EXHIBIT 10.1

 

 

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

 

DATED AS OF NOVEMBER 7, 2005

 

 

AMONG

 

 

LTC PROPERTIES, INC.

 

 

THE GUARANTORS FROM TIME TO TIME PARTIES HERETO,

 

 

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

 

 

AND

 

 

BANK OF MONTREAL, CHICAGO BRANCH,

as Administrative Agent

 

 

 

 

HARRIS NESBITT CORP.,

as Co-Lead Arranger and Book Manager and

 

KEY BANK NATIONAL ASSOCIATION,

as Co-Lead Arranger and Syndication Agent

 

 

 

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

 

TABLE OF CONTENTS

 

SECTION

 

HEADING

 

 

 

 

 

 

 

SECTION 1.

 

THE CREDIT FACILITIES

 

 

 

 

 

 

 

Section 1.1.

 

Commitments

 

 

Section 1.2.

 

Letters of Credit

 

 

Section 1.3.

 

Applicable Interest Rates

 

 

Section 1.4.

 

Minimum Borrowing Amounts; Maximum Eurodollar Loans

 

 

Section 1.5.

 

Manner of Borrowing Loans and Designating Applicable Interest Rates

 

 

Section 1.6.

 

Interest Periods

 

 

Section 1.7.

 

Maturity of Loans

 

 

Section 1.8.

 

Prepayments

 

 

Section 1.9.

 

Default Rate

 

 

Section 1.10.

 

The Notes

 

 

Section 1.11.

 

Funding Indemnity

 

 

Section 1.12.

 

Commitment Terminations

 

 

Section 1.13.

 

Substitution of Lenders

 

 

 

 

 

 

 

SECTION 2.

 

FEES

 

 

 

 

 

 

 

Section 2.1.

 

Fees

 

 

 

 

 

 

 

SECTION 3.

 

PLACE AND APPLICATION OF PAYMENTS

 

 

 

 

 

 

 

Section 3.1.

 

Place and Application of Payments

 

 

 

 

 

 

 

SECTION 4.

 

GUARANTIES

 

 

 

 

 

 

 

Section 4.1.

 

Guaranties

 

 

Section 4.2.

 

Further Assurances

 

 

 

 

 

 

 

SECTION 5.

 

DEFINITIONS; INTERPRETATION

 

 

 

 

 

 

 

Section 5.1.

 

Definitions

 

 

Section 5.2. [a05-19842_1ex10d1.htm#Section5_2_Interpretation_TheFore_054408]

 

Interpretation [a05-19842_1ex10d1.htm#Section5_2_Interpretation_TheFore_054408]

 

 

Section 5.3. [a05-19842_1ex10d1.htm#Section5_3_ChangeInAccountingPrin_054409]

 

Change in Accounting Principles
[a05-19842_1ex10d1.htm#Section5_3_ChangeInAccountingPrin_054409]

 

 

 

 

 

 

 

SECTION 6. [a05-19842_1ex10d1.htm#Section6_RepresentationsAndWarran_054410]

 

REPRESENTATIONS AND WARRANTIES
[a05-19842_1ex10d1.htm#Section6_RepresentationsAndWarran_054410]

 

 

 

 

 

 

 

Section 6.1. [a05-19842_1ex10d1.htm#Section6_1_OrganizationAndQualifi_054412]

 

Organization and Qualification
[a05-19842_1ex10d1.htm#Section6_1_OrganizationAndQualifi_054412]

 

 

Section 6.2. [a05-19842_1ex10d1.htm#Section6_2_Subsidiaries_EachSubsi_054412]

 

Subsidiaries [a05-19842_1ex10d1.htm#Section6_2_Subsidiaries_EachSubsi_054412]

 

 

Section 6.3. [a05-19842_1ex10d1.htm#Section6_3_AuthorityAndValidityOf_054413]

 

Authority and Validity of Obligations
[a05-19842_1ex10d1.htm#Section6_3_AuthorityAndValidityOf_054413]

 

 

Section 6.4. [a05-19842_1ex10d1.htm#Section6_4_UseOfProceedsMarginSto_054414]

 

Use of Proceeds; Margin Stock
[a05-19842_1ex10d1.htm#Section6_4_UseOfProceedsMarginSto_054414]

 

 

Section 6.5. [a05-19842_1ex10d1.htm#Section6_5_FinancialReports_theCo_054415]

 

Financial Reports
[a05-19842_1ex10d1.htm#Section6_5_FinancialReports_theCo_054415]

 

 

Section 6.6. [a05-19842_1ex10d1.htm#Section6_6_NoMaterialAdverseChang_054416]

 

No Material Adverse Change
[a05-19842_1ex10d1.htm#Section6_6_NoMaterialAdverseChang_054416]

 

 

Section 6.7. [a05-19842_1ex10d1.htm#Section6_7_FullDisclosure_TheStat_054417]

 

Full Disclosure [a05-19842_1ex10d1.htm#Section6_7_FullDisclosure_TheStat_054417]

 

 

 

i

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

 

Section 6.8. [a05-19842_1ex10d1.htm#Section6_8_TrademarksFranchisesAn_054418]

 

Trademarks, Franchises, and Licenses
[a05-19842_1ex10d1.htm#Section6_8_TrademarksFranchisesAn_054418]

 

 

Section 6.9. [a05-19842_1ex10d1.htm#Section6_9_GovernmentalAuthorityA_054419]

 

Governmental Authority and Licensing
[a05-19842_1ex10d1.htm#Section6_9_GovernmentalAuthorityA_054419]

 

 

Section 6.10. [a05-19842_1ex10d1.htm#Section6_10_GoodTitle_TheBorrower_054420]

 

Good Title [a05-19842_1ex10d1.htm#Section6_10_GoodTitle_TheBorrower_054420]

 

 

Section 6.11. [a05-19842_1ex10d1.htm#Section6_11_LitigationAndOtherCon_054421]

 

Litigation and Other Controversies
[a05-19842_1ex10d1.htm#Section6_11_LitigationAndOtherCon_054421]

 

 

Section 6.12. [a05-19842_1ex10d1.htm#Section6_12_Taxes_EachOfTheBorrow_054422]

 

Taxes [a05-19842_1ex10d1.htm#Section6_12_Taxes_EachOfTheBorrow_054422]

 

 

Section 6.13. [a05-19842_1ex10d1.htm#Section6_13_Approvals_NoAuthoriza_054422]

 

Approvals [a05-19842_1ex10d1.htm#Section6_13_Approvals_NoAuthoriza_054422]

 

 

Section 6.14. [a05-19842_1ex10d1.htm#Section6_14_AffiliateTransactions_054423]

 

Affiliate Transactions
[a05-19842_1ex10d1.htm#Section6_14_AffiliateTransactions_054423]

 

 

Section 6.15. [a05-19842_1ex10d1.htm#Section6_15_InvestmentCompanyPubl_054424]

 

Investment Company; Public Utility Holding Company
[a05-19842_1ex10d1.htm#Section6_15_InvestmentCompanyPubl_054424]

 

 

Section 6.16. [a05-19842_1ex10d1.htm#Section6_16_Erisa_DuringThe5yearP_054425]

 

ERISA [a05-19842_1ex10d1.htm#Section6_16_Erisa_DuringThe5yearP_054425]

 

 

Section 6.17. [a05-19842_1ex10d1.htm#Section6_17_ComplianceWithLaws_at_054426]

 

Compliance with Laws
[a05-19842_1ex10d1.htm#Section6_17_ComplianceWithLaws_at_054426]

 

 

Section 6.18. [a05-19842_1ex10d1.htm#Section6_18_OtherAgreements_Neith_054427]

 

Other Agreements
[a05-19842_1ex10d1.htm#Section6_18_OtherAgreements_Neith_054427]

 

 

Section 6.19. [a05-19842_1ex10d1.htm#Section6_19_Solvency_TheBorrowerA_054428]

 

Solvency [a05-19842_1ex10d1.htm#Section6_19_Solvency_TheBorrowerA_054428]

 

 

Section 6.20. [a05-19842_1ex10d1.htm#Section6_20_NoBrokerFees_NoBroker_054429]

 

No Broker Fees. [a05-19842_1ex10d1.htm#Section6_20_NoBrokerFees_NoBroker_054429]

 

 

Section 6.21. [a05-19842_1ex10d1.htm#Section6_21_NoDefault_NoDefaultOr_054430]

 

No Default [a05-19842_1ex10d1.htm#Section6_21_NoDefault_NoDefaultOr_054430]

 

 

Section 6.22. [a05-19842_1ex10d1.htm#Section6_22_StockOfTheBorrower_As_054431]

 

Stock of the Borrower
[a05-19842_1ex10d1.htm#Section6_22_StockOfTheBorrower_As_054431]

 

 

Section 6.23. [a05-19842_1ex10d1.htm#Section6_23_ConditionOfPropertyCa_054432]

 

Condition of Property; Casualties; Condemnation
[a05-19842_1ex10d1.htm#Section6_23_ConditionOfPropertyCa_054432]

 

 

Section 6.24. [a05-19842_1ex10d1.htm#Section6_24_LegalRequirementsAndZ_054433]

 

Legal Requirements, and Zoning
[a05-19842_1ex10d1.htm#Section6_24_LegalRequirementsAndZ_054433]

 

 

Section 6.25. [a05-19842_1ex10d1.htm#Section6_25_QualifiedGroundLeases_054434]

 

Qualified Ground Leases
[a05-19842_1ex10d1.htm#Section6_25_QualifiedGroundLeases_054434]

 

 

Section 6.26. [a05-19842_1ex10d1.htm#Section6_26_NoDefaultsLandlordIsI_054435]

 

No Defaults; Landlord is in Compliance with Leases
[a05-19842_1ex10d1.htm#Section6_26_NoDefaultsLandlordIsI_054435]

 

 

 

 

 

 

 

SECTION 7. [a05-19842_1ex10d1.htm#Section7_ConditionsPrecedent__054437]

 

CONDITIONS PRECEDENT
[a05-19842_1ex10d1.htm#Section7_ConditionsPrecedent__054437]

 

 

 

 

 

 

 

Section 7.1. [a05-19842_1ex10d1.htm#Section7_1_AllCreditEvents_AtTheT_054438]

 

All Credit Events
[a05-19842_1ex10d1.htm#Section7_1_AllCreditEvents_AtTheT_054438]

 

 

Section 7.2. [a05-19842_1ex10d1.htm#Section7_2_InitialCreditEvent_Bef_054439]

 

Initial Credit Event
[a05-19842_1ex10d1.htm#Section7_2_InitialCreditEvent_Bef_054439]

 

 

Section 7.3. [a05-19842_1ex10d1.htm#Section7_3_EligiblePropertyAdditi_054440]

 

Eligible Property Additions and Deletions to the Borrowing Base
[a05-19842_1ex10d1.htm#Section7_3_EligiblePropertyAdditi_054440]

 

 

 

 

 

 

 

SECTION 8. [a05-19842_1ex10d1.htm#Section8_Covenants__054441]

 

COVENANTS [a05-19842_1ex10d1.htm#Section8_Covenants__054441]

 

 

 

 

 

 

 

Section 8.1. [a05-19842_1ex10d1.htm#Section8_1_MaintenanceOfBusiness__054442]

 

Maintenance of Business
[a05-19842_1ex10d1.htm#Section8_1_MaintenanceOfBusiness__054442]

 

 

Section 8.2. [a05-19842_1ex10d1.htm#Section8_2_MaintenanceOfPropertie_054443]

 

Maintenance of Properties
[a05-19842_1ex10d1.htm#Section8_2_MaintenanceOfPropertie_054443]

 

 

Section 8.3. [a05-19842_1ex10d1.htm#Section8_3_TaxesAndAssessments_Th_054450]

 

Taxes and Assessments
[a05-19842_1ex10d1.htm#Section8_3_TaxesAndAssessments_Th_054450]

 

 

Section 8.4. [a05-19842_1ex10d1.htm#Section8_4_Insurance_TheBorrowerA_054451]

 

Insurance [a05-19842_1ex10d1.htm#Section8_4_Insurance_TheBorrowerA_054451]

 

 

Section 8.5. [a05-19842_1ex10d1.htm#Section8_5_FinancialReports_TheBo_054452]

 

Financial Reports
[a05-19842_1ex10d1.htm#Section8_5_FinancialReports_TheBo_054452]

 

 

Section 8.6. [a05-19842_1ex10d1.htm#Section8_6_Inspection_TheBorrower_054453]

 

Inspection [a05-19842_1ex10d1.htm#Section8_6_Inspection_TheBorrower_054453]

 

 

Section 8.7. [a05-19842_1ex10d1.htm#Section8_7_OfficeOfForeignAssetCo_054454]

 

Office of Foreign Asset Control
[a05-19842_1ex10d1.htm#Section8_7_OfficeOfForeignAssetCo_054454]

 

 

Section 8.8. [a05-19842_1ex10d1.htm#Section8_8_Liens_TheBorrowerShall_054455]

 

Liens [a05-19842_1ex10d1.htm#Section8_8_Liens_TheBorrowerShall_054455]

 

 

Section 8.9. [a05-19842_1ex10d1.htm#Section8_9_InvestmentsAcquisition_054456]

 

Investments, Acquisitions, Loans and Advances
[a05-19842_1ex10d1.htm#Section8_9_InvestmentsAcquisition_054456]

 

 

Section 8.10. [a05-19842_1ex10d1.htm#Section8_10_MergersConsolidations_054457]

 

Mergers, Consolidations and Sales
[a05-19842_1ex10d1.htm#Section8_10_MergersConsolidations_054457]

 

 

Section 8.11. [a05-19842_1ex10d1.htm#Section8_11_MaintenanceOfMaterial_054458]

 

Maintenance of Subsidiaries
[a05-19842_1ex10d1.htm#Section8_11_MaintenanceOfMaterial_054458]

 

 

Section 8.12. [a05-19842_1ex10d1.htm#Section8_12_054806]

 

[Intentionally Omitted] [a05-19842_1ex10d1.htm#Section8_12_054806]

 

 

Section 8.13. [a05-19842_1ex10d1.htm#Section8_13_054809]

 

ERISA [a05-19842_1ex10d1.htm#Section8_13_054809]

 

 

Section 8.14. [a05-19842_1ex10d1.htm#Section8_14_054814]

 

Compliance with Laws [a05-19842_1ex10d1.htm#Section8_14_054814]

 

 

Section 8.15. [a05-19842_1ex10d1.htm#Section8_15_054817]

 

Burdensome Contracts With Affiliates [a05-19842_1ex10d1.htm#Section8_15_054817]

 

 

Section 8.16. [a05-19842_1ex10d1.htm#Section8_16_054819]

 

No Changes in Fiscal Year [a05-19842_1ex10d1.htm#Section8_16_054819]

 

 

Section 8.17. [a05-19842_1ex10d1.htm#Section8_17_054822]

 

Intentionally Omitted [a05-19842_1ex10d1.htm#Section8_17_054822]

 

 

Section 8.18. [a05-19842_1ex10d1.htm#Section8_18_054824]

 

Change in the Nature of Business [a05-19842_1ex10d1.htm#Section8_18_054824]

 

 

 

ii

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

 

Section 8.19. [a05-19842_1ex10d1.htm#Section8_19_054827]

 

Use of Loan Proceeds [a05-19842_1ex10d1.htm#Section8_19_054827]

 

 

Section 8.20. [a05-19842_1ex10d1.htm#Section8_20_054829]

 

No Restrictions [a05-19842_1ex10d1.htm#Section8_20_054829]

 

 

Section 8.21. [a05-19842_1ex10d1.htm#Section8_21_054832]

 

Financial Covenants [a05-19842_1ex10d1.htm#Section8_21_054832]

 

 

Section 8.22. [a05-19842_1ex10d1.htm#Section8_22_054834]

 

Borrowing Base Covenants [a05-19842_1ex10d1.htm#Section8_22_054834]

 

 

 

 

 

 

 

SECTION 9. [a05-19842_1ex10d1.htm#Section9_054840]

 

EVENTS OF DEFAULT AND REMEDIES [a05-19842_1ex10d1.htm#Section9_054840]

 

 

 

 

 

 

 

Section 9.1. [a05-19842_1ex10d1.htm#Section9_1_054842]

 

Events of Default [a05-19842_1ex10d1.htm#Section9_1_054842]

 

 

Section 9.2. [a05-19842_1ex10d1.htm#Section9_2_054845]

 

Non-Bankruptcy Defaults [a05-19842_1ex10d1.htm#Section9_2_054845]

 

 

Section 9.3. [a05-19842_1ex10d1.htm#Section9_3_054848]

 

Bankruptcy Defaults [a05-19842_1ex10d1.htm#Section9_3_054848]

 

 

Section 9.4. [a05-19842_1ex10d1.htm#Section9_4_054851]

 

Collateral for Undrawn Letters of Credit
[a05-19842_1ex10d1.htm#Section9_4_054851]

 

 

Section 9.5. [a05-19842_1ex10d1.htm#Section9_5_054853]

 

Notice of Default [a05-19842_1ex10d1.htm#Section9_5_054853]

 

 

Section 9.6. [a05-19842_1ex10d1.htm#Section9_6_054856]

 

Expenses [a05-19842_1ex10d1.htm#Section9_6_054856]

 

 

 

 

 

 

 

SECTION 10. [a05-19842_1ex10d1.htm#Section10_054901]

 

CHANGE IN CIRCUMSTANCES [a05-19842_1ex10d1.htm#Section10_054901]

 

 

 

 

 

 

 

Section 10.1. [a05-19842_1ex10d1.htm#Section10_1_054910]

 

Change of Law [a05-19842_1ex10d1.htm#Section10_1_054910]

 

 

Section 10.2. [a05-19842_1ex10d1.htm#Section10_2_054914]

 

Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR
[a05-19842_1ex10d1.htm#Section10_2_054914]

 

 

Section 10.3. [a05-19842_1ex10d1.htm#Section10_3_054916]

 

Increased Cost and Reduced Return [a05-19842_1ex10d1.htm#Section10_3_054916]

 

 

Section 10.4. [a05-19842_1ex10d1.htm#Section10_4_054919]

 

Lending Offices [a05-19842_1ex10d1.htm#Section10_4_054919]

 

 

Section 10.5. [a05-19842_1ex10d1.htm#Section10_5_054921]

 

Discretion of Lender as to Manner of Funding
[a05-19842_1ex10d1.htm#Section10_5_054921]

 

 

 

 

 

 

 

SECTION 11. [a05-19842_1ex10d1.htm#Section11__054925]

 

THE ADMINISTRATIVE AGENT [a05-19842_1ex10d1.htm#Section11__054925]

 

 

 

 

 

 

 

Section 11.1. [a05-19842_1ex10d1.htm#Section11_1_054931]

 

Appointment and Authorization of Administrative Agent
[a05-19842_1ex10d1.htm#Section11_1_054931]

 

 

Section 11.2. [a05-19842_1ex10d1.htm#Section11_2_054933]

 

Administrative Agent and its Affiliates
[a05-19842_1ex10d1.htm#Section11_2_054933]

 

 

Section 11.3. [a05-19842_1ex10d1.htm#Section11_3_054936]

 

Action by Administrative Agent [a05-19842_1ex10d1.htm#Section11_3_054936]

 

 

Section 11.4. [a05-19842_1ex10d1.htm#Section11_4_054939]

 

Consultation with Experts [a05-19842_1ex10d1.htm#Section11_4_054939]

 

 

Section 11.5. [a05-19842_1ex10d1.htm#Section11_5_054946]

 

Liability of Administrative Agent; Credit Decision
[a05-19842_1ex10d1.htm#Section11_5_054946]

 

 

Section 11.6. [a05-19842_1ex10d1.htm#Section11_6_054949]

 

Indemnity [a05-19842_1ex10d1.htm#Section11_6_054949]

 

 

Section 11.7. [a05-19842_1ex10d1.htm#Section11_7_054951]

 

Resignation or Removal of Administrative Agent and Successor Administrative
Agent [a05-19842_1ex10d1.htm#Section11_7_054951]

 

 

Section 11.8. [a05-19842_1ex10d1.htm#Section11_8_054954]

 

L/C Issuer. [a05-19842_1ex10d1.htm#Section11_8_054954]

 

 

Section 11.9. [a05-19842_1ex10d1.htm#Section11_9_054958]

 

Designation of Additional Agents [a05-19842_1ex10d1.htm#Section11_9_054958]

 

 

 

 

 

 

 

SECTION 12. [a05-19842_1ex10d1.htm#Section12_055000]

 

THE GUARANTEES [a05-19842_1ex10d1.htm#Section12_055000]

 

 

 

 

 

 

 

Section 12.1. [a05-19842_1ex10d1.htm#Section12_1_055006]

 

The Guarantees [a05-19842_1ex10d1.htm#Section12_1_055006]

 

 

Section 12.2. [a05-19842_1ex10d1.htm#Section12_2_055022]

 

Guarantee Unconditional [a05-19842_1ex10d1.htm#Section12_2_055022]

 

 

Section 12.3. [a05-19842_1ex10d1.htm#Section12_3_055025]

 

Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances
[a05-19842_1ex10d1.htm#Section12_3_055025]

 

 

Section 12.4. [a05-19842_1ex10d1.htm#Section12_4_055027]

 

Subrogation [a05-19842_1ex10d1.htm#Section12_4_055027]

 

 

Section 12.5. [a05-19842_1ex10d1.htm#Section12_5_055029]

 

Waivers [a05-19842_1ex10d1.htm#Section12_5_055029]

 

 

Section 12.6. [a05-19842_1ex10d1.htm#Section12_6_055032]

 

Limit on Recovery [a05-19842_1ex10d1.htm#Section12_6_055032]

 

 

Section 12.7. [a05-19842_1ex10d1.htm#Section12_7_055034]

 

Stay of Acceleration [a05-19842_1ex10d1.htm#Section12_7_055034]

 

 

Section 12.8. [a05-19842_1ex10d1.htm#Section12_8_055036]

 

Benefit to Guarantors [a05-19842_1ex10d1.htm#Section12_8_055036]

 

 

Section 12.9. [a05-19842_1ex10d1.htm#Section12_9_055040]

 

Guarantor Covenants [a05-19842_1ex10d1.htm#Section12_9_055040]

 

 

 

iii

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

 

SECTION 13. [a05-19842_1ex10d1.htm#Section13_055042]

 

MISCELLANEOUS [a05-19842_1ex10d1.htm#Section13_055042]

 

 

 

 

 

 

 

Section 13.1. [a05-19842_1ex10d1.htm#Section13_1_055045]

 

Withholding Taxes [a05-19842_1ex10d1.htm#Section13_1_055045]

 

 

Section 13.2. [a05-19842_1ex10d1.htm#Section13_2_055047]

 

No Waiver, Cumulative Remedies [a05-19842_1ex10d1.htm#Section13_2_055047]

 

 

Section 13.3. [a05-19842_1ex10d1.htm#Section13_3_055053]

 

Non-Business Days [a05-19842_1ex10d1.htm#Section13_3_055053]

 

 

Section 13.4. [a05-19842_1ex10d1.htm#Section13_4_055055]

 

Documentary Taxes [a05-19842_1ex10d1.htm#Section13_4_055055]

 

 

Section 13.5. [a05-19842_1ex10d1.htm#Section13_5_055057]

 

Survival of Representations [a05-19842_1ex10d1.htm#Section13_5_055057]

 

 

Section 13.6. [a05-19842_1ex10d1.htm#Section13_6_055059]

 

Survival of Indemnities [a05-19842_1ex10d1.htm#Section13_6_055059]

 

 

Section 13.7. [a05-19842_1ex10d1.htm#Section13_7_055103]

 

Sharing of Set-Off [a05-19842_1ex10d1.htm#Section13_7_055103]

 

 

Section 13.8. [a05-19842_1ex10d1.htm#Section13_8_055105]

 

Notices [a05-19842_1ex10d1.htm#Section13_8_055105]

 

 

Section 13.9. [a05-19842_1ex10d1.htm#Section13_9_055108]

 

Counterparts [a05-19842_1ex10d1.htm#Section13_9_055108]

 

 

Section 13.10. [a05-19842_1ex10d1.htm#Section13_10_055110]

 

Successors and Assigns [a05-19842_1ex10d1.htm#Section13_10_055110]

 

 

Section 13.11. [a05-19842_1ex10d1.htm#Section13_11_055113]

 

Participants [a05-19842_1ex10d1.htm#Section13_11_055113]

 

 

Section 13.12. [a05-19842_1ex10d1.htm#Section13_12_055115]

 

Assignments [a05-19842_1ex10d1.htm#Section13_12_055115]

 

 

Section 13.13. [a05-19842_1ex10d1.htm#Section13_13_055118]

 

Amendments [a05-19842_1ex10d1.htm#Section13_13_055118]

 

 

Section 13.14. [a05-19842_1ex10d1.htm#Section13_14_055120]

 

Headings [a05-19842_1ex10d1.htm#Section13_14_055120]

 

 

Section 13.15. [a05-19842_1ex10d1.htm#Section13_15_055123]

 

Costs and Expenses; Indemnification [a05-19842_1ex10d1.htm#Section13_15_055123]

 

 

Section 13.16. [a05-19842_1ex10d1.htm#Section13_16_055126]

 

Set-off [a05-19842_1ex10d1.htm#Section13_16_055126]

 

 

Section 13.17. [a05-19842_1ex10d1.htm#Section13_17_055128]

 

Entire Agreement [a05-19842_1ex10d1.htm#Section13_17_055128]

 

 

Section 13.18. [a05-19842_1ex10d1.htm#Section13_18_055130]

 

Governing Law [a05-19842_1ex10d1.htm#Section13_18_055130]

 

 

Section 13.19. [a05-19842_1ex10d1.htm#Section13_19_055133]

 

Severability of Provisions [a05-19842_1ex10d1.htm#Section13_19_055133]

 

 

Section 13.20. [a05-19842_1ex10d1.htm#Section13_20_ExcessInterest_Notwi_055208]

 

Excess Interest [a05-19842_1ex10d1.htm#Section13_20_ExcessInterest_Notwi_055208]

 

 

Section 13.21. [a05-19842_1ex10d1.htm#Section13_063538]

 

Construction [a05-19842_1ex10d1.htm#Section13_063538]

 

 

Section 13.22. [a05-19842_1ex10d1.htm#Section13_22_063540]

 

Lender’s Obligations Several [a05-19842_1ex10d1.htm#Section13_22_063540]

 

 

Section 13.23. [a05-19842_1ex10d1.htm#Section13_23_063543]

 

Submission to Jurisdiction; Waiver of Jury Trial
[a05-19842_1ex10d1.htm#Section13_23_063543]

 

 

Section 13.24. [a05-19842_1ex10d1.htm#Section13_24_063544]

 

Amendment and Restatement [a05-19842_1ex10d1.htm#Section13_24_063544]

 

 

Section 13.25. [a05-19842_1ex10d1.htm#Section13_25_063546]

 

Equalization of Outstanding Obligations
[a05-19842_1ex10d1.htm#Section13_25_063546]

 

 

 

 

 

 

 

Signature Page [a05-19842_1ex10d1.htm#Signature_063947]

 

 

 

 

 

 

 

 

EXHIBIT A [a05-19842_1ex10d1.htm#Exhibita_085117]

— [a05-19842_1ex10d1.htm#Exhibita_085117]

 

Notice of Payment Request [a05-19842_1ex10d1.htm#Exhibita_085117]

 

 

EXHIBIT B [a05-19842_1ex10d1.htm#Exhibitb_085126]

— [a05-19842_1ex10d1.htm#Exhibitb_085126]

 

Notice of Borrowing [a05-19842_1ex10d1.htm#Exhibitb_085126]

 

 

EXHIBIT C [a05-19842_1ex10d1.htm#Exhibitc_085130]

— [a05-19842_1ex10d1.htm#Exhibitc_085130]

 

Notice of Continuation/Conversion [a05-19842_1ex10d1.htm#Exhibitc_085130]

 

 

EXHIBIT D [a05-19842_1ex10d1.htm#Exhibitd_085136]

— [a05-19842_1ex10d1.htm#Exhibitd_085136]

 

Note [a05-19842_1ex10d1.htm#Exhibitd_085136]

 

 

EXHIBIT E [a05-19842_1ex10d1.htm#Exhibite_085140]

— [a05-19842_1ex10d1.htm#Exhibite_085140]

 

Borrowing Base Certificate [a05-19842_1ex10d1.htm#Exhibite_085140]

 

 

EXHIBIT F [a05-19842_1ex10d1.htm#Exhibitf_085144]

— [a05-19842_1ex10d1.htm#Exhibitf_085144]

 

Compliance Certificate [a05-19842_1ex10d1.htm#Exhibitf_085144]

 

 

EXHIBIT G [a05-19842_1ex10d1.htm#Exhibitg_085148]

— [a05-19842_1ex10d1.htm#Exhibitg_085148]

 

Additional Guarantor Supplement [a05-19842_1ex10d1.htm#Exhibitg_085148]

 

 

EXHIBIT H [a05-19842_1ex10d1.htm#Exhibith_085153]

— [a05-19842_1ex10d1.htm#Exhibith_085153]

 

Assignment and Acceptance [a05-19842_1ex10d1.htm#Exhibith_085153]

 

 

EXHIBIT I [a05-19842_1ex10d1.htm#Exhibiti_085202]

— [a05-19842_1ex10d1.htm#Exhibiti_085202]

 

Opinion of Counsel [a05-19842_1ex10d1.htm#Exhibiti_085202]

 

 

SCHEDULE 1.0 [a05-19842_1ex10d1.htm#Schedule1_0_085210]

— [a05-19842_1ex10d1.htm#Schedule1_0_085210]

 

Commitments [a05-19842_1ex10d1.htm#Schedule1_0_085210]

 

 

SCHEDULE 1.1 [a05-19842_1ex10d1.htm#Schedule1_1_085213]

— [a05-19842_1ex10d1.htm#Schedule1_1_085213]

 

Initial Properties, Initial Investment Amount and Initial Senior Housing Value
[a05-19842_1ex10d1.htm#Schedule1_1_085213]

 

 

SCHEDULE 6.2 [a05-19842_1ex10d1.htm#Schedule6_2_085215]

— [a05-19842_1ex10d1.htm#Schedule6_2_085215]

 

Material Subsidiaries [a05-19842_1ex10d1.htm#Schedule6_2_085215]

 

 

SCHEDULE 6.26 [a05-19842_1ex10d1.htm#Schedule6_26_085217]

— [a05-19842_1ex10d1.htm#Schedule6_26_085217]

 

Significant Leases [a05-19842_1ex10d1.htm#Schedule6_26_085217]

 

 

 

iv

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

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

This Amended and Restated Credit Agreement is entered into as of
November 7, 2005 by and among LTC Properties, Inc., a Maryland corporation (the
“Borrower”), certain direct and indirect Subsidiaries of the Borrower from time
to time party to this Agreement, as Guarantors, the several financial
institutions from time to time party to this Agreement, as Lenders and Bank of
Montreal, Chicago Branch, as Administrative Agent as provided herein.  All
capitalized terms used herein without definition shall have the same meanings
herein as such terms are defined in Section 5.1 hereof.

 

PRELIMINARY STATEMENTS

 

WHEREAS, the Borrower, the Guarantors, the Lenders and the Administrative Agent
are currently party to that certain Credit Agreement dated as of December 26,
2003; as amended by that certain First Amendment to the Credit Agreement dated
as of September 17, 2004; and by that certain Second Amendment to Credit
Agreement dated as of October 5, 2004 (together, the “Prior Credit Agreement”). 
The Borrower has requested that the Prior Credit Agreement be amended in certain
respects as described below to, inter alia, (i) increase the Commitments,
(ii) amend the Applicable Margin, (iii) adjust certain financial covenants, and
(iv) make certain additional modifications to the Prior Credit Agreement, and
for the sake of clarity and convenience, the Borrower has requested that the
Prior Credit Agreement be restated as so amended.

 

WHEREAS, the Borrower has requested that the Lenders continue to extend credit
to it, and those Lenders, upon the occurrence of the Closing Date and subject to
the terms hereof, will continue to lend monies and/or make advances, extensions
of credit or other financial accommodations to, on behalf of or for the benefit
of the Borrower.

 

NOW, THEREFORE, in consideration of the mutual agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.                THE CREDIT FACILITIES.

 

Section 1.1.           Commitments.  Subject to the terms and conditions hereof,
each Lender, by its acceptance hereof, severally agrees to make a loan or loans
(individually a “Loan” and collectively the “Loans”) in U.S. Dollars to the
Borrower from time to time on a revolving basis up to the amount of such
Lender’s Commitment, subject to any reductions thereof pursuant to the terms
hereof, before the Termination Date.  The sum of the aggregate principal amount
of Loans and L/C Obligations at any time outstanding shall not exceed the lesser
of (i) the Commitments in effect at such time or (ii) the Borrowing Base as
determined based on the most recent Borrowing Base Certificate.  Each Borrowing
of Loans shall be made ratably by the Lenders in proportion to their respective
Percentages.  As provided in Section 1.5(a) hereof, the Borrower may elect that
each Borrowing of Loans be either Adjusted Base Rate Loans or Eurodollar Loans.

 

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

 

Loans may be repaid and the principal amount thereof reborrowed before the
Termination Date, subject to the terms and conditions hereof.

 

Section 1.2.           Letters of Credit.  (a) General Terms.  Subject to the
terms and conditions hereof, as part of the Revolving Credit, the L/C Issuer
shall issue standby and commercial letters of credit (each a “Letter of Credit”)
for the account of Borrower or for the account of the Borrower and one or more
of its Subsidiaries in an aggregate undrawn face amount up to the L/C Sublimit. 
Each Letter of Credit shall be issued by the L/C Issuer, but each Lender shall
be obligated to reimburse the L/C Issuer for such Lender’s Percentage of the
amount of each drawing thereunder and, accordingly, each Letter of Credit shall
constitute usage of the Commitment of each Lender pro rata in an amount equal to
its Percentage of the L/C Obligations then outstanding.

 

(b)           Applications.  At any time before the Termination Date, the L/C
Issuer shall, at the request of the Borrower, issue one or more Letters of
Credit in U.S. Dollars, in a form satisfactory to the L/C Issuer, with
expiration dates no later than the Termination Date, in an aggregate face amount
as set forth above up to the L/C Sublimit, upon the receipt of an application
duly executed by the Borrower and, if such Letter of Credit is for the account
of one of its Subsidiaries, such Subsidiary for the relevant Letter of Credit in
the form then customarily prescribed by the L/C Issuer for the Letter of Credit
requested (each an “Application”).  Notwithstanding anything contained in any
Application to the contrary:  (i) the Borrower shall pay fees in connection with
each Letter of Credit as set forth in Section 2.1 hereof, (ii) except as
otherwise provided in Section 1.8 hereof, before the occurrence of an Event of
Default, the L/C Issuer will not call for the funding by the Borrower of any
amount under a Letter of Credit before being presented with a drawing
thereunder, and (iii) if the L/C Issuer is not timely reimbursed for the amount
of any drawing under a Letter of Credit on the date such drawing is paid, the
Borrower’s obligation to reimburse the L/C Issuer for the amount of such drawing
shall bear interest (which the Borrower hereby promises to pay) from and after
the date such drawing is paid at a rate per annum equal to the sum of the
Applicable Margin plus the Adjusted Base Rate from time to time in effect
(computed on the basis of a year of 365 or 366 days, as the case may be, and the
actual number of days elapsed).  If the L/C Issuer issues any Letter of Credit
with an expiration date that is automatically extended unless the L/C Issuer
gives notice that the expiration date will not so extend beyond its then
scheduled expiration date, unless the Required Lenders instruct the L/C Issuer
otherwise, the L/C Issuer will give such notice of non-renewal before the time
necessary to prevent such automatic extension if before such required notice
date:  (i) the expiration date of such Letter of Credit if so extended would be
after the Termination Date, (ii) the Commitments have been terminated, or
(iii) a Default or an Event of Default exists and the Administrative Agent, at
the request or with the consent of the Required Lenders, has given the L/C
Issuer instructions not to so permit the extension of the expiration date of
such Letter of Credit.  The L/C Issuer agrees to issue amendments to the
Letter(s) of Credit increasing the amount, or extending the expiration date,
thereof at the request of the Borrower subject to the conditions of Section 7
hereof and the other terms of this Section 1.2.

 

(c)           The Reimbursement Obligations.  Subject to Section 1.2(b) hereof,
the obligation of the Borrower to reimburse the L/C Issuer for all drawings
under a Letter of Credit (a “Reimbursement Obligation”) shall be governed by the
Application related to such Letter of Credit,

 

2

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

 

except that reimbursement shall be made by no later than 2:00 p.m. (Chicago
time) on the date when each drawing is to be paid if the Borrower has been
informed of such drawing by the L/C Issuer on or before 11:30 a.m. (Chicago
time) on the date when such drawing is to be paid or, if notice of such drawing
is given to the Borrower after 11:30 a.m. (Chicago time) on the date when such
drawing is to be paid, by the end of such day, in immediately available funds at
the Administrative Agent’s principal office in Chicago, Illinois or such other
office as the Administrative Agent may designate in writing to the Borrower (who
shall thereafter cause to be distributed to the L/C Issuer such amount(s) in
like funds).  If the Borrower does not make any such reimbursement payment on
the date due and the Participating Lenders fund their participations therein in
the manner set forth in Section 1.2(d) below, then all payments thereafter
received by the Administrative Agent in discharge of any of the relevant
Reimbursement Obligations shall be distributed in accordance with
Section 1.2(d) below.

 

(d)           The Participating Interests.  Each Lender (other than the Lender
acting as L/C Issuer in issuing the relevant Letter of Credit), by its
acceptance hereof, severally agrees to purchase from the L/C Issuer, and the L/C
Issuer hereby agrees to sell to each such Lender (a “Participating Lender”), an
undivided percentage participating interest (a “Participating Interest”), to the
extent of its Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the L/C Issuer.  Upon any failure by the
Borrower to pay any Reimbursement Obligation at the time required on the date
the related drawing is to be paid, as set forth in Section 1.2(c) above, or if
the L/C Issuer is required at any time to return to the Borrower or to a
trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Participating Lender shall, not
later than the Business Day it receives a certificate in the form of Exhibit A
hereto from the L/C Issuer (with a copy to the Administrative Agent) to such
effect, if such certificate is received before 1:00 p.m. (Chicago time), or not
later than 1:00 p.m. (Chicago time) the following Business Day, if such
certificate is received after such time, pay to the Administrative Agent for the
account of the L/C Issuer an amount equal to such Participating Lender’s
Percentage of such unpaid or recaptured Reimbursement Obligation together with
interest on such amount accrued from the date the related payment was made by
the L/C Issuer to the date of such payment by such Participating Lender at a
rate per annum equal to:  (i) from the date the related payment was made by the
L/C Issuer to the date 2 Business Days after payment by such Participating
Lender is due hereunder, the Federal Funds Rate for each such day and (ii) from
the date 2 Business Days after the date such payment is due from such
Participating Lender to the date such payment is made by such Participating
Lender, the Adjusted Base Rate in effect for each such day.  Each such
Participating Lender shall thereafter be entitled to receive its Percentage of
each payment received in respect of the relevant Reimbursement Obligation and of
interest paid thereon, with the L/C Issuer retaining its Percentage thereof as a
Lender hereunder.  The several obligations of the Participating Lenders to the
L/C Issuer under this Section 1.2 shall be absolute, irrevocable, and
unconditional under any and all circumstances whatsoever and shall not be
subject to any set-off, counterclaim or defense to payment which any
Participating Lender may have or have had against the Borrower, the L/C Issuer,
the Administrative Agent, any Lender or any other Person whatsoever.  Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default or Event of Default or by any reduction or termination of any
Commitment of any Lender, and each payment by a Participating Lender under this
Section 1.2 shall be made without any offset, abatement, withholding or
reduction whatsoever.

 

3

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

 

(e)           Indemnification.  The Participating Lenders shall, to the extent
of their respective Percentages, indemnify the L/C Issuer (to the extent not
reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the L/C Issuer’s gross negligence or willful
misconduct) that the L/C Issuer may suffer or incur in connection with any
Letter of Credit issued by it.  The obligations of the Participating Lenders
under this Section 1.2(e) and all other parts of this Section 1.2 shall survive
termination of this Agreement and of all Applications, Letters of Credit, and
all drafts and other documents presented in connection with drawings thereunder.

 

(f)            Manner of Requesting a Letter of Credit.  The Borrower shall
provide at least five (5) Business Days’ advance written notice to the
Administrative Agent of each request for the issuance of a Letter of Credit,
such notice in each case to be accompanied by an Application for such Letter of
Credit properly completed and executed by the Borrower and, in the case of an
extension or an increase in the amount of a Letter of Credit, a written request
therefor, in a form acceptable to the Administrative Agent and the L/C Issuer,
in each case, together with the fees called for by this Agreement.  The
Administrative Agent shall promptly notify the L/C Issuer of the Administrative
Agent’s receipt of each such notice and shall send to each Lender within
five (5) Business Days of the date of receipt a facsimile of such notice and the
L/C Issuer shall promptly notify the Administrative Agent and the Lenders of the
issuance of the Letter of Credit so requested.

 

Section 1.3.           Applicable Interest Rates.  (a) Adjusted Base Rate
Loans.  Each Adjusted Base Rate Loan made or maintained by a Lender shall bear
interest during each Interest Period it is outstanding (computed on the basis of
a year of 365 or 366 days, as the case may be, and the actual days elapsed) on
the unpaid principal amount thereof from the date such Loan is advanced or
continued, or created by conversion from a Eurodollar Loan, until maturity
(whether by acceleration or otherwise) at a rate per annum equal to the sum of
the Applicable Margin plus the Adjusted Base Rate from time to time in effect,
payable on the last day of its Interest Period and at maturity (whether by
acceleration or otherwise).

 

“Adjusted Base Rate” means, for any day, the fluctuating rate per annum of
interest equal to the greater of (a) the Prime Rate in effect on such day, and
(b) the Federal Funds Rate in effect on such day plus 0.5 of 1% (one-half of one
percent), and

 

(b)           Eurodollar Loans.  Each Eurodollar Loan made or maintained by a
Lender shall bear interest during each Interest Period it is outstanding
(computed on the basis of a year of 360 days and actual days elapsed) on the
unpaid principal amount thereof from the date such Loan is advanced or
continued, or created by conversion from an Adjusted Base Rate Loan, until
maturity (whether by acceleration or otherwise) at a rate per annum equal to the
sum of the Applicable Margin plus the Adjusted LIBOR applicable for such
Interest Period, payable on the last day of each calendar month within an
Interest Period or on the last day of the Interest Period and at maturity
(whether by acceleration or otherwise).

 

4

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

 

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

 

Adjusted LIBOR

=

 

LIBOR

 

 

 

 

1 - Eurodollar Reserve Percentage

 

 

“Eurodollar Reserve Percentage” means, for any Borrowing of Eurodollar Loans,
the daily average for the applicable Interest Period of the maximum rate,
expressed as a decimal, at which reserves (including, without limitation, any
supplemental, marginal, and emergency reserves) are imposed during such Interest
Period by the Board of Governors of the Federal Reserve System (or any
successor) on “eurocurrency liabilities”, as defined in such Board’s
Regulation D (or in respect of any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Loans is
determined or any category of extensions of credit or other assets that include
loans by non-United States offices of any Lender to United States residents),
subject to any amendments of such reserve requirement by such Board or its
successor, taking into account any transitional adjustments thereto.  For
purposes of this definition, the Eurodollar Loans shall be deemed to be
“eurocurrency liabilities” as defined in Regulation D without benefit or credit
for any prorations, exemptions or offsets under Regulation D.

 

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

 

“LIBOR Index Rate” means, for any Interest Period, the rate per annum (rounded
upwards, if necessary, to the next higher one hundred-thousandth of a percentage
point) for deposits in U.S. Dollars for a period equal to such Interest Period,
which appears on the Telerate Page 3750 as of 11:00 a.m. (London, England time)
on the day 2 Business Days before the commencement of such Interest Period.

 

“Telerate Page 3750” means the display designated as “Page 3750” on the Telerate
Service (or such other page as may replace Page 3750 on that service or such
other service as may be nominated by the British Bankers’ Association as the
information vendor for the purpose of displaying British Bankers’ Association
Interest Settlement Rates for U.S. Dollar deposits).

 

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

 

5

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

 

Section 1.4.           Minimum Borrowing Amounts; Maximum Eurodollar Loans. 
Each Borrowing of Adjusted Base Rate Loans advanced under the Revolving Credit
shall be in an amount not less than $100,000.  Each Borrowing of Eurodollar
Loans advanced, continued or converted under the Revolving Credit shall be in an
amount equal to $1,000,000 or such greater amount which is an integral multiple
of $500,000.  Without the Administrative Agent’s consent, there shall not be
more than five (5) Borrowings of Eurodollar Loans outstanding under the
Revolving Credit at any one time.

 

Section 1.5.           Manner of Borrowing Loans and Designating Applicable
Interest Rates.  (a) Notice to the Administrative Agent.  The Borrower shall
give notice to the Administrative Agent by no later than 11:00 a.m. (Chicago
time):  (i) at least 3 Business Days before the date on which the Borrower
requests the Lenders to advance a Borrowing of Eurodollar Loans and (ii) on the
date the Borrower requests the Lenders to advance a Borrowing of Adjusted Base
Rate Loans.  The Loans included in each Borrowing shall bear interest initially
at the type of rate specified in such notice of a new Borrowing.  Thereafter,
subject to the terms and conditions hereof, the Borrower may from time to time
elect to change or continue the type of interest rate borne by each Borrowing
or, subject to Section 1.4’s minimum amount requirement for each outstanding
Borrowing, a portion thereof, as follows:  (i) if such Borrowing is of
Eurodollar Loans, on the last day of the Interest Period applicable thereto, the
Borrower may continue part or all of such Borrowing as Eurodollar Loans or
convert part or all of such Borrowing into Adjusted Base Rate Loans or (ii) if
such Borrowing is of Adjusted Base Rate Loans, on any Business Day, the Borrower
may convert all or part of such Borrowing into Eurodollar Loans for an Interest
Period or Interest Periods specified by the Borrower.  The Borrower shall give
all such notices requesting the advance, continuation or conversion of a
Borrowing to the Administrative Agent by telephone or telecopy (which notice
shall be irrevocable once given and, if by telephone, shall be promptly
confirmed in writing), substantially in the form attached hereto as Exhibit B
(Notice of Borrowing) or Exhibit C (Notice of Continuation/Conversion), as
applicable, or in such other form acceptable to the Administrative Agent. 
Notice of the continuation of a Borrowing of Eurodollar Loans for an additional
Interest Period or of the conversion of part or all of a Borrowing of Adjusted
Base Rate Loans into Eurodollar Loans must be given by no later than 11:00 a.m.
(Chicago time) at least 3 Business Days before the date of the requested
continuation or conversion.  All such notices concerning the advance,
continuation or conversion of a Borrowing shall specify the date of the
requested advance, continuation or conversion of a Borrowing (which shall be a
Business Day), the amount of the requested Borrowing to be advanced, continued
or converted, the type of Loans to comprise such new, continued or converted
Borrowing and, if such Borrowing is to be comprised of Eurodollar Loans, the
Interest Period applicable thereto.  The Borrower agrees that the Administrative
Agent may rely on any such telephonic or telecopy notice given by any person the
Administrative Agent in good faith believes is an Authorized Representative
without the necessity of independent investigation, and in the event any such
notice by telephone conflicts with any written confirmation such telephonic
notice shall govern if the Administrative Agent has acted in reliance thereon.

 

(b)           Notice to the Lenders.  The Administrative Agent shall (i) give
prompt telephonic or facsimile notice of each Borrowing notice received from
Borrower pursuant to Section 1.5(a) above, (ii) send a facsimile copy to each
Lender within five (5) Business Days of the date of receipt of each notice from
the Borrower received pursuant to Section 1.5(a) above and (iii) if

 

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such notice requests the Lenders to make Eurodollar Loans, the Administrative
Agent shall give notice to the Borrower and each Lender by like means of the
interest rate applicable thereto promptly after the Administrative Agent has
made such determination.

 

(c)           Borrower’s Failure to Notify; Automatic Continuations and
Conversions.  Any outstanding Borrowing of Adjusted Base Rate Loans shall
automatically be continued for an additional Interest Period on the last day of
its then current Interest Period unless the Borrower has notified the
Administrative Agent within the period required by Section 1.5(a) that the
Borrower intends to convert such Borrowing, subject to Section 7.1 hereof, into
a Borrowing of Eurodollar Loans or such Borrowing is prepaid in accordance with
Section 1.8(a).  If the Borrower fails to give notice pursuant to
Section 1.5(a) above of the continuation or conversion of any outstanding
principal amount of a Borrowing of Eurodollar Loans before the last day of its
then current Interest Period within the period required by Section 1.5(a) or,
whether or not such notice has been given, one or more of the conditions set
forth in Section 7.1 for the continuation or conversion of a Borrowing of
Eurodollar Loans would not be satisfied, and such Borrowing is not prepaid in
accordance with Section 1.8(a), such Borrowing shall automatically be converted
into a Borrowing of Adjusted Base Rate Loans.  In the event the Borrower fails
to give notice pursuant to Section 1.5(a) above of a Borrowing equal to the
amount of a Reimbursement Obligation and has not notified the Administrative
Agent by 12:00 noon (Chicago time) on the day such Reimbursement Obligation
becomes due that it intends to repay such Reimbursement Obligation through funds
not borrowed under this Agreement, the Borrower shall be deemed to have
requested a Borrowing of Adjusted Base Rate Loans under the Credit on such day
in the amount of the Reimbursement Obligation then due, which Borrowing shall be
applied to pay the Reimbursement Obligation then due.

 

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

 

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

 

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such Lender pays such amount to the Administrative Agent at a rate per annum
equal to:  (i) from the date the related advance was made by the Administrative
Agent to the date 2 Business Days after payment by such Lender is due hereunder,
the Federal Funds Rate for each such day and (ii) from the date 2 Business Days
after the date such payment is due from such Lender to the date such payment is
made by such Lender, the Adjusted Base Rate in effect for each such day.  If
such amount is not received from such Lender by the Administrative Agent
immediately upon demand, the Borrower will, on demand, repay to the
Administrative Agent the proceeds of the Loan attributable to such Lender with
interest thereon at a rate per annum equal to the interest rate applicable to
the relevant Loan, but without such payment being considered a payment or
prepayment of a Loan under Section 1.11 hereof so that the Borrower will have no
liability under such Section with respect to such payment.

 

Section 1.6.           Interest Periods.  As provided in Section 1.5(a) hereof,
at the time of each request to advance, continue or create by conversion a
Borrowing of Eurodollar Loans, the Borrower shall select an Interest Period
applicable to such Loans from among the available options.  The term “Interest
Period” means the period commencing on the date a Borrowing of Loans is
advanced, continued or created by conversion and ending:  (a) in the case of
Adjusted Base Rate Loans, on the last day of the calendar month in which such
Borrowing is advanced, continued or created by conversion (or on the last day of
the following calendar month if such Loan is advanced, continued or created by
conversion on the last day of a calendar month) and (b) in the case of a
Eurodollar Loan 1, 2, 3 or 6 months thereafter; provided, however, that:

 

(i)            any Interest Period for a Borrowing of Loans consisting of
Adjusted Base Rate Loans that otherwise would end after the Termination Date
shall end on the Termination Date;

 

(ii)           no Interest Period with respect to any portion of the Loans shall
extend beyond the Termination Date;

 

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

 

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

 

Section 1.7.           Maturity of Loans.  Each Loan both for principal and
interest not sooner paid, shall mature and become due and payable by the
Borrower on the Termination Date.

 

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Section 1.8.           Prepayments.  (a) Optional.  The Borrower may prepay in
whole or in part (but, if in part, then:  (i) if such Borrowing is of Adjusted
Base Rate Loans, in an amount not less than $100,000, (ii) if such Borrowing is
of Eurodollar Loans, in an amount not less than $500,000, and (iii) in each
case, in an amount such that the minimum amount required for a Borrowing
pursuant to Section 1.4 hereof remains outstanding) any Borrowing of Eurodollar
Loans at any time upon three (3) Business Days prior notice by the Borrower to
the Administrative Agent or, in the case of a Borrowing of Adjusted Base Rate
Loans, notice delivered by the Borrower to the Administrative Agent no later
than 10:00 a.m. (Chicago time) on the date of prepayment (or, in any case, such
shorter period of time then agreed to by the Administrative Agent), such
prepayment to be made by the payment of the principal amount to be prepaid and,
in the case of any Eurodollar Loans, accrued interest thereon to the date fixed
for prepayment plus any amounts due the Lenders under Section 1.11 hereof.

 

(b)           Mandatory.  (i) The Borrower shall, on each date the Commitments
are reduced pursuant to Section 1.12 hereof, prepay the Loans and, if necessary,
prefund the L/C Obligations by the amount, if any, necessary to reduce the sum
of the aggregate principal amount of Loans and L/C Obligations then outstanding
to the amount to which the Commitments have been so reduced.

 

(ii)           If at any time the sum of the unpaid principal balance of the
Loans and the L/C Obligations then outstanding shall be in excess of the
Borrowing Base as determined on the basis of the most recent Borrowing Base
Certificate, the Borrower shall immediately and without notice or demand pay
over the amount of the excess to the Administrative Agent for the account of the
Lenders as and for a mandatory prepayment on such Obligations, with each such
prepayment first to be applied to the Loans until payment in full thereof with
any remaining balance to be held by the Administrative Agent in the Collateral
Account as security for the Obligations owing with respect to the Letters of
Credit.

 

(iii)          Unless the Borrower otherwise directs, prepayments of Loans under
this Section 1.8(b) shall be applied first to Borrowings of Adjusted Base Rate
Loans until payment in full thereof with any balance applied to Borrowings of
Eurodollar Loans in the order in which their Interest Periods expire.  Each
prepayment of Loans under this Section 1.8(b) shall be made by the payment of
the principal amount to be prepaid and, in the case of any Eurodollar Loans,
accrued interest thereon to the date of prepayment together with any amounts due
the Lenders under Section 1.11 hereof.  Each prefunding of L/C Obligations shall
be made in accordance with Section 9.4 hereof.

 

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

 

Section 1.9.           Default Rate.  Notwithstanding anything to the contrary
contained herein, while any Event of Default exists or after acceleration, the
Borrower shall pay interest (after as well as before entry of judgment thereon
to the extent permitted by law) on the principal amount of all Loans and
Reimbursement Obligations, and letter of credit fees at a rate per annum equal
to:

 

9

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

 

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

 

(c)           for any Reimbursement Obligation, the sum of 2.0% plus the amounts
due under Section 1.2 with respect to such Reimbursement Obligation; and

 

(d)           for any Letter of Credit, the sum of 2.0% plus the letter of
credit fee due under Section 2.1 with respect to such Letter of Credit;

 

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

 

Section 1.10.        The Notes.  (a) The Loans made to the Borrower by a Lender
shall be evidenced by a single promissory note of the Borrower issued to such
Lender in the form of Exhibit D hereto.  Each such promissory note is
hereinafter referred to as a “Note” and collectively such promissory notes are
referred to as the “Notes.”

 

(b)           Each Lender shall record on its books and records or on a
schedule to its appropriate Note the amount of each Loan advanced, continued or
converted by it, all payments of principal and interest and the principal
balance from time to time outstanding thereon, the type of such Loan, and, for
any Eurodollar Loan, the Interest Period and the interest rate applicable
thereto.  The record thereof, whether shown on such books and records of a
Lender or on a schedule to the relevant Note, shall be prima facie evidence as
to all such matters; provided, however, that the failure of any Lender to record
any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrower to repay all Loans made to it
hereunder together with accrued interest thereon.  At the request of any Lender
and upon such Lender tendering to the Borrower the appropriate Note to be
replaced, the Borrower shall furnish a new Note to such Lender to replace any
outstanding Note.

 

Section 1.11.        Funding Indemnity.  If any Lender shall incur any loss,
cost or expense (including, without limitation, any loss of profit, and any
loss, cost or expense incurred by reason of the liquidation or re-employment of
deposits or other funds acquired by such Lender to fund or maintain any
Eurodollar Loan or the relending or reinvesting of such deposits or amounts paid
or prepaid to such Lender) as a result of:

 

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

 

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(b)           any failure (because of a failure to meet the conditions of
Section 7 or otherwise) by the Borrower to borrow or continue a Eurodollar Loan,
or to convert an Adjusted Base Rate Loan into a Eurodollar Loan, on the date
specified in a notice given pursuant to Section 1.5(a) hereof,

 

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

 

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

 

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

 

Section 1.12.        Commitment Terminations.  (a) Optional Credit
Terminations.  The Borrower shall have the right at any time and from time to
time, upon 5 Business Days prior written notice to the Administrative Agent (or
such shorter period of time agreed to by the Administrative Agent), to terminate
the Commitments without premium or penalty and in whole or in part, any partial
termination to be (i) in an amount not less than $1,000,000 and (ii) allocated
ratably among the Lenders in proportion to their respective Percentages,
provided that the Commitments may not be reduced to an amount less than the sum
of the aggregate principal amount of Loans and L/C Obligations then
outstanding.  Any termination of the Commitments below the L/C Sublimit then in
effect shall reduce the L/C Sublimit by a like amount.  The Administrative Agent
shall give prompt notice to each Lender of any such termination of the
Commitments.

 

(b)           Any termination of the Commitments pursuant to this Section 1.12
may not be reinstated.

 

Section 1.13.        Substitution of Lenders.  In the event (a) the Borrower
receives a claim from any Lender for compensation under Section 10.3 or 13.1
hereof, (b) the Borrower receives notice from any Lender of any illegality
pursuant to Section 10.1 hereof, (c) any Lender is in default in any material
respect with respect to its obligations under the Loan Documents, or (d) a
Lender fails to consent to an amendment or waiver requested under Section 13.13
hereof at a time when the Required Lenders have approved such amendment or
waiver (any such Lender referred to in clause (a), (b), (c), or (d) above being
hereinafter referred to as an “Affected Lender”), the Borrower may, in addition
to any other rights the Borrower may have hereunder or under applicable law,
require, at its expense, any such Affected Lender to assign, at par plus accrued
interest and fees, without recourse, all of its interest, rights, and
obligations hereunder (including all of its Commitments and the Loans and
participation interests in Letters of Credit and other amounts at any time owing
to it hereunder and the other Loan Documents) to a commercial bank or other
financial institution specified by the Borrower, provided that (i) such
assignment shall not conflict with or violate any law, rule or regulation or
order of any court or other

 

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governmental authority, (ii) the Borrower shall have received the written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld, to such assignment, (iii) the Borrower shall have paid to the Affected
Lender all monies (together with amounts due such Affected Lender under
Section 1.11 hereof as if the Loans owing to it were prepaid rather than
assigned) other than such principal owing to it hereunder, and (iv) the
assignment is entered into in accordance with the other requirements of
Section 13.12 hereof (provided any assignment fees and reimbursable expenses due
thereunder shall be paid by the Borrower).

 

SECTION 2.                FEES.

 

Section 2.1.           Fees.  (a) Commitment Fee.  The Borrower shall pay to the
Administrative Agent for the ratable account of the Lenders in accordance with
their Percentages a commitment fee at the rate per annum equal to the Applicable
Margin for commitment fees as shown in the definition of Applicable Margin in
Section 5.1 hereof, (computed on the basis of a year of 360 days and the actual
number of days elapsed) on the daily Unused Commitments.  Such commitment fee
shall be payable quarterly in arrears on the last day of each Fiscal Quarter in
each year (commencing on December 31, 2005) and on the Termination Date, unless
the Commitments are terminated in whole on an earlier date, in which event the
commitment fee for the period to the date of such termination in whole shall be
paid on the date of such termination.

 

(b)           Letter of Credit Fees.  On the date of issuance or extension, or
increase in the amount, of any Letter of Credit pursuant to Section 1.2 hereof,
the Borrower shall pay to the L/C Issuer for its own account a fronting fee
equal to .125% of the face amount of (or of the increase in the face amount of)
such Letter of Credit.  Quarterly in arrears, on the last day of each Fiscal
Quarter, commencing on December 31, 2005, the Borrower shall pay to the
Administrative Agent, for the ratable benefit of the Lenders in accordance with
their Percentages, a letter of credit fee at a rate per annum equal to the
Applicable Margin for Letter of Credit Fee as shown in the definition of
Applicable Margin in Section 5.1 hereof (computed on the basis of a year of
360 days and the actual number of days elapsed) in effect during each day of
such quarter applied to the daily face amount of Letters of Credit outstanding
during such quarter.  In addition, the Borrower shall pay to the L/C Issuer for
its own account the L/C Issuer’s standard issuance, drawing, negotiation,
amendment, and other administrative fees for each Letter of Credit as
established by the L/C Issuer from time to time.

 

(c)           Administrative Agent Fees.  The Borrower shall pay to the
Administrative Agent, for its own use and benefit, the fees agreed to between
the Administrative Agent and the Borrower in a fee letter dated
September 1, 2005, or as otherwise agreed to in writing between them (without
duplication and pro rata for the administrative fee previously paid to the
Administrative Agent in connection with the Prior Credit Agreement).

 

SECTION 3.                PLACE AND APPLICATION OF PAYMENTS.

 

Section 3.1.           Place and Application of Payments.  All payments of
principal and interest on the Loans and the Reimbursement Obligations, and of
all other Obligations payable by the Borrower under this Agreement and the other
Loan Documents, shall be made by the Borrower

 

12

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to the Administrative Agent by no later than 12:00 Noon (Chicago time) on the
due date thereof at the office of the Administrative Agent in Chicago, Illinois
(or such other location as the Administrative Agent may designate to the
Borrower) for the benefit of the Lender or Lenders entitled thereto.  Any
payments received after such time shall be deemed to have been received by the
Administrative Agent on the next Business Day, provided however, that if the
Borrower has provided to the Administrative Agent written authorization to
deduct such payments from its operating bank account maintained at Harris N.A.,
Chicago, Illinois, by 12:00 Noon (Chicago Time), such amounts shall be deemed to
have been received by the Administrative Agent upon receipt of such
notification.  All such payments shall be made in U.S. Dollars, in immediately
available funds at the place of payment, in each case without set-off or
counterclaim.  The Administrative Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal or interest on Loans
and on Reimbursement Obligations in which the Lenders have purchased
Participating Interests ratably to the Lenders and like funds relating to the
payment of any other amount payable to any Lender to such Lender, in each case
to be applied in accordance with the terms of this Agreement.  If the
Administrative Agent causes amounts to be distributed to the Lenders in reliance
upon the assumption that the Borrower will make a scheduled payment and such
scheduled payment is not so made, each Lender shall, on demand, repay to the
Administrative Agent the amount distributed to such Lender together with
interest thereon in respect of each day during the period commencing on the date
such amount was distributed to such Lender and ending on (but excluding) the
date such Lender repays such amount to the Administrative Agent, at a rate per
annum equal to:  (i) from the date the distribution was made to the date 2
Business Days after payment by such Lender is due hereunder, the Federal Funds
Rate for each such day and (ii) from the date 2 Business Days after the date
such payment is due from such Lender to the date such payment is made by such
Lender, the Adjusted Base Rate in effect for each such day.

 

Anything contained herein to the contrary notwithstanding (including, without
limitation, Section 1.8(b) hereof), all payments and collections received in
respect of the Obligations, by the Administrative Agent or any of the Lenders
after acceleration or the final maturity of the Obligations or termination of
the Commitments as a result of an Event of Default shall be remitted to the
Administrative Agent and distributed as follows:

 

(a)           first, to the payment of any outstanding costs and expenses
incurred by the Administrative Agent, in protecting, preserving or enforcing
rights under the Loan Documents, and in any event including all costs and
expenses of a character which the Borrower has agreed to pay the Administrative
Agent under Section 13.15 hereof (such funds to be retained by the
Administrative Agent for its own account unless it has previously been
reimbursed for such costs and expenses by the Lenders, in which event such
amounts shall be remitted to the Lenders to reimburse them for payments
theretofore made to the Administrative Agent);

 

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

 

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

 

(d)           fourth, to the payment of all other unpaid Obligations and all
other indebtedness, obligations, and liabilities of the Borrower and its
Subsidiaries secured by the Collateral Documents to be allocated pro rata in
accordance with the aggregate unpaid amounts owing to each holder thereof; and

 

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

 

SECTION 4.                GUARANTIES .

 

Section 4.1.           Guaranties.  The payment and performance of the
Obligations shall at all times be guaranteed by each direct and indirect
Material Subsidiary of the Borrower (individually a “Guarantor” and collectively
the “Guarantors”) pursuant to Section 12 hereof or pursuant to one or more
guaranty agreements in form and substance acceptable to the Administrative
Agent, as the same may be amended, modified or supplemented from time to time
(individually a “Guaranty” and collectively the “Guaranties”).

 

Section 4.2.           Further Assurances.  In the event the Borrower or any
Guarantor forms or acquires any other Material Subsidiary after the date hereof,
except as otherwise provided in Section 4.1 above, the Borrower shall promptly
upon such formation or acquisition cause such newly formed or acquired Material
Subsidiary to execute an Additional Guarantor Supplement in the form of
Exhibit G attached hereto (the “Additional Guarantor Supplement”) as the
Administrative Agent may then require, and the Borrower shall also deliver to
the Administrative Agent, or cause such Material Subsidiary to deliver to the
Administrative Agent, at the Borrower’s cost and expense, such other
instruments, documents, certificates, and opinions reasonably required by the
Administrative Agent or any Lender in connection therewith.  The Administrative
Agent shall promptly deliver to each Lender a copy of any Guaranty delivered
under this Section and any other materials requested by such Lender in the
possession of the Administrative Agent.

 

SECTION 5.                DEFINITIONS; INTERPRETATION.

 

Section 5.1.           Definitions.  The following terms when used herein shall
have the following meanings:

 

“Acquired Business” means the entity, Property or assets acquired by the
Borrower or a Subsidiary in an Acquisition, after the date hereof.

 

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“Acquisition” means 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 any business or division
of a Person, (b) the acquisition of in excess of 50% of the capital stock,
partnership interests, membership interests or equity of any Person (other than
a Person that is a Subsidiary), or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is a Subsidiary) provided that the
Borrower or the Subsidiary is the surviving entity.

 

“Additional Guarantor Supplement” is defined in Section 4.2 hereof.

 

“Adjusted Base Rate” is defined in Section 1.3(a) hereof.

 

“Adjusted Base Rate Loan” means a Loan bearing interest at a rate specified in
Section 1.3(a) hereof.

 

“Adjusted LIBOR” is defined in Section 1.3(b) hereof.

 

“Administrative Agent” means Bank of Montreal, Chicago Branch and any successor
pursuant to Section 11.7 hereof.

 

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

 

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

 

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

 

“Applicable Margin” means, with respect to Loans, Reimbursement Obligations, and
the commitment fees and letter of credit fee payable under Section 2.1 hereof,
until the first Pricing Date, the rates per annum shown opposite Level I below,
and thereafter from one Pricing Date to the next the Applicable Margin means the
rates per annum determined in accordance with the following schedule:

 

15

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LEVEL

 

MAXIMUM TOTAL
INDEBTEDNESS/TOTAL
ASSET VALUE RATIO FOR
SUCH PRICING DATE

 

APPLICABLE MARGIN FOR
ADJUSTED BASE RATE
LOANS UNDER REVOLVING
CREDIT AND
REIMBURSEMENT
OBLIGATIONS SHALL BE:

 

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

 

APPLICABLE
MARGIN FOR
COMMITMENT FEE
SHALL BE:

 

 

 

 

 

 

 

 

 

 

 

IV

 

Greater than .45 to 1.0

 

1.50

%

2.50

%

0.40

%

 

 

 

 

 

 

 

 

 

 

III

 

Less than or equal to
.45 to 1.0 but greater
than .35 to 1.0

 

1.00

%

2.00

%

.0.35

%

 

 

 

 

 

 

 

 

 

 

II

 

Less than or equal to
.35 to 1.0 but greater
than .25 to 1.0

 

0.75

%

1.75

%

0.35

%

 

 

 

 

 

 

 

 

 

 

I

 

Less than or equal to
.25 to 1.0

 

0.50

%

1.50

%

0.30

%

 

For purposes hereof, the term “Pricing Date” means, for any Fiscal Quarter of
the Borrower ending on or after December 31, 2005, the date on which the
Administrative Agent is in receipt of the Borrower’s most recent financial
statements and current Compliance Certificate (and, in the case of the year-end
financial statements, audit report) for the Fiscal Quarter then ended, pursuant
to Section 8.5 hereof.  The Applicable Margin shall be established based on the
Maximum Total Indebtedness/Total Asset Value Ratio for the most recently
completed Fiscal Quarter and the Applicable Margin established on a Pricing Date
shall remain in effect until the next Pricing Date.  If the Borrower has not
delivered its financial statements, including a Compliance Certificate, by the
date such financial statements (and, in the case of the year-end financial
statements, audit report) are required to be delivered under Section 8.5 hereof,
until such financial statements and audit report are delivered, the Applicable
Margin shall be the highest Applicable Margin (i.e., Level IV shall apply).  If
the Borrower subsequently delivers such financial statements before the next
Pricing Date, the Applicable Margin established by such late delivered financial
statements shall take effect from the date of delivery until the next Pricing
Date.  In all other circumstances, the Applicable Margin established by such
financial statements shall be in effect from the Pricing Date that occurs
immediately after the end of the Fiscal Quarter covered by such financial
statements until the next Pricing Date.  Each determination of the Applicable
Margin made by the Administrative Agent in accordance with the foregoing shall
be conclusive and binding on the Borrower and the Lenders if reasonably
determined.

 

“Application” is defined in Section 1.2(b) hereof.

 

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

 

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

 

16

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named by any Authorized Representative of the Borrower in a written notice to
the Administrative Agent.

 

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

 

“Borrowing” means the total of Loans of a single type advanced, continued for an
additional Interest Period, or converted from a different type into such type by
the Lenders on a single date and, in the case of Eurodollar Loans, for a single
Interest Period.  Borrowings of Loans are made and maintained ratably from each
of the Lenders according to their Percentages.  A Borrowing is “advanced” on the
day Lenders advance funds comprising such Borrowing to the Borrower, is
“continued” on the date a new Interest Period for the same type of Loans
commences for such Borrowing, and is “converted” when such Borrowing is changed
from one type of Loans to the other, all as determined pursuant to Section 1.5
hereof.

 

“Borrowing Base” means, at any date of its determination, an amount equal to 50%
of the Borrowing Base Value on such date minus the outstanding principal amount
of all Unsecured Debt of the Borrower on such date that is pari passu in rank to
the indebtedness under the Credit Agreement other than the Obligations.

 

“Borrowing Base Certificate” means the certificate in the form of Exhibit E
hereto, or in such other form acceptable to the Administrative Agent, to be
delivered to the Administrative Agent and the Lenders pursuant to Sections 7.2
and 8.5 hereof.

 

“Borrowing Base Determination Date” means each date on which the Borrowing Base
is certified to the Administrative Agent, as follows:

 

(a)           Quarterly.  On the 50th day following each calendar quarter
(except when such calendar quarter ends on December 31, in which event it shall
be on the 60th day.

 

(b)           Property Adjustments.  Following each addition or deletion of an
Eligible Property (an “Adjustment Event”), the Borrowing Base shall be adjusted
accordingly.

 

(c)           Notice of Borrowing Base Change.  Promptly following any date the
Borrowing Base is re-determined in accordance with the preceding paragraphs, the
Administrative Agent shall give notice to the Lenders and the Borrower of the
new Borrowing Base.

 

“Borrowing Base Requirements” means collectively that (a) no more than 10% of
the Borrowing Base Value may be comprised of Eligible Properties which are
leased by Borrower pursuant to a Qualified Ground Lease; (b) no more than 20% of
the Borrowing Base Value may be comprised of Eligible Properties which are
neither SNF’s or ALF’s; (c) no more than 15% of the Borrowing Base Value may be
comprised of Eligible Properties which are not 100% owned by Borrower and/or any
Guarantor (exclusive of Eligible Properties attributable to (a) above) and
(d) no more than 10% of the Borrowing Base Value may be comprised of any one
Eligible Property.

 

17

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

 

“Borrowing Base Value” means, at any date of its determination, an amount equal
to the sum of the following on such date (a) Eligible Properties owned more than
four quarters valued at the Calculated Value and (b) Eligible Properties owned
for less than four quarters valued at the Investment Amount.

 

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

 

“Calculated Value” means the quotient of the Eligible Property NOI for each
applicable Eligible Property divided by its applicable Capitalization Rate with
the resulting quotient multiplied by owner’s percentage ownership of such
Eligible Property.

 

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

 

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

 

“Capitalization Rate” means 9.5% for assisted living facilities (“ALF’s”) and
12% for skilled nursing facilities (“SNF’s”).

 

“Change of Control” means any of (a) the acquisition by any “person” or “group”
(as such terms are used in sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) at any time of beneficial ownership of 50% or more of
the outstanding capital stock or other equity interests of the Borrower on a
fully-diluted basis, (b) any “Change of Control” (or words of like import), as
defined in any agreement or indenture relating to any issue of Indebtedness for
Borrowed Money in excess of $10,000,000 shall occur or (c) during any
twelve (12) month period on or after the date hereof, individuals who at the
beginning of such period constituted the Board of Directors of the Borrower
(together with any new directors whose election by the Board of Directors or
whose nomination for election by the shareholders of the Borrower was approved
by a vote of at least a majority of the members of the Board of Directors then
in office who either were members of the Board of Directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the members of the
Board of Directors then in office.

 

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

 

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

 

18

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

 

“Collateral Account” is defined in Section 9.4 hereof.

 

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

 

“Commitment” means, as to any Lender, the obligation of such Lender to make
Loans and to participate in Letters of Credit issued for the account of the
Borrower hereunder in an aggregate principal or face amount at any one time
outstanding not to exceed the amount set forth opposite such Lender’s name on
Schedule 1 attached hereto and made a part hereof, as the same may be reduced or
modified at any time or from time to time pursuant to the terms hereof.  The
Borrower and the Lenders acknowledge and agree that the Commitments of the
Lenders aggregate $90,000,000 on the date hereof.

 

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

 

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

 

“Credit Event” means the advancing of any Loan, the continuation of or
conversion into a Eurodollar Loan, or the issuance of, or extension of the
expiration date or increase in the amount of, any Letter of Credit.

 

“Credit Facility Debt Service” means, for any Fiscal Quarter, all interest and
Letter of Credit fees payable on the Loans or Letters of Credit or as part of
the Obligations.

 

“Debt Service” means, for any Fiscal Quarter, the sum of (a) Interest Expense
and (b) the greater of (i) zero or (ii) scheduled principal amortization paid on
Total Indebtedness (exclusive of any balloon payments or prepayments of
principal paid on such Total Indebtedness) less amortized principal payments
received on mortgage loans receivable or its REMIC Certificate investments
(exclusive of any balloon payments or prepayments of principal received on
mortgage loans receivable or on the underlying mortgage loans of investments in
REMIC Certificates).

 

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

 

“Defined Benefit Plan” is defined in Section 4.14(j) of the Code.

 

“EBITDA” means, for any period, determined on a consolidated basis of the
Borrower and its Subsidiaries, in accordance with GAAP, the sum of net income
(or loss) plus: (i) depreciation and amortization expense; (ii) Interest
Expense; (iii) income tax expense; (iv) extraordinary, unrealized or
non-recurring losses, including impairment charges and reserves,

 

19

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

 

minus:  (v) funds received by the Borrower or a Subsidiary as rent but which are
reserved for capital expenses; (vi) unrealized gains on the sale of assets; and,
(vii) income tax benefits.

 

“Effective Date” means the date all of the conditions precedent set forth in
Section 7.2 have been satisfied.

 

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

 

“Eligible Property” means, as of any Borrowing Base Determination Date, any
Property owned by the Borrower or a Material Subsidiary which satisfies the
following conditions which would permit such Property to be included in the
Borrowing Base:

 

(a)           Is real property majority owned in fee simple, or 100% leased by
Borrower or a Material Subsidiary pursuant to a Qualified Ground Lease; provided
that for any Property owned less than 100%, the Borrower or Material Subsidiary
shall have the unilateral right to (i) sell, transfer or otherwise dispose of
such Property and (ii) to create a Lien on such Property as security for
Indebtedness for Borrowed Money;

 

(b)           Currently in service (not under development or non-stabilized);

 

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

 

(d)           Neither the Property nor the ownership interest is subject to any
Lien (other than Permitted Liens or Liens in favor of the Borrower or a Material
Subsidiary) or to any negative pledge;

 

(e)           If such Property is owned by a Material Subsidiary, (i) none of
the Borrower’s beneficial ownership interest in such Material Subsidiary is
subject to any Lien (other than certain Permitted Liens or Liens in favor of the
Borrower or a Material Subsidiary) or to any negative pledge, (ii) the Material
Subsidiary has the unilateral right to sell, transfer or otherwise dispose of
such Property and to create a Lien on such Property as security for
Indebtedness, and (iii) the Material Subsidiary has provided a Guaranty to the
Administrative Agent pursuant to Section 4.1 hereof;

 

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

 

(g)           The lessee of the Property under such lease is not more than 60
days past due with respect to any monthly rent payment obligations under such
lease, and,

 

(h)           For each such Property, the Borrower shall have delivered to the
Administrative Agent a copy, certified as true and correct by the Borrower, of
each of the following: if the Property Owner is not the Borrower, the Property
Owner’s articles of

 

20

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incorporation, by-laws, partnership agreements, operating agreements, as
applicable, and certificates of existence, good standing and authority to do
business from each appropriate state authority, and partnership, corporate or
limited liability company, as applicable, authorizations authorizing the
execution, delivery and performance of the Additional Guarantor Supplement all
certified to be true and complete by a duly authorized officer of such Property
Owner.

 

“Eligible Property NOI” means, for any given period, the aggregate Property NOI
attributable to the Eligible Properties owned by the Borrower or a Material
Subsidiary for a period in excess of four Fiscal Quarters and defined for each
such Eligible Property or pool of such Eligible Properties under a master Lease
as the lesser of (i) Property NOI divided by 1.15, or (ii) the related Lease
payment on such Eligible Property or pool of Eligible Properties due to the
Borrower or a Material Subsidiary for such period.

 

“Environmental Claim” means any investigation, notice, violation, demand,
allegation, action, suit, injunction, judgment, order, consent decree, penalty,
fine, lien, proceeding or claim (whether administrative, judicial or private in
nature) arising (a) pursuant to, or in connection with an actual or alleged
violation of, any Environmental Law, (b) in connection with any Hazardous
Material, (c) from any abatement, removal, remedial, corrective or response
action in connection with a Hazardous Material, Environmental Law or order of a
governmental authority or (d) from any actual or alleged damage, injury, threat
or harm to health, safety, natural resources or the environment.

 

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

 

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

 

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

 

“Eurodollar Loan” means a Loan bearing interest at the rate specified in
Section 1.3(b) hereof.

 

“Eurodollar Reserve Percentage” is defined in Section 1.3(b) hereof.

 

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

 

21

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“Event of Loss” means, with respect to any Property, any of the following: 
(a) any total loss, destruction or damage of such Property or (b) any total
condemnation, seizure, or taking, by exercise of the power of eminent domain or
otherwise, of such Property, or confiscation of such Property or the requisition
of the use of such Property.

 

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum 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 that
is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.

 

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

 

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

 

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

 

“Foreign Subsidiary” means each Subsidiary which (a) is organized under the laws
of a jurisdiction other than the United States of America or any state thereof,
(b) conducts substantially all of its business outside of the United States of
America, and (c) has substantially all of its assets outside of the United
States of America.

 

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

 

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

 

“Future Property” means any Property which the Borrower or any Subsidiary of the
Borrower acquires after the date hereof.

 

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within

 

22

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

 

the U.S. accounting profession), which are applicable to the circumstances as of
the date of determination.

 

“Governmental Authority” means any foreign governmental authority, the United
States of America, any state of the United States of America and any subdivision
of any of the foregoing, and any agency, department, commission, board,
authority or instrumentality, bureau or court having jurisdiction over any
Lender, the Borrower, any Subsidiaries of the Borrower or any of their
respective Properties.

 

“Guarantor” and “Guarantors” each is defined in Section 4.1 hereof.

 

“Guaranty” and “Guaranties” each is defined in Section 4.1 hereof.

 

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

 

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

 

“Hostile Acquisition” means the acquisition of the capital stock or other equity
interests of a Person through a tender offer or similar solicitation of the
owners of such capital stock or other equity interests which has not been
approved (prior to such acquisition) by resolutions of the Board of Directors of
such Person or by similar action if such Person is not a corporation, and as to
which such approval has not been withdrawn.

 

“Indebtedness for Borrowed Money” means for any Person (without duplication)
(a) all indebtedness created, assumed or incurred in any manner by such Person
representing money borrowed (including by the issuance of debt securities),
(b) all indebtedness for the deferred purchase price of property or services
(other than trade accounts payable arising in the ordinary course of business),
(c) all indebtedness secured by any Lien upon Property of such Person, whether
or not such Person has assumed or become liable for the payment of such
indebtedness, (d) all Capitalized Lease Obligations of such Person, and (e) all
obligations of such Person on or with respect to letters of credit, bankers’
acceptances and other extensions of credit whether or not representing
obligations for borrowed money.

 

“Improvements” for any Property means all buildings, structures, fixtures,
tenant improvements and other improvements of every kind and description now or
hereafter located in or on or attached to the Land for such Property; and all
additions and betterments thereto and all renewals, substitutions and
replacements thereof.

 

23

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“Initial Properties” means collectively the Properties listed on Schedule 1.1
and “Initial Property” means any of such Properties.

 

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

 

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

 

“Interest Period” is defined in Section 1.6 hereof.

 

“Investment Amount” means for any Property acquired after the date hereof, the
product of (i) the percentage interest of such Property owned by the Borrower or
Guarantor and (ii) the aggregate purchase price paid by the Borrower or its
Subsidiary for such other Property (giving effect to any securities used to
purchase a Property at the fair market value of the securities at the time of
purchase based upon the price at which such securities could be exchanged into
the Borrower’s common stock assuming such exchange occurred on the date of
acquiring the Property).

 

“Land” for any Property means the real property upon which the Improvements are
located, together with all rights, title and interests appurtenant to such real
property, including without limitation all rights, title and interests to
(a) all strips and gores within or adjoining such property, (b) the streets,
roads, sidewalks, alleys, and ways adjacent thereto, (c) all of the tenements,
hereditaments, easements, reciprocal easement agreements, rights-of-way and
other rights, privileges and appurtenances thereunto belonging or in any way
pertaining thereto, (d) all reversions and remainders, (e) all air space rights,
and all water, sewer and wastewater rights, (e) all mineral, oil, gas,
hydrocarbon substances and other rights to produce or share in the production of
anything related to such property, and (f) all other appurtenances appurtenant
to such property, including without limitation, any now or hereafter belonging
or in anywise appertaining thereto.

 

“L/C Issuer” means the Administrative Agent, or any other Lender requested by
the Borrower and approved by the Administrative Agent in its sole discretion
with respect to any Letter of Credit.

 

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

 

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

 

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

 

24

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

 

“Lenders” means and includes Bank of Montreal, Chicago Branch and the other
financial institutions from time to time party to this Agreement, including each
assignee Lender pursuant to Section 13.12 hereof.

 

“Lending Office” is defined in Section 10.4 hereof.

 

“Letter of Credit” is defined in Section 1.2(a) hereof.

 

“LIBOR” is defined in Section 1.3(b) hereof.

 

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

 

“Loan” is defined in Section 1.2 hereof and, as so defined, includes an Adjusted
Base Rate Loan or a Eurodollar Loan, each of which is a “type” of Loan
hereunder.

 

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

 

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

 

“Material Subsidiary” means, each Subsidiary that owns a Property included in
the Borrowing Base Value and Education Property Investors, Inc.

 

“Medical Office Buildings” means a medical office building that contains one or
more physicians’ offices and examination rooms, and may also include pharmacies,
hospital ancillary service space and day-surgery operating rooms.

 

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

 

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

 

25

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

 

“Note” is defined in Section 1.10 hereof.

 

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

 

“Participating Interest” is defined in Section 1.2(d) hereof.

 

“Participating Lender” is defined in Section 1.2(d) hereof.

 

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

 

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

 

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

 

(a)           the Acquired Business is in an Eligible Line of Business and has
its primary operations within the United States of America;

 

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

 

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

 

(d)           if a new Material Subsidiary is formed or acquired as a result of
or in connection with the Acquisition, the Borrower shall have complied with the
requirements of Section 4 hereof in connection therewith; and

 

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(e)           after giving effect to the Acquisition, no Default or Event of
Default shall exist, including with respect to the financial covenants contained
in Section 8.21 hereof, further provided however, that if such Acquisition
together with any other Acquisitions made during the then-current Fiscal Quarter
and the preceding three Fiscal Quarters of the Borrower have an aggregate cost
exceeding $100,000,000, then for such Acquisition and thereafter for any
additional Acquisition in such then-current Fiscal Quarter for an aggregate cost
exceeding $20,000,000, the Borrower shall provide to the Administrative Agent
covenant calculations for the covenants contained in Section 8.21, showing that
the projected effect of the Acquisition, in terms of additional asset value,
liabilities incurred if any, additional revenues and expenses associated
therewith have been contemplated and have been projected into the expected
operating results and financial position of the Borrower for the Fiscal Quarter
in which the Acquisition occurs, and demonstrating that such Acquisition is not
reasonably expected to cause a violation of the Section 8.21 covenants for such
Fiscal Quarter.

 

“Permitted Lien” means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding has been commenced: 
(a) Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 8.3; (b) Liens imposed by law, such
as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and
other similar Liens arising in the ordinary course of business securing
obligations that are not overdue or that are being contested in good faith and
by proper proceedings and as to which appropriate reserves are being maintained;
(c) pledges or deposits to secure obligations under workers’ compensation laws
or similar legislation or to secure public or statutory obligations;
(d) easements, rights of way and other encumbrances on title to real property
that do not materially and adversely affect the value of such property or the
use of such property for its present purposes; (e) deposits to secure the
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of like nature incurred in the ordinary course of business;
(f) Liens in favor of the United States of America for amounts paid to the
Borrower or any Subsidiary as progress payments under government contracts
entered into by it; (g) attachment, judgment and other similar Liens arising in
connection with court, reference or arbitration proceedings, provided that the
same have been in existence less than 20 days, that the same have been
discharged or that execution or enforcement thereof has been stayed pending
appeal; and (h) Liens on Properties not included in the Borrowing Base Value.

 

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

 

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

 

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

 

“Prime Rate” shall mean the rate of interest per annum publicly announced by the
Administrative Agent from time to time as its U.S. prime rate in effect at its
office in Chicago, Illinois; each change in the Prime Rate shall be effective
from and including the date such change is publicly announced as being
effective.  The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate charged to any customer.  The Administrative
Agent may make commercial loans or other loans at rates of interest at, above or
below the Prime Rate.

 

“Prior Credit Agreement” is defined in the first paragraph of the Preliminary
Statements on Page 1 of this Agreement.

 

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

 

“Property Net Operating Income” or “Property NOI” means, with respect to a
Property and for the four most recently ended Fiscal Quarters, the sum of the
following (without duplication):  (a) all revenues received in the ordinary
course of operating such Property (including proceeds of rent loss insurance but
excluding pre-paid rents and revenues and security deposits except to the extent
applied in satisfaction of tenants’ obligations for rent) minus (b) all expenses
(whether paid or accrued) directly related to the operation or maintenance of
such Property, including but not limited to payroll expenses, taxes, assessments
and other similar charges, insurance, utilities, maintenance, repair and
landscaping expenses but not including any management fees (in accordance with
the computation of EBITDA plus rent and management fees).  All amounts due to
the Borrower or Guarantor, whether as rent or mortgage payments for the
property, will be excluded from the calculation of (b) above.

 

“Property Owner” means the Person who owns fee or leasehold title interest (as
applicable) in, and to a Property.

 

“Qualified Ground Lease” means each of the ground leases or subground leases set
forth on Schedule 1.1 hereto and for a Future Property means any ground lease
(a) which is a direct ground lease granted by the fee owner of real property,
(b) which may be transferred and/or assigned without the consent of the lessor
(or as to which the lease expressly provides that (i) such lease may be
transferred and/or assigned with the consent of the lessor and (ii) such consent
shall not be unreasonably withheld or delayed) or subject to certain reasonable
pre-defined requirements, (c) which has a remaining term (including any renewal
terms exercisable at the sole option of the lessee) of at least twenty (20)
years, (d) under which no material default has occurred and is continuing,
(e) with respect to which a Lien may be granted without the consent of the
lessor, (f) which contains lender protection provisions acceptable to the
Administrative Agent, including, without limitation, provisions to the effect
that (i) the lessor shall notify any holder of a Lien in such lease of the
occurrence of any default by the lessee under such lease and shall afford such
holder the option to cure such default, and (ii) in the event that

 

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such lease is terminated, such holder shall have the option to enter into a new
lease having terms substantially identical to those contained in the terminated
lease and (g) which is otherwise acceptable in form and substance to the
Administrative Agent.

 

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

 

“Real Property” for any Senior Housing Asset means the Land and the Improvements
for such Senior Housing Asset, including without limitation, parking rights and
any and all real property rights to other ancillary functions necessary for the
operation of such Senior Housing Asset.

 

“Rehabilitation Assets” means healthcare facilities which are used primarily for
the provision of services to patients requiring rehabilitative or restorative
care, including some or all of the following services but not limited to
physical therapy, occupational therapy, speech therapy and other related
services.

 

“Reimbursement Obligation” is defined in Section 1.2(c) hereof.

 

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

 

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

 

“REMIC” means Real Estate Mortgage Investment Conduit.

 

“REMIC Certificates” means individually or collectively a certificated
beneficial interest in a REMIC.

 

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

 

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

 

“Required Lenders” means, as of the date of determination thereof, Lenders whose
outstanding Loans and interests in Letters of Credit and Unused Commitments
constitute more than 66-2/3% of the sum of the total outstanding Loans,
interests in Letters of Credit, and Unused Commitments of the Lenders.

 

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“Responsible Officer” means the Chief Executive Officer, President, Executive
Vice President, Chief Operating Officer, Chief Financial Officer, or Treasurer
of any Person.

 

“Revolving Credit” means the credit facility for making Loans and issuing
Letters of Credit described in Sections 1.1 and 1.2 hereof.

 

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

 

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

 

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

 

“Secured Recourse Debt” means Secured Debt that is recourse for payment to the
Borrower or its Subsidiaries.

 

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

 

“Significant Lease” means any Lease under which the Borrower or one of its
Subsidiaries is the lessor and which Lease provides for minimum rent payments of
$1,000,000 or more during any calendar year.

 

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

 

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

 

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

 

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

 

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“Subsidiary” means, as to any particular parent corporation or organization, any
other corporation or organization more than 50% of the outstanding Voting Stock
of which is at the time directly or indirectly owned by such parent corporation
or organization or by any one or more other entities which are themselves
subsidiaries of such parent corporation or organization.  Unless otherwise
expressly noted herein, the term “Subsidiary” means a Subsidiary of the Borrower
or of any of its direct or indirect Subsidiaries.

 

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

 

“Termination Date” means November 7, 2008, or such earlier date on which the
Commitments are terminated in whole pursuant to Section 1.12, 9.2 or 9.3 hereof.

 

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

 

“Total Indebtedness” means, as of a given date, all liabilities of the Borrower
and its Subsidiaries which would, in conformity with GAAP, be properly
classified as a liability on a consolidated balance sheet of the Borrower and
its Subsidiaries as of such date, excluding any amounts categorized as accrued
expenses, accrued dividends, deposits held, deferred revenues, minority
interests and other liabilities not directly associated with the borrowing of
money.

 

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

 

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

 

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

 

“Unsecured Debt Service” means, for a given period, Debt Service with respect to
Unsecured Debt.

 

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

 

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

 

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

 

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

 

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

 

Section 5.2.           Interpretation.  The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined.  The
words “hereof”, “herein”, and “hereunder” and words of like import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.  All references to time of day herein
are references to Chicago, Illinois, time unless otherwise specifically
provided.  Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with GAAP except where such principles
are inconsistent with the specific provisions of this Agreement.

 

Section 5.3.           Change in Accounting Principles.  If, after the date of
this Agreement, there shall occur any change in GAAP from those used in the
preparation of the financial statements referred to in Section 6.5 hereof and
such change shall result in a change in the method of calculation of any
financial covenant, standard or term found in this Agreement, either the
Borrower or the Required Lenders may by notice to the Lenders and the Borrower,
respectively, require that the Lenders and the Borrower negotiate in good faith
to amend such covenants, standards, and term so as equitably to reflect such
change in accounting principles, with the desired result being that the criteria
for evaluating the financial condition of the Borrower and its Subsidiaries
shall be the same as if such change had not been made.  No delay by the Borrower
or the Required Lenders in requiring such negotiation shall limit their right to
so require such a negotiation at any time after such a change in accounting
principles.  Until any such covenant, standard, or term is amended in accordance
with this Section 5.3, financial covenants shall be computed and determined in
accordance with GAAP in effect prior to such change in accounting principles. 
Without limiting the generality of the foregoing, the Borrower shall neither be
deemed to be in compliance with any financial covenant hereunder nor out of
compliance with any financial covenant hereunder if such state of compliance or
noncompliance, as the case may be, would not exist but for the occurrence of a
change in accounting principles after the date hereof.

 

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SECTION 6.                REPRESENTATIONS AND WARRANTIES.

 

The Borrower represents and warrants to the Administrative Agent and the Lenders
as follows:

 

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

 

Section 6.2.           Subsidiaries.  Each Subsidiary is duly organized, validly
existing, and in good standing under the laws of the jurisdiction in which it is
organized, has full and adequate power to own its Property and conduct its
business as now conducted, and is duly licensed or qualified and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the nature of the Property owned or leased by it requires such licensing
or qualifying.  Schedule 6.2 hereto identifies each Subsidiary, the jurisdiction
of its organization, the percentage of issued and outstanding shares of each
class of its capital stock or other equity interests owned by the Borrower and
the other Subsidiaries and, if such percentage is not 100% (excluding directors’
qualifying shares as required by law), a description of each class of its
authorized capital stock and other equity interests and the number of shares of
each class issued and outstanding.  All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares and other
equity interests indicated on Schedule 6.2 as owned by the Borrower or another
Subsidiary are owned, beneficially and of record, by the Borrower or such
Subsidiary free and clear of all Liens.  Neither the Borrower or any of its
Subsidiaries has committed or is obligated to issue Stock Equivalents in any of
the Borrower’s Subsidiaries to any Person not owned by the Borrower or its
Subsidiaries.

 

Section 6.3.           Authority and Validity of Obligations.  The Borrower has
full right and authority to enter into this Agreement and the other Loan
Documents executed by it, to make the borrowings herein provided for, to issue
its Notes in evidence thereof, and to perform all of its obligations hereunder
and under the other Loan Documents executed by it.  Each Material Subsidiary has
full right and authority to enter into the Loan Documents executed by it, to
guarantee the Obligations and to perform all of its obligations under the Loan
Documents executed by it.  The Loan Documents delivered by the Borrower and by
each Material Subsidiary have been duly authorized, executed, and delivered by
such Person and constitute valid and binding obligations of such Person
enforceable against it in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors’ rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law); and this Agreement and the other Loan Documents
do not, nor does the performance or observance by the Borrower or any Subsidiary
of any of the matters and things herein or therein provided for, (a) contravene
or constitute a default under any provision of law or any judgment, injunction,
order or decree binding upon the Borrower or any Material Subsidiary or any
provision of the

 

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organizational documents (e.g., charter, certificate or articles of
incorporation and by-laws, certificate or articles of association and operating
agreement, partnership agreement, or other similar organizational documents) of
the Borrower or any Material Subsidiary, (b) contravene or constitute a default
under any covenant, indenture or agreement of or affecting the Borrower or any
Material Subsidiary or any of its Property or (c) result in the creation or
imposition of any Lien on any Property of the Borrower or any Material
Subsidiary.

 

Section 6.4.           Use of Proceeds; Margin Stock.  The Borrower shall use
the proceeds of the Revolving Credit for refinancing its existing indebtedness,
for its general working capital purposes and for such other legal and proper
purposes as are consistent with all applicable laws.  Neither the Borrower nor
any Subsidiary is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System), and no part of the proceeds
of any Loan or any other extension of credit made hereunder will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock.  Margin stock (as
hereinabove defined) constitutes less than 25% of the assets of the Borrower and
its Subsidiaries which are subject to any limitation on sale, pledge or other
restriction hereunder.

 

Section 6.5.           Financial Reports.   The consolidated balance sheet of
the Borrower and its Subsidiaries as at December 31, 2004, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit report of
Ernst & Young, LLP, independent public accountants, and the unaudited interim
consolidated balance sheet of the Borrower and its Subsidiaries as at
September 30, 2005 and the related consolidated statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for the
nine (9) months then ended, heretofore furnished to the Administrative Agent and
the Lenders, fairly present the consolidated financial condition of the Borrower
and its Subsidiaries as at said dates and the consolidated results of their
operations and cash flows for the periods then ended in conformity with GAAP
applied on a consistent basis.  Neither the Borrower nor any Subsidiary has
contingent liabilities which are material to it other than as indicated on such
financial statements or, with respect to future periods, on the financial
statements furnished pursuant to Section 8.5 hereof.

 

Section 6.6.           No Material Adverse Change.  Since September 30, 2005,
there has been no event which could reasonably be expected to have a Material
Adverse Effect on the Borrower or its Subsidiaries, taken as a whole, except
those occurring in the ordinary course of business.

 

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

 

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same were prepared on the basis of information and estimates the Borrower
believed to be reasonable.

 

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

 

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

 

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

 

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

 

Section 6.12.        Taxes. Each of the Borrower and its Subsidiaries has filed,
or there has been filed on its behalf, all tax returns (federal, state, local
and foreign) required to be filed thereby and has paid all taxes shown thereon
to be due, including interest, additions to taxes and penalties, or has provided
adequate reserves in accordance with GAAP for payment thereof, except where the
failure to so file or pay would not cause a Material Adverse Effect on the
Borrower and its Subsidiaries taken as whole.

 

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

 

Section 6.14.        Affiliate Transactions.  Neither the Borrower nor any
Subsidiary is a party to any contracts or agreements with any of its Affiliates
(other than with Wholly-owned Subsidiaries) on terms and conditions which are
less favorable to the Borrower or such

 

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Subsidiary than would be usual and customary in similar contracts or agreements
between Persons not affiliated with each other.

 

Section 6.15.        Investment Company; Public Utility Holding Company. 
Neither the Borrower nor any Subsidiary is an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended, or a “public utility holding company” within
the meaning of the Public Utility Holding Company Act of 1935, as amended.

 

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

 

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

 

(b)           Without limiting the representations and warranties set forth in
Section 6.17(a) above, except for such matters, individually or in the
aggregate, which could not reasonably be expected to result in a Material
Adverse Effect, the Borrower represents and warrants that to the actual
knowledge of each respectively that the Borrower and its Subsidiaries, and each
of the Properties owned by them: (i) comply in all material respects with all
applicable Environmental Laws; (ii) the tenants of the Borrower and its
Subsidiaries have obtained all governmental approvals required for the operation
of the Properties under any applicable Environmental Law; (iii) the Borrower and
its Subsidiaries have no actual knowledge of any other Person who has, caused
any Release, threatened Release or disposal of any Hazardous Material at, on,
about, or off any of the Properties in any material quantity and, to the actual
the knowledge of the

 

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

 

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

 

Section 6.19.        Solvency.  The Borrower and its Subsidiaries are solvent,
able to pay their debts as they become due, and have sufficient capital to carry
on their business and all businesses in which they are about to engage.

 

Section 6.20.        No Broker Fees. No broker’s or finder’s fee or commission
will be payable with respect hereto or any of the transactions contemplated
thereby; and the Borrower hereby agrees to indemnify the Administrative Agent
and the Lenders against, and agree that they will hold the Administrative Agent
and the Lenders harmless from, any claim, demand, or liability for any such
broker’s or finder’s fees alleged to have been incurred in connection herewith
or therewith and any expenses (including reasonable attorneys’ fees) arising in
connection with any such claim, demand, or liability.

 

Section 6.21.        No Default.  No Default or Event of Default has occurred
and is continuing.

 

Section 6.22.        Stock of the Borrower.  As of October 21, 2005, the entire
outstanding capital stock of the Borrower consists of (i) Series C Cumulative
Convertible Preferred Stock,

 

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2,000,000 shares; (ii) Series E Cumulative Convertible Preferred Stock,
356,875 shares; (iii) Series F Cumulative Preferred Stock, 6,640,000 shares; and
(iv) Common Stock, 23,195,999 shares; all of which are duly and validly issued
and outstanding, fully paid and nonassessable as of the Effective Date.  The
issuance and sale of such Stock of the Borrower of the Borrower either (i) has
been registered under applicable federal and state securities laws or (ii) was
issued pursuant to an exemption therefrom.  The Borrower meets the requirements
for taxation as a REIT under the Code.

 

Section 6.23.        Condition of Property; Casualties; Condemnation.  As of the
Effective Date, to the actual knowledge of the Borrower or its Material
Subsidiaries, each Property owned by them, in all material respects (a) is in
good repair, working order and condition, normal wear and tear excepted, (b) is
free of structural defects, (c) is not subject to material deferred maintenance
and (d) has and will have all building systems contained therein in good repair,
working order and condition, normal wear and tear excepted.  To the actual
knowledge of the Borrower or of any of its Material Subsidiaries, none of the
Properties owned by them is currently materially and adversely affected as a
result of any fire, explosion, earthquake, flood, drought, windstorm, accident,
strike or other labor disturbance, embargo, requisition or taking of property or
cancellation of contracts, permits or concessions by a Governmental Authority,
riot, activities of armed forces or acts of God or of any public enemy.  No
condemnation or other like proceedings that has had, or could reasonably be
expected to result in, a Material Adverse Change, are pending and served nor, to
the actual knowledge of the Borrower, threatened against any Property owned by
it in any manner whatsoever.  No casualty has occurred to any such Property that
could reasonably be expected to have a Material Adverse Effect.

 

Section 6.24.        Legal Requirements and Zoning.  To the actual knowledge of
the Borrower and its Subsidiaries, the use and operation of each Property owned
by the Borrower and its Subsidiaries constitutes a legal use under applicable
zoning regulations (as the same may be modified by special use permits or the
granting of variances) and complies in all material respects with all Legal
Requirements, and does not violate in any material respect any material
approvals, material restrictions of record or any material agreement affecting
any such Property (or any portion thereof).

 

Section 6.25.        Qualified Ground Leases.  The only material leases of
Eligible Properties for which either the Borrower or a Guarantor is a lessee are
the Qualified Ground Leases.  The Property Owner for a Real Property subject to
a Qualified Ground Lease is the lessee under such Qualified Ground Lease and no
consent is necessary to such Person being the lessee under such Qualified Ground
Lease which has not already been obtained.  The Qualified Ground Leases are in
full force and effect and no defaults exist thereunder.

 

Section 6.26.        No Defaults; Landlord is in Compliance with Leases. 
Schedule 6.26 hereto identifies each Significant Lease in existence on the date
hereof, the Property which is demised pursuant to each Significant Lease and the
name of each landlord and lessee under each Significant Lease.  As of the
Effective Date: (i) none of the tenants under Significant Leases on Properties
owned by the Borrower, Material Subsidiaries or any other Subsidiary of the
Borrower are in default for a period in excess of 60 days on the monthly minimum
rent payments due under such Significant Leases and (ii) no other tenants on
other Leases that in the aggregate generate

 

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more than $4,000,000 in annual contractual rents payable to the Borrower or its
Subsidiaries are in default for a period in excess of 60 days on the monthly
minimum rent payments due under such Leases.

 

SECTION 7.                CONDITIONS PRECEDENT.

 

The obligation of each Lender to advance, continue or convert any Loan (other
than the continuation of, or conversion into, an Adjusted Base Rate Loan) or of
the L/C Issuer to issue, extend the expiration date (including by not giving
notice of non-renewal) of or increase the amount of any Letter of Credit under
this Agreement, shall be subject to the following conditions precedent:

 

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

 

(a)           each of the representations and warranties set forth herein and in
the other Loan Documents shall be and remain true and correct as of said time,
except to the extent the same expressly relate to an earlier date;

 

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

 

(c)           in the case of a Borrowing the Administrative Agent shall have
received the notice required by Section 1.5 hereof and a Borrowing Base
Certificate in the form attached hereto as Exhibit E, in the case of the
issuance of any Letter of Credit the L/C Issuer shall have received a duly
completed Application for such Letter of Credit together with any fees called
for by Section 2.1 hereof, and, in the case of an extension or increase in the
amount of a Letter of Credit, a written request therefor in a form acceptable to
the L/C Issuer together with fees called for by Section 2.1 hereof; and

 

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

 

Each request for a Borrowing hereunder and each request for the issuance of,
increase in the amount of, or extension of the expiration date of, a Letter of
Credit shall be deemed to be a representation and warranty by the Borrower on
the date on such Credit Event as to the facts specified in
subsections (a) through (c), both inclusive, of this Section.

 

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

 

(a)           the Administrative Agent shall have received for each Lender this
Agreement duly executed by the Borrower and its Material Subsidiaries, as
Guarantors, and the Lenders;

 

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(b)           the Administrative Agent shall have received for each Lender such
Lender’s duly executed Notes of the Borrower dated the date hereof and otherwise
in compliance with the provisions of Section 1.10 hereof;

 

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

 

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

 

(e)           the Administrative Agent shall have received for each Lender
copies of the certificates of good standing for the Borrower and each Material
Subsidiary from the office of the secretary of the state of its incorporation or
organization and of each state in which it is qualified to do business as a
foreign corporation or organization;

 

(f)            the Administrative Agent shall have received for each Lender a
list of the Borrower’s Authorized Representatives;

 

(g)           the Administrative Agent shall have received for itself and for
the Lenders the initial fees called for by Section 2.1 hereof;

 

(h)           each Lender shall have received a Borrowing Base Certificate
containing calculations of the Borrowing Base as of June 30, 2005, and
Schedule 1.1 (form of which is attached hereto) and a Compliance Certificate;

 

(i)            the Administrative Agent shall have received for each Lender the
favorable written opinion of counsel (attached as Exhibit I hereto) to the
Borrower and each Material Subsidiary, in form and substance satisfactory to the
Administrative Agent; and

 

(j)            the Administrative Agent shall have received for the account of
the Lenders such other agreements, instruments, documents, certificates, and
opinions as the Administrative Agent may reasonably request.

 

Section 7.3.           Eligible Property Additions and Deletions to the
Borrowing Base.  As of September 30, 2005, the Borrower represents to the
Required Lenders and the Administrative Agent that the Initial Properties
qualify as Eligible Properties and that the information provided on Schedule 1.1
is true and correct.

 

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Upon not less than 10 Business Days prior written notice from the Borrower to
the Administrative Agent, the Borrower can designate that a Property be added
(subject to the other requirements for a Property qualifying as an Eligible
Property) or deleted as an Eligible Property.  Such notice shall be accompanied
by a Borrowing Base Certificate setting forth the components of the Borrowing
Base as of the addition or deletion of the designated Property as an Eligible
Property, and (x) with respect to an addition, the certificate required above
and (y) with respect to a deletion, Borrower’s certification in such detail as
reasonably required by the Administrative Agent that such deletion shall not
(A) cause the Eligible Properties in the aggregate to violate the Borrowing Base
Requirements, (B) cause a Default, or (C) cause or result in the Borrower
failing to comply with any of the financial covenants contained herein.  Each
addition shall be an Eligible Property in a minimum amount equal to $5,000,000
Borrowing Base Value, or shall be comprised of more than one qualifying Eligible
Properties that in the aggregate have a minimum amount equal to $5,000,000
Borrowing Base Value, and all such additions shall be subject to approval by the
Required Lenders.

 

Notwithstanding anything contained in this Agreement to the contrary, the
Required Lenders in their reasonable discretion may (a) at the Borrower’s
request, add a Property as an Eligible Property despite the failure of such
Property to otherwise qualify as an Eligible Property and (b) upon five
(5) Business Days’ prior written notice to the Borrower, designate that a
Property is no longer an Eligible Property upon their determination that such
Property ceases to meet the criteria set forth in the definition of Eligible
Property, provided however, that if during such five (5) Business Day Period the
Borrower can satisfy those requirements deemed unsatisfied by the Required
Lenders, such Property shall remain an Eligible Property.

 

Furthermore, if no Default exists at the time of any deletion of a Property from
qualifying as an Eligible Property, any Material Subsidiary which owned such
Property, but that does not otherwise own any other Eligible Property, shall be
released from its obligations under its Guaranty.

 

SECTION 8.                COVENANTS.

 

The Borrower agrees that, so long as any credit is available to or in use by the
Borrower hereunder, except to the extent compliance in any case or cases is
waived in writing pursuant to the terms of Section 13.13 hereof:

 

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

 

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

 

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or the National Association of Securities Dealers Automated Quotation and the
Securities and Exchange Commission.

 

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

 

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

 

Section 8.4.           Insurance.  The Borrower and each Material Subsidiary
shall maintain or cause its tenants to maintain insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar Properties in the same general areas in which the Borrower or
such Subsidiary owns such Properties.

 

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

 

(a)           as soon as available, and in any event within 50 days after the
last day of each Fiscal Quarter, a Borrowing Base Certificate showing the
computation of the Borrowing Base in reasonable detail as of the close of
business on the last day of such Fiscal Quarter, prepared by the Borrower and
certified to by its chief financial officer or another officer of the Borrower
acceptable to the Administrative Agent;

 

(b)           as soon as available, and in any event within 45 days after the
close of each of the first three (3) Fiscal Quarters of each Fiscal Year of the
Borrower a copy of the consolidated balance sheet of the Borrower and its
Subsidiaries as of the last day of such Fiscal Quarter and the consolidated
statements of income, and cash flows of the Borrower and its Subsidiaries for
the Fiscal Quarter and for the fiscal year-to-date period then ended, each in
reasonable detail showing in comparative form the figures for the corresponding
date and period in the previous fiscal year, prepared by the Borrower in
accordance with GAAP and certified to by its chief financial officer or another
officer of the Borrower acceptable to the Administrative Agent (the delivery of
the Borrower’s Form 10-Q shall satisfy this requirement);

 

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

 

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

 

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

 

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

 

(g)           as soon as available, and in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the Borrower’s consolidated
projections of revenues, expenses and balance sheet on a quarter-by-quarter
basis, with such projections

 

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in reasonable detail prepared by the Borrower and in form satisfactory to the
Administrative Agent (which shall include a summary of all significant
assumptions made in preparing such business plan);

 

(h)           notice of any Change of Control;

 

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

 

(j)            within 45 days of the end of each of the first 3 Fiscal Quarters
and within 90 days after the close of the last Fiscal Quarter of the year (i) a
list of all newly formed or acquired Subsidiaries during such quarter (such list
shall contain the information relative to such new Subsidiaries as set forth in
Schedule 6.2 hereto); (ii) a list of newly executed Significant Leases or
Qualified Ground Leases during such quarter (upon receipt of which Schedule 1.1
and/or Schedule 6.26 shall be deemed amended to include references to such
Significant Lease and/or Qualified Ground Leases); (iii) a copy of any notice of
a material default or any other material notice (including without limitation
property condition reviews) received by the Borrower or any Guarantor from any
ground lessor under a Qualified Ground Lease or a Lease during such quarter and
(iv) a schedule showing for such quarter (a) any Significant Lease that was or
is continuing to be in default with respect to monthly minimum rent payments in
excess of 60 days, and (b) any other Leases that in the aggregate generate more
than $4,000,000 in annual contractual rents payable to the Borrower or its
Subsidiaries that were or are continuing to be in default for a period in excess
of 60 days on the monthly minimum rent payments due under such Leases; and

 

(k)           promptly after knowledge thereof shall have come to the attention
of any responsible officer of the Borrower, written notice to each Lender if a
Lease of any Property included in the Borrowing Base Value is more than
thirty (30) days past due.

 

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

 

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Section 8.7.           Office of Foreign Asset Control.  Neither Borrower nor
any Guarantor is (or will be) a person with whom a Lender is restricted from
doing business under regulations of the Office of Foreign Asset Control (“OFAC”)
of the Department of the Treasury of the United States of America (including,
those Persons named on OFAC’s Specially Designated and Blocked Persons list) or
under any statute, executive order (including, the September 24, 2001 Executive
Order Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action and is
not and shall not engage in any dealings or transactions or otherwise be
associated with such persons.  In addition, Borrower hereby agrees to provide to
any Lender with any additional information that the Lender deems necessary from
time to time in order to ensure compliance with all applicable Laws concerning
money laundering and similar activities.

 

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

 

Section 8.9.           Investments, Acquisitions, Loans and Advances.  The
Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any investments or acquire all or
any substantial part of the assets or business of any other Person or division
thereof; provided, however, that the foregoing shall not apply to nor operate to
prevent:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(h)           investments in Permitted Acquisitions;

 

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

 

(j)            investments in Medical Office Buildings in an amount not to
exceed $50,000,000 in the aggregate at any one time outstanding;

 

(k)           investments in real properties that are not Senior Housing Assets
and are not otherwise permitted under this Section 8.9 in an amount not to
exceed $10,000,000 in the aggregate at any one time outstanding;

 

(l)            investments in joint ventures in an amount not to exceed
$30,000,000 in the aggregate at any one time outstanding excluding investments
in joint ventures existing prior to the date of this Agreement;

 

(m)          Assets Under Development in an amount not to exceed $30,000,000 in
the aggregate at any one time outstanding excluding Assets Under Development
existing prior to the date of this Agreement;

 

(n)           investments in Rehabilitation Assets, in an amount not to exceed
$50,000,000 in the aggregate at any one time outstanding, excluding
Rehabilitation Assets existing prior to the date of this Agreement;

 

(o)           investments in REMIC’s pertaining to issues for which the Borrower
is both the issuer and the servicer in an amount not to exceed $10,000,000 in
the aggregate at any one time outstanding excluding investments in REMIC’s of
the Borrower existing prior to the date of this Agreement;

 

(p)           investments in publicly traded debt or equity instruments issued
by companies engaged in the healthcare industry in an amount not to exceed
$30,000,000 in addition to investments in publicly traded debt or equity
instruments held by the Borrower prior to the date of this Agreement; and

 

(q)           investments received in connection with a workout of any
obligation owed to Borrower or its Subsidiaries.

 

Investments of the type described in Sections (j), (k), (l), (m), (n), (o), (p)
and (q) immediately preceding shall at no time exceed $80,000,000 in the
aggregate at any one time outstanding.  In determining the amount of
investments, acquisitions, loans, and advances permitted under this Section,
investments and acquisitions shall always be taken at the original cost thereof
(regardless of any subsequent appreciation or depreciation therein), and loans
and advances shall be taken at the principal amount thereof then remaining
unpaid.

 

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Section 8.10.        Mergers, Consolidations and Sales.  The Borrower will not
merge or consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or a series of transactions) any of its
Property (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets of, any Person, or permit any Subsidiary to do
so; provided, however, that the Borrower may merge or consolidate with another
Person, including a Subsidiary, if (A) the Borrower is the surviving
corporation, (B) the Borrower will be in pro forma compliance with all
provisions of this Agreement upon and after such merger or consolidation and
(C) the Borrower will not engage in any material line of business substantially
different from that engaged in on the Closing Date and; further provided,
however, that so long as no Default or Event of Default exists this
Section shall not apply to nor operate to prevent:

 

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

 

(b)           the merger of any Subsidiary with and into the Borrower or any
other Subsidiary, provided that, in the case of any merger involving the
Borrower, the Borrower is the corporation surviving the merger;

 

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

 

(d)           the sale, transfer, lease or other disposition of Property of the
Borrower or any Subsidiary (including any disposition of Property as part of a
sale and leaseback transaction) aggregating for the Borrower and its
Subsidiaries not more than $100,000,000 during any fiscal year of the Borrower;
further provided however, that if such disposition during such Fiscal Quarter
exceeds $5,000,000 and together with any other dispositions made during the
preceding three Fiscal Quarters of the Borrower in the aggregate exceed
$50,000,000, then for such disposition(s) the Borrower shall provide to the
Administrative Agent covenant calculations for the covenants contained in
Section 8.21, showing that the projected effect of such disposition(s) have been
contemplated and have been projected into the expected operating results and
financial position of the Borrower for the Fiscal Quarter in which the
disposition occurs, and demonstrating that such disposition(s) are not
reasonably expected to cause a violation of the Section 8.21 covenants
applicable to the Fiscal Quarter.

 

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

 

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Section 8.12.        Intentionally Omitted.

 

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

 

Section 8.14.        Compliance with Laws.  (a) The Borrower shall, and shall
cause each Subsidiary to, comply in all respects with the requirements of all
federal, state, and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to its Property or business operations, where any
such non-compliance, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or result in a Lien upon any of its
Property.

 

(b)   Without limiting the agreements set forth in Section 8.14(a) above, for
each of its owned Properties, respectively, the Borrower shall, and shall cause
each Subsidiary to require that each tenant and subtenant, if any, of any of the
Properties or any part thereof, at all times, do the following to the extent the
failure to do so, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect: (i) comply in all material respects with all
applicable Environmental Laws; (ii) obtain and maintain in full force and effect
all material governmental approvals required by any applicable Environmental Law
for operations at each of the Properties and (iii) cause to be cured any
material violation by it or at any of the Properties of applicable Environmental
Laws.

 

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

 

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

 

Section 8.17.        Intentionally Omitted.

 

Section 8.18.        Change in the Nature of Business.  The Borrower shall not,
nor shall it permit any Subsidiary to, engage in any business or activity if as
a result the general nature of the business of the Borrower and its Subsidiaries
would be changed in any material respect from the general nature of the business
engaged in by it as of the Closing Date.  As of the Closing Date,

 

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the general nature of the business of the Borrower and its Subsidiaries is
primarily the business of the acquisition, financing and ownership of Senior
Housing Assets and other business activities incidental thereto.

 

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

 

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

 

Section 8.21.        Financial Covenants.  (a) Maximum Total Indebtedness to
Total Asset Value Ratio.  As of the last day of each Fiscal Quarter of the
Borrower, the Borrower shall not permit the ratio of Total Indebtedness to Total
Asset Value to be greater than .50 to 1.0.

 

(b)   Maximum Secured Debt to Total Asset Value Ratio.  As of the last day of
each Fiscal Quarter of the Borrower, the Borrower shall not permit the ratio of
Secured Debt to Total Asset Value to be greater than .35 to 1.0

 

(c)   Minimum EBITDA to Interest Expense Ratio.  As of the last day of each
Rolling Period of the Borrower, the Borrower shall not permit the ratio of
EBITDA to Interest Expense to be less than 2.50 to 1.0.

 

(d)   Minimum EBITDA to Fixed Charges Ratio.  As of the last day of each Rolling
Period of the Borrower, the Borrower shall not permit the ratio of EBITDA to
Fixed Charges to be less than 1.50 to 1.0.

 

(e)   Maximum Secured Recourse Debt to Total Asset Value Ratio.  As of the last
day of each Rolling Period of the Borrower, the Borrower shall not permit the
ratio of Secured Recourse Debt to Total Asset Value to be greater than .10 to
1.00.

 

(f)    Maintenance of Net Worth.  The Borrower shall at all times maintain a
Tangible Net Worth of not less than the sum of (a) $350,000,000 plus (b) 85% of
the aggregate net proceeds received by the Borrower or any of its Subsidiaries
after the Closing Date in connection with any offering of Stock or Stock
Equivalents of the Borrower or the Subsidiaries that results in an increase of
Tangible Net Worth.

 

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(g)   Floating Rate Debt.  On any date, the Borrower and its Subsidiaries shall
not, on a consolidated basis, have outstanding floating rate debt that is
neither at a fixed rate or hedged pursuant to a derivative contract greater than
40% of Total Asset Value.

 

Section 8.22.        Borrowing Base Covenants.  (a) The Borrower shall cause the
Eligible Properties in the Borrowing Base to at all times comply with the
Borrowing Base Requirements; provided that if the requirements of clauses (a),
(b), (c) or (d) of the definition of Borrowing Base Requirements are not met,
then within 2 Business Days of notice of such failure either (i) the Borrower
shall have cured such failure or (ii) for Borrowing Base purposes the Borrower
shall have lowered the Borrowing Base Value of those Eligible Properties that
contributed to such failure to the point that such failure no longer exists.

 

(b)   Minimum Borrowing Base Value.  The Borrower shall at all times maintain a
Borrowing Base Value of not less than $50,000,000.

 

(c)   Minimum Eligible Property NOI to Credit Facility Debt Service Ratio.  As
of the last day of each Fiscal Quarter of the Borrower, the Borrower shall not
permit the ratio of Eligible Property NOI to the sum of (i) Unsecured Debt
Service with respect to indebtedness that is pari passu in rank to the
indebtedness under the Credit Agreement, plus (ii) Credit Facility Debt Service,
to be less than 2.25 to 1.0.

 

SECTION 9.                EVENTS OF DEFAULT AND REMEDIES.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)   default shall occur under any Indebtedness for Borrowed Money issued,
assumed or guaranteed by the Borrower or any Subsidiary aggregating in excess of
$10,000,000 or under any indenture, agreement or other instrument under which
the same may be issued, and such default shall continue for a period of time
sufficient to permit the acceleration of the maturity of any such Indebtedness
for Borrowed Money (whether or not such maturity is in fact accelerated), or any
such Indebtedness for Borrowed Money shall not be paid when due (whether by
demand, lapse of time, acceleration or otherwise);

 

(h)   any judgment or judgments, writ or writs or warrant or warrants of
attachment, or any similar process or processes, shall be entered or filed
against the Borrower or any Subsidiary, or against any of its Property, in an
aggregate amount in excess of $10,000,000 (except to the extent fully covered by
insurance pursuant to which the insurer has accepted liability therefor in
writing), and which remains undischarged, unvacated, unbonded or unstayed for a
period of 30 days;

 

(i)    the Borrower or any Subsidiary, or any member of its Controlled Group,
shall fail to pay when due an amount or amounts aggregating in excess of
$10,000,000 which it shall have become liable to pay to the PBGC or to a Plan
under Title IV of ERISA; or notice of intent to terminate a Plan or Plans having
aggregate Unfunded Vested Liabilities in excess of $10,000,000 (collectively, a
“Material Plan”) shall be filed under Title IV of ERISA by the Borrower or any
Subsidiary, or any other member of its Controlled Group, any plan administrator
or any combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any Material Plan or a proceeding shall be instituted by a fiduciary
of any Material Plan against the Borrower or any Subsidiary, or any member of
its Controlled Group, to enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within 30 days thereafter; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated;

 

(j)    any Change of Control shall occur;

 

(k)   the Borrower or any Material Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States Bankruptcy
Code, as amended, (ii) not pay, or admit in writing its inability to pay, its
debts generally as they become due, (iii) make an assignment for the benefit of
creditors, (iv) apply for, seek, consent to or acquiesce in, the appointment of
a receiver, custodian, trustee, examiner,

 

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

 

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

 

(m)  default or event of default has occurred under any Qualified Ground Lease;

 

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

 

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

 

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

 

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Section 9.3.           Bankruptcy Defaults.  When any Event of Default described
in subsections (k) or (l) of Section 9.1 hereof has occurred and is continuing,
then all outstanding Notes shall immediately become due and payable together
with all other amounts payable under the Loan Documents without presentment,
demand, protest or notice of any kind, the obligation of the Lenders to extend
further credit pursuant to any of the terms hereof shall immediately terminate
and the Borrower shall immediately pay to the Administrative Agent the full
amount then available for drawing under all outstanding Letters of Credit, the
Borrower acknowledging and agreeing that the Lenders would not have an adequate
remedy at law for failure by the Borrower to honor any such demand and that the
Lenders, and the Administrative Agent on their behalf, shall have the right to
require the Borrower to specifically perform such undertaking whether or not any
draws or other demands for payment have been made under any of the Letters of
Credit.

 

Section 9.4.           Collateral for Undrawn Letters of Credit.  (a) If the
prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 1.8(b) or under Section 9.2 or 9.3
above, the Borrower shall forthwith pay the amount required to be so prepaid, to
be held by the Administrative Agent as provided in subsection (b) below.

 

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

 

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

 

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Section 9.6.           Expenses.  The Borrower agrees to pay to the
Administrative Agent and each Lender, and any other holder of any Note
outstanding hereunder, all costs and expenses reasonably incurred or paid by the
Administrative Agent and such Lender or any such holder, including reasonable
attorneys’ fees and court costs, in connection with any Default or Event of
Default hereunder or in connection with the enforcement of any of the Loan
Documents (including all such costs and expenses incurred in connection with any
proceeding under the United States Bankruptcy Code involving the Borrower or any
Subsidiary as a debtor thereunder).

 

SECTION 10.              CHANGE IN CIRCUMSTANCES.

 

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

 

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

 

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

 

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

 

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

 

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Section 10.3.        Increased Cost and Reduced Return.  (a) If, on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency:

 

(i)    shall subject any Lender (or its Lending Office) to any tax, duty or
other charge with respect to its Eurodollar Loans, its Notes, its Letter(s) of
Credit, or its participation in any thereof, any Reimbursement Obligations owed
to it or its obligation to make Eurodollar Loans, issue a Letter of Credit, or
to participate therein, or shall change the basis of taxation of payments to any
Lender (or its Lending Office) of the principal of or interest on its Eurodollar
Loans, Letter(s) of Credit, or participations therein or any other amounts due
under this Agreement or any other Loan Document in respect of its Eurodollar
Loans, Letter(s) of Credit, any participation therein, any Reimbursement
Obligations owed to it, or its obligation to make Eurodollar Loans, or issue a
Letter of Credit, or acquire participations therein (except for changes in the
rate of tax on the overall net income of such Lender or its Lending Office
imposed by the jurisdiction in which such Lender’s principal executive office or
Lending Office is located); or

 

(ii)   shall impose, modify or deem applicable any reserve, special deposit or
similar requirement (including, without limitation, any such requirement imposed
by the Board of Governors of the Federal Reserve System, but excluding with
respect to any Eurodollar Loans any such requirement included in an applicable
Eurodollar Reserve Percentage) against assets of, deposits with or for the
account of, or credit extended by, any Lender (or its Lending Office) or shall
impose on any Lender (or its Lending Office) or on the interbank market any
other condition affecting its Eurodollar Loans, its Notes, its Letter(s) of
Credit, or its participation in any thereof, any Reimbursement Obligation owed
to it, or its obligation to make Eurodollar Loans, or to issue a Letter of
Credit, or to participate therein;

 

and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of making or maintaining any Eurodollar Loan, issuing or
maintaining a Letter of Credit, or participating therein, or to reduce the
amount of any sum received or receivable by such Lender (or its Lending Office)
under this Agreement or under any other Loan Document with respect thereto, by
an amount deemed by such Lender to be material, then, within 15 days after
demand by such Lender (with a copy to the Administrative Agent), the Borrower
shall be obligated to pay to such Lender such additional amount or amounts as
will compensate such Lender for such increased cost or reduction.

 

(b)   If, after the date hereof, any Lender or the Administrative Agent shall
have determined that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Lending Office) or any corporation

 

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controlling such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has had the effect of reducing the rate of return on such
Lender’s or such corporation’s capital as a consequence of its obligations
hereunder to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender’s or such corporation’s policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time,
within 15 days after demand by such Lender (with a copy to the Administrative
Agent), the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender for such reduction.

 

(c)   A certificate of a Lender claiming compensation under this Section 10.3
and setting forth the additional amount or amounts to be paid to it hereunder
shall be conclusive if reasonably determined.  In determining such amount, such
Lender may use any reasonable averaging and attribution methods.

 

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

 

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

 

SECTION 11.              THE ADMINISTRATIVE AGENT.

 

Section 11.1.        Appointment and Authorization of Administrative Agent. 
Each Lender hereby appoints Bank of Montreal, Chicago Branch, as the
Administrative Agent under the Loan Documents and hereby authorizes the
Administrative Agent to take such action as Administrative Agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto.  The Lenders expressly agree that the
Administrative Agent is not acting as a fiduciary of the Lenders in respect of
the Loan Documents, the Borrower or otherwise, and nothing herein or in any of
the other Loan Documents shall result in any duties or obligations on the
Administrative Agent or any of the Lenders except as expressly set forth herein.

 

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Section 11.2.        Administrative Agent and its Affiliates.  The
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise or refrain
from exercising such rights and power as though it were not the Administrative
Agent, and the Administrative Agent and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower or
any Affiliate of the Borrower as if it were not the Administrative Agent under
the Loan Documents.  The term “Lender” as used herein and in all other Loan
Documents, unless the context otherwise clearly requires, includes the
Administrative Agent in its individual capacity as a Lender.  References in
Section 1 hereof to the Administrative Agent’s Loans, or to the amount owing to
the Administrative Agent for which an interest rate is being determined, refer
to the Administrative Agent in its individual capacity as a Lender.

 

Section 11.3.        Action by Administrative Agent.  If the Administrative
Agent receives from the Borrower a written notice of an Event of Default
pursuant to Section 8.5 hereof, the Administrative Agent shall promptly give
each of the Lenders written notice thereof.  The obligations of the
Administrative Agent under the Loan Documents are only those expressly set forth
therein.  Without limiting the generality of the foregoing, the Administrative
Agent shall not be required to take any action hereunder with respect to any
Default or Event of Default, except as expressly provided in Sections 9.2 and
9.5.  Unless and until the Required Lenders give such direction, the
Administrative Agent may (but shall not be obligated to) take or refrain from
taking such actions as it deems appropriate and in the best interest of all the
Lenders.  In no event, however, shall the Administrative Agent be required to
take any action in violation of applicable law or of any provision of any Loan
Document, and the Administrative Agent shall in all cases be fully justified in
failing or refusing to act hereunder or under any other Loan Document unless it
first receives any further assurances of its indemnification from the Lenders
that it may require, including prepayment of any related expenses and any other
protection it requires against any and all costs, expense, and liability which
may be incurred by it by reason of taking or continuing to take any such
action.  The Administrative Agent shall be entitled to assume that no Default or
Event of Default exists unless notified in writing to the contrary by a Lender
or the Borrower.  In all cases in which the Loan Documents do not require the
Administrative Agent to take specific action, the Administrative Agent shall be
fully justified in using its discretion in failing to take or in taking any
action thereunder.  Any instructions of the Required Lenders, or of any other
group of Lenders called for under the specific provisions of the Loan Documents,
shall be binding upon all the Lenders and the holders of the Obligations.

 

Section 11.4.        Consultation with Experts.  The Administrative Agent may
consult with legal counsel, independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.

 

Section 11.5.        Liability of Administrative Agent; Credit Decision. 
Neither the Administrative Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
with the Loan Documents:  (i) with the consent or at the request of the Required
Lenders or (ii) in the absence of its own gross negligence or willful
misconduct.  Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify:  (i) any

 

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statement, warranty or representation made in connection with this Agreement,
any other Loan Document or any Credit Event; (ii) the performance or observance
of any of the covenants or agreements of the Borrower or any Subsidiary
contained herein or in any other Loan Document; (iii) the satisfaction of any
condition specified in Section 7 hereof, except receipt of items required to be
delivered to the Administrative Agent; or (iv) the validity, effectiveness,
genuineness, enforceability, perfection, value, worth or collectibility hereof
or of any other Loan Document or of any other documents or writing furnished in
connection with any Loan Document; and the Administrative Agent makes no
representation of any kind or character with respect to any such matter
mentioned in this sentence.  The Administrative Agent may execute any of its
duties under any of the Loan Documents by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders, the Borrower, or
any other Person for the default or misconduct of any such agents or
attorneys-in-fact selected with reasonable care.  The Administrative Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, other document or statement (whether written or oral) believed by
it to be genuine or to be sent by the proper party or parties.  In particular
and without limiting any of the foregoing, the Administrative Agent shall have
no responsibility for confirming the accuracy of any compliance certificate or
other document or instrument received by it under the Loan Documents.  The
Administrative Agent may treat the payee of any Note as the holder thereof until
written notice of transfer shall have been filed with the Administrative Agent
signed by such payee in form satisfactory to the Administrative Agent.  Each
Lender acknowledges that it has independently and without reliance on the
Administrative Agent or any other Lender, and based upon such information,
investigations and inquiries as it deems appropriate, made its own credit
analysis and decision to extend credit to the Borrower in the manner set forth
in the Loan Documents.  It shall be the responsibility of each Lender to keep
itself informed as to the creditworthiness of the Borrower and its Subsidiaries,
and the Administrative Agent shall have no liability to any Lender with respect
thereto.

 

Section 11.6.        Indemnity.  The Lenders shall ratably, in accordance with
their respective Percentages, indemnify and hold the Administrative Agent, and
its directors, officers, employees, agents, and representatives harmless from
and against any liabilities, losses, costs or expenses suffered or incurred by
it under any Loan Document or in connection with the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent they are
promptly reimbursed for the same by the Borrower and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified.  The obligations of the
Lenders under this Section shall survive termination of this Agreement.  The
Administrative Agent shall be entitled to offset amounts received for the
account of a Lender under this Agreement against unpaid amounts due from such
Lender to the Administrative Agent hereunder (whether as fundings of
participations, indemnities or otherwise), but shall not be entitled to offset
against amounts owed to the Administrative Agent by any Lender arising outside
of this Agreement and the other Loan Documents.

 

Section 11.7.        Resignation or Removal of Administrative Agent and
Successor Administrative Agent.  The Administrative Agent may resign at any time
by giving written notice thereof to the Lenders and the Borrower.  The
Administrative Agent may be removed for gross negligence or willful misconduct
at any time by written notice from the Required Lenders to the Administrative
Agent and the Borrower.  Upon any such resignation or removal of the

 

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Administrative Agent, the Required Lenders shall have the right to appoint a
successor Administrative Agent from the Lenders or if no Lender is willing to
serve as Administrative Agent, a third party.  If no successor Administrative
Agent shall have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent’s giving of notice of resignation then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent, which
may be any Lender hereunder or any commercial bank organized under the laws of
the United States of America or of any State thereof and having a combined
capital and surplus of at least $500,000,000.  Upon the acceptance of its
appointment as the Administrative Agent hereunder, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights and
duties of the retiring Administrative Agent under the Loan Documents, and the
retiring Administrative Agent shall be discharged from its duties and
obligations thereunder.  After any retiring Administrative Agent’s resignation
or removal hereunder as Administrative Agent, the provisions of this Section 11
and all protective provisions of the other Loan Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent, but no successor Administrative Agent shall in any event
be liable or responsible for any actions of its predecessor.  If the
Administrative Agent resigns or is removed and no successor is appointed, the
rights and obligations of such Administrative Agent shall be automatically
assumed by the Required Lenders and the Borrower shall be directed to make all
payments due each Lender hereunder directly to such Lender.

 

Section 11.8.        L/C Issuer.  The L/C Issuer shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith.  The L/C Issuer shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Section 11 with
respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and the
Applications pertaining to such Letters of Credit as fully as if the term
“Administrative Agent”, as used in this Section 11, included the L/C Issuer with
respect to such acts or omissions and (ii) as additionally provided in this
Agreement with respect to such L/C Issuer.

 

Section 11.9.        Designation of Additional Agents.  The Administrative Agent
shall have the continuing right, for purposes hereof, at any time and from time
to time to designate one or more of the Lenders (and/or its or their Affiliates)
as “syndication agents,” “documentation agents,” “arrangers,” or other
designations for purposes hereto, but such designation shall have no substantive
effect, and such Lenders and their Affiliates shall have no additional powers,
duties or responsibilities as a result thereof.

 

SECTION 12.              THE GUARANTEES.

 

Section 12.1.        The Guarantees.  To induce the Lenders to provide the
credits described herein and in consideration of benefits expected to accrue to
the Borrower by reason of the Commitments and for other good and valuable
consideration, receipt of which is hereby acknowledged, each Material Subsidiary
party hereto (including any Material Subsidiary formed or acquired after the
Closing Date executing an Additional Guarantor Supplement in the form attached
hereto as Exhibit G or such other form acceptable to the Administrative Agent)
hereby unconditionally and irrevocably guarantee jointly and severally to the
Administrative Agent, the

 

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Lenders, and their Affiliates, the due and punctual payment of all present and
future Obligations, including, but not limited to, the due and punctual payment
of principal of and interest on the Notes, the Reimbursement Obligations, and
the due and punctual payment of all other Obligations now or hereafter owed by
the Borrower under the Loan Documents as and when the same shall become due and
payable, whether at stated maturity, by acceleration, or otherwise, according to
the terms hereof and thereof (including interest which, but for the filing of a
petition in bankruptcy, would otherwise accrue on any such indebtedness,
obligation, or liability).  In case of failure by the Borrower or other obligor
punctually to pay any Obligations guaranteed hereby, each Guarantor hereby
unconditionally agrees to make such payment or to cause such payment to be made
punctually as and when the same shall become due and payable, whether at stated
maturity, by acceleration, or otherwise, and as if such payment were made by the
Borrower or such obligor.

 

Section 12.2.        Guarantee Unconditional.  The obligations of each Guarantor
under this Section 12 shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged, or otherwise
affected by:

 

(a)   any extension, renewal, settlement, compromise, waiver, or release in
respect of any obligation of the Borrower or other obligor or of any other
guarantor under this Agreement or any other Loan Document or by operation of law
or otherwise;

 

(b)   any modification or amendment of or supplement to this Agreement or any
other Loan Document;

 

(c)   any change in the corporate existence, structure, or ownership of, or any
insolvency, bankruptcy, reorganization, or other similar proceeding affecting,
the Borrower or other obligor, any other guarantor, or any of their respective
assets, or any resulting release or discharge of any obligation of the Borrower
or other obligor or of any other guarantor contained in any Loan Document;

 

(d)   the existence of any claim, set-off, or other rights which the Borrower or
other obligor or any other guarantor may have at any time against the
Administrative Agent, any Lender, or any other Person, whether or not arising in
connection herewith;

 

(e)   any failure to assert, or any assertion of, any claim or demand or any
exercise of, or failure to exercise, any rights or remedies against the Borrower
or other obligor, any other guarantor, or any other Person or Property;

 

(f)    any application of any sums by whomsoever paid or howsoever realized to
any obligation of the Borrower or other obligor, regardless of what obligations
of the Borrower or other obligor remain unpaid;

 

(g)   any invalidity or unenforceability relating to or against the Borrower or
other obligor or any other guarantor for any reason of this Agreement or of any
other Loan Document or any provision of applicable law or regulation purporting
to prohibit the payment by the Borrower or other obligor or any other guarantor
of the principal of or

 

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interest on any Note or any Reimbursement Obligation or any other amount payable
under the Loan Documents; or

 

(h)   any other act or omission to act or delay of any kind by the
Administrative Agent, any Lender, or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of the obligations of any Guarantor under this
Section 12.

 

Section 12.3.        Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances.  Each Guarantor’s obligations under this Section 12 shall
remain in full force and effect until the Commitments are terminated, all
Letters of Credit have expired, and the principal of and interest on the Notes
and all other amounts payable by the Borrower and the Guarantors under this
Agreement and all other Loan Documents and, if then outstanding and unpaid.  If
at any time any payment of the principal of or interest on any Note or any
Reimbursement Obligation or any other amount payable by the Borrower or other
obligor or any Guarantor under the Loan Documents is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy, or
reorganization of the Borrower or other obligor or of any guarantor, or
otherwise, each Guarantor’s obligations under this Section 12 with respect to
such payment shall be reinstated at such time as though such payment had become
due but had not been made at such time.

 

Section 12.4.        Subrogation.  Each Guarantor agrees it will not exercise
any rights which it may acquire by way of subrogation by any payment made
hereunder, or otherwise, until all the Obligations shall have been paid in full
subsequent to the termination of all the Commitments and expiration of all
Letters of Credit.  If any amount shall be paid to a Guarantor on account of
such subrogation rights at any time prior to the later of (x) the payment in
full of the Obligations and all other amounts payable by the Borrower hereunder
and the other Loan Documents and (y) the termination of the Commitments and
expiration of all Letters of Credit, such amount shall be held in trust for the
benefit of the Administrative Agent and the Lenders (and their Affiliates) and
shall forthwith be paid to the Administrative Agent for the benefit of the
Lenders (and their Affiliates) or be credited and applied upon the Obligations,
whether matured or unmatured, in accordance with the terms of this Agreement.

 

Section 12.5.        Waivers.  Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest, and any notice not provided for herein, as
well as any requirement that at any time any action be taken by the
Administrative Agent, any Lender, or any other Person against the Borrower or
other obligor, another guarantor, or any other Person.

 

Section 12.6.        Limit on Recovery.  Notwithstanding any other provision
hereof, the right of recovery against each Guarantor under this Section 12 shall
not exceed $1.00 less than the lowest amount which would render such Guarantor’s
obligations under this Section 12 void or voidable under applicable law,
including, without limitation, fraudulent conveyance law.

 

Section 12.7.        Stay of Acceleration.  If acceleration of the time for
payment of any amount payable by the Borrower or other obligor under this
Agreement or any other Loan Document, is stayed upon the insolvency, bankruptcy
or reorganization of the Borrower or such obligor, all

 

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such amounts otherwise subject to acceleration under the terms of this Agreement
or the other Loan Documents, shall nonetheless be payable by the Guarantors
hereunder forthwith on demand by the Administrative Agent made at the request of
the Required Lenders.

 

Section 12.8.        Benefit to Guarantors.  The Borrower and the Guarantors are
engaged in related businesses and integrated to such an extent that the
financial strength and flexibility of the Borrower has a direct impact on the
success of each Guarantor.  Each Guarantor will derive substantial direct and
indirect benefit from the extensions of credit hereunder.

 

Section 12.9.        Guarantor Covenants.  Each Guarantor shall take such action
as the Borrower is required by this Agreement to cause such Guarantor to take,
and shall refrain from taking such action as the Borrower is required by this
Agreement to prohibit such Guarantor from taking.

 

SECTION 13.                         MISCELLANEOUS.

 

Section 13.1.        Withholding Taxes.  (a) Payments Free of Withholding. 
Except as otherwise required by law and subject to Section 13.1(b) hereof, each
payment by the Borrower and the Guarantors under this Agreement or the other
Loan Documents shall be made without withholding for or on account of any
present or future taxes (other than overall net income taxes on the recipient)
imposed by or within the jurisdiction in which the Borrower or such Guarantor is
domiciled, any jurisdiction from which the Borrower or such Guarantor makes any
payment, or (in each case) any political subdivision or taxing authority thereof
or therein.  If any such withholding is so required, the Borrower or such
Guarantor shall make the withholding, pay the amount withheld to the appropriate
governmental authority before penalties attach thereto or interest accrues
thereon, and forthwith pay such additional amount as may be necessary to ensure
that the net amount actually received by each Lender and the Administrative
Agent free and clear of such taxes (including such taxes on such additional
amount) is equal to the amount which that Lender or the Administrative Agent (as
the case may be) would have received had such withholding not been made.  If the
Administrative Agent or any Lender pays any amount in respect of any such taxes,
penalties or interest, the Borrower or such Guarantor shall reimburse the
Administrative Agent or such Lender for that payment on demand in the currency
in which such payment was made.  If the Borrower or such Guarantor pays any such
taxes, penalties or interest, it shall deliver official tax receipts evidencing
that payment or certified copies thereof to the Lender or Administrative Agent
on whose account such withholding was made (with a copy to the Administrative
Agent if not the recipient of the original) on or before the thirtieth day after
payment.

 

(b)           U.S. Withholding Tax Exemptions.  Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrower and the Administrative Agent on or before the date the
initial Credit Event is made hereunder or, if later, the date such financial
institution becomes a Lender hereunder, two duly completed and signed copies of
(i) either Form W-8 BEN (relating to such Lender and entitling it to a complete
exemption from withholding under the Code on all amounts to be received by such
Lender, including fees, pursuant to the Loan Documents and the Obligations) or
Form W-8 ECI (relating to all amounts to be received by such Lender, including
fees, pursuant to the Loan Documents

 

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and the Obligations) of the United States Internal Revenue Service or
(ii) solely if such Lender is claiming exemption from United States withholding
tax under Section 871(h) or 881(c) of the Code with respect to payments of
“portfolio interest”, a Form W-8 BEN, or any successor form prescribed by the
Internal Revenue Service, and a certificate representing that such Lender is not
a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code).  Thereafter and from time
to time, each Lender shall submit to the Borrower and the Administrative Agent
such additional duly completed and signed copies of one or the other of such
Forms (or such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) and such other certificates as may be
(i) requested by the Borrower in a written notice, directly or through the
Administrative Agent, to such Lender and (ii) required under then-current United
States law or regulations to avoid or reduce United States withholding taxes on
payments in respect of all amounts to be received by such Lender, including
fees, pursuant to the Loan Documents or the Obligations.  Upon the request of
the Borrower or the Administrative Agent, each Lender that is a United States
person (as such term is defined in Section 7701(a)(30) of the Code) shall submit
to the Borrower and the Administrative Agent a certificate to the effect that it
is such a United States person.

 

(c)           Inability of Lender to Submit Forms.  If any Lender determines, as
a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit to
the Borrower or the Administrative Agent any form or certificate that such
Lender is obligated to submit pursuant to subsection (b) of this Section 13.1 or
that such Lender is required to withdraw or cancel any such form or certificate
previously submitted or any such form or certificate otherwise becomes
ineffective or inaccurate, such Lender shall promptly notify the Borrower and
Administrative Agent of such fact and the Lender shall to that extent not be
obligated to provide any such form or certificate and will be entitled to
withdraw or cancel any affected form or certificate, as applicable.

 

Section 13.2.        No Waiver, Cumulative Remedies.  No delay or failure on the
part of the Administrative Agent or any Lender or on the part of the holder or
holders of any of the Obligations in the exercise of any power or right under
any Loan Document shall operate as a waiver thereof or as an acquiescence in any
default, nor shall any single or partial exercise of any power or right preclude
any other or further exercise thereof or the exercise of any other power or
right.  The rights and remedies hereunder of the Administrative Agent, the
Lenders and of the holder or holders of any of the Obligations are cumulative
to, and not exclusive of, any rights or remedies which any of them would
otherwise have.

 

Section 13.3.        Non-Business Days.  If any payment hereunder becomes due
and payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such payment
shall be due and payable.  In the case of any payment of principal falling due
on a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.

 

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Section 13.4.        Documentary Taxes.  The Borrower agrees to pay on demand
any documentary, stamp or similar taxes payable in respect of this Agreement or
any other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit is then in use or available hereunder.

 

Section 13.5.        Survival of Representations.  All representations and
warranties made herein or in any other Loan Document or in certificates given
pursuant hereto or thereto shall survive the execution and delivery of this
Agreement and the other Loan Documents, and shall continue in full force and
effect with respect to the date as of which they were made as long as any credit
is in use or available hereunder.

 

Section 13.6.        Survival of Indemnities.  All indemnities and other
provisions relative to reimbursement to the Lenders of amounts sufficient to
protect the yield of the Lenders with respect to the Loans and Letters of
Credit, including, but not limited to, Sections 1.11, 10.3, and 13.15 hereof,
shall survive the termination of this Agreement and the other Loan Documents and
the payment of the Obligations.

 

Section 13.7.        Sharing of Set-Off.  Each Lender agrees with each other
Lender a party hereto that if such Lender shall receive and retain any payment,
whether by set-off or application of deposit balances or otherwise, on any of
the Loans or Reimbursement Obligations in excess of its ratable share of
payments on all such Obligations then outstanding to the Lenders, then such
Lender shall purchase for cash at face value, but without recourse, ratably from
each of the other Lenders such amount of the Loans or Reimbursement Obligations,
or participations therein, held by each such other Lenders (or interest therein)
as shall be necessary to cause such Lender to share such excess payment ratably
with all the other Lenders; provided, however, that if any such purchase is made
by any Lender, and if such excess payment or part thereof is thereafter
recovered from such purchasing Lender, the related purchases from the other
Lenders shall be rescinded ratably and the purchase price restored as to the
portion of such excess payment so recovered, but without interest.  For purposes
of this Section, amounts owed to or recovered by the L/C Issuer in connection
with Reimbursement Obligations in which Lenders have been required to fund their
participation shall be treated as amounts owed to or recovered by the L/C Issuer
as a Lender hereunder.

 

Section 13.8.        Notices.  Except as otherwise specified herein, all notices
hereunder and under the other Loan Documents shall be in writing (including,
without limitation, notice by telecopy) and shall be given to the relevant party
at its address or telecopier number set forth below, or such other address or
telecopier number as such party may hereafter specify by notice to the
Administrative Agent and the Borrower given by courier, by United States
certified or registered mail, by telecopy or by other telecommunication device
capable of creating a written record of such notice and its receipt.  Notices
under the Loan Documents to the Lenders and the Administrative Agent shall be
addressed to their respective addresses or telecopier numbers set forth on the
signature pages hereof, and to the Borrower or any Guarantor to:

 

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LTC Properties, Inc.

31365 Oak Crest Drive

Suite 200

Westlake Village, California  91361

Attention:          Chief Financial Officer

Telephone:        (805) 981-8655

Telecopy:          (805) 981-8663

 

Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or on the signature pages hereof and a confirmation of
such telecopy has been received by the sender, (ii) if given by mail, 5 days
after such communication is deposited in the mail, certified or registered with
return receipt requested, addressed as aforesaid or (iii) if given by any other
means, when delivered at the addresses specified in this Section or on the
signature pages hereof; provided that any notice given pursuant to Section 1
hereof shall be effective only upon receipt.

 

Section 13.9.        Counterparts.  This Agreement may be executed in any number
of counterparts, and by the different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.

 

Section 13.10.      Successors and Assigns.  This Agreement shall be binding
upon the Borrower and the Guarantors and their successors and assigns, and shall
inure to the benefit of the Administrative Agent and each of the Lenders and the
benefit of their respective successors and assigns, including any subsequent
holder of any of the Obligations.  The Borrower and the Guarantors may not
assign any of their rights or obligations under any Loan Document without the
written consent of all of the Lenders.

 

Section 13.11.      Participants.  Each Lender shall have the right at its own
cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Commitments held by such Lender at any time and from time to time to one
or more other Persons; provided that no such participation shall relieve any
Lender of any of its obligations under this Agreement, and, provided, further
that no such participant shall have any rights under this Agreement except as
provided in this Section, and the Administrative Agent shall have no obligation
or responsibility to such participant.  Any agreement pursuant to which such
participation is granted shall provide that the granting Lender shall retain the
sole right and responsibility to enforce the obligations of the Borrower under
this Agreement and the other Loan Documents including, without limitation, the
right to approve any amendment, modification or waiver of any provision of the
Loan Documents, except that such agreement may provide that such Lender will not
agree to any modification, amendment or waiver of the Loan Documents that would
reduce the amount of or postpone any fixed date for payment of any Obligation in
which such participant has an interest.  Any party to which such a participation
has been granted shall have the benefits of Section 1.11 and Section 10.3
hereof.  The Borrower authorizes each Lender to disclose to any participant or
prospective participant under this Section any financial or other information
pertaining to the Borrower or any Subsidiary.

 

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Section 13.12.      Assignments.  (a) Each Lender shall have the right at any
time, with the prior consent of the Administrative Agent (and the L/C Issuers,
if other than the Administrative Agent) and, so long as no Event of Default then
exists, the Borrower (which consent of the Borrower shall not be unreasonably
withheld) to sell, assign, transfer or negotiate all or any part of its rights
and obligations under the Loan Documents (including, without limitation, the
indebtedness evidenced by the Notes then held by such assigning Lender, together
with an equivalent percentage of its obligation to make Loans and participate in
Letters of Credit) to one or more commercial banks or other financial
institutions or investors, provided that, unless otherwise agreed to by the
Administrative Agent, such assignment shall be of a fixed percentage (and not by
its terms of varying percentage) of the assigning Lender’s rights and
obligations under the Loan Documents; provided, however, that in order to make
any such assignment (i) unless the assigning Lender is assigning all of its
Commitments, outstanding Loans and interests in Letters of Credit Obligations,
the assigning Lender shall retain at least $5,000,000 in unused Commitments,
outstanding Loans and interests in Letters of Credit, (ii) the assignee Lender
shall have Commitments, outstanding Loans and interests in Letters of Credit of
at least $5,000,000, (iii) each such assignment shall be evidenced by a written
agreement (substantially in the form attached hereto as Exhibit H or in such
other form acceptable to the Administrative Agent) executed by such assigning
Lender, such assignee Lender or Lenders, the Administrative Agent (and the
L/C Issuers, if other than the Administrative Agent) and, if required as
provided above, the Borrower, which agreement shall specify in each instance the
portion of the Obligations which are to be assigned to the assignee Lender and
the portion of the Commitments of the assigning Lender to be assumed by the
assignee Lender, and (iv) the assigning Lender shall pay to the Administrative
Agent a processing fee of $3,500 and any out-of-pocket attorneys’ fees and
expenses incurred by the Administrative Agent in connection with any such
assignment agreement.  Any such assignee shall become a Lender for all purposes
hereunder to the extent of the rights and obligations under the Loan Documents
it assumes and the assigning Lender shall be released from its obligations, and
will have released its rights, under the Loan Documents to the extent of such
assignment.  The address for notices to such assignee Lender shall be as
specified in the assignment agreement executed by it.  Promptly upon the
effectiveness of any such assignment agreement, the Borrower shall execute and
deliver replacement Notes to the assignee Lender and the assigning Lender in the
respective amounts of their Commitments (or assigned principal amounts, as
applicable) after giving effect to the reduction occasioned by such assignment
(all such Notes to constitute “Notes” for all purposes of the Loan Documents),
and the assignee Lender shall thereafter surrender to the Borrower its old
Notes.  The Borrower authorizes each Lender to disclose to any purchaser or
prospective purchaser of an interest in the Loans and interest in Letters of
Credit owed to it or its Commitments under this Section any financial or other
information pertaining to the Borrower or any Subsidiary.  Notwithstanding any
other provision hereof, neither the Borrower nor any of its Subsidiaries or
Affiliates may at any time hold any interest whether by assignment or otherwise
in the Loan Documents, as a Lender.

 

(b)           Any Lender may at any time pledge or grant a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any such pledge or grant to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or grant of a security interest;
provided that no such pledge or grant of a security interest shall release a
Lender from any of its obligations hereunder or substitute any such pledgee

 

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or secured party for such Lender as a party hereto; provided further, however,
the right of any such pledgee or grantee (other than any Federal Reserve Bank)
to further transfer all or any portion of the rights pledged or granted to it,
whether by means of foreclosure or otherwise, shall be at all times subject to
the terms of this Agreement.

 

Section 13.13.      Amendments.  Any provision of this Agreement or the other
Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (a) the Borrower, (b) the Required
Lenders, and (c) if the rights or duties of the Administrative Agent or the
L/C Issuer are affected thereby, the Administrative Agent or such L/C Issuer, as
applicable; provided that:

 

(i)      no amendment or waiver pursuant to this Section 13.13 shall
(A) increase any Commitment of any Lender without the consent of such Lender or
(B) reduce the amount of or postpone the date for any scheduled payment of any
principal of or interest on any Loan or of any Reimbursement Obligation or of
any fee payable hereunder without the consent of the Lender to which such
payment is owing or which has committed to make such Loan or Letter of Credit
(or participate therein) hereunder;

 

(ii)     no amendment or waiver pursuant to this Section 13.13 shall, unless
signed by each Lender, increase the aggregate Commitments of the Lenders, change
the definitions of Termination Date or Required Lenders, change the provisions
of this Section 13.13, release any material guarantor or any substantial part of
the Collateral (except as otherwise provided for in the Loan Documents), or
affect the number of Lenders required to take any action hereunder or under any
other Loan Document; and

 

(iii)    no amendment to Section 12 hereof shall be made without the consent of
the Guarantor(s) affected thereby.

 

Section 13.14.      Headings. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.

 

Section 13.15.      Costs and Expenses; Indemnification.  (a) The Borrower
agrees to pay all reasonable costs and expenses of the Administrative Agent in
connection with the preparation, negotiation, syndication, and administration of
the Loan Documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, in connection with the
preparation and execution of the Loan Documents, and any amendment, waiver or
consent related thereto, whether or not the transactions contemplated herein are
consummated.  The Borrower further agrees to indemnify the Administrative Agent,
each Lender, and their respective directors, officers, employees, agents,
financial advisors, and consultants against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor, whether or not the
indemnified Person is a party thereto, or any settlement arrangement arising
from or relating to any such litigation) which any of them may pay or incur
arising out of or relating to any Loan Document or any of the transactions
contemplated thereby or the direct or indirect application or proposed
application of the proceeds of any Loan or Letter of Credit, other than those
which arise from the gross negligence or willful misconduct of the party
claiming indemnification.  The Borrower, upon demand by the Administrative Agent
or a Lender at any time, shall reimburse the

 

67

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Administrative Agent or such Lender for any legal or other expenses incurred in
connection with investigating or defending against any of the foregoing
(including any settlement costs relating to the foregoing) except if the same is
directly due to the gross negligence or willful misconduct of the party to be
indemnified.  The obligations of the Borrower under this Section shall survive
the termination of this Agreement.

 

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

 

Section 13.16.      Set-off.  In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, each Lender and each subsequent holder of
any Obligation is hereby authorized by the Borrower and each Guarantor at any
time or from time to time, without notice to the Borrower or such Guarantor or
to any other Person, any such notice being hereby expressly waived, to set-off
and to appropriate and to apply any and all deposits (general or special,
including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured, but not including trust accounts, and in
whatever currency denominated) and any other indebtedness at any time held or
owing by that Lender or that subsequent holder to or for the credit or the
account of the Borrower or such Guarantor, whether or not matured, against and
on account of the Obligations of the Borrower or such Guarantor to that Lender
or that subsequent holder under the Loan Documents, including, but not limited
to, all claims of any nature or description arising out of or connected with the
Loan Documents, irrespective of whether or not (a) that Lender or that
subsequent holder shall have made any demand hereunder or (b) the principal of
or the interest on the Loans or Notes and other amounts due hereunder shall have
become due and payable pursuant to Section 9 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.

 

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Section 13.17.      Entire Agreement.  The Loan Documents constitute the entire
understanding of the parties thereto with respect to the subject matter thereof
and any prior agreements, whether written or oral, with respect thereto are
superseded hereby.

 

Section 13.18.      Governing Law.  This Agreement and the other Loan Documents
(except as otherwise specified therein), and the rights and duties of the
parties hereto, shall be construed and determined in accordance with the
internal laws of the State of New York.

 

Section 13.19.      Severability of Provisions.  Any provision of any Loan
Document which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.  All rights,
remedies and powers provided in this Agreement and the other Loan Documents may
be exercised only to the extent that the exercise thereof does not violate any
applicable mandatory provisions of law, and all the provisions of this Agreement
and other Loan Documents are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement or the other Loan
Documents invalid or unenforceable.

 

Section 13.20.      Excess Interest.  Notwithstanding any provision to the
contrary contained herein or in any other Loan Document, no such provision shall
require the payment or permit the collection of any amount of interest in excess
of the maximum amount of interest permitted by applicable law to be charged for
the use or detention, or the forbearance in the collection, of all or any
portion of the Loans or other obligations outstanding under this Agreement or
any other Loan Document (“Excess Interest”).  If any Excess Interest is provided
for, or is adjudicated to be provided for, herein or in any other Loan Document,
then in such event (a) the provisions of this Section shall govern and control,
(b) neither the Borrower nor any guarantor or endorser shall be obligated to pay
any Excess Interest, (c) any Excess Interest that the Administrative Agent or
any Lender may have received hereunder shall, at the option of the
Administrative Agent, be (i) applied as a credit against the then outstanding
principal amount of Obligations hereunder and accrued and unpaid interest
thereon (not to exceed the maximum amount permitted by applicable law),
(ii) refunded to the Borrower, or (iii) any combination of the foregoing,
(d) the interest rate payable hereunder or under any other Loan Document shall
be automatically subject to reduction to the maximum lawful contract rate
allowed under applicable usury laws (the “Maximum Rate”), and this Agreement and
the other Loan Documents shall be deemed to have been, and shall be, reformed
and modified to reflect such reduction in the relevant interest rate, and
(e) neither the Borrower nor any guarantor or endorser shall have any action
against the Administrative Agent or any Lender for any damages whatsoever
arising out of the payment or collection of any Excess Interest. 
Notwithstanding the foregoing, if for any period of time interest on any of
Borrower’s Obligations is calculated at the Maximum Rate rather than the
applicable rate under this Agreement, and thereafter such applicable rate
becomes less than the Maximum Rate, the rate of interest payable on the
Borrower’s Obligations shall remain at the Maximum Rate until the Lenders have
received the amount of interest which such Lenders would have received during
such period on the Borrower’s Obligations had the rate of interest not been
limited to the Maximum Rate during such period.

 

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Section 13.21.      Construction.  Nothing contained herein shall be deemed or
construed to permit any act or omission which is prohibited by the terms of any
Collateral Document, the covenants and agreements contained herein being in
addition to and not in substitution for the covenants and agreements contained
in the Collateral Documents.

 

Section 13.22.      Lender’s Obligations Several.  The obligations of the
Lenders hereunder are several and not joint.  Nothing contained in this
Agreement and no action taken by the Lenders pursuant hereto shall be deemed to
constitute the Lenders a partnership, association, joint venture or other
entity.

 

Section 13.23.      Submission to Jurisdiction; Waiver of Jury Trial.  The
Borrower and the Guarantors hereby submit to the nonexclusive jurisdiction of
the Federal Courts located in New York, New York and of any New York State court
sitting in the City of New York for purposes of all legal proceedings arising
out of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby.  The Borrower and the Guarantors
irrevocably waive, to the fullest extent permitted by law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.  THE BORROWER, THE GUARANTORS,
THE ADMINISTRATIVE AGENT, AND THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

 

Section 13.24.      Amendment and Restatement.  This Agreement shall become
effective on the Closing Date and shall supersede all provisions of the Prior
Credit Agreement as of such date.  From and after the Closing Date, all
references made to the Prior Credit Agreement in any Loan Document or in any
other instrument or document shall, without more, be deemed to refer to this
Agreement.  The Parent heretofore executed and delivered to the Agent certain
Collateral Documents.

 

Section 13.25.      Equalization of Outstanding Obligations.  (a) Equalization
of Outstanding Obligations.  Upon the satisfaction of the conditions precedent
set forth in Section 7.2 hereof, all Loans outstanding under, and as defined in,
the Prior Credit Agreement shall remain outstanding as part of the initial
Borrowing of Loans under this Agreement.  On the Closing Date, the Lenders each
agree to make such purchases and sales of interests in the outstanding Loans
between themselves so that each Lender is then holding its Percentage of
outstanding Loans.  Such purchases and sales shall be arranged through the
Administrative Agent and each Lender hereby agrees to execute such further
instruments and documents, if any, as the Agent may reasonably request in
connection therewith.

 

(b)   Return of Notes.  The Lenders agree to return to the Borrower promptly
after the Closing Date the Notes issued under, and as defined in, the Prior
Credit Agreement, which Notes are replaced by certain Notes issued hereunder.

 

[SIGNATURE PAGES TO FOLLOW]

 

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

 

 

“BORROWER”

 

 

 

LTC PROPERTIES, INC.

 

 

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title Chairman and CEO

 

 

 

 

 

By

 

Name

/s/ Wendy Simpson

 

 

Title President and COO

 

 

 

“GUARANTORS”

 

 

 

LTC-WEST, INC.

 

 

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title Chairman and CEO

 

 

 

 

 

By

 

Name

/s/ Wendy Simpson

 

 

Title President and COO

 

 

 

FLORIDA-LTC, INC.

 

 

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title Chairman and CEO

 

 

 

 

 

By

 

Name

/s/ Wendy Simpson

 

 

Title President and COO

 

S-1

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

 

 

LTC GP I, INC.

 

 

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title Chairman and CEO

 

 

 

 

 

By

 

Name

/s/ Wendy Simpson

 

 

Title President and COO

 

 

 

LTC GP VI, INC.

 

 

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title Chairman and CEO

 

 

 

 

 

By

 

Name

/s/ Wendy Simpson

 

 

Title President and COO

 

 

 

NORTH CAROLINA REAL ESTATE
INVESTMENTS, LLC

 

 

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title Chairman and CEO

 

 

 

 

 

By

 

Name

/s/ Wendy Simpson

 

 

Title President and COO

 

S-2

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EDUCATION PROPERTY INVESTORS, INC.

 

 

 

 

 

By

 

Name

/s/ Andre Dimitriadis

 

 

Title Chairman and CEO

 

 

 

 

 

By

 

Name

/s/ Wendy Simpson

 

 

Title President and COO

 

S-3

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“LENDERS”

 

 

 

BANK OF MONTREAL, Chicago Branch, in its
individual capacity as a Lender, as
L/C Issuer, and as Administrative Agent

 

 

 

 

 

By

 

Name

/s/ Thomas A. Batterham

 

 

Title Managing Director

 

 

 

Address:

 

 

 

115 South LaSalle Street

 

Chicago, Illinois  60603

 

Attention:

Thomas Batterham

 

Telecopy:

(312) 293-5852

 

Telephone:

(312) 293-8364

 

S-4

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KEY BANK NATIONAL ASSOCIATION, as
successor in interest to KEY CORPORATE
CAPITAL INC., in its individual capacity as a
Lender

 

 

 

 

 

By

 

Name

/s/ Florentina Djulvezan

 

 

Title Vice President

 

 

 

Address:

 

 

 

580 Walnut Street

 

Mail Code OH-18-58-0229

 

Cincinnati, Ohio  45202

 

Attention:

Jack Boulder

 

Telecopy:

(513) 762-8450

 

Telephone:

(513) 762-8284

 

 

 

With a copy to:

 

 

 

127 Public Square

 

Mail Code OH-01-27-0839

 

Cleveland, Ohio  44114

 

Attention:  Denise Jones

 

Real Estate Capital Services

 

Telecopy:    (216) 689-3566

 

Telephone:  (216) 689-3607

 

S-5

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BANK LEUMI USA, in its individual capacity
as a Lender

 

 

 

 

 

By

 

Name

/s/ Joung Hee Hong

 

 

Title Vice President

 

 

 

Address:

 

 

 

562 Fifth Avenue

 

9th Floor (46th Street)

 

New York, New York  10036

 

Attention:

Joung Hee Hong

 

Telecopy:

(212) 407-4317

 

Telephone:

(212) 407-4469

 

S-6

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MERRILL LYNCH CAPITAL, a Division of
Merrill Lynch Business Financial Services
Inc., in its individual capacity as a Lender

 

 

 

 

 

By

 

Name

/s/ Brett Robinson

 

 

Title Vice President

 

 

 

 

 

Address:

 

 

 

222 N. LaSalle Street

 

16th Floor

 

Attention:

Chicago, IL  60601

 

 

Assistant Vice President, Operations

 

Telecopy:

(312) 499-3361

 

Telephone:

(312) 750-6240

 

S-7

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EXHIBIT A

 

NOTICE OF PAYMENT REQUEST

 

[Date]

 

[Name of Lender]

[Address]

 

Attention:

 

Reference is made to the Amended and Restated Credit Agreement, dated as of
November 7, 2005, among LTC Properties, Inc., the Guarantors from time to time
party thereto, the Lenders party thereto, and Bank of Montreal, Chicago Branch,
as Administrative Agent (the “Credit Agreement”).  Capitalized terms used herein
and not defined herein have the meanings assigned to them in the Credit
Agreement.  [The Borrower has failed to pay its Reimbursement Obligation in the
amount of $                       .  Your Percentage of the unpaid Reimbursement
Obligation is $                          ] or
[                                      has been required to return a payment by
the Borrower of a Reimbursement Obligation in the amount of
$                        .  Your Percentage of the returned Reimbursement
Obligation is $                              .]

 

 

Very truly yours,

 

 

 

BANK OF MONTREAL, Chicago Branch,

 

as L/C Issuer

 

 

 

 

 

By

 

Name

 

 

Title

 

 

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

 

EXHIBIT B

 

NOTICE OF BORROWING

 

Date:                  ,          

 

To:        BANK OF MONTREAL, Chicago Branch, as Administrative Agent for the
Lenders parties to the Amended and Restated Credit Agreement dated as of
November 7, 2005 (as extended, renewed, amended or restated from time to time,
the “Credit Agreement”), among LTC PROPERTIES, INC., certain Guarantors which
are signatories thereto, certain Lenders which are signatories thereto, and BANK
OF MONTREAL, Chicago Branch, as Administrative Agent

 

Ladies and Gentlemen:

 

The undersigned, LTC Properties, Inc. (the “Borrower”), refers to the Credit
Agreement, the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 1.5 of the Credit
Agreement, of the Borrowing specified below:

 

1.             The Business Day of the proposed Borrowing is
                          ,          .

 

2.             The aggregate amount of the proposed Borrowing is
$                            .

 

3.             The Borrowing is being advanced under the Revolving Credit.

 

4.             The Borrowing is to be comprised of $                      of
[Adjusted Base Rate] [Eurodollar] Loans.

 

[5.           The duration of the Interest Period for the Eurodollar Loans
included in the Borrowing shall be                         months.]

 

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the proposed Borrowing, before and
after giving effect thereto and to the application of the proceeds therefrom:

 

(a)           the representations and warranties of the Borrower contained in
Section 6 of the Credit Agreement are true and correct as though made on and as
of such date (except to the extent such representations and warranties relate to
an earlier date, in which case they are true and correct as of such date); and

 

(b)           no Default or Event of Default has occurred and is continuing or
would result from such proposed Borrowing.

 

 

LTC PROPERTIES, INC.

 

 

 

 

 

By

 

Name

 

 

Title

 

 

 

 

 

 

By

 

Name

 

 

Title

 

 

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

 

EXHIBIT C

 

NOTICE OF CONTINUATION/CONVERSION

 

Date:                    ,       

 

To:      BANK OF MONTREAL, Chicago Branch, as Administrative Agent for the
Lenders parties to the Amended and Restated Credit Agreement dated as of
November 7, 2005 (as extended, renewed, amended or restated from time to time,
the “Credit Agreement”), among LTC PROPERTIES, INC., certain Guarantors which
are signatories thereto, certain Lenders which are signatories thereto, and BANK
OF MONTREAL, Chicago Branch, as Administrative Agent

 

Ladies and Gentlemen:

 

The undersigned, LTC Properties, Inc. (the “Borrower”), refers to the Credit
Agreement, the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 1.5 of the Credit
Agreement, of the [conversion] [continuation] of the Loans specified herein,
that:

 

1.             The conversion/continuation Date is                            ,
       .

 

2.             The aggregate amount of the Loans to be [converted] [continued]
is $                       .

 

3.             The Loans are to be [converted into] [continued as] [Eurodollar]
[Adjusted Base Rate] Loans.

 

4.             [If applicable:]  The duration of the Interest Period for the
Loans included in the [conversion] [continuation] shall be                     
months.

 

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the proposed conversion/continuation date,
before and after giving effect thereto and to the application of the proceeds
therefrom:

 

(a)           the representations and warranties of the Borrower contained in
Section 6 of the Credit Agreement are true and correct as though made on and as
of such date (except to the extent such representations and warranties relate to
an earlier date, in which case they are true and correct as of such date);
provided, however, that this condition shall not apply to the conversion of an
outstanding Eurodollar Loan to an Adjusted Base Rate Loan; and

 

(b)           no Default or Event of Default has occurred and is continuing, or
would result from such proposed [conversion] [continuation].

 

 

LTC PROPERTIES, INC.

 

 

 

 

 

By

 

Name

 

 

Title

 

 

 

 

 

 

By

 

Name

 

 

Title

 

 

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

 

EXHIBIT D

 

NOTE

 

U.S. $                               

                    ,         

 

FOR VALUE RECEIVED, the undersigned, LTC PROPERTIES, INC., a Maryland
corporation (the “Borrower”), hereby promises to pay to the order of
                                 (the “Lender”) on the Termination Date of the
hereinafter defined Credit Agreement, at the principal office of Bank of
Montreal, Chicago Branch as Administrative Agent, in Chicago, Illinois, in
immediately available funds, the principal sum of                              
Dollars ($                      ) or, if less, the aggregate unpaid principal
amount of all Loans made by the Lender to the Borrower pursuant to the Credit
Agreement, together with interest on the principal amount of each Loan from time
to time outstanding hereunder at the rates, and payable in the manner and on the
dates, specified in the Credit Agreement.

 

This Note is one of the Notes referred to in the Amended and Restated Credit
Agreement dated as of November 7, 2005, among the Borrower, the Guarantors party
thereto, the Lenders party thereto, and Bank of Montreal, Chicago Branch, as
Administrative Agent for the Lenders (the “Credit Agreement”), and this Note and
the holder hereof are entitled to all the benefits provided for thereby or
referred to therein, to which Credit Agreement reference is hereby made for a
statement thereof.  All defined terms used in this Note, except terms otherwise
defined herein, shall have the same meaning as in the Credit Agreement.  This
Note shall be governed by and construed in accordance with the internal laws of
the State of New York.

 

Voluntary prepayments may be made hereon, certain prepayments are required to be
made hereon, and this Note may be declared due prior to the expressed maturity
hereof, all in the events, on the terms and in the manner as provided for in the
Credit Agreement.

 

The Borrower hereby waives demand, presentment, protest or notice of any kind
hereunder.

 

 

LTC PROPERTIES, INC.

 

 

 

 

 

By

 

Name

 

 

Title

 

 

 

 

 

 

By

 

Name

 

 

Title

 

 

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

 

EXHIBIT E

 

BORROWING BASE CERTIFICATE

 

To:          Bank of Montreal, Chicago Branch, as
Administrative Agent under, and the
Lenders party to, the Credit Agreement
described below.

 

Pursuant to the terms of the Amended and Restated Credit Agreement dated as of
November 7, 2005, among us (the “Credit Agreement”), we submit this Borrowing
Base Certificate to you and certify that the information set forth below and on
any attachments to this Certificate is true, correct and complete as of the date
of this Certificate.

 

 

1.

Borrowing Base Value

$

 

 

 

 

 

2.

Line 1 multiplied by 50%

$

 

 

 

 

 

3.

Unsecured Debt (other than Obligations)

($             

)

 

 

 

 

4.

Borrowing Base (Line 2 minus by Line 3 above)

$

 

 

The Borrower represents and warrants that the aggregate principal amount of
Loans and L/C Obligations on the date hereof, including any Loans to be made or
Letters of Credit to be issued on the date hereof, do not exceed the Borrowing
Base set forth above.

 

The foregoing certifications, together with the computations set forth in
Schedule I hereto are made and delivered this                 day of
                               20    .

 

 

LTC PROPERTIES, INC.

 

 

 

By

 

Name

 

 

Title

 

 

 

 

By

 

Name

 

 

Title

 

 

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

 

SCHEDULE I

CALCULATIONS

 

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

 

EXHIBIT F

 

COMPLIANCE CERTIFICATE

 

To:          Bank of Montreal, Chicago Branch, as
Administrative Agent under, and the
Lenders party to, the Credit Agreement
described below

 

This Compliance Certificate is furnished to the Administrative Agent and the
Lenders pursuant to that certain Amended and Restated Credit Agreement dated as
of November 7, 2005, among us (the “Credit Agreement”).  Unless otherwise
defined herein, the terms used in this Compliance Certificate have the meanings
ascribed thereto in the Credit Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

1.             I am the duly elected                                 of
                                                   ;

 

2.             I have reviewed the terms of the Credit Agreement and I have
made, or have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;

 

3.             The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or the occurrence of any
event which constitutes a Default or Event of Default during or at the end of
the accounting period covered by the attached financial statements or as of the
date of this Compliance Certificate, except as set forth below;

 

4.             The financial statements required by Section 8.5 of the Credit
Agreement and being furnished to you concurrently with this Compliance
Certificate are true, correct and complete as of the date and for the periods
covered thereby; and

 

5.             The Schedule I hereto sets forth financial data and computations
evidencing the Borrower’s compliance with certain covenants of the Credit
Agreement, all of which data and computations are, to the best of my knowledge,
true, complete and correct and have been made in accordance with the relevant
Sections of the Credit Agreement.

 

Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:

 

 

 

 

The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this           day of
                                20     .

 

 

 

By

 

Name

 

 

Title

 

 

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

 

SCHEDULE I

 

TO COMPLIANCE CERTIFICATE

 

COMPLIANCE CALCULATIONS

 

FOR AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF NOVEMBER 7, 2005

 

CALCULATIONS AS OF                        ,            

 

A.

Maximum Total Indebtedness to Total Asset Value (Section 8.21(a))

 

 

 

 

1.

Total Indebtedness

 

$

 

 

 

2.

Total Asset Value

 

 

 

 

3.

Ratio of Line A1 to A2

 

     :1.0

 

 

4.

Line A3 ratio must not exceed

 

.50:1.0

 

 

5.

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

 

 

 

 

 

B.

Maximum Secured Debt to Total Asset Value (Section 8.21(b))

 

 

 

 

1.

Secured Debt

 

$

 

 

 

2.

Total Asset Value

 

 

 

 

3.

Ratio of Line B1 to B2

 

     :1.0

 

 

4.

Line B3 ratio must not exceed

 

.35:1.0

 

 

5.

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

 

 

 

 

 

C.

Minimum EBITDA to Interest Expense Ratio (Section 8.21(c))

 

 

 

 

1.

Net Income for the last 4 quarters

 

$

 

 

 

2.

Depreciation and Amortization Expense for last 4 quarters

 

 

 

 

3.

Interest Expense for last 4 quarters

 

 

 

 

4.

Income Tax Expense for last 4 quarters

 

 

 

 

5.

Extraordinary, unrealized or non-recurring losses, including impairment charges
and reserves for the last 4 quarters

 

 

 

 

6.

Sum of Lines C1 through C5

 

 

 

 

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

 

 

7.

The funds received by the Borrower’s Subsidiaries rent by which are reserved for
capital expenses for the last 4 quarters

 

 

 

 

8.

Unrealized gains of the sale of assets for the last 4 quarters

 

 

 

 

9.

Income tax benefits of the last 4 quarters

 

 

 

 

10.

Sum of Lines C6 through C8

 

 

 

 

11.

Line 6 minus Line 10 (“EBITDA”)

 

 

 

 

12.

Interest Expense

 

 

 

 

13.

Ratio of Line C12 to C11

 

       :1.0

 

 

14.

Line C13 ratio shall not be less than

 

2.50:1.0

 

 

15.

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

 

 

 

 

 

D.

Minimum EBITDA to Fixed Charges Ratio (Section 8.21(d))

 

 

 

 

1.

EBITDA

 

$

 

 

 

2.

Fixed Charges

 

 

 

 

3.

Ratio of Line D1 to D2

 

       :1.0

 

 

4.

Line D3 ratio shall not be less than

 

1.50:1.0

 

 

5.

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

 

 

 

 

 

E.

Maximum Secured Recourse Debt to Total Asset Value Ratio (Section 8.21(e))

 

 

 

 

1.

Secured Recourse Debt

 

$

 

 

 

2.

Total Asset Value

 

$

 

 

 

3.

Ratio of Line E1 to Line E2

 

     :1.0

 

 

4.

Line E3 shall not exceed

 

.10:1.0

 

 

5.

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

 

 

 

 

 

F.

Tangible Net Worth (Section 8.21(f))

 

 

 

 

1.

Tangible Net Worth

 

$

 

 

 

2.

Line F1 shall not be less than

 

$

 

 

 

3.

The Borrower is in compliance (circle yes or no)

 

Yes/no

 

 

2

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

 

G.

Floating Rate Debt (Section 8.21(g))

 

 

 

 

1.

Total Asset Value

 

$

 

 

 

2.

Percentage of Total Asset Value consisting of outstanding unhedged floating rate
debt

 

              %

 

 

3.

Line G2 shall not exceed

 

40%

 

 

4.

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

 

 

 

 

 

H.

Minimum Borrowing Base Value (Section 8.22(b))

 

 

 

 

1.

Borrowing Base Value

 

$

 

 

 

2.

Line H1 shall not be less than

 

$

50,000,000

 

 

3.

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

 

 

 

 

 

I.

Minimum Eligible Property NOI to Debt Service Ratio (Section 8.22(c))

 

 

 

 

1.

Eligible Property NOI

 

$

 

 

 

2.

pari passu Unsecured Debt Service plus Credit Facility Debt Service

 

$

 

 

 

3.

Ratio of Line I1 to I2

 

        :1.0

 

 

4.

Line I3 ratio shall not be less than

 

2.25:1.0

 

 

5.

The Borrower is in compliance (circle yes or no)

 

yes/no

 

 

3

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

 

EXHIBIT G

 

ADDITIONAL GUARANTOR SUPPLEMENT

 

                           ,     

 

Bank of Montreal, Chicago Branch, as Administrative Agent for the Lenders named
in the Amended and Restated Credit Agreement dated as of November 7, 2005, among
LTC Properties, Inc., as Borrower, the Guarantors referred to therein, the
Lenders from time to time party thereto, and the Administrative Agent (the
“Credit Agreement”)

 

Ladies and Gentlemen:

 

Reference is made to the Credit Agreement described above.  Terms not defined
herein which are defined in the Credit Agreement shall have for the purposes
hereof the meaning provided therein.

 

The undersigned, [name of Subsidiary Guarantor], a [jurisdiction of
incorporation or organization] hereby elects to be a “Guarantor” for all
purposes of the Credit Agreement, effective from the date hereof.  The
undersigned confirms that the representations and warranties set forth in
Section 6 of the Credit Agreement are true and correct as to the undersigned as
of the date hereof and the undersigned shall comply with each of the covenants
set forth in Section 8 of the Credit Agreement applicable to it.

 

Without limiting the generality of the foregoing, the undersigned hereby agrees
to perform all the obligations of a Guarantor under, and to be bound in all
respects by the terms of, the Credit Agreement, including without limitation
Section 12 thereof, to the same extent and with the same force and effect as if
the undersigned were a signatory party thereto.

 

The undersigned acknowledges that this Agreement shall be effective upon its
execution and delivery by the undersigned to the Administrative Agent, and it
shall not be necessary for the Administrative Agent or any Lender, or any of
their Affiliates entitled to the benefits hereof, to execute this Agreement or
any other acceptance hereof.  This Agreement shall be construed in accordance
with and governed by the internal laws of the State of New York.

 

 

Very truly yours,

 

 

 

[NAME OF SUBSIDIARY GUARANTOR]

 

 

 

 

 

By

 

Name

 

 

 

Title

 

 

 

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

 

EXHIBIT H

 

ASSIGNMENT AND ACCEPTANCE

 

Dated              ,       

 

Reference is made to the Amended and Restated Credit Agreement dated as of
November 7, 2005 (the ”Credit Agreement”) among LTC Properties, Inc., the
Guarantors party thereto, the Lenders party thereto, and Bank of Montreal,
Chicago Branch, as Administrative Agent for the Lenders (the “Administrative
Agent”).  Terms defined in the Credit Agreement are used herein with the same
meaning.

 

                                                                                                            
(the “Assignor”) and                                            (the “Assignee”)
agree as follows:

 

1.             The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a                    %
interest in and to all of the Assignor’s rights and obligations under the Credit
Agreement as of the Effective Date (as defined below), including, without
limitation, such percentage interest in the Assignor’s Commitments as in effect
on the Effective Date and the Loans, if any, owing to the Assignor on the
Effective Date and the Assignor’s Percentage of any outstanding L/C Obligations.

 

2.             The Assignor (i) represents and warrants that as of the date
hereof (A) its Credit Commitment is $                       , (B) the aggregate
outstanding principal amount of Loans made by it under the Credit Agreement that
have not been repaid is $                       , and (C) the aggregate
principal amount of Assignor’s Percentage of outstanding L/C Obligations is
$                       ; (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim, lien, or encumbrance of any
kind; (iii) makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower or any Subsidiary of any of their respective
obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto.

 

3.             The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered to the Lenders pursuant to Section 8.5(b) and (c) thereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to

 

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

 

enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) appoints and authorizes the
Administrative Agent to take such action as Administrative Agent on its behalf
and to exercise such powers under the Credit Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (iv) agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as a
Lender; and (v) specifies as its lending office (and address for notices) the
offices set forth beneath its name on the signature pages hereof.

 

4.             As consideration for the assignment and sale contemplated in
Annex 1 hereof, the Assignee shall pay to the Assignor on the Effective Date in
Federal funds an amount equal to $                       *.  It is understood
that commitment and/or letter of credit fees accrued to the Effective Date with
respect to the interest assigned hereby are for the account of the Assignor and
such fees accruing from and including the date hereof are for the account of the
Assignee.  Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of the
other party hereto, it shall receive the same for the account of such other
party to the extent of such other party’s interest therein and shall promptly
pay the same to such other party.

 

5.             The effective date for this Assignment and Acceptance shall be
                        (the “Effective Date”).  Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent and, if required, the
Borrower.

 

6.             Upon such acceptance and recording, as of the Effective Date,
(i) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.

 

7.             Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments under the Credit
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee.  The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Effective Date directly between themselves.

 

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

*      Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any portion of
any upfront fee to be paid by the Assignor to the Assignee.  It may be
preferable in an appropriate case to specify these amounts generically or by
formula rather than as a fixed sum.

 

2

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

 

8.             In accordance with Section 13.12 of the Credit Agreement, the
Assignor and the Assignee request and direct that the Administrative Agent
prepare and cause the Borrower to execute and deliver to the Assignee the
relevant Notes payable to the Assignee in the amount of its Commitments and new
Notes to the Assignor in the amount of its Commitments after giving effect to
this assignment.

 

9.             This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Illinois.

 

 

[Assignor Lender]

 

 

 

 

 

By

 

 

Name

 

 

 

 

Title

 

 

 

 

 

[Assignee Lender]

 

 

 

 

 

By

 

 

Name

 

 

 

 

Title

 

 

 

 

 

Lending office (and address for notices):

Accepted and consented this

 

         day of              

 

 

 

 

 

By

 

 

 

 

Name

 

 

 

 

Title

 

 

 

 

 

Accepted and consented to by the Administrative

 

Agent and L/C Issuer this        day of          

 

 

 

BANK OF MONTREAL, Chicago Branch, as

 

Administrative Agent and L/C Issuer

 

 

 

By

 

 

 

 

Name

 

 

 

 

Title

 

 

 

 

3

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

 

EXHIBIT I

 

OPINION OF COUNSEL

 

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

 

ANNEX I

 

TO ASSIGNMENT AND ACCEPTANCE

 

 

 

PRINCIPAL AMOUNT

 

TYPE OF LOAN

 

INTEREST RATE

 

MATURITY DATE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SCHEDULE 1.0

 

COMMITMENTS

 

NAME OF LENDER

 

CREDIT COMMITMENT

 

 

 

 

 

Bank of Montreal, Chicago Branch

 

$

30,000,000

 

 

 

 

 

Key Bank National Association, as successor in interest to Key Corporate
Capital Inc.

 

$

30,000,000

 

 

 

 

 

Merrill Lynch Capital, a Division of Merrill Lynch Business Financial Services
Inc.

 

$

20,000,000

 

 

 

 

 

Bank Leumi USA

 

$

10,000,000

 

 

 

 

 

TOTAL

 

$

90,000,000

 

 

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

 

SCHEDULE 1.1

 

INITIAL PROPERTIES, INITIAL INVESTMENT AMOUNT
AND INITIAL BORROWING BASE VALUE

 

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

 

SCHEDULE 6.2

 

SUBSIDIARIES

 

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

 

SCHEDULE 6.26

 

SIGNIFICANT LEASES

 

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