THIRD AMENDED AND RESTATED TERM LOAN AND SECURITY AGREEMENT
dated as of October 14, 2020
by and among
Certain Affiliates of Diversicare Healthcare Services, Inc., Identified on
Schedule 1.1(a) Attached Hereto, collectively, Borrower,
CIBC BANK USA, f/k/a The PrivateBank and Trust Company,
as Administrative Agent for the Lenders and Joint Lead Arranger,
CIT BANK N.A.,
as Collateral Agent and Joint Lead Arranger,
and
The Financial Institutions Parties Hereto as the Lenders

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THIRD AMENDED AND RESTATED TERM LOAN AND SECURITY AGREEMENT
This THIRD AMENDED AND RESTATED TERM LOAN AND SECURITY AGREEMENT (this
“Agreement”), dated as of October 14, 2020, is by and among certain Affiliates
of Diversicare Healthcare Services, Inc., identified on Schedule 1.1(a) attached
hereto, each a Delaware limited liability company (individually and
collectively, the “Borrower” and/or “Borrowers”), CIBC BANK USA, formerly known
as The PrivateBank and Trust Company, an Illinois banking corporation in its
individual capacity (“CIBC”), and the other financial institutions parties
hereto (together with CIBC, the “Lenders”), and CIBC BANK USA, formerly known as
The PrivateBank and Trust Company, an Illinois banking corporation in its
capacity as administrative agent for the Lenders (together with its successors
and assigns, the “Administrative Agent”).
RECITALS
WHEREAS, certain of the Borrowers, certain of the Lenders, and the
Administrative Agent are parties to that certain Second Amended and Restated
Term Loan and Security Agreement dated as of February 26, 2016 (as amended, the
“Original Term Loan Agreement”);
WHEREAS, certain of the Borrowers and their Affiliates are parties to that
certain Third Amended and Restated Affiliate Revolving Loan and Security
Agreement dated as of February 26, 2016 by and among such Borrowers and such
Affiliates, certain of the Lenders, and Administrative Agent (as amended, the
“Original Affiliate Revolving Loan Agreement”), which is being amended and
restated in connection herewith pursuant to the Affiliate Revolving Loan
Agreement (as defined below);
WHEREAS, certain Affiliates of the Borrower are parties to that certain
Affiliate Revolving Loan and Security Agreement dated as of May 13, 2019 by and
among such Affiliates, certain of the Lenders, and Administrative Agent (as
amended, the “Original Affiliate Revolving Loan Agreement (QIPP)”), which is
being amended and restated in connection herewith pursuant to the Affiliate
Revolving Loan Agreement (QIPP) (as defined below); and
WHEREAS, the parties hereto desire to amend and restate the Original Term Loan
Agreement (and the Borrowers have agreed to continue to secure all of their
Liabilities under the Original Term Loan Agreement and the “Financing
Agreements” entered into in connection therewith by continuing their grant of a
security interest in and lien upon the Collateral described herein), upon the
terms and provisions and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements contained herein, and
of the term loan to be made to or for the benefit of the Borrower by the
Lenders, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereto (intending to be legally
bound) hereby agree as follows:
1.DEFINITIONS
.
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a.General Terms
. When used herein, the following terms shall have the following meanings:
“ACH Transactions” means any cash management or related services (including the
Automated Clearing House processing of electronic fund transfers through the
direct Federal Reserve Fedline system) provided by any Lender for the account of
Borrower or its Subsidiaries.
“Acquisition” means, individually or collectively as the context requires, any
transaction or series of related transactions for the purpose of or resulting,
directly or indirectly, in (a) the acquisition of all or substantially all of
the assets of a Person, or of all or substantially all of any business or
division of a Person, including, without limitation, the acquisition of any
leasehold interest of a Person, (b) the acquisition of in excess of fifty
percent (50%) of the Stock of any Person, or otherwise causing any Person to
become a Subsidiary, (c) a merger or consolidation or any other combination with
another Person (other than a Person that is already a Subsidiary), or (d) the
acquisition of fee ownership of any parcel of real estate.
“Acquisition Agreement” means, individually and collectively as the context
requires, each purchase agreement entered into by one or more Borrowers in
connection with any Acquisition (whether an asset purchase agreement, stock
purchase agreement, contribution agreement, merger agreement, real estate
purchase agreement or otherwise).
“Acquisition Documents” means, collectively, each Acquisition Agreement, bill of
sale, assignment and assumption agreement, real estate contract, special
warranty deed, escrow agreement, assignment of intellectual property, consulting
agreement, management agreement, employment agreement, noncompete agreement,
transition services agreement, and any and all of the other documents,
instruments and agreements executed or delivered in connection therewith or
otherwise in connection with any Acquisition.
“Adjusted EBITDA” means, on a consolidated basis for the applicable Person, the
sum of (a) EBITDA (which calculation shall not include or extend to Hospital
District (as defined in the Affiliate Revolving Loan Agreement (QIPP)) or any
QIPP Funds (as defined in the Affiliate Revolving Loan Agreement (QIPP))), and
(b) the amounts deducted (or less amounts added) in computing EBITDA for the
period for (i) the non-cash provision (benefit) for self-insured professional
and general liability expenses, (ii) non-cash rent expense, (iii) non-cash stock
based compensation expense, (iv) non-cash debt retirement, and (v) all other
non-cash expenses reasonably approved by the Administrative Agent, less (c) the
Cash Cost of Self-Insured Professional and General Liability.
“Adjusted EBITDA (QIPP Funds)” means, on a consolidated basis for the applicable
Person, the sum of (a) EBITDA (which calculation, for the avoidance of doubt,
shall not include or extend to Hospital District (as defined in the Affiliate
Revolving Loan Agreement (QIPP)), but shall include Affiliate Revolving
Borrower’s and any Affiliate Revolving Borrower (QIPP)’s portion of QIPP Funds
(as defined in the Affiliate Revolving Loan Agreement (QIPP)), as applicable),
and (b) the amounts deducted (or less amounts added) in computing EBITDA for the
period for (i) the non-cash provision (benefit) for self-insured professional
and general liability
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expenses, (ii) non-cash rent expense, (iii) non-cash stock based compensation
expense, (iv) non-cash debt retirement, and (v) all other non-cash expenses
reasonably approved by the Administrative Agent, less (c) the Cash Cost of
Self-Insured Professional and General Liability.
“Adjusted EBITDAR” means, on a consolidated basis for the applicable Person, (a)
Adjusted EBITDA plus (b) cash rent expense (rent expense adjusted to remove
effects of non-cash rent).
“Adjusted EBITDAR (QIPP Funds)” means, on a consolidated basis for the
applicable Person, (a) Adjusted EBITDA (QIPP Funds) plus (b) cash rent expense
(rent expense adjusted to remove effects of non-cash rent).
“Administrative Agent” means CIBC Bank USA, formerly known as The PrivateBank
and Trust Company, an Illinois banking corporation, in its capacity as
administrative agent for the Lenders hereunder and any successor thereto in such
capacity.
“Advocat Finance” means Advocat Finance, Inc., a Delaware corporation.
“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling (including, without limitation, all shareholders,
members, directors, partners, managers, and officers of such Person), controlled
by, or under direct or indirect common control with, such Person. A Person shall
be deemed to control another Person if such first Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through ownership of voting securities,
by contract or otherwise; provided, however, neither Administrative Agent nor
any Lender shall be deemed an Affiliate of any Credit Party.
“Affiliate Revolving Borrowers” means each of the entities identified on
Schedule 1.1(c) attached hereto.
“Affiliate Revolving Borrowers (QIPP)” means each of the “Borrowers” party to
the Affiliate Revolving Loan Agreement (QIPP) as a “Borrower” from time to time.
“Affiliate Revolving Loan” means, collectively, those certain Affiliate
Revolving Loans made by the Lenders to the Affiliate Revolving Borrowers from
time to time pursuant to the Affiliate Revolving Loan Agreement.
“Affiliate Revolving Loan (QIPP)” means, collectively, those certain Affiliate
Revolving Loans made by the Lenders to the Affiliate Revolving Borrowers (QIPP)
from time to time pursuant to the Affiliate Revolving Loan Agreement (QIPP).
“Affiliate Revolving Loan Agreement” means that certain Fourth Amended and
Restated Affiliate Revolving Loan and Security Agreement dated of even date
herewith by and among the Affiliate Revolving Borrowers, the Lenders and the
Administrative Agent, as the same may be restated, modified, supplemented or
amended from time to time.
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“Affiliate Revolving Loan Agreement (QIPP)” means that certain Amended and
Restated Affiliate Revolving Loan and Security Agreement dated as of the date
hereof by and among DIVERSICARE MANAGEMENT SERVICES CO., a Tennessee
corporation, in its capacity as borrowing agent for the Affiliate Revolving
Borrowers (QIPP), the Affiliate Revolving Borrowers (QIPP), the Lenders and the
Administrative Agent, as the same may be restated, modified, supplemented or
amended from time to time.
“Affiliate Revolving Loan Financing Agreement” means each “Financing Agreement”
as defined in the Affiliate Revolving Loan Agreement, as any of the same may be
restated, modified, supplemented or amended from time to time.
“Affiliate Revolving Loan Financing Agreement (QIPP)” means each “Financing
Agreement” as defined in the Affiliate Revolving Loan Agreement (QIPP), as any
of the same may be restated, modified, supplemented or amended from time to
time.
“Affiliate Revolving Loan Liabilities” means the “Liabilities” as defined in the
Affiliate Revolving Loan Agreement.
“Affiliate Revolving Loan Liabilities (QIPP)” means the “Liabilities” as defined
in the Affiliate Revolving Loan Agreement (QIPP).
“Agreement” means this Third Amended and Restated Term Loan and Security
Agreement as the same may be restated, modified, supplemented or amended from
time to time.
“Allocable Amount” shall have the meaning ascribed to such term in Section
12.21(g) hereof.
“Applicable Libor Margin” means, with respect to Libor Loans, an amount equal to
four percent (4.00%) per annum.
“Appraisal” means a complete, self-contained appraisal of the Property performed
in accordance with FIRREA and the Administrative Agent’s appraisal requirements
by an independent appraiser MAI licensed in the state in which the Property is
located and selected and retained by the Administrative Agent.
“Asset Disposition” means the sale, lease, assignment or other transfer for
value of greater than Fifty Thousand Dollars ($50,000) by Borrower to any Person
of any personal property of Borrower, other than (a) the sale of any personal
property asset which is to be replaced, and is in fact replaced, within sixty
(60) days thereof with another of equal or substantially similar value and used
in the ordinary course of business of Borrower, (b) the sale or lease of
Inventory in the ordinary course of business, (c) sales in the ordinary course
of business of personal property that is obsolete, unmerchantable or otherwise
unsalable, unusable or unnecessary to Borrower’s business, (d) sales, leases or
assignments of personal property between one Borrower to another Borrower, and
(e) in connection with a Permitted Disposition in accordance with Section 9.6.
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“Assignment Agreement” shall have the meaning ascribed to such term in Section
12.15 hereof.
“Assignment of Rents and Leases” means each of those certain amended and
restated assignment of rents and leases each dated of even date herewith made by
each Propco Borrower and each related Operator, respectively, in favor of the
Administrative Agent, with respect to each parcel of Property, respectively, in
form and substance reasonably satisfactory to the Administrative Agent, as the
same may be amended, supplemented, and modified from time to time.
“Bank Product” means any service provided to, facility extended to, or
transaction entered into with, any Credit Party by any Lender or its Affiliates
consisting of, (a) deposit accounts, (b) cash and treasury management services,
including, controlled disbursement, lockbox, electronic funds transfers
(including, book transfers, fedwire transfers, ACH transfers), online reporting
and other services relating to accounts maintained with any Lender or its
Affiliates, (c) debit cards, purchase cards, and credit cards, (d) Hedging
Agreements, or (e) so long as prior written notice thereof is provided by Lender
(or its Affiliate) providing such service, facility or transaction and
Administrative Agent consents in writing to its inclusion as a Bank Product, any
other service provided to, facility extended to, or transaction entered into
with, any Credit Party by a Lender or its Affiliates.
“Bank Product Agreements” means those agreements entered into from time to time
between any Credit Party and a Lender or its Affiliates in connection with the
obtaining of any of the Bank Products, including, without limitation, Hedging
Agreements.
“Bank Product Obligations” means all obligations, liabilities, reimbursement
obligations, contingent reimbursement obligations, fees, or expenses owing by
any Credit Party to any Lender or its Affiliates pursuant to or evidenced by a
Bank Product Agreement and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all such amounts that a Credit
Party is obligated to reimburse to Administrative Agent or any Lender as a
result of Administrative Agent or such Lender purchasing participations or
executing indemnities or reimbursement obligations with respect to the Bank
Products provided to the Credit Parties pursuant to the Bank Product Agreements.
“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. § 101 et
seq.), as amended from time to time, and any successor statute.
“Base Rate” means, solely with respect to Sections 2.7(b), 3.2, 3.6 and 3.7
hereof, the sum of (a) the corporate base rate of interest per annum identified
from time to time by the Administrative Agent, as its base or prime rate, which
rate shall not necessarily be the lowest rate of interest which the
Administrative Agent charges its customers, and (b) one and three quarters of
one percent (1.75%) per annum; provided, however, at no time shall the Base Rate
hereunder be less than five percent (5.00%) per annum. Any change in the Base
Rate shall be effective as of the effective date of such change.
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“Base Rate Loan” means a Loan that bears interest at an interest rate based upon
the Base Rate, solely with respect to Sections 2.7(b), 3.2, 3.6 and 3.7 hereof.
“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate
(which may include Term SOFR) that has been selected by Administrative Agent and
the Borrower giving due consideration to (i) any selection or recommendation of
a replacement rate or the mechanism for determining such a rate by the Relevant
Governmental Body or (ii) any evolving or then-prevailing market convention for
determining a rate of interest as a replacement to the Libor Base Rate for U.S.
dollar-denominated syndicated credit facilities and (b) the Benchmark
Replacement Adjustment. Notwithstanding anything contained herein to the
contrary, at no time shall the Benchmark Replacement be less than one percent
(1.00%).
“Benchmark Replacement Adjustment” means, with respect to any replacement of the
Libor Base Rate with an Unadjusted Benchmark Replacement for each applicable
Interest Period, the spread adjustment, or method for calculating or determining
such spread adjustment, (which may be a positive or negative value or zero) that
has been selected to by Administrative Agent and the Borrower giving due
consideration to (i) any selection or recommendation of a spread adjustment, or
method for calculating or determining such spread adjustment, for the
replacement of the Libor Base Rate with the applicable Unadjusted Benchmark
Replacement by the Relevant Governmental Body or (ii) any evolving or
then-prevailing market convention for determining a spread adjustment, or method
for calculating or determining such spread adjustment, for the replacement of
the Libor Base Rate with the applicable Unadjusted Benchmark Replacement for
U.S. dollar-denominated syndicated credit facilities at such time.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of “Interest Period,” timing and frequency of
determining rates and making payments of interest and other administrative
matters) that Administrative Agent decides may be appropriate to reflect the
adoption and implementation of such Benchmark Replacement and to permit the
administration thereof by Administrative Agent in a manner substantially
consistent with market practice (or, if Administrative Agent decides that
adoption of any portion of such market practice is not administratively feasible
or if Administrative Agent determines that no market practice for the
administration of the Benchmark Replacement exists, in such other manner of
administration as Administrative Agent decides is reasonably necessary in
connection with the administration of this Agreement).
“Benchmark Replacement Date” means the earlier to occur of the following events
with respect to the Libor Base Rate:
(1)in the case of clause (1) or (2) of the definition of “Benchmark Transition
Event,” the later of (a) the date of the public statement or publication of
information referenced therein and (b) the date on which the administrator of
the Libor Base Rate permanently or indefinitely ceases to provide the Libor Base
Rate; or
(2)in the case of clause (3) of the definition of “Benchmark Transition Event,”
the date of the public statement or publication of information referenced
therein.
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“Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to the Libor Base Rate:
(1)a public statement or publication of information by or on behalf of the
administrator of the Libor Base Rate announcing that such administrator has
ceased or will cease to provide the Libor Base Rate, permanently or
indefinitely, provided that, at the time of such statement or publication, there
is no successor administrator that will continue to provide the Libor Base Rate;
(2)a public statement or publication of information by the regulatory supervisor
for the administrator of the Libor Base Rate, the U.S. Federal Reserve System,
an insolvency official with jurisdiction over the administrator for the Libor
Base Rate, a resolution authority with jurisdiction over the administrator for
the Libor Base Rate or a court or an entity with similar insolvency or
resolution authority over the administrator for the Libor Base Rate, which
states that the administrator of the Libor Base Rate has ceased or will cease to
provide the Libor Base Rate permanently or indefinitely, provided that, at the
time of such statement or publication, there is no successor administrator that
will continue to provide the Libor Base Rate; or
(3)a public statement or publication of information by the regulatory supervisor
for the administrator of the Libor Base Rate announcing that the Libor Base Rate
is no longer representative.
“Benchmark Transition Start Date” means (a) in the case of a Benchmark
Transition Event, the earlier of (i) the applicable Benchmark Replacement Date
and (ii) if such Benchmark Transition Event is a public statement or publication
of information of a prospective event, the 90th day prior to the expected date
of such event as of such public statement or publication of information (or if
the expected date of such prospective event is fewer than 90 days after such
statement or publication, the date of such statement or publication) and (b) in
the case of an Early Opt-in Election, the date specified by Administrative Agent
or Required Lenders, as applicable, by notice to Borrower, Administrative Agent
(in the case of such notice by Required Lenders) and Lenders.
“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to the Libor Base
Rate and solely to the extent that the Libor Base Rate has not been replaced
with a Benchmark Replacement, the period (x) beginning at the time that such
Benchmark Replacement Date has occurred if, at such time, no Benchmark
Replacement has replaced the Libor Base Rate for all purposes hereunder in
accordance with Section 3.11 and (y) ending at the time that a Benchmark
Replacement has replaced the Libor Base Rate for all purposes hereunder pursuant
to Section 3.11.
“Blocked Persons List” shall have the meaning ascribed to such term in Section
7.29 hereof.
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“Borrower Agent” means Diversicare Property.
“Borrower Cash Management Program” means the business practice of Guarantor and
Borrowers whereby cash receipts for Guarantor, Borrowers and the Affiliate
Revolving Borrowers are transferred/swept into a central concentration account
and all cash disbursements are funded by transfers from such central
concentration account.
“Business Day” means (a) with respect to any borrowing, payment or rate
selection of Libor Loans, a day other than Saturday or Sunday on which banks are
open for business in Chicago, Illinois and on which dealings in United States
dollars are carried on in the London interbank market, and (b) for all other
purposes, a day other than Saturday or Sunday on which banks are open for
business in Chicago, Illinois.
“Capital Expenditures” means, as to any Person, any and all expenditures of such
Person for fixed or capital assets, equipment, real property or improvements to
other capital assets, including, without limitation, the incurrence of
Capitalized Lease Obligations, all as determined in accordance with GAAP, except
that Capital Expenditures shall not include (i) expenditures for fixed or
capital assets to the extent such expenditures are paid for or reimbursed from
the proceeds of insurance, condemnation awards and other settlements in respect
of lost, destroyed, damaged, condemned or stolen assets, (ii) expenditures for
assets purchased substantially concurrently with the trade-in of existing assets
to the extent of the trade-in credit thereof; and (iii) any incurrence of
Indebtedness comprising the purchase price for the acquisition, whether by
purchase, merger, consolidation or otherwise, by Borrower of the assets of, or
the equity interest in, a Person or a division, line of business or other
business unit of a Person engaged in a business of the type conducted by
Borrower as of the date hereof or in a business reasonably related thereto.
“Capitalized Lease Obligations” means any amount payable with respect to any
lease of any tangible or intangible property (whether real, personal or mixed),
however denoted, which either (a) is required by GAAP to be reflected as a
liability on the face of the balance sheet of the lessee thereunder, or (b)
based on actual circumstances existing and ascertainable, either at the
commencement of the term of such lease or at any subsequent time at which any
property becomes subject thereto, can reasonably be anticipated to impose on
such lessee substantially the same economic risks and burdens, having regard to
such lessee’s obligations and the lessor’s rights thereunder both during and at
the termination of such lease, as would be imposed on such lessee by any lease
which is required to be so reflected or by the ownership of the leased property.
For avoidance of doubt, prepaid leases shall not be deemed “Capital Lease
Obligations” except to the extent required under GAAP.
“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act (Pub.
L. No. 116-136)(H.R. 748), as amended from time to time, and all rules,
requirements, regulations, and administrative guidance related to the same.
“CARES Act Deferred Payroll Taxes” means, collectively, the employer portion of
Social Security Payroll Taxes deferred by the Credit Parties in accordance with
Section 2302 of the CARES Act.
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“CARES Act Provider Relief Payments” means, collectively, the payments received
by the Credit Parties pursuant to the Public Health and Social Services
Emergency Fund described in the CARES Act.
“Cash Cost of Self-Insured Professional and General Liability” means the total
cash expenditures associated with professional and general liability related
settlements, legal fees and administration costs for all facilities owned or
leased by the Borrower. For purposes of measuring the Cash Cost of Self-Insured
Professional and General Liability for individual facilities or groups of
facilities, these amounts shall be allocated on the basis of licensed beds of
the facility or group of facilities in relation to the total number of licensed
beds for all facilities owned or leased by the Borrower.
“CERCLA” means the Comprehensive Environmental Release Compensation and
Liability Act, 42 U.S.C. § 9601 et seq., as amended.
“Certificates” shall have the meaning ascribed to such term in Section 5.1(e)(7)
hereof.
“CHAMPUS” means the Civilian Health and Medical Program of the Uniformed
Service, a part of TRICARE, a medical benefits program supervised by the U.S.
Department of Defense.
“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule,
regulation, policy, guideline, directive or treaty, (b) any change in any law,
rule, regulation, policy, guideline, directive or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any rule, guideline or
directive (whether or not having the force of law) by any Governmental
Authority; provided that notwithstanding anything herein to the contrary, (x)
the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder or issued in connection therewith and
(y) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law,” regardless of the date enacted, adopted or issued.
“Change of Control” means the occurrence of any one or more of the following
events or conditions, except as the result of a merger or consolidation with, or
merger into, a Borrower (and such Borrower is the surviving entity) or the
dissolution of an inactive subsidiary as permitted in accordance with Section
9.3: (a) Guarantor shall at any time after the Closing Date have control and
voting power over less than all of the issued and outstanding Stock of
Diversicare Management Services Co., (b) Diversicare Management Services Co.
shall at any time after the Closing Date have control and voting power over less
than all of the issued and outstanding Stock of Advocat Finance, (c) Advocat
Finance shall at any time after the Closing Date have control and voting power
over less than all of the issued and outstanding Stock of Diversicare Leasing,
Diversicare Holding and Diversicare Property, (d) Diversicare Holding shall at
any time after the Closing Date have control and voting power over less than all
of the issued and outstanding Stock of Diversicare Kansas, LLC, and Diversicare
of Selma, LLC, (e)
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Diversicare Kansas shall at any time after the Closing Date have control and
voting power over less than all of the issued and outstanding Stock of the
Kansas Opco Borrowers, (f) Diversicare Leasing shall at any time after the
Closing Date have control and voting power, directly or indirectly, over less
than all of the issued and outstanding Stock of the Diversicare Leasing
Subsidiaries, (g) Diversicare Property shall at any time after the Closing Date
have control and voting power over less than all of the issued and outstanding
Stock of the Propco Borrowers, or (h) Guarantor shall cease to directly or
indirectly possess the right to elect (through contract, ownership of voting
securities or otherwise) at all times a majority of the board of directors or
managers (or similar governing body) of each Borrower and Pledgor and to direct
the management policies and decisions of each Borrower and Pledgor.
“CIA” means that certain Corporate Integrity Agreement between the Office of the
Inspector General of the Department of Health and Human Services and Diversicare
Healthcare Services, Inc. effective February 14, 2020, having a term of five (5)
years from the effective date, and entered into contemporaneously with the
Settlement Agreement.
“Closing Date” means October 14, 2020.
“CMS” means the Centers for Medicare and Medicaid Services of HHS and any Person
succeeding to the functions thereof.
“Collateral” shall have the meaning ascribed to such term in Section 6.1 hereof.
“Collateral Agent” shall mean CIT Bank N.A.
“Commercial Leases” means the collective reference to all Leases other than
admission agreements or residency agreements.
“Commitment” means the Term Loan Commitment.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.
“Compliance Certificate” shall have the meaning ascribed to such term in Section
8.1(c) hereof.
“CON” shall have the meaning ascribed to such term in Section 10.2 hereof.
“COVID-19” means the outbreak of the novel coronavirus 2019 (COVID-19) announced
in March 2020 by the World Health Organization as a global pandemic.
“Credit Party” means each Borrower, the Guarantor, and each other Person that is
or becomes primarily or secondarily liable for the Liabilities, whether as a
principal, surety, guarantor, endorser or otherwise.
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“Credit Termination Date” means the earlier of (i) the Stated Maturity Date or
(ii) such other date as is mutually agreed in writing between the Borrower and
the Administrative Agent (with the consent of the Required Lenders).
“Default” means (a) an event, circumstance or condition which through the
passage of time or the service of notice or both would (assuming no action is
taken to cure the same) mature into an Event of Default or (b) an Event of
Default.
“Default Rate” shall have the meaning ascribed to such term in Section 2.7(a)
hereof.
“Defaulting Lender” means any Lender that (a) has failed to fund its portion of
the Loan required to be funded by it hereunder at Closing, (b) has otherwise
failed to pay over to the Administrative Agent or any other Lender any other
amount required to be paid by it hereunder within one Business Day of the date
when due, unless the subject of a good faith dispute or unless such failure has
been cured, or (c) has been deemed insolvent or become the subject of a
bankruptcy or insolvency proceeding.
“Deferred Payroll Taxes Due Date” shall have the meaning ascribed to such term
in Section 8.21(a) hereof.
“Deposit Accounts” means any deposit, securities, operating, lockbox, blocked or
cash collateral account, together with any funds, instruments or other items
credited to any such account from time to time, and all interest earned thereon.
“Diversicare Holding” means Diversicare Holding Company, a limited liability
company.
“Diversicare Kansas” means Diversicare Kansas, LLC, a Delaware limited liability
company.
“Diversicare Leasing” means Diversicare Leasing Corp., a Tennessee corporation.
“Diversicare Leasing Subsidiaries” means Diversicare Afton Oaks, LLC,
Diversicare Briarcliff, LLC, Diversicare Chisolm, LLC, Diversicare Hartford,
LLC, and Diversicare Windsor House, LLC, each a Delaware limited liability
company and each a wholly-owned Subsidiary of Diversicare Leasing.
“Diversicare Property” means Diversicare Property Co., LLC, a Delaware limited
liability company and a wholly-owned Subsidiary of Advocat Finance, Inc.
“Dollars”, “dollars” or “$”each means lawful money of the United States of
America.
“Duly Authorized Officer” means the Chief Executive Officer, the President, the
Chief Operating Officer, the Chief Financial Officer and the Assistant Secretary
of the Borrower.
“Early Opt-in Election” means the occurrence of:
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1.a determination by Administrative Agent or (ii) a notification by Required
Lenders to Administrative Agent (with a copy to Borrower) that Required Lenders
have determined, that U.S. dollar-denominated syndicated credit facilities being
executed at such time, or that include language similar to that contained in
this Section 3.11, are being executed or amended, as applicable, to incorporate
or adopt a new benchmark interest rate to replace the Libor Base Rate, and
2.(i) the election by Administrative Agent or (ii) the election by Required
Lenders to declare that an Early Opt-in Election has occurred and the provision,
as applicable, by Administrative Agent of written notice of such election to
Borrower and Lenders or by Required Lenders of written notice of such election
to Administrative Agent.
“EBITDA” means, on a consolidated basis for the applicable Person, for any
period of determination, the sum of the net earnings of the consolidated Person
before nonrecurring items (in accordance with GAAP and as reasonably agreed to
by the Administrative Agent), interest, taxes, depreciation and amortization,
all as determined in accordance with GAAP, without duplication, consistently
applied.
“Environmental Indemnity Agreement” means that certain Environmental Indemnity
Agreement of even date herewith made by the Borrower in favor of the
Administrative Agent, in form and substance acceptable to the Administrative
Agent, as the same may be amended or modified from time to time.
“Environmental Laws” means all federal, state, local, and foreign statutes,
regulations, ordinances, and similar provisions having the force or effect of
law, all judicial and administrative orders and determinations, and all common
law concerning public health and safety, worker health and safety, pollution, or
protection of the environment, including all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials, substances,
or wastes, chemical substances, or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise, or radiation, including, without limitation,
the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., as
amended; CERCLA; the Toxic Substance Act, 15 U.S.C. § 2601 et seq., as amended;
the Clean Water Act, 33 U.S.C. § 466 et seq., as amended; the Clean Air Act, 42
U.S.C. § 7401 et seq., as amended; state and federal superlien and environmental
cleanup programs; and U.S. Department of Transportation regulations.
“Environmental Notice” means any summons, citation, directive, information
request, notice of potential responsibility, notice of violation or deficiency,
order, claim, complaint, investigation, proceeding, judgment, letters or other
communication, written or oral to the Borrower or any officer thereof, actual or
threatened, from the United States Environmental Protection Agency or other
federal, state or local agency or authority, or any other entity or individual,
public or private, concerning any intentional or unintentional act or omission
which involves Management of Hazardous Substances on or off the property of the
Borrower which
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could result in the Borrower incurring a material liability or which could have
a Material Adverse Effect, or the imposition of any Lien on property, or any
alleged violation of or responsibility under Environmental Laws which could
result in the Borrower incurring a material liability or which could have a
Material Adverse Effect, and, after due inquiry and investigation, any knowledge
of any facts which could give rise to any of the foregoing.
“Equipment” means “equipment” as defined in the Code, including, without
limitation, any and all of the Borrower’s machinery, equipment, vehicles,
fixtures, furniture, computers, appliances, tools, and other tangible personal
property (other than Inventory), whether located on the Borrower’s premises or
located elsewhere, together with any and all accessions, parts and appurtenances
thereto, whether presently owned or hereafter acquired by the Borrower.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
together with the regulations thereunder.
“ERISA Affiliate” means any corporation, trade or business, which together with
the Borrower would be treated as a single employer under Section 4001 of ERISA.
“Event of Default” shall have the meaning ascribed to such term in Section 11.1
hereof.
“Excluded Swap Obligation” means any Swap Obligation that arises from any
guaranty or collateral pledge with respect to the Liabilities that 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 any guarantor’s or pledgor’s failure
for any reason not to constitute an “eligible contract participant” as defined
in the Commodity Exchange Act at the time any applicable guaranty or pledge
agreement or similar collateral document becomes effective with respect to such
related Swap Obligation, but such exclusion shall only be effective for so long
as it would otherwise be so illegal.
“Facility” or “Facilities” shall mean any one or more of the skilled nursing
homes, assisted living facilities, retirement homes, rehabilitation centers or
senior adult care homes or facilities located on the Property as further
identified on Schedule 1.1(d).
“FATCA” means Sections 1471 - 1474 of the Tax Code, as enacted as of the date
hereof (or any amendment or successor to any such Section so long as such
amendment or successor is substantially similar to the purpose and obligations
of and not more onerous to comply with than such Sections as such Sections were
in effect as of the date of this Agreement) and any Treasury Regulation
promulgated thereunder implementing such Sections.
“FCPA” means the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq., as
amended, and the rules and regulations thereunder.
“Federal Funds Rate” shall have the meaning ascribed to such term in Section
13.13 hereof.
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“Federal Reserve Bank of New York’s Website” means the website of the Federal
Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.
“Fee Letter” means any letter agreement entered into from time to time by and
between CIBC and Borrower, pursuant to which, among other things, the
arrangement relating to compensation for certain services rendered by the
Administrative Agent is set forth (together with any similar letter from
Administrative Agent to the Lenders regarding their respective share of any
particular fee payable by Borrower).
“Financing Agreements” means any and all agreements, instruments, certificates
and documents, including, without limitation, security agreements, loan
agreements, notes, guarantees, keep well agreements, landlord waivers,
mortgages, deeds of trust, subordination agreements, intercreditor agreements,
pledges, powers of attorney, consents, assignments, collateral assignments,
perfection certificates, interest rate protection agreements, reimbursement
agreements, contracts, notices, leases, subordination and attornment agreement,
collateral assignments of key man life insurance policies, financing statements
and all other written matter (including, without limitation, this Agreement, the
Term Loan Notes, the Mortgages, the Assignment of Rents and Leases, the
Environmental Indemnity Agreement, the Subordination of Management Agreements,
the Guaranty, the Pledge Agreement, the Certificates, any Fee Letter, each
Hedging Agreement and any other Bank Product Agreement), in each case
evidencing, securing or relating to the Loan and the Liabilities, whether
heretofore, now, or hereafter executed by or on behalf of the Borrower, any
Affiliate, or any other Person, and delivered to or in favor of the
Administrative Agent or any Lender, together with all agreements and documents
referred to therein or contemplated thereby, as each may be amended, modified or
supplemented from time to time.
“FIRREA” means the Financial Institutions Reform, Recovery And Enforcement Act
of 1989, as amended from time to time.
“Fiscal Quarter” means the three (3) month period ending on March 31, June 30,
September 30 and December 31 of each calendar year.
“Fiscal Year” means the twelve (12) month period commencing on January 1 and
ending on December 31 of each calendar year.
“Fixed Charge Coverage Ratio” means, on a consolidated basis for the applicable
Person, on any date of determination, the ratio of (a) Adjusted EBITDAR (QIPP
Funds) for the period of 12 consecutive months then ended, to (b) Fixed Charges,
all as determined in accordance with GAAP, consistently applied.
“Fixed Charges” means, on a consolidated basis for the applicable Person, any
period of determination, the sum of, without duplication: (a) regularly
scheduled payments of principal with respect to all Indebtedness for borrowed
money; plus (b) cash interest expense for Indebtedness that has been paid during
such period (including, without limitation, interest attributable to issued and
outstanding Letters of Credit (as defined in the Affiliate Revolving Loan
Agreement)); plus (c) Net Capital Expenditures; plus (d) cash rent expense that
has been
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paid during such period; plus (e) dividends on stock; plus (f) cash paid income
taxes during such period; plus (g) payments pursuant to the Settlement Agreement
that have been paid during such period, all of the foregoing as determined in
accordance with GAAP, without duplication, consistently applied.
“Forgiveness Determination Date” shall have the meaning ascribed to such term in
Section 9.12 hereof.
“GAAP” means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board (or any successor authority) that are
applicable to the circumstances as of the date of determination.
“General Intangibles” means “general intangibles” as defined in the Code,
including, without limitation, any and all general intangibles, choses in
action, causes of action, rights to the payment of money (other than Accounts),
and all other intangible personal property of the Borrower of every kind and
nature wherever located and whether currently owned or hereafter acquired by the
Borrower (other than Accounts), including, without limitation, corporate or
other business records, inventions, designs, patents, patent applications,
service marks, service mark applications, trademark applications, brand names,
trade names, trademarks and all goodwill symbolized thereby and relating
thereto, trade styles, trade secrets, registrations, domain names, websites,
computer software, advertising materials, distributions on certificated and
uncertificated securities, investment property, securities entitlements,
goodwill, operational manuals, product formulas for industrial processes,
blueprints, drawings, copyrights, copyright applications, rights and benefits
under contracts, licenses, license agreements, permits, approvals,
authorizations which are associated with the operation of the Borrower’s
business and granted by any Person, franchises, customer lists, deposit
accounts, tax refunds, tax refund claims, and any letters of credit, guarantee
claims, security interests or other security held by or granted to the Borrower
to secure payment by an Account Debtor of any of Borrower’s Accounts, and, to
the maximum extent permitted by applicable Law, any recoveries or amounts
received in connection with any litigation or settlement of any litigation.
“Governing Documents” shall have the meaning ascribed to such term in Section
9.14 hereof.
“Governmental Approvals” means, collectively, all consents, licenses, and
permits and all other authorizations or approvals required from any Governmental
Authority to operate the Locations.
“Governmental Authority” means and includes any federal, state, District of
Columbia, county, municipal, or other government and any political subdivision,
department, commission, board, bureau, agency or instrumentality thereof,
whether domestic or foreign.
“Guarantor” means Diversicare Healthcare Services, Inc., a Delaware corporation
in its capacity as the guarantor pursuant to the Guaranty or as otherwise
provided in this Agreement.
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“Guaranty” means that certain Second Amended and Restated Guaranty of even date
herewith by Guarantor in favor of the Administrative Agent, in form and
substance reasonable satisfactory to the Administrative Agent, as the same may
be amended, restated, reaffirmed, modified or supplemented from time to time.
“Hazardous Substances” means hazardous substances, materials, wastes, and waste
constituents and reaction by-products, pesticides, oil and other petroleum
products, and toxic substances, including, without limitation, asbestos and
PCBs, as those terms are defined pursuant to Environmental Laws.
“Healthcare Laws” means all applicable Laws relating to the possession, control,
warehousing, marketing, sale and distribution of pharmaceuticals, the operation
of medical or senior housing facilities (such as, but not limited to, nursing
homes, skilled nursing facilities, rehabilitation hospitals, intermediate care
facilities, assisted living and adult care facilities), patient healthcare,
patient healthcare information, patient abuse, the quality and adequacy of
medical care, rate setting, equipment, personnel, operating policies, fee
splitting, including, without limitation, (a) all federal and state fraud and
abuse laws, including, but not limited to the federal Anti-Kickback Statute (42
U.S.C. §1320a-7b(6)), the Stark Law (42 U.S.C. §1395nn), the civil False Claims
Act (31 U.S.C. §3729 et seq.); (b) TRICARE; (c) CHAMPUS, (d) Medicare; (e)
Medicaid; (f) HIPAA; (g) quality, safety and accreditation standards and
requirements of all applicable state laws or regulatory bodies; (h) all laws,
policies, procedures, permits, requirements, certifications, and regulations
pursuant to which licenses, approvals and accreditation certificates are issued
in order to operate medical, senior housing facilities, assisted living
facilities, or skilled nursing facilities; and (i) any and all other applicable
health care laws, regulations, manual provisions, policies and administrative
guidance, each of (a) through (i) as may be amended from time to time.
“Hedging Agreement” means any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or
arrangement designed to protect a Person against fluctuations in interest rates,
currency exchange rates or commodity prices, in each case in form and substance
satisfactory to the Administrative Agent, as the same may be amended or modified
from time to time; provided, Borrower will only enter into any such Hedging
Agreement with CIBC, CIT Bank N.A. or Lake Forest Bank & Trust Company, N.A. or
another Lender reasonably approved by Administrative Agent.
“HHS” means the United States Department of Health and Human Services and any
Person succeeding to the functions thereof.
“HIPAA” means the Health Insurance Portability and Accountability Act of 1996,
as the same may be amended, modified or supplemented from time to time, and any
successor statute thereto, and any and all rules or regulations promulgated from
time to time thereunder.
“HUD” means the United States Department of Housing and Urban Development and
any successor thereto.
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“HUD Financing” means an Indebtedness of a Propco Borrower or Propco Borrowers
that is insured by HUD under one of its programs for HUD insured loans for long
term care facilities, including a HUD insured loan under Section 223(f) for
senior housing facilities and Section 232 for nursing home and assisted living
facilities of the National Housing Act, and any refinancing, refunding,
extension or renewal thereof, and which Indebtedness is to be secured by the
assets and properties owned or held by such Propco Borrower or Propco Borrowers,
including the Facility or Facilities owned and operated by such Propco Borrower
or Propco Borrowers.
“Hutchinson Acquisition” means the sale/purchase transaction intended to be
consummated on the Closing Date pursuant to and in accordance with the
Hutchinson Acquisition Documents.
“Hutchinson Acquisition Agreement” means that certain Purchase Option Agreement
dated as of January 22, 2015, by and among Hutchinson Seller and Hutchinson
Opco, the right thereunder of Hutchinson Opco to purchase the Hutchinson, Kansas
Facility having been assigned to Hutchinson Propco.
“Hutchinson Acquisition Documents” means, collectively, the Hutchinson
Acquisition Agreement, and any and all of the other material documents,
instruments and agreements executed or delivered in connection therewith, in
each case as the same may be amended or modified in conformity with Section 9.16
of this Agreement.
“Hutchinson Opco” means Diversicare of Hutchinson, LLC, a Delaware limited
liability company and the lessee-operator of the Hutchinson, Kansas Facility.
“Hutchinson Propco” means Diversicare Hutchinson Property, LLC, a Delaware
limited liability company and a wholly-owned Subsidiary of Diversicare Property
Co., LLC.
“Hutchinson Seller” means Golden Plains Real Estate, LLC, a Kansas limited
liability company.
“Indebtedness” with respect to any Person means, as of the date of determination
thereof, (a) all of such Person’s indebtedness for borrowed money, (b) all
indebtedness of such Person or any other Person secured by any Lien with respect
to any property or asset owned or held by such Person, regardless whether the
indebtedness secured thereby shall have been assumed by such Person or such
Person has become liable for the payment thereof, (c) all Capitalized Lease
Obligations of such Person and obligations or liabilities created or arising
under conditional sale or other title retention agreement with respect to
property used and/or acquired by Borrower even though the rights and remedies of
the lessor, seller and/or lender thereunder are limited to repossession of such
property, (d) all unfunded pension fund obligations and liabilities, (e) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (f) all obligations in respect of letters of credit, whether or not
drawn, and bankers’ acceptances issued for the account of such Person, (g)
deferred and/or accrued taxes and all unfunded pension fund obligations and
liabilities, (h) all guarantees by such Person, or any undertaking by such
Person to be liable for, the debts or obligations of any other Person, described
in clauses (a) through (h),
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(i) any Stock of such Person, whether or not mandatorily redeemable, that under
GAAP is characterized as debt, whether pursuant to Financial Accounting
Standards Board Issuance No. 150 or otherwise, and (j) all Bank Product
Obligations of such Person.
“Indemnified Liabilities” shall have the meaning ascribed to such term in
Section 12.16 hereof.
“Indemnified Parties” shall have the meaning ascribed to such term in Section
12.16 hereof.
“Intellectual Property” means all of the following in any jurisdiction
throughout the world: (a) all inventions (whether patentable or unpatentable and
whether or not reduced to practice), all improvements thereto, and all patents,
patent applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and reexaminations
thereof, (b) all trademarks, service marks, trade dress, logos, slogans, trade
names, corporate names, Internet domain names, and rights in telephone numbers,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all mask works and all applications, registrations,
and renewals in connection therewith, (e) all trade secrets and confidential
business information (including ideas, research and development, know-how,
formulas, compositions, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals),
(f) all computer software (including source code, executable code, data,
databases, and related documentation), (g) all material advertising and
promotional materials, (h) all other proprietary rights, and (i) all copies and
tangible embodiments thereof (in whatever form or medium).
“Inventory” means “inventory” as defined in the Code, including, without
limitation, any and all inventory and goods of the Borrower, wheresoever
located, whether now owned or hereafter acquired by the Borrower, which are held
for sale or lease, furnished under any contract of service or held as raw
materials, work-in-process or supplies, and all materials used or consumed in
the Borrower’s business, and shall include such property the sale or other
disposition of which has given rise to Accounts and which has been returned to
or repossessed or stopped in transit by the Borrower.
“Joint Liability Payment” shall have the meaning ascribed to such term in
Section 12.21(g) hereof.
“Kansas Opco Borrowers” means Diversicare of Chanute, LLC, Diversicare of
Council Grove, LLC, Diversicare of Haysville, LLC, Diversicare of Hutchinson,
LLC, Diversicare of Larned, LLC, and Diversicare of Sedgwick, LLC, each a
Delaware limited liability company.
“Laws” means, collectively, all federal, state and local laws, statutes, codes,
ordinances, orders, rules and regulations, including judicial opinions or
presidential authority in the
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applicable jurisdiction and Healthcare Laws and Environmental Laws, now or
hereafter in effect, and in each case as amended or supplemented from time to
time.
“Leases” means all leases, subleases, licenses, concessions and other agreements
(written or oral), including all amendments, extensions, renewals, guaranties,
and other agreements with respect thereto, pursuant to which the Borrower holds
any leased real property (including, without limitation, the Commercial Leases
and Operating Leases).
“Lender Parties” shall have the meaning ascribed to such term in Section 12.24
hereof.
“Liabilities” means any and all of each of the Borrower’s liabilities,
obligations and Indebtedness to the Lenders and the Administrative Agent of any
and every kind and nature, whether heretofore, now or hereafter owing, arising,
due or payable and howsoever evidenced, created, incurred, acquired, or owing,
whether primary, secondary, direct, indirect, contingent, absolute, fixed or
otherwise (including, without limitation, payments of or for principal,
interest, default interest, reimbursement obligations, interest rate hedging
obligations, fees, costs, expenses, and/or indemnification, and obligations of
performance, and any other fee due or payable to Administrative Agent or Lenders
in connection with any Financing Agreement, the Prepayment Premium, and all Bank
Product Obligations, and any interest that accrues after commencement of any
insolvency or bankruptcy proceeding regardless of whether allowed or allowable
in whole or in part as a claim in any such insolvency or bankruptcy proceeding)
and whether arising or existing under written agreement, oral agreement, or by
operation of law, including, without limitation, all of each Borrower’s
Indebtedness, liabilities and obligations to the Lenders and the Administrative
Agent under this Agreement (whether relating to the Loan or otherwise and
including, without limitation, all of each Borrower’s Bank Product Obligations)
or each Hedging Agreement (but excluding any Excluded Swap Obligation) and any
and all other Financing Agreements to which Borrower is a party, and any
refinancings, substitutions, extensions, renewals, replacements and
modifications for or of any or all of the foregoing.
“Libor Base Rate” means a rate of interest equal to (a) the per annum rate of
interest at which United States dollar deposits in an amount comparable to the
amount of the relevant Libor Loan and for a period equal to the Libor Interest
Period are offered in the London Interbank Eurodollar market at 11:00 A.M.
(London time) two (2) Business Days prior to the commencement of such Libor
Interest Period (or three (3) Business Days prior to the commencement of such
Libor Interest Period if banks in London, England were not open and dealing in
offshore United States dollars on such second preceding Business Day), as
displayed in the Bloomberg Financial Markets system (or other authoritative
source selected by the Administrative Agent in its sole discretion) or, if the
Bloomberg Financial Markets system or another authoritative source is not
available, as the Libor Base Rate is otherwise determined by the Administrative
Agent in its sole and absolute discretion, divided by (b) a number determined by
subtracting from 1.00 the then stated maximum reserve percentage for determining
reserves to be maintained by member banks of the Federal Reserve System for
Eurocurrency funding or liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D), such rate to remain fixed for such
Libor Interest Period. The Administrative Agent’s determination of the Libor
Base Rate shall be conclusive, absent manifest error.
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Notwithstanding anything contained herein to the contrary, at no time shall the
Libor Base Rate be less than one percent (1.00%).
“Libor Interest Period” means, with respect to any Libor Loan, successive one
(1) month periods, provided, however, that: (a) each Libor Interest Period
occurring after the initial Libor Interest Period of any Libor Loan shall
commence on the day on which the preceding Libor Interest Period for such Libor
Loan expires, with interest for such day to be calculated at the Libor Rate in
effect for the new Libor Interest Period; (b) whenever the last day of any Libor
Interest Period would otherwise occur on a day other than a Business Day, the
last day of such Libor Interest Period shall be extended to occur on the next
succeeding Business Day; (c) whenever the first day of any Libor Interest Period
occurs on a date for which there is no numerically corresponding date in the
month in which such Libor Interest Period terminates, such Libor Interest Period
shall end on the last day of such month, unless such day is not a Business Day,
in which case the Libor Interest Period shall terminate on the first Business
Day of the following month, provided, further, that so long as the Libor
Rollover remains in effect, all subsequent Libor Interest Periods shall
terminate on the date of the month numerically corresponding to the date on
which the initial Libor Interest Period commenced; and (d) if at any time the
Libor Interest Period for a Libor Loan expires less than one month before the
Stated Maturity Date, such Libor Loan shall automatically renew at the then
current Libor Rate for a Libor Interest Period terminating on the Stated
Maturity Date.
“Libor Loan” means a Loan which bears interest at a Libor Rate.
“Libor Rate” means, with respect to a Libor Loan for the relevant Libor Interest
Period, the sum of the Libor Base Rate applicable to that Libor Interest Period,
plus the Applicable Libor Margin.
“Libor Rollover” means that each Libor Loan shall automatically renew for the
Libor Interest Period specified in this Agreement at the then current Libor
Rate, except that a Libor Interest Period for a Libor Loan shall not
automatically renew with respect to any principal amount which is scheduled to
be repaid before the last day of the applicable Libor Interest Period, and any
such amounts shall bear interest at the Base Rate, until repaid.
“Licenses” shall have the meaning ascribed to such term in Section 10.2 hereof
“Lien” means any lien, security interest, mortgage, pledge, hypothecation,
collateral assignment, or other charge, encumbrance or preferential arrangement,
including, without limitation, the retained security title of a conditional
vendor or lessor.
“Loan Account” shall have the meaning ascribed to such term in Section 2.5
hereof.
“Loan” means the Term Loan and, if applicable, any and all other advances made
by the Lenders (or, if applicable, the Administrative Agent) to the Borrower
pursuant to the terms of this Agreement or any other Financing Agreement. The
term “Loans” shall mean, collectively, the Term Loan and, if applicable, any and
all other advances made by the Lenders (or, if
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applicable, the Administrative Agent) to the Borrower pursuant to the terms of
this Agreement or any other Financing Agreement.
“Location” or “Locations” mean one or more of the healthcare or other facilities
owned by the Propco Borrowers and operated by the Operators on the Property as
identified on Schedule 1.1(d) hereto.
“Manage” or “Management” means to generate, handle, manufacture, process, treat,
store, use, re-use, refine, recycle, reclaim, blend or burn for energy recovery,
incinerate, accumulate speculatively, transport, transfer, dispose of, release,
threaten to release or abandon Hazardous Substances.
“Management Agreements” means, collectively, those certain Management Agreements
between (i) Manager and each Operator for the operation and management of the
Facilities and (ii) Manager and Diversicare Therapy Services, LLC, for
bookkeeping, accounting, payroll, billing and management of its contract therapy
services.
“Manager” means Diversicare Management Services Co.
“Material Adverse Change” or “Material Adverse Effect” means, with respect to
any event, act, condition or occurrence of whatever nature (including any
adverse determination in any litigation, arbitration, or governmental
investigation or proceeding), whether singly or in conjunction with any other
event or events, act or acts, condition or conditions, occurrence or
occurrences, whether or not related, any of the following: (a) a material
adverse change in, or a material adverse effect upon, the financial condition,
operations, business or properties of the Credit Parties, taken as a whole, (b)
a material adverse change in, or a material adverse effect upon, the rights and
remedies of the Administrative Agent or the Lenders under any Financing
Agreement or the ability of the Credit Parties, taken as a whole, to perform
their payment or other obligations under any Financing Agreement to which they
are parties, (c) a material adverse change in, or a material adverse effect
upon, the legality, validity or enforceability of any Financing Agreement, (d) a
material adverse change in, or a material adverse effect upon, the existence,
perfection or priority of any security interest granted in any Financing
Agreement or the value of any material Collateral not resulting from any action
or inaction by the Administrative Agent, or (e) any liability of the Credit
Parties, or any one or more of them, in excess of Five Hundred Thousand and
No/100 Dollars ($500,000.00) in the aggregate as a result the final adjudication
of one or more violations of any Healthcare Law which remains unpaid for a
period of thirty (30) days, unless such liability is being contested or appealed
by appropriate proceedings and Borrower has established appropriate reserves
adequate for payment in the event such appeal or contest is ultimately
unsuccessful, provided further that in the event such contest or appeal is
ultimately unsuccessful, the Borrower shall pay the assessment no later than the
deadline set forth by the applicable agency.
“Maximum Term Loan Facility” means an amount equal to $62,000,000.
“Medicaid” mean collectively all federal statutes (whether set forth in Title
XIX of the Social Security Act or elsewhere) affecting the health insurance
program established by Title
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XIX of the Social Security Act (42 U.S.C. §§ 1396, et seq.), together with all
applicable provisions of all rules, regulations, manuals, final orders and
administrative, reimbursement and other applicable guidelines of all
governmental authorities, including HHS, CMS or the Office of the Inspector
General of HHS, or any Person succeeding to the functions of any of the
foregoing (whether or not having the force of law).
“Medicare” mean collectively all federal statutes (whether set forth in Title
XVIII of the Social Security Act or elsewhere) affecting the health insurance
program for the aged and disabled established by Title XVIII of the Social
Security Act (42 U.S.C. § 1395, et seq.), together with all applicable
provisions of all rules, regulations, manuals, final orders and administrative,
reimbursement and other applicable guidelines of all governmental authorities,
including HHS, CMS or the Office of the Inspector General of HHS, or any Person
succeeding to the functions of any of the foregoing (whether or not having the
force of law).
“Medicare Accelerated and Advance Payment Program” means the Accelerated and
Advance Payment Program for Medicare Part A and Part B providers and suppliers
as expanded during the period of the COVID-19 public health emergency by Section
3719 of the CARES Act, as amended from time to time, and all rules,
requirements, regulations, and administrative guidance related to the same.
“Mortgages” means, collectively, each of those certain amended and restated
deeds of trust and amended and restated mortgages, each dated of even date
herewith made by the Propco Borrower and related Operator, respectively,
granting and conveying to the Administrative Agent for the ratable benefit of
the Lenders first mortgage Liens on the Property as identified on Schedule
1.1(d), as the same may be amended, restated, supplemented or modified from time
to time
“Multiemployer Plan” shall have the meaning ascribed to such term in Section
7.19 hereof.
“Net Capital Expenditures” means Capital Expenditures minus the sum of (a) any
financing used in connection with such expenditures (including, without
limitation, any financing of capital improvements provided by a landlord and
recovered through rental payments), and (b) amounts actually incurred in
connection with Capital Expenditures made in connection with the Facilities (as
defined in the Affiliate Revolving Loan Agreement and Affiliate Revolving Loan
Agreement (QIPP)).
“Non-U.S. Participant” shall have the meaning ascribed to such term in Section
3.3 hereof.
“OFAC Lists” means, collectively, the Specially Designated Nationals and Blocked
Persons List maintained by the Office of Foreign Asset Control, the Department
of the Treasury pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079
(Sept. 25, 2001) and/or any other list of terrorists or terrorist organizations
maintained pursuant to any of the rules and regulations of or by the Office of
Foreign Asset Control, the Department of the Treasury or pursuant to any
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other applicable Executive Orders, as such lists may be amended or supplemented
from time to time.
“Operating Lease” means the collective reference to any Commercial Leases
between the Propco Borrower and any Operators, respectively, pursuant to which
such Operators lease and operate each Location.
“Operator(s)” means the respective operators of the Locations, all of which are
licensed under all applicable Healthcare Laws.
“Note(s)” means, collectively, the Term Loan Notes.
“Participant” shall have the meaning ascribed to such term in Section 12.15(d)
hereof.
“Patriot Act” shall have the meaning ascribed to such term in Section 8.16
hereof.
“Payment In Full” means the indefeasible payment in full in cash of all Loans
and other Liabilities (and all of the Affiliate Revolving Loan Liabilities),
other than contingent indemnification obligations for which no claims have been
asserted (and the termination of the Affiliate Revolving Loan Commitment in
accordance with the terms and conditions of the Affiliate Revolving Loan
Agreement).
“PBGC” shall have the meaning ascribed to such term in Section 7.19 hereof.
“Permitted Acquisition” means an Acquisition by a Borrower that (i) fully
complies with the terms and conditions set forth in Exhibit D attached hereto
and made a part of this Agreement by this reference thereto, and (ii) without
limiting the conditions identified on Exhibit D hereto, is otherwise approved in
advance in writing by the Administrative Agent, which approval will not be
unreasonably withheld, conditioned or delayed.
“Permitted Liens” shall have the meaning ascribed to such term in Section 9.1
hereof.
“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, limited liability company, unincorporated organization, association,
corporation, institution, entity, party, or government (whether national,
federal, state, provincial, county, city, municipal or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof).
“Plan” shall have the meaning ascribed to such term in Section 7.19 hereof.
“Pledge Agreements” means, collectively, that certain (a) Third Amended and
Restated Pledge Agreement of even date herewith made by Guarantor in favor of
the Administrative Agent, (b) Third Amended and Restated Pledge Agreement of
even date herewith made by Diversicare Management Services Co., a Tennessee
corporation, in favor of the Administrative Agent, (c) Third Amended and
Restated Pledge Agreement of even date herewith made by Advocat Finance, Inc., a
Delaware corporation, in favor of the Administrative Agent, (d) Third Amended
and Restated Pledge Agreement of even date herewith made by Diversicare Leasing
in
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favor of the Administrative Agent, (e) Third Amended and Restated Pledge
Agreement of even date herewith made by Senior Care Florida Leasing, LLC, a
Delaware limited liability company, in favor of the Administrative Agent, (f)
Second Amended and Restated Pledge Agreement of even date herewith of
Diversicare Leasing Company II, LLC, a Delaware limited liability company, in
favor of the Administrative Agent (g) Second Amended and Restated Pledge
Agreement of even date herewith of Diversicare Holding in favor of the
Administrative Agent, (h) Second Amended and Restated Pledge Agreement of even
date herewith of Diversicare Kansas in favor of the Administrative Agent, (i)
Second Amended and Restated Pledge Agreement of even date herewith of
Diversicare Property in favor of the Administrative Agent, and (j) Amended and
Restated Pledge Agreement of even date herewith of Diversicare Leasing Company
III, LLC, a Delaware limited liability company, in favor of the Administrative
Agent, each of the foregoing in form and substance reasonable satisfactory to
the Administrative Agent, as the same may be modified, supplemented or amended
from time to time in accordance with the terms thereof.
“Pledgor” means the “Pledgor” as such term is respectively defined in each
Pledge Agreement.
“PPP Loan” means any loan made by a U.S. Small Business Administration (“SBA”)
qualified lender to a Credit Party and guaranteed by the SBA pursuant to the
Paycheck Protection Program provisions of the CARES Act.
“Prepayment Premium” means, with respect to any prepayment of the Term Loan
pursuant to Section 2.10, three percent (3%) of the amount of the outstanding
principal balance of the Term Loan prepaid if such prepayment occurs on or prior
to the first (1st) year anniversary of the Closing Date; two percent (2%) of the
amount of the outstanding principal balance of the Term Loan prepaid if such
prepayment occurs after the first anniversary hereof and on or prior to the
second (2nd) year anniversary of the Closing Date; and one percent (1%) of the
amount of the outstanding principal balance of the Term Loan prepaid if such
prepayment occurs at any time after the second anniversary hereof.
“Pro Rata Share” means, (x) with respect to a Lender’s obligation to make any
portion of the Term Loan and receive payments of principal, interest, fees,
costs, and expenses with respect thereto, (a) prior to the making of the Term
Loan, the percentage obtained by dividing (i) such Lender’s Term Loan
Commitment, by (ii) the aggregate amount of all Lenders’ Term Loan Commitments,
and (b) from and after the making of the Term Loan, the percentage obtained by
dividing (i) the principal amount of such Lender’s Term Loan by (ii) the
aggregate principal amount of the Term Loan held by all Lenders, and (y) with
respect to a Lender’s obligation to make any portion of the Loan and receive
payments of principal, interest, fees, costs, and expenses with respect thereto,
(a) prior to the making of the Term Loan, the percentage obtained by dividing
(i) such Lender’s Commitment, by (ii) the aggregate amount of all Lenders’
Commitments, and (b) from and after the making of the Term Loan, the percentage
obtained by dividing (i) the principal amount of such Lender’s Loan by (ii) the
aggregate principal amount of the Loans held by all Lenders.
“Prohibited Transaction” shall have the meaning ascribed to such term in ERISA.
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“Propco Borrowers” means the limited liability companies identified on Schedule
1.1(b) attached hereto, each a Delaware limited liability company and each a
wholly-owned Subsidiary of Diversicare Property Co., LLC.
“Property” means any and all real property owned, leased, sub-leased or used at
any time by Borrower, including the real estate owned by the Propco Borrower
identified on Schedule 1.1(d).
“Register” shall have the meaning ascribed to such term in Section 12.15(d)
hereof.
“Release” means any actual or threatened spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing of Hazardous Substances into the environment, as “environment” is
defined in CERCLA.
“Released Parties” shall have the meaning ascribed to such term in Section 12.24
hereof.
“Releasing Parties” shall have the meaning ascribed to such term in Section
12.24 hereof.
“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal
Reserve Bank of New York, or a committee officially endorsed or convened by the
Federal Reserve Board and/or the Federal Reserve Bank of New York or any
successor thereto.
“Required Lenders” means, as of any date of determination, (a) if there are
three (3) or fewer Lenders, Lenders holding one hundred percent (100%) of the
sum of the outstanding principal balance of the Loan at such time, or (b) if
there are more than three (3) Lenders, Lenders holding sixty-six and two-thirds
percent (662/3%) or more of the sum of the outstanding principal balance of the
Loan at such time, provided, that the Commitments of, and the portion of the
Liabilities held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders, and any Lender and its
Affiliates shall be counted as a single Lender for purposes of making a
determination of Required Lenders.
“Respond” or “Response” means any action taken pursuant to Environmental Laws to
correct, remove, remediate, cleanup, prevent, mitigate, monitor, evaluate,
investigate or assess the Release of a Hazardous Substance.
“Restricted Agreements” means, collectively, each Management Agreement, each
Commercial Lease, each agreement, document or instrument entered into in
connection with (directly or indirectly) the Borrower Cash Management Program,
the Hutchinson Acquisition Documents, the Selma Acquisition Documents, and, if
applicable at any time, any material agreement entered into by a Borrower in
connection with a Permitted Acquisition (including, without limitation, each
Acquisition Agreement), the Settlement Agreement, and any other agreement,
document or instrument between or among the Credit Parties and any agreement,
document or instrument pertaining to (directly or indirectly) any of the
foregoing.
“Restrictions” shall have the meaning ascribed to such term in Section 10.3
hereof.
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“Selma Acquisition” means the sale/purchase transaction intended to be
consummated on June 30, 2017 pursuant to and in accordance with the Selma
Acquisition Documents.
“Selma Acquisition Agreement” means that certain Asset Purchase Agreement dated
as of June 8, 2017 by and among the Sellers (as defined therein) and Selma Opco,
as amended by the First Amendment dated as of June 19, 2017.
“Selma Acquisition Documents” means, collectively, the Selma Acquisition
Agreement, and any and all of the other material documents, instruments and
agreements executed or delivered in connection therewith, in each case as the
same may be amended or modified in conformity with Section 9.16 of this
Agreement.
“Selma Opco” means Diversicare of Selma, LLC.
“Service Fee” shall have the meaning ascribed to such term in Section 8.9
hereof.
“Settlement Agreement” means that certain Settlement Agreement entered into and
effective as of February 14, 2020, among the United States of America, acting
through the United States Department of Justice and on behalf of the Office of
the Inspector General (OIG-HHS) of the Department of Health and Human Services
(HHS), the State of Tennessee, acting through the Tennessee Attorney General and
Reporter and on behalf of its Medicaid program, Diversicare Healthcare Services,
Inc., and Mary Haggard and Bryant Fitzmorris, providing for annual payments by
Diversicare Healthcare Services, Inc. over a period of five (5) years with a
final payment on February 23, 2025, entered into contemporaneously with the CIA.
“SOFR” with respect to any day means the secured overnight financing rate
published for such day by the Federal Reserve Bank of New York, as the
administrator of the benchmark, (or a successor administrator) on the Federal
Reserve Bank of New York’s Website.
“Solvent” means, with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person; (b) the
present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured; (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay as such debts and liabilities mature; and (d) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person’s property would constitute
an unreasonably small capital. The amount of contingent liabilities (such as
litigation, guaranties and pension plan liabilities) at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability, but shall not include incurred but not
reported professional liability claims.
“Stated Maturity Date” means September 30, 2023.
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“Stock” shall mean all certificated and uncertificated shares, stock, options,
warrants, general or limited partnership interests, membership interests or
units, limited liability company interests, participation or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity whether voting or nonvoting, including
common stock, preferred stock, or any other “equity security” (as such term is
defined in Rule 3a111 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934).
“Subordinated Debt” means any and all Indebtedness owing by the Borrower to a
third party that has been subordinated to the Liabilities in writing on terms
and conditions satisfactory to the Administrative Agent in its sole and absolute
discretion.
“Subordination Agreement” means, collectively, any subordination agreements
entered into from time to time by holders of Subordinated Debt and the
Administrative Agent, each in form and substance satisfactory to the
Administrative Agent in its sole and absolute discretion, each as the same may
be modified, supplemented, amended or restated from time to time.
“Subordination of Management Agreements” means that certain Amended and Restated
Assignment and Subordination of Management Agreements of even date herewith made
by the Propco Borrowers, each Borrower that is also an Operator, the Manager in
favor of the Administrative Agent, in form and substance reasonable satisfactory
to the Administrative Agent, as the same may be modified, restated, supplemented
or amended from time to time in accordance with the terms thereof.
“Subsidiary” means, with respect to any Person, (i) any corporation of which an
aggregate of more than fifty percent (50%) of the outstanding Stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, Stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person and/or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock whether by
proxy, agreement, operation of law or otherwise, and (ii) any partnership or
limited liability company in which such Person or one or more Subsidiaries of
such Person has an equity interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%) or of which any such Person is a general partner, managing member or
manager or may exercise the powers of a general partner, managing member or
manager.
“Swap Obligation” means any Hedging Agreement or related obligation that
constitutes a “swap” within the meaning of section 1a(47) of the Commodity
Exchange Act.
“Tax Code” shall have the meaning ascribed to such term in Section 7.19 hereof.
“Taxes” shall have the meaning ascribed to such term in Section 3.3 hereof.
“Tenant” means any tenant, resident or occupant under any Lease.
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“Term Loan” shall have the meaning ascribed to such term in Section 2.1 hereof.
“Term Loan Note(s)” shall have the meaning ascribed to such term in Section 2.1
hereof.
“Term Loan Commitment” means, as to any Lender, such Lender’s commitment to make
the Term Loan under this Agreement. The initial amount of each Lender’s Term
Loan Commitment is set forth on Annex A attached hereto and made a part hereof.
“Term SOFR” means the forward-looking term rate based on SOFR that has been
selected or recommended by the Relevant Governmental Body.
“TRICARE” means the medical program for active duty members, qualified family
members, CHAMPUS eligible retirees and their family members and survivors, of
all uniformed services.
“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the
Benchmark Replacement Adjustment.
“Uniform Commercial Code” or “UCC” or “Code” means the Uniform Commercial Code
as the same may, from to time, be in effect in the State of Illinois; provided,
however, that if, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to,
Administrative Agent’s Lien on the Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of Illinois,
the term “Uniform Commercial Code” or “UCC” or “Code” shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions of this Agreement or the other Financing Agreements relating to such
attachment, perfection, priority or remedies and for purposes of definitions
related to such provisions; provided further that, to the extent that the
Uniform Commercial Code of a particular jurisdiction is used to define a term
herein or in any Financing Agreement and such term is defined differently in
different Articles or Divisions of such Uniform Commercial Code, then the
definition of such term contained in Article or Division 9 of such Uniform
Commercial Code shall control.
“United States” or “U.S.” means the United States of America.
“Withholding Certificate” shall have the meaning ascribed to such term in
Section 3.3 hereof.
a.Interpretation
.
1.All accounting terms used in this Agreement or the other Financing Agreements
shall have, unless otherwise specifically provided herein or therein, the
meaning customarily given such term in accordance with GAAP, and all financial
computations thereunder shall be computed, unless otherwise specifically
provided therein, in accordance with GAAP consistently applied; provided,
however, that all financial covenants and calculations in the Financing
Agreements shall be made in accordance with GAAP as in effect on the Closing
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Date unless Borrower, Administrative Agent and Required Lenders shall otherwise
specifically agree in writing. That certain items or computations are explicitly
modified by the phrase “in accordance with GAAP” shall in no way be construed to
limit the foregoing. Unless otherwise specified, references in this Agreement or
any of the attachments hereto or appendices hereof to a Section, subsection or
clause refer to such Section, subsection or clause as contained in this
Agreement. The words “herein,” “hereof” and “hereunder” and other words of
similar import refer to this Agreement as a whole, including all annexes,
exhibits and schedules attached hereto, as the same may from time to time be
amended, restated, modified or supplemented, and not to any particular section,
subsection or clause contained in this Agreement or any such annex, exhibit or
schedule.
2.Wherever from the context it appears appropriate, each term stated in either
the singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine and neuter genders. The words “including”, “includes” and “include”
shall be deemed to be followed by the words “without limitation”; the word “or”
is not exclusive; references to Persons include their respective successors and
assigns (to the extent and only to the extent permitted by the Financing
Agreements) or, in the case of governmental Persons, Persons succeeding to the
relevant functions of such Persons; and all references to statutes and related
regulations shall include any amendments of the same and any successor statutes
and regulations. Whenever any provision in any Financing Agreement refers to the
knowledge (or an analogous phrase) of Borrower, except as otherwise expressly
provided for herein, such words are intended to signify that a Duly Authorized
Officer of Borrower has actual knowledge or awareness of a particular fact or
circumstance or that a prudent individual in the position of such Duly
Authorized Officer of Borrower, would reasonably be expected to have known or
been aware of such fact or circumstance in the course of performing his or her
duties. Any reference in this Agreement or any of the Financing Agreements to a
Permitted Lien is not intended to subordinate or postpone, and shall not be
interpreted as subordinating or postponing, or as any agreement to subordinate
or postpone, any Lien created by any of the Financing Agreements in favor of
Administrative Agent (for the benefit of the Lenders and the Administrative
Agent) to any Permitted Lien.
3.COMMITMENT; INTEREST; FEES
.
a.Term Loan
. On the terms and subject to the conditions set forth in this Agreement, and
provided there does not then exist a Default or an Event of Default, each Lender
with a Term Loan Commitment, severally and for itself alone, agrees to make in
Dollars such Lender’s Pro Rata Share of a term loan (the “Term Loan”) in one
advance to the Borrower on the Closing Date in the aggregate amount of (x) the
Maximum Term Loan Facility minus (y) the outstanding aggregate principal amount
of the “Term Loan” (as defined in the Original Term Loan Agreement) on the date
hereof. As of the Closing Date, (x) the outstanding aggregate principal amount
of the “Term Loan” (as defined in the Original Term Loan Agreement) is equal to
$48,009,165 and immediately after giving effect to such advance on the Closing
Date, the
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outstanding aggregate principal amount of the “Term Loan” (as defined in this
Agreement) is equal to the Maximum Term Loan Facility and (y) the outstanding
aggregate principal amount of the “Acquisition Loan” (as defined in the Original
Term Loan Agreement) is equal to $11,400,000 and immediately after giving effect
to such advance on the Closing Date, the outstanding aggregate principal amount
of the “Acquisition Loan” (as defined in the Original Term Loan Agreement) is
equal to $0.00 and the “Acquisition Loan Commitment” (as defined in the Original
Term Loan Agreement) shall be terminated; provided, however, on the Closing Date
the Borrower shall make a voluntary prepayment of the Loan in an amount equal to
$700,000.00 (the “Closing Date Prepayment”), which amount shall be received by
Administrative Agent and applied by Administrative Agent against the outstanding
principal balance of the Term Loan, and, notwithstanding anything to the
contrary contained herein, the Administrative Agent and Lenders hereby consent
to the Closing Date Prepayment and waive any requirement that any Prepayment
Premium be required to be delivered by the Borrower in connection with such
Closing Date Prepayment for this specific instance only. Any amounts paid or
applied to the principal balance of the Term Loan (whether by mandatory
prepayment or otherwise) may not be reborrowed hereunder. The payment
obligations of the Borrower to the Lenders and Administrative Agent hereunder
are and shall be joint and several as provided in Section 12.21 hereof. Each
Lender’s obligation to fund the Term Loan shall be limited to such Lender’s Pro
Rata Share of the Term Loan Commitment. The Term Loan Commitment shall
automatically and permanently terminate concurrently with the making of the Term
Loan on the Closing Date.
3.The advance to the Borrower under this Section 2.1 shall be deposited, in
immediately available funds, in the Borrower’s demand deposit account with the
Administrative Agent, or in such other account as the Borrower Agent designates
in writing with the Administrative Agent’s approval.
4.The principal balance of the Term Loan shall be amortized over twenty-five
(25) years and shall be jointly and severally repaid by Borrower in consecutive
equal monthly installments as follows (subject to Section 2.10):

Year 1:$1,280,000 ($106,666.67/month)Year 2:$1,350,000 ($112,500.00/month)Year
3:
$1,420,000 ($118,333.33/month)

, together with interest accrued thereon, each payable on the first day of each
calendar month, commencing on November 1, 2020, and otherwise in accordance with
Section 2.7 hereof, with a final installment of the aggregate unpaid principal
balance of the Term Loan, together with interest accrued thereon, payable on the
Credit Termination Date.
5.At the request of the applicable Lender, the Term Loan shall be evidenced by a
separate amended and restated promissory note or promissory note (hereinafter,
as the same may be amended, restated, modified or supplemented from time to
time, and together with any renewals or extensions thereof or exchanges or
substitutions therefor, called the “Term Loan Note(s)”), duly executed and
delivered by the Borrower, substantially in the form set forth in Exhibit A
attached hereto, with appropriate insertions, dated the Closing Date, jointly
and severally payable to the order of each Lender, respectively, in the
principal amount equal to such
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Lender’s Pro Rata Share of the Maximum Term Loan Facility. THE PROVISIONS OF THE
TERM LOAN NOTES NOTWITHSTANDING, THE TERM LOAN THEN OUTSTANDING SHALL BECOME
IMMEDIATELY DUE AND PAYABLE ON A JOINT AND SEVERAL BASIS UPON THE EARLIEST TO
OCCUR OF (X) STATED MATURITY DATE; (Y) THE ACCELERATION OF THE LIABILITIES
PURSUANT TO SECTION 11.2 HEREOF; AND (Z) TERMINATION OF THIS AGREEMENT (WHETHER
BY PREPAYMENT OR OTHERWISE) IN ACCORDANCE WITH ITS TERMS.
6.Accrued interest on the Term Loan shall be due and payable and shall be made
by the Borrower to the Administrative Agent in accordance with Section 2.7
hereof. Interest payments on the Term Loan shall be computed using the interest
rate then in effect and based on the outstanding principal balance of the Term
Loan. Upon maturity, the outstanding principal balance of the Term Loan shall be
immediately due and payable, together with any remaining accrued interest
thereon.
b.[Intentionally Omitted]
.
c.[Intentionally Omitted]
.
d.Principal Balance of Liabilities Not to Exceed the Maximum Term Loan Facility
. The sum of the aggregate outstanding principal balance of the Loans to the
Borrower made under this Agreement shall not, at any time, exceed the Maximum
Term Loan Facility. The Borrower agrees that if at any time any such excess
shall arise, the Borrower shall immediately pay on a joint and several basis to
the Administrative Agent for distribution to the applicable Lenders such amount
as may be necessary to eliminate such excess.
e.The Borrower’s Loan Account
. The Administrative Agent, on behalf of each Lender, shall maintain a loan
account (the “Loan Account”) on its books for the Borrower in which shall be
recorded (a) the Loan made by the Lenders (including Administrative Agent) to
the Borrower pursuant to this Agreement, (b) all payments made by the Borrower
on the Loan, and (c) all other appropriate debits and credits as provided in
this Agreement, including, without limitation, all fees, charges, expenses and
interest. All entries in the Loan Account shall be made in accordance with the
Administrative Agent’s customary accounting practices as in effect from time to
time. The Borrower promises to pay the amount reflected as owing by Borrower
under its Loan Account and all of its other obligations hereunder as such
amounts become due or are declared due pursuant to the terms of this Agreement.
Notwithstanding the foregoing, the failure so to record any such amount or any
error in so recording any such amount shall not limit or otherwise affect the
Borrower’s obligations under this Agreement or under the Notes to repay the
outstanding principal amount of the Loan together with all interest accruing
thereon.
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f.Statements
. The Loan to the Borrower, and all other debits and credits provided for in
this Agreement, shall be evidenced by entries made by the Administrative Agent
in its internal data control systems showing the date, amount and reason for
each such debit or credit. Until such time as the Administrative Agent shall
have rendered to the Borrower Agent written statements of account as provided
herein, the balance in the Loan Account, as set forth on the Administrative
Agent’s most recent computer printout, shall be rebuttably presumptive evidence
of the amounts due and owing the Lenders by the Borrower. From time to time the
Administrative Agent shall render to the Borrower Agent a statement setting
forth the balance of the Loan Account, including principal, interest, expenses
and fees. Each such statement shall be subject to subsequent adjustment by the
Administrative Agent but shall, absent manifest errors or omissions, be presumed
correct and binding upon the Borrower.
g.Interest
. The Borrower agrees to jointly and severally pay to the Administrative Agent
on behalf of the Lenders interest on the daily outstanding principal balance of
the Loans at the Libor Rate; provided, however, that notwithstanding any other
term or provision of this Agreement to the contrary, (x) immediately following
the occurrence and during the continuance of an Event of Default relating to
Sections 11.1(a), (h), (i) or (j) hereof, and (y) unless the Required Lenders
otherwise direct in writing, upon Administrative Agent’s demand following the
occurrence and during the continuance of any other Event of Default, in each
case, Borrower agrees to and shall pay to Administrative Agent on behalf of
Lenders interest on the outstanding principal balance of the Loan at the per
annum rate of two percent (2.0%) plus the rate otherwise payable hereunder with
respect to such Loan (the “Default Rate”).
7.Accrued interest on each Libor Loan shall be payable on the last day of the
Libor Interest Period relating to such Libor Loan and at maturity, commencing
with the first such last day of the initial Libor Interest Period. If at any
time applicable in accordance with Sections 3.2, 3.6 or 3.7 hereof, accrued
interest on each Base Rate Loan shall be payable on the first calendar day of
each month and at maturity. Notwithstanding the foregoing in this Section
2.7(b), the first interest payment hereunder shall be due and payable on
November 1, 2020. Monthly interest payments on the Loan shall be computed using
the interest rate then in effect and based on the outstanding principal balance
of the Loan. Upon maturity, the outstanding principal balance of the Loan shall
be immediately due and payable, together with any remaining accrued interest
thereon. Interest shall be computed on the basis of a year of three hundred
sixty (360) days for the actual number of days elapsed (which results in more
interest being paid than if computed on the basis of a 365-day year). If any
payment of principal of, or interest on, any Loan falls due on a day that is not
a Business Day, then such due date shall be extended to the next following
Business Day, and additional interest shall accrue and be payable for the period
of such extension.
h.Method for Making Payments
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. All payments of principal, interest, fees and costs and expenses (including,
without limitation, pursuant to Section 12.2) hereunder shall be paid by
automatic debit from Borrower’s concentration account, wire transfer, check or
in coin or currency which, at the time or times of payment, is the legal tender
for public and private debts in the United States of America and shall be made
at such place as Administrative Agent may from time to time appoint or direct in
the payment invoice or otherwise in writing, and in the absence of such
appointment or direction, then, not later than 1:00 p.m. (Chicago time) on the
date of payment, at the offices of Administrative Agent at 120 South LaSalle
Street, Chicago, Illinois 60603, Attn: Commercial Loan Department. Payment made
by check shall be deemed paid on the date two Business Days after Administrative
Agent receives such check; provided, however, that if such check is subsequently
returned to Administrative Agent unpaid due to insufficient funds or otherwise,
the payment shall not be deemed to have been made and shall continue to bear
interest until collected. If at any time requested by Borrower (including via
electronic transmission), principal, interest, fees and costs and expenses
(including, without limitation, pursuant to Section 12.2) hereunder owed to
Administrative Agent or Lenders from time to time will be deducted by
Administrative Agent automatically on the due date or date declared due from
Borrower’s concentration account with Administrative Agent. Borrower shall
maintain sufficient funds in the account on the dates Administrative Agent
enters debits authorized hereby. If there are insufficient funds in the
concentration account on the date Administrative Agent enters any debit
authorized hereby, the debit will be reversed. Borrower may terminate this
direct debit arrangement at any time by sending written notice to Administrative
Agent at the address specified above. Notwithstanding the foregoing in this
Section, Borrower hereby irrevocably authorizes and instructs Administrative
Agent after the occurrence and during the continuance of any Default or Event of
Default to direct debit any of Borrower’s operating accounts with Administrative
Agent and CIBC for all principal, interest, costs, and any and all fees, costs
and expenses due hereunder or pursuant hereto with respect to the Loan and the
Liabilities (including, without limitation, reasonable attorneys’ fees).
Payments made after 1:00 p.m. (Chicago time) shall be deemed to have been made
on the next succeeding Business Day. Administrative Agent shall promptly (but in
no event longer than within three (3) Business Days thereof) remit to each
Lender its Pro Rata Share of all such payments received in collected funds by
Administrative Agent for the account of such Lender; provided, however, all
payments due by Borrower under Section 3 hereof, as applicable, shall be made by
Borrower directly to Administrative Agent and Lenders entitled thereto without
setoff, counterclaim or other defense.
i.Term of this Agreement
. The Borrower shall have the right to terminate this Agreement (subject to
survival of Sections 3.1, 3.3, 3.4, 12.2, 12.3, 12.9, 12.16, 13.3, 13.7 and
Section 14 and any other term hereof surviving by its terms hereof) following
prepayment of all of the Liabilities as provided under Section 2.10 hereof;
provided, however, that (a) all of the Administrative Agent’s and each Lender’s
rights and remedies under this Agreement, and (b) the Liens created under
Section 6.1 hereof and under any of the other Financing Agreements, shall
survive such termination until Payment in Full. In addition, the Liabilities may
be accelerated as set forth in Section 11.2 hereof. Upon the effective date of
termination, all of the Liabilities shall become immediately due and payable on
a joint and several basis without notice or demand. Notwithstanding any
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termination, until Payment in Full, the Administrative Agent shall be entitled
to retain its Liens (for the ratable benefit of the Lenders and the
Administrative Agent) in and to all existing and future Collateral.
j.Optional Prepayment of Term Loan
. The Borrower may, at its option, permanently prepay, at any time during the
term of this Agreement the Term Loan or any portion thereof but in minimum
amounts of no less than Five Hundred Thousand Dollars ($500,000), subject to the
following conditions: (i) not less than ten (10) days prior to the date upon
which the Borrower desires to make any such prepayment, Borrower shall deliver
to the Administrative Agent a written notice of its intention to prepay all or
such portion of the Term Loan, which notice shall be revocable (provided, that
any and all costs or expenses incurred or suffered by the Administrative Agent
and the Lenders as a result of the revocation of notice by the Borrower shall be
borne solely by the Borrower) and state the amount of the prepayment and the
prepayment date, (ii) the Borrower shall pay (A) in the case of a prepayment of
the entire Term Loan with the proceeds received from a Change in Control or a
refinancing from a Person not an Affiliate of the Borrower or any of its
Affiliates, the Prepayment Premium (in view of the impracticality and extreme
difficulty of ascertaining actual damages and by mutual agreement of the parties
as to a reasonable calculation of each Lender’s lost profits as a result of such
prepayment), (B) any amount due pursuant to Section 3.4 hereof, (C) any amounts
due in connection with such prepayment under any Hedging Agreement, and (D) all
liabilities, including any applicable swap or hedging breakage or termination
fee, if any, in connection with any Hedging Agreement; provided, however, no
Prepayment Premium shall be required or due in the event of a prepayment of the
Term Loan or any portion thereof (x) with the proceeds received by Borrower from
a HUD Financing, or (y) by Borrower outside the amortization schedule in Section
2.1(b). Any such Prepayment Premium shall constitute a part of the Liabilities
and be secured by the Collateral. Prepayments of the Term Loan shall be applied
against installments payable pursuant to Section 2.1(b) in the inverse order of
maturity. The parties agree that the Prepayment Premium is not a penalty.
BORROWER HEREBY EXPRESSLY ACKNOWLEDGES THAT SUCH PREPAYMENT PREMIUM IS
REASONABLE AND WILL FAIRLY COMPENSATE THE LENDERS FOR ANY COSTS AND CHARGES
INCURRED BY LENDERS AS A RESULT OF THE PREPAYMENT OF ALL OR ANY PORTION OF THE
TERM LOAN. BORROWER ACKNOWLEDGES THAT THE INCLUSION OF THIS AGREEMENT TO PAY THE
PREPAYMENT PREMIUM FOR THE RIGHT TO PREPAY ALL OR ANY PORTION OF THE TERM LOAN
WAS SEPARATELY NEGOTIATED WITH ADMINISTRATIVE AGENT AND LENDERS, THAT THE
ECONOMIC VALUE OF THE VARIOUS ELEMENTS OF THIS AGREEMENT WERE DISCUSSED, THAT
THE CONSIDERATION GIVEN BY BORROWER FOR THE TERM LOAN WAS ADJUSTED TO REFLECT
THE SPECIFIC AGREEMENT NEGOTIATED AMONG BORROWER, ADMINISTRATIVE AGENT AND
LENDERS AND CONTAINED IN THIS SECTION.
k.Limitation on Charges
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. It being the intent of the parties that the rate of interest and all other
charges to the Borrower be lawful, if for any reason the payment of a portion of
the interest or other charges otherwise required to be paid under this Agreement
would exceed the limit which the Lenders may lawfully charge the Borrower, then
the obligation to pay interest or other charges shall automatically be reduced
to such limit and, if any amounts in excess of such limit shall have been paid,
then such amounts shall at the sole option of the Administrative Agent (or
otherwise at the direction of the Required Lenders in writing) either be
refunded to the Borrowers or credited to the principal amount of the Liabilities
(or any combination of the foregoing) so that under no circumstances shall the
interest or other charges required to be paid by the Borrowers hereunder exceed
the maximum rate allowed by applicable Laws, and Borrowers shall not have any
action against any Lender or the Administrative Agent for any damages arising
out of the payment or collection of any such excess interest.
l.[Intentionally Omitted]
.
m.Setoff
.
8.Borrower agrees that the Administrative Agent and each Lender has all rights
of setoff and banker’s liens provided by applicable law. The Borrower agrees
that, if at any time (i) any amount owing by it under this Agreement or any
Financing Agreement is then due and payable to the Administrative Agent or
Lenders, or (ii) or an Event of Default shall have occurred and be continuing,
then the Administrative Agent or Lenders, in their sole discretion, may set off
against and apply to the payment of any and all Liabilities, any and all
balances, credits, deposits, accounts or moneys of the Borrower then or
thereafter with the Administrative Agent or such Lender.
9.Without limitation of Section 2.13(a) hereof, the Borrower agrees that, upon
and after the occurrence of any Event of Default, the Administrative Agent and
each Lender is hereby authorized, at any time and from time to time, without
prior notice to the Borrower (provided, however, prior to an Event of Default
the Administrative Agent and such Lender shall use reasonable efforts to provide
notice of any such action within a reasonable time thereafter but the
Administrative Agent and such Lender shall not be liable for any failure to
provide such notice), (i) to set off against and to appropriate and apply to the
payment of any and all Liabilities any and all amounts which the Administrative
Agent or Lender is obligated to pay over to the Borrower (whether matured or
unmatured, and, in the case of deposits, whether general or special, time or
demand and however evidenced), and (ii) pending any such action, to the extent
necessary, to deposit such amounts with the Administrative Agent as Collateral
to secure such Liabilities and to dishonor any and all checks and other items
drawn against any deposits so held as the Administrative Agent in its sole
discretion may elect.
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10.The rights of the Administrative Agent and Lenders under this Section 2.13
are in addition to all other rights and remedies which the Administrative Agent
and Lenders may otherwise have in equity or at law.
11.If any Lender shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of offset or otherwise), on account of (a) principal
of or interest on the Term Loan, but excluding (i) any payment pursuant to
Section 3.8 or Section 12.15 and (ii) payments of interest on any Base Rate Loan
that but for Sections 3.2, 3.6 and 3.7 would be a Libor Loan, or (b) other
recoveries obtained by all Lenders on account of principal of and interest on
the Loan (or such participation) then held by them, then such Lender shall
purchase from the other Lenders such participations in the Loan held by them as
shall be necessary to cause such purchasing Lender to share the excess payment
or other recovery ratably with each of them; provided that if all or any portion
of the excess payment or other recovery is thereafter recovered from such
purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery.
n.[Intentionally Omitted]
12..
o.[Intentionally Omitted]
.
p.[Intentionally Omitted]
.
q.Late Charge
. If any installment of principal or interest due hereunder shall become overdue
for five (5) days after the date when due, the Borrower shall pay to the
Administrative Agent (for the ratable benefit of the Lenders) on demand a “late
charge” of five cents ($.05) for each dollar so overdue in order to defray part
of the increased cost of collection occasioned by any such late payment, as
liquidated damages and not as a penalty.
2.18    Mandatory Prepayments. Upon receipt by Borrower of the proceeds of any
(a) Asset Disposition, or (b) sale or issuance of any Stock of Borrower
(excluding (i) any issuance to another Borrower or Guarantor, (ii) any issuance
of Stock pursuant to any employee, officer or director option program or
agreement, benefit plan or compensation program or agreement, or (iii) any
issuance of Stock pursuant to the exercise of options or warrants, or (iv) any
issuance in connection with any dividend reinvestment plan or direct stock
purchase plan, if applicable), in each case, Borrower shall prepay the
outstanding principal amount of the Liabilities in an amount equal to one
hundred percent (100%) of the cash proceeds of such transaction net of (A) the
direct reasonably and actually incurred costs relating thereto, such as sales
commissions and legal, accounting and investment banking fees and out-of-pocket
costs, and (B) taxes paid or
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reasonably estimated by Borrower to be payable as a result thereof. Nothing
contained in this Section 2.18 shall be construed to permit Borrower to
consummate any transaction in violation of any other provision contained in this
Agreement, including, without limitation, Section 9.6 hereof. No Prepayment
Premium shall be required or due in respect of any mandatory prepayment made by
Borrower pursuant to this Section 2.18 (except as identified in Section
2.10(ii)(A) hereof).
4.CHANGE IN CIRCUMSTANCES
.
a.Yield Protection
. If, after the date of this Agreement, any Change in Law:
13.subjects any Lender to any tax, duty, charge or withholding on or from
payments due from the Borrower (excluding taxation of the overall net income or
receipts of such Lender or any branch profits taxes), or changes the basis of
taxation of payments to such Lender in respect of its portion of the Loan or
other amounts due it hereunder, or
14.imposes, modifies, or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender (other
than reserves and assessments taken into account in determining the interest
rate applicable to Libor Loans), or
15.imposes any other condition the result of which is to increase the cost to
any Lender of making, funding or maintaining advances or reduces any amount
receivable by such Lender in connection with advances, or requires any Lender to
make any payment calculated by reference to the amount of advances held or
interest received by it, by an amount deemed material by such Lender, or
16.affects the amount of capital required or expected to be maintained by any
Lender or any corporation controlling such Lender and such Lender determines the
amount of capital required is increased by or based upon the existence of this
Agreement or its obligation to make the Loan hereunder or of commitments of this
type;
then, within three (3) Business Days of demand by such Lender, the Borrower
agrees to pay such Lender that portion of such increased expense incurred
(including, in the case of clause (d), any reduction in the rate of return on
capital to an amount below that which it could have achieved but for such law,
rule, regulation, policy, guideline or directive and after taking into account
such Lender’s policies as to capital adequacy) or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining the Loan.
b.Availability of Rate Options
. If Administrative Agent determines (or Required Lenders advise Administrative
Agent in writing) that maintenance of any Libor Loans would violate any
applicable law, rule,
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regulation or directive of any government or any division, agency, body or
department thereof, whether or not having the force of law, the Lenders shall
suspend the availability of the Libor Rate option and the Administrative Agent
shall require any Libor Loans outstanding to be promptly converted to a Base
Rate Loan subject to the Borrower’s compliance with Section 3.4 hereof; or if
Administrative Agent determines (or Required Lenders advise Administrative Agent
in writing) that (i) deposits of a type or maturity appropriate to match fund
Libor Loans are not available, the Lenders shall suspend the availability of the
Libor Rate after the date of any such determination, or (ii) the Libor Rate does
not accurately reflect the cost of making a Libor Loan, then, if for any reason
whatsoever the provisions of Section 3.1 hereof are inapplicable, the Lenders
shall, at their option, suspend the availability of the Libor Rate after the
date of any such determination or permit (solely in the case of clause (ii)) the
Borrower to pay the Lenders for any increased cost the Lenders may incur.
c.Taxes
. All payments by the Borrower under this Agreement shall be made free and clear
of, and without deduction for, any present or future income, excise, stamp or
other taxes, fees, levies, duties, withholdings or other charges of any nature
whatsoever, now or hereafter imposed by any taxing authority, other than
franchise taxes and taxes imposed on or measured by any Lender’s net income or
receipts or branch profits taxes (such non-excluded items being called “Taxes”).
If any withholding or deduction from any payment to be made by the Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then the Borrower shall:
17.pay directly to the relevant authority the full amount required to be so
withheld or deducted;
18.promptly forward to the Administrative Agent an official receipt or other
documentation satisfactory to the Administrative Agent evidencing such payment
to such authority; and
19.pay to the Lenders such additional amount or amounts as is necessary to
ensure that the net amount actually received by the Lenders will equal the full
amount the Lenders would have received had no such withholding or deduction been
required.
Moreover, if any Taxes are directly asserted against any Lender with respect to
any payment received by such Lender hereunder, such Lender may pay such Taxes
and the Borrower agrees to promptly pay such additional amounts (including,
without limitation, any penalties, interest or expenses) as is necessary in
order that the net amount received by the Lenders after the payment of such
Taxes (including, without limitation, any Taxes on such additional amount) shall
equal the amount the Lenders would have received had not such Taxes been
asserted.
The provisions of and undertakings of the Borrower set out in this Section 3.3
shall survive the satisfaction and payment of the Liabilities of Borrower and
the termination of this Agreement.
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To the extent permitted by applicable law, each Lender that is not a United
States person within the meaning of Code Section 7701(a)(30) (a “Non-U.S.
Participant”) shall deliver to Borrower and Administrative Agent on or prior to
the Closing Date (or in the case of a Lender that is an Assignee, on the date of
such assignment to such Lender) two accurate and complete original signed copies
of IRS Form W-8BEN, W-8ECI, or W-8IMY (or any successor or other applicable form
prescribed by the IRS) certifying to such Lender’s entitlement to a complete
exemption from, or a reduction in the rate of, United States withholding tax on
interest payments to be made hereunder or on the Loan. If a Lender that is a
Non-U.S. Participant is claiming a complete exemption from withholding on
interest pursuant to Code Sections 871(h) or 881(c), such Lender shall deliver
(along with two accurate and complete original signed copies of IRS Form W-8BEN)
a certificate in form and substance reasonably acceptable to Administrative
Agent (any such certificate, a “Withholding Certificate”). In addition, each
Lender that is a Non-U.S. Participant agrees that from time to time after the
Closing Date (or in the case of a Lender that is an Assignee, after the date of
the assignment to such Lender), when a lapse in time (or change in circumstances
occurs) renders the prior certificates hereunder obsolete or inaccurate in any
material respect, such Lender shall, to the extent permitted under applicable
law, deliver to Borrower and Administrative Agent two new and accurate and
complete original signed copies of an IRS Form W-8BEN, W-8ECI, or W-8IMY (or any
successor or other applicable forms prescribed by the IRS), and if applicable, a
new Withholding Certificate, to confirm or establish the entitlement of such
Lender or Administrative Agent to an exemption from, or a reduction in the rate
of, from United States withholding tax on interest payments to be made hereunder
or on the Loan.
Each Lender that is not a Non-U.S. Participant (other than any such Lender which
is taxed as a corporation for U.S. federal income tax purposes) shall provide
two properly completed and duly executed copies of IRS Form W-9 (or any
successor or other applicable form) to Borrower and Administrative Agent
certifying that such Lender is exempt from, or entitled to a reduction in the
rate of, United States backup withholding tax. To the extent that a form
provided pursuant to this Section is rendered obsolete or inaccurate in any
material respects as result of change in circumstances with respect to the
status of a Lender, such Lender shall, to the extent permitted by applicable
law, deliver to Borrower and Administrative Agent revised forms necessary to
confirm or establish the entitlement to such Lender’s or Administrative Agent’s
exemption from United States backup withholding tax. Borrower shall not be
required to pay additional amounts to a Lender, or indemnify any Lender, under
this Section to the extent that such obligations would not have arisen but for
the failure of such Lender to comply with this Section.
Each Lender agrees to and shall indemnify Administrative Agent and hold
Administrative Agent harmless for the full amount of any and all present or
future Taxes and related liabilities (including penalties, interest, additions
to tax and expenses, and any Taxes imposed by any jurisdiction on amounts
payable to Administrative Agent under this Section 3.3) which are imposed on or
with respect to principal, interest or fees payable to such Lender hereunder as
a result of the failure by such Lender to deliver, or as a result of the
inaccuracy, inadequacy or deficiency of, any documentation required to be
delivered by such Lender to the Administrative
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Agent as set forth above. Such indemnification shall be made within thirty (30)
days from the date Administrative Agent makes written demand therefor.
If a payment made to a Non-U.S. Participant under any Financing Agreement would
be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were
to fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Tax Code, as applicable),
such Lender shall deliver to the Administrative Agent and Borrower at the time
or times prescribed by FATCA and at such time or times reasonably requested by
the Administrative Agent or Borrower such documentation prescribed by FATCA as
may be necessary for the Administrative Agent and Borrower to comply with their
respective obligations under FATCA and to determine the amount (if any) required
to be deducted and withheld under FATCA from such payment and (ii) any U.S.
federal withholding taxes imposed by FATCA as a result of such Lender’s failure
to comply shall be excluded from the gross-up and indemnification obligations
under this section with respect to taxes.
d.Funding Indemnification
. If any payment of a Libor Loan occurs on a date that is not the last day of
the applicable Libor Interest Period, whether because of acceleration,
prepayment, or otherwise, or a Libor Loan is not made on the date specified by
the Borrower, the Borrower shall indemnify the Lender for any loss or cost
incurred by it resulting therefrom, including, without limitation, any loss or
cost in liquidating or employing deposits acquired to fund or maintain the Libor
Loan.
e.Lender Statements
. Each affected Lender shall deliver a written statement to the Borrower and
Administrative Agent as to the amount due, if any, under Sections 3.1, 3.3 or
3.4 hereof. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of demonstrable error.
Unless otherwise provided herein, the amount specified in the written statement
shall be payable on demand after receipt by the Borrower of the written
statement.
f.Basis for Determining Interest Rate Inadequate or Unfair
. If with respect to any Libor Interest Period: (a) Administrative Agent
reasonably determines (or Required Lenders advise Administrative Agent in
writing), which determination shall be binding and conclusive on the Borrower,
that by reason of circumstances affecting the interlender Libor Base market
adequate and reasonable means do not exist for ascertaining the applicable Libor
Base Rate; or (b) Administrative Agent reasonably determines (or Required
Lenders advise Administrative Agent in writing) that the Libor Base Rate will
not adequately and fairly reflect the cost to Lenders of maintaining or funding
the Loan or any portion thereof for such Libor Interest Period, or that the
making or funding of Libor Loans has become impracticable as a result of an
event occurring after the date of this Agreement which in the opinion of
Administrative Agent (or Required Lenders) adversely affects such Loan, then, in
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either case, so long as such circumstances shall continue: (i) Lenders shall not
be under any obligation to make, maintain, convert into or continue Libor Loans
and (ii) on the last day of the then current Libor Interest Period for each
Libor Loan, each such Loan shall, unless then repaid in full, automatically
convert to a Base Rate Loan. Each affected Lender shall promptly give the
Borrower written notice of any determination made by it under this Section
accompanied by a statement setting forth in reasonable detail the basis of such
determination.
g.Illegality
. If any applicable law or regulation, or any interpretation thereof by any
court or any governmental or other regulatory body charged with the
administration thereof, should make it unlawful for any Lender or its lending
office to make, maintain or fund any Libor Loan, then the obligation of such
Lender to make, convert into or continue such Libor Loan shall, upon the
effectiveness of such event, be suspended for the duration of such unlawfulness,
and on the last day of the current Libor Interest Period for such Libor Loan
(or, in any event, if Administrative Agent or Required Lenders so request, on
such earlier date as may be required by the relevant law, regulation or
interpretation), the Libor Loans shall, unless then repaid in full,
automatically convert to Base Rate Loans.
h.Right of Lenders to Fund through Other Offices
. Each Lender may, if it so elects, fulfill its commitment as to any Libor Loan
by causing a foreign branch or Affiliate of such Lender to make such Loan;
provided that such election shall not increase the costs to Borrower hereunder
and that in such event for the purposes of this Agreement such Loan shall be
deemed to have been made by such Lender and the obligation of Borrower to repay
such Loan shall nevertheless be to such Lender and shall be deemed held by it,
to the extent of such Loan, for the account of such branch or Affiliate.
i.Discretion of Lenders as to Manner of Funding; No Match Funding
. Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of its portion of the Loan in
any manner it sees fit, it being understood, however, that for the purposes of
this Agreement all determinations hereunder shall be made as if such Lender had
actually funded and maintained each Libor Loan during each Libor Interest Period
for such Loan through the purchase of deposits having a maturity corresponding
to such Libor Interest Period and bearing an interest rate equal to the Libor
Rate for such Libor Interest Period.
j.Further Documentation; Loss of Notes
. If any further documentation or information is (a) required by Administrative
Agent or any Lender or any prospective transferee in connection with selling,
transferring, delivering, assigning, or granting a participation in the Loan (or
transferring the servicing of the Loan), or (b) deemed necessary or appropriate
by Administrative Agent to correct patent mistakes in the Financing Agreements,
Borrower shall provide, or cause to be provided to Administrative Agent and
Lenders, and, in the case of (b), unless such patent mistake is due to the gross
negligence,
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willful misconduct or illegal activity of Administrative Agent and Lenders at
Borrower’s cost and expense, such documentation or information as Administrative
Agent and any Lender or any prospective transferee may reasonably request. Upon
notice from Administrative Agent of the loss, theft, or destruction of any of
the Notes and upon receipt of indemnity reasonably satisfactory to Borrower from
the applicable Lender, or in the case of mutilation of any of the Notes, upon
surrender of the mutilated Note, Borrower shall promptly make and deliver a new
promissory note of like tenor in lieu of the then to be superseded Note.
k.Effect of Benchmark Transition Event
.
20.Benchmark Replacement. Notwithstanding anything to the contrary herein or in
any other Financing Agreement, upon the occurrence of a Benchmark Transition
Event or an Early Opt-in Election, as applicable, Administrative Agent (without,
except as specifically provided in the two following sentences, any action or
consent by any other party to this Agreement) may amend this Agreement to
replace the Libor Base Rate with a Benchmark Replacement. Any such amendment
with respect to a Benchmark Transition Event will become effective at 5:00 p.m.
(Chicago time) on the fifth (5th) Business Day after Administrative Agent has
posted such proposed amendment to all Lenders and Borrower so long as
Administrative Agent has not received, by such time, written notice of objection
to such amendment from Lenders comprising Required Lenders or Borrower. Any such
amendment with respect to an Early Opt-in Election will become effective on the
date that Borrower and Lenders comprising Required Lenders have delivered to
Administrative Agent written notice that Borrower and such Required Lenders
accept such amendment. No replacement of Libor Base Rate with a Benchmark
Replacement pursuant to this Section 3.11 will occur prior to the applicable
Benchmark Transition Start Date.
21.Benchmark Replacement Conforming Changes. In connection with the
implementation of a Benchmark Replacement, Administrative Agent will have the
right to make Benchmark Replacement Conforming Changes from time to time and,
notwithstanding anything to the contrary herein or in any other Financing
Agreement, any amendments implementing such Benchmark Replacement Conforming
Changes will become effective without any further action or consent of any other
party to this Agreement.
22.Notices; Standards for Decisions and Determinations. Administrative Agent
will promptly notify Borrower and Lenders of (i) any occurrence of a Benchmark
Transition Event or an Early Opt-in Election, as applicable, and its related
Benchmark Replacement Date and Benchmark Transition Start Date, (ii) the
implementation of any Benchmark Replacement, (iii) the effectiveness of any
Benchmark Replacement Conforming Changes and (iv) the commencement or conclusion
of any Benchmark Unavailability Period. Any determination, decision or election
that may be made by Administrative Agent or Lenders pursuant to this Section
3.11 including any determination with respect to a tenor, rate or adjustment or
of the occurrence or non-occurrence of an event, circumstance or date and any
decision to take or refrain from taking any action, will be conclusive and
binding absent manifest
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error and may be made in its or their sole discretion and without consent from
any other party hereto, except, in each case, as expressly required pursuant to
this Section 3.11.
23.Benchmark Unavailability Period. Upon Borrower’s receipt of notice of the
commencement of a Benchmark Unavailability Period, Borrower will be deemed to
have converted any pending request for a Libor Loan, and any conversion to or
continuation of any Libor Loans to be made, converted or continued during any
Benchmark Unavailability Period into a request for a borrowing of or conversion
to Base Rate Loans.
5.ATTORNEY-IN-FACT
.
a.Appointment of the Administrative Agent as the Borrower’s Attorney-in-Fact
. The Borrower hereby irrevocably designates, makes, constitutes and appoints
the Administrative Agent (and all Persons designated by the Administrative Agent
in writing to the Borrower) as the Borrower’s true and lawful attorney-in-fact,
and authorizes the Administrative Agent, in the Borrower’s or the Administrative
Agent’s name, after an Event of Default has occurred and is continuing to do the
following: (a) at any time, (i) endorse the Borrower’s name upon any items of
payment or proceeds thereof and deposit the same in the Administrative Agent’s
account on account of the Borrower’s Liabilities, and (ii) do all other acts and
things which are necessary, in the Administrative Agent’s reasonable discretion,
to fulfill the Borrower’s obligations under this Agreement. The Borrower hereby
ratifies and approves all acts under such power of attorney and neither
Administrative Agent nor any other Person acting as Borrower’s attorney
hereunder will be liable for any acts or omissions or for any error of judgment
or mistake of fact or law made in good faith except as result of its gross
negligence, willful misconduct or illegal activity as finally determined in a
non-appealable judicial proceeding. The appointment of Administrative Agent (and
any of the Administrative Agent’s officers, employees or agents designated by
the Administrative Agent) as Borrower’s attorney, and each and every one of
Administrative Agent’s rights and powers, being coupled with an interest, are
irrevocable until all of the Liabilities have been fully repaid and this
Agreement shall have expired or been terminated in accordance with the terms
hereunder. Without restricting the generality of the foregoing, after an Event
of Default has occurred and is continuing, Borrower hereby appoints and
constitutes the Administrative Agent its lawful attorney-in-fact with full power
of substitution in the Property to advance funds in excess of the face amount of
the applicable Note, to pay, settle or compromise all existing bills and claims,
which may be liens or security interests, or to avoid such bills and claims
becoming liens against the Collateral; to execute all applications and
certificates in the name of Borrower prosecute and defend all actions or
proceedings in connection with the Collateral (including any Leases pertaining
to Property); and to do any and every act which the Borrower might do in its own
behalf; it being understood and agreed that this power of attorney shall be a
power coupled with an interest and cannot be revoked.
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6.CONDITIONS OF LOANS
.
a.Conditions to All Loans
. Notwithstanding any other term or provision contained in this Agreement, the
Administrative Agent’s and Lenders’ obligation to make the Term Loan and any
other Loan hereunder is subject to the satisfaction of each of the following
conditions precedent:
24.The Borrower’s Request
. The Administrative Agent shall have received a borrowing notice from Borrower,
signed by a Duly Authorized Officer of the Borrower, irrevocably electing the
Term Loan to be made on the Closing Date. If at any time applicable, if at all,
the Administrative Agent and Lenders shall have no liability to the Borrower or
any other Person as a result of acting on any telephonic request that the
Administrative Agent believes in good faith to have been made by any Person
authorized by Borrower to make a borrowing request on behalf of Borrower.
Promptly upon receipt of such borrowing request, Administrative Agent will
advise each Lender thereof. Not later than 1:00 p.m. (Chicago time), on the date
of the proposed borrowing of the Term Loan, each Lender shall provide
Administrative Agent at the office specified by Administrative Agent with
immediately available funds covering such Lender’s Pro Rata Share of the Term
Loan and, so long as Administrative Agent has not received written notice that
the conditions precedent set forth in Section 5.1 with respect to such borrowing
have not been satisfied, Administrative Agent shall pay over the funds received
by Administrative Agent to Borrower on the requested borrowing date.
25.No Default
. Neither a Default nor an Event of Default shall have occurred or be in
existence.
26.Representations and Warranties
. All of the representations and warranties contained in the Financing
Agreements to which the Borrower is a party and in this Agreement (including,
without limitation, those set forth in Section 7 hereof), are true and correct.
27.Fees and Expenses
. The Borrower shall have paid all fees owed to the Administrative Agent and
Lenders and reimbursed Administrative Agent and the Lenders for all costs,
disbursements, fees and expenses due and payable hereunder on or before the
Closing Date, including, without limitation, all fees and costs identified in
Section 12.2(a) hereof.
28.Documents
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. The Administrative Agent shall have received all of the following, each duly
executed and delivered and dated the Closing Date, or such earlier date as shall
be satisfactory to the Administrative Agent, each in form and substance
reasonably satisfactory to the Administrative Agent in its sole determination:
(1)Financing Agreements
. This Agreement, the Term Loan Notes, the Guaranty, each Pledge Agreement, each
Mortgage, each Assignment of Rents and Leases, the Environmental Indemnity
Agreement, the Subordination of Management Agreements, and such other Financing
Agreements as the Administrative Agent may require (provided each Lender shall
also receive a fully-executed original of this Agreement and such Lender’s
respective Term Loan Note).
(2)Resolutions; Incumbency and Signatures
. Copies of resolutions of the Board of Directors or Board of Managers of the
Borrower (as applicable), and, if required, the shareholder or member(s) of the
Borrower, authorizing or ratifying the execution, delivery and performance by
the Borrower of this Agreement, the Financing Agreements to which the Borrower
is a party and any other document provided for herein or therein to be executed
by Borrower, certified by a Duly Authorized Officer. A certificate of a Duly
Authorized Officer certifying the names of the officers of the Borrower
authorized to make a borrowing request and sign this Agreement and the Financing
Agreements to which the Borrower is a party, together with a sample of the true
signature of each such officer; the Administrative Agent may conclusively rely
on each such certificate until formally advised by a like certificate of any
changes therein. A copy of resolutions of the Board of Directors of Guarantor
and each Pledgor authorizing or ratifying the execution, delivery and
performance by Guarantor and each Pledgor, respectively, of the Guaranty and its
respective Pledge Agreement.
(3)Consents
. Certified copies of all documents evidencing any necessary consents and
governmental approvals, if any, with respect to this Agreement, the Financing
Agreements, and any other documents provided for herein or therein to be
executed by Borrower.
(4)Opinions of Counsel
. An opinion of Bass, Berry & Sims PLC, the legal counsel to the Borrower,
Guarantor and each Pledgor, and local counsel opinions in the jurisdictions
where the Facilities are located with respect to the Mortgages, each in form and
substance reasonably satisfactory to Administrative Agent.
(5)Certain Restricted Agreements
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. Correct and complete copies of the fully executed Commercial Leases,
Management Agreements, the nursing home licenses of each applicable Borrower
that is an Operator, and any other Restricted Agreement, together with all
applicable amendments thereto.
(6)Financial Condition Certificate
. A Financial Condition Certificate, in form and substance reasonably
satisfactory to the Administrative Agent, signed on behalf of the Borrower by a
Duly Authorized Officer of the Borrower.
(7)Governing Documents and Good Standings
. Administrative Agent shall have received (i) copies, certified as correct and
complete by an authorized officer, member or partner of each Borrower, Pledgor
and Guarantor,, of the certificate of incorporation, certificate of formation or
certificate of limited liability partnership, as applicable, of each Borrower,
Pledgor and Guarantor, with any amendments to any of the foregoing, (ii) copies,
certified as correct and complete by an authorized officer, member or partner of
each Borrower, Pledgor and Guarantor, of all other documents necessary for
performance of the obligations of each Borrower, Pledgor and Guarantor under
this Agreement and the other Financing Agreements, and (iii) certificates of
good standing for each Borrower, Pledgor and Guarantor issued by the state of
organization of each Borrower, Pledgor and Guarantor and by each state in which
each Borrower and Guarantor is doing and currently intends to do business for
which qualification is required, as of a recent date (such certificates set
forth in (i) through (iii), the “Certificates”).
(8)Affiliate Revolving Loan Agreement and Affiliate Revolving Loan Financing
Agreements/Affiliate Revolving Loan Agreement (QIPP) and Affiliate Revolving
Loan Financing Agreements (QIPP)
. Fully-executed copies of the Affiliate Revolving Loan Agreement, the Affiliate
Revolving Loan Financing Agreements, the Affiliate Revolving Loan Agreement
(QIPP) and the Affiliate Revolving Loan Financing Agreements (QIPP).
(9)UCC Financing Statements; Termination Statements; UCC Searches
. UCC Financing Statements or UCC Amendment Statements, as requested by the
Administrative Agent, naming the Borrower as debtor and the Administrative Agent
as secured party with respect to the Collateral, together with such UCC
termination statements necessary to release all Liens (other than Permitted
Liens) and other rights in favor of any Person in any of the Collateral except
the Administrative Agent (for the ratable benefit of the Lenders and the
Administrative Agent), and other documents as the Administrative Agent deems
necessary or appropriate, shall have been filed in all jurisdictions that the
Administrative Agent deems necessary or advisable. UCC Financing Statements or
UCC Amendment Statements, as requested by the Administrative Agent, naming each
Pledgor as debtor and the Administrative Agent as secured party with respect to
the Collateral (as respectively defined in the Pledge
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Agreement), and other documents, if any, as the Administrative Agent deems
necessary or appropriate, shall have been filed in all jurisdictions that the
Administrative Agent deems necessary or advisable. UCC tax, lien, bankruptcy,
pending suit and judgment searches for each Borrower, Pledgor and the Guarantor
(including, for each, any assumed name or trade name) and each dated a date
reasonably near to the Closing Date in all jurisdictions deemed necessary by the
Administrative Agent, the results of which shall be satisfactory to the
Administrative Agent in its sole and absolute determination.
(10)Insurance Certificates
. Certificates from the Borrower’s insurance carriers evidencing that all
required insurance coverage is in effect, each designating the Administrative
Agent as an additional insured, mortgagee and “lender’s loss payee” thereunder
(and any reasonably required endorsements thereof).
(11)[Intentionally Omitted]
.
(12)Certificate of Occupancy
. To the extent available, a true and complete copy of each certificate of
occupancy with respect to the Facilities, respectively.
(13)Environmental Assessments
. A Phase I environmental report of the Property addressed to Administrative
Agent prepared by an environmental audit firm reasonably acceptable to the
Administrative Agent, the form and results of which shall be satisfactory to the
Administrative Agent in its sole and absolute determination.
(14)Title Insurance
. A title insurance policy or date down endorsement, as applicable, in the form
of ALTA Form Mortgagee Title Insurance Policy shall be issued by an insurer
(reasonably acceptable to the Administrative Agent) in favor of the
Administrative Agent for the Property. Each title insurance policy shall contain
such endorsements as deemed appropriate by the Administrative Agent that are
available in the applicable State and each date down endorsement shall continue
all endorsements contained therein. Copies of all documents of record concerning
the Property as identified on the commitment for the ALTA policies/date down
endorsements referred to above.
(15)Survey
. If requested by Administrative Agent, an ALTA plat of survey shall be prepared
on the Property. If acceptable to the title insurer such that title insurer can
issue all
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required title insurance policies and date down endorsements required in
subsection (14) above, Administrative Agent shall accept affidavits of no new
improvements as to the Property.
(16)Appraisal
. An Appraisal prepared by an independent appraiser of the Property engaged by
Administrative Agent, which appraisal shall satisfy the requirements of the
FIRREA, if applicable, and shall evidence compliance with the supervisory
loan-to-value limits set forth in the Federal Deposit Insurance Corporation
Improvement Act of 1991 (including a combined loan-to-value ratio on a
“stabilized value” not to exceed 75%). Such appraisal (and the results thereof)
shall be satisfactory to the Administrative Agent in its sole and absolute
determination.
(17)Flood Insurance
. A flood insurance policy, if applicable, concerning the Property, reasonably
satisfactory to the Administrative Agent, if required by the Flood Disaster
Protection Act of 1973.
(18)Property Condition Report
. Property Condition Reports for each parcel of Property, the form, substance
and results of which shall be satisfactory to the Administrative Agent in its
sole and absolute determination.
(19)Property Zoning Report. Property Zoning Reports for each parcel of Property,
the form, substance and results of which shall be satisfactory to the
Administrative Agent in its sole and absolution determination.
(20)Bylaws and Operating Agreements
. Correct and complete certified copies of the Bylaws and the duly executed
Limited Liability Company Agreements (as applicable) of each Borrower and
Pledgor, as amended.
(21)Other
. The Administrative Agent shall have received, in form and substance reasonably
satisfactory to the Administrative Agent, all certificates, orders, authorities,
consents, affidavits, schedules, instruments, agreements, financing statements,
and other documents which are provided for hereunder or under or in connection
with any Financing Agreement, which the Administrative Agent may reasonably
request on or prior to the Closing Date.
29.Field Examinations
. At the Administrative Agent’s sole option, the Administrative Agent shall have
completed its field examinations of the Borrower’s books and records, assets,
and operations
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which examinations will be satisfactory to the Administrative Agent in its sole
and absolute discretion.
30.Certificate
. The Administrative Agent shall have received a certificate signed on behalf of
the Borrower by a Duly Authorized Officer and dated the Closing Date certifying
satisfaction of the conditions specified in this Section 5.
31.[Intentionally Omitted]
.
32.[Intentionally Omitted]
.
33.Bank Meetings
. Borrower’s senior management shall have made themselves and Borrower’s
facilities reasonably available (through scheduled bank meetings, company
visits, or other venues) to Administrative Agent and Lenders and their
representatives.
34.Affiliate Revolving Loan Agreement/Affiliate Revolving Loan Agreement (QIPP)
. Satisfaction of each of the conditions precedent contained in the Affiliate
Revolving Loan Agreement and the Affiliate Revolving Loan Agreement (QIPP), as
determined by the Administrative Agent.
35.Solvency
. On the Closing Date, Borrower, as determined on a consolidated basis, is
Solvent.
36.No Material Adverse Change
. No Material Adverse Change, as reasonably determined by Administrative Agent
and Lenders, in the business, assets, liabilities, properties, condition
(financial or otherwise), prospects or results of operations of Borrower or
Guarantor shall have occurred from December 31, 2019 through the Closing Date.
37.Litigation
. There shall not have been instituted or threatened, from December 31, 2019
through the Closing Date, as reasonably determined by Administrative Agent, any
litigation or
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proceeding in any court or administrative forum to which Borrower is, or is
threatened to be, a party which has, or is reasonably likely to result in, a
Material Adverse Change.
7.COLLATERAL
.
a.Security Interest
. As security for the prompt and complete payment and performance of all of the
Liabilities and the Affiliate Revolving Loan Liabilities when due or declared
due, each Borrower hereby grants, pledges, conveys and transfers to the
Administrative Agent (for the ratable benefit of the Lenders and Administrative
Agent) a continuing security interest in and to all of such Borrower’s right,
title and interest in and to the following property and interests in property,
whether now owned or existing or hereafter owned, arising or acquired, and
wheresoever located (collectively, the “Collateral”): (a) all of Borrower’s
accounts receivable, including, without limitation, Accounts and
Health-Care-Insurance Receivables (each as defined in the Code); (b) all of the
Borrower’s General Intangibles, including, without limitation, General
Intangibles related to accounts receivable and money; (c) all of Borrower’s
Deposit Accounts and other deposit accounts (general or special) with, and
credits and other claims against, the Administrative Agent or any Lender, or any
other financial institution with which the Borrower maintains deposits; (d) all
of the Borrower’s contracts, licenses (including, without limitation, any
Licenses and CONs), chattel paper, instruments, notes, letters of credit,
contract rights, bills of lading, warehouse receipts, shipping documents,
permits, tax refunds, documents and documents of title, and all of the
Borrower’s Tangible Chattel Paper, Documents, Electronic Chattel Paper,
Letter-of-Credit Rights, letters of credit, Software, Supporting Obligations,
Payment Intangibles, and Goods (each as defined in the Code); (e) all of the
Borrower’s Inventory and Equipment and motor vehicles and trucks; (f) all of the
Borrower’s monies, and any and all other property and interests in property of
the Borrower, including, without limitation, Investment Property, Instruments,
Security Entitlements, Uncertificated Securities, Certificated Securities,
Chattel Paper, and Financial Assets (each as defined in the Code), now or
hereafter coming into the actual possession, custody or control of the
Administrative Agent, any Lender or any agent or Affiliate thereof in any way or
for any purpose (whether for safekeeping, deposit, custody, pledge,
transmission, collection or otherwise), and, independent of and in addition to
the Administrative Agent’s and each Lender’s rights of setoff (which the
Borrower acknowledges), the balance of any account or any amount that may be
owing from time to time by Administrative Agent or any Lender to the Borrower;
(g) all insurance proceeds of or relating to any of the foregoing property and
interests in property, and any key man life insurance policy covering the life
of any officer or employee of Borrower; (h) all proceeds and profits derived
from the operation of the Borrower’s business; (i) all of the Borrower’s books
and records, computer printouts, manuals and correspondence relating to any of
the foregoing and to the Borrower’s business; and (j) all accessions,
improvements and additions to, substitutions for, and replacements, products,
profits and proceeds of any of the foregoing.
Administrative Agent acknowledges that it will not have control over or right of
setoff against the Government Blocked Account (as defined in the Affiliate
Revolving Loan
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Agreement) solely to the extent such control or right of setoff is or would be
prohibited by applicable Healthcare Laws, provided, however, that as soon as any
such prohibition or restriction lapses or is legally removed Borrower shall
immediately take such all actions as are reasonably necessary to provide
Administrative Agent with control over and/or the right of setoff against such
Government Blocked Account (at Borrower’s cost).
Administrative Agent, for itself and on behalf of the other Lenders further
acknowledges and agrees that the term “Collateral” shall not include: (i) any
portion of the Collateral (but not the proceeds thereof) that is subject to a
rule of law, statute or regulation prohibiting the granting of a security
interest therein; and (ii) any rights or interest in any contract, lease,
permit, license, or license agreement covering real or personal property of the
Borrower if under the terms of such contract, lease, permit, license, or license
agreement, or applicable law with respect thereto, the grant of a security
interest or lien therein is prohibited as a matter of law or under the terms of
such contract, lease, permit, license, or license agreement and such prohibition
or restriction has not been waived or the consent of the other party to such
contract, lease, permit, license, or license agreement has not been obtained;
provided, that, (A) the foregoing exclusions of clauses (i) and (ii) above shall
(x) exist only for so long as such rule of law, statute, regulations or written
agreement, document or instrument continues to be effective (and when such rule,
statute, regulation or written agreement, document or instrument becomes no
longer applicable or upon the cessation, termination or expiration thereof, the
security interest granted herein shall be deemed to have automatically attached
to such Collateral), (B) the foregoing exclusions of clause (ii) above shall in
no way be construed to (1) apply to the extent that any described prohibition or
restriction is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the
Code or other applicable law, or (2) apply to the extent that any consent or
waiver has been obtained that would permit Administrative Agent’s security
interest or lien to attach notwithstanding the prohibition or restriction on the
pledge of such contract, lease, permit, license, or license agreement, and (C)
the foregoing exclusions of clauses (i) and (ii) above shall in no way be
construed to limit, impair, or otherwise affect any of Administrative Agent’s or
any Lender’s continuing security interests in and liens upon any rights or
interests of the Borrower in or to (1) monies due or to become due under or in
connection with any described contract, lease, permit, license, license
agreement, or (2) any proceeds from the sale, license, lease, or other
dispositions of any such contract, lease, permit, license, or license
agreement).
b.Preservation of Collateral and Perfection of Security Interests Therein
. The Borrower agrees that it shall execute and deliver to Administrative Agent,
concurrently with the execution of this Agreement, and promptly at any time or
times hereafter at the reasonable request of Administrative Agent instruments
and documents as Administrative Agent may reasonably request, in a form and
substance satisfactory to Administrative Agent, to establish, create, perfect
and keep perfected the Liens in the Collateral or to otherwise protect and
preserve the Collateral and Administrative Agent’s Liens therein (including,
without limitation, if and as applicable, financing statements, and Borrower
shall pay the cost of filing or recording the same in all public offices deemed
necessary by Administrative Agent). If the Borrower fails to do so,
Administrative Agent is authorized to file such financing statements.
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The Borrower further agrees that a carbon, photographic, photostatic or other
reproduction of this Agreement or of a financing statement is sufficient as a
financing statement.
c.Loss of Value of Collateral
. The Borrower agrees to immediately notify the Administrative Agent of any
material loss or depreciation in the value of the Collateral or any portion
thereof.
d.Right to File Financing Statements
. Notwithstanding anything to the contrary contained herein, the Administrative
Agent may at any time and from time to time file financing statements,
continuation statements and amendments thereto that describe the Collateral as
“all assets” or in particular and which contain any other information required
by the Code for the sufficiency or filing office acceptance of any financing
statement, continuation statement or amendment, including whether the Borrower
is an organization, the type of organization and any organization identification
number issued to the Borrower. The Borrower agrees to furnish any such
information to the Administrative Agent promptly upon request. Any such
financing statements, continuation statements or amendments may be signed (if at
any time required) by the Administrative Agent on behalf of the Borrower and may
be filed at any time with or without signature and in any jurisdiction as
reasonably determined by the Administrative Agent. The Administrative Agent
agrees to use its reasonable efforts to notify the Borrower of the
Administrative Agent taking any such action provided in this Section; provided,
however, the Borrower agrees that the failure of the Administrative Agent to so
notify the Borrower for any reason shall not in any way invalidate the actions
taken by the Administrative Agent pursuant to this Section.
e.Third Party Agreements
. The Borrower shall at any time and from time to time take such steps as the
Administrative Agent may reasonably require for the Administrative Agent: (i) to
obtain an acknowledgment, in form and substance reasonably satisfactory to the
Administrative Agent, of any third party having possession of any of the
Collateral that the third party holds for the benefit of the Administrative
Agent, (ii) to obtain “control” (as defined in the Code) of any Investment
Property, Deposit Accounts, Letter of Credit Rights or Electronic Chattel Paper
(each as defined in the Code), with any agreements establishing control to be in
form and substance reasonably satisfactory to the Administrative Agent, and
(iii) otherwise to ensure the continued perfection and priority of the
Administrative Agent’s security interest in any of the Collateral and of the
preservation of its rights therein.
f.All Loans One Obligation
. All Liabilities of the Borrowers under this Agreement and each of the
Financing Agreements, and all of the Affiliate Revolving Loan Liabilities under
the Affiliate Revolving Loan Agreement and each of the Affiliate Revolving Loan
Financing Agreements, are cross-collateralized and (y) all Liabilities of the
Borrowers under this Agreement and each of the Financing Agreements, all of the
Affiliate Revolving Loan Liabilities (QIPP) under the Affiliate
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Revolving Loan Agreement (QIPP) and each of the Affiliate Revolving Loan
Financing Agreements (QIPP) and all of the Affiliate Revolving Loan Liabilities
under the Affiliate Revolving Loan Agreement and each of the Affiliate Revolving
Loan Financing Agreements are cross-defaulted. Payment of all sums and
indebtedness to be paid by Borrower to Lenders and Administrative Agent under
this Agreement shall be secured by, among other things, the Financing
Agreements. All loans or advances made to Borrower under this Agreement shall
constitute one Loan, and all of Borrower’s Liabilities and other liabilities of
Borrower to Lenders and Administrative Agent shall constitute one general
obligation secured by Administrative Agent’s Lien on all of the Collateral of
Borrower and by all other liens heretofore, now, or at any time or times granted
to Lender to secure the Loan and other Liabilities (for the ratable benefit of
the Lenders and the Administrative Agent). Borrower agrees that all of the
rights of Administrative Agent and Lenders set forth in this Agreement shall
apply to any amendment, restatement or modification of, or supplement to, this
Agreement, any supplements or exhibits hereto and the Financing Agreements,
unless otherwise agreed in writing by the Administrative Agent or Required
Lenders.
g.Commercial Tort Claim
. If the Borrower shall at any time hereafter acquire a Commercial Tort Claim
(as defined in the Code), the Borrower shall promptly notify the Administrative
Agent of same in a writing signed by the Borrower (describing such claim in
reasonable detail) and grant to the Administrative Agent (for the ratable
benefit of the Lenders and the Administrative Agent) in such writing (at the
sole cost and expense of the Borrower) a continuing, first-priority security
interest therein and in the proceeds thereof, with such writing to be in form
and substance satisfactory to the Administrative Agent in its sole and absolute
determination.
h.HUD Financing; Prepayment and Release
. Notwithstanding the provisions of Section 6.6, upon any one or more of the
Propco Borrowers obtaining HUD Financing for their respective Facility or
Facilities, Administrative Agent will fully release and discharge the lien and
security interest granted to Administrative Agent to secure the Loan (for the
ratable benefit of the Lenders and the Administrative Agent) under this
Agreement and the Financing Agreements on the specific Collateral of such Propco
Borrower or Propco Borrowers (the “Released Collateral (HUD)”), and will fully
release and discharge such Propco Borrower or Propco Borrowers and the
applicable Operators who are also Borrowers of such specific Collateral (the
“Released Borrowers (HUD)”) from their obligations under this Agreement and any
Financing Agreement, including the Term Loan Note (except for contingent
indemnification obligations that survive by their terms herein), provided that
and conditioned upon satisfaction of each of the foregoing, in the sole
determination of the Administrative Agent:
(1)Administrative Agent shall receive written notice within thirty (30) days of
such Propco Borrower or Propco Borrowers decision to seek and obtain such HUD
Financing;
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(2)Both before and after giving effect to the HUD Financing, no Default or Event
of Default shall have occurred and be continuing (including, without limitation,
any breach of any financial covenant set forth in Section 9.12);
(3)[Intentionally Omitted];
(4)The release documents are reasonably acceptable to Administrative Agent and
customary for recording the release of liens and security interests in the
applicable Collateral in the jurisdictions where the liens and security in the
Released Collateral (HUD) are filed or recorded. Borrowers shall be responsible
for the cost and expense of preparing and recording the applicable release
documents;
(5)All reasonably requested instruments, documents and agreements by the
Administrative Agent and Lenders in connection with such HUD Financing are duly
executed and delivered by Propco Borrower, each other applicable Borrower and
any Affiliate thereof (including amendments to this Agreement and the other
Financing Agreements); and
(6)The Released Borrowers (HUD) shall, substantially simultaneously with (and in
any event not later than the first (1st) Business Day following the receipt of
the net cash proceeds from the insurance or incurrence of the HUD Financing),
apply and pay in immediately available funds without setoff or deduction of any
kind an amount equal to one hundred percent (100%) of such net cash proceeds to
prepay the outstanding Term Loan amount in accordance with Section 2.10 and any
other related then due and owing Liabilities of the Released Borrowers (HUD). As
used in this Section, “Net cash proceeds” shall mean the cash proceeds of the
HUD Financing net of all taxes and customary and reasonable fees, commissions,
costs and other expenses actually incurred in connection therewith.
Notwithstanding the release and discharge of the Released Borrowers (HUD) and
the Released Collateral (HUD) as provided in this Section 6.8, this Agreement,
the other Financing Agreements and the Lien of the Administrative Agent on the
Collateral (and any other Lien provided by the other Financing Agreements,
including pursuant to the applicable Mortgages), shall remain and continue in
full force and effect as to the Borrowers other than the Released Borrowers
(HUD) and the Collateral (and other assets and property subject to the other
Financing Agreements) other than the Released Collateral (HUD).
8.REPRESENTATIONS AND WARRANTIES
.
The Borrower represents and warrants on a joint and several basis to
Administrative Agent and Lenders that as of the date of this Agreement, and
continuing as long as any Liabilities or Affiliate Revolving Loan Liabilities
remain outstanding, and (even if there shall be no such Liabilities or Affiliate
Revolving Loan Liabilities outstanding) as long as this Agreement remains in
effect:
a.Existence
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. The Borrower is a corporation or limited liability company duly organized,
validly existing and in good standing under the laws of the state of its
incorporation or formation. The Borrower is duly (a) qualified and in good
standing as a foreign corporation or foreign limited liability company and (b)
authorized to do business in each jurisdiction where such qualification is
required because of the nature of its activities or properties. The Borrower has
all requisite power to carry on its business as now being conducted and as
proposed to be conducted. The Pledgors legally and beneficially own and control
all of the issued and outstanding capital Stock of the Borrower.
b.Corporate Authority
. The execution and delivery by the Borrower of this Agreement and all of the
other Financing Agreements to which Borrower is a party and the performance of
its obligations hereunder and thereunder: (i) are within its powers; (ii) are
duly authorized by the board of directors, manger or members of the Borrower,
each as applicable, and, if applicable, Pledgor; and (iii) are not in
contravention of the terms of its operating agreement, bylaws, or of an
indenture, agreement or undertaking to which it is a party or by which it or any
of its property is bound. The execution and delivery by the Borrower of this
Agreement and all of the other Financing Agreements to which it is a party and
the performance of its obligations hereunder and thereunder: (i) do not require
any governmental consent, registration or approval; (ii) do not contravene any
contractual or governmental restriction binding upon it; and (iii) will not,
except in favor of Administrative Agent, result in the imposition of any Lien
upon any property of Borrower under any existing indenture, mortgage, deed of
trust, loan or credit agreement or other material agreement or instrument to
which it is a party or by which it or any of its property may be bound or
affected. Borrower is not bound by any contractual obligation, or subject to any
restriction in any organizational document, that could reasonably be expected to
have a Material Adverse Effect. This Agreement and all of the other Financing
Agreements to which Borrower is a party have been duly executed and delivered.
c.Binding Effect
. This Agreement and all of the other Financing Agreements to which the Borrower
is a party are the legal, valid and binding obligations of the Borrower and are
enforceable against the Borrower in accordance with their respective terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditor’s rights and remedies generally.
d.Financial Data
.
38.All income statements, balance sheets, cash flow statements, statements of
operations, and other financial data which have been or shall hereafter be
furnished to the Administrative Agent and Lenders for the purposes of or in
connection with this Agreement do and will present fairly in all material
respects in accordance with GAAP, consistently applied, the financial condition
of the Borrower as of the dates thereof and the results of its operations for
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the period(s) covered thereby. The foregoing notwithstanding all unaudited
financial statements furnished or to be furnished to the Administrative Agent
and Lenders by or on behalf of Borrower are not and will not be prepared in
accordance with GAAP to the extent that such financial statements (a) are
subject to cost report and other year-end audit adjustments, (b) do not contain
footnotes, (c) were prepared without physical inventories, (d) are not restated
for subsequent events, (e) may not contain a statement of construction in
process, and (f) may not fully reflect the following liabilities: (i) vacation,
holiday and similar accruals, (ii) liabilities payable in connection with
workers’ compensation claims, (iii) liabilities payable to any employee welfare
benefit plan (within the meaning of Section 3(1) of ERISA) maintained by
Borrower or its affiliates on account of Borrower’s employees, (iv) federal,
state and local income or franchise taxes and (v) bonuses payable to certain
employees (collectively, the “GAAP Exceptions”).
39.Since December 31, 2019, there has been no Material Adverse Change with
respect to Borrower.
e.Collateral
. Except for the Permitted Liens, all of the Borrower’s assets and property
(including, without limitation, the Collateral) is and will continue to be owned
by Borrower (except for items of Inventory disposed of in the ordinary course of
business and sales of Equipment being replaced in the ordinary course of
business, or as a result of casualty loss or condemnation, with other Equipment
with a value equal to or greater than the Equipment being sold), has been fully
paid for and is free and clear of all Liens. No financing statement or other
document similar in effect covering all or any part of the Collateral is on file
in any recording or filing office, other than those identifying the
Administrative Agent as the secured creditor or except for Permitted Liens. The
organizational number assigned by the Secretary of State of the Borrower’s state
of incorporation or formation, as applicable, is as identified on the UCC
Financing Statements filed in connection with this Agreement and as set forth on
Schedule 1.1(a) hereto.
f.Solvency
. The Borrower, as determined on a consolidated basis, is Solvent. The Borrower,
as determined on a consolidated basis, will not be rendered insolvent by the
execution and delivery of this Agreement or any Financing Agreement, or by
completion of the transactions contemplated hereunder or thereunder.
g.Principal Place of Business; State of Organization
. Set forth on Schedule 1.1(a) hereto, is, as of the Closing Date, (a) the
principal place of business and chief executive office of Borrower and (b) the
Borrower’s state of incorporation or formation. The books and records of the
Borrower are at the principal place of business and chief executive office of
the Borrower.
h.Other Names
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. As of the Closing Date the Borrower is not using, and shall not thereafter
use, any name (including, without limitation, any trade name, trade style,
assumed name, division name or any similar name), other than the names set forth
on Schedule 7.8 attached hereto.
i.Tax Liabilities
. The Borrower has filed all material federal, state and local tax reports and
returns required by any law or regulation to be filed by it, except for
extensions duly obtained, and taxes that are being contested in good faith by
appropriate proceedings duly conducted, and has either duly paid all taxes,
duties and charges indicated due on the basis of such returns and reports, or
made adequate provision for the payment thereof, and the assessment of any
material amount of additional taxes in excess of those paid and reported is not
reasonably expected.
j.Loans
. Except as otherwise permitted by Section 9.2 hereof, the Borrower is not
obligated on any loans or other Indebtedness.
k.Margin Securities
. No part of the proceeds of the Loan will be used, and whether immediately,
incidentally or ultimately, for any purposes that violates or results in
directly or indirectly, a violation of Regulations U, T or X of the Board of
Governors of the Federal Reserve System (assuming, in the case of Regulation T,
that no broker-dealer or other “creditor” as defined in Regulation T extends or
maintains credit to Borrower under this Agreement). The Borrower does not own
any margin securities and the Loan advanced hereunder will not be used for the
purpose of purchasing or carrying any margin securities or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
any margin securities or for any other purpose not permitted by Regulation U of
the Board of Governors of the Federal Reserve System.
l.Organizational Chart
. Set forth on Schedule 7.12 hereto is a true and complete copy of an
organizational chart setting forth the Guarantor and each of its Subsidiaries
and Affiliates as of the Closing Date.
m.Litigation and Proceedings
. As of the Closing Date, no judgments are outstanding against the Borrower that
could be an Event of Default under clause (e) of Section 11.1, nor is there as
of such date pending, or to the best of Borrower’s knowledge, threatened,
except, as of the Closing Date, as shown on Schedule 7.13, any (i) litigation,
suit, action or contested claim (other than a personal injury tort claim), or
federal, state or municipal governmental proceeding, by or against the Borrower
or any of its Property which if adversely determined could have a Material
Adverse Effect, or (ii) any tort claim for personal injury, including death,
against the Borrower as to which (a) litigation has
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been instituted and is pending or (b) or a request for medical records has been
made upon Borrower by an attorney for the claimant on or after January 1, 2018.
n.Other Agreements
. The Borrower is not in default under or in breach of any agreement, contract,
lease, or commitment to which it is a party or by which it is bound which could
reasonably be expected to have a Material Adverse Effect. The Borrower does not
know of any dispute regarding any agreement, contract, instrument, lease or
commitment to which it is a party which could reasonably be expected to have a
Material Adverse Effect.
o.Compliance with Laws and Regulations
. The execution and delivery by the Borrower of this Agreement and all of the
other Financing Agreements to which it is a party and the performance of the
Borrower’s obligations hereunder and thereunder are not in contravention of any
applicable law, rule or regulation. The Borrower has obtained all licenses,
authorizations, approvals, licenses and permits necessary in connection with the
operation of its business, except to the extent the failure to obtain any of the
foregoing could reasonably be expected to not result in a Material Adverse
Effect. The Borrower is in compliance with all laws, orders, rules, regulations
and ordinances of all federal, foreign, state and local governmental authorities
applicable to it and its business, operations, property, and assets, except to
the extent any such non-compliance could reasonably be expected to not result in
a Material Adverse Effect.
p.Intellectual Property
. As of the Closing Date, the Borrower does not own or otherwise possess any
material Intellectual Property. To the Borrower’s best knowledge, none of its
Intellectual Property infringes on the rights of any other Person; provided that
the name “Diversicare” is shared in Canada with various Diversicare entities
that were sold in 2004.
q.Environmental Matters
. The Borrower has not Managed Hazardous Substances on or off its Property other
than in compliance with applicable Environmental Laws, except to the extent any
such non-compliance could reasonably be expected to not result in a Material
Adverse Effect. Except as set forth on Schedule 7.17 hereto, the Borrower has
complied in all material respects with applicable Environmental Laws regarding
transfer, construction on and operation of its business and Property, including,
but not limited to, notifying authorities, observing restrictions on use,
transferring, modifying or obtaining permits, licenses, approvals and
registrations, making required notices, certifications and submissions,
complying with financial liability requirements, and, except where not required
to do so pursuant to any Commercial Lease, Managing Hazardous Substances and
Responding to the presence or Release of Hazardous Substances connected with
operation of its business or Property. The Borrower does not have any contingent
liability with respect to the Management of any Hazardous Substance that could
reasonably be expected to result in a Material Adverse Effect. As of the Closing
Date, the
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Borrower has not received any Environmental Notice that could reasonably be
expected to result in a Material Adverse Effect.
r.Disclosure
. As of the Closing Date, none of the representations or warranties made by the
Borrower herein or in any Financing Agreement to which the Borrower is a party
and no other written information provided or statements made by the Borrower or
its representatives to the Administrative Agent or Lenders contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. As of the Closing Date, the Borrower has disclosed to the
Administrative Agent and Lenders all facts of which the Borrower has knowledge
which might result in a Material Adverse Effect either prior or subsequent to
the consummation of the transactions contemplated hereby or which, to Borrower’s
knowledge, at any time hereafter might reasonably be expected to result in a
Material Adverse Effect.
s.Pension Related Matters
. Each employee pension plan (other than a multiemployer plan within the meaning
of Section 3(37) of ERISA and to which the Borrower or any ERISA Affiliate has
or had any obligation to contribute (a “Multiemployer Plan”)) maintained by the
Borrower or any of its ERISA Affiliates to which Title IV of ERISA applies and
(a) which is maintained for employees of the Borrower or any of its ERISA
Affiliates or (b) to which the Borrower or any of its ERISA Affiliates made, or
was required to make, contributions at any time within the preceding five (5)
years (a “Plan”), complies, and is administered in accordance, with its terms
and all material applicable requirements of ERISA and of the Internal Revenue
Code of 1986, as amended, and any successor statute thereto (the “Tax Code”),
and with all material applicable rulings and regulations issued under the
provisions of ERISA and the Tax Code setting forth those requirements. No
“Reportable Event” or “Prohibited Transaction” (as each is defined in ERISA) or
withdrawal from a Multiemployer Plan caused by the Borrower has occurred and no
funding deficiency described in Section 302 of ERISA caused by the Borrower
exists with respect to any Plan or Multiemployer Plan which could have a
Material Adverse Effect. The Borrower and each ERISA Affiliate has satisfied all
of their respective funding standards applicable to such Plans and Multiemployer
Plans under Section 302 of ERISA and Section 412 of the Tax Code and the Pension
Benefit Guaranty Corporation and any entity succeeding to any or all of its
functions under ERISA (“PBGC”) has not instituted any proceedings, and there
exists no event or condition caused by the Borrower which would reasonably be
expected to constitute grounds for the institution of proceedings by PBGC, to
terminate any Plan or Multiemployer Plan under Section 4042 of ERISA which could
have a Material Adverse Effect.
t.Perfected Security Interests
. The Lien in favor of the Administrative Agent provided pursuant to Section 6.1
hereof is a valid and perfected first priority security interest in the
Collateral (subject only to the Permitted Liens), and all filings and other
actions necessary to perfect such Lien have been or will be duly taken.
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u.FCPA
. None of Borrower or any of its Subsidiaries nor, to knowledge of Borrower, any
director, manager, officer, agent, employee or other Person acting on behalf of
Borrower or any of its Subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of the
FCPA or any other applicable anti-corruption law, and Borrower has instituted
and maintains policies and procedures designed to ensure continued compliance
therewith.
v.Broker’s Fees
. The Borrower does not have any obligation to any Person in respect of any
finder’s, brokers or similar fee in connection with the Loan or this Agreement.
w.Investment Company Act
. The Borrower is not an “investment company” or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended.
x.[Intentionally Omitted.]
.
y.[Intentionally Omitted.]
.
z.Offenses and Penalties Under the Medicare/Medicaid Programs
. Except as listed on Schedule 7.26 attached hereto, as of the Closing Date,
neither the Borrower nor any Affiliate and/or employee of the Borrower or any
Affiliate is currently, to the best knowledge of the Borrower, after due
inquiry, under investigation or prosecution for, nor has the Borrower or any
Affiliate or, to the best knowledge of Borrower, after due inquiry, any current
employee of the Borrower or any Affiliate been convicted of: (a) any offense
related to the delivery of an item or service under the Medicare or Medicaid
programs; (b) a criminal offense related to neglect or abuse of patients in
connection with the delivery of a health care item or service; (c) fraud, theft,
embezzlement or other financial misconduct; (d) the obstruction of an
investigation of any crime referred to in subsections (a) through (c) of this
Section; or (e) unlawful manufacture, distribution, prescription, or dispensing
of a controlled substance. Except as listed on Schedule 7.26, as of the Closing
Date, neither the Borrower nor any Affiliate and/or, to the best knowledge of
Borrower, after due inquiry, any current employee of the Borrower or any
Affiliate has been required to pay any civil money penalty under applicable laws
regarding false, fraudulent or impermissible claims or payments to induce a
reduction or limitation of health care services to beneficiaries of any state or
federal health care program, nor, to the best knowledge of the Borrower, after
due inquiry, is the Borrower nor any Affiliate and/or to the best
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knowledge of Borrower, after due inquiry, any current employee of the Borrower
or any Affiliate currently the subject of any investigation or proceeding that
may result in such payment.
aa.Medicaid/Medicare
. Neither the Borrower nor any Affiliate of the Borrower nor any current officer
or director of the foregoing has engaged in any of the following: (i) knowingly
and willfully making or causing to be made a false statement or representation
of a material fact in any application for any benefit or payment under Medicare
or Medicaid; (ii) knowingly and willfully making or causing to be made any false
statement or representation of a material fact for use in determining rights to
any benefit or payment under Medicare or Medicaid; (iii) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment under Medicare or Medicaid on its own
behalf or on behalf of another, with intent to secure such benefit or payment
fraudulently; or (iv) knowingly and willfully soliciting or receiving any
remuneration (including any kickback, bribe or rebate), directly or indirectly,
overtly or covertly, in cash or in kind or offering to pay such remuneration:
(A) in return for referring any individual to a Person for the furnishing or
arranging for the furnishing of any item or service for which payment may be
made in whole or in part by Medicare or Medicaid; or (B) in return for
purchasing, leasing or ordering or arranging for or recommending the purchasing,
leasing or ordering of any good, facility, service or item for which payment may
be made in whole in part by Medicare or Medicaid.
ab.Consideration
. Borrower acknowledges that it desires to have this Agreement and the Financing
Agreements to which the Borrower is a party cross-collateralized and
cross-defaulted and have the Collateral serve as collateral for all of the
Liabilities and Affiliate Revolving Loan Liabilities. The Affiliate Revolving
Borrowers, the Affiliate Revolving Borrowers (QIPP) and the Borrowers are
Affiliates of each other. Each Borrower will derive substantial direct and
indirect benefit (financial and otherwise) from funds made available to the
Affiliate Revolving Borrowers pursuant to the Affiliate Revolving Loan Agreement
and the Affiliate Revolving Borrowers (QIPP) pursuant to the Affiliate Revolving
Loan Agreement (QIPP), and it is and will be to each Borrower’s, Affiliate
Revolving Borrower (QIPP)’s and Affiliate Revolving Borrower’s advantage to
assist each other in procuring such funds from the Lenders.
ac.USA Patriot Act
. Neither the Borrower nor any of its Affiliates is identified in any list of
known or suspected terrorists published by any United States government agency
(collectively, as such lists may be amended or supplemented from time to time,
referred to as the “Blocked Persons Lists”) including, without limitation, (a)
the annex to Executive Order 13224 issued on September 23, 2001, and (b) the
Specially Designated Nationals List published by the Office of Foreign Assets
Control. No part of the proceeds of any Loan will be used directly or indirectly
for any payments to any government official or employee, political party,
official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct
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business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.
ad.Absence of Foreign or Enemy Status
. Neither the Borrower nor any Affiliate of the Borrower is an “enemy” or an
“ally of the enemy” within the meaning of Section 2 of the Trading with the
Enemy Act (50 U.S.C. App. §§ 1 et seq.), as amended. Neither the Borrower nor
any Affiliate of the Borrower is in violation of, nor will the use of the Loan
violate, the Trading with the Enemy Act, as amended, or any executive orders,
proclamations or regulations issued pursuant thereto, including, without
limitation, regulations administered by the Office of Foreign Asset Control of
the Department of the Treasury (31 C.F.R. Subtitle B, Chapter V).
ae.(Intentionally Omitted)
.
af.Labor Matters
. There are no strikes or other labor disputes or grievances pending or, to the
knowledge of Borrower, threatened against Borrower. All payments due from the
Borrower on account of wages and employee and retiree health and welfare
insurance and other benefits have been paid or accrued as a liability on its
books. The consummation of the transactions contemplated by the Financing
Agreements will not give rise to a right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which Borrower is a party or by which it is bound.
ag.Capitalization
. The authorized Stock of each Borrower, as of the Closing Date, is set forth on
Schedule 7.33 hereto. Pledgor legally and beneficially owns all of the issued
and outstanding Stock of each Borrower. All issued and outstanding Stock of the
Borrower is duly authorized and validly issued, fully paid, non-assessable, free
and clear of all Liens or pledges other than Permitted Liens, and such Stock was
issued in compliance with all applicable state, federal and foreign laws
concerning the issuance of securities. No shares of the Stock of Borrower, other
than those owned by Pledgor are issued and outstanding. There are no preemptive
or other outstanding rights, options, warrants, conversion rights or similar
agreements or understandings for the purchase or acquisition from Borrower of
any equity securities of Borrower.
ah.Government Contracts
. The Borrower is not a party to any contract or agreement (including, but not
limited to, any Lease) that requires Borrower to comply with the Federal
Assignment of Claims Act, as amended (31 U.S.C. Section 3727) or, to the best of
Borrower’s knowledge, any similar state or local law.
ai.OFAC
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. Neither the Borrower, nor Guarantor, nor any beneficial owner of the Borrower
or Guarantor, is currently listed on the OFAC Lists. None of Borrower and, to
the best knowledge of Borrower, its Affiliates, are in violation of (a) the
Trading with the Enemy Act, and each of the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B Chapter V, as
amended) and any other enabling legislation or executive order relating thereto,
(b) the Patriot Act and (c) other federal or state laws relating to “know your
customer” and anti-money laundering rules and regulations.
aj.Operation of the Facilities; Operating Leases
. Each Borrower that is an Operator is the Operator of the Facility owned by
each respective Propco Borrower, in each case as identified on Schedule 1.1(d)
attached hereto. Schedule 1.1(d) identifies each Operating Lease between Propco
Borrower and the respective Operators and Administrative Agent has been provided
true, complete and correct copies of all such Operating Leases.
ak.Title to Property
. Except as could not reasonably be expected to have a Material Adverse Effect,
the applicable Borrower owns good and, in the case of real property, marketable
title to all of its properties and assets, real and personal, tangible and
intangible, of any nature whatsoever, free and clear of all Liens (except for
Permitted Liens), and except for minor defects in title that do not interfere
with in any material respect with the ability of Borrower to conduct its
business as currently conducted or utilize such properties and assets for their
intended purposes.
al.Management Fees
. The management fees payable by the applicable Borrower to Manager pursuant to
the Management Agreements is entirely used to cover and pay for actually
incurred, ordinary course costs and does not include any amount of profit.
am.CARES Act Provider Relief Payment Representations. As of the Closing Date,
Schedule 7.39 hereto sets forth with respect to the Borrower (a) the full amount
of CARES Act Provider Relief Payments or other grant, reimbursement or other
payment pursuant to the CARES Act or other COVID-19 relief program (other than
any Medicare Accelerated Payment or any PPP Loan payments) received by the
Borrower, and (b) the amount (if any) of such payment the Borrower intends to
return to HHS or other applicable Governmental Authority. The information
contained in each attestation submitted to HHS in connection with any CARES Act
Provider Relief Payment by or on behalf of the Borrower was true and correct in
all material respects as of the date submitted, and each such request complies
in all material respects with the requirements of the CARES Act. As of the
Closing Date, Borrower has not (x) elected to participate in the Medicare
Accelerated and Advance Payment Program or (y) applied for or entered into any
PPP Loan.
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9.AFFIRMATIVE COVENANTS
.
The Borrower covenants and agrees on a joint and several basis with
Administrative Agent and Lenders that, as long as any Liabilities or Affiliate
Revolving Loan Liabilities remain outstanding, and (even if there shall be no
such Liabilities or Affiliate Revolving Loan Liabilities outstanding) as long as
this Agreement remains in effect:
a.Reports, Certificates and Other Information
. The Borrower Agent shall deliver to the Administrative Agent and each Lender:
40.Financial Statements
.
(1)On or before the one hundred twentieth (120th) day after each of Guarantor’s
Fiscal Years, a copy of the annual financial statements on a consolidated basis
for Guarantor, duly certified and audited by independent certified public
accountants of nationally recognized standing selected by the Guarantor,
together with the supporting consolidating statements for each Borrower,
consisting of, at least, balance sheets and statements of income and cash flow
for such period, prepared in conformity with GAAP. In lieu of its obligations
hereunder, Guarantor may submit to Administrative Agent and Lenders, upon its
filing thereof, a copy of its form 10-K as filed with the United States Security
and Exchange Commission.
(2)On or before the forty-fifth (45th) day of the end of each of Guarantor’s
first, second and third Fiscal Quarters, a copy of the quarterly financial
statements on a consolidated basis for Guarantor, duly reviewed by independent
certified public accountants of nationally recognized standing selected by the
Guarantor, together with the supporting consolidating statements for each
Borrower, consisting of, at least, balance sheets and statements of income and
cash flow for such period, prepared in conformity with GAAP. In lieu of its
obligations hereunder, Guarantor may submit to Administrative Agent and Lenders,
upon its filing thereof, a copy of its form 10-Q as filed with the United States
Security and Exchange Commission.
(3)On or before (i) the forty-fifth (45th) day after the end of each calendar
month ending the Borrower’s first, second and third Fiscal Quarters, (ii) the
seventy-fifth (75th) day after the end of the calendar month ending the
Borrower’s final Fiscal Quarter, and (iii) the thirtieth (30th) day after the
end of each other calendar month, a copy of internally prepared financial
statements for Borrower prepared in accordance with GAAP and in a manner
substantially consistent with the financial statements referred to in Section
8.1(a)(2) hereof, signed on behalf of the Borrower by a Duly Authorized Officer
and consisting of, at least, an income statement and a balance sheet, as at the
close of such calendar month and statements of earnings for such calendar month
and for the period from the beginning of such Fiscal Year to
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the close of such calendar month, each of which must be in form, scope and
substance reasonably satisfactory to Administrative Agent and the Required
Lenders.
41.[Intentionally Omitted]
.
42.Compliance Certificates
. Contemporaneously with the furnishing of each quarterly financial statements
pursuant to Section 8.1(a)(2), a duly completed compliance certificate with
appropriate insertions (a “Compliance Certificate”), dated the date of such
annual financial statement or such Fiscal Quarter and signed on behalf of the
Borrower by a Duly Authorized Officer, which Compliance Certificate shall state
that no Default or Event of Default has occurred and is continuing, or, if there
is any such event, describes it and the steps, if any, being taken to cure it.
Each Compliance Certificate shall contain a computation of, and show compliance
with, each of the financial covenants set forth in Section 9.12 hereof (each
such computation and calculation to be in form and substance acceptable to the
Administrative Agent), and each Compliance Certificate must otherwise be in
form, scope and substance reasonably satisfactory to Administrative Agent and
the Required Lenders.
43.Real Estate Taxes
. As paid, evidence of timely payment of real estate taxes owed on the Property.
44.Notice of Default, Regulatory Matters, Litigation Matters or Adverse Change
in Business
. Forthwith upon learning of the occurrence of any of the following, written
notice thereof which describes the same and the steps being taken by the
Borrower with respect thereto: (i) the occurrence of a Default or an Event of
Default; (ii) the institution or threatened institution of, or any adverse
determination in, any litigation (other than a personal injury tort claim),
arbitration proceeding or governmental proceeding in which any injunctive relief
or money damages is sought which if adversely determined could have a Material
Adverse Effect; (iii) the receipt of any notice from any governmental agency
concerning any violation or potential violation of any regulations, rules or
laws applicable to Borrower which could have a Material Adverse Effect; (iv)
notice of the occurrence of any “Material Breach” or the receipt of any “Demand
Letter” under (and in each case as defined in) the CIA or under (and in each
such case pursuant to similar defined terms) in any other corporate integrity
agreement, corporate compliance agreement or deferred prosecution agreement
pursuant to which any Credit Party has to make a submission to any Governmental
Authority or other Person under the terms of such agreement; or (v) any Material
Adverse Change. With regard to personal injury tort claims, upon request by
Administrative Agent, Borrower shall review with Administrative Agent the
occurrence of any personal injury or other action which could reasonably give
rise to a personal injury tort claim against the Borrower as to which (i)
litigation has been instituted and is pending
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or (ii) a request for medical records has been made upon Borrower by an attorney
for the claimant on or after January 1, 2018.
45.Insurance Reports
. (i) At any time after a Default and upon the request of the Administrative
Agent, a certificate signed by a Duly Authorized Officer that summarizes the
property, casualty, liability and malpractice insurance policies carried by the
Borrower, and (ii) written notification of any material change in any such
insurance by the Borrower within five (5) Business Days after receipt of any
notice (whether formal or informal) of such change by any of its insurers.
46.Operating Budget
. No later than thirty (30) days after the end of each Fiscal Year, a copy of
the Borrower’s and Guarantor’s Fiscal Year consolidated operating budget.
47.Affiliate Transactions
. Upon the Administrative Agent’s reasonable request from time to time, a
reasonably detailed description of each of the material transactions between the
Borrower and any of its Affiliates during the time period reasonably requested
by the Administrative Agent, which shall include, without limitation, the amount
of money either paid or received, as applicable, by the Borrower in such
transactions.
48.CARES Act
. Furnish to the Administrative Agent and each Lender each of the following, to
the extent applicable: (i) any written notices of failure to pay or comply or of
any material changes to the requirements of the program received from any
Governmental Authority in connection with the CARES Act Deferred Payroll Taxes;
and (ii) any written notices of failure to pay or comply or of any material
changes to the requirements of the program received from any Governmental
Authority in connection with any CARES Act Provider Relief Payment.
49.Interim Reports
. Promptly upon receipt thereof, copies of any reports submitted to Guarantor or
Borrower by the independent accountants in connection with any interim audit of
the books of any such Person and copies of each management control letter
provided to Guarantor or Borrower by independent accountants.
50.Reports to the SEC
. Upon the Administrative Agent’s reasonable request from time to time, copies
of any and all regular, annual, periodic or special reports of Guarantor, any
Borrower or any Affiliate thereof filed with the Securities and Exchange
Commission (“SEC”); copies of any and all registration statements of Guarantor,
any Borrower or any Affiliate thereof filed with the
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SEC; and copies of any and all proxy statements or other written communications
made to security holders generally.
51.Other Information
. Such other information, certificates, schedules, exhibits or documents
(financial or otherwise) concerning the Borrower and its operations, business,
properties, condition or otherwise as the Administrative Agent or any Lender may
reasonably request from time to time.
b.Inspection; Audit Fees
. Borrower shall keep proper books of record and account in accordance with GAAP
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and shall permit (at
the expense of the Borrower provided the Borrower shall be responsible for such
reasonable expenses no more than one (1) time per year unless an Event of
Default has occurred and is continuing), representatives of the Administrative
Agent or any Person appointed by Administrative Agent to visit and inspect any
of their respective properties, to examine and make abstracts or copies from any
of their respective books and records (in each case excluding patient medical
records and other records to the extent confidential or where such examination
is prohibited under applicable Laws, including without limitation HIPAA), to
conduct a collateral audit and analysis of their respective Inventory and
Accounts and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants as often
as may reasonably be desired. In the absence of an Event of Default, the
Administrative Agent shall give the Borrower commercially reasonable prior
written notice of such exercise; provided, no notice shall be required during
the existence and continuance of any Event of Default. All such costs, expenses
and fees incurred or charged by Administrative Agent under this Section 8.2
shall bear interest at the Default Rate and shall be additional Liabilities of
Borrower to Administrative Agent, secured by the Collateral, if not promptly
paid upon the request of Administrative Agent.
c.Conduct of Business
. The Borrower shall maintain its corporate existence, shall maintain in full
force and effect all licenses, permits, authorizations, bonds, franchises,
leases, patents, trademarks and other Intellectual Property, contracts and other
rights necessary to the conduct of its business, and shall comply with all
applicable laws (including, without limitation, Healthcare Laws and
Environmental Laws), orders, regulations and ordinances of all federal, foreign,
state and local governmental authorities, except to the extent any such
non-compliance could reasonably be expected to result in a Material Adverse
Effect. The Borrower shall continue in, and limit its operations to, the same
general line of business as that currently conducted. The Borrower shall keep
proper books of record and account in which full and true entries will be made
of all dealings or transactions of or in relation to the business and affairs of
the Borrower, in accordance with GAAP (subject, however, to the GAAP
Exceptions), consistently applied.
d.Claims and Taxes
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. The Borrower agrees to pay or cause to be paid all license fees, bonding
premiums and related taxes and charges and shall pay or cause to be paid all of
the Borrower’s real and personal property taxes, assessments and charges and all
of the Borrower’s franchise, income, unemployment, payroll, use, excise, old age
benefit, withholding, sales and other taxes and other governmental charges
assessed against the Borrower, or payable by the Borrower, at such times and in
such manner as to prevent any penalty from accruing or any Lien from attaching
to its property, provided that the Borrower shall have the right to contest in
good faith, by an appropriate proceeding promptly initiated and diligently
conducted, the validity, amount or imposition of any such tax, assessment or
charge, and upon such good faith contest to delay or refuse payment thereof, if
(a) the Borrower establishes adequate reserves to cover such contested taxes,
assessments or charges, and (b) such contest does not have a Material Adverse
Effect.
e.State of Incorporation or Formation
. The Borrower’s state of incorporation or formation, as applicable, set forth
on Schedule 1.1(a) hereto shall remain the Borrower’s state of incorporation or
formation, as applicable, unless: (a) the Borrower provides the Administrative
Agent with at least thirty (30) days prior written notice of any proposed change
(provided that Borrower shall at all times be organized in a state or
commonwealth of the United States); (b) no Event of Default then exists or will
exist immediately after such proposed change; and (c) the Borrower provides the
Administrative Agent with, at Borrower’s sole cost and expense, such financing
statements, and such other agreements and documents as the Administrative Agent
shall reasonably request in connection therewith.
f.Liability Insurance
. The Borrower shall maintain, at its expense, general liability and
environmental insurance through commercial insurance in such amounts and with
such deductibles consistent with its past practices, and shall deliver to the
Administrative Agent the original (or a certified) copy of each policy of
insurance and evidence of the payment of all premiums therefor. Such policies of
insurance shall contain an endorsement showing the Administrative Agent as
additional insured thereunder to the general liability coverage and, where such
an endorsement is available from Borrower’s carrier at commercially affordable
rates, to the professional liability coverage. Administrative Agent acknowledges
that general liability insurance coverage is currently unavailable generally in
the nursing home industry at commercially affordable rates. Borrower has in
place and will maintain either (i) so long it is available at commercially
affordable rates, for the States in which the Facilities are located, indemnity
insurance with coverage limits of One Million Dollars ($1,000,000.00) per
medical incident, subject to a deductible of up to Five Hundred Thousand Dollars
($500,000.00) per claim and a sublimit per Facility of Three Million Dollars
($3,000,000.00) or (ii) general liability and malpractice insurance with single
limit coverage of Five Hundred Thousand and No/100 Dollars ($500,000.00) per
occurrence and One Million and No/100 Dollars ($1,000,000.00) cumulative.
Administrative Agent agrees that until such time as insurance coverage is
generally available in the nursing home industry at commercially affordable
rates, Administrative Agent agrees to accept Borrower’s current coverage.
Borrower shall provide Administrative Agent, (a) on an
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annual basis, information from its insurance representative, insurance carrier
or from comparable insurance carriers regarding availability of insurance and
(b) with respect to the insurance policies contemplated by this Section 8.6 and
those certain insurance policies contemplated by Section 8.7 below, prompt (but
in any event, within five (5) Business Days of any such occurrence) written
notice of any alteration or cancellation of such insurance policy.
g.Property and Other Insurance
. The Borrower shall, at its expense, keep and maintain its assets material to
the business of Borrower insured against (i) loss or damage by fire, theft,
explosion, flood, earthquake, spoilage and all other hazards and risks and (ii)
business interruption, in such amounts with such deductibles (which may include
self-insurance trusts) ordinarily insured against by other owners or users of
such properties in similar businesses of comparable size operating in the same
or similar locations. Borrower, at Borrower’s expense, shall keep and maintain
workers compensation insurance as may be required by applicable Laws. The
Borrower Agent shall deliver to the Administrative Agent the original (or a
certified) copy of each policy of insurance and evidence of payment of all
premiums therefor. All such policies of insurance shall be in form and substance
reasonably satisfactory to the Administrative Agent. Such policies of insurance
shall contain an endorsement, in form and substance satisfactory to the
Administrative Agent, showing the Administrative Agent as “Mortgagee” and
“Lender’s Loss Payee” and all loss payable to the Administrative Agent (for the
ratable benefit of the Lenders), as its interests may appear, as provided in
this Section. Such endorsement shall provide that such insurance company will
give the Administrative Agent at least thirty (30) days prior written notice
before any such policy or policies of insurance shall be altered or canceled and
that no act or default of the Borrower or any other Person shall affect the
right of the Administrative Agent to recover under such policy or policies of
insurance in case of loss or damage. The Borrower hereby directs all insurers
under such policies of insurance to pay all proceeds of insurance policies
directly to the Administrative Agent and the Administrative Agent shall absent
an Event of Default permit the Borrower to use such proceeds to restore or
rebuild the damaged property as the Borrower shall determine in its reasonable
and good faith determination.
Upon the occurrence of an Event of Default under this Agreement, the Borrower
irrevocably makes, constitutes and appoints the Administrative Agent (and all
officers, employees or agents designated by the Administrative Agent in writing
to the Borrower) as the Borrower’s true and lawful attorney-in-fact for the
purpose, subject at all times to the terms and conditions of the Commercial
Leases (if and as applicable), of making, settling and adjusting claims on
behalf of the Borrower under all such policies of insurance, endorsing the name
of the Borrower on any check, draft, instrument or other item of payment
received by the Borrower or the Administrative Agent pursuant to any such
policies of insurance, and for making all determinations and decisions of
Borrower with respect to such policies of insurance.
UNLESS THE BORROWER PROVIDES THE ADMINISTRATIVE AGENT WITH EVIDENCE OF THE
INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT WITHIN THREE BUSINESS DAYS
FOLLOWING ADMINISTRATIVE AGENT’S REQUEST, THE ADMINISTRATIVE AGENT MAY PURCHASE
INSURANCE AT THE
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BORROWER’S EXPENSE TO PROTECT THE ADMINISTRATIVE AGENT’S INTERESTS IN THE
COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT THE INTERESTS IN THE
COLLATERAL. THE COVERAGE PURCHASED BY THE ADMINISTRATIVE AGENT MAY NOT PAY ANY
CLAIMS THAT THE BORROWER MAKES OR ANY CLAIM THAT IS MADE AGAINST THE BORROWER IN
CONNECTION WITH THE COLLATERAL. THE BORROWER MAY LATER CANCEL ANY SUCH INSURANCE
PURCHASED BY THE ADMINISTRATIVE AGENT, BUT ONLY AFTER PROVIDING THE
ADMINISTRATIVE AGENT WITH EVIDENCE THAT THE BORROWER HAS OBTAINED INSURANCE AS
REQUIRED BY THIS AGREEMENT. IF THE ADMINISTRATIVE AGENT PURCHASES INSURANCE FOR
THE COLLATERAL, THE BORROWER WILL BE RESPONSIBLE FOR THE COSTS OF THAT
INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT THE ADMINISTRATIVE
AGENT MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE
EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF
THE INSURANCE MAY BE ADDED TO THE LIABILITIES SECURED HEREBY. THE COSTS OF THE
INSURANCE MAY BE MORE THAN THE COST OF INSURANCE THE BORROWER MAY BE ABLE TO
OBTAIN ON ITS OWN.
h.Environmental
. The Borrower shall promptly notify and furnish Administrative Agent with a
copy of any and all Environmental Notices which are received by it. Except where
not required to do so pursuant to any Commercial Lease, the Borrower shall take
prompt and appropriate action in response to any and all such Environmental
Notices and shall promptly furnish Administrative Agent with a description of
the Borrower’s Response thereto. The Borrower shall (a) obtain and maintain all
permits required under all applicable federal, state, and local Environmental
Laws, except as to which the failure to obtain or maintain would not have a
Material Adverse Effect; and (b) except where not required to do so pursuant to
any Commercial Lease, keep and maintain the Property and each portion thereof in
compliance with, and not cause or permit the Property or any portion thereof to
be in violation of, any Environmental Law, except as to which the failure to
comply with or the violation of which, would not have a Material Adverse Effect.
During the term of this Agreement, the Borrower shall not permit others to,
Manage, whether on or off Borrower’s Property, Hazardous Substances, except to
the extent such Management does not or is not reasonably likely to result in or
create a Material Adverse Effect. Except where not required to do so pursuant to
any Commercial Lease, the Borrower shall take prompt action in material
compliance with applicable Environmental Laws to Respond to the on-site or
off-site Release of Hazardous Substances connected with operation of its
business or Property.
i.Banking Relationship
. Except as otherwise provided in the Affiliate Revolving Loan Agreement the
Borrower and the Guarantor shall at all times maintain all of their respective
primary deposit and operating accounts with the Administrative Agent and the
Administrative Agent will act as the principal depository and remittance agent
for the Borrower and Guarantor. The Borrower agrees to pay to
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the Administrative Agent reasonable and customary fees for banking services/cash
management services of Borrower and Guarantor (the “Service Fee”). The
Administrative Agent shall be and hereby is authorized to charge any deposit or
operating account of the Borrower in respect of the Service Fee. Notwithstanding
the foregoing in this Section 8.9, Borrower, Affiliate Revolving Borrowers and
Affiliate Term Borrowers shall be permitted to open and maintain accounts with
other depositories (including, without limitation, CIT Bank N.A. and Lake Forest
Bank & Trust Company, N.A.) as long as the aggregate amount contained therein
does not at any time exceed Seven Million Five Hundred Thousand Dollars
($7,500,000).
j.Intellectual Property
. If after the Closing Date the Borrower shall own or otherwise possess any
registered patents, copyrights, trademarks, trade names, or service marks other
than those owned by Guarantor or any derivation thereof (or file an application
to attempt to register any of the foregoing), the Borrower shall promptly notify
the Administrative Agent in writing of same and execute and deliver any
documents or instruments (at the Borrower’s sole cost and expense) reasonably
required by Administrative Agent to perfect a security interest in and lien on
any such federally registered Intellectual Property in favor of the
Administrative Agent and assist in the filing of such documents or instruments
with the United States Patent and Trademark Office and/or United States
Copyright Office or other applicable registrar.
k.Change of Location; Etc
. Any of the Collateral may be moved to another location within the continental
United States so long as: (i) the Borrower provides the Administrative Agent
with at least thirty (30) days prior written notice; (ii) no Event of Default
then exists, and (iii) the Borrower provides the Administrative Agent with, at
Borrower’s sole cost and expense, such financing statements, landlord waivers,
bailee and processor letters and other such agreements and documents as the
Administrative Agent shall reasonably request. The Borrower shall defend and
protect the Collateral against and from all claims and demands of all Persons at
any time claiming any interest therein adverse to the Administrative Agent. If
the Borrower desires to change its principal place of business and chief
executive office or its name, the Borrower shall notify the Administrative Agent
thereof in writing no later than thirty (30) days prior to such change and the
Borrower shall provide the Administrative Agent with, at Borrower’s sole cost
and expense, such financing statements, amendment statements and other documents
as the Administrative Agent shall reasonably request in connection with such
change. If the Borrower shall decide to change the location where its books and
records are maintained, the Borrower shall notify the Administrative Agent
thereof in writing no later than thirty (30) days prior to such change.
l.Health Care Related Matters
. To the extent applicable, the Borrower shall cause all licenses, permits,
certificates of need, reimbursement contracts and programs, and any other
agreements necessary for the use and operation of its business or as may be
necessary for participation in Medicaid and other applicable reimbursement
programs, to remain in full force and effect, except to the extent that
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the failure to do so would not cause a Material Adverse Effect or a material
adverse effect on the prospects of the Borrowers on a consolidated basis.
m.US Patriot Act
. Borrower covenants to Administrative Agent and Lenders that if Borrower
becomes aware that it or any of its Affiliates is identified on any Blocked
Persons List (as identified in Section 7.29 hereof), Borrower shall immediately
notify Administrative Agent and Lenders in writing of such information. Borrower
further agrees that in the event any of them or any Affiliate is at any time
identified on any Blocked Persons List, such event shall be an Event of Default,
and shall entitle Administrative Agent and Lenders to exercise any and all
remedies provided in any Financing Agreements or otherwise permitted by Law. In
addition, Administrative Agent and Lenders may immediately contact the Office of
Foreign Assets Control and any other government agency Administrative Agent or
Lenders deem appropriate in order to comply with its respective obligations
under any Law regulating or relating to terrorism and international money
laundering.
n.Single Purpose Entity Provisions
. (a) The business and purposes of Borrower is and will continue to be limited
to the following: (i) for the Propco Borrower, to acquire, own, hold, lease,
maintain, develop and/or improve the Property; (ii) except for the Propco
Borrower and Diversicare Property, to operate and manage the Facilities; (iii)
to enter into and perform its obligations under this Agreement and the other
Financing Agreements and the Affiliate Revolving Loan Financing Agreements; (iv)
for the Propco Borrower, to sell, transfer, service, convey, dispose of, pledge,
assign, borrow money against, finance or otherwise deal with the Property to the
extent permitted under this Agreement and the other Financing Agreements; (v)
for the Propco Borrower, to lease the Property to the Operators; and (vi) to
engage in any lawful act or activity and to exercise any powers permitted to
entities of its type pursuant to Section 6 of the applicable Borrower’s
operating agreement or the laws of its state of organization that are related or
incidental to and necessary, convenient or advisable for the accomplishment of
the above mentioned purposes.
(b)    Borrower shall do all of the following: (i) maintain its intention to
remain Solvent and pay its debts and liabilities (including, as applicable,
shared personnel and overhead expenses) from its assets, to the extent of its
assets, as the same shall become due; (ii) do or cause to be done all things
necessary to observe organizational formalities of Borrower and preserve its
existence; and (iii) to the extent of cash flow available from operations,
intend to maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations.
o.Further Assurances
. The Borrower shall, at its own cost and expense, cause to be promptly and duly
taken, executed, acknowledged and delivered all such further acts, documents and
assurances as may from time to time be necessary or as the Administrative Agent
or any Lender may from time to time reasonably request in order to carry out the
intent and purposes of this Agreement and the
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other Financing Agreements and the transactions contemplated hereby and thereby,
including, without limitation, all such actions to establish, create, preserve,
protect and perfect a first-priority Lien in favor of the Administrative Agent
(for the ratable benefit of Lenders and Administrative Agent) on the Collateral
(including Collateral acquired after the date hereof), including on any and all
unencumbered assets of Borrower whether now owned or hereafter acquired.
p.Compliance with Anti-Terrorism Orders
. Administrative Agent and Lenders hereby notify Borrowers that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into
law October 26, 2001) (the “Patriot Act”), and the policies and practices of
Administrative Agent and Lenders, the Administrative Agent and Lenders are
required to obtain, verify and record certain information and documentation that
identifies each Borrower, which information includes the name and address of
each Borrower and such other information that will allow the Administrative
Agent and Lenders to identify each Borrower in accordance with the Patriot Act.
In addition, Borrowers shall (a) ensure that no Person who owns a controlling
interest in or otherwise controls any Borrower is or shall be listed on the OFAC
Lists, (b) not use or permit the use of the proceeds of the Loan to violate any
of the foreign asset control regulations of OFAC or any enabling statute or
Executive Order relating thereto, and (c) comply with all applicable Bank
Secrecy Act laws and regulations, as amended. Borrower shall not permit the
transfer of any interest in Borrower to any Person (or any beneficial owner of
such entity) who is listed on the OFAC Lists. Borrower shall not knowingly enter
into a Lease with any party who is listed on the OFAC Lists. Borrower shall
immediately notify Administrative Agent and Lenders if Borrower has knowledge
that the Guarantor, manger or any member or beneficial owner of Borrower,
Guarantor, Manager is listed on the OFAC Lists or (i) is indicted on or (ii)
arraigned and held over on charges involving money laundering or predicate
crimes to money laundering. Borrower shall immediately notify Administrative
Agent and Lenders if Borrower knows that any Tenant is listed on the OFAC Lists
or (A) is convicted on, (B) pleads nolo contendere to, (C) is indicted on or (D)
is arraigned and held over on charges involving money laundering or predicate
crimes to money laundering.
q.[Intentionally Omitted]
.
r.ERISA
. The Borrower shall maintain, or cause its ERISA Affiliates to maintain, each
Plan in compliance in all material respects with all material applicable
requirements of ERISA and the Tax Code.
s.Certain Healthcare Matters
. Borrower shall, promptly following the Closing Date, apply for, diligently
prosecute, and promptly upon obtaining provide Administrative Agent with copies
of, certificates of need,
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certificates of medical necessity, Medicaid and Medicare provider numbers,
license, permits and authorizations that are necessary in the generation of
accounts receivable for and with respect to the applicable Borrowers other than
Diversicare Property.
t.FCPA
. No part of the proceeds of the Loan will be used, directly or indirectly, 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 the FCPA or any other applicable anti-corruption law. Borrower
shall maintain in effect policies and procedures designed to promote compliance
by Borrower, its Subsidiaries and their respective directors, managers,
officers, employees, and agents with the FCPA and any other applicable
anti-corruption laws.
u.COVID-19 Relief Program Participation.
52.Payroll Tax Deferral Covenants. Borrower shall: (i) repay to the applicable
Governmental Authority all CARES Act Deferred Payroll Taxes at the times
required by the CARES Act and otherwise in accordance with the requirements of
the CARES Act (such date being hereinafter referred to as the “Deferred Payroll
Taxes Due Date”), (ii) promptly upon receipt, execution or delivery thereof, as
applicable, provide to Administrative Agent copies of any written notices of
failure to pay or comply or of any material changes to the requirements of the
program submitted to or received from any Governmental Authority in connection
with the CARES Act Deferred Payroll Taxes, and (iii) at the request of
Administrative Agent, provide a calculation of estimated CARES Act Deferred
Payroll Taxes and any other information related thereto, provided that the
Borrower shall have the right to contest in good faith, by an appropriate
proceeding promptly initiated and diligently conducted, the validity, amount or
imposition of any such tax, assessment or charge, and upon such good faith
contest to delay or refuse payment thereof, if (A) the Borrower establishes
adequate reserves to cover such contested taxes, assessments or charges and (B)
such contest does not have a Material Adverse Effect.
53.CARES Act Provider Relief Payment Covenants. Promptly after Borrower receives
any CARES Act Provider Relief Payment or other grant, reimbursement or other
payment pursuant to the CARES Act or other COVID-19 relief program, Borrower
shall (i) notify Administrative Agent of its receipt of such payment,
(ii) promptly upon receipt, execution or delivery thereof, as applicable,
provide to Administrative Agent copies of any written notices of failure to pay
or comply or of any material changes to the requirements of the program
submitted to or received from any Governmental Authority in connection with such
payment, and (iii) provide to Administrative Agent such additional information
regarding such payment as Administrative Agent may reasonably request.
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In the event any Credit Party elects to retain all or any portion of one or more
CARES Act Provider Relief Payments, such Credit Party shall use the proceeds
thereof exclusively for uses that are permitted pursuant to the CARES Act and
otherwise comply in all material respects with the terms of the CARES Act
(including, for the avoidance of doubt, the Relief Fund Payment Terms and
Conditions published by HHS).
54.Medicare Accelerated Payment/PPP Loans Covenants. Borrower shall not elect to
participate in the Medicare Accelerated and Advance Payment Program until
Borrower provides Administrative Agent with (i) prior written notice of its
intent to participate and (ii) such information, certificates, schedules,
exhibits or documents (financial or otherwise) concerning the Borrower and its
operations, business, properties, condition or otherwise as the Administrative
Agent may reasonably request in connection therewith (including, without
limitation, any amendments to this Agreement which Administrative Agent may
request in order to address such participation). Borrower shall not apply for or
enter into any PPP Loan until (i) Borrower receives the prior written consent of
Administrative Agent (which consent may be withheld in Administrative Agent’s
commercially reasonable discretion) and (ii) Borrower provides Administrative
Agent with such information, certificates, schedules, exhibits or documents
(financial or otherwise) concerning the Borrower and its operations, business,
properties, condition or otherwise as the Administrative Agent may reasonably
request in connection therewith (including, without limitation, any amendments
to this Agreement which Administrative Agent may request in order to address
such PPP Loan).
v.Post-Closing Covenants
. Notwithstanding any other term or provision contained in this Agreement,
Borrower shall complete each of the following post-closing obligations and/or
provide to Administrative Agent each of the following documents, instruments,
agreements and information set forth below on or before the date set forth
therein (as applicable), each of which shall be completed or provided in form
and substance reasonably satisfactory to Administrative Agent.
55.Within 180 days of the Closing Date (or such later date as may be approved by
Administrative Agent in writing to the extent there are any delays caused by
weather or the responsiveness of a Governmental Authority for any Governmental
Approvals with respect to such work), Borrower shall address the approximately
$320,163 of repairs identified in the property condition reports made with
respect to the Facilities made by EMG in December, 2019.
56.Within 90 days of the Closing Date, Borrower, Affiliate Revolving Borrowers
and/or Affiliate Revolving Borrowers (QIPP) shall open and maintain certain
accounts as permitted by Section 8.9 hereof at each of CIT Bank N.A. and Lake
Forest Bank &
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Trust Company, N.A., and deliver a Deposit Account Control Agreement covering
such accounts to Administrative Agent.
57.Within 180 days of the Closing Date, Borrower shall provide Operations and
Maintenance programs for all Facilities to the Administrative Agent.
58.Prior to November 30, 2020, Administrative Agent shall have ordered a field
examination of the Borrower’s books and records, assets, and operations, which
examination shall be completed in a reasonable time thereafter and be
satisfactory to the Administrative Agent in its sole and absolute discretion.
59.Within 180 days of the Closing Date (or such later date as may be approved by
Administrative Agent in writing to the extent there are any delays caused by
weather or the responsiveness of a Governmental Authority for any Governmental
Approvals with respect to such work), Borrower shall address the moisture issues
occurring at the Facility operated by Diversicare Windsor House, LLC identified
in the property condition reports.
60.Within 180 days of the Closing Date (or such later date as may be approved by
Administrative Agent in writing to the extent there are any delays caused by the
State’s responsiveness), Borrower shall either participate in the Kansas
Petroleum Storage Tank Release Trust Fund Program or obtain environmental
insurance for the underground storage tank, and provide documentation of such
action to Administrative Agent, at the Facility operated by Diversicare of
Hutchinson, LLC.
61.Within 180 days of the Closing Date, Borrower shall repair or replace the
circuit breaker panels at the Facility operated by Diversicare Chisolm, LLC
identified in the property condition reports as needing repair or replacement.
10.NEGATIVE COVENANTS
.
The Borrower covenants and agrees on a joint and several basis with
Administrative Agent and Lenders that as long as any Liabilities or Affiliate
Revolving Loan Liabilities remain outstanding, and (even if there shall be no
such Liabilities or Affiliate Revolving Loan Liabilities outstanding) as long as
this Agreement remains in effect (unless the Required Lenders shall give (or
Administrative Agent upon instruction by Required Lenders to give) prior written
consent thereto):
a.Encumbrances
. The Borrower shall not create, incur, assume or suffer to exist any Lien of
any nature whatsoever on any of its assets or property, including, without
limitation, the Collateral, other than the following (“Permitted Liens”):
(i) Liens securing the payment of taxes, either not yet due or the validity of
which is being contested in good faith by appropriate proceedings, and as to
which the Borrower shall, if appropriate under GAAP, have set aside on its books
and records
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adequate reserves, provided, that such contest does not have a material adverse
effect on the ability of the Borrower to pay any of the Liabilities, or the
priority or value of the Administrative Agent’s Lien in the Collateral;
(ii) deposits under workmen’s compensation, unemployment insurance, social
security and other similar laws made in ordinary course of business; (iii) Liens
in favor of the Administrative Agent (for the ratable benefit of Lenders and
Administrative Agent); (iv) liens imposed by law, such as mechanics’,
materialmen’s, landlord’s, warehousemen’s, carriers’ and other similar liens,
securing obligations incurred in the ordinary course of business that are not
past due for more than thirty (30) calendar days, or that are being diligently
contested in good faith by appropriate proceedings and for which appropriate
reserves have been established, or that are not yet due and payable;
(v) purchase money security interests upon or in any property acquired or held
by the Borrower in the ordinary course of business to secure the purchase price
of such property so long as: (a) the aggregate indebtedness relating to such
purchase money security interests and Capitalized Lease Obligations does not at
any time exceed Three Million and No/100 Dollars ($3,000,000.00) in the
aggregate at any time, (b) each such lien shall only attach to the property to
be acquired; and (c) the indebtedness incurred shall not exceed one hundred
percent (100%) of the purchase price of the item or items purchased; (v) pledges
and deposits made in the ordinary course of business in compliance with
workmen’s compensation laws, unemployment insurance and other social security
laws or regulations, or deposits to secure performance of tenders, statutory
obligations, trade contracts (other than for Indebtedness), leases (other than
Capital Lease Obligations), surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of Borrower’s
business as presently conducted; (vi) any Lien securing a judgment; provided,
that any Lien securing a judgment in excess of Five Hundred Thousand Dollars
($500,000.00) that remains unsatisfied or undischarged for more than thirty (30)
days shall not be a Permitted Lien, unless such judgment is either (x) fully
insured and such insurer has admitted liability or (y) is being contested or
appealed by appropriate proceedings and the enforcement of such judgment is
stayed during the course of such contest or appeal, provided that Borrower has
established reserves adequate for payment of such judgment and in the event such
contest or appeal is ultimately unsuccessful pays such judgment within ten (10)
days of the final, non-appealable ruling rendered in such contest or appeal; and
(vii) financing statements with respect to a lessor’s rights in and to personal
property leased to a Borrower in the ordinary course of business other than
through a Capitalized Lease Obligations.
b.Indebtedness; Capital Expenditures
. Borrower shall not incur, create, assume, become or be liable in any manner
with respect to, or permit to exist, any Indebtedness, except (i) the
Liabilities, (ii) HUD Financing (but only for purposes of payment and release of
a Propco Borrower and such Propco Borrower’s Collateral in accordance with
Section 6.8 hereof), (iii) the Commercial Leases, and any extensions or renewals
thereof, (iv) trade obligations and normal accruals in the ordinary course of
business not yet due and payable, (v) the indebtedness not to at any time exceed
Three Million and No/100 Dollars ($3,000,000.00) relating to the purchase money
security interests and Capitalized Lease Obligations permitted pursuant to
Section 9.1 hereof, (vi) intercompany Indebtedness of the Borrower to the extent
permitted under Section 9.4, and (vii) the CARES Act Deferred Payroll Taxes.
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c.Consolidations, Mergers or Transactions; Subsidiary
. Other than any Permitted Acquisition, the Borrower shall not be a party to any
merger, consolidation, recapitalization or other exchange of Stock, or purchase
or otherwise acquire all or substantially all of the assets or Stock of any
class of, or any other evidence of an equity interest in, or any partnership,
limited liability company, or joint venture interest in, any other Person
(whether in one transaction or a series of related transactions); provided,
that, with prior written notice to Administrative Agent, a Borrower may merge or
consolidate with, or dissolve into, another Borrower so long as the surviving
entity remains a Borrower for all purposes under this Agreement and the other
Financing Agreements. The Borrower shall not form or establish any Subsidiary
without the Administrative Agent’s prior written consent, unless each of the
requirements identified on Schedule 9.3 hereto are satisfied, as reasonably
determined by the Administrative Agent. With prior notice to Administrative
Agent, Borrower may dissolve an inactive Subsidiary that does not conduct any
business operations and has assets with a book value not in excess of Ten
Thousand and No/100 Dollars ($10,000.00) (“Inactive Subsidiary”), provided that
any assets are transferred to Guarantor or an existing Subsidiary which is a
Borrower under this Agreement or the Affiliate Revolving Loan Agreement.
d.Investments or Loans
. The Borrower shall not make, incur, assume or permit to exist any loans or
advances, or any investments in or to any other Person, except (i) investments
in short-term direct obligations of the United States Government, agency or
instrumentality thereof; or any (ii) investments in negotiable certificates of
deposit issued by the Administrative Agent or by any other bank reasonably
satisfactory to the Administrative Agent, payable to the order of the Borrower
or to bearer, (iii) investments in commercial paper rated at least A-1 by
Standard & Poor’s Corporation or P-1 by Moody’s Investors Service, Inc., or
carrying an equivalent rating by a nationally recognized rating agency if both
of the two named rating agencies cease publishing ratings of investments, (iv)
investments in money market funds which invest substantially all their assets in
securities of the types described in clauses (i) through (iii), above; provided
that, in each case, such investment is reasonably acceptable to the
Administrative Agent, (iv) other short-term investments as may be permitted by
Administrative Agent, (vi) loans or advances made by any Borrower to Guarantor,
any other Borrower or any Affiliate Revolving Borrower, (vii) loans and advances
to employees permitted under Section 9.8; (viii) investments by the Borrowers in
their respective Subsidiaries existing on the date hereof and additional
investments by the Borrower in their respective Subsidiaries so long as such
Subsidiary is a Borrower under this Agreement; and (iv) loans or advances made
to the applicable hospital operator under either (x) the Indiana IGT Arrangement
(as defined in the Affiliate Revolving Loan Agreement) or (y) a Texas IGT
Arrangement (as defined in the Affiliate Revolving Loan Agreement).
e.Guarantees
. The Borrower shall not guarantee, endorse or otherwise in any way become or be
responsible for obligations of any other Person, whether by agreement to
purchase the Indebtedness of any other Person or through the purchase of goods,
supplies or services, or maintenance of working capital or other balance sheet
covenants or conditions, or by way of
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stock purchase, capital contribution, advance or loan for the purpose of paying
or discharging any Indebtedness or obligation of such other Person or otherwise,
except (i) endorsements of negotiable instruments for collection in the ordinary
course of business, and (ii) the Indebtedness permitted under Section 9.2,
above.
f.Disposal of Property
. The Borrower shall not sell, assign, lease, convey, lease, transfer or
otherwise dispose of (whether in one transaction or a series of transactions)
all or any substantial part of its properties, assets and rights (or sell or
assign, with or without recourse, any receivables) to any Person except (a)
sales of Inventory in the ordinary course of business, (b) sales of Equipment
being replaced in the ordinary course of business with other Equipment with a
fair market value and orderly liquidation value equal to or greater than the
Equipment being replaced, (c) sales in the ordinary course of business of
personal property that is obsolete, unmerchantable or otherwise unsalable,
unusable or unnecessary to Borrower’s business, (d) sales, leases and
assignments of personal property between one Borrower to another Borrower, and
(e) the sale, conveyance or transfer (a “Permitted Disposition”) of any one or
more of the Facilities provided that:
(i)     at the time of each such Permitted Disposition, no Default or Event of
Default shall have occurred and be continuing or would result from such
transaction (including, without limitation, any breach or violation of any
financial covenant set forth in Section 9.12 hereof);
(ii)     that such Permitted Disposition is an arm’s length transaction for the
fair value of the Facility being sold or transferred;
(iii)     such Permitted Disposition shall be consummated in accordance with all
applicable Law; and
(iv)     at least five (5) Business Days prior to the consummation of the
Permitted Disposition, the Borrower whose Facility is being disposed of shall
have delivered to the Administrative Agent an Officer’s Certificate certifying
that such transactions comply with the foregoing provisions (which shall have
attached thereto reasonable back-up data and calculations showing such
compliance).
Solely for purpose of this Section 9.6 in connection with the consummation of
any one or more Permitted Dispositions complying in all respects with the
foregoing requirements, or as permitted pursuant to Section 6.8, Administrative
Agent and Lender will fully release and discharge the applicable lien and
security interest granted to Administrative Agent to secure the Loan (for the
ratable benefit of the Lenders and the Administrative Agent) under this
Agreement and the Financing Agreements on the specific Collateral of such
applicable Borrower or Borrowers (the “Released Collateral”), and will fully
release and discharge such Borrower or Borrowers (the “Released Borrowers”) from
their obligations under this Agreement and any Financing Agreement, including
the Term Loan Note (except for contingent indemnification obligations that
survive by their terms herein, including, without limitation, pursuant to
Sections
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12.9 and 12.16), provided that and conditioned upon satisfaction of each of the
foregoing, in the sole determination of the Administrative Agent:
(1)    The release documents are reasonably acceptable to Administrative Agent
and customary for recording the release of liens and security interests in the
applicable Collateral in the jurisdictions where the liens and security in the
Released Collateral are filed or recorded. Released Borrowers shall be
responsible for the cost and expense of preparing and recording the applicable
release documents;
(2)    All reasonably requested instruments, documents and agreements by the
Administrative Agent and Lenders in connection with such Permitted Dispositions
are duly executed and delivered by the Released Borrowers and, if applicable,
any other Borrower (including amendments to this Agreement and the other
Financing Agreements); and
(3)    The Released Borrowers shall, substantially simultaneously with (and in
any event not later than the first (1st) Business Day following the receipt of
the net cash proceeds from the insurance or incurrence of the Permitted
Disposition), apply and pay in immediately available funds without setoff or
deduction of any kind an amount equal to (A) the loan value apportioned to the
Facility or Facilities being disposed of as set forth on Schedule 9.6 attached
hereto (which Schedule shall identify the values given to the respective
Facilities for purposes of achieving such loan to value based on the “Debt
Allocation Percentage” column on such Schedule) to prepay the outstanding Term
Loan amount in accordance with Section 2.10 and any other related then due and
owing Liabilities, if such Permitted Disposition is with respect to any Facility
listed on Schedule 9.6 hereof or (B) an amount equal to one hundred percent
(100%) of such net cash proceeds of such Permitted Disposition to be applied to
the outstanding Term Loans and any other related then due and owing Liabilities,
if such Permitted Disposition is with respect to any Facility not listed on
Schedule 9.6 and that was acquired by the Borrowers pursuant to a Permitted
Acquisition.
Notwithstanding the release and discharge of the Released Borrowers and the
Released Collateral as provided in this Section 9.6, this Agreement, the other
Financing Agreements and the Lien of the Administrative Agent on the Collateral
(and any other Lien provided by the other Financing Agreements, including
pursuant to the applicable Mortgages), shall remain and continue in full force
and effect as to the Borrowers other than the Released Borrower and the
Collateral (and other assets and property subject to the other Financing
Agreements) other than the Released Collateral. No Prepayment Premium shall be
required or due in respect of any prepayment on the Loan made by Borrower
pursuant to a Permitted Disposition.
g.Use of Proceeds
. The Borrower shall use the proceeds of the Term Loan only for the following
purposes: (a) payment of certain capital expenditures in the ordinary course of
Borrower’s business; (b) to refinance an aggregate amount equal to $0.00 of
Affiliate Revolving Loans under the Original Affiliate Revolving Loan Agreement;
(c) for the payment in full in an aggregate amount equal to $11,400,000 of the
“Acquisition Loan” (as defined in the Original Term Loan Agreement), after which
time, for the avoidance of doubt, the “Acquisition Loan Commitment” (as defined
in the
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Original Term Loan Agreement) shall be terminated, and (d) to pay reasonable and
actually incurred transaction costs and expenses in connection with this
Agreement and the transactions contemplated hereby.
h.Loans to Officers; Consulting and Management Fees
. The Borrower shall not make any loans to its officers, directors, equity
holders, manager, member, or employees or to any other Person, and the Borrower
shall not pay any consulting, management fees or similar fees to its officers,
directors, equity holders, member, manager, employees, or Affiliates or any
other Person, whether for services rendered to the Borrower or otherwise;
provided, however, the Borrower shall be permitted to (i) make advances to its
employees in an aggregate amount not to exceed One Hundred Thousand Dollars
($100,000) in any Fiscal Year of Borrower for all such employees collectively,
in each case, provided that both immediately before such contemplated payment(s)
or after giving effect to any such payment(s) no Default or Event of Default
shall exist or have occurred or result therefrom; (ii) pay reasonable outside
directors fees; and (iii) pay the management fees permitted by the Management
Agreements (with an absolute cap on the payment of any and all management fees
notwithstanding anything to the contrary contained in the Management Agreements
of five percent (5.0%) of the total revenues of Borrowers on a consolidated
basis during any Fiscal Year). Administrative Agent acknowledges that travel
advances issued in the ordinary course of business do not constitute loans for
purposes of this Section 9.8.
i.Dividends, Distributions and Stock Redemptions
. The Borrower shall not (a) declare, make or pay any dividend or other
distribution (whether in cash, property or rights or obligations) to or for the
benefit of any officer, member, equity holder, director, or any Affiliate or any
other Person other than (i) to Guarantor, provided that both immediately before
such contemplated payment(s) or after giving effect to any such payment(s)
Guarantor is in compliance with Section 9.12(b), (ii) distributions under the
Borrower Cash Management Program, including distributions for Guarantor’s normal
quarterly dividends to common shareholders, and (iii) payment of the management
fees under the Management Agreements (subject to subsection (iii) of Section 9.8
above), or (b) purchase or redeem any of the Stock of the Borrower or any
options or warrants with respect thereto, declare or pay any dividends or
distributions thereon, or set aside any funds for any such purpose.
Notwithstanding the foregoing or anything to the contrary contained herein, the
foregoing declarations, payments, distributions, purchases or redemptions set
forth in this Section 9.9 shall, in each case, be in both manner and amount
consistent with the Borrower’s historical practices.
j.Payments in Respect of Subordinated Debt
.
62.[Intentionally Omitted.]
63.The Borrower shall not make any payment in respect of any Indebtedness for
borrowed money that is subordinated to the Liabilities (including, without
limitation, the
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Subordinated Debt); provided, however, the Borrower shall be permitted to make
solely those payments expressly permitted pursuant to the terms of any
Subordination Agreements, in each case, as long as the Borrower is in compliance
with the financial covenants contained in Section 9.12 hereof both immediately
before and after any such contemplated or actual payment, provided, further,
that both immediately before any such contemplated payment or after giving
effect to any such payments no Default or Event of Default shall exist or have
occurred or result therefrom, unless otherwise permitted expressly under the
terms of such Subordination Agreements.
k.Transactions with Affiliates
. Except as expressly permitted under this Agreement, and except for the
Management Agreements and payment of the fee permitted by the terms of the
Management Agreements (subject to subsection (iii) of Section 9.8 above), and
the Borrower Cash Management Program, the Borrower shall not transfer any cash
or property to any Affiliate or enter into any transaction, including, without
limitation, the purchase, lease, sale or exchange of property or the rendering
of any service to any Affiliate; provided, however, except as otherwise
expressly restricted under this Agreement, that the Borrower may transfer cash
or property to Affiliates and enter into transactions with Affiliates for fair
value in the ordinary course of business pursuant to terms that are no less
favorable to the Borrower than the terms upon which such transfers or
transactions would have been made had such transfers or transactions been made
to or with a Person that is not an Affiliate.
l.Financial Covenants
. Commencing with the Fiscal Quarter ending September 30, 2020 and continuing
thereafter:
64.Minimum Fixed Charge Coverage Ratio
. Borrowers shall not permit the Fixed Charge Coverage Ratio of Parent and each
of its Subsidiaries, taken as a whole, to be less than 1.05 to 1.00 for the
Fiscal Quarter (i) ending September 30, 2020, measured on the last day of such
Fiscal Quarter on a trailing nine (9) month basis and (ii) ending December 31,
2020 and for each Fiscal Quarter thereafter, each measured on the last day of
the applicable Fiscal Quarter on a trailing twelve (12) month basis.
65.Minimum Adjusted EBITDA (QIPP Funds) (Parent and its Subsidiaries)
. Borrowers shall not permit the Adjusted EBITDA (QIPP Funds) of Parent and each
of its Subsidiaries, taken as a whole, to be less than (i) $9,750,000 for the
Fiscal Quarter ending September 30, 2020, measured on the last day of the
applicable Fiscal Quarter on a trailing nine (9) month basis, and (ii)
$13,000,000 for the Fiscal Quarter ending December 31, 2020 and for each Fiscal
Quarter thereafter, each measured on the last day of the applicable Fiscal
Quarter on a trailing twelve (12) month basis.
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66.Minimum Adjusted EBITDA (QIPP Funds) (Affiliate Revolving Borrowers (QIPP)
Only)
. Borrowers shall not permit the Adjusted EBITDA (QIPP Funds) of Affiliate
Revolving Borrowers (QIPP), taken as a whole, to be less than $825,000 for the
Fiscal Quarter ending September 30, 2020 and for each Fiscal Quarter thereafter,
each measured on the last day of the applicable Fiscal Quarter on a trailing
twelve (12) month basis.
67.Minimum Adjusted EBITDAR
. Borrower shall not permit the Adjusted EBITDAR of the Operators (as defined
herein) and the Affiliate Revolving Borrowers (QIPP) (other than Diversicare
Humble, LLC), taken as a whole, to be less than Ten Million Dollars
($10,000,000) for the Fiscal Quarter ending September 30, 2020 and for each
Fiscal Quarter thereafter, measured on the last day of the applicable Fiscal
Quarter on a trailing twelve (12) month basis; provided, Administrative Agent
acknowledges the minimum Adjusted EBITDAR herein will need to be adjusted to a
mutually acceptable dollar amount as a result of any HUD Financing in accordance
with Section 6.8 of the Affiliate Revolving Loan Agreement.
Notwithstanding anything to the contrary contained herein, Borrower,
Administrative Agent and the Lenders hereby agree that (x) for purposes of
determining whether Borrower is in compliance with Section 9.12(a) (Minimum
Fixed Charge Coverage Ratio) and Section 9.12(b) (Minimum Adjusted EBITDA
(QIPP)) herein, the Borrower may, solely for the Fiscal Years ending December
31, 2020 and December 31, 2021, add back the amount of Cash Cost of Self-Insured
Professional and General Liability for such period that were previously
deducted, in an amount not to exceed $1,500,000 during such 12 month period,
solely to the extent such claims are associated with those facilities located in
the State of Kentucky which were previously owned or leased by Borrower or
Borrower’s affiliates and (y) for purposes of calculating the financial
covenants set forth in Section 9.12, after any Forgiveness Determination Date
(defined below), any portion of any such CARES Act Provider Relief Payment or
other grant, reimbursement or other payment pursuant to the CARES Act or other
COVID-19 relief program not forgiven shall be subtracted from EBITDA and deemed
included in the financial covenant calculations in Section 9.12, which covenants
shall be re-calculated on a retroactive basis for any applicable period where
such amounts were originally excluded. The term “Forgiveness Determination Date”
as used herein shall mean any date the applicable Governmental Authority
determines that any such CARES Act Provider Relief Payments or other grants,
reimbursements or other payments pursuant to the CARES Act or other COVID-19
relief program are not forgiven.
m.Change in Nature of Business
. Propco Borrower shall not engage, directly or indirectly, in any business
other than owning and/or leasing the Property to the Operators and matters
incidental or directly related thereto. Borrowers other than Propco Borrower and
Diversicare Property shall not engage, directly or indirectly, in any business
other than operating the Facilities leased to them by Propco Borrower.
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n.Other Agreements
. The Borrower shall not enter into any agreement containing any provision which
would be violated or breached by the performance of its obligations hereunder or
under any Financing Agreement to which Borrower is a party or which would
violate or breach any provision hereof or thereof, or that would or is
reasonably likely to adversely affect the Administrative Agent’s or any Lender’s
interests or rights under this Agreement and the other Financing Agreements to
which Borrower is a party or the likelihood that the Liabilities will be paid in
full when due, nor shall the Borrower’s certificate of formation, bylaws,
articles of incorporation, operating agreement, partnership agreement or other
governing document (each a “Governing Document”), as applicable, be amended or
modified in any way that would violate or breach any provision hereof or of any
Financing Agreement to which Borrower is a party, or that would or is reasonably
likely to adversely affect the Administrative Agent’s or any Lender’s interests
or rights under this Agreement and the other Financing Agreements to which
Borrower is a party or the likelihood that the Liabilities will be paid in full
when due; provided, prior to any amendment or modification of any of the
Borrower’s Governing Documents, the Borrower shall furnish a correct and
complete copy of any such proposed amendment or modification to the
Administrative Agent.
o.Blocked Accounts and Lock Box Accounts
. The Borrower shall not establish or open any blocked account or any lock box
accounts after the Closing Date unless in favor of and with the Administrative
Agent.
p.Amendments to Restricted Agreements
. The Borrower shall not amend, modify or supplement any Restricted Agreement in
any manner that would or is reasonably likely to adversely affect the
Administrative Agent’s or any Lender’s interests under this Agreement and the
other Financing Agreements to which Borrower is a party, without the
Administrative Agent’s prior written consent. Within three (3) Business Days
after entering into any non-adverse amendment, modification or supplement to any
Restricted Agreement, the Borrower Agent shall deliver to the Administrative
Agent a complete and correct copy of such amendment, modification or supplement.
q.State of Incorporation or Formation
. The Borrower shall not change its state of incorporation or formation, as
applicable, from that set forth on Schedule 1.1(a) hereto. The Borrower shall
not convert or change its status as a type of Person (e.g., corporation, limited
liability company, partnership or limited partnership).
r.Environmental
. Except as to environmental conditions for which it is not responsible pursuant
to any Commercial Lease, the Borrower shall not permit the Property or any
portion thereof to be
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involved in the use, generation, manufacture, storage, disposal or
transportation of Hazardous Substances except in compliance in all material
respects with all Environmental Laws.
s.Fiscal Year
. The Borrower shall not change its Fiscal Year.
t.Restrictions on Fundamental Changes
. Without duplication of any of the foregoing, Borrower shall not:
68.except as expressly permitted in accordance with Section 9.3 hereof,
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution);
69.except as required upon the termination of a Commercial Lease or in
connection with a Texas IGT Arrangement (as defined in the Affiliate Revolving
Loan Agreement), transfer, assign, convey or grant to any other Person, other
than another Borrower, the right to operate or control any Location, whether by
lease, sublease, management agreement, joint venture agreement or otherwise;
70.without providing Administrative Agent with thirty (30) days’ prior written
notice, change its legal name (and Borrower shall provide Administrative Agent
with, at Borrower’s sole cost and expense, such amendment and financing
statements and other documents as Administrative Agent shall reasonably request
in connection with such contemplated change);
71.except as expressly permitted in accordance with Section 9.3 hereof, suffer
or permit to occur any change in the legal or beneficial ownership of the
capital stock, partnership interests or membership interests, or in the capital
structure, or any material change in the organizational documents or governing
documents, of Borrower;
72.except as permitted by a Texas IGT Arrangement (as defined in the Affiliate
Revolving Loan Agreement) change the licensed operator, manager or property
manager for any Property; or
73.consent to or acknowledge any of the foregoing.
u.Margin Stock
. Borrower shall not carry or purchase any “margin security” within the meaning
of Regulations U, T or X of the Board of Governors of the Federal Reserve
System.
v.Truth of Statements and Certificates
. Borrower shall not furnish to the Administrative Agent or any Lender any
certificate or other document that contains any untrue statement of a material
fact or that omits to state a
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material fact necessary to make it not misleading in light of the circumstances
under which it was furnished.
w.Commercial Leases
. Without the prior written consent of Administrative Agent, which consent will
not unreasonably be withheld: (a) Borrower (other than Diversicare Property)
shall not enter into any Commercial Lease as to which a Borrower would be the
lessee; (b) except in connection with a Texas IGT Arrangement (as defined in the
Affiliate Revolving Loan Agreement), no Person shall be the Operator of the
Facility other than the applicable Borrower; and (c) except in connection with a
Texas IGT Arrangement (as defined in the Affiliate Revolving Loan Agreement), no
Operating Lease will be entered into between Borrower and any Operator of the
Facilities (other than an Operating Lease by and among a Propco Borrower and any
Borrower).
x.ERISA
. Borrower shall not, and shall not cause or permit any ERISA Affiliate to,
cause or permit to occur an unfunded pension fund obligation and liability to
the extent such unfunded pension fund obligation and liability would reasonably
be expected to result in taxes, penalties and other liability in excess of Two
Hundred Fifty Thousand Dollars ($250,000) in the aggregate.
9.25    Miscellaneous. Borrower shall not (a) voluntarily cancel any claim or
debt owing to it, except for reasonable consideration or in the ordinary course
of business, the effect of which would be a Material Adverse Change, or (b)
enter into any agreement containing any provision that would (i) be violated or
breached by any borrowing by Borrower hereunder or the performance by Borrower
of any of its Liabilities hereunder or under any other Financing Agreement to
which it is a party, or (ii) prohibit Borrower from granting to Administrative
Agent (for the benefit of the Lenders and itself) a Lien on any of Borrower’s
assets as contemplated hereunder, except for (w) any restrictions imposed by any
Permitted Lien pursuant to Section 9.1; (x) any restrictions imposed by any
agreement relating to any Indebtedness permitted by Section 9.2; (y) customary
provisions contained in leases and licenses entered into in the ordinary course
of Borrower’s business restricting the assignment thereof; and (z) any
restrictions imposed by applicable Laws. Without the prior written consent of
Administrative Agent and Required Lenders, the management fees payable by
Borrower to Manager pursuant to the Management Agreements shall not include any
amount of profit (but shall entirely be used to cover and pay for actually
incurred, ordinary course costs).
The Borrower agrees that compliance with this Section 9 is a material inducement
to the Lenders’ advancing credit under this Agreement. The Borrower further
agrees that in addition to all other remedies available to the Administrative
Agent and the Lenders, the Administrative Agent and Lenders shall be entitled to
specific enforcement of the covenants in this Section 9, including injunctive
relief.
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11.HEALTH CARE MATTERS
.
Without limiting the generality of any representation or warranty made in
Section 7 or any covenant made in Sections 8 or 9, each Borrower represents and
warrants on a joint and several basis to and covenants with the Administrative
Agent and each Lender (or any Affiliate Revolving Loan Liabilities shall be
outstanding under the Affiliate Revolving Loan Agreement), that:
a.[Intentionally Omitted]
.
b.Certificate of Need
. If required under applicable Law, each Borrower has and shall maintain in full
force and effect a valid certificate of need (“CON”) or similar certificates,
license, permit, registration, certification or approval issued by the
applicable Governmental Authority for the requisite number of beds in each
Property (the “Licenses”). Borrower shall cause to be operated the Location and
the Property in a manner such that the Licenses shall remain in full force and
effect at all times, except to the extent the failure to do so would not cause a
Material Adverse Effect or a material adverse effect on the prospects of the
Borrowers on a consolidated basis. True and complete copies of the Licenses have
been delivered to Administrative Agent.
c.Licenses
. The Licenses: (i) are and shall continue in full force and effect at all times
throughout the term of this Agreement and are and shall be free from
restrictions or known conflicts which would materially impair the use or
operation of any Property for its current use, and if any Licenses become
provisional, probationary, conditional or restricted in any way (collectively
“Restrictions”), Borrower shall take or cause to be taken prompt action to
correct such Restrictions; (ii) may not be, and have not been, and will not be
transferred to any location other than the Property; and (iii) have not been and
will not be pledged as collateral security for any other loan or indebtedness.
Borrower shall not do (or suffer to be done) any of the following:
74.Rescind, withdraw, revoke, amend, modify, supplement, or otherwise alter the
nature, tenor or scope of the Licenses for any Property without Administrative
Agent’s prior written consent;
75.Amend or otherwise change any Property’s licensed beds capacity and/or the
number of beds approved by the applicable Governmental Authority without
Administrative Agent’s prior written consent; or
76.Unless required to do so by the applicable Governmental Authority, replace,
assign or transfer all or any part of any Property’s beds to another site or
location (other than to any other Property) without Administrative Agent’s prior
written consent.
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12.DEFAULT, RIGHTS AND REMEDIES OF THE ADMINISTRATIVE AGENT
.
a.Event of Default
. Any one or more of the following shall constitute an “Event of Default” under
this Agreement:
77.the Borrower fails to pay: (i) any principal or interest payable hereunder or
under a Term Loan Note on the date due, declared due or demanded (including,
without limitation, any amount due under Sections 2.4 or 2.15); or (ii) any
other amount payable to the Administrative Agent or any Lender under this
Agreement or under any other Financing Agreement to which the Borrower is a
party (including, without limitation, the Term Loan Notes) within five (5)
calendar days after the date when any such payment is due and, with respect to
clause (ii) only, such failure is not cured within five (5) calendar days after
notice to Borrower by Administrative Agent;
78.the Borrower fails or neglects to perform, keep or observe any of the
covenants, conditions or agreements set forth in (i) Sections 8.1(a), 8.1(c),
8.2, 8.5, 8.6, 8.7, 8.9, 8.11, 8.12, 8.17 or 8.22 hereof, (ii) any Section of
Section 9 hereof (other than Section 9.18 hereof), or (iii) any Section of
Section 10 hereof and, with respect to such Sections in Section 10 only, such
failure or neglect shall continue for a period of five (5) calendar days after
the earlier of (1) the date the Borrower actually knew of such failure or
neglect and (2) notice to the Borrower by the Administrative Agent.
79.the Borrower fails or neglects to perform, keep or observe any of the
covenants, conditions, promises or agreements contained in this Agreement (which
is not otherwise specifically referenced in this Section 11.1) and such failure
or neglect shall continue for a period of thirty (30) calendar days after the
earlier of (i) the date the Borrower actually knew of such failure or neglect
and (ii) notice to the Borrower by the Administrative Agent;
80.any representation or warranty heretofore, now or hereafter made by the
Borrower in connection with this Agreement or any of the other Financing
Agreements to which Borrower is a party is untrue, misleading or incorrect in
any material respect, or any schedule, certificate, statement, report, financial
data, notice, or writing furnished at any time by the Borrower to the
Administrative Agent or any Lender is untrue, misleading or incorrect in any
material respect, on the date as of which the facts set forth therein are stated
or certified;
81.a judgment, decree or order requiring payment in excess of Five Hundred
Thousand Dollars ($500,000) shall be rendered against the Borrower and such
judgment or order shall remain unsatisfied or undischarged and in effect for
thirty (30) consecutive days without a stay of enforcement or execution,
provided that this clause (e) shall not apply to any judgment, decree or order
for which the Borrower is fully insured and with respect to which the insurer
has admitted liability, or such judgment, decree or order is being contested or
appealed by appropriate proceedings;
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82.a notice of Lien, levy or assessment is filed or recorded with respect to any
of the assets of the Borrower (including, without limitation, the Collateral),
by the United States, or any department, agency or instrumentality thereof, or
by any state, county, municipality or other governmental agency or any taxes or
debts owing at any time or times hereafter to any one or more of them become a
Lien, upon any of the assets of the Borrower (including, without limitation, the
Collateral), provided that this clause (f) shall not apply to any Liens, levies,
or assessments which a Borrower is diligently contesting in good faith (provided
the Borrower has complied with the provisions of clauses (a) and (b) of Section
8.4 hereof) or which relate to current taxes not yet due and payable;
83.any material portion of the Collateral is attached, seized, subjected to a
writ or distress warrant, or is levied upon, or comes within the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors;
84.a proceeding under any bankruptcy, reorganization, arrangement of debt,
insolvency, readjustment of debt or receivership law or statute is filed against
the Borrower or any guarantor of the Liabilities, including Guarantor, and any
such proceeding is not dismissed within sixty (60) days of the date of its
filing, or a proceeding under any bankruptcy, reorganization, arrangement of
debt, insolvency, readjustment of debt or receivership law or statute is filed
by the Borrower or any guarantor of the Liabilities, including Guarantor, or the
Borrower or any guarantor of the Liabilities, including Guarantor, makes an
assignment for the benefit of creditors, or the Borrower or any guarantor of the
Liabilities, including Guarantor, takes any action to authorize any of the
foregoing;
85.except as permitted for an Inactive Subsidiary, the Borrower or Guarantor
voluntarily or involuntarily dissolves or is dissolved, or its existence
terminates or is terminated; provided that in the case of an administrative
dissolution or revocation of existence for failure to file the proper reports or
returns with the applicable governmental authorities, no Event of Default shall
be deemed to have occurred if an application for reinstatement is (i) filed
promptly (but in any event, within fifteen (15) calendar days) upon Guarantor or
Borrower receiving notice of such dissolution or revocation from the applicable
Governmental Authority and (ii) diligently pursued to completion (if reasonably
capable of being completed), as determined by the Administrative Agent in its
sole and absolute discretion;
86.the Credit Parties, taken as a whole, fail, at any time, to be Solvent;
87.the Borrower or any guarantor of the Liabilities, including Guarantor, is
enjoined, restrained, or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting all or any material part of
its business affairs;
88.a breach by the Borrower shall occur under any agreement, document or
instrument (other than an agreement, document or instrument evidencing the
lending of money), whether heretofore, now or hereafter existing between the
Borrower and any other Person and the effect of such breach if not cured within
any applicable cure period will or is likely to have or create a Material
Adverse Effect;
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89.the Borrower shall fail to make any payment due on any other obligation for
borrowed money or shall be in breach of any agreement evidencing the lending of
money and the effect of such failure or breach if not cured within any
applicable cure period would be to permit the acceleration of any obligation,
liability or indebtedness in excess of Five Hundred Thousand Dollars ($500,000);
90.there shall be instituted in any court criminal proceedings against the
Borrower, or the Borrower shall be indicted for any crime, in either case for
which forfeiture of a material amount of its property is a potential penalty,
unless (i) such actions are being contested or appealed in good faith by
appropriate proceedings, (ii) the potential forfeiture has been stayed during
the pendency of such proceedings, and (iii) no Medicare or Medicaid
reimbursement obligations are materially adversely affected by such proceedings;
91.a Change of Control shall occur;
92.any Lien securing the Liabilities shall, in whole or in part, cease to be a
perfected first priority Lien (subject only to the Permitted Liens); this
Agreement or any of the Financing Agreements to which the Borrower is a party,
shall (except in accordance with its terms), in whole or in part, terminate,
cease to be effective or cease to be the legally valid, binding and enforceable
obligations of the Borrower; or the Borrower shall directly or indirectly,
contest in any manner such effectiveness, validity, binding nature or
enforceability;
93.any breach, non-compliance, default or event of default shall occur under or
pursuant to any Subordination Agreement, or any other Financing Agreement
(including, without limitation, the Guaranty, any Hedging Agreement, any
Mortgage or any Pledge Agreement) by any party thereto (other than by the
Administrative Agent), and the same is not cured or remedied within any
applicable cure period, provided that if such default or event of default,
breach, noncompliance or default, requires the giving of notice by
Administrative Agent to any party in addition to or other than Borrower,
Administrative Agent shall have provided Borrower with such notice at the same
time as it provides such notice to such other party;
94.any material adverse breach by Borrower that would materially adversely
effect the Administrative Agent or the Lenders or their respective rights or
remedies hereunder shall occur under or pursuant to the Acquisition Documents,
after expiration of any applicable notice or cure period provided therein, if
any;
95.institution by the PBGC, the Borrower or any ERISA Affiliate of steps to
terminate any Plan or to organize, withdraw from or terminate a Multiemployer
Plan if as a result of such reorganization, withdrawal or termination, the
Borrower or any ERISA Affiliate could be required to make a contribution to such
Plan or Multiemployer Plan, or could incur a liability or obligation to such
Plan or Multiemployer Plan, in excess of Two Hundred Fifty Thousand Dollars
($250,000), or (ii) a contribution failure occurs with respect to any Plan
sufficient to give rise to a Lien under ERISA, which Lien is not fully
discharged within fifteen (15) days;
96.a Material Adverse Change shall occur;
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97.Borrower or any Affiliate of Borrower, shall challenge or contest, in any
action, suit or proceeding, the validity or enforceability of this Agreement, or
any of the other Financing Agreements, the legality or the enforceability of any
of the Liabilities or the perfection or priority of any Lien granted to the
Administrative Agent;
98.Guarantor shall revoke or attempt to revoke, terminate or contest its
obligations under the Guaranty, or the Guaranty or any provision thereof shall
cease to be in full force and effect in accordance with its terms and
provisions;
99.Any Pledgor shall revoke or attempt to revoke, terminate or contest in any
way its respective Pledge Agreement, or any provision thereof shall cease to be
in full force and effect in accordance with its terms and provisions;
100.Borrower shall be prohibited or otherwise restrained from conducting the
business theretofore conducted by it in any manner that has or could reasonably
be expected to have or result in a Material Adverse Effect;
101.there shall occur with respect to the Operator of any Location any Medicare
or Medicaid survey deficiencies at Level I, J, K, L or worse (i) which
deficiencies are not cured within the amount of time permitted by the applicable
reviewing agency; (ii) which result in the imposition by any Government
Authority or the applicable state survey agency of sanctions in the form of
either a program termination, temporary management, denial of payment for new
admission (which continues for thirty (30) days or more or pertains to more than
one Location) or facility closure and (iii) which sanctions could have a
Material Adverse Effect as determined by Administrative Agent in its reasonable
discretion. Upon the occurrence of such event, Borrower shall submit to
Administrative Agent its plan of correction for dealing with such event, and
shall periodically review its progress under the plan of correction with
Administrative Agent. Provided that Administrative Agent remains satisfied with
the progress under the plan of correction, then such Event shall not be an Event
of Default unless formal notice is given by Administrative Agent to Borrower;
102.a state or federal regulatory agency shall have revoked any license, permit,
certificate or Medicaid or Medicare qualification pertaining to the Property or
any Location, regardless of whether such license, permit, certificate or
qualification was held by or originally issued for the benefit of Borrower, a
tenant or any other Person, the revocation of which could reasonably be expected
to have a Material Adverse Effect;
103.any material default by Borrower under the terms of any material Lease
following the expiration of any applicable notice and cure period (if any);
104.James R. McKnight, Jr. or Kerry D. Massey shall not be senior officers of
the Borrower and devote significant time and energy to the business of the
Borrower; provided, however, it shall not constitute an Event of Default if any
such individual shall fail for any reason to be a senior officer of the Borrower
or fail to devote significant time and energy to the business of the Borrower,
and such individual shall be promptly replaced by the Borrower, whether on an
interim or permanent basis, with an individual with substantially similar skills
and
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experience (but in no event later than within 90 calendar days of the former
individual’s resignation, termination, permanent disability or death) and
otherwise acceptable to the Administrative Agent in its reasonable and good
faith determination;
105.any subordination provision in any document or instrument governing
Subordinated Debt, or any subordination provision in any guaranty by any
Subsidiary of any Subordinated Debt, shall cease to be in full force and effect,
or any Credit Party or any other Person (including the holder of any applicable
Subordinated Debt) shall contest in any manner the validity, binding nature or
enforceability of any such provision;
106.[Intentionally Omitted];
107.an “Event of Default” shall occur under or pursuant to the Affiliate
Revolving Loan Agreement, any Affiliate Revolving Loan Financing Agreement, the
Affiliate Revolving Loan Agreement (QIPP) or any Affiliate Revolving Loan
Financing Agreement (QIPP);
108.any Credit Party shall (i) be in “Material Breach” under (and as defined in)
the CIA and (A) fails to cure such Material Breach within the time provided in
the CIA following receipt of a “Notice of Material Breach and Intent to Exclude”
under (and as defined in) the CIA or (B) (x) fails to request a hearing before
an HHS administrative law judge under the Dispute Resolution provisions of the
CIA within the time provided after receipt of an “Exclusion Letter” under (and
as defined in) the CIA or (y) if a hearing under the Dispute Resolution
provisions of the CIA with respect to such Material Breach results in an
decision against such Credit Party, or (ii) receives a “Demand Letter” under
(and as defined in) the CIA for an amount in excess of $500,000 and (A) fails to
cure the breach set forth in the Demand Letter and pay the amount due thereunder
or (B) (x) fails to request a hearing before an HHS administrative law judge
under the Dispute Resolution provisions of the CIA within the time provided
after receipt of the Demand Letter or (y) if a hearing under the Dispute
Resolution provisions of the CIA with respect to such Demand Letter results in
an decision against such Credit Party; or
109.any material breach of, or other “Default” (as defined therein) shall occur
under or pursuant to, the Settlement Agreement, and such breach or Default is
not cured within the time provided, or the Settlement Agreement shall terminate
(other than in accordance with its terms as a result of the obligations
thereunder having been paid in full).
Notwithstanding the foregoing, in the situations described in clauses (l), (t),
(x) and (z), above, where an Event of Default is triggered by the occurrence of
a Material Adverse Change or a Material Adverse Effect, events which could
reasonably be expected to have or result in a Material Adverse Effect or
Material Adverse Change, such occurrence shall not be deemed to be an Event of
Default hereunder provided that Borrower shall within forty-eight (48) hours
after the occurrence thereof submit to Administrative Agent in writing a plan of
correction for dealing with such Material Adverse Change or Material Adverse
Effect that is acceptable to Administrative Agent in its sole and absolute
discretion, and, if such plan of correction is so acceptable, for so long as
Administrative Agent remains satisfied in all respects with the progress
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under such plan of correction and until written notice that Administrative Agent
is not so satisfied is given by Administrative Agent to Borrower.
b.Acceleration
. Upon the occurrence of any Event of Default described in Sections 11.1(h),
(i), or (j), all of the Liabilities shall immediately and automatically, without
presentment, demand, protest or notice of any kind (all of which are hereby
expressly waived), be immediately due and payable; and upon the occurrence of
any other Event of Default, the Administrative Agent may with the consent of the
Required Lenders (or, upon written request of Required Lenders shall) declare
any or all of the Liabilities may, at the option of the Administrative Agent
with the consent of the Required Lenders (or, upon written request of Required
Lenders shall), and without presentment, demand, protest or notice of any kind
(all of which are hereby expressly waived), be declared, and thereupon shall
become, immediately due and payable.
c.Rights and Remedies Generally
.
110.Upon the occurrence of any Event of Default, the Administrative Agent and
Lenders shall have, in addition to any other rights and remedies contained in
this Agreement and in any of the other Financing Agreements, all of the rights
and remedies of a secured party under the Code or other applicable laws, all of
which rights and remedies shall be cumulative, and non-exclusive, to the extent
permitted by Laws, including, without limitation, the right of Administrative
Agent (with the consent of or at the direction of the Required Lenders) to sell,
assign, or lease any or all of the Collateral. The exercise of any one right or
remedy shall not be deemed a waiver or release of any other right or remedy, and
the Administrative Agent, upon the occurrence of an Event of Default, may
proceed against Borrower, and/or the Collateral (with the consent of or at the
direction of the Required Lenders), at any time, under any agreement, with any
available remedy and in any order. All sums received from Borrower and/or the
Collateral in respect of the Loan may be applied by the Administrative Agent to
any Liabilities in such order of application and in such amounts as the
Administrative Agent shall deem appropriate in its discretion (subject to
Section 12.8). Borrower waives any right it may have to require the
Administrative Agent to pursue any Person for any of the Liabilities.
111.Upon notice to Borrower after an Event of Default, Borrower at its own
expense shall assemble all or any part of the Collateral as determined by
Administrative Agent and make it available to Administrative Agent at any
location designated by Administrative Agent. In such event, Borrower shall, at
its sole cost and expense, store and keep any Collateral so assembled at such
location pending further action by Administrative Agent and provide such
security guards and maintenance services as shall be necessary to protect and
preserve such Collateral. In addition to all such rights and remedies, the sale,
lease or other disposition of the Collateral, or any part thereof, by the
Administrative Agent after an Event of Default may be for cash, credit or any
combination thereof, and the Administrative Agent (on behalf of Lenders and
itself) may purchase all or any part of the Collateral at public or, if
permitted by law, private sale, and in lieu of actual payment of such purchase
price, may set-off the amount of such purchase
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price against the Liabilities of the Borrower then owing. Any sales of such
Collateral may be adjourned from time to time with or without notice. The
Administrative Agent may, in its sole discretion, cause the Collateral to remain
on the Borrower’s premises, at the Borrower’s expense, pending sale or other
disposition of such Collateral. The Administrative Agent shall have the right
after an Event of Default to conduct such sales (with the consent of the
Required Lenders) on the Borrower’s premises, at the Borrower’s expense, or
elsewhere, on such occasion or occasions as the Administrative Agent may see
fit.
d.Entry Upon Premises and Access to Information
. Upon the occurrence of any Event of Default, the Administrative Agent shall
have the right to enter upon the premises of the Borrower where the Collateral
is located without any obligation to pay rent to the Borrower, or any other
place or places where such Collateral is believed to be located and kept, and
remove such Collateral therefrom to the premises of the Administrative Agent or
any agent of the Administrative Agent, for such time as the Administrative Agent
may desire, in order to effectively collect or liquidate such Collateral. Upon
the occurrence of any Event of Default, the Administrative Agent shall have the
right to obtain access to the Borrower’s data processing equipment, computer
hardware and software relating to the Collateral and subject to the privacy
requirements and regulations of HIPAA and of any applicable state or federal
patients’ bill of rights, to use all of the foregoing and the information
contained therein in any manner the Administrative Agent deems appropriate. Upon
the occurrence of any Event of Default, the Administrative Agent shall have the
right to receive, open and process all mail addressed to the Borrower and
relating to the Collateral.
e.Sale or Other Disposition of Collateral by the Administrative Agent
. Any notice required to be given by the Administrative Agent of a sale, lease
or other disposition or other intended action by the Administrative Agent, with
respect to any of the Collateral, which is deposited in the United States mails,
postage prepaid and duly addressed to the Borrower at the address specified in
Section 12.12 hereof, at least ten (10) calendar days prior to such proposed
action shall constitute fair and reasonable notice to the Borrower of any such
action. The net proceeds realized by the Administrative Agent upon any such sale
or other disposition, after deduction for the expense of retaking, holding,
preparing for sale, selling or the like and the attorneys’ and paralegals’ fees
and legal expenses incurred by the Administrative Agent in connection therewith,
shall be applied as provided herein toward satisfaction of the Liabilities,
including, without limitation, such Liabilities described in Sections 8.2 and
11.2 hereof. The Administrative Agent shall account to the Borrower for any
surplus realized upon such sale or other disposition, and the Borrower shall
remain liable for any deficiency. The commencement of any action, legal or
equitable, or the rendering of any judgment or decree for any deficiency shall
not affect the Administrative Agent’s Liens in the Collateral until Payment in
Full. The Borrower agrees that the Administrative Agent has no obligation to
preserve rights to the Collateral against any other Person. If and to the extent
applicable, the Administrative Agent is hereby granted a license or other right
to use, without charge, the Borrower’s labels, patents, copyrights, rights of
use of any name, trade secrets, trade names, trade styles, trademarks, service
marks and advertising matter or any property of a similar nature, as it
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pertains to the Collateral, in completing production of, advertising for sale
and selling any such Collateral, and the Borrower’s rights and benefits under
all licenses and franchise agreements, if any, shall inure to the Administrative
Agent’s benefit until Payment in Full. Borrower covenants and agrees not to
interfere with or impose any obstacle to Administrative Agent’s exercise of its
rights and remedies with respect to the Collateral.
f.Waivers (General)
.
112.Except as otherwise provided for in this Agreement and to the fullest extent
permitted by applicable Law, Borrower hereby waives: (i) presentment, demand and
protest, and notice of presentment, dishonor, intent to accelerate,
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all Financing Agreements, the Term
Loan Notes or any other notes, commercial paper, Accounts, contracts, documents,
instruments, chattel paper and guaranties at any time held by Administrative
Agent or any Lender on which Borrower may in any way be liable, and hereby
ratifies and confirms whatever Administrative Agent and Lenders may do in this
regard; (ii) all rights to notice and a hearing prior to Administrative Agent’s
taking possession or control of, or to Administrative Agent’s replevy,
attachment or levy upon, any Collateral or any bond or security which might be
required by any court prior to allowing Administrative Agent to exercise any of
its remedies; and (iii) the benefit of all valuation, appraisal and exemption
Laws. Borrower acknowledges that it has been advised by counsel of its choice
and decision with respect to this Agreement, the other Financing Agreements and
the transactions evidenced hereby and thereby.
113.Borrower for itself and all endorsers, guarantors and sureties and their
heirs, legal representatives, successors and assigns, (i) agrees that its
liability shall not be in any manner affected by any indulgence, extension of
time, renewal, waiver, or modification granted or consented to by Administrative
Agent; (ii) consents to any indulgences and all extensions of time, renewals,
waivers, or modifications that may be granted by Administrative Agent with
respect to the payment or other provisions of this Agreement, the Term Loan
Notes, and to any substitution, exchange or release of the Collateral, or any
part thereof, with or without substitution, and agrees to the addition or
release of any Borrower, endorsers, guarantors, or sureties, or whether
primarily or secondarily liable, without notice to Borrower and without
affecting its liability hereunder; (iii) agrees that its liability shall be
unconditional and without regard to the liability of any other tax; and (iv)
expressly waives the benefit of any statute or rule of law or equity now
provided, or which may hereafter be provided, which would produce a result
contrary to or in conflict with the foregoing.
114.Subject to Section 12.1, each and every covenant and condition for the
benefit of Administrative Agent and Lenders contained in this Agreement and the
other Financing Agreements may be waived by Administrative Agent. Any
forbearance by Administrative Agent in exercising any right or remedy under any
of the Financing Agreements, or otherwise afforded by applicable Law, including
any failure to accelerate the Stated Maturity Date shall not be a waiver of or
preclude the exercise of any right or remedy nor shall it serve as
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a novation of a Term Loan Note or as a reinstatement of the Loan or a waiver of
such right of acceleration or the right to insist upon strict compliance of the
terms of the Financing Agreements. Administrative Agent’s acceptance of payment
of any sum secured by any of the Financing Agreements after the due date of such
payment shall not be a waiver of Administrative Agent’s right to either require
prompt payment when due of all other sums so secured or to declare a default for
failure to make prompt payment. The procurement of insurance or the payment of
taxes or other liens or charges by Administrative Agent shall not be a waiver of
Administrative Agent’s right to accelerate the maturity of the Loan, nor shall
Administrative Agent’s receipt of any condemnation awards, insurance proceeds,
or damages under this Agreement operate to cure or waive Borrower’s or
Guarantor’s default in payment of sums secured by any of the Financing
Agreements.
115.Without limiting the generality of anything contained in this Agreement or
the other Financing Agreements, Borrower agrees that if an Event of Default is
continuing (i) Administrative Agent is not subject to any “one action” or
“election of remedies” law or rule, and (ii) all liens and other rights,
remedies or privileges provided to Administrative Agent shall remain in full
force and effect until Administrative Agent has exhausted all of its remedies
against the Collateral and any other properties owned by Borrower and the
Financing Agreements and other security instruments or agreements securing the
Liabilities has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Liabilities.
116.Nothing contained herein or in any other Financing Agreement shall be
construed as requiring Administrative Agent to resort to any part of the
Collateral for the satisfaction of any of Borrower’s obligations under the
Financing Agreements in preference or priority to any other Collateral, and
Administrative Agent may (with the consent of or at the direction of the
Required Lenders) seek satisfaction out of all of the Collateral or any part
thereof, in its absolute discretion in respect of Borrower’s obligations under
the Financing Agreements. In addition, Administrative Agent shall have the right
from time to time to partially foreclose upon any Collateral in any manner and
for any amounts secured by the Financing Agreements then due and payable as
determined by Administrative Agent (with the consent of or at the direction of
the Required Lenders), including, without limitation, the following
circumstances: (i) if Borrower defaults beyond any applicable grace period in
the payment of one or more scheduled payments of principal and interest,
Administrative Agent may (with the consent of or at the direction of the
Required Lenders) foreclose upon all or any part of the Collateral to recover
such delinquent payments, or (ii) if Administrative Agent elects (with the
consent of or at the direction of the Required Lenders) to accelerate less than
the entire outstanding principal balance of the Loans, Administrative Agent may
(with the consent of or at the direction of the Required Lenders) foreclose all
or any part of the Collateral to recover so much of the principal balance of the
Loans as Administrative Agent may accelerate and such other sums secured by one
or more of the Financing Agreements as Administrative Agent may elect (with the
consent of or at the direction of the Required Lenders). Notwithstanding one or
more partial foreclosures, any unforeclosed Collateral shall remain subject to
the Financing Agreements to secure payment of sums secured by the Financing
Agreements and not previously recovered.
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117.To the fullest extent permitted by Law, Borrower, for itself and its
successors and assigns, waives in the event of foreclosure of any or all of the
Collateral any equitable right otherwise available to Borrower which would
require the separate sale of any of the Collateral or require Administrative
Agent to exhaust its remedies against any part of the Collateral before
proceeding against any other part of the Collateral; and further in the event of
such foreclosure Borrower does hereby expressly consent to and authorize, at the
option of Administrative Agent, the foreclosure and sale either separately or
together of each part of the Collateral.
g.Waiver of Notice
. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, THE BORROWER HEREBY WAIVES ALL
RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE
ADMINISTRATIVE AGENT OF ITS RIGHTS TO REPOSSESS THE COLLATERAL WITHOUT JUDICIAL
PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR NOTICE
OR HEARING.
h.Injunctive Relief
. The parties acknowledge and agree that, in the event of a breach or threatened
breach of any Credit Party’s obligations under any Financing Agreements,
Administrative Agent may have no adequate remedy in money damages and,
accordingly, shall be entitled to an injunction (including without limitation, a
temporary restraining order, preliminary injunction, writ of attachment, or
order compelling an audit) against such breach or threatened breach. However, no
specification in this Agreement of a specific legal or equitable remedy shall be
construed as a waiver or prohibition against any other legal or equitable
remedies in the event of a breach or threatened breach of any provision of this
Agreement. Each Credit Party waives the requirement of the posting of any bond
in connection with such injunctive relief.
i.Marshalling; Recourse to Borrower
. Administrative Agent shall have no obligation to marshal any assets in favor
of any Credit Party, or against or in payment of any of the other Liabilities or
any other obligation owed to the Administrative Agent and Lenders by any Credit
Party. Notwithstanding anything to the contrary contained herein or in any other
Financing Agreement, the Loan and other Liabilities shall be fully recourse to
Borrower, and Administrative Agent shall be authorized, in its sole and absolute
discretion, to enforce any or all of its remedies hereunder against Borrower,
including all present and future revenue and assets of Borrower, whether or not
such assets have been pledged as collateral for the Loan.
j.Advice of Counsel
. The Borrower acknowledges that it has been advised by its counsel with respect
to this transaction and this Agreement, including, without limitation, all
waivers contained herein.
k.Credit Bidding
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. Without limiting the foregoing, Borrower and Lenders hereby irrevocably
authorize (and by entering into a Bank Product Agreement, each Bank Product
provider shall be deemed to authorize) Administrative Agent, based upon the
written instruction of the Required Lenders, to Credit Bid (as defined below)
and purchase (either directly or through one or more acquisition vehicles) all
or any portion of the Collateral (and Borrower shall approve Administrative
Agent as a qualified bidder and such Credit Bid as a qualified bid) at any sale
thereof conducted by Administrative Agent, based upon the written instruction of
the Required Lenders, to Credit Bid (as defined below) and purchase (either
directly or through one or more acquisition vehicles) all or any portion of the
Collateral (and Borrower shall approve Administrative Agent as a qualified
bidder and such Credit Bid as a qualified bid) at any sale thereof conducted by
Administrative Agent, based upon the written instruction of the Required
Lenders, (a) under any provisions of the UCC, including pursuant to Sections
9-610 or 9-620 of the UCC, (b) under the provisions of the Bankruptcy Code,
including pursuant to Section 363 thereof, or any applicable insolvency,
reorganization or similar law, or (c) at any other sale or foreclosure conducted
by (or with the consent or at the direction of) the Administrative Agent
(whether by judicial action or otherwise) in accordance with applicable law or
by the exercise of any legal or equitable remedy; provided, however, that (i)
the Required Lenders may not direct Administrative Agent in any manner that does
not treat each of the Lenders equally, without preference or discrimination, in
respect of consideration received as a result of the Credit Bid, (ii) the
acquisition documents shall be commercially reasonable and contain customary
protections for minority holders, such as anti-dilution and tag-along rights,
(iii) the exchanged debt or equity securities must be freely transferable,
without restriction (subject to applicable securities laws) and (iv) reasonable
efforts shall be made to structure the acquisition in a manner that causes the
governance documents pertaining thereto to not impose any obligations or
liabilities upon the Lenders individually (such as indemnification obligations).
Each Lender hereby agrees that, except as otherwise provided in this Agreement
or with the written consent of the Administrative Agent and the Required
Lenders, it will not exercise any right that it might otherwise have to Credit
Bid at any sales of all or any portion of the Collateral conducted under the
provisions of the UCC, the Bankruptcy Code, foreclosure sales or other similar
dispositions of Collateral.
For purposes of the preceding sentence, the term “Credit Bid” shall mean, an
offer submitted at a public or private sale of all or any portion of the
Collateral by Administrative Agent (on behalf of the Lender group), based upon
the written instruction of the Required Lenders, to acquire all of the
Collateral of any Borrower or any portion thereof in exchange for and in full
and final satisfaction of all or a portion (as determined by Administrative
Agent, based upon the written instruction of the Required Lenders) of the
Liabilities owing to the Lenders under this Agreement and the other Financing
Agreements.
13.MISCELLANEOUS
.
a.Waiver; Amendment
. The Administrative Agent’s or Lenders’ failure, at any time or times
hereafter, to require strict performance by the Borrower of any covenant,
condition or provision of this
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Agreement shall not waive, affect or diminish any right of the Administrative
Agent thereafter to demand strict compliance and performance therewith. Any
suspension or waiver by the Administrative Agent or the Lenders, as applicable,
of an Event of Default under this Agreement or a default under any of the other
Financing Agreements shall not suspend, waive or affect any other Event of
Default under this Agreement or any other default under any of the other
Financing Agreements, whether the same is prior or subsequent thereto and
whether of the same or of a different kind or character. None of the
undertakings, agreements, warranties, covenants and representations of the
Borrower contained in this Agreement or any of the other Financing Agreements
and no Event of Default under this Agreement or default under any of the other
Financing Agreements shall be deemed to have been suspended or waived by the
Administrative Agent unless such suspension or waiver is in writing signed by an
officer of the Administrative Agent, and directed to the Borrower specifying
such suspension or waiver.
Except as otherwise set forth herein (including, without limitation, Section
3.11), no amendment or modification or waiver of, or consent with respect to (as
reasonably determined by Administrative Agent) any provision of this Agreement
or the other Financing Agreements shall in any event be effective unless the
same shall be in writing and acknowledged by Borrower and either (i) Required
Lenders, or (ii) Administrative Agent with a certification that consent from the
Required Lenders has been obtained, and then any such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. Notwithstanding anything contained herein to
the contrary, no amendment, modification, waiver or consent shall (a) extend or
increase the Commitment of any Lender without the written consent of such
Lender, as applicable, (b) extend the date scheduled for payment of any
principal (exclusive of mandatory prepayments) of or interest on the Loan or any
fees payable hereunder without the written consent of each Lender directly
affected thereby, (c) extend the Stated Maturity Date of the Loan without the
written consent of all Lenders (except in accordance with the terms of this
Agreement, if applicable), (d) reduce the principal amount of the Loan, the rate
of interest thereon or any fees payable hereunder, without the consent of each
Lender directly affected thereby (except for any periodic adjustments of
interest rates and fees as provided for in this Agreement), provided, that only
the consent of the Required Lenders shall be necessary (i) to amend the
definition of “Default Rate” or to waive any obligation of the Borrower to pay
interest at the Default Rate or (ii) to amend or waive any financial covenant
hereunder (or any defined term used therein) even if the effect of such
amendment or waiver would be to reduce the rate of interest on any Loan or any
unreimbursed drawing under a Letter of Credit or to reduce any fee payable
hereunder, (e) release any party from its obligations under any guaranty at any
time hereafter provided, if any, or all or substantially all of the Collateral
granted hereunder or under any of the Financing Agreements (except as otherwise
specifically permitted or provided in this Agreement), subordinate the Liens of
Administrative Agent on all or substantially all of the Collateral or
subordinate any guaranty, change the payment application waterfall in Section
12.8 or the pro rata sharing provision in Section 2.13(d), change the definition
of Required Lenders, change any provision of this Section 12.1 or reduce the
aggregate Pro Rata Share required to effect an amendment, modification, waiver
or consent, without, in each case with respect to this subsection (e), the
written consent of all Lenders, (f) waive any material condition set forth in
Section 5 without the prior written consent of each Lender directly affected
thereby or (g) subordinate the payment priority of the Loans and other
Liabilities without the consent of all
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Lenders. No provision in this Agreement with respect to the timing or
application of mandatory prepayments of the Loan shall be amended, modified or
waived without the consent of Required Lenders. No provision of Section 13 or
other provision of this Agreement affecting Administrative Agent as such shall
be amended, modified or waived without the prior written consent of
Administrative Agent. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except for the matters set forth in subsections
(a), (b), (c) or (d)(subject to the proviso contained therein) of this Section
12.1.
b.Costs and Attorneys’ Fees
.
118.Borrower agrees to jointly and severally pay on demand all of the costs and
expenses of the Administrative Agent (including, without limitation, the
reasonable fees and out-of-pocket expenses of the Administrative Agent’s
counsel, all UCC tax, lien, judgment, pending suit, and bankruptcy search fees
and costs, UCC filing fee and costs, recording, filing and registration fees and
charges, mortgage or documentary taxes, all costs of Intralinks, DebtX or other
similar transmission system, if applicable, all corporate search fees and
certified documents, all financial and legal due diligence expenses, all audit,
field exam and appraisal costs and fees, costs incurred by Administrative Agent
in connection with travel expenses of its associates, background checks on
members of management of Borrower, and real estate appraisal fees, survey fees,
recording and title insurance costs, and any environmental report or analysis)
in connection with the structuring, preparation, negotiation, execution,
delivery and closing of: (i) this Agreement, the other Financing Agreements and
all other instruments, agreements, certificates or documents provided for herein
or delivered or to be delivered hereunder, and (ii) any and all amendments,
modifications, supplements and waivers executed and delivered pursuant hereto or
any other Financing Agreement or in connection herewith or therewith. Borrower
further agrees that the Administrative Agent, in its sole discretion, may deduct
all such unpaid amounts from the aggregate proceeds of the Loan or debit such
amounts from the operating accounts of Borrower maintained with the
Administrative Agent.
119.The costs and expenses that the Administrative Agent and Lenders incur in
any manner or way with respect to the following shall be part of the
Liabilities, payable by Borrower jointly and severally on demand if at any time
after the date of this Agreement the Administrative Agent or any Lender: (i)
employs counsel in good faith for advice or other representation, (ii) with
respect to the amendment, modification or enforcement of this Agreement or the
other Financing Agreements, or with respect to any Collateral hereunder or other
collateral under the other Financing Agreements securing the Liabilities
hereunder, (iii) to represent the Administrative Agent and Lender in any
work-out or any type of restructuring of the Liabilities, or any litigation,
contest, dispute, suit or proceeding or to commence, defend or intervene or to
take any other action in or with respect to any litigation, contest, dispute,
suit or proceeding (whether instituted by the Administrative Agent, Lenders,
Borrower or any other Person) in any way or respect relating to this Agreement,
the other Financing Agreements, Borrower’s affairs or any Collateral hereunder
or under any other Financing Agreement, (iv) to
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protect, preserve, or enforce any of the rights of the Administrative Agent or
Lenders with respect to Borrower provided in this Agreement, under any of the
other Financing Agreements, or otherwise (whether at law or in equity)
(including any foreclosure sale, deed in lieu transaction or costs incurred in
connection with any litigation or bankruptcy or administrative hearing and any
appeals therefrom and any post-judgment enforcement action including, without
limitation, supplementary proceedings in connection with the enforcement of this
Agreement); (v) takes any action to protect, preserve, store, ship, appraise,
prepare for sale, collect, sell, liquidate or otherwise dispose of any
Collateral hereunder or any other collateral under any other Financing
Agreement; and/or (vi) seeks to enforce or enforces any of the rights and
remedies of the Administrative Agent or Lenders with respect to Borrower or any
guarantor of the Liabilities. Without limiting the generality of the foregoing,
such expenses, costs, charges and fees include: reasonable fees, costs and
expenses of attorneys, accountants, environmental consultants, and other
consultants (whether work out, financial or otherwise); court costs and
expenses; court reporter fees, costs and expenses; long distance telephone
charges; and courier and telecopier charges.
120.Borrower further agrees to pay, and to save the Administrative Agent and
Lenders harmless from all liability for, any documentary stamp tax, intangible
tax, or other stamp tax or taxes of any kind which may be payable in connection
with or related to the execution or delivery of this Agreement, the other
Financing Agreements, the borrowing hereunder, the issuance of the Term Loan
Notes or of any other instruments, agreements, certificates or documents
provided for herein or delivered or to be delivered hereunder or in connection
herewith, provided that Borrower shall not be liable for Administrative Agent’s
or any Lender’s income tax liabilities.
121.All of the Borrower’s obligations provided for in this Section 12.2 shall be
Liabilities secured by the Collateral and shall survive repayment of the Loan or
any termination of this Agreement or any Financing Agreements.
c.Expenditures by the Administrative Agent
. In the event the Borrower shall fail to pay taxes, insurance, audit fees and
expenses, consulting fees, filing, recording and search fees, assessments, fees,
costs or expenses which the Borrower is, under any of the terms hereof or of any
of the other Financing Agreements, required to pay, or fails to keep the
Collateral free from other Liens, except as permitted herein, the Administrative
Agent may, in its sole discretion, pay or make expenditures for any or all of
such purposes, and the amounts so expended, together with interest thereon at
the Default Rate (from the date the obligation or liability of Borrower is
charged or incurred until actually paid in full to Administrative Agent and
Lenders, as applicable) and shall be part of the Liabilities of the Borrower,
payable on demand and secured by the Collateral.
d.Custody and Preservation of Collateral
. The Administrative Agent shall be deemed to have exercised reasonable care in
the custody and preservation of any of the Collateral in its possession if it
takes such action for that purpose as the Borrower shall request in writing, but
failure by the Administrative Agent to
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comply with any such request shall not of itself be deemed a failure to exercise
reasonable care, and no failure by the Administrative Agent to preserve or
protect any right with respect to such Collateral against prior parties, or to
do any act with respect to the preservation of such Collateral not so requested
by a Borrower, shall of itself be deemed a failure to exercise reasonable care
in the custody or preservation of such Collateral.
e.Reliance by the Lenders
. The Borrower acknowledges that the Lenders and Administrative Agent, in
entering into this Agreement and agreeing to make the Loan to the Borrower
hereunder, has relied upon the accuracy of the covenants, agreements,
representations and warranties made herein by the Borrower and the information
delivered by the Borrower to the Administrative Agent and Lenders in connection
herewith (including, without limitation, all financial information and data).
f.Assignability; Parties
. This Agreement (including, without limitation, any and all of the Borrower’s
rights, obligations and liabilities hereunder) may not be assigned by the
Borrower without the prior written consent of Administrative Agent and Required
Lenders. Whenever in this Agreement there is reference made to any of the
parties hereto, such reference shall be deemed to include, wherever applicable,
a reference to the successors and permitted assigns of the Borrower and the
successors and assigns of the Administrative Agent and (subject to Section 12.15
hereof) the Lenders.
g.Severability; Construction
. Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provisions or the
remaining provisions of this Agreement. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
h.Application of Payments
. Notwithstanding any contrary provision contained in this Agreement or in any
of the other Financing Agreements, after the occurrence of a Default or an Event
of Default Borrower irrevocably waives the right to direct the application of
any and all payments at any time or times hereafter received by Administrative
Agent or any Lender from Borrower or with respect to any of the Collateral, and
Borrower and Administrative Agent does hereby irrevocably agree that any and all
payments or proceeds so received shall be applied in the following manner:
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First, to the payment of all fees, costs, expenses and indemnities of
Administrative Agent (in its capacity as such), including reasonable attorneys’
fees and costs of Administrative Agent, and any other Liabilities owing to
Administrative Agent in respect of sums advanced by Administrative Agent to
preserve the Collateral or to preserve its security interest in the Collateral
(or any other collateral provided pursuant to any other Financing Agreement);
Second, to payment of that portion of the Liabilities constituting fees, costs,
expenses and indemnities of Administrative Agent;
Third, to payment of that portion of the Liabilities constituting fees,
Prepayment Premium, costs, expenses and indemnities of the Lenders as provided
herein, ratably among them in proportion to the respective amounts described in
this clause Third payable to them;
Fourth, to the payment of all of the Liabilities consisting of accrued and
unpaid interest owing to the Lenders, ratably among them in proportion to the
respective amounts described in this clause Fourth payable to them;
Fifth, to the payment of all Liabilities consisting of principal owing to the
Lenders, ratably among them in proportion to the respective amounts described in
this clause Fifth payable to them;
Sixth, to the payment of all Bank Product Obligations (including with respect to
any Hedging Agreement) owing to the applicable Lenders or their Affiliates,
ratably among such Lenders and their Affiliates in proportion to the respective
amounts described in this clause Sixth payable to them;
Seventh, to the payment of all other Liabilities owing to the Lenders;
Eighth, to the payment of all Affiliate Revolving Loan Liabilities pursuant to
Sections 12.8 and 12.29(a)(6) of the Affiliate Revolving Loan Financing
Agreements; and
Last, the payment of any remaining proceeds, if any, to whomever may be lawfully
entitled to receive such amounts, including, if applicable, Borrower.
All amounts owing under this Agreement in respect of Liabilities including fees,
interest, default interest, interest on interest, expense reimbursements and
indemnities, shall be payable in accordance with the foregoing waterfall
provisions irrespective of whether a claim in respect of such amounts is allowed
or allowable in any insolvency proceeding.
i.Payments Set Aside
. To the extent that the Borrower makes a payment or payments to the
Administrative Agent or Lenders or the Administrative Agent or Lenders enforce
their respective Liens or exercise their respective rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
or Person under any bankruptcy law, state or federal law, common law or
equitable cause or
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otherwise (including, without limitation, provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences, or other voidable or
recoverable payments of money or transfers of property), then to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be automatically revived, reinstated, restored and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred. The provisions of and undertakings set out in this
Section 12.9 shall survive the satisfaction and payment of the Liabilities of
Borrower and the termination of this Agreement.
j.Sections and Titles; UCC Termination Statements
. The sections and titles contained in this Agreement shall be without
substantive meaning or content of any kind whatsoever and are not a part of the
agreement between the parties hereto. Upon Payment in Full, the Administrative
Agent will, upon Borrower’s written request and at the Borrower’s cost and
expense, timely file all Uniform Commercial Code termination statements
reasonably required by the Borrower to evidence the termination of the Liens in
the Collateral in favor of the Administrative Agent (for the ratable benefit of
Lenders and Administrative Agent).
k.Continuing Effect; No Joint Venture
. This Agreement, the Administrative Agent’s Liens in the Collateral, and all of
the other Financing Agreements shall continue in full force and effect so long
as any Liabilities shall be owed to the Lenders and Administrative Agent, and
(even if there shall be no such Liabilities outstanding) so long as this
Agreement has not been terminated as provided in Section 2.9 hereof. The
relationship between Administrative Agent and Lenders on the one hand and
Borrower on the other hand shall be that of creditor-debtor only. No term in
this Agreement or in any other Financing Agreement and no course of dealing
between the parties shall be deemed to create any relationship or agency,
partnership or joint venture or any fiduciary duty by Administrative Agent or
any Lender to Borrower or any other party. In exercising its rights hereunder
and under any other Financing Agreements or taking any actions herein or
therein, Administrative Agent and Lenders may act through its respective
employees, agents or independent contractors as authorized by Administrative
Agent or such Lender.
l.Notices
. Any notice or other communication required or permitted under this Agreement
shall be in writing and personally delivered, mailed by registered or certified
U.S. mail (return receipt requested and postage prepaid), sent by telecopier
(with a confirming copy sent by regular mail), or sent by prepaid nationally
recognized overnight courier service, and addressed to the relevant party at its
address set forth below, or at such other address as such party may, by written
notice, designate as its address for purposes of notice under this Agreement:
122.If to the Administrative Agent, at:
CIBC Bank USA
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120 South LaSalle Street
Chicago, Illinois 60603
Attention: Adam D. Panos, Managing Director
Telephone No.: 312-564-1278
Facsimile No.: 312-800-9733
With a copy to:

Duane Morris LLP
190 South LaSalle Street - Suite 3700
Chicago, Illinois 60603
Attention: Brian P. Kerwin, Esq.
Telephone No: 312-499-6737
Facsimile No: 312-499-6701
123.If to the Borrower or Borrower Agent, at:
Diversicare Healthcare Services, Inc.
1621 Galleria Boulevard
Brentwood, Tennessee 37027
Attention: Kerry D. Massey
Telephone No.: 615-771-7575
Facsimile No.: 615-771-7409
With a copy to:

Bass, Berry & Sims PLC
150 Third Avenue South, Suite 2800
Nashville, Tennessee 37201
Attention: John N. Popham IV, Esq.
Telephone No.: 615-742-6278
Facsimile No.: 615-742-0466
124.If to Lenders, as identified on Annex A hereto.
If mailed, notice shall be deemed to be given three (3) days after being sent,
and if sent by personal delivery, telecopier or prepaid courier, notice shall be
deemed to be given when delivered. If any notice is tendered to an addressee and
delivery thereof is refused by such addressee, such notice shall be effective
upon such tender unless expressly set forth in such notice.
m.Equitable Relief
. The Borrower recognizes that, in the event the Borrower fails to perform,
observe or discharge any of its obligations or liabilities under this Agreement,
any remedy at law may prove to be inadequate relief to the Administrative Agent
and Lenders; therefore, the Borrower agrees that the Administrative Agent and
Lenders, if the Administrative Agent or Lenders so request,
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shall be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
n.Entire Agreement
. This Agreement, together with the Financing Agreements (and, as applicable,
the Affiliate Revolving Loan Agreement) executed in connection herewith,
constitutes the entire agreement among the parties with respect to the subject
matter hereof, and supersedes all prior written or oral understandings,
discussions and agreements with respect thereto (including, without limitation,
any term sheet, proposal letter or commitment letter). Notwithstanding anything
to the contrary contained in this Agreement, Borrower is and shall be required
to observe, perform and comply with each of the terms, representations,
warranties, covenants, conditions and provisions set forth in the Affiliate
Revolving Loan Agreement applicable to Borrower and such terms, representations,
warranties, covenants, conditions and provisions are hereby incorporated into
this Agreement by this reference thereto.
o.Participations and Assignments
. Any Lender may at any time assign to one or more Persons that extends secured
commercial loans in its ordinary course of business and has assets or capital of
at least $100,000,000 (other than (i) a natural person or (ii) any Defaulting
Lender or its wholly-owned subsidiaries or its other Affiliates) (any such
Person, an “Assignee”) all or any portion of such Lender’s Pro Rata Share of the
Loan and also such Lender’s Pro Rata Share of the Affiliate Revolving Loans,
with the prior written consent of Administrative Agent, and, so long as no Event
of Default has occurred and is continuing, Borrower (all of which consents shall
not be unreasonably withheld, conditioned or delayed and shall not be required
for an assignment by a Lender to another Lender or an Affiliate of a Lender).
Except as Administrative Agent may otherwise agree (and, so long as no Event of
Default has occurred and is continuing, Borrower otherwise consents in writing,
which consent shall not be unreasonably withheld, conditioned or delayed), any
such assignment shall be in a minimum aggregate amount equal to Five Million
Dollars ($5,000,000) or, if less, the remaining Loan held by the assigning
Lender. Borrower and Administrative Agent shall be entitled to continue to deal
solely and directly with such Lender in connection with the interests so
assigned to an Assignee until Administrative Agent shall have received and
accepted an effective assignment agreement in substantially the form of
Exhibit C hereto (an “Assignment Agreement”) executed, delivered and fully
completed by the applicable parties thereto and a processing fee of Five
Thousand Dollars ($5,000). No assignment may be made to any Person if at the
time of such assignment Borrower would be obligated to pay any greater amount
under Sections 3.1 or 3.3 to the Assignee than Borrower is then obligated to pay
to the assigning Lender under such Sections (and if any assignment is made in
violation of the foregoing, Borrower will not be required to pay such greater
amounts). Any attempted assignment not made in accordance with this Section
12.15 shall be treated as the sale of a participation hereunder. Borrower shall
be deemed to have granted its consent to any assignment requiring its consent
hereunder unless Borrower has expressly objected to such assignment within three
(3) Business Days after notice thereof. Notwithstanding the foregoing, no
consent of Borrower or Administrative Agent shall be required for any assignment
to a Lender or an
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Affiliate of a Lender (provided that no assignment shall be made to any
Defaulting Lender or its wholly-owned subsidiaries).
125.From and after the date on which the conditions described above have been
met, (i) such Assignee shall be deemed automatically to have become a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Lender hereunder and (ii) the assigning Lender, to
the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment Agreement, shall be released from its rights (other
than its indemnification rights) and obligations hereunder. Upon the request of
the Assignee (and, as applicable, the assigning Lender) pursuant to an effective
Assignment Agreement, Borrower shall execute and deliver to Administrative Agent
for delivery to the Assignee (and, as applicable, the assigning Lender) a Term
Loan Note in the principal amount of the Assignee’s Term Loan (and, as
applicable, a Term Loan Note in the principal amount of the Term Loan retained
by the assigning Lender). Each such Term Loan Note shall be dated the effective
date of such assignment. Upon receipt by the assigning Lender of such Term Loan
Note, the assigning Lender shall return to Borrower any prior Term Loan Note
held by it.
126.Notwithstanding anything to the contrary set forth herein, any Lender may at
any time pledge or assign a security interest in all or any portion of its
rights under this Agreement and applicable promissory note to secure obligations
of such Lender, including any pledge or assignment to secure obligations to any
Federal Reserve Bank (including as collateral security pursuant to Regulation A
and any Operating Circular issued by such Federal Reserve Bank), and such
Loan(s) and promissory note(s) shall be fully transferable as provided therein,
and this Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.
127.Subject to the last sentence in Section 13.9, any Lender may at any time
(without any required consent) sell to one or more Persons (other than (i) a
natural person or (ii) a Defaulting Lender or its wholly-owned subsidiaries or
its other Affiliates) participating interests in its respective Loan or other
interests hereunder (any such Person, a “Participant”). In the event of a sale
by a Lender of a participating interest to a Participant, (a) such Lender’s
obligations under this Agreement shall remain unchanged for all purposes, (b)
Administrative Agent and Borrower shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement and (c) all amounts payable by Borrower shall be determined as if
such Lender had not sold such participation and shall be paid directly to such
Lender. No Participant shall have any direct or indirect voting rights under
this Agreement except with respect to any event described in Section 12.1
expressly requiring the unanimous vote of all Lenders or, as applicable, all
affected Lenders. Each Lender agrees to incorporate the requirements of the
preceding sentence into each participation agreement which such Lender enters
into with any Participant. Borrower agrees that if amounts outstanding under
this Agreement are due and payable (as a result of acceleration or otherwise),
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts
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owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement; provided that such right of set-off shall be subject to the
obligation of each Participant to share with Lenders, and Lenders agree to share
with each Participant, as provided in Section 2.13(d). Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.1 or 3.3 as if it
were a Lender (provided that on the date of the participation no Participant
shall be entitled to any greater compensation pursuant to Sections 3.1 or 3.3
than would have been paid to the participating Lender on such date if no
participation had been sold and that each Participant complies with Section 3.3
as if it were an Assignee).
128.Administrative Agent will maintain a copy of each Assignment Agreement
delivered and accepted by it and register (the “Register”) for the recordation
of names and addresses of Lenders, the Pro Rata Share of each Lender and the
portion of the Loan of each Lender and whether such Lender is the original
Lender or the Assignee. No assignment shall be effective unless and until the
Assignment Agreement is accepted and registered in the Register. All records of
transfer of a Lender’s interest in the Register shall be conclusive, absent
manifest error, as to the ownership of the interests in such Loan.
Administrative Agent shall not incur any liability of any kind with respect to
any Lender with respect to the maintenance of the Register. Upon the reasonable
written request of Borrower, Administrative Agent will furnish a copy of the
Register to the Borrower Agent or Borrower (at the cost, if any, to Borrower).
p.INDEMNIFICATION BY BORROWER
. IN CONSIDERATION OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY
ADMINISTRATIVE AGENT AND LENDERS AND THE AGREEMENT TO EXTEND THE COMMITMENTS
PROVIDED HEREUNDER, EACH BORROWER HEREBY JOINTLY AND SEVERALLY AGREES TO AND
SHALL INDEMNIFY, DEFEND, PROTECT, EXONERATE AND HOLD ADMINISTRATIVE AGENT, EACH
LENDER, AND EACH OF THE OFFICERS, DIRECTORS, EMPLOYEES, PARENT ENTITIES,
AFFILIATES, SUCCESSORS, ASSIGNS, ATTORNEYS AND AGENTS OF ADMINISTRATIVE AGENT
AND EACH LENDER (EACH A “INDEMNIFIED PARTY”) FREE AND HARMLESS FROM AND AGAINST
ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, JUDGMENTS, CLAIMS, LOSSES,
LIABILITIES, DAMAGES, PENALTIES, COSTS, AND EXPENSES, INCLUDING, WITHOUT
LIMITATION, ATTORNEYS’ FEES AND COSTS (COLLECTIVELY, THE “INDEMNIFIED
LIABILITIES”), INCURRED BY THE INDEMNIFIED PARTIES OR ANY OF THEM AS A RESULT
OF, OR ARISING OUT OF, OR RELATING TO (a) ANY REFINANCING, TENDER OFFER, MERGER,
PURCHASE OF STOCK, PURCHASE OF ASSETS OR OTHER SIMILAR TRANSACTION FINANCED OR
PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITH THE
PROCEEDS OF THE LOAN, (b) THE USE, HANDLING, RELEASE, EMISSION, DISCHARGE,
TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS SUBSTANCE AT ANY
PROPERTY OWNED OR LEASED BY ANY BORROWER, (c) ANY VIOLATION OF ANY ENVIRONMENTAL
LAWS WITH RESPECT TO CONDITIONS AT ANY
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PROPERTY OWNED OR LEASED BY ANY BORROWER OR THE OPERATIONS CONDUCTED THEREON,
(d) THE INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY
BORROWER OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR
INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES, (e) THE USE, MAINTENANCE OR
OPERATION OF THE FACILITIES, OR (f) THE EXECUTION, DELIVERY, PERFORMANCE OR
ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER FINANCING AGREEMENT BY ANY OF THE
INDEMNIFIED PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED LIABILITIES (A) ARISING ON
ACCOUNT OF THE APPLICABLE INDEMNIFIED PARTY’S GROSS NEGLIGENCE, WILLFUL
MISCONDUCT OR ILLEGAL ACTIVITY AS DETERMINED BY A FINAL, NON-APPEALABLE JUDGMENT
BY A COURT OF COMPETENT JURISDICTION, OR (B) AS ARE IN RESPECT OF ANY PROPERTY
FOR ANY OCCURRENCE ARISING DIRECTLY FROM THE ACTS OR OMISSIONS OF THE
ADMINISTRATIVE AGENT OR ANY LENDER DURING THE PERIOD AFTER WHICH SUCH PERSON,
ITS SUCCESSORS OR ASSIGNS HAVE OBTAINED TITLE AND POSSESSION OF SUCH PROPERTY BY
FORECLOSURE OR DEED IN LIEU OF FORECLOSURE; PROVIDED, HOWEVER, THAT THE
INDEMNIFICATION IN THIS SECTION 12.16 SHALL NOT EXTEND TO DISPUTES SOLELY AND
ENTIRELY BETWEEN OR AMONG ADMINISTRATIVE AGENT, THE LENDERS OR THEIR RESPECTIVE
AFFILIATES NOT IN ANY WAY OR MANNER DIRECTLY OR INDIRECTLY CAUSED BY OR THE
FAULT OF ANY BORROWER OR ANY OF ITS RESPECTIVE AFFILIATES. IF AND TO THE EXTENT
THAT THE FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, EACH
BORROWER HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND
SATISFACTION OF EACH OF THE INDEMNIFIED LIABILITIES THAT IS PERMISSIBLE UNDER
APPLICABLE LAW. ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION 12.16 SHALL SURVIVE
REPAYMENT OF THE LOAN, CANCELLATION OF THE NOTES, ANY FORECLOSURE UNDER, OR ANY
MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF THE OTHER FINANCING
AGREEMENTS AND TERMINATION OF THIS AGREEMENT. Any liability, obligation, loss,
damage, penalty, cost or expense incurred by the Indemnified Parties shall be
paid to the Indemnified Parties on demand, together with interest thereon at the
Default Rate from the date incurred by the Indemnified Parties until paid by
Borrower, be added to the Liabilities, and be secured by the Collateral. The
provisions of and undertakings and indemnifications set out in this Section
12.16 shall survive the satisfaction and payment of the Liabilities of Borrower
and the termination of this Agreement. Borrower agrees that neither
Administrative Agent nor any Lender shall have liability to any Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by any
Borrower in connection with, arising out of, or in any way related to the
transactions contemplated and the relationship established by this Agreement and
the other Financing Agreements, or any act, omission or event occurring in
connection herewith or therewith, unless it is determined in a final
non-appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence, willful misconduct or illegal activity of
the party from which recovery is sought. NO INDEMNIFIED PARTY SHALL BE LIABLE
FOR ANY DAMAGES ARISING FROM THE USE BY
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OTHERS OF ANY INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS, DEBTX,
OR OTHER SIMILAR INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS
AGREEMENT, NOR SHALL ANY INDEMNIFIED PARTY HAVE ANY LIABILITY WITH RESPECT TO,
AND BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR ANY SPECIAL,
PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS
AGREEMENT OR ANY OTHER FINANCING AGREEMENT OR ARISING OUT OF ITS ACTIVITIES IN
CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE CLOSING DATE).
Each Borrower acknowledges that it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Financing
Agreements to which it is a party.
q.Representations and Warranties
. Notwithstanding anything to the contrary contained herein, each representation
or warranty contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement and the other
Financing Agreements and the making of the Loan and the repayment of the
Liabilities hereunder.
r.Counterparts
. This Agreement and any amendment or supplement hereto or any waiver granted in
connection herewith may be executed in any number of counterparts and by the
different parties on separate counterparts and each such counterpart shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same Agreement.
s.Limitation of Liability of Administrative Agent and Lenders
. It is hereby expressly agreed that:
129.Administrative Agent and Lenders may conclusively rely and shall be
protected in acting or refraining from acting upon any document, instrument,
certificate, instruction or signature believed to be genuine and may assume and
shall be protected in assuming that any Person purporting to give any notice or
instructions in connection with any transaction to which this Agreement relates
has been duly authorized to do so. Administrative Agent and Lenders shall not be
obligated to make any inquiry as to the authority, capacity, existence or
identity of any Person purporting to have executed any such document or
instrument or have made any such signature or purporting to give any such notice
or instructions;
130.Administrative Agent and Lenders shall not be liable for any acts,
omissions, errors of judgment or mistakes of fact or law, including, without
limitation, acts, omissions, errors or mistakes with respect to the Collateral,
except for those arising out of or in connection with Administrative Agent’s and
Lender’s gross negligence, willful misconduct or illegal activity. Without
limiting the generality of the foregoing, Administrative Agent and Lenders shall
be under no obligation to take any steps necessary to preserve rights in the
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Collateral against any other parties, but may do so at its option, and all
expenses incurred in connection therewith shall be payable by Borrower; and
131.Administrative Agent and Lenders shall not be liable for any action taken in
good faith and believed to be authorized or within the rights or powers
conferred by this Agreement and the other Financing Agreements.
t.Borrower Authorizing Accounting Firm
. Borrower shall authorize its accounting firm and/or service bureaus to provide
Administrative Agent with such information as is requested by Administrative
Agent in accordance with this Agreement. Borrower authorizes Administrative
Agent to contact directly any such accounting firm and/or service bureaus to
obtain such information.
u.Joint and Several Liability; Binding Obligations
.
132.Borrower is defined collectively to include all Persons constituting the
Borrower; provided, however, that any references herein to “any Borrower”, “each
Borrower” or similar references, shall be construed as a reference to each
individual Person comprising the Borrower; provided, further, in case of any
question as to which particular Person is to be deemed a Borrower in any given
context for purposes of any term or provision contained in this Agreement, the
Lender shall make such determination. Each Person comprising Borrower shall be
jointly and severally liable for all of the liabilities and obligations of
Borrower under this Agreement, regardless of which of the Borrowers actually
receives the proceeds of the Loan hereunder, or the manner in which the
Borrowers, or the Administrative Agent or Lenders accounts therefor in their
respective books and records. In addition, each entity comprising Borrower
hereby acknowledges and agrees that all of the representations, warranties,
covenants, obligations, conditions, agreements and other terms contained in this
Agreement shall be applicable to and shall be binding upon and measured and
enforceable individually against each Person comprising Borrower as well as all
such Persons when taken together. By way of illustration, but without limiting
the generality of the foregoing, the terms of Section 11 of this Agreement are
to be applied to each individual Person comprising the Borrower (as well as to
all such Persons taken as a whole), such that the occurrence of any of the
events described in Section 11 of this Agreement as to any Person comprising the
Borrower shall constitute an Event of Default even if such event has not
occurred as to any other Persons comprising the Borrower or as to all such
Persons taken as a whole (except as otherwise expressly provided therein by, for
example, the use of the term “Material Adverse Effect”).
133.Each Borrower acknowledges that it will enjoy significant benefits from the
business conducted by the other Borrowers because of, inter alia, their combined
ability to bargain with other Persons including, without limitation, their
ability to receive the credit facilities hereunder and other Financing
Agreements which would not have been available to an individual Borrower acting
alone. Each Borrower has determined that it is in its best interest to procure
the Loan with the credit support of the other Borrowers as contemplated by this
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Agreement and the other Financing Agreements as well as permit the
cross-collateralization with the Affiliate Revolving Loan Liabilities, Affiliate
Revolving Loan Agreement and Affiliate Revolving Loan Financing Agreements and
cross-default with the Affiliate Revolving Loan Liabilities, Affiliate Revolving
Loan Agreement and Affiliate Revolving Loan Financing Agreements and Affiliate
Revolving Loan Liabilities (QIPP), Affiliate Revolving Loan Agreement (QIPP) and
Affiliate Revolving Loan Financing Agreements (QIPP) as contemplated hereunder.
134.The Administrative Agent and the Lenders have advised the Borrowers that the
Administrative Agent and the Lenders are unwilling to enter into this Agreement
and the other Financing Agreements and make available the Loan extended hereby
or thereby to any Borrower unless each Borrower agrees, among other things, to
be jointly and severally liable for the due and proper payment of the
Liabilities of each other Borrower under this Agreement and other Financing
Agreements. Each Borrower has determined that it is in its best interest and in
pursuit of its purposes that it so induce the Lenders to extend credit pursuant
to this Agreement and the other documents executed in connection herewith
(i) because of the desirability to each Borrower of the Loan and the interest
rates and the modes of borrowing available hereunder, (ii) because each Borrower
may engage in transactions jointly with other Borrowers and (iii) because each
Borrower may require, from time to time, access to funds under this Agreement
for the purposes herein set forth. Each Borrower, individually, expressly
understands, agrees and acknowledges, that the Loan would not be made available
on the terms herein in the absence of the collective credit of all of the
Persons constituting the Borrower, the joint and several liability of all such
Persons, and the cross-collateralization of the collateral of all such Persons
hereunder and under the other Financing Agreements. Accordingly, each Borrower,
individually acknowledges that the benefit to each of the Persons comprising the
Borrower as a whole constitutes reasonably equivalent value, regardless of the
amount of the Loan actually borrowed by, advanced to, or the amount of
collateral provided by, any individual Borrower.
135.Each Borrower has determined that it has and, after giving effect to the
transactions contemplated by this Agreement and the other Financing Agreements
(including, without limitation, the inter-Borrower arrangement set forth in this
Section) will have, assets having a fair saleable value in excess of the amount
required to pay its probable liability on its existing debts as they fall due
for payment and that the sum of its debts is not and will not then be greater
than all of its property at a fair valuation, that such Borrower has, and will
have, access to adequate capital for the conduct of its business and the ability
to pay its debts from time to time incurred in connection therewith as such
debts mature and that the value of the benefits to be derived by such Borrower
from the access to funds under this Agreement (including, without limitation,
the inter-Borrower arrangement set forth in this Section) is reasonably
equivalent to the obligations undertaken pursuant hereto.
136.The Borrower Agent (on behalf of each Borrower) shall maintain records
specifying (a) all Liabilities incurred by each Borrower, (b) the date of such
incurrence, (c) the date and amount of any payments made in respect of such
Liabilities and (d) all inter-Borrower
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obligations pursuant to this Section. The Borrower Agent shall make copies of
such records available to the Administrative Agent, upon request.
137.To the extent that applicable Law otherwise would render the full amount of
the joint and several obligations of any Borrower hereunder and under the other
Financing Agreements invalid or unenforceable, such Borrower’s obligations
hereunder and under the other Financing Agreements shall be limited to the
maximum amount which does not result in such invalidity or unenforceability,
provided, however, that each Borrower’s obligations hereunder and under the
other Financing Agreements shall be presumptively valid and enforceable to their
fullest extent in accordance with the terms hereof or thereof, as if this
Section were not a part of this Agreement.
138.To the extent that any Borrower shall make a payment under this Section of
all or any of the Liabilities (a “Joint Liability Payment”) which, taking into
account all other Joint Liability Payments then previously or concurrently made
by any other Borrower, exceeds the amount which such Borrower would otherwise
have paid if each Borrower had paid the aggregate Liabilities satisfied by such
Joint Liability Payments in the same proportion that such Borrower’s “Allocable
Amount” (as defined below) (as determined immediately prior to such Joint
Liability Payments) bore to the aggregate Allocable Amounts of each of the
Borrowers as determined immediately prior to the making of such Joint Liability
Payments, then, following Payment in Full, such Borrower shall be entitled to
receive contribution and indemnification payments from, and be reimbursed by,
each other Borrower for the amount of such excess, pro rata based upon their
respective Allocable Amounts in effect immediately prior to such Joint Liability
Payments. As of any date of determination, the “Allocable Amount” of any
Borrower shall be equal to the maximum amount of the claim which could then be
recovered from such Borrower under this Section without rendering such claim
voidable or avoidable under Section 548 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.
139.The term “Borrower” as used herein shall mean either one or more particular
Borrowers or all of the Borrowers collectively as the Administrative Agent shall
determine in its sole and absolute good faith discretion.
140.[Intentionally Omitted.]
141.[Intentionally Omitted.]
142.Each Borrower hereby agrees that, except as hereinafter provided, its
obligations hereunder shall be unconditional, irrespective of (i) the absence of
any attempt to collect the Liabilities from any obligor or other action to
enforce the same; (ii) the waiver or consent by Administrative Agent with
respect to any provision of any instrument evidencing the Liabilities, or any
part thereof, or any other agreement heretofore, now or hereafter executed by a
Borrower and delivered to Administrative Agent or any Lender; (iii) failure by
Administrative Agent to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral for the
Liabilities; (iv) the institution of any proceeding under the Bankruptcy Code,
or any similar proceeding, by or against a Borrower or Administrative Agent’s
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election in any such proceeding of the application of Section 1111(b)(2) of the
Bankruptcy Code; (v) any borrowing or grant of a security interest by a Borrower
as debtor-in-possession, under Section 364 of the Bankruptcy Code; (vi) the
disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of
Administrative Agent’s claim(s) for repayment of any of the Liabilities; or
(vii) any other circumstance other than Payment in Full which might otherwise
constitute a legal or equitable discharge or defense of a guarantor or surety.
143.Until Payment in Full, no payment made by or for the account of a Borrower
including, without limitation, (i) a payment made by such Borrower on behalf of
the liabilities of any other Borrower or (ii) a payment made by any other Person
under any guaranty, shall entitle such Borrower, by subrogation or otherwise, to
any payment from any other Borrower or from or out of any other Borrower’s
property and such Borrower shall not exercise any right or remedy against any
other Borrower or any property of any other Borrower by reason of any
performance of such Borrower of its joint and several obligations hereunder.
144.Any notice given by one Borrower hereunder shall constitute and be deemed to
be notice given by all Borrowers, jointly and severally. Notice given by
Administrative Agent to any one Borrower hereunder or pursuant to any Financing
Agreements in accordance with the terms hereof or thereof shall constitute
notice to each and every Borrower. The knowledge of one Borrower shall be
imputed to all Borrowers and any consent by one Borrower shall constitute the
consent of and shall bind all Borrowers.
145.This Section is intended only to define the relative rights of Borrower and
nothing set forth in this Section is intended to or shall impair the obligations
of Borrower, jointly and severally, to pay any amounts as and when the same
shall become due and payable in accordance with the terms of this Agreement or
any other Financing Agreements. Nothing contained in this Section shall limit
the liability of any Borrower to pay the Loan made directly or indirectly to
that Borrower and accrued interest, fees and expenses with respect thereto for
which such Borrower shall be primarily liable.
146.The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of each Borrower to which such
contribution and indemnification is owing. The rights of any indemnifying
Borrower against the other Borrowers under this Section shall be exercisable
upon the full and indefeasible payment of the Liabilities and the termination of
the Loan.
v.Confidentiality; Press Releases
. Borrower shall not disclose the contents of this Agreement and the other
Financing Agreements to any third party (including, without limitation, any
financial institution or intermediary), unless required by applicable Laws or by
any subpoena, judicial order or similar legal process, without Administrative
Agent’s prior written consent, other than to Borrower’s officers, lawyers and
other professional advisors on a need-to-know basis, and in connection with any
filings required to be made under any applicable federal or state securities
laws or regulations (“Securities Laws”). Borrower agrees to inform all such
Persons who receive information concerning this Agreement that such information
is confidential and may not be
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disclosed to any other Person, except as required by applicable Laws, including
Securities Laws, or by any subpoena, judicial order or similar legal process. No
party hereto shall, and no party hereto shall permit its Affiliates to, at any
time issue any press release or other public disclosure using the name of any
Borrower, Lender, Administrative Agent or any of their respective Affiliates or
referring to this Agreement or the other Financing Agreements without at least
two (2) Business Days prior written notice to Borrower, Administrative Agent and
the applicable Lender and, except for press releases or other public disclosures
required under applicable Securities Laws, without the prior written consent of
Borrower, Administrative Agent and the applicable Lender, which consent shall
not unreasonably be withheld, conditioned or delayed. Upon Borrower’s prior
written consent, which consent shall not unreasonably be withheld, conditioned
or delayed, each Lender and Administrative Agent may publish or disseminate a
tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement. Nothing contained in this Agreement is intended
to permit or authorize Borrower to make any contract on behalf of Administrative
Agent or any Lender. Each of the Administrative Agent and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to each of its and its Affiliates’ respective
directors, officers, managers, employees and agents, including, without
limitation, accountants, legal counsel and other professional advisors (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, (c) to the extent required by applicable Laws or regulations or by
any subpoena, judicial order or similar legal process or bank regulatory
process, (d) to any other party to this Agreement or any other Financing
Agreement, (e) in connection with the exercise of any remedies hereunder or
under any Financing Agreement or any suit, action or proceedings relating to
this Agreement or any Financing Agreement or the enforcement of rights hereunder
or thereunder, or (f) subject to an agreement containing provisions
substantially the same as those of this Section 12.22, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement.
For the purpose of this Section 12.22, “Information” means all information
received from the Borrower or any other Credit Party relating to the Borrower or
any other Credit Party and their businesses, other than any information (i) that
is available to the Administrative Agent or any Lender on a non-confidential
basis prior to disclosure by the Borrower or any Credit Party, (ii) that is
publicly disclosed by the Borrower or any Credit Party in connection with public
filings with the Securities and Exchange Commission, (iii) without limitation of
subsection (i) immediately above, that was in the possession of the
Administrative Agent or Lender prior to its disclosure by the Borrower or any
Credit Party pursuant hereto provided that the source of such information was
not known by the Administrative Agent or Lender to be bound by a confidentiality
agreement with or other contractual, legal or fiduciary obligation of
confidentiality to the Borrower or any Credit Party with respect to such
information, (iv) is or becomes generally available to the public by acts other
than those of the Administrative Agent or any Lender or their respective
Affiliates, officers, directors, managers, employees or agents in breach of the
terms hereof, (v) that has been or is received by the Administrative Agent or
any Lender from a third party who is not known by Administrative Agent or any
Lender, as applicable, to be bound by a confidentiality agreement with or other
contractual, legal or
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fiduciary obligation of confidentiality to the Borrower or any Credit Party with
respect to such information, or (vi) has been or is developed independently
without use of or reference to Confidential Information. Any Person required to
maintain the confidentiality of Information as provided in this Section 12.22
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.
Without limiting anything to the contrary contained in this Agreement, each of
the obligations contained in this Section 12.22 are several (and not joint and
several) and Administrative Agent shall not be liable or responsible in any way
for any breach of this Section 12.22 by any Lender or any other Person.
w.Fax Signatures
. A signature hereto sent or delivered by facsimile or other electronic
transmission shall be as legally binding and enforceable as a signed original
for all purposes.
x.Release
. For and in consideration of the Loan hereunder, each Borrower, voluntarily,
knowingly, unconditionally, and irrevocably, with specific and express intent,
for and on behalf of itself and its agents, attorneys, heirs, successors, and
assigns (collectively the “Releasing Parties”) does hereby fully and completely
release, acquit and forever discharge the Administrative Agent and each Lender,
and each of their respective successors, assigns, heirs, affiliates,
subsidiaries, parent companies, principals, directors, officers, employees,
shareholders and agents (hereinafter called the “Lender Parties”), and any other
person, firm, business, corporation, insurer, or association which may be
responsible or liable for the acts or omissions of the Lender Parties, or who
may be liable for the injury or damage resulting therefrom (collectively the
“Released Parties”), of and from any and all actions, causes of action, suits,
debts, disputes, damages, claims, obligations, liabilities, costs, expenses,
fees (including, without limitation, reasonable attorneys’ fees) and demands of
any kind whatsoever, at law or in equity, whether matured or unmatured,
liquidated or unliquidated, vested or contingent, choate or inchoate, known or
unknown that the Releasing Parties (or any of them) have or may have, against
the Released Parties or any of them (whether directly or indirectly) relating to
events occurring on or before the date of this Agreement, other than any claim
as to which a final determination is made in a judicial proceeding (in which the
Administrative Agent and Lenders or any of the Released Parties have had an
opportunity to be heard) which determination includes a specific finding that
one of the Released Parties acted in a grossly negligent manner or with actual
willful misconduct or illegal activity. Each Borrower acknowledges that the
foregoing release is a material inducement to Administrative Agent’s and each
Lender’s decision to extend to Borrower the financial accommodations hereunder
and has been relied upon by the Lenders in agreeing to make the Loan hereunder.
Borrower understands, acknowledges and agrees that the release set forth above
may be pleaded as a full and complete defense and may be used as a basis for an
injunction against any action, suit or other proceeding which may be instituted,
prosecuted or attempted in breach of the provisions of such release. To the
furthest extent permitted by law, Borrower hereby knowingly, voluntarily,
intentionally and expressly waives and relinquishes any and all
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rights and benefits that it respectively may have as against any of the Lender
Parties or any other Released Parties under any law, rule or regulation of any
jurisdiction that would or could have the effect of limiting the extent to which
a general release extends to claims which any of the Releasing Parties does not
know or suspect to exist as of the date hereof.
y.Time; Inconsistency
. Time is of the essence in Borrower’s performance under this Agreement and all
other Financing Agreements. Notwithstanding anything to the contrary contained
in any Financing Agreement, if and to the extent any terms or provisions
contained in any Financing Agreement are inconsistent or conflict with the terms
and provisions of this Agreement, the terms and provisions of this Agreement
shall control and govern.
z.Relationship
. The relationship between, on the one hand, the Administrative Agent and
Lenders, and the Borrower, on the other hand, shall be that of creditor-debtor
only. No term in this Agreement or in the other Financing Agreements and no
course of dealing between the parties shall be deemed to create any relationship
of agency, partnership or joint venture or any fiduciary duty by the
Administrative Agent and Lenders to Borrower or any other party.
aa.Borrower Agent
. Each Borrower hereby irrevocably appoints Borrower Agent as the borrowing
agent and attorney-in-fact for all Borrowers which appointment shall remain in
full force and effect unless and until Administrative Agent shall have received
prior written notice signed by each Borrower that such appointment has been
revoked and that another Borrower has been appointed Borrower Agent. Each
Borrower hereby irrevocably appoints and authorizes the Borrower Agent (i) to
provide Administrative Agent with all notices with respect to Loan obtained for
the benefit of Borrower and all other notices and instructions under this
Agreement, (ii) for all purposes of delivery or receipt of communications,
preparation and delivery of financial reports, receipt and payment of
Liabilities, requests for waivers, amendments or other accommodations and/or
actions under this Agreement, and to duly execute and deliver on behalf of
Borrower any and all instruments, amendments, modifications, reaffirmations,
agreements, certificates and documents made to, in favor of or with
Administrative Agent and Lenders in connection with this Agreement or the
Financing Agreements, and (iii) to take such other action as Borrower Agent
deems appropriate on its behalf to obtain the Loan and to exercise such other
powers as are reasonably incidental thereto to carry out the purposes of this
Agreement. Each Borrower agrees that any notice, election, communication,
representation, instrument, amendment, modification, reaffirmation, certificate,
document, agreement or undertaking made on its behalf by Borrower Agent shall be
legally binding upon and enforceable against each such Borrower. It is
understood that the handling of the Loan Account and Collateral of Borrowers in
a combined fashion, as more fully set forth in this Agreement, is done solely as
an accommodation to Borrowers in order to utilize the collective borrowing
powers of Borrowers in the most efficient and economical manner and at their
request, and Administrative Agent and Lenders shall not incur liability to any
Borrower as a result hereof. Each Borrower expects to derive benefit,
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directly or indirectly, from the handling of the Loan Account and the Collateral
in a combined fashion since the successful operation of each Borrower is
dependent on the continued successful performance of the integrated group. To
induce the Administrative Agent and Lenders to do so, and in consideration
thereof, but without limiting any other provision contained in this Agreement,
each Borrower hereby jointly and severally agrees to indemnify Administrative
Agent and each Lender and hold Administrative Agent and Lenders harmless against
any and all liability, expense, loss or claim of damage or injury, made against
Administrative Agent or any Lender by any Borrower or by any third party or
Person whosoever, arising from or incurred by reason of (a) the handling of the
Loan Account and Collateral as herein provided, (b) the Administrative Agent’s
relying on any instructions of the Borrower Agent, or (c) any other action taken
by the Administrative Agent hereunder or under the other Financing Agreements,
except that Borrowers will have no liability to the Administrative Agent under
this Section with respect to any liability that has been finally determined by a
court of competent jurisdiction in a non-appealable proceeding to have resulted
solely from the gross negligence, willful misconduct, or illegal activity of
Administrative Agent.
ab.Acting Through Agents
. In exercising any rights under the Financing Agreements or taking any actions
provided for therein, the Administrative Agent may act through its employees,
agents or independent contractors as authorized by the Administrative Agent.
Borrower shall authorize its accounting firm and/or service bureaus to provide
Administrative Agent with such information as is requested by Administrative
Agent in accordance with this Agreement. Borrower authorizes the Administrative
Agent to contact directly any such accounting firm and/or service bureaus to
obtain such information.
ac.Additional Provisions
.
147.Consents
. Each Borrower, as joint and several primary obligor of the Liabilities
directly incurred by any other Borrower, authorizes Administrative Agent,
without giving notice to such Borrower or to any other Borrower (to the extent
permitted hereunder) or obtaining such Borrower’s consent or any other
Borrower’s consent (to the extent permitted hereunder) and without affecting the
liability of such Borrower for the Liabilities directly incurred by the other
Borrower, from time to time to:
(1)compromise, settle, renew, extend the time for payment, change the manner or
terms of payment, discharge the performance of, decline to enforce, or release
all or any of the Liabilities; grant other indulgences to any Borrower in
respect thereof; or modify in any manner any documents relating to the
Liabilities;
(2)declare all Liabilities due and payable upon the occurrence and during the
continuance of an Event of Default;
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(3)take and hold security for the performance of the Liabilities of any Borrower
and exchange, enforce, waive and release any such security;
(4)apply and reapply such security and direct the order or manner of sale
thereof as Administrative Agent, in its sole discretion, may determine;
(5)release, surrender or exchange any deposits or other property securing the
Liabilities or on which Administrative Agent at any time may have a Lien;
release, substitute or add any one or more endorsers or guarantors of the
Liabilities of any other Borrower or such Borrower; or compromise, settle,
renew, extend the time for payment, discharge the performance of, decline to
enforce, or release all or any obligations of any such endorser or guarantor or
other Person who is now or may hereafter be liable on any Liabilities or
release, surrender or exchange any deposits or other property of any such
Person;
(6)apply payments received by Administrative Agent from any Borrower to any
Liabilities, in such order as Administrative Agent shall determine, in its sole
discretion, subject to Section 12.8; and
(7)assign this Agreement in whole or in part.
148.Waivers
. Each Borrower, as a primary, joint and several obligor with respect to the
Liabilities directly incurred by any other Borrower, hereby waives:
(8)any defense based upon any legal disability or other defense of any other
Borrower, or by reason of the cessation or limitation of the liability of any
other Borrower from any cause (other than full payment of all Liabilities),
including, but not limited to, failure of consideration, breach of warranty,
statute of frauds, statute of limitations, accord and satisfaction, and usury;
(9)any defense based upon any legal disability or other defense of any other
guarantor or other Person;
(10)any defense based upon any lack of authority of the officers, directors,
members, managers, partners or agents acting or purporting to act on behalf of
any other Borrower or any principal of any other Borrower or any defect in the
formation of any other Borrower or any principal of any other Borrower;
(11)any defense based upon the application by any other Borrower of the proceeds
of the Loan for purposes other than the purposes represented by such other
Borrower to Administrative Agent or intended or understood by Administrative
Agent or such Borrower;
(12)any defense based on such Borrower’s rights, under statute or otherwise, to
require Administrative Agent to sue any other Borrower or otherwise to exhaust
its rights and remedies against any other Borrower or any other Person or
against any collateral
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before seeking to enforce its right to require such Borrower to satisfy the
Liabilities of any other Borrower;
(13)any defense based on Administrative Agent’s failure at any time to require
strict performance by any Borrower of any provision of the Financing Agreements.
Such Borrower agrees that no such failure shall waive, alter or diminish any
right of Administrative Agent thereafter to demand strict compliance and
performance therewith. Nothing contained herein shall prevent Administrative
Agent from foreclosing on any Lien, or exercising any rights available to
Administrative Agent thereunder, and the exercise of any such rights shall not
constitute a legal or equitable discharge of such Borrower;
(14)[intentionally omitted];
(15)any defense based upon Administrative Agent’s election of any remedy against
such Borrower or any other Borrower or any of them; any defense based on the
order in which Administrative Agent enforces its remedies;
(16)any defense based on (A) Administrative Agent’s surrender, release,
exchange, substitution, dealing with or taking any additional collateral, (B)
Administrative Agent’s abstaining from taking advantage of or realizing upon any
Lien or other guaranty, and (C) any impairment of collateral securing the
Liabilities, including, but not limited to, Administrative Agent’s failure to
perfect or maintain a Lien in such collateral;
(17)any defense based upon Administrative Agent’s failure to disclose to such
Borrower any information concerning any other Borrower’s financial condition or
any other circumstances bearing on any other Borrower’s ability to pay the
Liabilities;
(18)any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in any other
respects more burdensome than that of a principal;
(19)any defense based upon Administrative Agent’s election, in any proceeding
instituted under the Bankruptcy Code, of the application of Section 1111(b)(2)
of the Bankruptcy Code or any successor statute;
(20)any defense based upon any borrowing or any grant of a security interest
under Section 364 of the Bankruptcy Code;
(21)[intentionally omitted];
(22)except as otherwise expressly set forth herein: notice of acceptance hereof;
notice of the existence, creation or acquisition of any Liability; notice of any
Event of Default; notice of the amount of the Liabilities outstanding from time
to time; notice of any other fact which might increase such Borrower’s risk;
diligence; presentment; demand of payment; protest; filing of claims with a
court in the event of any other Borrower’s receivership or bankruptcy and all
other notices and demands to which such Borrower might otherwise be
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entitled (and agrees the same shall not have to be made on the other Borrower as
a condition precedent to such Borrower’s obligations hereunder);
(23)[intentionally omitted];
(24)any defense based on application of fraudulent conveyance or transfer law or
shareholder distribution law to any of the Liabilities or the security therefor;
(25)any defense based on Administrative Agent’s failure to seek relief from stay
or adequate protection in any other Borrower’s bankruptcy proceeding or any
other act or omission by Administrative Agent which impairs such Borrower’s
prospective subrogation rights;
(26)any defense based on legal prohibition of Administrative Agent’s
acceleration of the maturity of the Liabilities during the occurrence of an
Event of Default or any other legal prohibition on enforcement of any other
right or remedy of Administrative Agent with respect to the Liabilities and the
security therefor;
(27)any defense available to a surety under applicable Law; and
(28)the benefit of any statute of limitations affecting the liability of such
Borrower hereunder or the enforcement hereof.
Each Borrower further agrees that its obligations hereunder shall not be
impaired in any manner whatsoever by any bankruptcy, extensions, moratoria or
other relief granted to any other Borrower pursuant to any statute presently in
force or hereafter enacted.
149.Additional Waivers
. Each Borrower authorizes Administrative Agent to exercise, in its sole
discretion, any right, remedy or combination thereof which may then be available
to Administrative Agent, since it is such Borrower’s intent that the Liabilities
be absolute, independent and unconditional obligations of such Borrower under
all circumstances. Notwithstanding any foreclosure of any Lien with respect to
any or all of any property securing the Liabilities, whether by the exercise of
the power of sale contained therein, by an action for judicial foreclosure or by
an acceptance of a deed in lieu of foreclosure, each Borrower shall remain bound
under such Borrower’s guaranty of the Liabilities directly incurred by any other
Borrower.
150.Primary Obligations
. This Agreement is a primary and original obligation of each of the Borrowers
and each of the Borrowers shall be liable for all existing and future
Liabilities of any other Borrower as fully as if such Liabilities were directly
incurred by such Borrower.
ad.Nonliability of Administrative Agent and Lenders
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. The relationship between the Borrowers on the one hand and the Administrative
Agent and Lenders on the other hand shall be solely that of borrower and lender.
The Administrative Agent and Lenders do not have any fiduciary relationship with
or duty to any Credit Party arising out of or in connection with this Agreement
or any of the other Financing Agreements, and the relationship between the
Credit Parties, on the one hand, and the Administrative Agent and Lenders, on
the other hand, in connection herewith or therewith is solely that of debtor and
creditor. The Administrative Agent does not undertake any responsibility to any
Credit Party to review or inform any Credit Party of any matter in connection
with any phase of any Credit Party’s business or operations. The Borrower Agent
agrees, on behalf of itself and each other Borrower, that the Administrative
Agent and Lenders shall have no liability to any Credit Party (whether sounding
in tort, contract or otherwise) for losses suffered by any Credit Party in
connection with, arising out of, or in any way related to the transactions
contemplated and the relationship established by the Financing Agreements, or
any act, omission or event occurring in connection therewith, unless it is
determined in a final non-appealable judgment by a court of competent
jurisdiction that such losses resulted from the gross negligence, willful
misconduct or illegal activity of the party from which recovery is sought. NO
LENDER OR ADMINISTRATIVE AGENT SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE
USE BY OTHERS OF ANY INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS,
DEBTX OR OTHER SIMILAR INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS
AGREEMENT, NOR SHALL ANY LENDER OR ADMINISTRATIVE AGENT HAVE ANY LIABILITY WITH
RESPECT TO, AND THE BORROWER AGENT ON BEHALF OF ITSELF AND EACH OTHER CREDIT
PARTY, HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR ANY SPECIAL, PUNITIVE,
EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY
OTHER FINANCING AGREEMENT OR ARISING OUT OF ITS ACTIVITIES IN CONNECTION
HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE CLOSING DATE). Each Borrower
and the Borrower Agent acknowledges that it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Financing
Agreements to which it is a party. No joint venture is created hereby or by the
other Financing Agreements or otherwise exists by virtue of the transactions
contemplated hereby by the Administrative Agent and Lenders or among the Credit
Parties and the Administrative Agent and Lenders.
ae.Amendment and Restatement
. On the date hereof (the “Restatement Date”), the Original Term Loan Agreement
shall be amended, restated and superseded by this Agreement. The parties hereto
acknowledge and agree that (a) this Agreement, the Term Loan Notes delivered
pursuant to this Agreement (the “Restated Notes”) and the other Financing
Agreements executed and delivered in connection herewith do not constitute a
novation, payment and reborrowing, or termination of the “Liabilities” (as
defined in the Original Term Loan Agreement) under the Original Term Loan
Agreement as in effect prior to the Restatement Date; (b) such “Liabilities” are
in all respects continuing with only the terms thereof being amended and
modified as provided in this Agreement; (c) the Liens granted in the Collateral
pursuant to the Financing Agreements securing payment of such “Liabilities” are
in all respects continuing and in full force and effect
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and secure the payment of the Liabilities (as defined in this Agreement) and are
hereby fully ratified and affirmed; and (d) upon the effectiveness of this
Agreement all loans outstanding under the Original Term Loan Agreement
immediately before the effectiveness of this Agreement will be part of the Loans
hereunder on the terms and conditions set forth in this Agreement. Without
limitation on the foregoing, each of the Borrowers hereby fully and
unconditionally ratifies and affirms all of the Financing Agreements, as
amended, and agrees that all security interests granted to CIBC or the
Administrative Agent in the Collateral thereunder shall from and after the date
hereof secure all Liabilities hereunder but in favor of the Administrative Agent
for the ratable benefit of the Lenders and the Administrative Agent.
Notwithstanding the modifications effected by this Agreement of the
representations, warranties and covenants of the Borrowers contained in the
Original Term Loan Agreement, each of the Borrowers acknowledges and agrees that
any choses in action or other rights created in favor of CIBC or the
Administrative Agent and its successors and assigns arising out of the
representations and warranties of the Borrowers contained in or delivered
(including representations and warranties delivered in connection with the
making of the loans or other extensions of credit thereunder) in connection with
the Original Term Loan Agreement, shall survive the execution and delivery of
this Agreement but in favor of the Lenders and the Administrative Agent;
provided, however, that it is understood and agreed that the Borrowers’ monetary
obligations under the Original Term Loan Agreement in respect of the loans and
letters of credit thereunder are evidenced by this Agreement. All
indemnification obligations of the Borrowers pursuant to the Original Term Loan
Agreement shall survive the amendment and restatement of the Original Term Loan
Agreement pursuant to this Agreement. On and after the Restatement Date, (a)
each reference in the Financing Agreements to the “Loan Agreement”, “Loan and
Security Agreement”, “thereunder”, “thereof” or similar words referring to the
Loan Agreement shall mean and be a reference to this Agreement and (b) each
reference in the Financing Agreements to a “Term Loan Note” shall mean and be a
Term Loan Note as defined in this Agreement.
14.AGENCY
.
Administrative Agent, Lenders and Borrower agree that, except for the rights
expressly granted to Borrower under Section 13.9 and Section 13.15 and
Borrower’s obligations pursuant to Section 13.14, Borrower shall not be a party
to the agreements contained in this Section 13, and shall have no obligations
under this Section 13. Without limitation of the foregoing, Administrative
Agent, Lenders and Borrower agree that in no event shall Borrower be required to
seek comment from, deliver notices to or otherwise deal with any Lender other
than Administrative Agent (except as otherwise specifically stated in this
Agreement), nor shall Borrower be required to make an independent investigation
of whether Administrative Agent has obtained any consents from the Lenders or as
may be required (it being agreed that all communications from Administrative
Agent may conclusively be deemed to be authorized by Lenders in accordance with
this Section 13). Borrower shall not have any benefits or rights as a third
party beneficiary of any term or condition contained in this Section 13.
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a.Appointment and Authorization
. Each Lender hereby irrevocably (subject to Section 13.9) appoints, designates
and authorizes Administrative Agent to take such action on its behalf under the
provisions of this Agreement and each other Financing Agreement and to exercise
such powers and perform such duties as are expressly delegated to it by the
terms of this Agreement or any other Financing Agreement, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere in this Agreement or in any other Financing
Agreement, Administrative Agent shall not have any duty or responsibility except
those expressly set forth herein, nor shall Administrative Agent have or be
deemed to have any fiduciary relationship with any Lender or participant, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Financing Agreement
or otherwise exist against Administrative Agent. The duties of Administrative
Agent shall be mechanical and administrative in nature. Without limiting the
generality of the foregoing sentence, the use of the term “agent” herein and in
other Financing Agreements with reference to Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties.
b.Delegation of Duties
. Administrative Agent may execute any of its duties under this Agreement or any
other Financing Agreement by or through agents, employees or attorneys-in-fact
and shall be entitled to advice of legal counsel and other consultants,
independent public accountants or experts concerning all matters pertaining to
such duties. Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.
c.Exculpation of Administrative Agent
. None of Administrative Agent nor any of its directors, officers, employees,
Affiliates or agents shall (a) be liable to any Lender or any other Person for
any action taken or omitted to be taken by any of them under or in connection
with this Agreement or any other Financing Agreement or the transactions
contemplated hereby (except to the extent resulting from its own gross
negligence or willful misconduct in connection with its duties expressly set
forth herein as determined by a final, nonappealable judgment by a court of
competent jurisdiction), or (b) be responsible in any manner to any Lender or
participant for any recital, statement, representation or warranty made by
Borrower or any Affiliate, or any officer thereof, contained in this Agreement
or in any other Financing Agreement, or in any certificate, report, statement or
other document referred to or provided for in, or received by Administrative
Agent under or in connection with, this Agreement or any other Financing
Agreement, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Financing Agreement (or the creation,
perfection or priority of any Lien or security interest therein), or for any
failure of Borrower or any other party to any Financing Agreement to perform its
obligations and Liabilities hereunder or thereunder, or be responsible for or
have any
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duty to ascertain or verify the satisfaction of any conditions specified in this
Agreement or any other Financing Agreement, except receipt of items required to
be delivered to Administrative Agent. Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Financing Agreement, or to inspect the properties, books
or records of Borrower or its Affiliates.
d.Reliance by Administrative Agent
. Administrative Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, electronic mail message,
affidavit, letter, telegram, facsimile, telex or telephone message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including legal counsel to Borrower),
independent accountants and other experts selected by Administrative Agent.
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Financing Agreement unless it shall
first receive such advice or concurrence of the Required Lenders or such other
number or percentage of Lenders as shall be required elsewhere in this Agreement
as it deems appropriate and, if it so requests, confirmation from Lenders of
their obligation to indemnify Administrative Agent against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any other
Financing Agreement in accordance with a request or consent of the Required
Lenders or such other number or percentage of Lenders as shall be required
elsewhere in this Agreement and such request and any action taken or failure to
act pursuant thereto shall be binding upon each Lender. For purposes of
determining compliance with the conditions specified in Section 5.1, each Lender
that has signed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to a
Lender unless Administrative Agent shall have received written notice from such
Lender prior to the Closing Date specifying its objection thereto.
e.Notice of Default
. Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default except with respect to defaults in
the payment of principal, interest and fees required to be paid to
Administrative Agent for the account of the Lenders, unless Administrative Agent
shall have received written notice from a Lender or Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”. Administrative Agent will notify Lenders of its
receipt of any such notice. Administrative Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Required
Lenders in accordance with Section 11.2; provided that unless and until
Administrative Agent has received any such request, Administrative Agent may
(but shall not be obligated to) take such action, or refrain from taking
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such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of Lenders.
f.Credit Decision
. Each Lender acknowledges that Administrative Agent has not made any
representation or warranty to it, and that no act by Administrative Agent
hereafter taken, including any consent and acceptance of any assignment or
review of the affairs of Borrower, shall be deemed to constitute any
representation or warranty by Administrative Agent to any Lender as to any
matter, including whether Administrative Agent has disclosed material
information in its possession. Each Lender represents to Administrative Agent
that it has, independently and without reliance upon Administrative Agent and
based on such documents and information as it has deemed appropriate, made its
own appraisal of, and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrower, and
made its own decision to enter into this Agreement and to extend credit to
Borrower hereunder. Each Lender also represents that it will, independently and
without reliance upon Administrative Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Financing Agreements, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower. Except for notices, reports and other documents
expressly herein required to be furnished to Lenders by Administrative Agent,
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of
Borrower which may come into the possession of Administrative Agent.
g.Indemnification
. Whether or not the transactions contemplated hereby are consummated, each
Lender shall severally indemnify, defend and hold harmless upon demand
Administrative Agent and its directors, officers, employees, Affiliates and
agents (to the extent not reimbursed by or on behalf of Borrower and without
limiting the obligation of Borrower to do so), according to its applicable Pro
Rata Share, from and against any and all Indemnified Liabilities, provided that
no Lender shall be liable for any payment to any such Person of any portion of
the Indemnified Liabilities to the extent determined by a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from the
applicable Person’s own gross negligence or willful misconduct. No action taken
in accordance with the directions of Required Lenders shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section.
Without limitation of the foregoing, each Lender shall reimburse Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including, without limitation, reasonable attorneys’ fees and costs) incurred
by Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Financing Agreement,
or
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any document contemplated by or referred to herein, to the extent that
Administrative Agent is not reimbursed for such expenses by or on behalf of
Borrower. If any indemnity furnished to Administrative Agent for any purpose
shall, in the reasonable, good faith opinion of Administrative Agent, be
insufficient or become impaired, Administrative Agent may call for additional
reasonable indemnity and cease, or not commence, to do the acts indemnified
against even if so directed by Required Lenders until such additional reasonable
indemnity is furnished. The undertaking in this Section shall survive repayment
of the Loan and other Liabilities, cancellation of any promissory notes, any
foreclosure under, or modification, release or discharge of, any or all of the
Financing Agreements, termination of this Agreement and the resignation or
replacement of Administrative Agent.
h.Administrative Agent in Individual Capacity
. CIBC and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with Borrower and its Affiliates as though CIBC were not Administrative
Agent hereunder and without notice to or consent of any Lender. Each Lender
acknowledges that, pursuant to such activities, CIBC or its Affiliates may
receive information regarding Borrower or its Affiliates (including information
that may be subject to confidentiality obligations in favor of Borrower or such
Affiliates) and acknowledge that Administrative Agent shall be under no
obligation to provide such information to them. With respect to its portion of
the Loan, CIBC and its Affiliates shall have the same rights and powers under
this Agreement as any other Lender and may exercise the same as though CIBC were
not Administrative Agent, and the terms “Lender” and “Lenders” include CIBC and
its Affiliates, to the extent applicable, in their individual capacities.
i.Successor Administrative Agent
. Administrative Agent may resign as Administrative Agent upon at least thirty
(30) days’ notice to Lenders. If Administrative Agent resigns under this
Agreement, Required Lenders shall, with (so long as no Default or Event of
Default exists) the consent of Borrower (which shall not be unreasonably
withheld, conditioned or delayed), appoint from among Lenders a successor agent
for Lenders. Notwithstanding the immediately foregoing sentence, if no successor
agent is appointed prior to the effective date of the resignation of
Administrative Agent, Administrative Agent may appoint, after consulting with
Lenders and Borrower, a successor agent from among Lenders. Upon the acceptance
of its appointment as successor agent hereunder, such successor agent shall
succeed to and become vested with all the rights, powers and duties of the
retiring Administrative Agent and the term “Administrative Agent” shall mean
such successor agent, and the retiring Administrative Agent’s appointment,
powers and duties as Administrative Agent shall be terminated. After any
retiring Administrative Agent’s resignation hereunder as Administrative Agent,
the provisions of this Section 13 and Sections 12.2 and 12.16 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. If no successor agent has accepted
appointment as Administrative Agent by the date which is thirty (30) days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation
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shall nevertheless thereupon become effective and Lenders shall perform all of
the duties of Administrative Agent hereunder until such time, if any, as
Required Lenders appoint a successor agent as provided for above. The fees
payable by Borrower to a successor agent in its capacity as such agent shall be
the same as those payable to its predecessor unless otherwise agreed in writing
between Borrower and such successor.
j.Collateral Matters; Restriction on Lenders; Etc.
Each Lender authorizes and directs Administrative Agent to enter into the other
Financing Agreements for the benefit of Lenders. Each Lender hereby agrees that,
except as otherwise set forth herein, any action taken by Required Lenders in
accordance with the provisions of this Agreement or the other Financing
Agreements, and the exercise by the Required Lenders of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all Lenders. Administrative Agent
is hereby authorized on behalf of all Lenders, without the necessity of any
notice to or further consent from any Lender, to take any action with respect to
any Collateral and any of the other collateral pursuant to Financing Agreements
that may be necessary to perfect and maintain perfected the Liens upon the
Collateral and the other collateral pursuant to the other Financing Agreements.
Lenders irrevocably authorize Administrative Agent, at its option and in its
discretion, (a) to release any Lien granted to or held by Administrative Agent
under this Agreement and any other Financing Agreement (i) upon Payment in Full;
(ii) constituting property sold or to be sold or disposed of, financed or
refinanced, as part of or in connection with any sale, disposition, financing or
refinancing which is expressly permitted by this Agreement or the Affiliate
Revolving Loan Agreement at any time; or (iii) subject to Section 12.1, if
approved, authorized or ratified in writing by Required Lenders; or (b) to
subordinate its interest in any Collateral to any holder of a Lien on such
Collateral which is expressly permitted by this Agreement or the Affiliate
Revolving Loan Agreement at any time. Upon request by Administrative Agent at
any time, Lenders will promptly confirm in writing Administrative Agent’s
authority to release, or subordinate its interest in, particular types or items
of Collateral pursuant to this Section 13.10. Administrative Agent and each
Lender hereby appoint each other Lender as agent for the purpose of perfecting
Administrative Agent’s security interest in assets and Collateral which, in
accordance with the Uniform Commercial Code in any applicable jurisdiction, can
be perfected by possession or control. Should any Lender (other than
Administrative Agent) obtain possession or control of any such assets or
Collateral, such Lender shall promptly notify Administrative Agent thereof in
writing, and, promptly upon Administrative Agent’s written request therefor,
shall deliver such assets or Collateral to Administrative Agent or in accordance
with Administrative Agent’s instructions or transfer control to Administrative
Agent in accordance with Administrative Agent’s instructions. Each Lender agrees
that, except as otherwise expressly provided herein, it will not have any right
individually to enforce or seek to enforce this Agreement or any Financing
Agreement or to realize upon any Collateral for the Liabilities unless
instructed in writing to do so by Administrative Agent, it being understood and
agreed that such rights and remedies may be exercised only by Administrative
Agent. Each Lender agrees that it shall not, without the express written consent
of Administrative Agent, and shall, upon the written request of Administrative
Agent (to the extent it is lawfully entitled to do so), set off against the
Liabilities,
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any amounts owing by such Lender to a Credit Party or any deposit accounts of
any Credit Party now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested to do so
in writing by Administrative Agent, take or cause to be taken, any action,
including the commencement of any legal or equitable proceedings to foreclose
any loan or otherwise enforce any security interest in any of the Collateral or
to enforce all or any part of this Agreement or the other Financing Agreements.
All enforcement actions under this Agreement and the other Financing Agreements
against the Credit Parties or any third party with respect to the Liabilities or
the Collateral may only be taken by Administrative Agent (at the direction of
the Required Lenders or as otherwise permitted in this Agreement) or by its
agents at the direction of Administrative Agent.
k.Administrative Agent May File Proofs of Claim
. In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to Borrower, Administrative Agent (irrespective of
whether the principal of the Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether
Administrative Agent shall have made any demand on Borrower) shall be entitled
and empowered, by intervention in such proceeding or otherwise:
151.to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loan, and all other Liabilities that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of Lenders and Administrative Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of Lenders and Administrative Agent and their respective agents and
attorneys and all other amounts due Lenders and Administrative Agent under this
Agreement) allowed in such judicial proceedings; and
152.to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Administrative Agent and
its agents and attorneys, and any other amounts due Administrative Agent under
this Agreement.
Nothing contained herein shall be deemed to authorize Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Liabilities
or the rights of any Lender or to authorize Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.
l.Other Agents; Arrangers and Managers
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. None of the Lenders or other Persons identified on the facing page or
signature pages of this Credit Agreement as a “collateral agent” (including the
Collateral Agent), shall have any right, power, obligation, liability,
responsibility or duty under this Credit Agreement other than, in the case of
such Lenders, those applicable to all Lenders as such. 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 Credit Agreement or
in taking or not taking action hereunder.
m.Return of Payments
. If Administrative Agent pays an amount to a Lender under this Agreement in the
belief or expectation that a related payment has been or will be received by
Administrative Agent from Borrower and such related payment is not received by
Administrative Agent, then Administrative Agent will be entitled to recover such
amount from such Lender on demand without setoff, counterclaim or deduction of
any kind, together with interest accruing on a daily basis at the Federal Funds
Rate (as defined below). If Administrative Agent determines at any time that any
amount received by Administrative Agent under this Agreement must be returned to
Borrower or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement
or any other Financing Agreement, Administrative Agent will not be required to
distribute any portion thereof to any Lender. In addition, each Lender will
repay to Administrative Agent on demand any portion of such amount that
Administrative Agent has distributed to such Lender, together with interest at
such rate, if any, as Administrative Agent is required to pay to Borrower or
such other Person, without setoff, counterclaim or deduction of any kind. As
used herein, the term “Federal Funds Rate” means for any day, a fluctuating
interest rate equal for each day during such period to 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 for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent; provided,
Administrative Agent’s determination of such rate shall be binding and
conclusive absent manifest error.
13.14    Defaulting Lender. Notwithstanding any provision of this Agreement to
the contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:
153.Any amount payable to a Defaulting Lender hereunder (whether on account of
principal, interest, fees or otherwise) shall, in lieu of being distributed to
such Defaulting Lender, be retained by Administrative Agent in a segregated
account and, subject to any applicable requirements of law, be applied at such
time or times as may be determined by Administrative Agent (i) first, to the
payment of any amounts owing by such Defaulting Lender to Administrative Agent
hereunder, (ii) second, if so determined by Administrative Agent and Borrower,
held in such account as cash collateral for future funding obligations (if any)
of the
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Defaulting Lender under this Agreement, (iii) third, pro rata, to the payment of
any amounts owing to Borrower, Administrative Agent or the Lenders as a result
of any judgment of a court of competent jurisdiction obtained by Borrower,
Administrative Agent or any Lender against such Defaulting Lender as a result of
such Defaulting Lender’s breach of its obligations under this Agreement, and
(vi) fourth, to such Defaulting Lender or as otherwise directed by a court of
competent jurisdiction; provided, that if such payment is (x) a prepayment of
the principal amount of any Loans and (y) made at a time when the conditions set
forth in Section 5.1 are satisfied, such payment shall be applied solely to
prepay the Loans of all Lenders that are not Defaulting Lenders pro rata prior
to being applied to the prepayment of any Loans of any Defaulting Lender.
154.Notwithstanding anything set forth herein to the contrary, a Defaulting
Lender shall not have any voting or consent rights under or with respect to this
Agreement or any other Financing Agreement or constitute a “Lender” (or be
included in the calculation of “Required Lenders” hereunder) for any voting or
consent rights under or with respect to this Agreement or any other Financing
Agreement except with respect to items which require the vote or consent of all
Lenders or all affected Lenders, and no Defaulting Lender shall have any other
right to approve or disapprove any amendment, waiver, consent or any other
action the Lenders or the Required Lenders have taken or may take hereunder
(including any consent to any amendment or waiver pursuant to Section 12.1),
provided that any waiver, amendment or modification requiring the consent of all
Lenders or each directly affected Lender which affects such Defaulting Lender
differently than other affected Lenders shall require the consent of such
Defaulting Lender.
155.The failure of any Defaulting Lender to make any Loan, advance or any
payment required by it hereunder shall not relieve any other Lender of its
obligations to make such Loan, advance or payment, but neither any Lender nor
Administrative Agent shall be responsible for the failure of any Defaulting
Lender to make a Loan, advance or make any other payment required hereunder.
At Borrower’s written request, Administrative Agent or a Person reasonably
acceptable to Administrative Agent shall have the right with Administrative
Agent’s written consent and in Administrative Agent’s sole discretion (but
without no obligation whatsoever on Administrative Agent) to purchase from any
Defaulting Lender, and each Defaulting Lender agrees that it shall, at
Administrative Agent’s written request, promptly sell and assign to
Administrative Agent or such Person, all of the lending commitments and
commitment interests of that Defaulting Lender for an amount equal to the
principal balance of all Loans held by such Defaulting Lender and all accrued
interest and fees with respect thereto through the date of sale, such purchase
and sale to be consummated (if at all upon Administrative Agent’s election)
pursuant to an executed Assignment Agreement.
n.[Intentionally Omitted]
.
13.15    Replacement of Certain Lenders.
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1.Each of the following shall constitute a “Replacement Event”:
(i)    if in connection with any proposed change, waiver, discharge or
termination of or to any of the provisions of this Agreement and/or any
Financing Agreement as contemplated by Section 12.1, the consent of each Lender
or each affected Lender, as applicable, is required and the consent of the
Required Lenders at such time is obtained but the consent of one or more of such
other Lenders (other than Administrative Agent) whose consent is required is not
obtained (each such other Lender, a “Non-Consenting Lender”);
(ii)    if any Lender (other than Administrative Agent) is a Defaulting Lender;
or
(iii)    if any Lender (other than Administrative Agent) requests compensation
under Section 3.1 and the condition giving rise to such compensation still
exists (each such Lender, an “Affected Lender”).
(b)    For so long as any Replacement Event exists, the Borrower may seek one or
more Assignees eligible under Section 12.15, for clarification, with the prior
written consent of the Administrative Agent (each, a “Replacement Lender”) at
Borrower’s sole cost and expense to purchase the affected Loans and Commitments
of the Non-Consenting Lender, Defaulting Lender or Affected Lender, as the case
may be (such Lender, the “Replaced Lender”). Such purchase may be made, in whole
or in part (subject to the minimum amount requirements in Section 12.15 and a
requirement that the Replacement Lender assume a portion of the Commitment of
the Replaced Lender that corresponds to the purchased portion of the Loans of
such Replaced Lender), at an aggregate price no less than the outstanding
principal amount of the purchased Loans plus accrued interest with respect
thereto. In such case, the Borrower, the Administrative Agent, the Replaced
Lender and each Replacement Lender shall execute and deliver (at Borrower’s sole
cost and expense) an appropriately completed Assignment and Assumption pursuant
to Section 12.15 to effect the assignment of rights to, and the assumption of
obligations by, each Replacement Lender; provided that any fees required to be
paid by Section 12.15 in connection with such assignment shall be paid by the
Borrower or the Replacement Lender. In the case of each replacement of a Lender
(other than a Defaulting Lender), the Borrower shall pay such Replaced Lender,
any commitment fees and other amounts then due and owing to such Lender
(including any additional amounts owing under Section 3.1) prior to such
replacement.
(c)    If a Replaced Lender does not execute and deliver to the Administrative
Agent a duly completed Assignment and Assumption and/or any other reasonable
documentation necessary to reflect such replacement within a period of time
deemed reasonable by the Administrative Agent after the later of (x) the date on
which each Replacement Lender executes and delivers such Assignment and
Assumption and/or such other reasonable documentation and (y) the date as of
which all obligations of the Borrower owing to the Replaced Lender relating to
the Loans and participations so assigned have been paid in full by each
Replacement Lender to such Replaced Lender, then such Replaced Lender shall be
deemed to have executed and delivered such
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Assignment and Assumption and/or such other documentation as of such date and
the Borrower shall be entitled (but not obligated) to execute and deliver such
Assignment and Assumption and/or such other documentation on behalf of such
Replaced Lender.
(d)    Notwithstanding anything herein, neither the Administrative Agent nor any
Lender shall have any obligation to the Borrower to find a Replacement Lender.
15.JURISDICTION; JURY TRIAL WAIVER
.
a.SUBMISSION TO JURISDICTION; WAIVER OF VENUE
. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:
2.SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT AND THE OTHER FINANCING AGREEMENTS TO WHICH IT IS A PARTY, OR
FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS AND
APPELLATE COURTS FROM ANY THEREOF, LOCATED IN COOK COUNTY;
3.CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND
WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW IN CONNECTION WITH ANY SUCH ACTION
OR PROCEEDING (i) ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME, (ii) THE RIGHT TO ASSERT OR IMPOSE ANY CLAIM, NONCOMPULSORY SET-OFF,
COUNTERCLAIM OR CROSS-CLAIM IN RESPECT THEREOF IN SUCH PROCEEDING; PROVIDED,
HOWEVER, THIS WAIVER DOES NOT PRECLUDE THE RIGHT TO ASSERT A DEFENSE IN SUCH
ACTION OR PROCEEDING OR TO ASSERT OR IMPOSE ANY CLAIM, COUNTERCLAIM OR
CROSS-CLAIM WHICH THE BORROWER WISHES TO PURSUE IN A SEPARATE PROCEEDING AT ITS
SOLE COST AND EXPENSE, AND (iii) ALL STATUTES OF LIMITATIONS WHICH MAY BE
RELEVANT THERETO; AND
4.AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY CERTIFIED MAIL (OR ANY SUBSTANTIALLY
SIMILAR FORM OF MAIL), POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE
BORROWER AT ITS ADDRESS SET FORTH ABOVE OR AT SUCH OTHER ADDRESS OF WHICH THE
ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. THE BORROWER
AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW (i) SHALL BE
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DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE BORROWER IN ANY
SUIT, ACTION OR PROCEEDING, AND (ii) SHALL BE TAKEN AND HELD TO BE VALID
PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO THE BORROWER. SOLELY TO THE
EXTENT PROVIDED BY APPLICABLE LAW, SHOULD THE BORROWER, AFTER BEING SERVED, FAIL
TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED
WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE DELIVERY OR MAILING
THEREOF, THE BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT
MAY BE ENTERED BY THE COURT AGAINST THE BORROWER AS DEMANDED OR PRAYED FOR IN
SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS.
5.NOTHING HEREIN SHALL AFFECT THE ADMINISTRATIVE AGENT’S OR ANY LENDER’S RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR LIMIT THE
ADMINISTRATIVE AGENT’S OR ANY LENDER’S RIGHT TO BRING PROCEEDINGS AGAINST THE
BORROWER OR ITS PROPERTY IN ANY COURT OR ANY OTHER JURISDICTION.
b.GOVERNING LAW
. THIS AGREEMENT SHALL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH, AND
ENFORCED AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES.
c.JURY TRIAL
. THE BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
KNOWINGLY WAIVE (TO THE FULLEST EXTENT PERMITTED BY LAW) ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ANY
COUNTERCLAIM) ARISING OUT OF THIS AGREEMENT, THE FINANCING AGREEMENTS OR ANY
OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO, INCLUDING, WITHOUT
LIMITATION, ANY ACTION OR PROCEEDING (A) TO ENFORCE OR DEFEND ANY RIGHTS UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (B)
ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS
AGREEMENT AND THE FINANCING AGREEMENTS. THE ADMINISTRATIVE AGENT, THE LENDERS
AND THE BORROWER AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
A COURT AND NOT A JURY.
[Signature Pages Follow]

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IN WITNESS WHEREOF, this Third Amended and Restated Term Loan and Security
Agreement has been duly executed as of the day and year first above written.
BORROWER:
Diversicare Afton Oaks, LLCDiversicare Briarcliff, LLCDiversicare Chisolm,
LLCDiversicare Hartford, LLCDIVERSICARE WINDSOR HOUSE, LLCBY:Diversicare Leasing
Corp., its sole memberBy:/s/ Kerry D. MasseyName:    Kerry D.
MasseyIts:    Executive Vice President &
Chief Financial OfficerDIVERSICARE OF CHANUTE, LLCDIVERSICARE OF COUNCIL GROVE,
LLCDIVERSICARE OF HAYSVILLE, LLCDIVERSICARE OF SEDGWICK, LLCDIVERSICARE OF
hutchinson, LLCDIVERSICARE OF LARNED, LLCBY:

Diversicare Kansas, LLC,
its sole member

By:/s/ Kerry D. MasseyName:    Kerry D. MasseyIts:    Executive Vice President &
Chief Financial Officer

Signature Page to Third Amended and Restated Term Loan and Security Agreement

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DIVERSICARE PROPERTY CO., LLCBy:/s/ Kerry D. MasseyName:    Kerry D.
MasseyIts:    Executive Vice President &
Chief Financial Officer

DIVERSICARE AFTON OAKS PROPERTY, LLCDIVERSICARE BRIARCLIFF PROPERTY,
LLCDIVERSICARE CHANUTE PROPERTY, LLCDIVERSICARE CHISOLM PROPERTY, LLCDIVERSICARE
COUNCIL GROVE PROPERTY, LLCDIVERSICARE HAYSVILLE PROPERTY, LLCDIVERSICARE
HARTFORD PROPERTY, LLCDIVERSICARE HILLCREST PROPERTY, LLCDIVERSICARE LAMPASAS
PROPERTY, LLCDIVERSICARE LARNED PROPERTY, LLCDIVERSICARE SEDGWICK PROPERTY,
LLCDIVERSICARE WINDSOR HOUSE PROPERTY, LLCDIVERSICARE YORKTOWN PROPERTY,
LLCDIVERSICARE HUTCHINSON PROPERTY, LLCDIVERSICARE SELMA PROPERTY,
LLCBY:Diversicare Property Co., LLC, its sole memberBy:/s/ Kerry D.
MasseyName:    Kerry D. MasseyIts:    Executive Vice President &
Chief Financial Officer

Signature Page to Third Amended and Restated Term Loan and Security Agreement

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                            DIVERSICARE OF SELMA, LLC

By:    DIVERSICARE HOLDING COMPANY, LLC, its sole member

By: /s/ Kerry D. Massey    _______________    
Name: Kerry D. Massey
Its:    Executive Vice President & Chief
    Financial Officer

Signature Page to Third Amended and Restated Term Loan and Security Agreement

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Acknowledged and Agreedsolely for purposes of Sections 8.1(a)(1), 8.1(a)(2), 8.9
and 9.12 hereof:DIVERSICARE HEALTHCARE services, INC.By:/s/ James R. McKnight,
Jr.
Name: James R. McKnight, Jr.
Its:     President and Chief Executive
           Officer

Signature Page to Third Amended and Restated Term Loan and Security Agreement

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ADMINISTRATIVE AGENT:
CIBC BANK USA, formerly known as The PrivateBank and Trust Company, in its
capacity as administrative agent

By:/s/ Adam D. Panos
Name: Adam D. Panos
Its: Managing Director

Signature Page to Third Amended and Restated Term Loan and Security Agreement

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LENDER:
CIBC BANK USA, formerly known as The PrivateBank and Trust Company, in its
capacity as a lender
By:/s/ Adam D. Panos
Name: Adam D. Panos
Its: Managing Director

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LENDER:
CIT BANK N.A., in its capacity as a lender
By:/s/ Thomas T. Gatsios
Name: Thomas T. Gatsios
Its:      Director

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LENDER:
LAKE FOREST BANK & TRUST COMPANY, N.A., in its capacity as a lender
By:/s/ Joel Gordon
Name: Joel Gordon
Its:     SVP

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Signature Page to Third Amended and Restated Term Loan and Security Agreement

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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES

Schedule 1.1(a)BorrowersSchedule 1.1(b)Propco BorrowersSchedule 1.1(c)Affiliate
Revolving BorrowersSchedule 1.1(d)Facilities; Locations; Real Property;
Operators; Owners; LeasesSchedule 7.8Other NamesSchedule 7.12Organizational
ChartSchedule 7.13LitigationSchedule 7.17Environmental MattersSchedule
7.26Medicare and Medicaid PenaltiesSchedule 7.33CapitalizationSchedule 7.39CARES
Act Provider Relief PaymentsSchedule 9.3Requirements for Subsidiary
FormationSchedule 9.6Released Collateral Information

EXHIBITS

Exhibit AForm of Term Loan NoteExhibit B[Intentionally Omitted]Exhibit CForm of
Assignment AgreementExhibit DConditions Precedent to Permitted Acquisition

ANNEX

Annex ALenders, Pro Rata Shares/Dollar Allocations, and Notice Information

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SCHEDULE 1.1(a)
BORROWERS

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SCHEDULE 1.1(b)
PROPCO BORROWERS

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SCHEDULE 1.1(c)
AFFILIATE REVOLVING BORROWERS

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SCHEDULE 1.1(d)
FACILITIES; LOCATIONS; REAL PROPERTY; OPERATORS; OWNERS; LEASES

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SCHEDULE 7.8

OTHER NAMES

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SCHEDULE 7.12

ORGANIZATIONAL CHART
Attach Diversicare Healthcare Services Organizational Chart dated 12-31-2019.
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SCHEDULE 7.33

CAPITALIZATION

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SCHEDULE 7.39

CARES ACT PROVIDER RELIEF PAYMENTS
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SCHEDULE 9.3

REQUIREMENTS FOR SUBSIDIARY FORMATION
(a) the due execution of a joinder by such subsidiary and the other Borrowers to
this Agreement and each other applicable Financing Agreement, in form and
substance reasonably satisfactory to Administrative Agent (“Joinders”) shall be
delivered to the Administrative Agent, including pursuant to which such
subsidiary shall then absolutely and unconditionally (i) join as and become a
party to this Agreement as a Borrower hereunder and under each other Financing
Agreement to which a Borrower is a party, (ii) assume, as a joint and several
obligor hereunder, all of the obligations, liabilities and indemnities of
Borrower under this Agreement (including the Liabilities) and the Financing
Agreements to which a Borrower is a party, (iii) covenant and agree to be bound
by and adhere to all of the terms, representations, warranties, covenants,
waivers, releases, agreements and conditions of or respecting Borrower with
respect to this Agreement and the other Financing Agreements to which a Borrower
is a party, and (iv) grant in favor of Administrative Agent (for benefit of
Lenders and itself) a present first priority perfected security interest and
Lien in all of such subsidiary’s Collateral (other than Permitted Liens);
(b) the business of such subsidiary is and will be engaged in substantially the
same line of business or a related business engaged in by the other Borrowers at
such time; (c) immediately before and immediately after giving effect to the
formation of such subsidiary, no Default or Event of Default shall exist or be
reasonably likely to occur as a result of such subsidiary formation; (d) unless
otherwise agreed in writing by Administrative Agent, the equity of such
subsidiary shall be pledged to Administrative Agent pursuant to a pledge
agreement in form and substance substantially similar to the Pledge Agreement,
or if applicable, the applicable Pledge Agreement shall be amended, to provide
for the first priority perfected pledge of the equity of such subsidiary (and
the original stock certificate regarding such subsidiary shall be delivered to
Administrative Agent, together with an applicable assignment separate from
certificate, if such Stock is certificated, and in any case, the filing of an
applicable UCC Financing Statement); (e) all of the representations and
warranties of the Borrowers (and with respect to such subsidiary, except as
otherwise noted in the Joinder) contained in this Agreement shall be true and
correct in all material respects (without duplication of materiality); (f) a
copy of the resolutions of the Board of Directors or other governing body of
such subsidiary authorizing or ratifying the execution, delivery and performance
by such subsidiary of the Joinders, this Agreement and the Financing Agreements
to which such subsidiary is a party shall be delivered to the Administrative
Agent; (g) a written legal opinion of Borrower’s counsel with respect to such
subsidiary, in form and substance as reasonably requested by Administrative
Agent, shall be delivered to the Administrative Agent; (h) certified copies of
such subsidiary’s organizational documents from the secretary of state of the
state of organization, together with applicable good standing certificate(s),
operating agreement and/or bylaws, shall be furnished to the Administrative
Agent; (i) a UCC Financing Statement naming such subsidiary as debtor and the
Administrative Agent as secured party shall be filed with the secretary of state
of the applicable state of organization for such subsidiary; (j) UCC tax, lien,
bankruptcy, pending suit and judgment searches for such subsidiary shall be
furnished to the Administrative Agent, if
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requested; (k) a certificate from the insurance carrier of such subsidiary
evidencing that all required insurance coverage for such subsidiary as a
Borrower is in effect, designating the Administrative Agent as “mortgagee” and
“lender’s loss payee” and an additional insured thereunder, in form and
substance reasonably satisfactory to Administrative Agent; and (l) any other
applicable Financing Agreement (including, without limitation, Mortgage) or
other instrument, document, agreement, opinion or certificate shall be duly
executed and delivered to the Administrative Agent as it may reasonably require
in its reasonable discretion in connection with the creation of such subsidiary.

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SCHEDULE 9.6

RELEASED COLLATERAL INFORMATION

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EXHIBIT A
FORM OF TERM LOAN NOTE
See attached.

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EXHIBIT B
[INTENTIONALLY OMITTED]
See attached.

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EXHIBIT C
FORM OF ASSIGNMENT AGREEMENT
See attached.

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EXHIBIT D
CONDITIONS PRECEDENT TO PERMITTED ACQUISITIONs

With respect to any Permitted Acquisition to be consummated after the Closing
Date, each of the following conditions precedent shall be satisfied, in form and
substance (and in results) satisfactory to the Administrative Agent and the
Required Lenders:

(a)    immediately before and after giving effect to such Permitted Acquisition,
no Default or Event of Default shall exist, or be reasonably likely to occur, as
a result of such Permitted Acquisition;

(b)    the business, division, property or assets to be acquired are for use, or
the Person to be acquired is engaged, in substantially the same line of business
or a related business engaged in by Borrower on the Closing Date;

(c)    reasonably prior to such Acquisition, Administrative Agent shall have
received true, complete copies of (i) each material document, instrument and
agreement contemplated to be executed in connection with such Acquisition
(including all Acquisition Documents and the disclosure schedules thereto), (ii)
all existing appraisals, surveys, environmental testing results and reports,
title commitments, property condition reports and applicable documents of
record, in each case as reasonably requested by Administrative Agent and as
available to the Borrower, and (iii) UCC, tax, judgment, bankruptcy, pending
suit and lien search reports (from all reasonably required jurisdictions and
under all corporate and trade names), lien and ownership searches from the U.S.
Patent and Trademark Office and U.S. Copyright Office (if applicable), and
payoff letters, lien release letters, UCC termination statements and other
documents as Administrative Agent may require to evidence the existence and
termination of Liens on the assets or business to be acquired (and
fully-executed or conformed copies of such documents when final), except only to
the extent such Liens constitute Permitted Liens;

(d)    a title insurance policy in the form of ALTA Form Mortgagee Title
Insurance Policy (containing such endorsements as deemed appropriate by the
Administrative Agent that are available in the applicable State) issued by an
insurer (reasonably acceptable to the Administrative Agent) in favor of the
Administrative Agent for any real property acquired in connection with a
Permitted Acquisition, together with copies of all documents of record
concerning such real property as identified on the commitment for the ALTA
Policy referred to above;

(e)    not less than ten (10) days’ prior to the closing date of such
Acquisition, a flood insurance report and policy, if required by the Flood
Disaster Protection Act of 1973, concerning the
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property or facility to be acquired in connection with an Acquisition,
reasonably satisfactory to the Administrative Agent;

(f)    receipt of due diligence with respect to environmental, insurance and
management background checks; provided, all such due diligence must be performed
by parties reasonably acceptable to Administrative Agent and the results thereof
may not have findings that could be deemed to have a Material Adverse Effect;
provided, further, Administrative Agent shall have completed its own due
diligence with respect to the applicable/target/property and the results thereof
shall be reasonably satisfactory to Administrative Agent;

(g)    in the case of an Acquisition of any Person (which must be a business in
the United States), the applicable governing body of such Person has approved
such Acquisition, and such transaction shall in any event not be deemed to be,
as is customarily known as, a “hostile takeover” or “tender offer”;

(h)    simultaneously with the closing of such Acquisition, any and all
additional documents, opinions, joinders, affidavits, instruments, notes,
amendments, modifications, security agreements, pledge agreements, and other
Financing Agreements reasonably required by Administrative Agent and Required
Lenders shall be duly executed and delivered by Borrower, Guarantor and their
applicable Affiliates;

(i)    any and all indebtedness of any kind incurred by Borrower from a third
party in making such Acquisition is made expressly subordinate to the
Liabilities pursuant to a Subordination Agreement duly executed and delivered by
all applicable parties in connection with such Acquisition in favor of and
reasonably acceptable to Administrative Agent;

(j)    all representations and warranties made by Borrower in this Agreement and
in the Acquisition Documents shall be true and correct as of the date made
therein (except where the failure to do so could not reasonably be expected to
have an adverse effect on such Acquisition or any portion thereof or a Material
Adverse Effect), and to the best of Borrower’s knowledge, as of such closing
date, and except as disclosed to Administrative Agent in writing, all
representations made by the applicable seller/target in such Acquisition
Documents, shall be true and correct in all material respects (without the
duplication of materiality that may be set forth therein); and none of such
representations and warranties are inconsistent in any material respect with the
representations and warranties of Borrower made in this Agreement or in any
other Financing Agreement;

(k)    all consents and approvals of, and filings and registrations with, and
all other actions by, any Governmental Authority and (except where the failure
to obtain or make the same could not reasonably be expected to have an adverse
effect on such Acquisition or any portion thereof or a Material Adverse Effect)
each other Person required in order to make or consummate such Acquisition will
have been obtained, given, filed or taken and are or will be in full force and
effect at such time;

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(l)    Borrower shall not, directly or indirectly, have any obligation or
liability to any Person in respect of any finder’s, brokers or similar fee in
connection with such Acquisition that will not be fully paid concurrent with the
closing of such Acquisition;

(m)    resolutions, certified organization documents, good standing
certificates, secretary’s certificates, landlord waivers, insurance certificates
(each designating Lender as “lender’s loss payee” and additional insured
thereunder, with required endorsements), and related certificates and documents
customarily required by Administrative Agent in connection with such type of
transaction as the contemplated Acquisition (similar to those required pursuant
to Section 5 hereof) shall be duly executed and delivered to Administrative
Agent;

(n)    immediately prior to and after giving effect to such Acquisition,
Borrower must be in pro forma compliance with the financial covenants contained
in Section 9.12 of this Agreement;

(o)    such contemplated Acquisition does not result in a Change of Control;

(p)    the Acquisition closes in accordance with the terms of the applicable
Acquisition Agreement and the other relevant Acquisition Documents and in
accordance in all material respects with all applicable laws;

(q)    Administrative Agent shall have received a certificate signed on behalf
of Borrower by a Duly Authorized Officer and dated the date of the contemplated
Acquisition certifying satisfaction of each of the conditions precedent
specified in this Exhibit;

(r)    payment by Borrower of the reasonable fees and out-of-pocket costs and
expenses of counsel to Administrative Agent in connection with such Acquisition
and the items identified in this Exhibit;

(s)    Borrower duly executes and delivers to Administrative Agent such other
instruments, certificates, schedules (including supplements to the schedules to
this Agreement), exhibits, opinions, affidavits, amendments, instruments,
agreements and documents reasonably required by Administrative Agent in
connection with such contemplated Acquisition; and

(t)    Administrative Agent shall have received a first priority Lien over the
property and assets acquired in connection with such Acquisition, including,
without limitation, a first priority Mortgage and Assignment of Rents and
Leases.

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ANNEX A
LENDERS, PRO RATA SHARES/DOLLAR ALLOCATIONS, AND NOTICE INFORMATION

LenderContact InformationPro Rata SharesCIBC Bank USA
120 South LaSalle Street
Chicago, IL 60603
Attn.: Adam D. Panos
Managing Director
Tel.: (312) 564-1278
Fax: (312) 800-9733
Dollar Allocation:
Term Loan Commitment: $34,100,000.00

Term Loan Commitment: 55.000000000%

CIT Bank N.A.
11 West 42nd Street
New York, NY 10036
Attention: Eli Plotkin
Telephone: (212) 461-5233

Dollar Allocation:
Term Loan Commitment: $21,700,000.00

Term Loan Commitment: 35.000000000%

Lake Forest Bank & Trust Company, N.A.
727 N. Bank Lane,
Lake Forest, IL 60045
Attention: Joel Gordon
Telephone: (847) 810-5039
Dollar Allocation:
Term Loan Commitment: $6,200,000.00

Term Loan Commitment: 10.000000000%

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