that (i) the aggregate amount of LOC Obligations shall not at
any time exceed FORTY MILLION DOLLARS ($40,000,000) (the “LOC Committed
Amount”), (ii) the sum of the aggregate principal amount of outstanding
Revolving Loans plus outstanding Swingline Loans plus outstanding LOC
Obligations shall not at any time exceed the Revolving

 

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Committed Amount then in effect, (iii) all Letters of Credit shall be
denominated in Dollars, (iv) Letters of Credit shall be issued for any lawful
corporate purposes and may be issued as standby letters of credit, including in
connection with workers’ compensation and other insurance programs, (v) no
Letter of Credit shall be issued after the occurrence and during the continuance
of a Default or an Event of Default, (vi) the beneficiary of any Letter of
Credit shall not be a Sanctioned Person, and (vii) the sum of the aggregate
amount of an Issuing Lender’s outstanding LOC Obligations shall not exceed such
Issuing Lender’s respective share of the LOC Committed Amount according to such
Issuing Lender’s LOC Commitment Percentage. Except as otherwise expressly agreed
in writing upon by all the Lenders, no Letter of Credit shall have an original
expiry date more than one year from the date of issuance; provided, however, so
long as no Default or Event of Default has occurred and is continuing and
subject to the other terms and conditions to the issuance of Letters of Credit
hereunder, the expiry dates of Letters of Credit may be extended annually or
periodically from time to time on the request of the Company or by operation of
the terms of the applicable Letter of Credit to a date not more than one year
from the date of extension; provided, further, except as otherwise set forth in
clause (k) hereof, no Letter of Credit, as originally issued or as extended,
shall have an expiry date extending beyond the date that is five (5) Business
Days prior to the Maturity Date (the “Letter of Credit Expiration Date”). Each
Letter of Credit shall comply with the related LOC Documents. The issuance and
expiry date of each Letter of Credit shall be a Business Day. Each Letter of
Credit issued hereunder shall be in a minimum original face amount of $50,000,
or such lesser amount as approved by the applicable Issuing Lender. The
Company’s Reimbursement Obligations in respect of each Existing Letter of
Credit, and each Lender’s participation obligations in connection therewith,
shall be governed by the terms of this Agreement. The Existing Letters of Credit
shall, as of the Closing Date, be deemed to have been issued as Letters of
Credit hereunder and subject to and governed by the terms of this Agreement.

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

(c) Participations. Each Lender, (i) on the Closing Date with respect to each
Existing Letter of Credit and (ii) upon issuance of a Letter of Credit, shall be
deemed to have purchased without recourse a risk participation from the
applicable Issuing Lender in such Letter of Credit and the obligations arising
thereunder and any Collateral relating thereto, in each case in an amount equal
to its Revolving Commitment Percentage of the obligations under such Letter of
Credit and shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and be obligated to pay to the applicable Issuing
Lender therefor and discharge when due, its Revolving Commitment Percentage of
the obligations arising under such Letter of Credit; provided that any Person
that becomes a Lender after the Closing Date shall be deemed to have purchased a
Participation Interest in all outstanding Letters of Credit on the date it
becomes a Lender hereunder and any Letter of Credit issued on or after such
date, in each case in accordance with the foregoing terms. Without limiting the
scope and nature of each Lender’s participation in any Letter of Credit, to the
extent that the applicable Issuing Lender has not been reimbursed as

 

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required hereunder or under any LOC Document, each such Lender shall pay to the
applicable Issuing Lender its Revolving Commitment Percentage of such
unreimbursed drawing in same day funds pursuant to and in accordance with the
provisions of subsection (d) hereof. The obligation of each Lender to so
reimburse the applicable Issuing Lender shall be absolute and unconditional and
shall not be affected by the occurrence of a Default, an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Company to reimburse the applicable Issuing Lender
under any Letter of Credit, together with interest as hereinafter provided.

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

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

 

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

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

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

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

 

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

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

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

Section 2.4 Fees.

(a) Facility Fee. Subject to Section 2.21, in consideration of the Revolving
Commitments, the Company agrees to pay to the Agent, for the ratable benefit of
the Lenders, a facility fee (the “Facility Fee”) in an amount equal to the
Applicable Margin for the Facility Fee per annum on the Revolving Committed
Amount. The Facility Fee shall be calculated quarterly in arrears. The Facility
Fee shall be payable quarterly in arrears on the last Business Day of each
calendar quarter.

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

 

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(c) Issuing Lender Fees. In addition to the Letter of Credit Fees payable
pursuant to subsection (b) hereof, the Company shall pay to the applicable
Issuing Lender for its own account without sharing by the other Lenders the
reasonable and customary charges from time to time of such Issuing Lender with
respect to the amendment, transfer, administration, cancellation and conversion
of, and drawings under, such Letters of Credit (collectively, the “Issuing
Lender Fees”). Each Issuing Lender may charge, and retain for its own account
without sharing by the other Lenders, an additional facing fee (the “Letter of
Credit Facing Fee”) as described in the respective Fee Letters of Wells Fargo
and Bank of America. The Issuing Lender Fees and the Letter of Credit Facing Fee
shall be payable quarterly in arrears on the last Business Day of each calendar
quarter.

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

Section 2.5 Commitment Reductions.

(a) Voluntary Reductions. The Company shall have the right to terminate or
permanently reduce the unused portion of the Revolving Committed Amount at any
time or from time to time upon not less than five (5) Business Days’ prior
written notice to the Agent (which shall notify the Lenders thereof as soon as
practicable) of each such termination or reduction, which notice shall specify
the effective date thereof and the amount of any such reduction which shall be
in a minimum amount of $500,000 or a whole multiple of $250,000 in excess
thereof and shall be irrevocable and effective upon receipt by the Agent;
provided that no such reduction or termination shall be permitted if after
giving effect thereto, and to any prepayments of the Revolving Loans made on the
effective date thereof, the sum of the aggregate principal amount of outstanding
Revolving Loans plus outstanding Swingline Loans plus outstanding LOC
Obligations would exceed the Revolving Committed Amount then in effect. Any
reduction in the Revolving Committed Amount shall be applied to the Commitment
of each Lender in according to its Revolving Commitment Percentage.

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

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

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

Section 2.6 Prepayments.

(a) Optional Prepayments. The Company shall have the right to prepay Loans in
whole or in part from time to time; provided, however, that (i) each partial
prepayment of any Base Rate Loan shall be in a minimum principal amount of (i)
$100,000 and integral multiples of $100,000 in excess thereof, (ii) each partial
prepayment of a Swingline Loan shall be in a minimum principal amount of
$100,000 and integral multiples of $100,000 in excess thereof and (iii) each
partial prepayment of a LIBOR Rate Loan shall be in a minimum principal amount
of

 

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

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

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

Section 2.7 Default Rate and Payment Dates.

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

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

 

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

Section 2.8 Conversion Options.

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

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

Section 2.9 Swingline Loan Subfacility.

(a) Swingline Commitment. During the Commitment Period, subject to the terms and
conditions hereof, each Swingline Lender, in its individual capacity, agrees to,
in reliance upon the agreements of the other Lenders set forth in this Section,
make certain revolving credit loans to the Company (each a “Swingline Loan” and,
collectively, the “Swingline Loans”) for the purposes hereinafter set forth;
provided, however, (i) the aggregate principal amount of Swingline Loans
outstanding at any time shall not exceed THIRTY MILLION DOLLARS ($30,000,000)
(the “Swingline Committed Amount”), (ii) the sum of the aggregate principal
amount of outstanding Revolving Loans plus outstanding Swingline Loans plus
outstanding LOC

 

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Obligations shall not exceed the Revolving Committed Amount then in effect, and
(iii) the sum of the aggregate principal amount of a Swingline Lender’s
outstanding Swingline Loans shall not exceed such Swingline Lender’s respective
share of the Swingline Committed Amount according to such Swingline Lender’s
Swingline Commitment Percentage. Swingline Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.

(b) Swingline Loan Borrowings.

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

(ii) Repayment of Swingline Loans. Each Swingline Loan borrowing shall be due
and payable on the earlier of thirty (30) days following the date such Swingline
Loan is made and the Maturity Date. The Applicable Swingline Lender may, at any
time, in its sole discretion, by written notice to the Company and the Agent,
demand repayment of its Swingline Loans by way of a Revolving Loan borrowing, in
which case the Company shall be deemed to have requested a Revolving Loan
borrowing comprised entirely of Base Rate Loans in the amount of such Swingline
Loans; provided, however, that, in the following circumstances, any such demand
shall also be deemed to have been given one Business Day prior to each of
(A) the Maturity Date, (B) the occurrence of any Bankruptcy Event, (C) upon
acceleration of the Obligations hereunder, whether on account of a Bankruptcy
Event or any other Event of Default, and (D) the exercise of remedies in
accordance with the provisions of Section 7.2 hereof (each such Revolving Loan
borrowing made on account of any such deemed request therefor as provided herein
being hereinafter referred to as “Mandatory Swingline Borrowing”). Each Lender
hereby irrevocably agrees to make such Revolving Loans promptly upon any such
request or deemed request on account of each Mandatory Swingline Borrowing in
the amount and in the manner specified in the preceding sentence on the date
such notice is received by the Lenders from the Agent if such notice is received
at or before 2:00 P.M., otherwise such payment shall be made at or before
12:00 Noon on the Business Day next succeeding the date such notice is received
notwithstanding (1) the amount of Mandatory Swingline Borrowing may not comply
with the minimum amount for borrowings of Revolving Loans otherwise required
hereunder, (2) whether any conditions specified in Section 4.2 are then
satisfied, (3) whether a Default or an Event of Default then exists, (4) failure
of any such request or deemed request for Revolving Loans to be made by the time
otherwise required in Section 2.1(b)(i), (5) the date of such Mandatory
Swingline Borrowing, or (6) any reduction in the Revolving Committed Amount or
termination of the Revolving Commitments immediately prior to such Mandatory
Swingline Borrowing or contemporaneously therewith. In the event that any
Mandatory Swingline Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code), then each Lender hereby
agrees that it shall forthwith purchase (as of the date the Mandatory Swingline
Borrowing would otherwise have occurred, but adjusted for any

 

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payments received from the Company on or after such date and prior to such
purchase) from the Applicable Swingline Lender such Participation Interest in
the outstanding Swingline Loans as shall be necessary to cause each such Lender
to share in such Swingline Loans ratably based upon its respective Revolving
Commitment Percentage (determined before giving effect to any termination of the
Commitments pursuant to Section 7.2); provided that (x) all interest payable on
the Swingline Loans shall be for the account of the Applicable Swingline Lender
until the date as of which the respective Participation Interest is purchased,
and (y) at the time any purchase of a Participation Interest pursuant to this
sentence is actually made, the purchasing Lender shall be required to pay to the
Applicable Swingline Lender interest on the principal amount of such
Participation Interest purchased for each day from and including the day upon
which the Mandatory Swingline Borrowing would otherwise have occurred to but
excluding the date of payment for such Participation Interest, at the rate equal
to, if paid within two (2) Business Days of the date of the Mandatory Swingline
Borrowing, the Federal Funds Effective Rate, and thereafter at a rate equal to
the Base Rate. The Company shall have the right to repay the Swingline Loan in
whole or in part from time to time in accordance with Section 2.6(a).

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

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

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

Section 2.10 Computation of Interest and Fees; Usury.

(a) Interest payable hereunder with respect to any Base Rate Loan based on the
Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days,
as applicable) for the actual days elapsed. All other fees, interest and all
other amounts payable hereunder shall be calculated on the basis of a 360-day
year for the actual days elapsed. The Agent shall as soon as practicable notify
the Company and the Lenders of each determination of a LIBOR Rate on the
Business Day of the determination thereof. Any change in the interest rate on a
Loan resulting from a change in the Base Rate shall become effective as of the
opening of business on the day on which such change in the Base Rate shall
become effective. The Agent shall as soon as practicable notify the Company and
the Lenders of the effective date and the amount of each such change.

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

 

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

Section 2.11 Pro Rata Treatment and Payments.

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

 

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becomes due and payable on a day other than a Business Day, such payment date
shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. For
the avoidance of doubt, unless otherwise required by the terms of this
Agreement, each payment made with regards to the LOC Commitments shall be made
pro rata according to the respective outstanding LOC Obligations of the
applicable Issuing Lender.

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

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

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

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

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

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

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

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

 

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In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders (including any Issuing Lenders) and
any Bank Product Provider shall receive an amount equal to its pro rata share
(based on the proportion that the then outstanding Loans and LOC Obligations
held by such Lender or the outstanding obligations payable to such Bank Product
Provider bears to the aggregate then outstanding Loans and LOC Obligations and
obligations payable under all Bank Products) of amounts available to be applied
pursuant to clauses “THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and (c) to the
extent that any amounts available for distribution pursuant to clause “FIFTH”
above are attributable to the issued but undrawn amount of outstanding Letters
of Credit, such amounts shall be held by the Agent in a Cash Collateral account
and applied (i) first, to reimburse each applicable Issuing Lender from time to
time for any drawings under such Letters of Credit on a pro rata basis and
(ii) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses “FIFTH” and “SIXTH” above in the
manner provided in this Section. Notwithstanding the foregoing terms of this
Section, only Collateral proceeds and payments under the Subsidiary Guaranty (as
opposed to ordinary course principal, interest and fee payments hereunder) shall
be applied to obligations under any Bank Product. Notwithstanding the foregoing,
Credit Party Obligations arising under Bank Products with Bank Product Providers
shall be excluded from the application described above if the Agent has not
received written notice thereof, together with such supporting documentation as
the Agent may request, from the applicable Bank Product Provider, as the case
may be. Each Bank Product Provider not a party to this Agreement that has given
the notice contemplated by the preceding sentence shall, by such notice, be
deemed to have acknowledged and accepted the appointment of the Agent pursuant
to the terms of Article VIII for itself and its Affiliates as if a “Lender”
party hereto.

Section 2.12 Non-Receipt of Funds by the Agent.

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

 

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

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

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

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

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

Section 2.13 Inability to Determine Interest Rate.

(a) Notwithstanding any other provision of this Agreement, unless and until a
Replacement Rate is implemented in accordance with clause (b) below if (i) the
Agent shall reasonably determine (which determination shall be conclusive and
binding absent manifest error) that Dollar deposits are not being offered to
banks in the London interbank Eurodollar market for the applicable amount and
Interest Period of a Loan, (ii) the Agent shall reasonably determine (which
determination shall be conclusive and binding absent manifest error) that, by
reason of circumstances affecting the relevant market, reasonable and adequate
means do not exist for ascertaining the LIBOR Rate for such Interest Period, or
(iii) the Required Lenders shall reasonably determine (which determination shall
be conclusive and binding absent manifest error) that the LIBOR Rate does not
adequately and fairly reflect the cost to such Lenders of funding LIBOR Rate
Loans that the Company has requested be outstanding as a LIBOR Tranche during
such Interest Period, the Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Company, and the Lenders at least
two (2) Business Days prior to the first day of such Interest Period. Unless the
Company shall have notified the Agent upon receipt of such telephone notice that
it wishes to rescind or modify its request regarding such LIBOR Rate Loans, any
Loans that were requested to be made as LIBOR Rate Loans

 

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shall be made as Base Rate Loans and any Loans that were requested to be
converted into or continued as LIBOR Rate Loans shall remain as or be converted
into Base Rate Loans. Until any such notice has been withdrawn by the Agent, no
further Loans shall be made as, continued as, or converted into, LIBOR Rate
Loans for the Interest Periods so affected.

(b) Notwithstanding anything to the contrary in clause (a) above, if the Agent
has made the determination (which determination shall be conclusive and binding
absent manifest error) that (i) the circumstances described in
Section 2.13(a)(i) or (a)(ii) have arisen and that such circumstances are
unlikely to be temporary, (ii) any applicable interest rate specified herein is
no longer a widely recognized benchmark rate for newly originated loans in the
syndicated loan market in the applicable currency or (iii) the applicable
supervisor or administrator (if any) of any applicable interest rate specified
herein or any Governmental Authority having, or purporting to have, jurisdiction
over the Agent has made a public statement identifying a specific date after
which any applicable interest rate specified herein shall no longer be used for
determining interest rates for loans in the syndicated loan market in the
applicable currency, then the Agent may, to the extent practicable (in
consultation with the Company and as determined by the Agent to be generally in
accordance with similar situations in other transactions in which it is serving
as administrative agent or otherwise consistent with market practice generally),
establish a replacement interest rate (the “Replacement Rate”), in which case,
the Replacement Rate shall, subject to the next two sentences, replace such
applicable interest rate for all purposes under the Loan Documents unless and
until (A) an event described in Section 2.13(b)(i), (b)(ii) or (b)(iii) occurs
with respect to the Replacement Rate or (B) the Agent (or the Required Lenders
through the Agent) notifies the Company that the Replacement Rate does not
adequately and fairly reflect the cost to the Lenders of funding the Loans
bearing interest at the Replacement Rate. In connection with the establishment
and application of the Replacement Rate, this Agreement and the other Loan
Documents shall be amended solely with the consent of the Agent and the Company,
as may be necessary or appropriate, in the opinion of the Agent, to effect the
provisions of this clause (b). Notwithstanding anything to the contrary in this
Agreement or the other Loan Documents (including, without limitation,
Section 9.1), such amendment shall become effective without any further action
or consent of any other party to this Agreement so long as the Agent shall not
have received, within five (5) Business Days of the delivery of such amendment
to the Lenders, written notices from such Lenders that in the aggregate
constitute Required Lenders, with each such notice stating that such Lender
objects to such amendment. To the extent the Replacement Rate is approved by the
Agent and the Company in connection with this clause (b), the Replacement Rate
shall be applied in a manner consistent with market practice; provided that, in
each case, to the extent such market practice is not administratively feasible
for the Agent, such Replacement Rate shall be applied as otherwise reasonably
determined by the Agent (it being understood that any such modification by the
Agent shall not require the consent of, or consultation with, any of the
Lenders).

Section 2.14 Yield Protection.

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

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

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (e) 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 any Issuing Lender or the London interbank market
any other condition, cost or expense affecting this Agreement or LIBOR Rate
Loans made by such Lender or any Letter of Credit or participation therein;

 

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

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

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

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

Section 2.15 Compensation for Losses.

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

 

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

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

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

excluding any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Company shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

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

Section 2.16 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Company hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Taxes;
provided that if the Company or the Agent shall be required by Applicable Law to
deduct any Taxes from such payments, then (i) if such Taxes are Indemnified
Taxes, the sum payable by the Company shall be increased as necessary so that
after making all required deductions (including deductions 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 deductions been
made, (ii) the Company or the Agent, as applicable, shall be entitled to make
such deductions and (iii) the Company or the Agent, as applicable, shall timely
pay the full amount deducted to the relevant Governmental Authority in
accordance with Applicable Law.

(b) Payment of Other Taxes by the Company. Without limiting the provisions of
paragraph (a) above, the Company shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with Applicable Law, or at the
option of the Agent timely reimburse the Agent for the payment of any Other
Taxes; provided, that evidence of any such payment of Other Taxes has been
provided to the Company.

(c) Indemnification by the Company. The Company shall indemnify each Recipient,
within thirty (30) 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) paid by such Recipient, and
any penalties, interest and 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 Company by a Lender or
Issuing Lender

 

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(with a copy to the Agent), or by the Agent on its own behalf or on behalf of a
Lender or Issuing Lender, shall be conclusive absent manifest error. The Company
shall also indemnify the Agent, within thirty (30) days after demand therefor,
for any amount which a Lender or Issuing Lender for any reason fails to pay
indefeasibly to the Agent as required by paragraph (g) below; provided that,
such Lender or Issuing Lender, as the case may be, shall indemnify the Company
to the extent of any payment the Company makes to the Agent pursuant to this
sentence. In addition, the Company shall indemnify the Agent, each Lender and
Issuing Lender, within thirty (30) days after demand therefor, for any
incremental Taxes that may become payable by such Agent, Lender (or its
beneficial owners) or Issuing Lender as a result of any failure of any Credit
Party to pay any Taxes when due to the appropriate Governmental Authority or to
deliver to such Agent, pursuant to clause (d), documentation evidencing the
payment of Taxes.

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

(e) Status of Lenders. Any Lender that is a United States person (within the
meaning of Section 7701(a)(30) of the Code) shall deliver to the Company and the
Agent on or about the date on which such Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of the
Company or the Agent), executed copies of IRS Form W-9 certifying that such
Lender is exempt from U.S. federal backup withholding tax. Any Foreign Lender
that is entitled to an exemption from or reduction of withholding tax with
respect to payments hereunder or under any other Loan Document shall deliver to
the Company (with a copy to the Agent), at the time or times prescribed by
Applicable Law or reasonably requested by the Company or the Agent, such
properly completed and executed documentation prescribed by Applicable Law as
will permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if requested by the Company or the Agent,
shall deliver such other documentation prescribed by Applicable Law or
reasonably requested by the Company or the Agent as will enable the Company or
the Agent to determine whether or not such Lender is subject to backup
withholding or information reporting requirements. Without limiting the
generality of the foregoing, in the event that the Company is a resident for tax
purposes in the United States, any Foreign Lender shall deliver to the Company
and the Agent (in such number of copies as shall be requested by the recipient)
on or prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the request of the Company or
the Agent, but only if such Foreign Lender is legally entitled to do so),
whichever of the following is applicable:

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

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

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

 

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(iv) to the extent a Foreign Lender is not the beneficial owner, executed copies
of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or
W-8BEN, as applicable), a Tax Compliance Certificate in a form reasonably
satisfactory to the Company and the Agent, 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 shall provide a Tax Compliance Certificate in a form
reasonably satisfactory to the Company and the Agent on behalf of each such
direct and indirect partner; or

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

If a payment made to a Lender under any Loan Document would be subject to U.S.
Federal withholding Tax imposed by FATCA if such Lender were to fail to comply
with any requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender shall deliver to the Company
and the Agent at the time or times prescribed by Applicable Law and at such time
or times reasonably requested by the Company or the 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 Company or the Agent as may be necessary for the
Company and the 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 paragraph, “FATCA” shall include any amendments made
to FATCA after the Closing Date.

To the extent that the relevant documentation provided pursuant to this
Section 2.16(e) is rendered obsolete or inaccurate in any respect, such Lender
or Issuing Lender shall update such documentation or promptly notify the Company
and the Agent in writing of its legal inability to do so.

(f) Treatment of Certain Refunds. If any party determines, in its reasonable
discretion, that it has received a refund of any Taxes as to which it has been
indemnified pursuant to this Section (including additional amounts paid by the
Company pursuant to this Section), it shall pay to the applicable indemnifying
party an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, under this Section with respect to
the Taxes 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); provided that the applicable indemnifying party, upon the request of
such indemnified party, agrees to repay the amount paid over pursuant to this
Section (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to such indemnified party in the event such indemnified
party is required to repay such refund to such Governmental Authority.
Notwithstanding anything to the contrary in this paragraph (f), in no event will
the indemnified party be required to pay any amount to an indemnifying party
pursuant to this paragraph (f) 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 indemnification payments or additional amounts giving
rise to such refund had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to the Company or
any other Person.

 

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(g) Indemnification of the Agent. Each Lender and Issuing Lender shall severally
indemnify the Agent within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender or Issuing Lender (but only to the
extent that the Company has not already indemnified the Agent for such
Indemnified Taxes and without limiting the obligation of the Company to do so),
(ii) any Taxes attributable to such Lender’s or Issuing Lender’s failure to
comply with the provisions of Section 9.6(d) relating to the maintenance of a
Participant Register and (iii) any Excluded Taxes attributable to such Lender or
Issuing Lender, in each case, that are payable or paid by the 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 or Issuing
Lender by the Agent shall be conclusive absent manifest error. Each Lender and
Issuing Lender hereby authorizes the Agent to set off and apply any and all
amounts at any time owing to such Lender or Issuing Lender, as the case may be,
under any Loan Document against any amount due to the Agent under this
paragraph (g). The agreements in paragraph (g) shall survive the resignation
and/or replacement of the Agent.

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

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

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

(b) As between the Credit Parties, each Issuing Lender and each Lender, the
Credit Parties shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. Neither the Issuing Lenders nor any
Lender shall be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon a Letter of Credit so long as the applicable
Issuing Lender acts with reasonable care in connection therewith; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in

 

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cipher; (v) for errors in interpretation of technical terms; (vi) for any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under a Letter of Credit or of the proceeds thereof; and
(vii) for any consequences arising from causes beyond the control of any Issuing
Lender or any Lender, including, without limitation, any Government Acts. None
of the above shall affect, impair, or prevent the vesting of any Issuing
Lender’s rights or powers hereunder.

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

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

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

Section 2.18 Illegality.

Notwithstanding any other provision of this Agreement, if any Change in Law
shall make it unlawful for such Lender or its Lending Office to make or maintain
LIBOR Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its Lending Office the funds with which to make such
Loans, (a) such Lender shall promptly notify the Agent and the Company thereof,
(b) the commitment of such Lender hereunder to make LIBOR Rate Loans or continue
LIBOR Rate Loans as such shall forthwith be suspended until the Agent shall give
notice that the condition or situation which gave rise to the suspension shall
no longer exist, and (c) such Lender’s Loans then outstanding as LIBOR Rate
Loans, if any, shall be converted on the last day of the Interest Period for
such Loans or within such earlier period as required by law as Base Rate Loans.
The Company hereby agrees to promptly pay any Lender, upon its demand, any
additional amounts necessary to compensate such Lender for actual and direct
costs (but not including anticipated profits) reasonably incurred by such Lender
in making any repayment in accordance with this Section including, but not
limited to, any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its LIBOR Rate Loans hereunder;
provided any such amounts being demanded of the Company by such Lender shall be
made on a nondiscriminatory basis, consistent with other requests being made by
such Lender in connection with other similar loans held by such Lender. A
certificate (which certificate shall include a description of the basis for the
computation) as to any additional amounts payable pursuant to

 

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this Section submitted by such Lender, through the Agent, to the Company shall
be conclusive in the absence of manifest error. Each Lender agrees to use
reasonable efforts (including reasonable efforts to change its Lending Office)
to avoid or to minimize any amounts which may otherwise be payable pursuant to
this Section; provided, however, that such efforts shall not cause the
imposition on such Lender of any additional costs or legal or regulatory burdens
deemed by such Lender in its sole discretion to be material.

Section 2.19 Mitigation; Replacement of Lenders

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

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

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

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

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

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

 

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

Section 2.20 Cash Collateral.

(a) Cash Collateral.

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

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

(b) Grant of Security Interest. All Cash Collateral (other than credit support
not constituting funds subject to deposit) shall be maintained in blocked,
non-interest bearing deposit accounts with the Agent. The Company, and to the
extent provided by any Lender, such Lender, hereby grants to (and subjects to
the control of) the Agent, for the benefit of the Agent, the Issuing Lenders and
the Lenders (including the Swingline Lenders), and agrees to maintain, a first
priority security interest in all such cash, deposit accounts and all balances
therein, and all other property so provided as collateral pursuant hereto, and
in all proceeds of the foregoing, all as security for the obligations to which
such Cash Collateral may be applied pursuant to clause (c) below. If at any time
the Agent, any Issuing Lender or any Swingline Lender determines that Cash
Collateral is subject to any right or claim of any Person other than the Agent
as herein provided, or that the total amount of such Cash Collateral is less
than the applicable Fronting Exposure and other obligations secured thereby, the
Company or the relevant Defaulting Lender will, promptly upon demand by the
Agent, any Issuing Lender or any Swingline Lender pay or provide to the Agent
additional Cash Collateral in an amount sufficient to eliminate such deficiency.

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

(d) Release. Cash Collateral (or the appropriate portion thereof) provided to
reduce Fronting Exposure or other obligations shall be released promptly
following (i) the elimination of the applicable Fronting Exposure or other
obligations giving rise thereto (including by the termination of Defaulting
Lender status of the applicable Lender (or, as appropriate, its assignee)), or
(ii) the Agent’s good faith determination that there exists excess Cash
Collateral (which determination shall be confirmed by any Issuing Lender or
Swingline Lender affected by such release of Cash Collateral); provided,
however, (A) that Cash Collateral furnished by or on behalf of a Credit Party
shall not be released during the continuance of a Default (and following

 

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application as provided in this Section may be otherwise applied in accordance
with Section 2.11), and (B) the Person providing Cash Collateral and each
applicable Issuing Lender or Applicable Swingline Lender may agree that Cash
Collateral shall not be released but instead held to support future anticipated
Fronting Exposure or other obligations.

Section 2.21 Defaulting Lenders.

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

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

(b) Reallocation of Payments. Any payment of principal, interest, fees or other
amounts received by the Agent under this Agreement for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VII or otherwise) or received by the Agent from a Defaulting Lender
pursuant to Section 9.7 shall be applied at such time or times as may be
determined by the Agent as follows: first, to the payment of any amounts owing
by such Defaulting Lender to the Agent hereunder; second, to the payment on a
pro rata basis of any amounts owing by such Defaulting Lender to any Issuing
Lender or Swingline Lender hereunder; third, to Cash Collateralize the Issuing
Lenders’ Fronting Exposure with respect to such Defaulting Lender in accordance
with Section 2.20; fourth, as the Company may request (so long as no Default or
Event of Default exists), to the funding of any Loan in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Agent; fifth, if so determined by the Agent and
the Company, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement and (y) Cash Collateralize the Issuing
Lenders’ future Fronting Exposure with respect to such Defaulting Lender with
respect to future Letters of Credit issued under this Agreement, in accordance
with Section 2.20; sixth, to the payment of any amounts owing to the Lenders,
the Issuing Lenders or Swingline Lenders as a result of any judgment of a court
of competent jurisdiction obtained by any Lender, the Issuing Lenders or
Swingline Lenders against such Defaulting Lender as a result of such Defaulting
Lender’s breach of its obligations under this Agreement; seventh, so long as no
Default or Event of Default exists, to the payment of any amounts owing to the
Company as a result of any judgment of a court of competent jurisdiction
obtained by the Company against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement; and eighth,
to such Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (x) such payment is a payment of the principal
amount of any Revolving Loans or funded participations in Swingline Loans or
Letters of Credit in respect of which such Defaulting Lender has not fully
funded its appropriate share, and (y) such Revolving Loans or funded
participations in Swingline Loans or Letters of Credit were issued at a time
when the conditions set forth in Section 4.2 were satisfied or waived, such
payment shall be applied solely to pay the Revolving Loans of, and funded
participations in Swingline Loans or Letters of Credit owed to, all
Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment
of any Loans of, or Letters of Credit owed to, such Defaulting Lender until such
time as all Loans and funded and unfunded participations in LOC Obligations and
Swingline Loans are held by the Lenders pro rata in accordance with the
Revolving Commitments without giving effect to Section 2.21(c). Any payments,
prepayments or other amounts paid or payable to a Defaulting Lender that are
applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash
Collateral pursuant to this Section 2.21(b) shall be deemed paid to and
redirected by such Defaulting Lender, and each Lender irrevocably consents
hereto.

 

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(c) Reallocation of Revolving Commitment Percentages to Reduce Fronting
Exposure. All or any part of such Defaulting Lender’s participation in LOC
Obligations and Swingline Loans shall be reallocated among the Non-Defaulting
Lenders in accordance with their respective Revolving Commitment Percentage
(calculated without regard to such Defaulting Lender’s Revolving Commitment) but
only to the extent that (x) the conditions set forth in Section 4.2 are
satisfied at the time of such reallocation (and, unless the Company shall have
otherwise notified the Agent at such time, the Company shall be deemed to have
represented and warranted that such conditions are satisfied at such time), and
(y) such reallocation does not cause the aggregate Revolving Loans outstanding,
participations in LOC Obligations and Swingline Loans of any Non-Defaulting
Lender to exceed such Non-Defaulting Lender’s Revolving Commitment. Subject to
Section 9.23, no reallocation hereunder shall constitute a waiver or release of
any claim of any party hereunder against a Defaulting Lender arising from that
Lender having become a Defaulting Lender, including any claim of a
Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased
exposure following such reallocation.

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

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

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

 

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(g) Defaulting Lender Cure. If the Company, the Agent, the Swingline Lenders and
the Issuing Lenders agree in writing in their sole discretion that a Defaulting
Lender should no longer be deemed to be a Defaulting Lender, the Agent will so
notify the parties hereto, whereupon as of the date specified in such notice and
subject to any conditions set forth therein (which may include arrangements with
respect to any Cash Collateral), that Lender will, to the extent applicable,
purchase that portion of outstanding Revolving Loans of the other Lenders or
take such other actions as the Agent may determine to be necessary to cause the
Revolving Loans and funded and unfunded participations in Letters of Credit and
Swingline Loans to be held on a pro rata basis by the Lenders in accordance with
their Revolving Commitment Percentages (without giving effect to
Section 2.21(c)), whereupon such Lender will cease to be a Defaulting Lender;
provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Company while such Lender was a
Defaulting Lender; and provided, further, that except to the extent otherwise
expressly agreed by the affected parties, no change hereunder from Defaulting
Lender to Lender will constitute a waiver or release of any claim of any party
hereunder arising from such Lender’s having been a Defaulting Lender.

Section 2.22 Extension of Maturity Date.

The Company shall have the option, up to two (2) times during the term of this
Agreement, to extend the Maturity Date each time by an additional six (6) month
period, subject to the satisfaction of the following conditions for each
request:

(i) the Agent shall have received written notice of the extension request from
the Company not earlier than 180 days and not later than 30 days prior to the
Maturity Date then in effect hereunder;

(ii) no Default or Event of Default shall have occurred and be continuing on the
date of such extension and after giving effect thereto;

(iii) the representations and warranties contained in this Agreement and the
other Loan Documents shall be true and correct in all material respects (or if
qualified by materiality or Material Adverse Effect, in all respects) on and as
of the date of such extension and after giving effect thereto, as though made on
and as of such date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific date);

(iv) the Agent shall have received, for the ratable benefit of the Lenders from
the Company an extension fee in aggregate amount equal to 0.075% of the
aggregate Revolving Commitments on the date of such extension;

(v) the Agent shall have received evidence that, before and after giving effect
to this Section 2.22, the Company is in compliance with each of the financial
covenants set forth in Section 5.5, and

(vi) the Agent shall have received a certificate signed by a duly authorized
officer of the Company and each other Credit Party ratifying and reaffirming
each of its obligations under the Loan Documents and certifying to subsections
(i) – (v) above.

The extension of the Maturity Date provided for herein shall become effective on
the date on which all of the foregoing conditions are satisfied and the Agent
will promptly notify the Lenders of such extension. This Section shall supersede
any provisions in Section 9.1 to the contrary.

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

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

Section 3.1 Corporate Existence.

(a) The Company (i) is a real estate investment trust duly organized, validly
existing and in good standing under the laws of the State of Maryland, (ii) has
adequate power and authority and full legal right to own or to hold under lease
its properties and to carry on the business in which it is presently engaged;
and (iii) except as indicated on Schedule 3.1 hereto, is qualified, licensed,
admitted or approved to do business as a foreign business entity in each
jurisdiction wherein the character of the properties owned or held under lease
by it, or the nature of the business conducted by it, makes such qualification
necessary, except where such failure to qualify could not reasonably be expected
to have a Material Adverse Effect. No Credit Party nor any Subsidiary thereof is
an EEA Financial Institution.

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

Section 3.2 Subsidiaries; Unconsolidated Affiliates.

The Company has no Subsidiaries other than those Subsidiaries listed on sub-part
A of Schedule 3.2 (which Schedule shall include an indication of whether such
Subsidiary is a Guarantor, an Other Non-Guarantor Subsidiary or an Excluded
Subsidiary), and such other Subsidiaries established by the Company from time to
time subject to the requirements of Section 5.33. Each of the Subsidiaries
identified on sub-part A of Schedule 3.2 as of the Closing Date and as of the
last date such Schedule was required to be updated in accordance with
Section 5.3(i) as an Excluded Subsidiary meets the requirements for an Excluded
Subsidiary set forth in the definition thereof. The Company has no
Unconsolidated Affiliates other than those Unconsolidated Affiliates set forth
on sub-part B of Schedule 3.2 and such other Unconsolidated Affiliates
established by the Company from time to time pursuant to investments permitted
under Section 5.25. The capital structure of the Company and each of its
Subsidiaries (including detail as to ownership interests) is set forth on
sub-part C of Schedule 3.2.

Section 3.3 Authority, Etc.

The execution and delivery by the Company of each of the Loan Documents to which
it is or is to become a party, the performance by the Company of all of its
agreements and obligations under each of such documents and the making by the
Company of all of the borrowings contemplated by this Agreement as and when such
borrowings are made, have been duly authorized by all necessary action on the
part of the Company and its shareholders and do not (i) contravene any provision
of its declaration of trust, by-laws or other organizational document,
(ii) conflict with, or result in a breach of any material term, condition or
provision of, or constitute a default under or result in the creation of any
mortgage, lien, pledge, charge, security interest or other encumbrance upon any
of its property under, any agreement, trust deed, indenture, mortgage or other
instrument to which it is or may become a party or by which it or any of its
property is or may become bound or affected, (iii) violate or contravene any

 

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provision of any law, regulation, order or judgment of any court or governmental
or regulatory, bureau, agency or official except where such violation or
contravention could not reasonably be expected to have a Material Adverse
Effect, (iv) require any waivers, consents or approvals by any of the creditors
of the Company, (v) require any consents or approvals by any shareholders of the
Company (except such as will be duly obtained on or prior to the Closing Date
and will be in full force and effect on and as of the Closing Date), or
(vi) require any approval, consent, order, authorization or license by, or
giving notice to, or taking any other action with respect to, any governmental
or regulatory authority or agency under any provision of any applicable law,
except those actions which have been taken or will be taken prior to the Closing
Date or where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

Section 3.4 Binding Effect Of Documents, Etc.

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

Section 3.5 No Events Of Default, Etc.

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

Section 3.6 Title to Properties; Leases.

Except as indicated on Schedule 3.6 hereto, the Company and its Subsidiaries own
all of the assets reflected in the balance sheet of the Company as of
December 31, 2017, or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no mortgages, leases, liens or other encumbrances except Permitted
Liens.

Section 3.7 Financial Statements.

The Company has delivered to the Agent and the Lenders (a) the balance sheets
and related statements of income and of cash flows of the Company and its
Consolidated Subsidiaries for the fiscal years ended December 31, 2015,
December 31, 2016 and December 31, 2017, audited by KPMG, (b) balance sheets and
related statements of income for each of the Company’s Health Care Facilities
which is leased to UHS, in each case for the year ended December 31, 2017 and
(c) the five-year projections of the Company which have been prepared in good
faith based upon reasonable assumptions and on an annual basis for each year
during the term of this Agreement, which shall not be inconsistent with any
financial information or projections previously delivered to the Agent. The
financial statements referred to in clauses (a) and (b) above are complete and
correct in all material respects and present fairly the financial condition of
the Company and its Subsidiaries as of such dates. The financial statements
referred to in clauses (a) and (b) above, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as disclosed therein).

 

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

Since December 31, 2017 (and, in addition, after delivery of annual audited
financial statements in accordance with Section 5.3(a), from the date of the
most recently delivered annual audited financial statements), (a) there has been
no development or event which has had or could reasonably be expected to have a
Material Adverse Effect and (b) no Internal Control Event has occurred. No
representation or warranty made by the Company in this Agreement, the other Loan
Documents or in any agreement instrument, document, certificate, statement or
letter furnished to the Lenders or the Agent by or on behalf of the Company in
connection with any of the transactions contemplated by any of the Loan
Documents contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances in which they are made. Except as
disclosed in writing to the Lenders and the Agent, there is no fact known to the
Company or its Subsidiaries which, in the Company’s reasonable belief, has had
or could be reasonably expected to have a Material Adverse Effect.

Section 3.9 Permits; Patents; Copyrights.

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

Section 3.10 Litigation.

There are no actions, suits, proceedings or investigations of any kind pending
or threatened against the Company or any of its Subsidiaries, any Unconsolidated
Affiliate or against any of their properties or revenues before any court,
tribunal or administrative agency or board which, if adversely determined, could
be reasonably expected to have a Material Adverse Effect.

Section 3.11 Compliance With Other Instruments, Laws, Etc.

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

Section 3.12 Tax Status; REIT Status.

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

 

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

Section 3.13 Investment Company Act.

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

Section 3.14 Absence of Financing Statements, Etc.

Except as indicated on Schedule 5.10(f) hereto and except in connection with the
Loan Documents, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document executed by the Company or any
Guarantors filed or recorded with any filing records, registry, or other public
office of any jurisdiction, which purports to cover, affect or give notice of
any present or possible future lien on, or security interest in, any assets or
property of the Company or any Guarantor or rights thereunder.

Section 3.15 Certain Transactions.

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

Section 3.16 Pension Plans.

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

Section 3.17 Margin Regulations.

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

 

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Section 3.18 Environmental Matters.

(a) To the best knowledge of the Company, the Properties do not contain any
Materials of Environmental Concern in amounts or concentrations which
(i) constitute a violation of, or (ii) could reasonably be expected to give rise
to liability under, any Environmental Law except to the extent such violation or
liability could not reasonably be expected to have a Material Adverse Effect.

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

(c) Except as set forth on Schedule 3.18, neither the Company nor any Subsidiary
has received any written or actual notice of material violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Properties or the Business, nor does the Company have knowledge or reason
to believe that any such notice will be received or is being threatened.

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

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

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

 

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Section 3.19 Use of Proceeds.

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

(a) with respect to the Loans, (i) to refinance certain existing indebtedness of
the Company, (ii) to pay any fees and expenses, (iii) to provide for the working
capital and general corporate requirements of the Company and its Subsidiaries
(including to make Investments permitted by Section 5.25(e) and for acquisitions
permitted under this Agreement), (iv) to provide mortgage and construction
financing permitted by Sections 7.26 and 7.27, (v) to make Distributions
permitted by Section 5.24, and (vi) for other general corporate purposes; and

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

and, in no event shall any part of the proceeds of any Loan or Letter of Credit
hereunder be used, directly or indirectly, in violation of Section 5.31.

Section 3.20 Indebtedness.

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

Section 3.21 Solvency.

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

Section 3.22 Investments.

All Investments of the Company and its Subsidiaries, including each Investment
in any Unconsolidated Affiliate, are Investments permitted under Section 5.25.

Section 3.23 Labor Matters.

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

Section 3.24 Accuracy and Completeness of Information.

All factual information (which does not include projections) heretofore,
contemporaneously or hereafter furnished by or on behalf of the Company, any of
its Subsidiaries or any Unconsolidated Affiliate to or for the Agent or any
Lender for purposes of or in connection with this Agreement or any other Loan
Document, or any transaction contemplated hereby or thereby, is or will be true
and accurate in all material respects and not incomplete by omitting to state
any material fact necessary to make such information not misleading. There is no
fact now known to the Company which has, or could reasonably

 

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be expected to have, a Material Adverse Effect which fact has not been set forth
herein, in the financial statements of the Company and its Consolidated
Subsidiaries furnished to the Agent and/or the Lenders, or in any certificate,
opinion or other written statement made or furnished by the Company to the Agent
and/or the Lender.

Section 3.25 Material Contracts.

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

Section 3.26 Insurance.

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

Section 3.27 Anti-Terrorism; Anti-Corruption and Sanctions.

None of the Credit Parties, any of their Subsidiaries or any of their respective
directors or officers or, to the knowledge of the Company, any of their Related
Parties (excluding any officers or directors of the Credit Parties and their
Subsidiaries), (A) is a Sanctioned Person or currently the subject or target of
any Sanctions, (B) is controlled by or is acting on behalf of a Sanctioned
Person, (C) with respect to the Credit Parties and any of their Subsidiaries,
has its assets located in a Sanctioned Country, (D) is under administrative,
civil or criminal investigation for an alleged violation of, or received notice
from or made a voluntary disclosure to any governmental entity regarding a
possible violation of, Anti-Corruption Laws, Anti-Money Laundering Laws or
Sanctions by a governmental authority that enforces Sanctions or any
Anti-Corruption Laws or Anti-Money Laundering Laws, or (E) directly or
indirectly derives revenues from investments in, or transactions with,
Sanctioned Persons.

Section 3.28 Security Documents.

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

 

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ARTICLE IV

CONDITIONS PRECEDENT

Section 4.1 Conditions Precedent to Closing.

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

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

(b) Subsidiary Guaranty. The Company shall have caused each Guarantor as of the
Closing Date to execute and deliver to the Agent the Subsidiary Guaranty.

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

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

(i) a good standing certificate of recent date of the Secretary of State (A) for
the Company, from the state of jurisdiction of formation and each other
jurisdiction where failure to be qualified would have a Material Adverse Effect
and (B) for each Guarantor, from its applicable jurisdiction of formation and in
each jurisdiction in which such Guarantor’s material real estate assets (if any)
are located;

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

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

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

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

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

(vii) an opinion of Norton, Rose Fulbright US LLP, counsel for the Company, as
to the Company and each Guarantor, in a form satisfactory to the Agent and the
Lenders;

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

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

 

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(e) [reserved].

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

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

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

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

(j) No Material Adverse Change. Since December 31, 2017, there shall have not
occurred any event or condition that has had or could be reasonably expected,
either individually or in the aggregate, to have a Material Adverse Effect.

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

(l) Repayment of Existing Indebtedness. All of the existing indebtedness for
borrowed money of the Company and its Subsidiaries (other than Excluded
Subsidiaries) shall be repaid in full and all liens relating thereto, if any,
extinguished on or prior to the Closing Date (including, without limitation, the
loans and other obligations outstanding under that certain Credit Agreement
dated as of March 27, 2015 by and among the Company, the lenders party thereto
and Wells Fargo, as administrative agent) other than Non-Recourse Debt and the
Indebtedness set forth on Schedule 5.9.

(m) Due Diligence. The Agent and Arranger shall have completed in form and scope
satisfactory thereto their business, legal, financial and environmental due
diligence on the Company and its Subsidiaries (including due diligence related
to management, strategy, material customers and contracts) and shall be
satisfied with the corporate and capital structure of the Company and its
Subsidiaries in all material aspects.

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

 

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

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

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

(r) Bankruptcy. There shall be no bankruptcy or insolvency proceedings pending
or threatened with respect to the Company, any of its Subsidiaries or any
Unconsolidated Affiliate.

(s) Officer’s Certificates. The Agent shall have received a certificate executed
by a the President, Chief Financial Officer or Treasurer of the Company as of
the Closing Date stating that (i) no action, suit, investigation or proceeding
is pending or, to the knowledge of the Company, threatened in any court or
before any arbitrator or governmental instrumentality that purports to affect
the Company, its Subsidiaries, any Unconsolidated Affiliate or any transaction
contemplated by the Loan Documents, if such action, suit, investigation or
proceeding could reasonably be expected to have a Material Adverse Effect and
(ii) immediately after giving effect to this Agreement (including the initial
Loans made and Letters of Credit issued hereunder), the other Loan Documents and
all the transactions contemplated herein and therein to occur on such date,
(A) no Default or Event of Default exists, (B) all representations and
warranties contained herein and in the other Loan Documents are true and correct
in all material respects (other than any representations and warranties that
contain a materiality qualification, which shall be true and correct), and
(C) the Company is in compliance with each of the financial covenants set forth
in Section 5.5, and demonstrating compliance with such financial covenants.

(t) Patriot Act Certificate. The Agent shall have received a certificate
satisfactory thereto, substantially in the form of Exhibit 4.1(t), for benefit
of itself and the Lenders, provided by the Company that sets forth information
required by the Anti-Money Laundering Laws, (including, without limitation, the
Patriot Act) including, without limitation, the identity of the Company and the
Guarantors, the name and address of the Company and the Guarantors and other
information that will allow the Agent or any Lender, as applicable, to identify
the Company and the Guarantors in accordance with the Anti-Money Laundering
Laws.

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

Section 4.2 Conditions To Loans.

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

(a) Representations and Warranties. The representations and warranties made by
the Credit Parties herein, in the other Loan Documents and which are contained
in any certificate furnished at any time under or in connection herewith shall
(i) with respect to representations and

 

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warranties that contain a materiality qualification, be true and correct and
(ii) with respect to representations and warranties that do not contain a
materiality qualification, be true and correct in all material respects, in each
case on and as of the date of such Extension of Credit as if made on and as of
such date except for any representation or warranty made as of an earlier date,
which representation and warranty shall remain true and correct as of such
earlier date.

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

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

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

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

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

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

ARTICLE V

COVENANTS OF THE COMPANY

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

Section 5.1 Punctual Payment.

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

 

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Section 5.2 Legal Existence, Etc.

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

Section 5.3 Financial Statements, Etc.

The Company will deliver to the Agent and each Lender:

(a) Annual Financial Statements. Within 90 days (or, if earlier, within 5 days
after the required date of delivery to the SEC) after the close of each fiscal
year of the Company (beginning with the fiscal year ending December 31, 2017), a
copy of the consolidated and consolidating balance sheet of the Company and its
Consolidated Subsidiaries as of the end of such fiscal year and the related
statements of income and retained earnings and of cash flows of the Company and
its Consolidated Subsidiaries for such year, including the notes thereto and
audited, except with respect to the consolidating statements, by KPMG, in each
case setting forth in comparative form consolidated and consolidating figures
for the preceding fiscal year, reported on without a “going concern” or like
qualification or exception, or qualification indicating that the scope of the
audit was inadequate to permit such independent certified public accountants to
certify such financial statements without qualification and accompanied by a
report and a certificate of KPMG or other firm of independent certified public
accountants selected by the Company and acceptable to the Agent or other firm of
independent certified public accountants selected by the Company and acceptable
to the Agent, reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate, which report shall be
prepared in accordance with generally accepted auditing standards and applicable
Securities Laws;

(b) Quarterly Financial Statements. Within 45 days (or, if earlier, within 5
days after the required date of delivery to the SEC) after the end of each
fiscal quarter of the Company, other than the final quarter in a fiscal year
(beginning with the fiscal quarter ending March 31, 2018), (i) unaudited
company-prepared consolidated and consolidating balance sheet of the Company and
its Consolidated Subsidiaries, as of the end of such period and related
statements Company prepared consolidated and consolidating statements of income
and retained earnings and of cash flows for the Company and its Consolidated
Subsidiaries for such quarterly period and for the portion of the fiscal year
ending with such period, in each case, setting forth in comparative form
consolidated and consolidating figures for the period or periods in the
preceding fiscal year (subject to normal year-end audit adjustments) and
including management discussion and analysis of operating results in comparative
form;

 

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

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

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

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

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

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

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

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

All such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with

 

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subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 1.3.

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

Section 5.4 Health Care Facilities - Financial Statements, Etc.

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

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

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

(c) upon request, an appraisal, made at the Company’s expense (except as limited
hereby) in form and substance satisfactory to the Agent, of any Health Care
Facility of the Company (other than those leased to UHS or a UHS Subsidiary)
that has a Facility Coverage Ratio of less than 1.6 to 1.0 for the most recent
four fiscal quarters; provided that the Company shall not be required to pay for
more than one appraisal of any single Health Care Facility during any period of
twenty-four (24) consecutive months; and

 

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

Section 5.5 Financial Covenants.

(a) Minimum Tangible Net Worth. The Company will maintain as of the last day of
each fiscal quarter, Tangible Net Worth of not less than $125,000,000.

(b) Maximum Total Leverage Ratio. The Company will not permit the Total Leverage
Ratio as of the last day of each fiscal quarter of the Company to exceed 60%
(the “Maximum Leverage Level”); provided that the Maximum Leverage Level
(i) shall be increased to 65% for the last day of the first two fiscal quarters
of the Company immediately following the date of consummation of a Material
Acquisition and (ii) the Maximum Leverage Level shall return to 60% after such
two fiscal quarters.

(c) Minimum Fixed Charge Coverage Ratio. The Company will not permit the Fixed
Charge Coverage Ratio as of the last day of each fiscal quarter of the Company
to be less than 1.5:1.0.

(d) Maximum Secured Leverage Ratio. The Company will not permit the Secured
Leverage Ratio as of the last day of each fiscal quarter of the Company to
exceed 30%.

(e) Maximum Unencumbered Leverage Ratio. The Company will not permit the
Unencumbered Leverage Ratio as of the last day of each fiscal quarter of the
Company to exceed 60% (the “Maximum Unencumbered Leverage Level”); provided that
the Maximum Unencumbered Leverage Level (i) shall be increased to 65% for the
last day of the first two fiscal quarters of the Company immediately following
the date of consummation of a Material Acquisition and (ii) the Maximum
Unencumbered Leverage Level shall return to 60% after such two fiscal quarters.

Section 5.6 [Reserved].

Section 5.7 [Reserved].

Section 5.8 [Reserved].

Section 5.9 Indebtedness.

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

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

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

 

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

(d) Indebtedness in respect of leases of real and personal property by the
Company and its Subsidiaries provided that the aggregate amount due is not
greater than $8,000,000 at any time outstanding;

(e) Non-Recourse Debt of the Company, Subsidiary Guarantors, Other Non-Guarantor
Subsidiaries and Excluded Subsidiaries; provided that after giving effect to
such Indebtedness (x) no Default or Event of Default would result as a
consequence thereof and (y) the Company would (on a Pro Forma Basis, calculated
as of the last day of the immediately preceding fiscal quarter) be in compliance
with the financial covenants set forth in Section 5.5;

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

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

(h) Indebtedness of Unconsolidated Affiliates (in addition to the amount set
forth on Schedule 5.9) so long as the Company’s and its Subsidiaries’ pro rata
share (based on their percentage ownership interest) of the principal amount of
such Indebtedness does not exceed $30,000,000;

(i) Indebtedness of the Company or any Subsidiary incurred after the date hereof
which is secured by a mortgage, pledge, security interest or other lien or
encumbrance on any of the Company or such Subsidiary’s property, provided that
after giving effect to such Indebtedness, (i) no Default or Event of Default
would result as a consequence thereof and (ii) the Company would (on a Pro Forma
Basis, calculated as of the last day of the immediately preceding fiscal
quarter) be in compliance with the financial covenants set forth in
Sections 5.5;

(j) Indebtedness in the form of Guarantees to the extent permitted under
Section 5.12; and

(k) unsecured loans or advances constituting Investments permitted under
Section 5.25(e) or (f).

 

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Notwithstanding the foregoing, the only Indebtedness of Unconsolidated
Affiliates that shall be permitted pursuant to subsections (g) and (h) above
shall be Non-Recourse Debt.

Section 5.10 Security Interests and Liens; Negative Pledge.

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

(a) Liens under the Security Documents;

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

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

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

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

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

(g) Liens securing Indebtedness permitted by Section 5.9 (other than
Section 5.9(k))(collectively, “Permitted Liens”); provided that such Liens shall
not relate to any Unencumbered Assets.

Section 5.11 No Further Negative Pledge; No Restrictive Agreements.

(a) The Company will not, nor will it permit any of its Subsidiaries (other than
Excluded Subsidiaries) to, enter into any commitment or agreement with any other
party that limits or impairs the ability of the Company or any such Subsidiaries
to grant security interests, liens or mortgages in favor of the Lenders
(including, without limitation, with respect to any Unencumbered Assets), except
that this Section 5.11 shall not be deemed to prohibit the granting of any Lien
permitted by Section 5.10.

 

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(b) The Company will not, nor will it permit any of its Subsidiaries to create
or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Credit Party or any Subsidiary
thereof or any Unconsolidated Affiliate to pay dividends or make any other
distributions to any Credit Party or any Subsidiary on its Equity Interests or
with respect to any other interest or participation in, or measured by, its
profits, except (i) in each case for such encumbrances or restrictions existing
under or by reason of (A) this Agreement and the other Loan Documents and
(B) Applicable Law and (ii) in the case of any Excluded Subsidiary, such
encumbrances and restrictions on such Excluded Subsidiary as may be required by
the lender providing Non-Recourse Debt to such Excluded Subsidiary.

Section 5.12 Guarantees.

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

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

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

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

For the avoidance of doubt, neither the Company nor any Guarantor shall be
permitted to guarantee any Non-Recourse Debt or any other Indebtedness of
Excluded Subsidiaries, Other Non-Guarantor Subsidiaries or Unconsolidated
Affiliates.

Section 5.13 Notice of Litigation And Judgments.

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

Section 5.14 Notice of Defaults; Material Adverse Effect.

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

 

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

(c) The Company will give notice to the Agent and each of the Lenders
immediately upon becoming aware of any Bankruptcy Event with respect to any
Excluded Subsidiary, Other Non-Guarantor Subsidiary or Unconsolidated Affiliate;
and

(c) The Company will give notice to the Agent and each of the Lenders
immediately upon becoming aware of any final judgment against any Excluded
Subsidiary, Other Non-Guarantor Subsidiary or Unconsolidated Affiliate that
remains in force, undischarged, unsatisfied and unstayed, for more than sixty
days and which in excess of $5,000,000.

Section 5.15 Notices With Regard to Health Care Operators.

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

Section 5.16 Books and Records.

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

Section 5.17 Maintenance of Properties.

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

Section 5.18 Insurance.

The Company will, and will require each Subsidiary to, require that the lessees
of its properties maintain at all times with financially sound and reputable
insurers insurance with respect to their properties and business and against
such casualties and contingencies and in such types and such amounts as shall be
in accordance with sound business practices and reasonably satisfactory to the
Agent. Without limiting the foregoing, the Company will, and will require each
Subsidiary to, use commercially reasonable efforts cause such lessees to
(i) keep all of its physical property insured against fire and extended coverage
risks in amounts and with deductibles equal to those generally maintained by
businesses of similar size engaged in similar activities in similar geographic
areas, (ii) maintain all such workers’ compensation or similar insurance as may
be required by law, and (iii) maintain, in amounts and with deductibles equal to
those generally maintained by businesses of similar size engaged in similar
activities in similar geographic areas, general public liability insurance
against claims for bodily injury,

 

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death or property damage occurring on, in or about the properties of the Company
and its Subsidiaries and business interruption insurance. In the event that any
lessee shall fail to maintain such insurance, the Company will maintain such
insurance. The Company will notify the Agent and each Lender of any cancellation
of any such insurance. Evidence of all renewals or replacements of such
insurance from time to time in force, satisfactory to the Agent shall be
delivered to the Agent before the expiration date of the then current insurance.

Section 5.19 Taxes.

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

Section 5.20 Compliance With Laws, Contracts, and Licenses.

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

Section 5.21 Access.

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

 

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Section 5.22 ERISA Compliance.

Neither the Company nor any of its Subsidiaries will permit any employee pension
benefit plan (as that term is defined in Section 3 of ERISA) maintained by the
Company to (x) engage in any “prohibited transaction” as such term is defined in
Section 4975 of the Code that is likely to result in a material liability for
the Company; or (y) incur any “unpaid minimum required distribution” or
“accumulated funding deficiency”, as defined or otherwise set forth in
Section 4971 of the Code or Part 3 of Subtitle B of Title I of ERISA, whether or
not waived; or (z) terminate any such benefit plan in a manner which could
result in the imposition of a lien or encumbrance on the assets of the Company
pursuant to Section 303 or 4068 of ERISA.

Section 5.23 Reserves.

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

Section 5.24 Distributions.

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

Section 5.25 Investments.

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

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

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

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

(d) repurchase agreements secured by any one or more of the Investments
permitted by paragraphs (a), (b) or (c) above (the items set forth in clauses
(a) – (d) collectively referred to herein as “Cash Equivalents”)

(e) direct or indirect Investments in (United States) Health Care Facilities
located in the United States or any Specified Jurisdiction which Investments
either (i) existed on the Closing Date and set forth on Schedule 5.25(e), or
(ii) are made after the Closing Date, provided (x) that

 

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no Default or Event of Default exists or would result as a consequence thereof
and (y) after giving effect to such investment, the Company would (on a Pro
Forma Basis, calculated as of the last day of the immediately preceding fiscal
quarter) be in compliance with the financial covenants set forth in Section 5.5;

(f) Investments in any Unconsolidated Affiliate or other Person (other than a
Subsidiary of the Company) in an aggregate amount not to exceed at any time 10%
of Total Asset Value (measured as the most recently ended fiscal period for
which a compliance certificate has been delivered pursuant to Section 5.3(d));
provided that, after giving effect to such investment, (x) no Default or Event
of Default exists or would result as a consequence thereof and (y) the Company
would (on a Pro Forma Basis, calculated as of the last day of the immediately
preceding fiscal quarter) be in compliance with the financial covenants set
forth in Section 5.5;

(g) Mortgage Loans permitted by Section 5.26; and

(h) Construction Loans permitted by Section 5.27.

Section 5.26 Mortgage Loans.

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

Section 5.27 Construction Loans.

(a) In the event that any portion of the Loans is to be used by the Company or
any Subsidiary to finance the construction of Health Care Facilities, the
Company will monitor such construction to insure that all approvals, consents,
waivers, orders, agreements, acknowledgments, authorizations, permits and
licenses required under any law, ordinance, code, order, rule or regulation of
any Governmental Authority, or under the terms of any restriction, covenant or
easement affecting the construction project, or otherwise necessary, for the
ownership and acquisition of the subject properties and the improvements
thereon, the construction and equipping of the improvements being constructed on
the subject properties, and the use, occupancy and operation of the construction
project as a Health Care Facility following completion of construction of the
improvements on the subject property, have been obtained, whether from a
Governmental Authority or other Person. Further, the Company will give notice to
the Agent and each of the Lenders immediately after becoming aware that any
construction project will likely not be completed in a timely manner or on
budget. The Company shall from time to time deliver such further information and
take such further action as may be reasonably requested by the Agent or any
Lender to effect the purposes of this Section 5.27.

(b) The Company will not permit at any time the aggregate outstanding principal
amount of all Construction Loans made by the Company and its Subsidiaries to
exceed 15% of Total Asset Value (measured as of the most recently ended fiscal
period for which a compliance certificate has been delivered pursuant to
Section 5.3(d)). In no event may the Company or any Subsidiary provide any
Construction Loans to any Person except on a full recourse basis to an owner or
operator of a domestic (United States) Health Care Facility and except upon
using the Company’s commercially reasonable efforts to obtain the agreement and
consent of such Person to provide its quarterly and annual balance sheets and
income statements to the Company for delivery to the Agent and each Lender.

 

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Section 5.28 Environmental Audits.

The Company will not, nor will it permit any Subsidiary to, make any Investment,
Mortgage Loan or Construction Loan otherwise permitted by Section 5.25(e), 5.26
or 5.27, respectively, unless the Company shall have first received a Phase I
environmental audit report with respect to the property involved, which audit
shall have been conducted not earlier than twenty-four (24) months prior to the
date of the transaction, a copy of such audit shall have been furnished to the
Lenders, and such audit shall not have reported or uncovered any environmental
matters which could have a material adverse effect on such property or on the
financial condition, properties or business of the Company.

Section 5.29 Merger, Consolidation and Disposition of Assets.

(a) Neither the Company, nor any of its Subsidiaries, will at any time merge or
consolidate with or into any Person except that (i) any Guarantor may merge with
and into another Guarantor, (ii) any Guarantor may merge with and into the
Company so long as the Company is the surviving corporation.

(b) Neither the Company, nor any of its Subsidiaries, will sell or otherwise
dispose of any assets (including any Health Care Facility of the Company leased
to UHS or to a UHS Subsidiary), except for:

(i) sales or other dispositions to a Credit Party,

(ii) sales or other dispositions made in connection with an exchange or swap of
assets of like property for use in a business permitted by Section 5.2 provided
that (x) (A) such property is exchanged for credit against the purchase price of
similar replacement property or (B) the proceeds of such sale or other
disposition are applied to the purchase price of such replacement property and
(y) such exchanges or purchases occur within 180 days of any such sale or
disposition;

(iii) sales or other dispositions of any Health Care Facility of the Company
leased to UHS or to a UHS Subsidiary (but excluding any multi-tenant office
building of which UHS or a UHS Subsidiary is a tenant), so long as (x) no
Default or Event of Default exists or would result as a consequence thereof and
(y) after giving effect to such transaction, the Company would (on a Pro Forma
Basis, calculated as of the last day of the immediately preceding fiscal
quarter) be in compliance with the financial covenants set forth in Section 5.5,
which in the case of such disposition of a Health Care Facility with a fair
market value in excess of $10,000,000 shall be evidenced by a compliance
certificate delivered to the Agent at least five days prior to such disposition;
and

(iv) other sales or dispositions of assets of the Company or its Subsidiaries
(including, without limitation, any multi-tenant office building of which UHS or
a UHS Subsidiary is a tenant but excluding any other Health Care Facility of the
Company leased to UHS or to a UHS Subsidiary) so long as (x) no Default or Event
of Default exists or would result as a consequence thereof and (y) after giving
effect to such transaction, the Company would (on a Pro Forma Basis, calculated
as of the last day of the immediately preceding fiscal quarter) be in compliance
with the financial covenants set forth in Section 5.5.

 

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Section 5.30 Sale and Leaseback.

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

Section 5.31 Use of Proceeds.

The Company will use the proceeds of the Loans (a) to refinance certain existing
indebtedness of the Company, (b) to pay any fees and expenses, (c) to provide
for the working capital and general corporate requirements of the Company and
its Subsidiaries (including to make Investments permitted by Section 5.25(e) and
for acquisitions permitted under this Agreement), (d) to provide mortgage and
construction financing permitted by Sections 5.26 and 5.27, (e) to make
Distributions permitted by Section 5.24, and (f) for other general corporate
purposes. The Company will not use the proceeds of any Loan, either directly or
indirectly, (w) for the purpose, whether immediate, incidental or ultimate, of
buying or carrying margin stock within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System, as amended from time to time (x) in
furtherance of an offer, payment, promise to pay, or authorization of the
payment or giving of money, or anything else of value, to any Person in
violation of any Anti-Corruption Laws, (y) for the purpose of funding, financing
or facilitating any activities, business or transaction of or with any
Sanctioned Person, or in any Sanctioned Country, or (z) in any manner that would
result in the violation of any Sanctions applicable to any party hereto.

Section 5.32 Fiscal Year; Organizational Documents; Material Contracts.

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

Section 5.33 Guarantors.

(a) The Company shall promptly upon the formation or acquisition of any
additional wholly-owned Subsidiary or upon any Excluded Subsidiary no longer
qualifying as an Excluded Subsidiary, and in any event within 30 days of such
formation, acquisition or change from status of an Excluded Subsidiary, cause
such Subsidiary to (i) execute joinder to the Subsidiary Guaranty and the Pledge
Agreement in substantially in the form of the Guarantor Accession (as defined in
the Subsidiary Guaranty) and (ii) deliver such organizational documents,
secretary’s certificates and legal opinions in connection therewith as the Agent
may reasonably request. Notwithstanding the foregoing, any Subsidiary that is a
Foreign Subsidiary will not be required to be a Guarantor to the extent the
provision of such Subsidiary Guaranty by such Subsidiary may cause any adverse
tax consequences to the Company.

(b) Upon ten (10) day’s prior written notice to the Agent, the Company may
designate a Subsidiary Guarantor as an Excluded Subsidiary so long as (i) such
Subsidiary Guarantor meets (or will meet as a result of such designation) the
requirements pursuant to the definition of Excluded Subsidiary,

 

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(ii) no Default or Event of Default exists or would result as a consequence
thereof, and (iii) the Company would (on a Pro Forma Basis after giving effect
to such designation, calculated as of the last day of the immediately preceding
fiscal quarter) be in compliance with the Unencumbered Leverage Ratio set forth
in Section 5.5(e).

Section 5.34 Pledged Assets.

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

Section 5.35 Further Assurances.

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

Section 5.36 Transactions with Affiliates.

The Company will not, and will not permit any Subsidiary to, enter into any
transaction of any kind with any Affiliate (including any Unconsolidated
Affiliate) of the Company or its Subsidiaries, whether or not in the ordinary
course of business, other than on fair and reasonable terms substantially as
favorable to the Company or such Subsidiary as would be obtainable by the
Company or such Subsidiary at the time in a comparable arm’s length transaction
with a Person other than an Affiliate; provided that the foregoing restriction
shall not apply to any transaction between and among the Company and the
Guarantors and between and among any Guarantors.

ARTICLE VI

[RESERVED]

ARTICLE VII

EVENTS OF DEFAULT; ACCELERATION

Section 7.1 Events of Default.

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

(a) if the Company shall fail to (i) pay any principal on the Loans or any Note
owing hereunder or fail to reimburse the applicable Issuing Lender for any LOC
Obligations in each case when the same shall become due and payable, whether at
the stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment in accordance with the terms hereof or thereof or
(ii) the Company shall fail to pay any interest on the Loans or any other amount
payable hereunder or under the LOC Documents when the same shall become due and
payable and such failure shall continue for three (3) Business Days (or any
Guarantor shall fail to pay on the Subsidiary Guaranty in respect of any of the
foregoing within the applicable period of time);

 

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

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

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

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

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

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

 

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

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

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

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

(l) if the Company or any other Credit Party shall fail to make any payment due
under any Hedging Agreement or if the Company or any other Credit Party shall
fail to observe or perform any material term, covenant or agreement contained in
any Hedging Agreement and the effect of such failure could or would have
permitted (assuming the giving of appropriate notice if required) the
counterparty thereof to terminate such Hedging Agreement and demand payment from
the Company or such other Credit Party in excess of $5,000,000; or

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

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

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

 

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Section 7.2 Acceleration; Remedies.

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

ARTICLE VIII

THE ADMINISTRATIVE AGENT

Section 8.1 Appointment and Authority.

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

Section 8.2 Nature of Duties.

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

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

 

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Section 8.3 Exculpatory Provisions.

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

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

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

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

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

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

Section 8.4 Reliance by Agent.

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

 

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Section 8.5 Notice of Default.

The Agent shall not be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default hereunder unless the Agent has received written
notice from a Lender or the Company referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a “notice of
default”. In the event that the Agent receives such a notice, the Agent shall
give prompt notice thereof to the Lenders. The Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; provided, however, that unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders except to the extent that this Agreement expressly requires that
such action be taken, or not taken, only with the consent or upon the
authorization of the Required Lenders, or all of the Lenders, as the case may
be.

Section 8.6 Non-Reliance on Agent and Other Lenders.

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

Section 8.7 Indemnification.

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

 

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Section 8.8 Agent in Its Individual Capacity.

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

Section 8.9 Successor Agent.

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

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

 

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Section 8.10 Collateral and Guaranty Matters.

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

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

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

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

Section 8.11 Bank Products.

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

ARTICLE IX

MISCELLANEOUS

Section 9.1 Amendments, Waivers and Consents.

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

 

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

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

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

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

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

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

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

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

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

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

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

 

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

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

Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (a) each Lender is entitled to vote as
such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth
herein, (b) the Required Lenders may consent to allow a Credit Party to use Cash
Collateral in the context of a bankruptcy or insolvency proceeding, (c) no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except (i) that the Commitment of such Lender may
not be increased or extended without the consent of such Lender and (ii) to the
extent such amendment, waiver or consent impacts such Defaulting Lender more
than the other Lenders (other a as a result of being a Defaulting Lender) and
(d) the Agent and the Company may, without the consent of any Lender, enter into
amendments or modifications to this Agreement or any of the other Loan Documents
or to enter into additional Loan Documents as the Agent reasonably deems
appropriate in order to implement any Replacement Rate or otherwise effectuate
the terms of Section 2.13(b) in accordance with the terms of Section 2.13(b).

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

Section 9.2 Notices.

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

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

Cheryl K. Ramagano

Vice President & Treasurer

Universal Health Realty Income Trust

367 South Gulph Road

King of Prussia, PA 19406

Telecopier: (610)382-4407

Telephone: (610)768-3402

Email: cheryl.ramagano@uhsinc.com

 

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(ii) If to the Agent:

Wells Fargo Bank, National Association, as Agent

1525 West W.T. Harris Blvd. 1B1

Mail Code D1109-019

Charlotte, North Carolina 28262

Attention: Syndication Agency Services

Telephone: (704) 590-9003

Fax: (844) 879-5899

Email: Nicole.Prebeck@wellsfargo.com

with a copy to:

Wells Fargo Bank, National Association

301 South College Street, 14th Floor

MAC D1053-150

Charlotte, North Carolina 28202

Attention: Andrea Chen

Telephone: (704) 383-3747

Fax: (704) 715 -1438

Email: andrea.chen@wellsfargo.com

with a copy to (which shall not constitute notice):

King & Spalding, LLP

300 South Tryon Street

Charlotte, North Carolina 28202

Attention: Aleksandra Kopec

Telephone: (704) 503-2587

Email: akopec@kslaw.com

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

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

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

 

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

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

(d) Platform.

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

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

Section 9.3 No Waiver; Cumulative Remedies.

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

Section 9.4 Survival of Representations and Warranties.

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

 

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Section 9.5 Payment of Expenses and Taxes; Indemnity.

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

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

 

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Indemnitee’s obligations hereunder or under any other Loan Document, if the
Company or such Credit Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction. This
section (b) shall not apply with respect to Taxes other than any Taxes that
represent losses or damages arising from any non-Tax claim.

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

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

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

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

Section 9.6 Successors and Assigns; Participations.

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

 

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assigns permitted hereby, Participants to the extent provided in paragraph (d)
of this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

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

(i) Minimum Amounts.

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

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

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

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

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

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

 

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

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

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

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

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

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

(c) Register. The Agent, acting solely for this purpose as an agent of the
Company, shall maintain at one of its offices in Charlotte, North Carolina a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive absent manifest error, and the Company, the Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Company and any Lender, at any reasonable time and from time to time upon
reasonable prior notice; provided that a Lender shall only be entitled to
inspect its own entry in the Register and not that of any other Lender. In
addition, the Agent shall maintain on the Register information regarding the
designation and revocation of designation, of any Lender as a Defaulting Lender.

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

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver that affects such Participant. Subject
to paragraph (e) of this Section, the Company agrees that each Participant shall
be entitled to the benefits of Sections 2.14 and 2.16 (subject to the
requirements and limitations therein, including the requirement in
Section 2.16(e) (it being understood that the documentation required under
Section 2.16(e) 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 such Participant agrees to
be subject to Sections 2.19 as if it were a Lender. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.7 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.11 as though it were a Lender. Each Lender that sells a participation
shall, acting solely for this purpose as a non-fiduciary agent of the Company,
maintain a register in the United States on which it enters the name and address
of each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); 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
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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 Agent (in its capacity as the
Agent) shall have no responsibility for maintaining a Participant Register.

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

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

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

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

 

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(b) If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or other obligations hereunder resulting in such Lender’s receiving
payment of a proportion of the aggregate amount of its Loans and accrued
interest thereon or other such obligations greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (i) notify the Agent of such fact, and (ii) purchase (for cash at face
value) participations in the Loans and such other obligations of the other
Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

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

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

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

Section 9.8 Table of Contents and Section Headings.

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

Section 9.9 Counterparts; Effectiveness; Electronic Execution.

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

 

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

Section 9.10 Severability.

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

Section 9.11 Integration.

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

Section 9.12 Governing Law.

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

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

(a) Consent to Jurisdiction. The Company irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
courts of the State of New York and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or any other
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York sitting State court or, to the fullest extent permitted by applicable law,
in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement or in any other Loan Document shall affect any
right that the Agent, any Lender, any Swingline Lender or any Issuing Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against the Company or any other Credit Party or its
properties in the courts of any jurisdiction.

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

 

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

Section 9.14 Confidentiality.

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

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

 

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Section 9.15 Acknowledgments.

The Company hereby acknowledges on behalf of itself and the Guarantors that:

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

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

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

Section 9.16 Waivers of Jury Trial.

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

Section 9.17 Patriot Act Notice.

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

Section 9.18 Resolution of Drafting Ambiguities.

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

 

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Section 9.19 Continuing Agreement.

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

Section 9.20 Press Releases and Related Matters.

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

Section 9.21 No Advisory or Fiduciary Responsibility.

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

 

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Section 9.22 Responsible Officers.

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

Section 9.23 Acknowledgment and Consent to Bail-In of EEA Financial
Institutions.

Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document, to the extent such liability is unsecured, may be
subject to the Write-Down and Conversion Powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

Section 9.24 Certain ERISA Matters.

(a) Each Lender (x) represents and warrants, as of the date such Person became a
Lender party hereto, to, and (y) covenants, from the date such Person became a
Lender party hereto to the date such Person ceases being a Lender party hereto,
for the benefit of, the Agent, each Arranger and their respective Affiliates,
and not, for the avoidance of doubt, to or for the benefit of the Company or any
other Credit Party, that at least one of the following is and will be true:

(i) such Lender is not using “plan assets” (within the meaning of 29 CFR §
2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans
in connection with the Loans, the Letters of Credit or the Commitments;

 

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(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14
(a class exemption for certain transactions determined by independent qualified
professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with respect
to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement;

(iii) (A) such Lender is an investment fund managed by a “Qualified Professional
Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender
to enter into, participate in, administer and perform the Loans, the Letters of
Credit, the Commitments and this Agreement, (C) the entrance into, participation
in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and this Agreement satisfies the requirements of sub-sections
(b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such
Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied
with respect to such Lender’s entrance into, participation in, administration of
and performance of the Loans, the Letters of Credit, the Commitments and this
Agreement; or

(iv) such other representation, warranty and covenant as may be agreed in
writing between the Agent, in its sole discretion, and such Lender.

(b) In addition, unless sub-clause (i) in the immediately preceding clause
(a) is true with respect to a Lender or such Lender has not provided another
representation, warranty and covenant as provided in sub-clause (iv) in the
immediately preceding clause (a), such Lender further (x) represents and
warrants, as of the date such Person became a Lender party hereto, to, and
(y) covenants, from the date such Person became a Lender party hereto to the
date such Person ceases being a Lender party hereto, for the benefit of, the
Agent, each Arranger and their respective Affiliates, and not, for the avoidance
of doubt, to or for the benefit of the Company or any other Credit Party, that:

(i) none of the Agent, any Arranger nor any of their respective Affiliates is a
fiduciary with respect to the assets of such Lender (including in connection
with the reservation or exercise of any rights by the Agent under this
Agreement, any Loan Document or any documents related to hereto or thereto);

(ii) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a
bank, an insurance carrier, an investment adviser, a broker-dealer or other
person that holds, or has under management or control, total assets of at least
$50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),

(iii) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is capable of evaluating investment risks independently, both in
general and with regard to particular transactions and investment strategies
(including in respect of the Secured Obligations);

 

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(iv) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is a fiduciary under ERISA or the Code, or both, with respect to the
Loans, the Letters of Credit, the Commitments and this Agreement and is
responsible for exercising independent judgment in evaluating the transactions
hereunder, and

(v) no fee or other compensation is being paid directly to the Agent, each
Arranger or their respective Affiliates for investment advice (as opposed to
other services) in connection with the Loans, the Letters of Credit, the
Commitments or this Agreement.

(c) The Agent and each Arranger hereby informs the Lenders that each such Person
is not undertaking to provide impartial investment advice, or to give advice in
a fiduciary capacity, in connection with the transactions contemplated hereby,
and that such Person has a financial interest in the transactions contemplated
hereby in that such Person or an Affiliate thereof (i) may receive interest or
other payments with respect to the Loans, the Letters of Credit, the Commitments
and this Agreement, (ii) may recognize a gain if it extended the Loans, the
Letters of Credit or the Commitments for an amount less than the amount being
paid for an interest in the Loans, the Letters of Credit or the Commitments by
such Lender or (iii) may receive fees or other payments in connection with the
transactions contemplated hereby, the Loan Documents or otherwise, including
structuring fees, commitment fees, arrangement fees, facility fees, upfront
fees, underwriting fees, ticking fees, agency fees, administrative agent or
collateral agent fees, utilization fees, minimum usage fees, letter of credit
fees, fronting fees, deal-away or alternate transaction fees, amendment fees,
processing fees, term out premiums, banker’s acceptance fees, breakage or other
early termination fees or fees similar to the foregoing.

[Signature Pages Follow]

 

105

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

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

 

UNIVERSAL HEALTH REALTY INCOME

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

By:   /s/ CHERYL K. RAMAGANO

Name: Cheryl K. Ramagano

Title: Vice President, Secretary & Treasurer

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

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender, Agent, a Swingline Lender
and an Issuing Lender By:   /s/ ANDREA S. CHEN

Name: Andrea S. Chen

Title: Managing Director

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

BANK OF AMERICA, as a Lender, a Swingline Lender and an Issuing Lender By:   /s/
JOSEPH L. CORAH Name:   Joseph L. Corah Title:   Director

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

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Lender By:   /s/ GORDON YIP
Name:   Gordon Yip Title:   Director By:   /s/ MARK KONEVAL Name:   Mark Koneval
Title:   Managing Director

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

FIFTH THIRD BANK, as a Lender By:   /s/ ELLIE ROBERTSON Name:   Ellie Robertson
Title:   Officer

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

JPMORGAN CHASE BANK, N.A., as a Lender By:   /s/ DAWN LEE LUM Name:   Dawn Lee
Lum Title:   Executive Director

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

PNC BANK, NATIONAL ASSOCIATION, as a Lender By:   /s/ JEFFREY D. GREENLAW Name:
  Jeffrey D. Greenlaw Title:   Vice President

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

SunTrust Bank, as a Lender By:   /s/ PHILIP VANFOSSAN Name:   Philip VanFossan
Title:   Vice President

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

Exhibit 1.1(a)

[FORM OF]

ACCOUNT DESIGNATION LETTER

March 27, 2018

Wells Fargo Bank, National Association

1525 West W.T. Harris Blvd. 1B1

Charlotte, North Carolina 28262

Attn: Nicole Prebeck, Syndication Agency Services

Ladies and Gentlemen:

This Account Designation Letter is delivered to you by UNIVERSAL HEALTH REALTY
INCOME TRUST, a real estate investment trust organized under the laws of
Maryland (the “Company”), under the Credit Agreement dated as of March 27, 2018
(as amended, restated or otherwise modified, the “Credit Agreement”) by and
among the Company, the Lenders party thereto and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as administrative agent (the “Agent”).

The Agent is hereby authorized to disburse all Loan proceeds into the following
account, unless the Company shall designate, in writing to the Agent, one or
more other accounts:

 

  Bank Name:    [                                                 ]  
ABA Routing Number:    [                ]   Account Number:   
[                        ]

Notwithstanding the foregoing, on the Closing Date of the Credit Agreement,
funds borrowed under the Credit Agreement shall be sent to the institutions
and/or persons designated on payment instructions to be delivered separately.

IN WITNESS WHEREOF, the undersigned has executed this Account Designation Letter
this          day of             ,                 .

 

[CORPORATE SEAL]     UNIVERSAL HEALTH REALTY INCOME TRUST,     a Maryland real
estate investment trust         By:         Name:       Title:  

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

Exhibit 1.1(b)

[FORM OF]

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [the]
[each] Assignor identified in item 1 below ([the] [each, an] “Assignor”) and
[the] [each] Assignee identified in item 2 below ([the] [each, an] “Assignee”).
[It is understood and agreed that the rights and obligations of [the Assignors]
[the Assignees] hereunder are several and not joint.]1 Capitalized terms used
but not defined herein shall have the meanings given to them in the Credit
Agreement identified below (as amended, the “Credit Agreement”), receipt of a
copy of which is hereby acknowledged by [the] [each] Assignee. The Standard
Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to
and incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

For an agreed consideration, [the] [each] Assignor hereby irrevocably sells and
assigns to [the Assignee] [the respective Assignees], and [the] [each] Assignee
hereby irrevocably purchases and assumes from [the Assignor] [the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the Agent as
contemplated below (i) all of [the Assignor’s] [the respective Assignors’]
rights and obligations in [its capacity as a Lender] [their respective
capacities as Lenders] under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of [the Assignor] [the respective Assignors] under the respective
facilities identified below (including, without limitation, any letters of
credit, guarantees, and swingline loans included in such facilities) and (ii) to
the extent permitted to be assigned under applicable law, all claims, suits,
causes of action and any other right of [the Assignor (in its capacity as a
Lender)] [the respective Assignors (in their respective capacities as Lenders)]
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned by [the] [any]
Assignor to [the] [any] Assignee pursuant to clauses (i) and (ii) above being
referred to herein collectively as [the] [an] “Assigned Interest”). Each such
sale and assignment is without recourse to [the] [any] Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by [the] [any] Assignor.

 

1. Assignor[s]:                 2. Assignee[s]:                

[for each Assignee, indicate [Affiliate] [Approved Fund] of [identify Lender]

 

1  Include bracketed language if there are either multiple Assignors or multiple
Assignees.

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

3. Borrower:    UNIVERSAL HEALTH REALTY INCOME TRUST, a real estate investment
trust organized under the laws of Maryland 4. Administrative Agent:    Wells
Fargo Bank, National Association, as the administrative agent under the Credit
Agreement. 5. Credit Agreement:    The Credit Agreement dated as of March 27,
2018, among the Borrower, the guarantors from time to time party thereto, the
lenders and other financial institutions from time to time party thereto, and
Wells Fargo Bank, National Association, as administrative agent. 6. Assigned
Interest[s]:   

 

Assignor[s]

   Assignee[s]    Facility
Assigned    Aggregate
Amount of
Commitment/
Loans for all
Lenders    Amount of
Commitment/
Loans
Assigned    Percentage
Assigned of
Commitment/
Loans    CUSIP
Number          $    $    %             $    $    %             $    $    %   

[7. Trade Date:                                              ]2

Effective Date:                                          , 20        .

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

2  To be completed if the Assignor(s) and the Assignee(s) intend that the
minimum assignment amount is to be determined as of the Trade Date.

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

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR[S] [NAME OF ASSIGNOR] By:       Title:

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

ASSIGNEE[S] [NAME OF ASSIGNEE] By:       Title:

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

[Consented to and] Accepted:

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Agent

By:       Title:

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

[Consented to:] [NAME OF RELEVANT PARTY] By:       Title:

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

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim, (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and (iv) it is [not] a Defaulting Lender; and (b) except as
set forth herein, makes no representation or warranty and assumes no
responsibility with respect to (i) any statements, representations or warranties
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, validity, legality, enforceability, sufficiency, genuineness
or value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, the Credit
Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto or any collateral thereunder, (iii) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under the Credit Agreement, any
other Loan Document or any other instrument or document furnished pursuant
thereto or (iv) the financial condition of the Borrower, any of its Subsidiaries
or Affiliates or any other Person obligated in respect of the Credit Agreement
or any other Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it meets all
requirements of an Eligible Assignee under the Credit Agreement (subject to
receipt of such consents as may be required under the Credit Agreement), (iii)
it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, from and after the Effective Date, (iv) it
is sophisticated regarding decisions to purchase assets such as those
represented by the Assigned Interest and either it, or the Person exercising
discretion in making its decision to purchase the Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the
Credit Agreement [and the other Loan Documents], together with (or been given
the opportunity to receive) copies of the most recent financial statements
delivered pursuant to Section 5.1 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest and, on the basis of such documents and
information, it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (vi) if it is a
Foreign Lender, attached hereto is any documentation required to be delivered by
it pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or refraining from taking action under the Loan
Documents, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, (ii) [it appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto;] and (iii) it will perform
in accordance with their terms all of the obligations that are required to be
performed by it as a Lender under the Credit Agreement and the other Loan
Documents.

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

2. Payments. [From and after the Effective Date, the Administrative Agent shall
make all payments of principal, interest, fees and other amounts in respect of
the Assigned Interest to the Assignor for amounts which have accrued prior to
but excluding the Effective Date and to the Assignee for amounts which have
accrued from and after the Effective Date. Notwithstanding the foregoing, the
Administrative Agent shall make all payments of interest, fees or other amounts
paid or payable in kind from and after the Effective Date to the [relevant]
Assignee.][From and after the Effective Date, the Administrative Agent shall
make all payments of principal, interest, fees and other amounts in respect of
the Assigned Interest to the Assignee whether such amounts have accrued prior to
or on or after the Effective Date. The Assignor and the Assignee shall make all
appropriate adjustments in payments made by the Administrative Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.] Each of the Assignor and the Assignee agrees that
it will hold in trust for the other party any interest, fees and other amounts
which it may receive to which the other party is entitled pursuant to this
clause, and pay to the other party any such amounts which it may receive
promptly upon receipt.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as
delivery of a manually executed counterpart of this Assignment and Assumption.
This Assignment and Assumption [and the other Loan Documents] and any claim,
controversy, dispute or cause of action (whether in contract or tort or
otherwise) based upon, arising out of or relating to this Assignment and
Assumption [(except, as to any other Loan Document, as expressly set forth
therein)] and the transactions contemplated hereby and thereby shall be governed
by, and construed in accordance with, the law of the State of New York.

 

2

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

Exhibit 1.1(c)

[FORM OF]

BANK PRODUCT PROVIDER NOTICE

 

TO:   

Wells Fargo Bank, National Association, as Agent

 

RE:   

Credit Agreement, dated as of March 27, 2018, by and among UNIVERSAL HEALTH
REALTY INCOME TRUST, a real estate investment trust organized under the laws of
Maryland (the “Borrower”), the Guarantors, the Lenders and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as administrative agent for the Lenders (as amended,
modified, extended, restated, replaced, or supplemented from time to time, the
“Credit Agreement”; capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Credit Agreement)

 

DATE:    [        ] [    ], [        ]

[Name of Bank Product Provider] hereby notifies you, pursuant to the terms of
the Credit Agreement, that:

(a) [Name of Bank Product Provider] meets the requirements of a Bank Product
Provider under the terms of the Credit Agreement and is a Bank Product Provider
under the Credit Agreement and the other Loan Documents.

(b) The Credit Parties have entered into Bank Products with [Name of Bank
Product Provider] which include: [set forth Bank Products].

(c) The maximum dollar amount1 of obligations arising under the Bank Products
set forth in clause (b) above is: $            .

(d) The methodology to be used by such parties in determining the Bank Product
Debt (as defined in the Credit Agreement) owing from time to time is:
                                        .

Delivery of this Notice by telecopy shall be effective as an original.

 

1  If reasonably capable of being determined.

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

A duly authorized officer of the undersigned has executed this Notice as of the
[        ] day of [        ],[        ].

 

[                                             ],

as a Bank Product Provider

By:

   

Name:

 

Title:

 

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

Exhibit 1.1(d)

[FORM OF]

NOTICE OF BORROWING

             , 20    

Wells Fargo Bank, National Association, as Agent

under the Credit Agreement referred to below

1525 West W.T. Harris Blvd. 1B1

Charlotte, North Carolina 28262

Attn: Nicole Prebeck, Syndication Agency Services

Ladies and Gentlemen:

Pursuant to Section 2.1(b)(i) and/or Section 2.9(b)(i) of the Credit Agreement
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”) dated as of March 27, 2018 among UNIVERSAL HEALTH REALTY INCOME
TRUST, a real estate investment trust organized under the laws of Maryland (the
“Company”), the Lenders and other financial institutions from time to time party
thereto (the “Lenders”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent for
the Lenders, the Company hereby requests the following:

I. Revolving Loans to be made on [date] as follows (the “Proposed Borrowing”):

 

(1)

   Total Amount of Revolving Loans    $                   

(2)

  

Amount of (1) to be allocated

to LIBOR Rate Loans

 

   $                   

(3)

  

Amount of (1) to be allocated

to Base Rate Loans

 

   $                   

(4)

  

Interest Periods and amounts to be allocated

thereto in respect of LIBOR Rate Loans

(amounts must total (2)):

 

     

(i) one month

 

   $                      

(ii) two months

 

   $                      

(iii) three months

 

   $                      

(iv) six months

 

   $                       Total LIBOR Rate Loans    $                   

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

NOTE:

   BORROWINGS MUST BE IN MINIMUM AMOUNTS OF (A) WITH RESPECT TO LIBOR RATE LOANS
$100,000 AND $100,000 INCREMENTS IN EXCESS THEREOF AND (B) WITH RESPECT TO BASE
RATE LOANS, $100,000 AND $100,000 INCREMENTS IN EXCESS THEREOF.

II. Swingline Loans to be made on [date] as follows:

 

(1)

  

Total Amount of Swingline Loans

 

   $                   

NOTE:

   SWINGLINE LOAN BORROWINGS MUST BE IN MINIMUM AMOUNTS OF $50,000 AND IN
INTEGRAL AMOUNTS OF $50,000 IN EXCESS THEREOF.   

Terms defined in the Credit Agreement shall have the same meanings when used
herein.

The undersigned hereby certifies that the following statements are true on the
date hereof and will be true on the date of the Proposed Borrowing:

(A) the applicable representations and warranties contained in the Credit
Agreement and in the other Loan Documents are and will be true and correct in
all material respects, both before and after giving effect to the Proposed
Borrowing and to the application of the proceeds thereof, with the same effect
as though such representations and warranties had been made on and as of the
date of such Proposed Borrowing (it being understood that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct in all material respects only as of such specified date);
and

(B) no Default or Event of Default has occurred and is continuing, or would
result from such Proposed Borrowing or from the application of the proceeds
thereof.

 

Very truly yours,

UNIVERSAL HEALTH REALTY INCOME TRUST

a Maryland real estate investment trust

By:     Name:   Title:  

 

- 2 -

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

Exhibit 1.1(e)

[FORM OF]

NOTICE OF CONVERSION/EXTENSION]

             , 20    

Wells Fargo Bank, National Association, as Agent

under the Credit Agreement referred to below

1525 West W.T. Harris Blvd. 1B1

Charlotte, North Carolina 28262

Attn: Nicole Prebeck, Syndication Agency Services

Ladies and Gentlemen:

Pursuant to Section 2.8 of the Credit Agreement dated as of March 27, 2018 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among UNIVERSAL HEALTH REALTY INCOME TRUST, a real estate investment
trust organized under the laws of Maryland (the “Company”), the Lenders and
other financial institutions from time to time parties thereto (the “Lenders”)
and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent for the Lenders, the
Company hereby requests conversion or extension of the following Revolving Loans
be made on [date] as follows (the “Proposed Conversion/Extension”):

 

(1)

  

Total Amount of Revolving Loans

to be converted/extended

   $                   

(2)

  

Amount of (1) to be allocated

to LIBOR Rate Loans

 

   $                   

(3)

  

Amount of (1) to be allocated

to Base Rate Loans

 

   $                   

(4)

  

Interest Periods and amounts to be allocated

thereto in respect of LIBOR Rate Loans

(amounts must total (2)):

 

     

(i) one month

 

   $                      

(ii) two months

 

   $                      

(iii) three months

 

   $                      

(iv) six months

 

   $                       Total LIBOR Rate Loans    $                   

 

NOTE:

   BORROWINGS MUST BE IN MINIMUM AMOUNTS OF (A) WITH RESPECT TO LIBOR RATE
LOANS, $100,000 and $100,000 INCREMENTS IN EXCESS THEREOF AND (B) WITH RESPECT
TO BASE RATE LOANS $100,000 AND $100,000 INCREMENTS IN EXCESS THEREOF.

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

Terms defined in the Credit Agreement shall have the same meanings when used
herein.

The undersigned hereby certifies as of the date hereof and on the-date of the
Proposed Conversion/Extension that no Default or Event of Default has occurred
and is continuing, or would result from such Proposed Conversion/Extension or
from the application of the proceeds thereof.

 

Very truly yours,

UNIVERSAL HEALTH REALTY INCOME TRUST

a Maryland real estate investment trust

By:     Name:   Title:  

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

Exhibit 1.1(f)

[FORM OF]

SUBSIDIARY GUARANTY

THIS SUBSIDIARY GUARANTY, dated as of the 27th day of March, 2018 (this
“Guaranty”), is made by each of the undersigned Subsidiaries and each Subsidiary
that may become a party hereto by execution of a Guarantor Accession (as defined
below) (the “Guarantors”) of UNIVERSAL HEALTH REALTY INCOME TRUST, a real estate
investment trust organized under the laws of the State of Maryland (the
“Company”), in favor of the Guaranteed Parties (as hereinafter defined).
Capitalized terms used herein without definition shall have the meanings given
to them in the Credit Agreement referred to below.

RECITALS

A. The Company, certain financial institutions from time to time party thereto
(collectively, the “Lenders”), and Wells Fargo Bank, National Association, as
administrative agent for the Lenders (in such capacity, the “Agent”), are
parties to a Credit Agreement, dated as of the date hereof (as amended, modified
or supplemented from time to time, the “Credit Agreement”), providing for the
availability of certain credit facilities to the Company upon the terms and
conditions set forth therein.

B. It is a condition to the extension of credit to the Company under the Credit
Agreement that (1) each Guarantor shall have agreed, by executing and delivering
this Guaranty, to guarantee to the Guaranteed Parties the payment in full of the
Guaranteed Obligations (as hereinafter defined) and (2) promptly upon the
formation or acquisition of any additional wholly-owned Subsidiary (other than
an Excluded Subsidiary), or upon any Excluded Subsidiary no longer qualifying as
an Excluded Subsidiary, and in any event within 30 days thereof, the Company
shall cause such additional Subsidiary to execute a Guarantor Accession (as
defined herein) pursuant to Section 5.33(a) of the Credit Agreement.

C. The Company and the Guarantors are engaged in related businesses and
undertake certain activities and operations on an integrated basis. Each
Guarantor will therefore obtain benefits as a result of the extension of credit
to the Company under the Credit Agreement, which benefits are hereby
acknowledged, and, accordingly, desires to execute and deliver this Guaranty.

STATEMENT OF AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
induce the Guaranteed Parties to enter into the Credit Agreement and to induce
the Lenders to extend credit to the Company thereunder, each Guarantor hereby
agrees as follows:

1. Guaranty. (a) Each Guarantor hereby irrevocably, absolutely and
unconditionally, and jointly and severally:

(i) guarantees to the Lenders, each Bank Product Provider, each Swingline
Lender, each Issuing Lender and the Agent (collectively, the “Guaranteed
Parties”) the full and prompt payment, at any time and from time to time as and
when due (whether at the stated maturity, by acceleration or otherwise), of all
Credit Party Obligations of the Company under the Credit Agreement and the other
Loan Documents, including, without limitation, all principal of and interest on
the Loans, all fees, expenses, indemnities and other amounts payable by the
Company under the Credit Agreement or any other Loan Document (including
interest accruing after the

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

filing of a petition or commencement of a case by or with respect to the Company
seeking relief under any Debtor Relief Laws, whether or not the claim for such
interest is allowed in such proceeding), all obligations of the Company under
any Bank Product, and all Obligations that, but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due, in
each case whether now existing or hereafter created or arising and whether
direct or indirect, absolute or contingent, due or to become due (all
liabilities and obligations described in this clause (i), collectively, the
“Guaranteed Obligations”); and

(ii) agrees to pay or reimburse upon demand all reasonable costs and expenses
(including, without limitation, reasonable attorneys’ fees and expenses)
incurred or paid by (y) any Guaranteed Party in connection with any suit, action
or proceeding to enforce or protect any rights of the Guaranteed Parties
hereunder and (z) the Agent in connection with any amendment, modification or
waiver hereof or consent pursuant hereto (all liabilities and obligations
described in this clause (ii), collectively, the “Other Obligations”; and the
Other Obligations, together with the Guaranteed Obligations, the “Total
Obligations”).

(b) Notwithstanding the provisions of subsection (a) above and notwithstanding
any other provisions contained herein or in any other Loan Document:

(i) no provision of this Guaranty shall require or permit the collection from
any Guarantor of interest in excess of the maximum rate or amount that such
Guarantor may be required or permitted to pay pursuant to applicable law; and

(ii) the liability of each Guarantor under this Guaranty as of any date shall be
limited to a maximum aggregate amount (the “Maximum Guaranteed Amount”) equal to
the greatest amount that would not render such Guarantor’s obligations under
this Guaranty subject to avoidance, discharge or reduction as of such date as a
fraudulent transfer or conveyance under applicable Debtor Relief Laws, in each
instance after giving effect to all other liabilities of such Guarantor,
contingent or otherwise, that are relevant under applicable Debtor Relief Laws
(specifically excluding, however, any liabilities of such Guarantor in respect
of intercompany indebtedness to the Company or any of its Affiliates to the
extent that such indebtedness would be discharged in an amount equal to the
amount paid by such Guarantor hereunder, and after giving effect as assets to
the value (as determined under applicable Debtor Relief Laws) of any rights to
subrogation, contribution, reimbursement, indemnity or similar rights of such
Guarantor pursuant to (y) applicable law or (z) any agreement (including this
Guaranty) providing for an equitable allocation among such Guarantor and other
Affiliates of the Company of obligations arising under guaranties by such
parties).

(c) The guaranty of each Guarantor set forth in this Section is a guaranty of
payment as a primary obligor, and not a guaranty of collection. Each Guarantor
hereby acknowledges and agrees that the Guaranteed Obligations, at any time and
from time to time, may exceed the Maximum Guaranteed Amount of such Guarantor
and may exceed the aggregate of the Maximum Guaranteed Amounts of all
Guarantors, in each case without discharging, limiting or otherwise affecting
the obligations of any Guarantor hereunder or the rights, powers and remedies of
any Guaranteed Party hereunder or under any other Loan Document.

2. Guaranty Absolute. Each Guarantor agrees that its obligations hereunder are
irrevocable, absolute and unconditional, are independent of the Guaranteed
Obligations or other guaranty or liability in respect thereof, whether given by
such Guarantor or any other Person, and shall not be discharged, limited or
otherwise affected by reason of any of the following, whether or not such
Guarantor has notice or knowledge thereof:

 

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(i) any change in the time, manner or place of payment of, or in any other term
of, any Guaranteed Obligations or any guaranty or other liability in respect
thereof, or any amendment, modification or supplement to, restatement of, or
consent to any rescission or waiver of or departure from, any provisions of the
Credit Agreement, any other Loan Document or any agreement or instrument
delivered pursuant to any of the foregoing;

(ii) the invalidity or unenforceability of any Guaranteed Obligations, any
guaranty or other liability in respect thereof or any provisions of the Credit
Agreement, any other Loan Document or any agreement or instrument delivered
pursuant to any of the foregoing;

(iii) the addition or release of Guarantors hereunder or the taking, acceptance
or release of other guarantees of any Guaranteed Obligations or for any guaranty
or other liability in respect thereof;

(iv) any discharge, modification, extension, renewal, settlement, compromise or
other action in respect of any Guaranteed Obligations or any guaranty or other
liability in respect thereof, including any acceptance or refusal of any offer
or performance with respect to the same or the subordination of the same to the
payment of any other obligations;

(v) any agreement not to pursue or enforce or any failure to pursue or enforce
(whether voluntarily or involuntarily as a result of operation of law, court
order or otherwise) any right or remedy in respect of any Guaranteed
Obligations, any guaranty or other liability in respect thereof;

(vi) the exercise of any right or remedy available under the Loan Documents, at
law, in equity or otherwise in respect of any Guaranteed Obligations or for any
guaranty or other liability in respect thereof, in any order and by any manner
thereby permitted;

(vii) any bankruptcy, reorganization, arrangement, liquidation, insolvency,
dissolution, termination, reorganization or like change in the corporate
structure or existence of the Company or any other Person directly or indirectly
liable for any Guaranteed Obligations;

(viii) any release, non-perfection or invalidity of any direct or indirect
security for any Guaranteed Obligation, any sale, exchange, surrender,
realization upon, offset against or other action in respect of any direct or
indirect security for any Guaranteed Obligation or any release of any Credit
Party or any other guarantor or guarantors of any Guaranteed Obligation;

(ix) any failure by any Agent or any other Guaranteed Party: (A) to file or
enforce a claim against any Guarantor or its estate (in a bankruptcy or other
proceeding); (B) to give notice of the existence, creation or incurrence by any
Guarantor of any new or additional indebtedness or obligation under or with
respect to the Guaranteed Obligations; (C) to commence any action against any
Guarantor; (D) to disclose to any Guarantor any facts which such Agent or such
other Guaranteed Party may now or hereafter know with regard to any Guarantor;
or (E) to proceed with due diligence in the collection, protection or
realization upon any collateral securing the Guaranteed Obligations;

(x) any act or failure to act by any Agent or any other Guaranteed Party under
this Guaranty or otherwise which may deprive any Guarantor of any right to
subrogation, contribution or reimbursement against any Credit Party or any right
to recover full indemnity for any payments made by such Guarantor in respect of
the Guaranteed Obligations;

 

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(xi) any other act or omission to act or delay of any kind by any Credit Party,
any Agent, or any other Guaranteed Party or any other Person or any other
circumstance whatsoever which might, but for the provisions of this clause,
constitute a legal or equitable discharge of any Guarantor’s obligations
hereunder (except that a Guarantor may assert the defense of final payment in
full of the Guaranteed Obligations); or

(xii) any other circumstance that might otherwise constitute a legal or
equitable discharge of, or a defense, set-off or counterclaim available to, the
Company, any Guarantor or a surety or guarantor generally, other than the
occurrence of all of the following: (x) the payment in full of the Total
Obligations, (y) the termination of the Commitments and the termination or
expiration of all Letters of Credit under the Credit Agreement, and (z) the
termination of, and settlement of all obligations of the Company and any
Subsidiary under, each Bank Product to which the Company, any Subsidiary and any
Bank Product Provider are parties (the events in clauses (x), (y) and (z) above,
collectively, the “Termination Requirements”).

3. Certain Waivers. Each Guarantor hereby knowingly, voluntarily and expressly
waives:

(i) presentment, demand for payment, demand for performance, protest and notice
of any other kind, including, without limitation, notice of nonpayment or other
nonperformance (including notice of default under any Loan Document with respect
to any Guaranteed Obligations), protest, dishonor, acceptance hereof, extension
of additional credit to the Company and of any of the matters referred to in
Section 2 hereof and of any rights to consent thereto;

(ii) any right or defense based on or arising by reason of any right or defense
of the Company or any other Person, including, without limitation, any defense
based on or arising from a lack of authority or other disability of the Company
or any other Person, the invalidity or unenforceability of any Guaranteed
Obligations or any Loan Document or other agreement or instrument delivered
pursuant thereto, or the cessation of the liability of the Company for any
reason other than the satisfaction of the Termination Requirements;

(iii) any defense based on any Guaranteed Party’s acts or omissions in the
administration of the Guaranteed Obligations, any guaranty or other liability in
respect thereof or other security for any of the foregoing;

(iv) any right to assert against any Guaranteed Party, as a defense,
counterclaim, crossclaim or set-off, any defense, counterclaim, claim, right of
recoupment or set-off that it may at any time have against any Guaranteed Party
(including, without limitation, failure of consideration, statute of
limitations, payment, accord and satisfaction and usury), other than compulsory
counterclaims; and

(v) any defense based on or afforded by any applicable law that limits the
liability of or exonerates guarantors or sureties or that may in any other way
conflict with the terms of this Guaranty.

4. Waiver of Subrogation; Subordination. Until all of the Obligations have been
paid in full, each Guarantor hereby knowingly, voluntarily and expressly waives
all claims and rights that it may have against the Company at any time as a
result of any payment made under or in connection with this Guaranty or the
performance or enforcement hereof, including all rights of subrogation to the
rights of any of the Guaranteed Parties against the Company, all rights of
indemnity, contribution or reimbursement against the Company, all rights to
enforce any remedies of any Guaranteed Party against

 

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the Company, in each case whether such claims or rights arise by contract,
statute (including without limitation the Bankruptcy Code), common law or
otherwise. Each Guarantor agrees that all indebtedness and other obligations,
whether now or hereafter existing, of the Company or any other Subsidiary of the
Company to such Guarantor, including, without limitation, any such indebtedness
in any proceeding under the Bankruptcy Code and any intercompany receivables,
together with any interest thereon, shall be, and hereby are, subordinated and
made junior in right of payment to the Total Obligations. Each Guarantor further
agrees that if any amount shall be paid to or any distribution received by any
Guarantor (i) on account of any such indebtedness at any time after the
occurrence and during the continuance of an Event of Default hereunder or under
the Credit Agreement, or (ii) on account of any such rights of subrogation,
indemnity, contribution or reimbursement at any time prior to the satisfaction
of the Termination Requirements, such amount or distribution shall be deemed to
have been received and to be held in trust for the benefit of the Guaranteed
Parties, and shall forthwith be delivered to the Agent in the form received
(with any necessary endorsements in the case of written instruments), to be
applied against the Guaranteed Obligations, whether or not matured, in
accordance with the terms of the applicable Loan Documents and without in any
way discharging, limiting or otherwise affecting the liability of such Guarantor
under any other provision of this Guaranty. Additionally, in the event the
Company or any Subsidiary of the Company becomes a “debtor” within the meaning
of the Bankruptcy Code, the Agent shall be entitled, at its option, on behalf of
the Guaranteed Parties and as attorney-in-fact for each Guarantor, and is hereby
authorized and appointed by each Guarantor, to file proofs of claim on behalf of
each relevant Guarantor and vote the rights of each such Guarantor in any plan
of reorganization, and to demand, sue for, collect and receive every payment and
distribution on any indebtedness of the Company or such Subsidiary to any
Guarantor in any such proceeding, each Guarantor hereby assigning to the Agent
all of its rights in respect of any such claim, including the right to receive
payments and distributions in respect thereof.

5. Representations and Warranties. Each Guarantor hereby represents and warrants
to the Guaranteed Parties as follows:

(a) Such Guarantor (a) is a corporation, partnership or limited liability
company duly organized or formed, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization and (b) has
the full power and authority to execute, deliver and perform this Guaranty, to
own and hold its property and to engage in its business as presently conducted.

(b) Such Guarantor has taken all necessary corporate or limited liability
company action to execute, deliver and perform this Guaranty. This Guaranty
constitutes, the legal, valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally or by
general equitable principles.

(c) The execution, delivery and performance by such Guarantor of this Guaranty,
and compliance by it with the terms hereof and thereof, do not and will not
(i) violate any provision of its articles or certificate of incorporation or
bylaws, (ii) contravene any Requirement of Law applicable to it, (iii) conflict
with, result in a breach of or constitute (with notice, lapse of time or both) a
default under any indenture, loan agreement, mortgage, deed of trust, lease or
other agreement or instrument to which it is a party, by which it or any of its
properties is bound or to which it is subject, or (iv) result in or require the
creation or imposition of any Lien upon any of its properties, except to the
extent that the failure of any of the foregoing to be true could not be
reasonably expected to have a Material Adverse Effect.

 

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(d) No consent, approval, authorization or other action by, notice to, or
registration or filing with, any Governmental Authority is or will be required
as a condition to or otherwise in connection with the due execution, delivery
and performance by such Guarantor of this Guaranty or the legality, validity or
enforceability hereof.

(e) There are no actions, investigations, suits or proceedings pending or, to
the knowledge of such Guarantor, threatened, at law, in equity or in
arbitration, before any court, other Governmental Authority or other Person,
(i) against or affecting such Guarantor or any of its properties that would be
reasonably likely to have a Material Adverse Effect or (ii) with respect to this
Guaranty.

(f) Such Guarantor has been provided with a true and complete copy of the
executed Credit Agreement, as in effect as of the date it became a party hereto,
and its principal officers are familiar with the contents thereof, particularly
insofar as the contents thereof relate or apply to such Guarantor.

(g) The representations and warranties contained in the Credit Agreement (with
respect to the business, operations, assets, financial condition, liabilities or
contracts of, or which otherwise pertain to, such Guarantor (including to the
extent such Guarantor is referred to as a Credit Party or, where applicable, as
a Subsidiary of the Company in such representations and warranties)) are true
and correct in all material respects.

(h) Such Guarantor has, independently and without reliance upon the Agent or any
other Guaranteed Party and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Guaranty. Such Guarantor has investigated the benefits and advantages which will
be derived by it from execution of this Guaranty, and the board of directors (or
persons performing similar functions in case the Guarantor is not a corporation)
of such Guarantor has decided that a direct or an indirect benefit will accrue
to such Guarantor by reason of the execution of this Guaranty.

(i) Subject to Section 1(b)(ii), (i) this Guaranty is not given with actual
intent to hinder, delay or defraud any Person to which such Guarantor is or will
become, on or after the date hereof, indebted; (ii) such Guarantor has received
at least a reasonably equivalent value in exchange for the giving of this
Guaranty; (iii) such Guarantor is not insolvent on the date hereof and will not
become insolvent as a result of the giving of this Guaranty; (iv) such Guarantor
is not engaged in a business or transaction, nor is about to engage in a
business or transaction, for which any property remaining with such Guarantor
constitutes an unreasonably small amount of capital; and (v) such Guarantor does
not intend to incur debts that will be beyond such Guarantor’s ability to pay as
such debts mature.

(j) This Guaranty shall be a Loan Document and shall inure to the benefit of and
be enforceable by each Guaranteed Party and its successors and assigns.

6. Covenants. Each Guarantor hereby covenants to the Guaranteed Parties as
follows:

(a) Such Guarantor hereby (i) confirms and agrees to be bound by all of the
agreements applicable to a Credit Party as set forth in the Credit Agreement and
(ii) agrees to comply, subject to any applicable notice, cure or grace periods,
with each of the covenants contained in the Credit Agreement that imposes or
purports to impose, through agreements with the Company, restrictions or
obligations on such Guarantor.

(b) Such Guarantor acknowledges that any default in the due observance or
performance by such Guarantor of any covenant, condition or agreement contained
herein may constitute, after giving effect to any applicable notice, grace or
cure periods, an Event of Default under Section 7.1 of the Credit Agreement.

 

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7. Events of Default. An Event of Default shall exist upon the occurrence of any
Event of Default as defined in the Credit Agreement (each an “Event of
Default”).

8. Financial Condition of the Company. Each Guarantor represents that it has
knowledge of the Company’s financial condition and affairs and that it has
adequate means to obtain from the Company on an ongoing basis information
relating thereto and to the Company’s ability to pay and perform the Guaranteed
Obligations, and agrees to assume the responsibility for keeping, and to keep,
so informed for so long as this Guaranty is in effect with respect to such
Guarantor. Each Guarantor agrees that the Guaranteed Parties shall have no
obligation to investigate the financial condition or affairs of the Company for
the benefit of any Guarantor nor to advise any Guarantor of any fact respecting,
or any change in, the financial condition or affairs of the Company that might
become known to any Guaranteed Party at any time, whether or not such Guaranteed
Party knows or believes or has reason to know or believe that any such fact or
change is unknown to any Guarantor, or might (or does) materially increase the
risk of any Guarantor as guarantor, or might (or would) affect the willingness
of any Guarantor to continue as a guarantor of the Guaranteed Obligations.

9. Payments; Application; Set-Off.

(a) Each Guarantor agrees that, upon the failure of the Company to pay any
Guaranteed Obligations when and as the same shall become due (whether at the
stated maturity, by acceleration or otherwise), and without limitation of any
other right or remedy that any Guaranteed Party may have at law, in equity or
otherwise against such Guarantor, such Guarantor will, subject to the provisions
of Section 1(b), forthwith pay or cause to be paid to the Agent, for the benefit
of the Guaranteed Parties, an amount equal to the amount of the Guaranteed
Obligations then due and owing as aforesaid.

(b) All payments made by each Guarantor hereunder will be made in Dollars to the
Agent, without set-off, counterclaim or other defense and, in accordance with
Section 2.16 of the Credit Agreement, each Guarantor hereby agreeing to comply
with and be bound by the provisions of Section 2.16 of the Credit Agreement in
respect of all payments made by it hereunder and the provisions of which Section
are hereby incorporated into and made a part of this Guaranty by this reference
as if set forth herein at length.

(c) All payments made hereunder shall be applied upon receipt in the manner set
forth in Section 2.11 of the Credit Agreement.

(d) [Reserved].

(e) The Guarantors shall remain jointly and severally liable to the extent of
any deficiency between the amount of all payments made hereunder and the
aggregate amount of the Total Obligations.

(f) In addition to all other rights and remedies available under the Loan
Documents or applicable law or otherwise, upon and at any time after the
occurrence and during the continuance of any Event of Default, each Guaranteed
Party may, and is hereby authorized by each Guarantor, at any such time and from
time to time, to the fullest extent permitted by applicable law, without
presentment, demand, protest or other notice of any kind, all of which are
hereby knowingly and expressly waived by each Guarantor, to set off and to apply
any and all deposits (general or special, time or demand, provisional or final)
and any other property at any time held (including at any branches or agencies,
wherever located), and any other indebtedness at any time owing, by such
Guaranteed Party to or for the credit or the account of such Guarantor against
any or all of the obligations of such Guarantor to such Guaranteed Party
hereunder now or hereafter existing. Each Guaranteed Party agrees to notify any
affected Guarantor promptly after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.

 

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10. No Waiver. The rights and remedies of the Guaranteed Parties expressly set
forth in this Guaranty and the other Loan Documents are cumulative and in
addition to, and not exclusive of, all other rights and remedies available at
law, in equity or otherwise. No failure or delay on the part of any Guaranteed
Party in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege or be construed to be a waiver of any Default or
Event of Default. No course of dealing between any of the Guarantors and the
Guaranteed Parties or their agents or employees shall be effective to amend,
modify or discharge any provision of this Guaranty or any other Loan Document or
to constitute a waiver of any Default or Event of Default. No notice to or
demand upon any Guarantor in any case shall entitle such Guarantor or any other
Guarantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of any Guaranteed Party to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.

11. Enforcement. The Guaranteed Parties agree that, except as provided in
Section 8(f), this Guaranty may be enforced only by the Agent, acting upon the
instructions or with the consent of the Lenders as provided for in the Credit
Agreement, and that no Guaranteed Party shall have any right individually to
enforce or seek to enforce this Guaranty. The obligations of each Guarantor
hereunder are independent of the Guaranteed Obligations, and a separate action
or actions may be brought against each Guarantor whether or not action is
brought against the Company or any other Guarantor and whether or not the
Company or any other Guarantor is joined in any such action. Each Guarantor
agrees that to the extent all or part of any payment of the Guaranteed
Obligations made by any Person is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid by or on behalf
of any Guaranteed Party to a trustee, receiver or any other party under any
insolvency laws (the amount of any such payment, a “Reclaimed Amount”), then, to
the extent of such Reclaimed Amount, this Guaranty shall continue in full force
and effect or be revived and reinstated, as the case may be, as to the
Guaranteed Obligations intended to be satisfied as if such payment had not been
received; and each Guarantor acknowledges that the term “Guaranteed Obligations”
includes all Reclaimed Amounts that may arise from time to time.

12. Amendments, Waivers, etc. No amendment, modification, waiver, discharge or
termination of, or consent to any departure by any Guarantor from, any provision
of this Guaranty, shall be effective unless in a writing signed by the
Guarantors, the Agent and such of the Lenders as may be required under the
provisions of the Credit Agreement to concur in the action then being taken, and
then the same shall be effective only in the specific instance and for the
specific purpose for which given.

13. Addition, Release of Guarantors. Each Guarantor recognizes that the
provisions of the Credit Agreement require certain Subsidiaries of the Company
that are not already parties hereto to become Guarantors hereunder by executing
a Guarantor Accession and Joinder in the form attached hereto as Exhibit A (the
“Guarantor Accession”), and agrees that its obligations hereunder shall not be
discharged, limited or otherwise affected by reason of the same, or by reason of
the Agent’s actions in effecting the same or in releasing any Guarantor
hereunder, in each case without the necessity of giving notice to or obtaining
the consent of any other Guarantor. The parties hereto agree that at any time a
Guarantor is designated as an Excluded Subsidiary in accordance with
Section 5.33(b) of the Credit Agreement pursuant to and in accordance with the
terms of the Credit Agreement, such Guarantor shall be automatically released
from its obligations hereunder.

 

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14. Continuing Guaranty; Term; Successors and Assigns; Assignment; Survival.
This Guaranty is a continuing guaranty and covers all of the Guaranteed
Obligations as the same may arise and be outstanding at any time and from time
to time from and after the date hereof, and shall (i) remain in full force and
effect until satisfaction of all of the Termination Requirements, (ii) be
binding upon and enforceable against each Guarantor and its successors and
assigns (provided, however, that no Guarantor may sell, assign or transfer any
of its rights, interests, duties or obligations hereunder without the prior
written consent of the Lenders) and (iii) inure to the benefit of and be
enforceable by each Guaranteed Party and its successors and assigns. Without
limiting the generality of clause (iii) above, any Guaranteed Party may, in
accordance with the provisions of the Credit Agreement, assign all or a portion
of the Guaranteed Obligations held by it (including by the sale of
participations), whereupon each Person that becomes the holder of any such
Guaranteed Obligations shall (except as may be otherwise agreed between such
Guaranteed Party and such Person) have and may exercise all of the rights and
benefits in respect thereof granted to such Guaranteed Party under this Guaranty
or otherwise. Each Guarantor hereby irrevocably waives notice of and consents in
advance to the assignment as provided above from time to time by any Guaranteed
Party of all or any portion of the Guaranteed Obligations held by it and of the
corresponding rights and interests of such Guaranteed Party hereunder in
connection therewith. All representations, warranties, covenants and agreements
herein shall survive the execution and delivery of this Guaranty and any
Guarantor Accession.

15. Keepwell. Each Credit Party that has total assets exceeding $10,000,000 at
the time this Guaranty or the grant of the relevant security interest becomes
effective with respect to a Swap Obligation or such other Credit Party that
qualifies at such time as an “eligible contract participant” under the Commodity
Exchange Act or any regulations promulgated thereunder and can cause another
Person to qualify as an “eligible contract participant” at such time under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act (each, a “Qualified ECP
Guarantor”) hereby jointly and severally, absolutely, unconditionally and
irrevocably undertakes to provide such funds or other support as may be needed
from time to time by each other Guarantor to honor all of its obligations under
the Loan Documents in respect of Swap Obligations (provided, however, that each
Qualified ECP Guarantor shall only be liable under this Section 15 for the
maximum amount of such liability that can be hereby incurred without rendering
such Qualified ECP Guarantor’s obligations and undertakings under this Guaranty,
or any other Loan Document, voidable under Debtor Relief Laws, and not for any
greater amount). The obligations of each Qualified ECP Guarantor under this
Section shall remain in full force and effect until all of the Guaranteed
Obligations (other than contingent indemnification and expense reimbursement
obligations not then due or asserted) shall have been paid in full in cash and
the Commitments terminated. Each Qualified ECP Guarantor intends that this
Section 15 constitute, and this Section 15 shall be deemed to constitute, a
“keepwell, support, or other agreement” for the benefit of each other Guarantor
for all purposes of the Commodity Exchange Act.

16. Governing Law; Consent to Jurisdiction; Appointment of Company as
Representative, Process Agent, Attorney-in-Fact. (a) THIS GUARANTY AND ANY
CLAIMS, CONTROVERSY OR DISPUTE ARISING OUT OF OR RELATING TO THIS GUARANTY SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW. THE
GUARANTOR AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS GUARANTY OR ANY OF
THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT.

(b) NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY GUARANTEED PARTY TO
BRING ANY ACTION OR PROCEEDING AGAINST ANY GUARANTOR IN THE COURTS OF ANY OTHER
JURISDICTION.

 

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17. Waiver of Jury Trial. EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS
HEREOF, EACH GUARANTEED PARTY, HEREBY WAIVES, TO THE GREATEST EXTENT PERMITTED
BY APPLICABLE LAW, ITS RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OF THE OTHER
LOAN DOCUMENTS, OR ANY PROCEEDING TO WHICH ANY GUARANTEED PARTY OR SUCH
GUARANTOR IS A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN
CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF ANY GUARANTEED PARTY OR SUCH GUARANTOR.

18. Notices. All notices and other communications provided for hereunder shall
be in writing (including telegraphic, telex, facsimile transmission or cable
communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered
(a) if to any Guarantor, in care of the Company and at the Company’s address for
notices set forth in the Credit Agreement and (b) if to any Guaranteed Party, at
its address for notices set forth in Section 9.2 the Credit Agreement; or to
such other address as any of the Persons listed above may designate for itself
by like notice to the other Persons listed above; and in each case, with copies
to such other Persons as may be specified under the provisions of the Credit
Agreement. All such notices and communications shall be deemed to have been
given (i) if mailed as provided above by any method other than overnight
delivery service, on the third Business Day after deposit in the mails, (ii) if
mailed by overnight delivery service, telegraphed, telexed, telecopied or
cabled, when delivered for overnight delivery, delivered to the telegraph
company, confirmed by telex answerback, transmitted by telecopier or delivered
to the cable company, respectively, or (iii) if delivered by hand, upon
delivery; provided that notices and communications to the Agent shall not be
effective until received by the Agent.

19. Severability. To the extent any provision of this Guaranty is prohibited by
or invalid under the applicable law of any jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity and only in
such jurisdiction, without prohibiting or invalidating such provision in any
other jurisdiction or the remaining provisions of this Guaranty in any
jurisdiction.

20. Construction. The headings of the various sections and subsections of this
Guaranty have been inserted for convenience only and shall not in any way affect
the meaning or construction of any of the provisions hereof. Unless the context
otherwise requires, words in the singular include the plural and words in the
plural include the singular.

21. Counterparts; Effectiveness. This Guaranty may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. This Guaranty shall
become effective, as to any Guarantor, upon the execution and delivery by such
Guarantor of a counterpart hereof or a Guarantor Accession.

IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed by
its duly authorized officers as of the date first above written.

[GUARANTORS]4

 

4  Company to confirm Guarantors.

 

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IN WITNESS HEREOF, solely with respect to Paragraph 14, the Company has caused
this Guaranty to be executed by its duly authorized officers as of the date
first above written.

 

UNIVERSAL HEALTH REALTY INCOME TRUST,

a Maryland real estate investment trust

By:     Name:   Title:  

 

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Accepted and agreed to:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as

Agent for the Lenders

By:     Name:   Title  

 

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EXHIBIT A

GUARANTOR ACCESSION AND JOINDER

THIS GUARANTOR ACCESSION AND JOINDER (this “Accession”), dated as of
_____________, ____, is executed and delivered by [NAME OF NEW GUARANTOR], a
______________ [corporation][limited liability company] (the “Subsidiary
Guarantor”), pursuant to the Subsidiary Guaranty and Pledge Agreement referred
to herein below.

Reference is made to the Credit Agreement, dated as of March 27, 2018, among
Universal Health Realty Income Trust, a real estate investment trust organized
under the laws of the State of Maryland (the “Company”), the Lenders party
thereto, and the Agent (as amended, modified or supplemented from time to time,
the “Credit Agreement”). In connection with and as a condition to the Lenders’
entering into the Credit Agreement and making the initial and continued
extensions of credit to the Company thereunder, the Subsidiary Guarantor and
certain of its subsidiaries have executed and delivered (i) a Subsidiary
Guaranty, dated as of March 27, 2018 (as amended, modified or supplemented from
time to time, the “Subsidiary Guaranty”), pursuant to which such subsidiaries
have guaranteed the payment in full of the obligations of the Company under the
Credit Agreement and the other Loan Documents (as defined in the Credit
Agreement) and (ii) a Pledge Agreement, dated as of March 27, 2018 (as amended,
modified or supplemented from time to time, the “Pledge Agreement”), pursuant to
which such subsidiaries have granted a continuing security interest in any and
all right, title and interest of its Pledged Collateral (as defined in the
Pledge Agreement). Capitalized terms used herein without definition shall have
the meanings given to them in the Subsidiary Guaranty or Pledge Agreement, as
applicable.

The Company has agreed under Section 5.33(a) of the Credit Agreement to cause
certain of its future subsidiaries to become parties to the Subsidiary Guaranty
as guarantors thereunder and the Pledge Agreement as pledgor thereunder. The
Subsidiary Guarantor is a Subsidiary of the Company. The Subsidiary Guarantor
will obtain benefits as a result of the continued extension of credit to the
Company under the Credit Agreement, which benefits are hereby acknowledged, and,
accordingly, desire to execute and deliver this Accession. Therefore, in
consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and to induce the
Lenders to continue to extend credit to the Company under the Credit Agreement,
the Subsidiary Guarantor hereby agrees as follows:

1. The Subsidiary Guarantor hereby joins in and agrees to be bound by each and
all of the provisions of the Subsidiary Guaranty as a Guarantor thereunder. In
furtherance (and without limitation) of the foregoing, pursuant to Section 1 of
the Subsidiary Guaranty, the Subsidiary Guarantor hereby irrevocably, absolutely
and unconditionally, and jointly and severally with each other Guarantor,
guarantees to the Guaranteed Parties the full and prompt payment, at any time
and from time to time as and when due (whether at the stated maturity, by
acceleration or otherwise), of all of the Guaranteed Obligations, and agrees to
pay or reimburse upon demand all Other Obligations, all on the terms and subject
to the conditions set forth in the Subsidiary Guaranty.

2. The Subsidiary Guarantor hereby represents and warrants that after giving
effect to this Accession, each representation and warranty contained in
Section 5 of the Subsidiary Guaranty is true and correct with respect to the
Subsidiary Guarantor as of the date hereof, as if such representations and
warranties were set forth at length herein.

3. The Subsidiary Guarantor hereby acknowledges, agrees and confirms that, by
its execution of this Accession, the Subsidiary Guarantor will be deemed to be a
party to the Pledge Agreement and a “Pledgor” for all purposes of the Pledge
Agreement, and shall have all the obligations of

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

a Pledgor thereunder as if it had executed the Pledge Agreement. The Subsidiary
Guarantor hereby ratifies, as of the date hereof, and agrees to be bound by, all
of the terms, provisions and conditions contained in the Pledge Agreement.
Without limiting generality of the foregoing terms of this paragraph 3, the
Subsidiary Guarantor hereby grants, pledges and assigns to the Agent, for the
benefit of the Secured Parties (as defined in the Pledge Agreement), a
continuing security interest in, and a right of set off against, any and all
right, title and interest of the Subsidiary Guarantor in and to the Pledged
Collateral (as defined in the Pledge Agreement) identified on Schedule 1 hereto
to secure the prompt payment and performance in full when due, whether by lapse
of time, acceleration, mandatory prepayment or otherwise, of the Credit Party
Obligations (as defined in the Credit Agreement).

4. This Accession shall be a Loan Document (within the meaning of such term
under the Credit Agreement), shall be binding upon and enforceable against the
Subsidiary Guarantor and its successors and assigns, and shall inure to the
benefit of and be enforceable by each Guaranteed Party and its successors and
assigns. This Accession and its attachments are hereby incorporated into the
Subsidiary Guaranty and Pledge Agreement and made a part thereof.

 

2

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

IN WITNESS WHEREOF, the Subsidiary Guarantor has caused this Accession to be
executed under seal by its duly authorized officer as of the date first above
written.

 

[NAME OF NEW GUARANTOR]

By:     Name:   Title:  

 

3

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

Schedule 1

 

Guarantor Subsidiary: [                                ]

Name of Subsidiary

   Number of Shares    Certificate Number    Percentage Ownership

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

Exhibit 2.1(a)

[FORM OF]

FUNDING INDEMNITY LETTER

 

TO:   

WellsFargo Bank, National Association, as Agent

RE:    Credit Agreement, to be dated on or about March 27, 2018, by and among
UNIVERSAL HEALTH REALTY INCOME TRUST, a real estate investment trust organized
under the laws of Maryland (the “Borrower”), the Guarantors, the Lenders and
WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders
(as amended, modified, extended, restated, replaced, or supplemented from time
to time, the “Credit Agreement”) DATE:   

[________],2018

This letter is delivered in anticipation of the closing of the above-referenced
Credit Agreement. Capitalized terms used herein and not otherwise defined shall
have the meanings assigned thereto in the most recent draft of the Credit
Agreement circulated to the Borrower and the Lenders.

The Borrower anticipates that all conditions precedent to the effectiveness of
the Credit Agreement will be satisfied on March 27, 2018 (the “Effective Date”).
The Borrower wishes to borrow the initial Revolving Loans, described in the
Notice of Borrowing delivered in connection with this letter agreement, on the
Effective Date as LIBOR Rate Loans (the “Effective Date LIBOR Rate Loans”).

In order to induce the Lenders to accept this request prior to the Effective
Date, the Borrower hereby agrees that, in the event the Borrower fails to borrow
the Effective Date LIBOR Rate Loans on the Effective Date for any reason
whatsoever (including the failure of the Credit Agreement to become effective),
the Borrower hereby unconditionally agrees to reimburse each applicable Lender
in respect of its Effective Date LIBOR Rate Loans upon its demand as set forth
in Section 2.15 of the Credit Agreement (as such Section is set forth in the
most recent draft of the Credit Agreement circulated to the Borrower prior to
execution of this letter) as if it were in effect with respect to the requested
Effective Date LIBOR Rate Loans.

This letter agreement shall be governed by, and shall be construed and enforced
in accordance with, the laws of the State of New York. This letter may (a) be
executed in any number of counterparts by the different signatories hereto on
separate counterparts, each of which counterparts when executed and delivered
shall be an original, but all of which together shall constitute one and the
same letter and (b) upon execution, be delivered by facsimile or electronic
mail, which shall be deemed for all purposes to be an original signature.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

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

UNIVERSAL HEALTH REALTY INCOME TRUST,

a Maryland real estate investment trust

By:     Name:   Title:  

 

1

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Exhibit 2.1(e)

[FORM OF]

REVOLVING NOTE

March 27, 2018

FOR VALUE RECEIVED, the undersigned, UNIVERSAL HEALTH REALTY INCOME TRUST, a
real estate investment trust organized under the laws of Maryland (the
“Company”) hereby unconditionally promises to pay, on the Maturity Date (as
defined in the Credit Agreement referred to below), to the order of ___________
(the “Lender”) at the office of Wells Fargo Bank, National Association located
at One Wells Fargo Center, 301 South College Street, 5th Floor, Charlotte, North
Carolina 28288 to the Attention of Andrea Chen, Healthcare Corporate Banking, in
lawful money of the United States of America and in immediately available funds,
the aggregate unpaid principal amount of all Revolving Loans made by the Lender
to the undersigned pursuant to Section 2.1 of the Credit Agreement referred to
below. The undersigned further agrees to pay interest in like money at such
office on the unpaid principal amount hereof and, to the extent permitted by law
and when required by the Credit Agreement, accrued interest owing hereunder from
time to time from the date hereof until payment in full of the principal amount
hereof and accrued interest hereon, at the rates and on the dates set forth in
the Credit Agreement.

The holder of this Note is authorized to endorse the date and amount of each
Revolving Loan pursuant to Section 2.1 of the Credit Agreement and each payment
of principal and interest with respect thereto and its character as a LIBOR Rate
Loan or a Base Rate Loan on Schedule I annexed hereto and made a part hereof, or
on a continuation thereof which shall be attached hereto and made a part hereof,
which endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed; provided, however, that the failure to make any such
endorsement shall not affect the obligations of the undersigned under this Note.

This Note is one of the Notes referred to in the Credit Agreement dated as of
the date hereof among the Company, the Lender, the other Lenders from time to
time parties thereto and Wells Fargo Bank, National Association, as Agent (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), and is entitled to the benefits thereof. Terms used but not
otherwise defined herein shall have the meanings provided in the Credit
Agreement.

Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable, all as provided therein.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Company agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys’ fees.

All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, endorser or otherwise, hereby waive presentment, demand,
protest and all other notices of any kind.

 

2

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

This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

 

UNIVERSAL HEALTH REALTY INCOME TRUST,

a Maryland real estate investment trust

By:     Name:     Title:    

 

3

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

SCHEDULE 1

to

Note

LOANS AND PAYMENTS OF PRINCIPAL

 

Date

   Amount
Of
Loan    Type
of
Loan1    Interest
Rate    Interest
Period    Maturity
Date    Principal
Paid
or
Converted    Principal
Balance    Notation
Made By

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

 

1  The type of Loan may be represented by “L” for LIBO Rate Loans or “BR” for
Base Rate Loans.

 

4

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Exhibit 2.6(a)

[FORM OF]

NOTICE OF PREPAYMENT

Dated as of: ________________

Wells Fargo Bank, National Association,

as Agent

1525 West W.T. Harris Blvd. 1B1

Charlotte, North Carolina 28262

Attn: Nicole Prebeck, Syndication Agency Services

Ladies and Gentlemen:

This irrevocable Notice of Prepayment is delivered to you by Universal Health
Realty Income Trust (the “Company”), in connection with Section 2.6(a) of the
Credit Agreement dated as of March 27, 2018 (as amended, restated or otherwise
modified, the “Credit Agreement”) by and among the Company, the Lenders from
time to time party thereto, and Wells Fargo Bank, National Association, as
administrative agent (the “Agent”).

1. The Company hereby provides notice to the Agent that it shall repay the
following [Base Rate Loans] [LIBOR Rate Loans] [Swingline Loans] in an amount
equal to _____________.

2. The Company shall repay the above-referenced Loans on the following Business
Day: _______________. (Complete with a Business Day at least one (1) Business
Day subsequent to the date of this Notice of Prepayment with respect to any Base
Rate Loan and three (3) Business Days subsequent to the date of this Notice of
Prepayment with respect to any LIBOR Rate Loan).

4. Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Notice of Prepayment this
____ day of _______, ____.

 

UNIVERSAL HEALTH REALTY INCOME TRUST

By:    

Name:    

Title:    

 

5

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Exhibit 2.9(d)

[FORM OF]

SWINGLINE NOTE

March 27, 2018

FOR VALUE RECEIVED, the undersigned, UNIVERSAL HEALTH REALTY INCOME TRUST, a
real estate investment trust organized under the laws of Maryland (the
“Company”) hereby unconditionally promises to pay, on the Maturity Date (as
defined in the Credit Agreement referred to below), to the order of
                     (the “Lender”) at the office of Wells Fargo Bank, National
Association located at One Wells Fargo Center, 301 South College Street, 5th
Floor, Charlotte, North Carolina 28288 to the Attention of Andrea Chen,
Healthcare Corporate Banking, in lawful money of the United States of America
and in immediately available funds, the aggregate unpaid principal amount of all
Swingline Loans made by the Lender to the undersigned pursuant to Section 2.9 of
the Credit Agreement referred to below. The undersigned further agrees to pay
interest in like money at such office on the unpaid principal amount hereof and,
to the extent permitted by law and when required by the Credit Agreement,
accrued interest owing hereunder from time to time from the date hereof until
payment in full of the principal amount hereof and accrued interest hereon, at
the rates and on the dates set forth in the Credit Agreement.

The holder of this Note is authorized to endorse the date and amount of each
Swingline Loan made pursuant to Section 2.9 of the Credit Agreement and each
payment of principal and interest with respect thereto on Schedule 1 annexed
hereto and made a part hereof, or on a continuation thereof which shall be
attached hereto and made a part hereof, which endorsement shall constitute prima
facie evidence of the accuracy of the information endorsed (absent error);
provided, however, that the failure to make any such endorsement shall not
affect the obligations of the undersigned under this Note.

This Note is one of the Notes referred to in the Credit Agreement dated as of
the date hereof among the Company, the Lender, the other Lenders from time to
time parties thereto and Wells Fargo Bank, National Association, as Agent (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), and is entitled to the benefits thereof. Terms used but not
otherwise defined herein shall have the meanings provided in the Credit
Agreement.

Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable, all as provided therein.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Company agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable documented attorneys’ fees.

All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, endorser or otherwise, hereby waive presentment, demand,
protest and all other notices of any kind.

 

6

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This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

 

UNIVERSAL HEALTH REALTY INCOME TRUST,

a Maryland real estate investment trust

By:    

Name:    

Title:    

 

7

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SCHEDULE 1

to

Swingline Note

LOANS AND PAYMENTS OF PRINCIPAL

 

        Date         

           Amount        
of
Loan            Type        
of
Loan            Interest        
Rate            Principal        
Paid            Principal        
Balance            Notation        
Made By

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

8

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

Exhibit 4.1(p)

UNIVERSAL HEALTH REALTY INCOME TRUST

[FORM OF]

SOLVENCY CERTIFICATE

Reference is made to that Credit Agreement dated as of March 27, 2018 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among UNIVERSAL HEALTH REALTY INCOME TRUST, a real estate investment
trust organized under the laws of Maryland (the “Company”), the Lenders from
time to time parties thereto (the “Lenders”) and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Agent. All capitalized terms used herein and not defined shall
have the meanings provided in the Credit Agreement.

1. The undersigned certifies that he has made such investigation and inquiries
as to the financial condition of the Company and its Subsidiaries as he deems
necessary and prudent for the purpose of providing this Certificate. The
undersigned acknowledges that the Agent and the Lenders are relying on the truth
and accuracy of this Certificate in connection with the making of Loans under
the Credit Agreement.

2. The undersigned certifies that the financial information, projections and
assumptions which underlie and form the basis for the representations made in
this Certificate were reasonable when made and were made in good faith and
continue to be reasonable as of the date hereof.

BASED ON AND SUBJECT TO THE FOREGOING and specifically upon such investigation
and inquiries and otherwise to his knowledge, the undersigned certifies that, as
of the date hereof, both before and after giving effect to the Loans:

A. The Company and its Subsidiaries taken as a whole are able to pay their debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business.

B. Neither the Company nor its Subsidiaries intend to, or believe that they
will, incur debts or liabilities beyond the ability of the Company and its
Subsidiaries taken as a whole to pay as such debts and liabilities mature in
their ordinary course.

C. Neither the Company nor its Subsidiaries are engaged in any business or
transaction, or are about to engage in any business or transaction, for which
the assets of the Company and its Subsidiaries taken as a whole would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which the Company and its Subsidiaries are engaged
or are to engage.

D. The present fair saleable value of the consolidated assets of the Company and
its Subsidiaries taken as a whole is not less than the amount that will be
required to pay the probable liability on the debts of the Company and its
Subsidiaries taken as a whole as they become absolute and matured.

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

IN WITNESS WHEREOF, the undersigned has executed this Certificate this
             day of March, 2018, in his capacity as the chief financial officer
of the Company.

 

UNIVERSAL HEALTH REALTY INCOME TRUST

By:    

Name:  

Title:   Chief Financial Officer

 

2

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

Exhibit 4.1(u)

[FORM OF]

PATRIOT ACT CERTIFICATE

 

TO:       Wells Fargo Bank, National Association, as Agent RE:       Credit
Agreement, dated as of March 27, 2018 (as amended, restated or otherwise
modified, the “Credit Agreement”; capitalized terms used herein and not defined
shall have the meanings provided in the Credit Agreement), by and among
UNIVERSAL HEALTH REALTY INCOME TRUST, a real estate investment trust organized
under the laws of Maryland (the “Company”), the Lenders party thereto and WELLS
FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in
such capacity, the “Agent”). DATE :       March 27, 2018

I,                     , hereby certify that I am the duly elected, qualified
and acting                      of the Company and am authorized to execute this
certificate on behalf of the Company. Capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement.

Solely in my capacity as                      of the Company, I hereby certify
on behalf of the Company that attached hereto on Exhibit A is true and complete
information, as requested by the Agent, on behalf of the Lenders, for compliance
with Anti-Money Laundering Laws, including, without limitation, the legal name
and address of the Company and the Guarantors and other information that will
allow the Agent or any Lender, as applicable, to identify the Company and the
Guarantors in accordance with such Anti-Money Laundering Laws.

[Signature on Following Page]

 

3

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

IN WITNESS WHEREOF, I have hereunto set my hand this              day of March,
2018.

 

UNIVERSAL HEALTH REALTY INCOME TRUST

By:    

Name:  

Title:  

 

4

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

Exhibit A

 

Legal Name of the Company:

 

State of Incorporation:

 

Address of Chief Executive Office:

 

Address of Principal Place of Business:

 

 

Legal Name of the Guarantors:

 

States of Incorporation:

 

Address of Chief Executive Offices:

 

Address of Principal Places of Business:

 

 

5

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Exhibit 5.3(d)

UNIVERSAL HEALTH REALTY INCOME TRUST

[FORM OF]

COMPLIANCE CERTIFICATE

This Certificate is delivered in accordance with the provisions of
Section 5.3(d) of that Credit Agreement, dated as of March 27, 2018 (as amended,
modified and supplemented, the “Credit Agreement”) among Universal Health Realty
Income Trust, a real estate investment trust organized under the laws of
Maryland (the “Company”), the Lenders identified therein, and Wells Fargo Bank,
National Association, as administrative agent (the “Agent”). Terms used but not
otherwise defined herein shall have the same meanings provided in the Credit
Agreement.

I, the undersigned, being the [Vice President, Treasurer and Secretary] of the
Company, hereby certify, in my official capacity and not in my individual
capacity, that to the best of my knowledge and belief:

(a) the financial statements fairly present the financial condition of the
parties covered by such financial statements in all material respects;

(b) during the period the Company has observed or performed all of its covenants
and other agreements in all material respects, and satisfied in all material
respects every material condition, contained in the Credit Agreement to be
observed, performed or satisfied by it;

(c) the undersigned has no actual knowledge of any Default or Event of Default
except as specified in the attached; and

(d) attached hereto are detailed calculations demonstrating compliance with the
financial covenants set out in Section 5.5 of the Credit Agreement;

This the              day of [            ] [            ].

 

UNIVERSAL HEALTH REALTY INCOME TRUST

By:    

Name:   [Cheryl K. Ramagano]

Title:   [Vice President, Treasurer and Secretary]

 

6

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

ATTACHMENT TO COMPLIANCE CERTIFICATE

 

7