EXHIBIT 10.3

 

 

 

 

 

 

 

 

 

LTC PROPERTIES, INC.

 

 

 

 

 

$85,800,000 5.03% SENIOR NOTES DUE JULY 19, 2024

 

 

 

 

 

 

 

 

NOTE PURCHASE AGREEMENT

 

 

 

 

 

 

 

 

 

As of July 19, 2012

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

AUTHORIZATION OF NOTES

1

 

 

 

 

 

2.

SALE AND PURCHASE OF NOTES

1

 

 

 

 

 

3.

CLOSING

1

 

 

 

 

 

4.

CONDITIONS TO CLOSING

2

 

 

 

 

 

 

 

4.1.

Representations and Warranties

2

 

 

 

 

 

 

 

 

 

4.2.

Performance; No Default

2

 

 

 

 

 

 

 

 

 

4.3.

Compliance Certificates

2

 

 

 

 

 

 

 

 

 

4.4.

Opinions of Counsel

3

 

 

 

 

 

 

 

 

 

4.5.

Purchase Permitted By Applicable Law, Etc.

3

 

 

 

 

 

 

 

 

 

4.6.

Sale of Other Notes

4

 

 

 

 

 

 

 

 

 

4.7.

Payment of Special Counsel Fees

4

 

 

 

 

 

 

 

 

 

4.8.

Private Placement Number

4

 

 

 

 

 

 

 

 

 

4.9.

Changes in Corporate Structure

4

 

 

 

 

 

 

 

 

 

4.10.

Funding Instructions

4

 

 

 

 

 

 

 

 

 

4.11.

Certain Other Financing Documents

4

 

 

 

 

 

 

 

 

 

4.12.

Proceedings and Documents

4

 

 

 

 

 

 

 

5.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

5

 

 

 

 

 

 

 

 

 

5.1.

Organization; Power and Authority

5

 

 

 

 

 

 

 

 

 

5.2.

Authorization, Etc.

5

 

 

 

 

 

 

 

 

 

5.3.

Disclosure

5

 

 

 

 

 

 

 

 

 

5.4.

Organization and Ownership of Equity in Subsidiaries; Affiliates

6

 

 

 

 

 

 

 

 

 

5.5.

Financial Statements; Material Liabilities

6

 

 

 

 

 

 

 

 

 

5.6.

Compliance with Laws; Other Instruments, Etc.

7

 

 

 

 

 

 

 

 

 

5.7.

Governmental Authorizations, Etc.

7

 

 

 

 

 

 

 

 

 

5.8.

Litigation; Observance of Agreements, Statutes and Orders

7

 

 

 

 

 

 

 

 

 

5.9.

Taxes

8

 

 

 

 

 

 

 

 

 

5.10.

Title to Property; Leases

8

 

 

 

 

 

 

 

 

 

5.11.

Licenses, Permits, Etc.

9

 

 

 

 

 

 

 

 

 

5.12.

Compliance with ERISA

9

 

 

 

 

 

 

 

 

 

5.13.

Private Offering by the Company

10

 

 

 

 

 

 

 

 

 

5.14.

Use of Proceeds; Margin Regulations

10

 

 

 

 

 

 

 

 

 

5.15.

Existing Indebtedness; Future Liens

10

 

 

i

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TABLE OF CONTENTS

(continued)

 

 

 

 

 

Page

 

 

 

 

 

 

 

5.16.

Foreign Assets Control Regulations, Etc.

11

 

 

 

 

 

 

 

 

 

5.17.

Status under Certain Statutes

12

 

 

 

 

 

 

 

 

 

5.18.

Environmental Matters

12

 

 

 

 

 

 

 

 

 

5.19.

Stock of the Company

13

 

 

 

 

 

 

 

 

 

5.20.

Condition of Property; Casualties; Condemnation

13

 

 

 

 

 

 

 

 

 

5.21.

Legal Requirements and Zoning

14

 

 

 

 

 

 

 

 

 

5.22.

Solvency

14

 

 

 

 

 

 

 

 

 

5.23.

Hostile Tender Offers

14

 

 

 

 

 

 

 

 

 

5.24.

UAP Properties

14

 

 

 

 

 

 

 

6.

REPRESENTATIONS OF THE PURCHASERS

14

 

 

 

 

 

 

 

 

 

6.1.

Purchase for Investment

14

 

 

 

 

 

 

 

 

 

6.2.

Source of Funds

14

 

 

 

 

 

 

 

7.

INFORMATION AS TO THE COMPANY

16

 

 

 

 

 

 

 

 

 

7.1.

Financial and Business Information

16

 

 

 

 

 

 

 

 

 

7.2.

Officer’s Certificate

18

 

 

 

 

 

 

 

 

 

7.3.

Visitation

19

 

 

 

 

 

 

 

8.

PAYMENT AND PREPAYMENT OF THE NOTES

19

 

 

 

 

 

 

 

 

 

8.1.

Required Prepayments

19

 

 

 

 

 

 

 

 

 

8.2.

Optional Prepayments with Make-Whole Amount

19

 

 

 

 

 

 

 

 

 

8.3.

Prepayments in Connection with a Change of Control

20

 

 

 

 

 

 

 

 

 

8.4.

Allocation of Partial Prepayments

21

 

 

 

 

 

 

 

 

 

8.5.

Maturity; Surrender, Etc.

21

 

 

 

 

 

 

 

 

 

8.6.

Purchase of Notes

21

 

 

 

 

 

 

 

 

 

8.7.

Make-Whole Amount

22

 

 

 

 

 

 

 

9.

AFFIRMATIVE COVENANTS

23

 

 

 

 

 

 

 

 

 

9.1.

Compliance with Law

23

 

 

 

 

 

 

 

 

 

9.2.

Insurance

24

 

 

 

 

 

 

 

 

 

9.3.

Maintenance of Properties

24

 

 

 

 

 

 

 

 

 

9.4.

Payment of Taxes and Claims

24

 

 

 

 

 

 

 

 

 

9.5.

Corporate Existence, Etc.

25

 

 

 

 

 

 

 

 

 

9.6.

Books and Records

25

 

 

 

 

 

 

 

 

 

9.7.

Maintenance of REIT Status

25

 

 

ii

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TABLE OF CONTENTS

(continued)

 

 

 

 

 

Page

 

 

 

 

 

 

 

 

9.8.

Additional Guarantors

25

 

 

 

 

 

 

 

 

 

9.9.

UAP Properties

25

 

 

 

 

 

 

 

 

 

9.10.

Most Favored Lender

26

 

 

 

 

 

 

 

10.

NEGATIVE COVENANTS

27

 

 

 

 

 

 

 

 

 

10.1.

Liens, Etc.

27

 

 

 

 

 

 

 

 

 

10.2.

Investments, Acquisitions, Loans and Advances

27

 

 

 

 

 

 

 

 

 

10.3.

Mergers, Consolidations and Sales

29

 

 

 

 

 

 

 

 

 

10.4.

Maintenance of Subsidiaries

30

 

 

 

 

 

 

 

 

 

10.5.

No Burdensome Contracts With Affiliates

30

 

 

 

 

 

 

 

 

 

10.6.

Change in the Nature of Business

30

 

 

 

 

 

 

 

 

 

10.7.

Use of Proceeds of Notes

30

 

 

 

 

 

 

 

 

 

10.8.

No Restrictions

30

 

 

 

 

 

 

 

 

 

10.9.

Financial Covenants

31

 

 

 

 

 

 

 

 

 

10.10.

Terrorism Sanctions Regulations

32

 

 

 

 

 

 

 

 

 

10.11.

Redemption of Stock, Etc.

32

 

 

 

 

 

 

 

11.

EVENTS OF DEFAULT

32

 

 

 

 

 

 

 

12.

REMEDIES ON DEFAULT, ETC.

35

 

 

 

 

 

 

 

 

 

12.1.

Acceleration

35

 

 

 

 

 

 

 

 

 

12.2.

Other Remedies

35

 

 

 

 

 

 

 

 

 

12.3.

Rescission

35

 

 

 

 

 

 

 

 

 

12.4.

No Waivers or Election of Remedies, Expenses, Etc.

36

 

 

 

 

 

 

 

13.

REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

36

 

 

 

 

 

 

 

 

 

13.1.

Registration of Notes

36

 

 

 

 

 

 

 

 

 

13.2.

Transfer and Exchange of Notes

36

 

 

 

 

 

 

 

 

 

13.3.

Replacement of Notes

37

 

 

 

 

 

 

 

14.

PAYMENTS ON NOTES

37

 

 

 

 

 

 

 

 

 

14.1.

Place of Payment

37

 

 

 

 

 

 

 

 

 

14.2.

Home Office Payment

38

 

 

 

 

 

 

 

15.

EXPENSES, ETC.

38

 

 

 

 

 

 

 

 

 

15.1.

Transaction Expenses

38

 

 

 

 

 

 

 

 

 

15.2.

Survival

39

 

 

iii

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TABLE OF CONTENTS

(continued)

 

 

 

 

 

Page

 

 

 

 

 

 

16.

SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT

39

 

 

 

 

 

 

 

17.

Amendment And Waiver

39

 

 

 

 

 

 

 

 

 

17.1.

Requirements

39

 

 

 

 

 

 

 

 

 

17.2.

Solicitation of Holders of Notes

39

 

 

 

 

 

 

 

 

 

17.3.

Binding Effect, Etc.

40

 

 

 

 

 

 

 

 

 

17.4.

Notes Held by Company, Etc.

40

 

 

 

 

 

 

 

18.

NOTICES

41

 

 

 

 

 

 

 

19.

REPRODUCTION OF DOCUMENTS

41

 

 

 

 

 

 

 

20.

MULTIPARTY GUARANTY

41

 

 

 

 

 

 

 

 

 

20.1.

Unconditional Guaranty

42

 

 

 

 

 

 

 

 

 

20.2.

Subrogation

44

 

 

 

 

 

 

 

 

 

20.3.

Amendments, Etc. with Respect to Guaranteed Obligations

44

 

 

 

 

 

 

 

 

 

20.4.

Guaranty Absolute and Unconditional; Termination

44

 

 

 

 

 

 

 

 

 

20.5.

Reinstatement

46

 

 

 

 

 

 

 

 

 

20.6.

Payments

46

 

 

 

 

 

 

 

 

 

20.7.

Bound by Other Provisions

46

 

 

 

 

 

 

 

 

 

20.8.

Additional Guarantors

46

 

 

 

 

 

 

 

21.

CONFIDENTIALITY

47

 

 

 

 

 

 

 

22.

SUBSTITUTION OF PURCHASER

48

 

 

 

 

 

 

 

23.

MISCELLANEOUS

48

 

 

 

 

 

 

 

 

 

23.1.

Successors and Assigns

48

 

 

 

 

 

 

 

 

 

23.2.

Payments Due on Non-Business Days

48

 

 

 

 

 

 

 

 

 

23.3.

Accounting Terms

48

 

 

 

 

 

 

 

 

 

23.4.

Severability

49

 

 

 

 

 

 

 

 

 

23.5.

Construction, Etc.

49

 

 

 

 

 

 

 

 

 

23.6.

Counterparts

49

 

 

 

 

 

 

 

 

 

23.7.

Governing Law

49

 

 

 

 

 

 

 

 

 

23.8.

Jurisdiction and Process; Waiver of Jury Trial

50

 

 

iv

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Schedule A

 

--

 

Information Relating to Purchasers

 

 

 

 

 

Schedule B

 

--

 

Defined Terms

 

 

 

 

 

Schedule 5.3

 

--

 

Disclosure Materials

 

 

 

 

 

Schedule 5.4

 

--

 

Subsidiaries of the Company and Ownership of Subsidiary Stock

 

 

 

 

 

Schedule 5.5

 

--

 

Financial Statements

 

 

 

 

 

Schedule 5.10(c)

 

--

 

Significant Leases

 

 

 

 

 

Schedule 5.15

 

--

 

Existing Indebtedness for Borrowed Money

 

 

 

 

 

Schedule 5.24

 

--

 

UAP Properties

 

 

 

 

 

Schedule 10.2

 

--

 

Existing Investments

 

 

 

 

 

Exhibit 1

 

--

 

Form of 5.03% Senior Note due July 19, 2024

 

 

 

 

 

Exhibit 4.4(a)

 

--

 

Form of Opinion of Special Counsel for the Credit Parties

 

 

 

 

 

Exhibit 4.4(b)

 

--

 

Form of Opinion of Special Maryland Counsel for the Credit Parties

 

 

 

 

 

Exhibit 4.4(c)

 

--

 

Form of Opinion of Special Texas Counsel for the Credit Parties

 

 

 

 

 

Exhibit 4.4(d)

 

--

 

Form of Opinion of Special Nevada Counsel for the Credit Parties

 

 

 

 

 

Exhibit 4.4(e)

 

--

 

Form of Opinion of Special North Carolina Counsel for the Credit Parties

 

 

 

 

 

Exhibit 4.4(f)

 

--

 

Form of Opinion of Special Counsel for the Purchasers

 

 

 

 

 

Exhibit 20.8

 

--

 

Form of Joinder to Multiparty Guaranty

 

v

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LTC PROPERTIES, INC.

2829 Townsgate Road, Suite 350

Westlake Village, California 91361

 

 

$85,800,000 5.03% Senior Notes due July 19, 2024

 

 

As of July 19, 2012

 

 

To Each of The Purchasers Listed in

Schedule A Hereto:

 

Ladies and Gentlemen:

 

Each of the undersigned, LTC Properties, Inc., a Maryland corporation (the
“Company”), and certain direct and indirect Subsidiaries of the Company from
time to time party to this Agreement, as Guarantors, agrees with each of the
purchasers whose names appear at the end hereof (each, a “Purchaser” and,
collectively, the “Purchasers”) as follows:

 

1.                                    AUTHORIZATION OF NOTES.

 

The Company will authorize the issuance and sale of $85,800,000 aggregate
principal amount of its 5.03% Senior Notes due July 19, 2024 (as amended,
restated, supplemented or otherwise modified from time to time, the “Notes”,
such term to include any such notes issued in substitution therefor pursuant to
Section 13).  The Notes shall be substantially in the form set out in
Exhibit 1.  Certain capitalized and other terms used in this Agreement are
defined in Schedule B; and references to a “Schedule” or an “Exhibit” are,
unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.

 

2.                                    SALE AND PURCHASE OF NOTES.

 

Subject to the terms and conditions of this Agreement, the Company will issue
and sell to each Purchaser and each Purchaser will purchase from the Company, at
the Closing provided for in Section 3, Notes in the principal amount specified
opposite such Purchaser’s name in Schedule A at the purchase price of 100% of
the principal amount thereof.  The Purchasers’ obligations hereunder are several
and not joint obligations and no Purchaser shall have any liability to any
Person for the performance or non-performance of any obligation by any other
Purchaser hereunder.

 

3.                                    CLOSING.

 

The sale and purchase of the Notes to be purchased by each Purchaser shall occur
at the offices of Bingham McCutchen LLP, Three Embarcadero Center, San
Francisco, California 94111, at 10:00 a.m., California time, at a closing (the
“Closing”) on July 19, 2012.  At the Closing the Company will deliver to each
Purchaser the Notes to be purchased by such Purchaser

 

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in the form of a single Note (or such greater number of Notes in denominations
of at least $100,000 as such Purchaser may request) dated the date of the
Closing and registered in such Purchaser’s name (or in the name of its nominee),
against delivery by such Purchaser to the Company or its order of immediately
available funds in the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company c/o Harris N.A., at
ABA 071000288, Account Number 317-4554, OBI - LTC Properties, Inc.  If at the
Closing the Company shall fail to tender such Notes to any Purchaser as provided
above in this Section 3, or any of the conditions specified in Section 4 shall
not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall,
at its election, be relieved of all further obligations under this Agreement,
without thereby waiving any rights such Purchaser may have by reason of such
failure or such nonfulfillment.

 

4.                                    CONDITIONS TO CLOSING.

 

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such
Purchaser at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, prior to or at the Closing, of the following conditions:

 

4.1.      Representations and Warranties.

 

The representations and warranties of the Credit Parties in this Agreement shall
be correct when made and at the time of the Closing.

 

4.2.      Performance; No Default.

 

Each of the Credit Parties shall have performed and complied with all agreements
and conditions contained in this Agreement required to be performed or complied
with by it prior to or at the Closing, and after giving effect to the issuance
and sale of the Notes (and the application of the proceeds thereof as
contemplated by Section 5.14) no Default or Event of Default shall have occurred
and be continuing.  Neither the Company nor any Subsidiary shall have entered
into any transaction since the date of the Memorandum that would have been
prohibited by Sections 10.1, 10.2, 10.3, 10.4, 10.5, 10.9 or 10.10 had such
Sections applied since such date.

 

4.3.      Compliance Certificates.

 

(a)        Officer’s Certificate.  The Company shall have delivered to such
Purchaser an Officer’s Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

 

(b)        Secretary’s Certificate.  Each Credit Party shall have delivered to
such Purchaser a certificate of its Secretary or Assistant Secretary, dated the
date of Closing, certifying as to the resolutions attached thereto and other
corporate or similar proceedings relating to the authorization, execution and
delivery of the Transaction Documents to which such Credit Party is a party
(including, in the case of such resolutions of the Company, the issuance,
execution and delivery of the Notes by the Company).

 

2

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4.4.      Opinions of Counsel.

 

Such Purchaser shall have received opinions in form and substance satisfactory
to such Purchaser, dated the date of the Closing (a) from Weil Gotshal & Manges,
LLP, counsel for the Credit Parties, covering the matters set forth in
Exhibit 4.4(a) and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or its counsel may reasonably request (and
the Company hereby instructs such counsel to deliver such opinion to the
Purchasers), (b) from Ballard Spahr LLP, special Maryland counsel for the Credit
Parties, covering the matters set forth in Exhibit 4.4(b) and covering such
other matters incident to the transactions contemplated hereby as such Purchaser
or its counsel may reasonably request (and the Company hereby instructs such
counsel to deliver such opinion to the Purchasers); (c) from Fulbright &
Jaworski L.L.P., special Texas counsel for the Credit Parties, covering the
matters set forth in Exhibit 4.4(c) and covering such other matters incident to
the transactions contemplated hereby as such Purchaser or its counsel may
reasonably request (and the Company hereby instructs such counsel to deliver
such opinion to the Purchasers), (d) Brownstein Hyatt Farber Schreck, LLP,
special Nevada counsel for the Credit Parties, covering the matters set forth in
Exhibit 4.4(d) and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or its counsel may reasonably request (and
the Company hereby instructs such counsel to deliver such opinion to the
Purchasers), (e) Parker Poe Adams & Bernstein LLP, special North Carolina
counsel for the Credit Parties, covering the matters set forth in
Exhibit 4.4(e) and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or its counsel may reasonably request (and
the Company hereby instructs such counsel to deliver such opinion to the
Purchasers) and (f) from Bingham McCutchen LLP, the Purchasers’ special counsel
in connection with such transactions, substantially in the form set forth in
Exhibit 4.4(f) and covering such other matters incident to such transactions as
such Purchaser may reasonably request.

 

4.5.      Purchase Permitted By Applicable Law, Etc.

 

On the date of the Closing such Purchaser’s purchase of Notes shall (a) be
permitted by the laws and regulations of each jurisdiction to which such
Purchaser is subject, without recourse to provisions (such as section
1405(a)(8) of the New York Insurance Law) permitting limited investments by
insurance companies without restriction as to the character of the particular
investment, (b) not violate any applicable law or regulation (including, without
limitation, Regulation T, U or X of the Board of Governors of the Federal
Reserve System), and (c) not subject such Purchaser to any tax, penalty or
liability under or pursuant to any applicable law or regulation, which law or
regulation was not in effect on the date hereof.  If requested by such
Purchaser, such Purchaser shall have received an Officer’s Certificate
certifying as to such matters of fact as such Purchaser may reasonably specify
to enable such Purchaser to determine whether such purchase is so permitted.

 

3

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4.6.      Sale of Other Notes.

 

Contemporaneously with the Closing the Company shall sell to each other
Purchaser and each other Purchaser shall purchase the Notes to be purchased by
it at the Closing as specified in Schedule A.

 

4.7.      Payment of Special Counsel Fees.

 

Without limiting the provisions of Section 15.1, the Company shall have paid on
or before the Closing the fees, charges and disbursements of the Purchasers’
special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.

 

4.8.      Private Placement Number.

 

A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in
cooperation with the SVO) shall have been obtained for the Notes.

 

4.9.      Changes in Corporate Structure.

 

The Company shall not have changed its jurisdiction of incorporation or been a
party to any merger or consolidation or succeeded to all or any substantial part
of the liabilities of any other entity, at any time following the date of the
most recent financial statements referred to in Schedule 5.5.

 

4.10.    Funding Instructions.

 

At least three Business Days prior to the date of the Closing, each Purchaser
shall have received written instructions signed by a Responsible Officer of the
Company on letterhead of the Company confirming the information specified in
Section 3 including (i) the name and address of the transferee bank, (ii) such
transferee bank’s ABA number and (iii) the account name and number into which
the purchase price for the Notes is to be deposited.

 

4.11.    Certain Other Financing Documents.

 

Such Purchaser shall have received fully executed copies of:  (a) the Credit
Agreement and all existing amendments or other modifications thereof and (b) the
Prudential Note Agreement and all existing amendments or other modifications
thereof.

 

4.12.    Proceedings and Documents.

 

All corporate, organizational and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be reasonably satisfactory to such Purchaser
and its special counsel, and such Purchaser and its special counsel shall have
received all such counterpart originals or certified or other copies of such
documents as such Purchaser or such special counsel may reasonably request.

 

4

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5.                                    REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.

 

The Company represents and warrants to each Purchaser that:

 

5.1.      Organization; Power and Authority.

 

Each Credit Party is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal
entity and is in good standing in each jurisdiction in which such qualification
is required by law, other than those jurisdictions as to which the failure to be
so qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.  Each Credit Party has
the requisite power and authority to own or hold under lease the Properties it
purports to own or hold under lease, to transact the business it transacts and
proposes to transact, to execute and deliver the Transaction Documents to which
it is a party and to perform the provisions of such Transaction Documents which
it is required to perform.  The Company is organized in conformity with the
requirements for qualification as a REIT under the Code, and its method of
operation enables it to meet the requirements for qualification and taxation as
a REIT under the Code.

 

5.2.      Authorization, Etc.

 

This Agreement, the Notes and the other Transaction Documents to which any
Credit Party is a party have been duly authorized by all necessary action on the
part of such Credit Party, and each of this Agreement and such other Transaction
Documents (other than the Notes) constitutes, and upon execution and delivery
thereof each Note will constitute, a legal, valid and binding obligation of each
Credit Party that is party to such Transaction Document enforceable against such
Credit Party in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally, and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

5.3.      Disclosure.

 

The Company, through its agents, RBC Capital Markets, LLC and Wells Fargo
Securities, LLC, has delivered to each Purchaser a copy of a Private Placement
Memorandum, dated June 2012 (the “Memorandum”), relating to the transactions
contemplated hereby.  The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Company and
its Subsidiaries.  This Agreement, the Memorandum and the documents,
certificates or other writings delivered to the Purchasers by or on behalf of
the Company or the other Credit Parties in connection with the transactions
contemplated hereby and identified in Schedule 5.3, and the financial statements
listed in Schedule 5.5 (this Agreement, the Memorandum and such documents,
certificates or other writings and such financial statements delivered to each
Purchaser prior to June 27, 2012 being referred to, collectively, as the
“Disclosure Documents”), taken as a whole, do not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made.  As to any projections furnished to the Purchasers, the Company
only represents that the same were

 

5

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prepared on the basis of information and estimates the Company believed to be
reasonable at the time of the preparation and delivery thereof.  Except as
disclosed in the Disclosure Documents, since December 31, 2011, there has been
no change in the financial condition, operations, business, Properties or
prospects of the Company or any Subsidiary except changes that individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect.  There is no fact known to the Company that could reasonably be expected
to have a Material Adverse Effect that has not been set forth herein or in the
Disclosure Documents.

 

5.4.      Organization and Ownership of Equity in Subsidiaries; Affiliates.

 

(a)        Schedule 5.4 contains complete and correct lists as of the date
hereof (i) of the Company’s Subsidiaries, showing, as to each such Person, the
correct name thereof, the jurisdiction of its organization, the percentage of
shares of each class of its capital stock or similar equity interests
outstanding owned by the Company 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 or units of each class issued and
outstanding, (ii) of each of the Company’s Affiliates, other than such Person’s
Subsidiaries and other than the other Credit Parties, and (iii) of the Company’s
directors and senior officers.

 

(b)        All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).

 

(c)        Each Subsidiary (other than the Credit Parties) is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the Properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.

 

(d)        No Subsidiary is a party to, or otherwise subject to any legal,
regulatory, contractual or other restriction (other than this Agreement, the
agreements listed on Schedule 5.4 and customary limitations imposed by corporate
law or similar statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Subsidiary.

 

5.5.      Financial Statements; Material Liabilities.

 

The Company has delivered to each Purchaser copies of the financial statements
of the Company and its Subsidiaries listed on Schedule 5.5.  All of said
financial statements (including

 

6

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in each case the related schedules and notes) fairly present in all material
respects the consolidated financial condition of the Company and its
Subsidiaries as of the respective dates specified in such Schedule and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).  The Company and its Subsidiaries do not have any Material
liabilities that are not disclosed on such financial statements or otherwise
disclosed in the Disclosure Documents.

 

5.6.      Compliance with Laws; Other Instruments, Etc.

 

(a)        The execution, delivery and performance by each Credit Party of the
Transaction Documents to which it is a party will not (i) contravene, result in
any breach of, or constitute a default under, or result in the creation of any
Lien in respect of any Property of any Credit Party or any of its Subsidiaries
under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter (or similar constitutive documents) or
bylaws (or similar documents), or any other agreement or instrument to which any
Credit Party or any of its Subsidiaries is bound or by which any Credit Party or
any of its Subsidiaries or any of their respective Properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to any Credit Party or any of
its Subsidiaries, or (iii) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to any Credit Party or any
of its Subsidiaries.

 

(b)        Neither the Company 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.

 

5.7.      Governmental Authorizations, Etc.

 

No consent, approval or authorization of, or registration, filing or declaration
with, any Governmental Authority is required in connection with the execution,
delivery or performance by any Credit Party of this Agreement, the Notes or the
other Transaction Documents to which such Person is a party.

 

5.8.      Litigation; Observance of Agreements, Statutes and Orders.

 

(a)        There are no actions, suits, investigations or proceedings pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any Subsidiary or any Property of the Company or any Subsidiary in any court
or before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

(b)        Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in

 

7

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violation of any applicable law, ordinance, rule or regulation (including
without limitation Environmental Laws or the USA Patriot Act, or any of the
other laws and regulations referred to in Section 5.16) of any Governmental
Authority, which default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

5.9.      Taxes.

 

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

 

5.10.    Title to Property; Leases.

 

(a)        The Company and its Subsidiaries have good and sufficient title to
their respective Properties (other than Properties which are leased) that
individually or in the aggregate are Material, including all such Properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement.

 

(b)        [Intentionally Omitted].

 

(c)        Schedule 5.10(c) identifies, as of the date hereof, each Significant
Lease, the Property which is demised pursuant to each Significant Lease and the
name of each landlord and lessee under each Significant Lease.  Except as set
forth on Schedule 5.10(c), as of the date hereof:  (x) none of the tenants under
Significant Leases on Properties owned by the Company, Material Subsidiaries or
any other Subsidiary of the Company was (as of such date or at any other time
during the Fiscal Quarter beginning immediately prior to such date) in default
for a period in excess of 60 days on the monthly minimum rent payments due under
such Significant Leases, and (y) no other tenants on other Leases that in the
aggregate generate more than $6,000,000 in annual minimum rents payable to the
Company or its Subsidiaries were (as of such date or at any other time during
the Fiscal Quarter beginning immediately prior to such date) in default for a
period in excess of 60 days on the monthly minimum rent payments due under such
Leases.

 

8

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5.11.    Licenses, Permits, Etc.

 

(a)        The Company and its Subsidiaries own or possess all of their
respective licenses, permits, franchises, authorizations, patents, copyrights,
proprietary software, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material, without known
conflict with the rights of others.

 

(b)        To the best knowledge of the Company, no product of the Company or
any of its Subsidiaries infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, proprietary software, service mark,
trademark, trade name or other right owned by any other Person.

 

(c)        To the best knowledge of the Company, there is no Material violation
by any Person of any right of the Company or any of its Subsidiaries with
respect to any patent, copyright, proprietary software, service mark, trademark,
trade name or other right owned or used by the Company or any of its
Subsidiaries.

 

5.12.    Compliance with ERISA.

 

(a)        The Company and each ERISA Affiliate have operated and administered
each Plan in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect.  Neither the Company nor any ERISA
Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee benefit plans
(as defined in section 3 of ERISA), and no event, transaction or condition has
occurred or exists that could reasonably be expected to result in the incurrence
of any such liability by the Company or any ERISA Affiliate, or in the
imposition of any Lien on any of the rights, properties or assets of the Company
or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to
such penalty or excise tax provisions or to section 430 or 436 of the Code or
section 4068 of ERISA, other than such liabilities or Liens as would not be
individually or in the aggregate Material.

 

(b)        The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan’s most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities.  The term “benefit liabilities” has the
meaning specified in section 4001 of ERISA and the terms “current value” and
“present value” have the meaning specified in section 3 of ERISA.

 

(c)        The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.

 

9

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(d)        The expected postretirement benefit obligation (determined as of the
last day of the Company’s most recently ended fiscal year in accordance with
Accounting Standards Codification 715-60 (formerly known as Financial Accounting
Standards Board Statement No. 106), without regard to liabilities attributable
to continuation coverage mandated by section 4980B of the Code) of the Company
and its Subsidiaries is not Material.

 

(e)        The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.  The
representation by the Company to each Purchaser in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of such
Purchaser’s representation in Section 6.2 as to the sources of the funds used to
pay the purchase price of the Notes to be purchased by such Purchaser.

 

5.13.    Private Offering by the Company.

 

Neither the Company nor anyone acting on its behalf has offered the Notes or any
similar securities for sale to, or solicited any offer to buy any of the same
from, or otherwise approached or negotiated in respect thereof with, any person
other than the Purchasers and not more than 65 other Institutional Investors (as
defined in clause (c) to the definition of such term), each of which has been
offered the Notes at a private sale for investment.  Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act or to the registration requirements of any
securities or blue sky laws of any applicable jurisdiction.

 

5.14.    Use of Proceeds; Margin Regulations.

 

The Company will apply the proceeds of the sale of the Notes as set forth in
Section 1.4 of the Memorandum.  No part of the proceeds from the sale of the
Notes hereunder will be used, directly or indirectly, for the purpose of buying
or carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220).  Margin stock does not constitute more than 5% of the value of the
consolidated assets of the Company and its Subsidiaries and the Company does not
have any present intention that margin stock will constitute more than 5% of the
value of such assets.  As used in this Section, the terms “margin stock” and
“purpose of buying or carrying” shall have the meanings assigned to them in said
Regulation U.

 

5.15.    Existing Indebtedness; Future Liens.

 

(a)        Except as described therein, Schedule 5.15 sets forth a complete and
correct list of all outstanding Indebtedness for Borrowed Money of the Company
and its Subsidiaries as of June 30, 2012 (including a description of the
obligors and obligees,

 

10

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principal amount outstanding and collateral therefor, if any, and Guaranties
thereof, if any), since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Indebtedness for Borrowed Money of the Company or any of its Subsidiaries
except as otherwise set forth in Section 1.4 of the Memorandum.  Neither the
Company nor any Subsidiary is in default, and no waiver of default is currently
in effect, in the payment of any principal or interest on any Indebtedness for
Borrowed Money of the Company or such Subsidiary and no event or condition
exists with respect to any Indebtedness for Borrowed Money of the Company or any
Subsidiary that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Indebtedness for Borrowed Money
to become due and payable before its stated maturity or before its regularly
scheduled dates of payment.

 

(b)        Neither the Company nor any Subsidiary has agreed or consented to
cause or permit in the future (upon the happening of a contingency or otherwise)
any of its Property, whether now owned or hereafter acquired, to be subject to a
Lien not permitted by Section 10.1.

 

(c)        Neither the Company nor any Subsidiary is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Indebtedness
for Borrowed Money of the Company or such Subsidiary, any agreement relating
thereto or any other agreement (including, but not limited to, its charter or
other organizational document) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Indebtedness for Borrowed Money of the Company
or any Subsidiary, except as specifically indicated in Schedule 5.15.

 

5.16.    Foreign Assets Control Regulations, Etc.

 

(a)        Neither the Company nor any Affiliated Entity is (i) a Person whose
name appears on the list of Specially Designated National and Blocked Persons
published by the Office of Foreign Assets Control, U.S. Department of Treasury
(“OFAC”) (an “OFAC Listed Person”) or (ii) a department, agency or
instrumentality of, or is otherwise controlled by or acting on behalf of,
directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity,
organization, foreign country or regime that is subject to any OFAC Sanctions
Program (each OFAC Listed Person and each other Person, entity, organization and
government of a country described in clause (ii), a “Blocked Person”).

 

(b)        No part of the proceeds from the sale of the Notes hereunder
constitutes or will constitute funds obtained on behalf of any Blocked Person or
will otherwise be used, directly by the Company or indirectly through any
Affiliated Entity, in connection with any investment in, or any transactions or
dealings with, any Blocked Person.

 

(c)        To the Company’s actual knowledge after making due inquiry, neither
the Company nor any Affiliated Entity (i) is under investigation by any
Governmental Authority for, or has been charged with, or convicted of, money
laundering, drug trafficking, terrorist-related activities or other money
laundering predicate crimes under

 

11

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any applicable law (collectively, “Anti-Money Laundering Laws”), (ii) has been
assessed civil penalties under any Anti-Money Laundering Laws or (iii) has had
any of its funds seized or forfeited in an action under any Anti-Money
Laundering Laws.  The Company has taken reasonable measures appropriate to the
circumstances (in any event as required by applicable law) to ensure that the
Company and each Affiliated Entity is and will continue to be in compliance with
all applicable current and future Anti-Money Laundering Laws.

 

(d)        No part of the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, for any improper payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, official of any public international organization or
anyone else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage.  The Company has taken reasonable
measures appropriate to the circumstances (in any event as required by
applicable law) to ensure that the Company and each Affiliated Entity is and
will continue to be in compliance with all applicable current and future
anti-corruption laws and regulations.

 

5.17.    Status under Certain Statutes.

 

Neither the Company nor any Subsidiary is subject to regulation under the
Investment Company Act of 1940, as amended, the Public Utility Holding Company
Act of 2005, as amended, the ICC Termination Act of 1995, as amended, or the
Federal Power Act, as amended.

 

5.18.    Environmental Matters.

 

(a)        Neither the Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect.

 

(b)        Neither the Company nor any Subsidiary has knowledge of any claim or
has knowledge that any of its tenants has received any notice of any claim, and
neither the Company nor any Subsidiary has knowledge that any proceeding has
been instituted raising any claim against any tenant of the Company or its
Subsidiaries with respect to their use of any of their respective real
properties or other assets now or formerly owned, leased or operated by any of
the Company or its Subsidiaries, alleging any damage to the environment or
violation of any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.

 

(c)        Neither the Company nor any Subsidiary has knowledge of any facts
which would give rise to any claim, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned, leased or operated
by any of them or to other assets or

 

12

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their use, except, in each case, such as could not reasonably be expected to
result in a Material Adverse Effect.

 

(d)        Neither the Company nor any Subsidiary has, and to the knowledge of
the Company and its Subsidiaries none of its tenants has, stored any material
quantities of Hazardous Materials on real properties now or formerly owned,
leased or operated by any of the Company or its Subsidiaries; and neither the
Company nor any Subsidiary has, and to the knowledge of the Company and its
Subsidiaries none of its tenants or any other Person has, disposed of any
Hazardous Materials in a manner contrary to any Environmental Laws in each case
in any manner that could reasonably be expected to result in a Material Adverse
Effect.

 

(e)        To the knowledge of the Company and its Subsidiaries, the tenants of
the Company and its Subsidiaries have obtained all governmental approvals
required for the operation of the Properties under applicable Environmental
Laws, except such as could not reasonably be expected to result in a Material
Adverse Effect.

 

(f)         To the knowledge of the Company, all buildings on all real
properties now owned, leased or operated by the Company or any Subsidiary are in
compliance with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse Effect.

 

5.19.    Stock of the Company.

 

As of the date hereof, the entire outstanding capital stock of the Company
consists of:  (i) Series C Cumulative Convertible Preferred Stock, 2,000,000
shares outstanding; and (ii) Common Stock, 30,419,774 shares outstanding.

 

5.20.    Condition of Property; Casualties; Condemnation.

 

To the knowledge of the Company or its Material Subsidiaries, and except such as
has not had, and could not reasonably be expected to have, a Material Adverse
Effect, each Property owned by them (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 knowledge of the Company or of
any of its Subsidiaries, and except such as has not had, and could not
reasonably be expected to have, a Material Adverse Effect, none of the
Properties owned by them is currently 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 Effect, are pending and served nor, to the knowledge of the
Company, threatened against any Property owned by it or any of its Subsidiaries
in any manner whatsoever.  No casualty has occurred to any such Property that
could reasonably be expected to have a Material Adverse Effect.

 

13

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5.21.    Legal Requirements and Zoning.

 

To the knowledge of the Company and its Subsidiaries, the use and operation of
each Property owned by the Company or 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).

 

5.22.    Solvency.

 

The Company and each of the Guarantors 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.

 

5.23.    Hostile Tender Offers.

 

None of the proceeds of the sale of any Notes will be used to finance a Hostile
Acquisition.

 

5.24.    UAP Properties.

 

Schedule 5.24 hereto identifies each UAP Property.

 

6.                                    REPRESENTATIONS OF THE PURCHASERS.

 

6.1.      Purchase for Investment.

 

Each Purchaser severally represents that it is purchasing the Notes for its own
account or for one or more separate accounts maintained by such Purchaser or for
the account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of such Purchaser’s or their
property shall at all times be within such Purchaser’s or their control.  Each
Purchaser is a financial institution or investor which is an institutional
“accredited investor” within the meaning of Rule 501(a) of Regulation D under
the Securities Act.  Each Purchaser has such knowledge and experience in
financial and business matters that such Purchaser is capable of evaluating the
merits and risks associated with an investment in the Notes.  Each Purchaser
understands that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.

 

6.2.      Source of Funds.

 

Each Purchaser severally represents that at least one of the following
statements is an accurate representation as to each source of funds (a “Source”)
to be used by such Purchaser to pay the purchase price of the Notes to be
purchased by such Purchaser hereunder:

 

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(a)        the Source is an “insurance company general account” (as the term is
defined in the United States Department of Labor’s Prohibited Transaction
Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as
defined by the annual statement for life insurance companies approved by the
National Association of Insurance Commissioners (the “NAIC Annual Statement”))
for the general account contract(s) held by or on behalf of any employee benefit
plan together with the amount of the reserves and liabilities for the general
account contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE 95-60)
or by the same employee organization in the general account do not exceed 10% of
the total reserves and liabilities of the general account (exclusive of separate
account liabilities) plus surplus as set forth in the NAIC Annual Statement
filed with such Purchaser’s state of domicile; or

 

(b)        the Source is a separate account that is maintained solely in
connection with such Purchaser’s fixed contractual obligations under which the
amounts payable, or credited, to any employee benefit plan (or its related
trust) that has any interest in such separate account (or to any participant or
beneficiary of such plan (including any annuitant)) are not affected in any
manner by the investment performance of the separate account; or

 

(c)        the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 or (ii) a bank collective investment
fund, within the meaning of the PTE 91-38 and, except as disclosed by such
Purchaser to the Company in writing pursuant to this clause (c), no employee
benefit plan or group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets allocated to such
pooled separate account or collective investment fund; or

 

(d)        the Source constitutes assets of an “investment fund” (within the
meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified
professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM
Exemption), no employee benefit plan’s assets that are included in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within
the meaning of Section VI(c)(1) of the QPAM Exemption) of such employer or by
the same employee organization and managed by such QPAM, exceed 20% of the total
client assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling or
controlled by the QPAM (applying the definition of “control” in Section VI(e) of
the QPAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans whose
assets are included in such investment fund have been disclosed to the Company
in writing pursuant to this clause (d); or

 

(e)        the Source constitutes assets of a “plan(s)” (within the meaning of
Section IV of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset
manager” or “INHAM” (within the meaning of Part IV of the INHAM Exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a person controlling or controlled by the INHAM (applying
the definition of “control” in

 

15

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Section IV(d) of the INHAM Exemption) owns a 10% or more interest in the Company
and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit
plan(s) whose assets constitute the Source have been disclosed to the Company in
writing pursuant to this clause (e); or

 

(f)         the Source is a governmental plan; or

 

(g)        the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each of
which has been identified to the Company in writing pursuant to this clause (g);
or

 

(h)        the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.

 

As used in this Section 6.2, the terms “employee benefit plan,” “governmental
plan,” and “separate account” shall have the respective meanings assigned to
such terms in section 3 of ERISA.

 

7.                                    INFORMATION AS TO THE COMPANY.

 

7.1.      Financial and Business Information.

 

The Company shall deliver to each holder of Notes that is an Institutional
Investor:

 

(a)        Quarterly Statements -- 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 Company a copy of the consolidated balance sheet of the
Company and its Subsidiaries as of the last day of such Fiscal Quarter and the
consolidated statements of income and cash flows of the Company and its
Subsidiaries for such 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
Company in accordance with GAAP and certified to by its chief financial officer
or another officer of the Company acceptable to the Required Holders (the filing
within the time period specified above of the Company’s Form 10-Q for such
Fiscal Quarter on the EDGAR system shall satisfy this requirement);

 

(b)        Annual Statements -- as soon as available, and in any event within 90
days after the end of each Fiscal Year of the Company, duplicate copies of

 

(i)                          a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such year, and

 

(ii)       consolidated statements of income, changes in stockholders’ equity
and cash flows of the Company and its Subsidiaries for such year,

 

setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by an opinion thereon of independent public accountants of
recognized national standing, which

 

16

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opinion shall state that such financial statements present fairly, in all
material respects, the financial position of the companies being reported upon
and their results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such accountants in connection
with such financial statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a reasonable basis for
such opinion in the circumstances,

 

provided that the filing within the time period specified above of the Company’s
Form 10-K for such Fiscal Year (together with the Company’s annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act,
provided that such annual report need not be filed until required to be filed
pursuant to SEC requirements) prepared in accordance with the requirements
therefor and filed with the SEC shall be deemed to satisfy the requirements of
this Section 7.1(b);

 

(c)        Annual Projections -- as soon as available, and in any event within
90 days after the last day of each Fiscal Year of the Company, a copy of the
Company’s consolidated projections for the then current fiscal year of revenues,
expenses and balance sheet on a quarter-by-quarter basis, with such projections
in reasonable detail prepared by the Company and in form satisfactory to the
Required Holders (which shall include a summary of all significant assumptions
made in preparing such business plan);

 

(d)        SEC and Other Reports -- promptly upon their becoming available, one
copy of each report on Form 8-K (or any similar successor form) and all
amendments thereto (which documents may be delivered by email) filed by the
Company or any Subsidiary with the SEC, provided that filing with the SEC shall
be deemed to satisfy the requirements of this Section 7.1(d);

 

(e)        Notice of Default or Event of Default -- promptly, and in any event
within five days after a Responsible Officer becoming aware of the existence of
any Default or Event of Default or that any Person has given any notice or taken
any action with respect to a claimed default hereunder or that any Person has
given any notice or taken any action with respect to a claimed default of the
type referred to in Section 11(f), a written notice specifying the nature and
period of existence thereof and what action the Company is taking or proposes to
take with respect thereto;

 

(f)         Notices from Governmental Authority -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or any
Subsidiary from any federal or state Governmental Authority relating to any
order, ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect;

 

(g)        ERISA Matters -- promptly, and in any event within five days after a
Responsible Officer becoming aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Company or an
ERISA Affiliate proposes to take with respect thereto:

 

(i)       with respect to any Plan, any reportable event, as defined in
section 4043(c) of ERISA and the regulations thereunder, for which notice
thereof

 

17

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has not been waived pursuant to such regulations as in effect on the date
hereof; or

 

(ii)       the taking by the PBGC of steps to institute, or the threatening by
the PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from a Multi-employer
Plan that such action has been taken by the PBGC with respect to such
Multi-employer Plan; or

 

(iii)       any event, transaction or condition that could result in the
incurrence of any liability by the Company or any ERISA Affiliate pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the imposition of any Lien on any of
the rights, properties or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax provisions, if such
liability or Lien, taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material Adverse Effect;

 

(h)        Requested Information -- with reasonable promptness, such other data
and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Subsidiaries or
relating to the ability of the Company to perform its obligations hereunder and
under the Notes as from time to time may be reasonably requested by any such
holder of Notes.

 

7.2.      Officer’s Certificate.

 

Each set of financial statements delivered to a holder of Notes pursuant to
Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a
Senior Financial Officer setting forth:

 

(a)        Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.9 and the requirements of any
additional financial covenants incorporated herein pursuant to Section 9.10
during the quarterly or annual period covered by the statements then being
furnished (including with respect to each such Section, where applicable,
(i) the calculations of the maximum or minimum amount, ratio or percentage, as
the case may be, permissible under the terms of such Sections, and the
calculation of the amount, ratio or percentage then in existence, and (ii) a
reconciliation from GAAP, as reflected in the statements then being furnished,
to the calculation of the financial covenants in Section 10.9 and any additional
financial covenants incorporated herein pursuant to Section 9.10, after giving
effect to the exclusion from GAAP of the effects of Accounting Standards
Codification 825-10-25 (previously referred to as SFAS 159) or any successor or
similar provision to the extent it relates to “fair value” accounting for
liabilities); and

 

(b)        Event of Default -- a statement that such Senior Financial Officer
has reviewed the relevant terms hereof and has made, or caused to be made, under
his or her supervision, a review of the transactions and conditions of the
Company and its Subsidiaries

 

18

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from the beginning of the quarterly or annual period covered by the statements
then being furnished to the date of the certificate and that such review shall
not have disclosed the existence during such period of any condition or event
that constitutes a Default or an Event of Default or, if any such condition or
event existed or exists (including, without limitation, any such event or
condition resulting from the failure of the Company or any Subsidiary to comply
with any Environmental Law), specifying the nature and period of existence
thereof and what action the Company shall have taken or proposes to take with
respect thereto.

 

7.3.      Visitation.

 

The Company shall permit the representatives of each holder of Notes that is an
Institutional Investor:

 

(a)        No Default -- if no Default or Event of Default then exists, at the
expense of such holder and upon reasonable prior notice to the Company, to visit
the principal executive office of the Company, to discuss the affairs, finances
and accounts of the Company and its Subsidiaries with the Company’s officers,
and (with the consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing; and

 

(b)        Default -- if a Default or Event of Default then exists, at the
expense of the Company to visit and inspect any of the offices or properties of
the Company or any Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.

 

8.                                    PAYMENT AND PREPAYMENT OF THE NOTES.

 

8.1.      Required Prepayments.

 

On July 19, 2020 and on each July 19 thereafter to and including July 19, 2023
the Company will prepay $17,160,000 principal amount (or such lesser principal
amount as shall then be outstanding) of the Notes at par and without payment of
the Make-Whole Amount or any premium, provided that upon any partial prepayment
of the Notes pursuant to Section 8.2 or Section 8.3 or any partial purchase of
Notes permitted pursuant to Section 8.6, the principal amount of each required
prepayment of the Notes becoming due under this Section 8.1 on and after the
date of such prepayment or purchase shall be reduced in the same proportion as
the aggregate unpaid principal amount of the Notes is reduced as a result of
such prepayment or purchase.

 

8.2.      Optional Prepayments with Make-Whole Amount.

 

The Company may, at its option, upon notice as provided below, prepay at any
time all, or from time to time any part of, the Notes, in an amount not less
than $5,000,000 (and

 

19

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increments of $500,000 in excess thereof) of the aggregate principal amount of
the Notes then outstanding in the case of a partial prepayment, or such lesser
principal amount of the Notes as shall then be outstanding, at 100% of the
principal amount so prepaid, plus interest thereon to the prepayment date and
the Make-Whole Amount determined for the prepayment date with respect to such
principal amount.  The Company will give each holder of Notes written notice of
each optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment.  Each such notice
shall specify such date (which shall be a Business Day), the aggregate principal
amount of the Notes to be prepaid on such date, the principal amount of each
Note held by such holder to be prepaid (determined in accordance with
Section 8.4), and the interest to be paid on the prepayment date with respect to
such principal amount being prepaid, and shall be accompanied by a certificate
of a Senior Financial Officer as to the estimated Make-Whole Amount due in
connection with such prepayment (calculated as if the date of such notice were
the date of the prepayment), setting forth the details of such computation.  Two
Business Days prior to such prepayment, the Company shall deliver to each holder
of Notes a certificate of a Senior Financial Officer specifying the calculation
of such Make-Whole Amount as of the specified prepayment date.

 

8.3.      Prepayments in Connection with a Change of Control.

 

(a)        Notice of Change of Control.  The Company will, within five Business
Days after any Responsible Officer has knowledge of the occurrence of a Change
of Control, give written notice of such Change of Control to each holder of
Notes unless written notice of such Change of Control shall have been given
pursuant to Section 8.3(b).  If a Change of Control has occurred, such notice
shall contain and constitute an offer to prepay Notes as described in
Section 8.3(b) (and shall be accompanied by the certificate described in
Section 8.3(e)).

 

(b)        Offer to Prepay Notes.  The offer to prepay Notes contemplated by
Section 8.3(a) shall be an offer to prepay, in accordance with and subject to
this Section 8.3, all, but not less than all, the Notes held by each holder (in
this case only, “holder” in respect of any Note registered in the name of a
nominee for a disclosed beneficial owner shall mean such beneficial owner) on a
date (which shall be a Business Day) specified in such offer (the “Proposed
Prepayment Date”).  Such date shall be not less than 30 days and not more than
60 days after the date of such offer (or if the Proposed Prepayment Date shall
not be specified in such offer, the Proposed Prepayment Date shall be the
Business Day that falls on or next following the 40th day after the date of such
offer).

 

(c)        Acceptance; Rejection.  A holder of Notes may accept or reject the
offer to prepay made pursuant to this Section 8.3 by causing a notice of such
acceptance or rejection to be delivered to the Company at least 10 days prior to
the Proposed Prepayment Date.  A failure by a holder of Notes to respond to an
offer to prepay made pursuant to this Section 8.3 shall be deemed to constitute
a rejection of such offer by such holder.

 

(d)        Prepayment.  Prepayment of the Notes to be prepaid pursuant to this
Section 8.3 shall be made on the Proposed Prepayment Date at 100% of the
principal amount of such Notes, together with accrued and unpaid interest on
such Notes accrued to the date of prepayment, but, in any case, without any
Make-Whole Amount.

 

20

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(e)        Officer’s Certificate.  Each offer to prepay the Notes pursuant to
this Section 8.3 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying: 
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
Section 8.3 and that failure by a holder to respond to such offer by the
deadline established in Section 8.3(c) shall result in such offer to such holder
being deemed rejected; (iii) the principal amount of each Note offered to be
prepaid; (iv) the interest that would be due on each Note offered to be prepaid,
accrued to the Proposed Prepayment Date; (v) that the conditions of this
Section 8.3 have been fulfilled; and (vi) in reasonable detail, the nature and
date of the Change of Control.

 

(f)         Notice Concerning Status of Holders of Notes.  Promptly after the
Proposed Prepayment Date and the making of all prepayments contemplated on such
Proposed Prepayment Date under this Section 8.3 (and, in any event, within 30
days thereafter), the Company shall deliver to each then current holder of
Notes, if any, a certificate signed by a Senior Financial Officer of the Company
containing a list of the then current holders of Notes (together with their
addresses) and setting forth as to each such holder the outstanding principal
amount of Notes held by such holder at such time (in each case calculated after
giving effect to the prepayments made on such Proposed Prepayment Date.)

 

8.4.      Allocation of Partial Prepayments.

 

In the case of each partial prepayment of the Notes pursuant to Section 8.1 or
Section 8.2, the principal amount of the Notes to be prepaid shall be allocated
among all of the Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not theretofore
called or accepted for prepayment (regardless of whether prepayment has in fact
occurred).

 

8.5.      Maturity; Surrender, Etc.

 

In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment (which shall be a Business Day),
together with interest on such principal amount accrued to such date and, in the
case of prepayments pursuant to Section 8.2, the applicable Make-Whole Amount,
if any.  From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

 

8.6.      Purchase of Notes.

 

The Company will not, and will not permit any Affiliate to, purchase, redeem,
prepay or otherwise acquire, directly or indirectly, any of the outstanding
Notes except (i) upon the payment or prepayment of the Notes in accordance with
the terms of this Agreement and the Notes, or (ii) pursuant to a written offer
to purchase made by the Company or an Affiliate pro rata to the holders of all
Notes at the time outstanding upon the same terms and conditions.  Any such
offer shall provide each holder with sufficient information to enable it to make
an informed

 

21

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decision with respect to such offer, and shall remain open for at least 20
Business Days.  If the Required Holders accept such offer, the Company shall
promptly notify the remaining holders of such fact and the expiration date for
the acceptance by holders of Notes of such offer shall be extended by the number
of days necessary to give each such remaining holder at least 10 Business Days
from its receipt of such notice to accept such offer.  The Company will promptly
cancel all Notes acquired by it or any Affiliate pursuant to any payment,
prepayment or purchase of Notes pursuant to any provision of this Agreement, and
no Notes may be issued in substitution or exchange for any such Notes.

 

8.7.      Make-Whole Amount.

 

“Make-Whole Amount” means, with respect to any Note, an amount equal to the
excess, if any, of the Discounted Value of the Remaining Scheduled Payments with
respect to the Called Principal of such Note over the amount of such Called
Principal; provided that the Make-Whole Amount may in no event be less than
zero.  For the purposes of determining the Make-Whole Amount, the following
terms have the following meanings:

 

“Called Principal” means, with respect to any Note, the principal of such Note
that is to be prepaid pursuant to Section 8.2 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context requires.

 

“Discounted Value” means, with respect to the Called Principal of any Note, the
amount obtained by discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.

 

“Reinvestment Yield” means, with respect to the Called Principal of any Note,
0.50% over the yield to maturity implied by (i) the yields reported, as of
10:00 a.m. (New York City time) on the second Business Day preceding the
Settlement Date with respect to such Called Principal, on the display designated
as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg
Financial Markets (“Bloomberg”) or, if Page PX1 (or its successor screen on
Bloomberg) is unavailable, the Telerate Access Service Screen which corresponds
most closely to Page PX1 for the most recently issued actively traded on the run
U.S. Treasury securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date, or (ii) if such yields are
not reported as of such time or the yields reported as of such time are not
ascertainable (including by way of interpolation), the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields have
been so reported as of the second Business Day preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (or any comparable successor publication) for U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date.

 

In the case of each determination under clause (i) or clause (ii), as the case
may be, of the preceding paragraph, such implied yield will be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent
yields in accordance with accepted financial practice,

 

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and (b) interpolating linearly between (1) the applicable U.S. Treasury security
with the maturity closest to and greater than the Remaining Average Life of such
Called Principal, and (2) the applicable U.S. Treasury security with the
maturity closest to and less than the Remaining Average Life.  The Reinvestment
Yield shall be rounded to the number of decimal places as appears in the
interest rate of the applicable Note.

 

“Remaining Average Life”  means, with respect to any Called Principal, the
number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (b) the number of years (calculated to the
nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.

 

“Remaining Scheduled Payments” means, with respect to the Called Principal of
any Note, all payments of such Called Principal and interest thereon that would
be due after the Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled due date;
provided that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Section 8.2 or Section 12.1.

 

“Settlement Date” means, with respect to the Called Principal of any Note, the
date on which such Called Principal is to be prepaid pursuant to Section 8.2, or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.

 

9.                                    AFFIRMATIVE COVENANTS.

 

The Company covenants that so long as any of the Notes are outstanding or any
amounts owing under the Transaction Documents remain unpaid:

 

9.1.      Compliance with Law.

 

(a)        Without limiting Section 10.10, the Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, including, without
limitation, ERISA, the USA Patriot Act, Environmental Laws and the other laws
and regulations that are referenced in Section 5.16, and will obtain and
maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
Properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

(b)        Without limiting the agreements set forth in Section 9.1(a) above,
for each of its owned Properties, respectively, the Company will, and will cause
each of its Subsidiaries

 

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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) not allow the presence or operation at any
of the Properties of any (1) landfill or dump or (2) hazardous waste management
facility or solid waste disposal facility as defined pursuant to RCRA or any
comparable state law; (iii) not manufacture, use, generate, transport, treat,
store, release, dispose or handle any Hazardous Material at any of the
Properties except in the ordinary course of its business and in de minimis
amounts; and (iv) abide by and observe any restrictions on the use of the
Properties imposed by any governmental authority as set forth in a deed or other
instrument affecting the Company’s or any Subsidiary’s interest therein.

 

9.2.      Insurance.

 

The Company will, and will cause each of its Subsidiaries to, maintain and cause
their respective tenants to maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in the
case of entities of established reputations engaged in the same or a similar
business, similarly situated, and operating like Properties.  The Company shall,
upon the request of the Required Holders, furnish to the holders of Notes
certificates of insurance setting forth in summary form the nature and extent of
the insurance maintained on the Properties.

 

9.3.      Maintenance of Properties.

 

The Company will, and will cause each of its Subsidiaries to, maintain and keep,
or cause to be maintained and kept (including, without limitation, by their
respective tenants), their respective Properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Subsidiary from discontinuing
the operation and the maintenance of any of its Properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

9.4.      Payment of Taxes and Claims.

 

The Company will, and will cause each of its Subsidiaries to, file all tax
returns required to be filed in any jurisdiction and to pay and discharge all
taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
Properties, assets, income or franchises, to the extent the same have become due
and payable and before they have become delinquent and all claims for which sums
have become due and payable that have or might become a Lien on Properties or
assets of the Company or any Subsidiary, provided that neither the Company nor
any Subsidiary need pay any such tax, assessment, charge, levy or claim if
(i) the amount, applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate

 

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proceedings, and the Company or a Subsidiary has established adequate reserves
therefor in accordance with GAAP on the books of the Company or such Subsidiary,
or (ii) the nonpayment of all such taxes, assessments, charges, levies and
claims in the aggregate could not reasonably be expected to have a Material
Adverse Effect.

 

9.5.      Corporate Existence, Etc.

 

Subject to Section 10.3, the Company will at all times preserve and keep in full
force and effect its corporate or similar existence and the corporate or similar
existence of each of its Subsidiaries (unless merged into the Company or a
Wholly-Owned Subsidiary) and all rights and franchises of the Company and its
Subsidiaries unless, in the good faith judgment of the Company, the termination
of or failure to preserve and keep in full force and effect such corporate
existence, right or franchise could not, individually or in the aggregate, have
a Material Adverse Effect.

 

9.6.      Books and Records.

 

The Company will, and will cause each of its Subsidiaries to, maintain proper
books of record and account in conformity with GAAP and all applicable
requirements of any Governmental Authority having legal or regulatory
jurisdiction over the Company or such Subsidiary, as the case may be.

 

9.7.      Maintenance of REIT Status.

 

The Company will, at all times, conduct its affairs and the affairs of its
Subsidiaries in a manner so as to continue to qualify as a REIT and elect to be
treated as a REIT under all applicable laws, rules and regulations.

 

9.8.      Additional Guarantors.

 

Concurrent with any Person becoming a guarantor or other obligor under the
Credit Agreement, the Prudential Note Agreement or any other Principal Credit
Facility, the Company shall cause such Person to execute and deliver a Joinder
to Multiparty Guaranty, together with such other instruments, documents,
certificates, and opinions reasonably required by the Required Holders in
connection therewith.

 

9.9.      UAP Properties.

 

Upon not less than ten (10) Business Days prior written notice from the Company
to the holders of Notes, the Company may from time to time designate that a
Property be added (subject to the other requirements for a Property otherwise
qualifying as a UAP Property) or deleted as a UAP Property.  Such notice shall
be accompanied by a certificate certifying that immediately before and after
giving effect to such additions or deletions the Company is in compliance with
Section 10.9 on a pro-forma basis as of the then most recently ended Fiscal
Quarter and no Default or Event of Default exists or would result.  Upon receipt
by the holders of Notes of the forgoing, Schedule 5.24 hereof shall be deemed to
have been updated to reflect the deletion or addition, as applicable.

 

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9.10.    Most Favored Lender.

 

If at any time after the date hereof the Credit Agreement is amended or
otherwise modified, or any agreement related to the Credit Agreement is entered
into or is amended or otherwise modified, and as a result of any of the
foregoing any Financial Covenant for the Bank Facility is modified (whether in a
manner to be more beneficial or less beneficial to the lenders under the Credit
Agreement) or eliminated, or any Financial Covenant is added for the Bank
Facility (in each such case, a “Modified Bank Financial Covenant”), then (i) the
corresponding Financial Covenant in this Agreement shall be deemed automatically
modified in such manner or eliminated, as the case may be, or such additional
Financial Covenant for the Bank Facility shall be deemed automatically
incorporated by reference, in each case mutatis mutandis, as if such modified or
additional Financial Covenant were set forth fully herein or such eliminated
Financial Covenant were deleted herefrom, as applicable, and (ii) the Company
shall promptly, and in any event within five (5) Business Days after entering
into any such Modified Bank Financial Covenant, so advise the holders of Notes
in writing.  Thereafter, upon the request of the Required Holders, the Company
shall enter into an amendment to this Agreement with the Required Holders
evidencing the incorporation of such Modified Bank Financial Covenant, it being
agreed that any failure to make such request or to enter into any such amendment
shall in no way qualify or limit the effectiveness of the deemed modification or
elimination, as the case may be, of the applicable Financial Covenant in this
Agreement, or the incorporation by reference into this Agreement of the
applicable additional Financial Covenant, in each case as described in clause
(i) of the immediately preceding sentence.

 

Notwithstanding anything to the contrary in the immediately preceding paragraph
of this Section 9.10:  (a) no such modification of a Financial Covenant
hereunder that would be less beneficial to the holders of the Notes, and no such
elimination hereunder of a Financial Covenant, shall be effective if a Default
or Event of Default has occurred and is continuing immediately prior to the time
such Modified Bank Financial Covenant becomes effective; (b) no modification or
series of modifications effected pursuant to the provisions of this Section 9.10
shall be effective to (w) increase the maximum permitted ratio of Total
Indebtedness to Total Asset Value as set forth in Section 10.9(a) of this
Agreement to a level greater than 0.60 to 1.00 (assuming such covenant were
calculated on a basis consistent with the manner in which it is calculated on
the date hereof pursuant to this Agreement) or eliminate such covenant set forth
in Section 10.9(a) from this Agreement, (x) increase the maximum permitted ratio
of Secured Debt to Total Asset Value as set forth in Section 10.9(b) of this
Agreement to a level greater than 0.40 to 1.00 (assuming such covenant were
calculated on a basis consistent with the manner in which it is calculated on
the date hereof pursuant to this Agreement) or eliminate such covenant set forth
in Section 10.9(b) from this Agreement, (y) (i) increase the maximum permitted
ratio of Unsecured Debt of the Company and its Subsidiaries to Unencumbered
Asset Pool Value as set forth in Section 10.9(c) of this Agreement to a level
greater than 0.6667 to 1.00 (assuming such covenant were calculated on a basis
consistent with the manner in which it is calculated on the date hereof pursuant
to this Agreement), or (ii) modify the definition of “Capitalization Rate” such
that the capitalization rate for ALFs would be lower than 7.00%, the
capitalization rate for continuum of care facilities would be lower than 7.50%
or any capitalization rate set forth in such definition on the date hereof as
10% would be lower than 8.50%, or (iii) eliminate such covenant set forth in
Section 10.9(c) from this Agreement unless (1) such covenant is replaced with a
covenant prohibiting the ratio of Total Asset Value (but computed solely for

 

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unencumbered assets of the Company and its Subsidiaries) to Unsecured Debt, or a
formulation for such replacement covenant which is substantially similar
thereto, from being less than 1.50 to 1.00 as of the last day of each Fiscal
Quarter of the Company, (2) a customary priority debt covenant satisfactory to
the Required Holders is added to Section 10.9 and (3) Section 10.1 is modified
in a manner consistent with such newly added priority debt covenant and
reasonably satisfactory to the Required Holders, provided that if such covenant
set forth in Section 10.9(c) is eliminated as provided in this clause (y)(iii),
then the immediately preceding clauses (y)(i) and (y)(ii) will not be applicable
or (z) decrease the minimum required ratio of EBITDA for any Rolling Period to
Fixed Charges for such Rolling Period as set forth in Section 10.9(d) of this
Agreement to a level less than 1.50 to 1.00 (assuming such covenant were
calculated on a basis consistent with the manner in which it is calculated on
the date hereof pursuant to this Agreement) or eliminate such covenant set forth
in Section 10.9(d) from this Agreement; and (c) in the event the Bank Facility
is terminated, all Financial Covenants hereunder shall be unaffected and shall
remain in effect in the same manner as they existed immediately prior to such
termination.

 

10.                            NEGATIVE COVENANTS.

 

The Company covenants that so long as any of the Notes are outstanding or any
amounts owing under the Transaction Documents remain unpaid:

 

10.1.    Liens, Etc.

 

The Company will 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.  Without limitation of the immediately preceding sentence,
the Company will not permit any Principal Credit Facility (including the Credit
Agreement and the Prudential Note Agreement) to be secured by any consensual
Lien unless the Notes are simultaneously secured pursuant to terms and
provisions, including an intercreditor agreement, satisfactory to the Required
Holders.

 

10.2.    Investments, Acquisitions, Loans and Advances.

 

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

 

(a)        investments in direct obligations of the United States of America or
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;

 

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

 

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

 

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

 

(f)         the Company’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;

 

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

 

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

 

(i)         investments held by the Company and its Subsidiaries as of the date
hereof and disclosed in Schedule 10.2;

 

(j)         excluding investments in joint ventures existing as of or prior to
the date hereof and disclosed on Schedule 10.2, investments in joint ventures
which are Permitted Acquisitions and are in an amount not to exceed in the
aggregate at any one time outstanding 15% of the Total Asset Value of the
Company and its Subsidiaries at such time;

 

(k)        excluding Assets Under Development existing as of or prior to the
date hereof and disclosed on Schedule 10.2, investments in Assets Under
Development which are Permitted Acquisitions and are in an amount not to exceed
in the aggregate at any one time outstanding 20% of the Total Asset Value of the
Company and its Subsidiaries at such time;

 

(l)         excluding investments in Redevelopment Assets existing as of or
prior to the date hereof and disclosed on Schedule 10.2, investments in
Redevelopment Assets which are Permitted Acquisitions and are in an amount not
to exceed in the aggregate at any one time outstanding 15% of the Total Asset
Value of the Company and its Subsidiaries at such time;

 

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

 

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

 

Investments made after the date hereof of the type described in Sections (j),
(k), (l) and (n) immediately preceding shall at no time exceed in the aggregate
at any one time outstanding 25% of the Total Asset Value of the Company and its
Subsidiaries at such time.  In determining the amount of investments,
acquisitions, loans, and advances permitted under this Section, investments and
acquisitions shall always be taken at the original cost thereof (regardless of
any subsequent appreciation or depreciation therein), and loans and advances
shall be taken at the principal amount thereof then remaining unpaid.

 

10.3.    Mergers, Consolidations and Sales.

 

The Company 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 Company may merge or
consolidate with another Person, including a Subsidiary, if (A) the Company is
the surviving corporation, (B) the Company will be in pro forma compliance with
all provisions of this Agreement upon and after such merger or consolidation,
and (C) the Company will not engage in any material line of business
substantially different from that engaged in on the date hereof and; provided
further, that so long as no Default or Event of Default exists this
Section shall not apply to nor operate to prevent:

 

(a)       the sale, transfer, lease or other disposition of Property of the
Company and its Subsidiaries to one another;

 

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

 

(c)       the sale, transfer or other disposition of (i) any tangible personal
property that, in the reasonable business judgment of the Company or its
Subsidiary, has become obsolete or worn out, and which is disposed of in the
ordinary course of business, or (ii) for the avoidance of doubt, capital stock
of the Company held by the Company as treasury stock; and

 

(d)       the sale, transfer, lease or other disposition of Property of the
Company or any Subsidiary (including any disposition of Property as part of a
sale and leaseback transaction); provided, that if such sale, transfer, lease or
disposition during any Fiscal Quarter exceeds 2% of the Applicable Total Asset
Value and together with any other sales, transfers, leases or dispositions made
during such Fiscal Quarter in the aggregate exceed an amount equal to 10% of the
Applicable Total Asset Value, then for such sales, transfers, leases or
dispositions, the Company shall provide to the holders of Notes covenant
calculations for the covenants contained in Section 10.9, showing that, after
giving effect to such sales, transfers, leases or dispositions, the Company
shall be in pro

 

29

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forma compliance with such covenants for the Fiscal Quarter then most recently
ended for which financial statement have been provided hereunder.

 

10.4.    Maintenance of Subsidiaries.

 

The Company shall not assign, sell or transfer, nor shall it permit any
Subsidiary to issue, assign, sell or transfer, any shares of capital stock or
other equity interests of a Guarantor; provided, however, that the foregoing
shall not operate to prevent (a) Liens on the capital stock or other equity
interests of Subsidiaries granted to a collateral agent for the ratable benefit
of the holders from time to time of the Notes, the Prudential Noteholders, the
Lenders under (and as defined in) the Credit Agreement and other indebtedness
(subject to compliance with Section 10.1), (b) the issuance, sale, and transfer
to any person of any shares of capital stock of a Subsidiary solely for the
purpose of qualifying, and to the extent legally necessary to qualify, such
person as a director of such Subsidiary, and (c) any assignment, sale or
transfer of the shares of capital stock or other equity interests of a
Subsidiary if the conveyance, transfer, lease or other disposition of all of the
assets of such Subsidiary would be permitted by Sections 10.3(a), (b) or
(d) above.

 

10.5.    No Burdensome Contracts With Affiliates.

 

The Company 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 Company or such Subsidiary than would be usual and customary in
similar contracts, agreements or business arrangements between Persons not
affiliated with each other.

 

10.6.    Change in the Nature of Business.

 

The Company will 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
Company and its Subsidiaries would be changed in any material respect from the
general nature of the business engaged in by it as of the date hereof.  As of
the date hereof, the general nature of the business of the Company and its
Subsidiaries is primarily the business of the acquisition, financing and
ownership of Senior Housing Assets and other business activities incidental
thereto.

 

10.7.    Use of Proceeds of Notes.

 

The Company will not use the credit extended under this Agreement for any
purpose other than solely the purposes set forth in, or otherwise contemplated
by, Section 5.14 hereof.

 

10.8.    No Restrictions.

 

Except as provided herein, the Company will not, nor will 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 Company or any
Subsidiary to:  (a)

 

30

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pay dividends or make any other distributions on any Subsidiary’s capital stock
or other equity interests owned by the Company or any other Subsidiary, (b) pay
any indebtedness owed to the Company or any other Subsidiary, (c) make loans or
advances to the Company or any other Subsidiary, (d) transfer any of its
Property to the Company 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 evidenced by the
Notes or under this Agreement and/or grant Liens on its assets to a collateral
agent for the ratable benefit of the holders from time to time of the Notes, the
Prudential Noteholders, the Lenders under (and as defined in) the Credit
Agreement and other indebtedness as required by the Transaction Documents.

 

10.9.    Financial Covenants.

 

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

 

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

 

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

 

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

 

(e)       Maximum Secured Recourse Debt to Total Asset Value Ratio.  As of the
last day of each Fiscal Quarter of the Company, the Company shall not permit the
ratio of Secured Recourse Debt to Total Asset Value to be greater than 0.10 to
1.00.

 

(f)        Maintenance of Tangible Net Worth.  The Company shall not permit at
any time Tangible Net Worth to be less than the sum of (a) $385,000,000 plus
(b) 80% of the aggregate net proceeds received by the Company or any of its
Subsidiaries after May 5, 2011 in connection with any offering of capital stock
or other equity interests of the Company or the Subsidiaries, but only to the
extent that such net proceeds are not used to redeem existing capital stock or
other equity interests of the Company or the Subsidiaries.

 

(g)       Maximum Floating Rate Debt as a Percentage of Total Asset Value.  On
any date, the Company and its Subsidiaries shall not, on a consolidated basis,
have outstanding Indebtedness for Borrowed Money that is neither at a fixed rate
nor hedged pursuant to a derivative contract greater than 40% of Total Asset
Value.

 

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(h)       Minimum Eligible Property NOI to Interest Expense on Unsecured Debt
Ratio.  As of the last day of each Rolling Period of the Company, the Company
shall not permit the ratio of Eligible Property NOI for such Rolling Period to
Interest Expense on Unsecured Debt for such Rolling Period to be less than 2.25
to 1.00.

 

10.10.  Terrorism Sanctions Regulations.

 

The Company will not and will not permit any Affiliated Entity to (a) become an
OFAC Listed Person, or (b) have any investments in, or engage in any dealings or
transactions with, any Blocked Person.

 

10.11.  Redemption of Stock, Etc.

 

The Company will not, and will not permit any Subsidiary to, (a) redeem,
purchase or otherwise acquire, refinance or repay any preferred stock of the
Company or any Subsidiary if an Event of Default exists at such time or
immediately after giving effect thereto, or (b) redeem, purchase or otherwise
acquire, refinance or repay any preferred stock of the Company or any Subsidiary
with the proceeds from, or in exchange for, the issuance of capital stock which
is mandatorily redeemable, preferred stock which is redeemable at the election
of the holder thereof or preferred stock with respect to which any holder
thereof has a put or similar right to require the Company or any Subsidiary to
purchase, re-purchase or otherwise acquire such preferred stock.

 

11.                            EVENTS OF DEFAULT.

 

An “Event of Default” shall exist if any of the following conditions or events
shall occur and be continuing:

 

(a)       the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or

 

(b)       the Company defaults in the payment of any interest on any Note for
more than three Business Days after the same becomes due and payable; or

 

(c)       the Company defaults in the performance of or compliance with any term
contained in Sections 9.5 (to the extent that Section 9.5 pertains to the
maintenance and keeping in full force and effect of the Company’s existence),
9.8, 10.1, 10.2, 10.3, 10.4, 10.7, 10.8, 10.9 or 10.10 or any Financial Covenant
that has been incorporated by reference pursuant to Section 9.10; or

 

(d)       any Credit Party defaults in the performance of or compliance with any
term contained herein (other than those referred to in Sections 11 (a), (b) and
(c)) or in any collateral document or intercreditor agreement that hereafter may
be entered into in connection with this Agreement or in any amendment or other
modification agreement relating to any of the foregoing agreements described in
this Section 11(d) and such default is not remedied within 30 days after the
earlier of (i) a Responsible Officer obtaining actual knowledge of such default,
and (ii) the Company receiving written

 

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notice of such default from any holder of a Note (any such written notice to be
identified as a “notice of default” and to refer specifically to this
Section 11(d)); or

 

(e)       any representation or warranty made in writing by or on behalf of any
Credit Party or by any officer of any Credit Party in this Agreement or in any
collateral document or intercreditor agreement that hereafter may be entered
into in connection with this Agreement or in any amendment or other modification
agreement relating to any of the foregoing agreements described in this
Section 11(e) or in any certificate furnished in connection with the
transactions contemplated hereby or thereby or in any notice required to be
delivered pursuant hereto or thereto proves to have been false or incorrect in
any material respect on the date as of which made; or

 

(f)        (i) the Company or any Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any principal of or premium or
make-whole amount or interest on any Indebtedness for Borrowed Money that is
outstanding beyond any period of grace provided with respect thereto, or
(ii) the Company or any Subsidiary is in default in the performance of or
compliance with any term of any evidence of any Indebtedness for Borrowed Money
or of any mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition such
Indebtedness for Borrowed Money has become, or has been declared (or one or more
Persons are entitled to declare such Indebtedness for Borrowed Money to be), due
and payable before its stated maturity or before its regularly scheduled dates
of payment, or (iii) as a consequence of the occurrence or continuation of any
event or condition (other than the passage of time or the right of the holder of
Indebtedness for Borrowed Money to convert such Indebtedness for Borrowed Money
into equity interests), (x) the Company or any Subsidiary has become obligated
to purchase or repay Indebtedness for Borrowed Money before its regular maturity
or before its regularly scheduled dates of payment, or (y) one or more Persons
have the right to require the Company or any Subsidiary so to purchase or repay
such Indebtedness for Borrowed Money; provided that the aggregate amount of all
Indebtedness for Borrowed Money to which such a payment default shall occur and
be continuing or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) shall occur and be
continuing exceeds 2% of the Applicable Total Asset Value; or

 

(g)       the Company or any Subsidiary (i) is generally not paying, or admits
in writing its inability to pay, its debts as they become due, (ii) files, or
consents by answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or

 

(h)       a court or Governmental Authority of competent jurisdiction enters an
order appointing, without consent by the Company or any of the Subsidiaries, a

 

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custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company or any of the Subsidiaries, or any such
petition shall be filed against the Company or any of the Subsidiaries and such
petition shall not be dismissed within 60 days; or

 

(i)        (a) a final judgment or judgments for the payment of money
aggregating in excess of 2% of the Applicable Total Asset Value are rendered
against one or more of the Company and its Subsidiaries and which judgments are
not, within 30 days after entry thereof, bonded, discharged or stayed pending
appeal, or are not discharged within 30 days after the expiration of such stay;

 

(j)        if (i) any Plan shall fail to satisfy the minimum funding standards
of ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified any Credit Party
or any ERISA Affiliate that a Plan may become a subject of any such proceedings,
(iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning
of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed 2% of the Applicable Total Asset Value, (iv) any
Credit Party or any ERISA Affiliate shall have incurred or is reasonably
expected to incur any liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee benefit plans,
(v) any Credit Party or any ERISA Affiliate withdraws from any Multiemployer
Plan, or (vi) any Credit Party or any Subsidiary establishes or amends any
employee welfare benefit plan that provides post-employment welfare benefits in
a manner that would increase the liability of any Credit Party or any Subsidiary
thereunder; and any such event or events described in clauses (i) through
(vi) above, either individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse Effect; or

 

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

 

(l)        any provision of any Transaction Document shall for any reason (other
than pursuant to the terms thereof) cease to be valid and binding on or
enforceable in any material respect against any Credit Party party to it, or any
such Credit Party shall so state in writing.

 

As used in Section 11(j), the terms “employee benefit plan” and “employee
welfare benefit plan” shall have the respective meanings assigned to such terms
in section 3 of ERISA.

 

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12.                            REMEDIES ON DEFAULT, ETC.

 

12.1.    Acceleration.

 

(a)        If an Event of Default with respect to any Credit Party described in
Section 11(g) or (h) (other than an Event of Default described in clause (i) of
Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact
that such clause encompasses clause (i) of Section 11(g)) has occurred, all the
Notes then outstanding shall automatically become immediately due and payable.

 

(b)        If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.

 

(c)        If any Event of Default described in Section 11(a) or (b) has
occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held by it or
them to be immediately due and payable.

 

Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon (including, but not limited to, interest accrued thereon at the Default
Rate) and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived.  The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

 

12.2.    Other Remedies.

 

If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.

 

12.3.    Rescission.

 

At any time after any Notes have been declared due and payable pursuant to
Section 12.1(b) or (c), the Required Holders, by written notice to the Company,
may rescind and annul any such declaration and its consequences if (a) the
Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable

 

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and are unpaid other than by reason of such declaration, and all interest on
such overdue principal and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) any overdue interest in respect of the Notes, at
the Default Rate, (b) neither the Company nor any other Person shall have paid
any amounts which have become due solely by reason of such declaration, (c) all
Events of Default and Defaults, other than non-payment of amounts that have
become due solely by reason of such declaration, have been cured or have been
waived pursuant to Section 17, and (d) no judgment or decree has been entered
for the payment of any monies due pursuant hereto or to the Notes.  No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.

 

12.4.    No Waivers or Election of Remedies, Expenses, Etc.

 

No course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder’s rights, powers or remedies.  No right, power
or remedy conferred by this Agreement, any Note or any other Transaction
Document upon any holder thereof shall be exclusive of any other right, power or
remedy referred to herein or therein or now or hereafter available at law, in
equity, by statute or otherwise.  Without limiting the obligations of the
Company under Section 15, the Company will pay to the holder of each Note on
demand such further amount as shall be sufficient to cover all costs and
expenses of such holder incurred in any enforcement or collection under this
Section 12, including, without limitation, reasonable attorneys’ fees, expenses
and disbursements.

 

13.                            REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

 

13.1.    Registration of Notes.

 

The Company shall keep at its principal executive office a register for the
registration and registration of transfers of Notes.  The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register. 
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary.  The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.

 

13.2.    Transfer and Exchange of Notes.

 

Upon surrender of any Note to the Company at the address and to the attention of
the designated officer (all as specified in Section 18(iii)), for registration
of transfer or exchange (and in the case of a surrender for registration of
transfer accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or such holder’s attorney duly authorized in
writing and accompanied by the relevant name, address and other information for
notices of each transferee of such Note or part thereof), within ten Business
Days thereafter, the Company shall execute and deliver, at the Company’s expense
(except as provided below), one or more replacement Notes (as requested by the
holder thereof) in exchange therefor, in an

 

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aggregate principal amount equal to the unpaid principal amount of the
surrendered Note.  Each such replacement Note shall be payable to such Person as
such holder may request and shall be substantially in the form of Exhibit 1. 
Each such replacement Note shall be dated and bear interest from the date to
which interest shall have been paid on the surrendered Note or dated the date of
the surrendered Note if no interest shall have been paid thereon.  The Company
may require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes.  Notes shall not be
transferred in denominations of less than $100,000; provided that if necessary
to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000.  Any transferee,
by its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representation set forth in Section 6.2.

 

13.3.    Replacement of Notes.

 

Upon receipt by the Company at the address and to the attention of the
designated officer (all as specified in Section 18(iii)) of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Note (which evidence shall be, in the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and such
loss, theft, destruction or mutilation), and

 

(a)        in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least $5,000,000 or a Qualified Institutional Buyer, such Person’s own
unsecured agreement of indemnity shall be deemed to be satisfactory), or

 

(b)        in the case of mutilation, upon surrender and cancellation thereof,

 

within ten Business Days thereafter, the Company at its own expense shall
execute and deliver, in lieu thereof, a replacement Note, dated and bearing
interest from the date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon;
provided, that in no event shall the Company be required to pay any interest or
principal with respect to a replacement Note if such amounts have previously
been paid with respect to the original Note.

 

14.                            PAYMENTS ON NOTES.

 

14.1.    Place of Payment.

 

Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and
interest becoming due and payable on the Notes shall be made in New York, New
York at the principal office of JPMorgan Chase Bank in such jurisdiction.  The
holder of a Note may at any time, by notice to the Company, change the place of
payment of the Notes so long as such place of payment shall be either the
principal office of the Company in such jurisdiction or the principal office of
a bank or trust company in such jurisdiction.

 

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14.2.    Home Office Payment.

 

So long as any Purchaser or its nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below such Purchaser’s name in Schedule A, or by such
other method or at such other address as such Purchaser shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, such
Purchaser shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at its principal executive office or at the
place of payment most recently designated by the Company pursuant to
Section 14.1.  Prior to any sale or other disposition of any Note held by a
Purchaser or its nominee, such Purchaser will, at its election, either endorse
thereon the amount of principal paid thereon and the last date to which interest
has been paid thereon or surrender such Note to the Company in exchange for a
replacement Note or Notes pursuant to Section 13.2.  The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by a Purchaser under this Agreement
and that has made the same agreement relating to such Note as the Purchasers
have made in this Section 14.2.

 

15.                            EXPENSES, ETC.

 

15.1.    Transaction Expenses.

 

Whether or not the transactions contemplated hereby are consummated, the Company
will pay all costs and expenses (including reasonable attorneys’ fees of a
special counsel and, if reasonably required by the Required Holders, local or
other counsel) incurred by the Purchasers and each other holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement, the Notes or any of the other
Transaction Documents (whether or not such amendment, waiver or consent becomes
effective), including, without limitation:  (a) the costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement, the Notes or any of the other Transaction
Documents or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement, the Notes or any
of the other Transaction Documents, or by reason of being a holder of any Note,
(b) the costs and expenses, including financial advisors’ fees, incurred in
connection with the insolvency or bankruptcy of the Company, any Guarantor or
any Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby, by the Notes and the other Transaction
Documents, and (c) the costs and expenses incurred in connection with the
initial filing of this Agreement and all related documents and financial
information with the SVO provided, that such costs and expenses under this
clause (c) shall not exceed $3,500.  The Company will pay, and will save each
Purchaser and each other holder of a Note harmless from, all claims in respect
of any fees, costs or expenses, if any, of brokers and finders (other than
those, if any, retained by a Purchaser or other holder in connection with its
purchase of the Notes).

 

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15.2.    Survival.

 

The obligations of the Company under this Section 15 will survive the payment or
transfer of any Note, the enforcement, amendment or waiver of any provision of
this Agreement, the Notes or the other Transaction Documents, and the
termination of this Agreement.

 

16.                            SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
ENTIRE AGREEMENT.

 

All representations and warranties contained herein or in any of the other
Transaction Documents shall survive the execution and delivery of this
Agreement, the Notes and the other Transaction Documents, the purchase or
transfer by any Purchaser of any Note or portion thereof or interest therein and
the payment of any Note, and may be relied upon by any subsequent holder of a
Note, regardless of any investigation made at any time by or on behalf of such
Purchaser or any other holder of a Note.  All statements contained in any
certificate or other instrument delivered by or on behalf of any Credit Party or
any Subsidiary pursuant to this Agreement or any of the other Transaction
Documents shall be deemed representations and warranties of such Credit Party or
Subsidiary under this Agreement or such other Transaction Document.  Subject to
the preceding sentence, this Agreement (including the Multiparty Guaranty), the
Notes and the other Transaction Documents embody the entire agreement and
understanding between each Purchaser and the Credit Parties and supersede all
prior agreements and understandings relating to the subject matter hereof.

 

17.                            AMENDMENT AND WAIVER.

 

17.1.    Requirements.

 

This Agreement and the Notes may be amended, and the observance of any term
hereof or of the Notes may be waived (either retroactively or prospectively),
with (and only with) the written consent of the Company and the Required
Holders, except that (a) no amendment or waiver of any of the provisions of
Section 1, 2, 3, 4, 5, 6 or 22 hereof, or any defined term (as it is used
therein), will be effective as to any Purchaser unless consented to by such
Purchaser in writing, (b) no such amendment or waiver may, without the written
consent of the holder of each Note at the time outstanding affected thereby,
(i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 17 or 21, and (c) no amendment to Section 20 hereof shall be
made without consent of the Guarantors affected thereby.

 

17.2.    Solicitation of Holders of Notes.

 

(a)        Solicitation.  The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes.  The

 

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Company will deliver executed or true and correct copies of each amendment,
waiver or consent effected pursuant to the provisions of this Section 17 to each
holder of outstanding Notes promptly following the date on which it is executed
and delivered by, or receives the consent or approval of, the requisite holders
of Notes.

 

(b)        Payment.  The Company will not directly or indirectly pay or cause to
be paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security or provide other credit support, to any
holder of Notes as consideration for or as an inducement to the entering into by
any holder of Notes of any waiver or amendment of any of the terms and
provisions hereof unless such remuneration is concurrently paid, or security is
concurrently granted or other credit support concurrently provided, on the same
terms, ratably to each holder of Notes then outstanding even if such holder did
not consent to such waiver or amendment.

 

(c)        Consent in Contemplation of Transfer.  Any consent made pursuant to
Section 17.2 by the holder of any Note that has transferred or has agreed to
transfer such Note to the Company, any Subsidiary or any Affiliate of the
Company and has provided or has agreed to provide such written consent as a
condition to such transfer shall be void and of no force or effect except solely
as to such holder, and any amendments effected or waivers granted or to be
effected or granted that would not have been or would not be so effected or
granted but for such consent (and the consents of all other holders of Notes
that were acquired under the same or similar conditions) shall be void and of no
force or effect except solely as to such transferring holder.

 

17.3.    Binding Effect, Etc.

 

Any amendment or waiver consented to as provided in this Section 17 applies
equally to all holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether such Note has
been marked to indicate such amendment or waiver.  No such amendment or waiver
will extend to or affect any obligation, covenant, agreement, Default or Event
of Default not expressly amended or waived or impair any right consequent
thereon.  No course of dealing between any Credit Party and the holder of any
Note nor any delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any holder of such Note.  As used herein,
the term “this Agreement” and references thereto shall mean this Agreement as it
may from time to time be amended or supplemented.

 

17.4.    Notes Held by Company, Etc.

 

Solely for the purpose of determining whether the holders of the requisite
percentage of the aggregate principal amount of Notes then outstanding approved
or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by any Credit Party or any of
its Affiliates shall be deemed not to be outstanding.

 

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18.                            NOTICES.

 

All notices and communications provided for hereunder shall be in writing and
sent (a) by telecopy if the sender on the same day sends a confirming copy of
such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid).  Any such notice must be sent:

 

(i)         if to any Purchaser or its nominee, to such Purchaser or nominee at
the address (or telecopy number) specified for such communications in Schedule
A, or at such other address (or telecopy number) as such Purchaser or nominee
shall have specified to the Company in writing,

 

(ii)        if to any other holder of any Note, to such holder at such address
(or telecopy number) as such other holder shall have specified to the Company in
writing, or

 

(iii)       if to any Credit Party, to such Credit Party care of the Company at
its address set forth at the beginning hereof to the attention of the Chief
Financial Officer, or at such other address as the Company shall have specified
to the holder of each Note in writing.

 

Notices under this Section 18 will be deemed given only when actually received.

 

19.                            REPRODUCTION OF DOCUMENTS.

 

This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by any Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, electronic,
digital, or other similar process and such Purchaser may destroy any original
document so reproduced.  Each of the Credit Parties agrees and stipulates that,
to the extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.  This Section 19 shall not prohibit any
Credit Party or any other holder of Notes from contesting any such reproduction
to the same extent that it could contest the original, or from introducing
evidence to demonstrate the inaccuracy of any such reproduction.

 

20.                            MULTIPARTY GUARANTY.

 

The multiparty guaranty under this Section 20 (as amended or otherwise modified
from time to time, the “Multiparty Guaranty”) is made jointly and severally by
each of the Guarantors in favor of the Purchasers, and their respective
successors, assigns and transferees (each of such Persons being referred to
herein as a “Beneficiary” and collectively, as the “Beneficiaries”).

 

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20.1.    Unconditional Guaranty.

 

(a)        Unconditional Guaranty.

 

Each Guarantor hereby unconditionally, absolutely and irrevocably guarantees to
each of the Beneficiaries the prompt and complete payment when due (whether at
stated maturity, by acceleration or otherwise) and performance of all Guaranteed
Obligations.  The term “Guaranteed Obligations” shall mean all loans, advances,
debts, liabilities and obligations for monetary amounts and otherwise from time
to time owing by the Company, in the Company’s capacity as the issuer of Notes,
to the Beneficiaries in connection with this Agreement, the Notes and the other
Transaction Documents, whether due or to become due, matured or unmatured,
liquidated or unliquidated, contingent or non-contingent, and all covenants and
duties regarding such amounts, of any kind or nature, present or future, whether
or not evidenced by any note, agreement or instrument, arising under or in
respect of this Agreement, the Notes or the other Transaction Documents (it
being understood that this term includes all principal, interest (including
interest that accrues after the commencement by or against the Company of any
action under bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law, whether now or
hereafter in effect), the Make-Whole Amount, if any, premium or other prepayment
consideration, fees, expenses, costs or other sums (including, without
limitation, all fees and disbursements of any law firm or other external
counsel) chargeable to the Company, in the Company’s capacity as the issuer of
Notes, under this Agreement, the Notes or the other Transaction Documents).

 

(b)        Reimbursement of Expenses.

 

Each Guarantor also agrees to pay upon demand all costs and expenses (including,
without limitation, all fees and disbursements of any law firm or other external
counsel) incurred by any Beneficiary in enforcing any rights under this
Multiparty Guaranty.

 

(c)        Guaranteed Obligations Unaffected.

 

No payment or payments made by any other Guarantor or other Credit Party, or by
any other guarantor or other Person, or received or collected by any of the
Beneficiaries from any other Guarantor or other Credit Party or from any other
guarantor or other Person by virtue of any action or proceeding or any setoff or
appropriation or application at any time or from time to time in reduction of or
in payment of the Guaranteed Obligations shall be deemed to modify, release or
otherwise affect the liability of each of the Guarantors hereunder which shall,
notwithstanding any such payments, remain liable for the Guaranteed Obligations,
subject to Section 20.5 below, until the Guaranteed Obligations are indefeasibly
paid in full.

 

(d)        Joint and Several Liability.

 

All Guarantors and their respective successors and assigns shall be jointly and
severally liable for the payment of the Guaranteed Obligations and the expenses
required

 

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to be reimbursed to the holders of the Notes pursuant to Section 20.1(b), above,
notwithstanding any relationship or contract of co-obligation by or among the
Guarantors or their successors and assigns.

 

(e)        Enforcement of Guaranteed Obligations.

 

Upon the occurrence and during the continuance of an Event of Default, then and
in any such event all of the Guaranteed Obligations shall automatically become
due and payable (in the case of an Event of Default described in
Section 11(g) or (h)) and all or any part of the Guaranteed Obligations may, at
the option of (i) any holder of any Note (in the case of an Event of Default
described in Section 11(a) or (b)), and (ii) the Required Holders (in the case
of any Event of Default described in Section 11 other than those described in
Section 11(g) or (h)) and without demand, notice or legal process of any kind,
be declared, and immediately shall become, due and payable.

 

(f)         Tolling of Statute of Limitations.

 

Each Guarantor agrees that any payment, performance or other act that tolls any
statute of limitations applicable to the obligations, liabilities and
indebtedness of the Company owing to the Beneficiaries under this Agreement, the
Notes or any of the other Transaction Documents shall also toll the statute of
limitations applicable to such Guarantor’s liability under this Multiparty
Guaranty to the extent permitted by law.

 

(g)        Rights of Contribution.

 

The Company and each Guarantor hereby agree that, to the extent that a Guarantor
shall have paid an amount hereunder to any Beneficiary that is greater than the
net value of the benefits received, directly or indirectly, by such paying
Guarantor as a result of the issuance and sale of the Notes, such paying
Guarantor shall be entitled to contribution from the Company or any Guarantor
that has not paid its proportionate share, based on benefits received as a
result of the issuance and sale of the Notes, of the Guaranteed Obligations. 
Any amount payable as a contribution under this Section 20.1(g) shall be
determined as of the date on which the related payment or distribution is made
by the Guarantor seeking contribution, and each of the Company and the
Guarantors acknowledges that the right to contribution hereunder shall
constitute an asset of such Guarantor to which such contribution is owed. 
Notwithstanding the foregoing, the provisions of this Section 20.1(g) shall in
no respect limit the obligations and liabilities of any Guarantor to the
Beneficiaries hereunder or under any other Transaction Document, and each
Guarantor shall remain liable for the full payment and performance guaranteed
hereunder.  Any indebtedness or other obligations of the Company or a Guarantor
now or hereafter held by or owing to any Guarantor is hereby subordinated in
time and right of payment to all indebtedness or other obligations of the
Company and the Guarantors to any or all of the Beneficiaries under the Notes,
this Agreement or any other Transaction Document.

 

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20.2.    Subrogation.

 

Notwithstanding any payment or payments made by any Guarantor hereunder, each
Guarantor hereby irrevocably waives, solely with respect to such payment or
payments, any and all rights of subrogation to the rights of the Beneficiaries
against the Company and, except to the extent otherwise provided in
Section 20.1(g), any and all rights of contribution, reimbursement, assignment,
indemnification or implied contract or any similar rights against the Company,
any endorser or other guarantor of all or any part of the Guaranteed
Obligations, in each case until such time as the Guaranteed Obligations have
been indefeasibly paid in full (subject to Section 20.5 below).  If,
notwithstanding the foregoing, any amount shall be paid to any Guarantor on
account of such subrogation or other rights at any time when all of the
Guaranteed Obligations shall not have been indefeasibly paid in full, such
amount shall be held by such Guarantor in trust for the Beneficiaries,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to each Beneficiary (ratably based on the
principal amount outstanding of Notes held by such Beneficiary at such time as a
percentage of the aggregate principal amount outstanding of Notes held by all
the Beneficiaries at such time) in the exact form received by such Guarantor
(duly endorsed by such Guarantor to such Beneficiary if required), to be applied
against the Guaranteed Obligations, whether matured or unmatured, in such order
as such Beneficiary may determine.

 

20.3.    Amendments, Etc. with Respect to Guaranteed Obligations.

 

Each Guarantor shall remain obligated hereunder notwithstanding that:  (a) any
demand for payment of any of the Guaranteed Obligations made by any Beneficiary
may be rescinded by such Beneficiary, and any of the Guaranteed Obligations
continued; (b) this Multiparty Guaranty, the Guaranteed Obligations, or the
liability of any other party upon or for any part of the Guaranteed Obligations,
or any collateral security or guaranty therefor or right of setoff with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
any Beneficiary or such other party; (c) this Agreement, the Notes, the other
Transaction Documents and any other document executed in connection with any of
them may be renewed, extended, amended, modified, supplemented or terminated, in
whole or in part; or (d) any guaranty, collateral or right of setoff at any time
held by any Person for the payment of any of the Guaranteed Obligations may be
sold, exchanged, waived, surrendered or released.  When making any demand
hereunder against any Guarantor, each Beneficiary may, but shall be under no
obligation to, make a similar demand on any other Credit Party or any other
Person, and any failure by such Beneficiary to make any such demand or to
collect any payments from any other Credit Party or any other Person or any
release of any such other Credit Party or Person shall not impair or affect the
rights and remedies, express or implied, or as a matter of law, of such
Beneficiary against the Guarantors.  For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings.

 

20.4.    Guaranty Absolute and Unconditional; Termination.

 

(a)        Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Guaranteed Obligations and notice of or proof
of reliance by any Beneficiary upon this Multiparty Guaranty or acceptance of
this

 

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Multiparty Guaranty.  This Agreement, the Notes, the other Transaction Documents
and the Guaranteed Obligations in respect of any of them, shall conclusively be
deemed to have been created, contracted for or incurred in reliance upon this
Multiparty Guaranty; and all dealings between any of the Company or the
Guarantors, on the one hand, and any of the Beneficiaries, on the other, shall
likewise conclusively be presumed to have been had or consummated in reliance
upon this Multiparty Guaranty.  Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon any
Credit Party or any other guarantor with respect to the Guaranteed Obligations. 
Except as provided in Section 20.4(b), this Multiparty Guaranty shall be
construed as a continuing, irrevocable, absolute and unconditional guaranty of
payment, performance and compliance when due (and not of collection) and is a
primary obligation of each Guarantor without regard to (a) the validity or
enforceability of the provisions of this Agreement (other than the Multiparty
Guaranty), the Notes, the other Transaction Documents, any of the Guaranteed
Obligations or any other guaranty or right of setoff with respect thereto at any
time or from time to time held by any Beneficiary, (b) any defense, setoff or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by any of the Credit Parties against any
Beneficiary, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of any Credit Party or guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of any Credit Party or
any other guarantor of the Guaranteed Obligations, in bankruptcy or in any other
instance (other than payment or performance in full of the Guaranteed
Obligations).  Each of the Guarantors hereby agrees that it has complete and
absolute responsibility for keeping itself informed of the business, operations,
properties, assets, condition (financial or otherwise) of the Company, the other
Guarantors, any and all endorsers and any and all guarantors of the Guaranteed
Obligations and of all other circumstances bearing upon the risk of nonpayment
of the obligations evidenced by the Notes or the Guaranteed Obligations, and
each of the Guarantors further agrees that the Beneficiaries shall have no duty,
obligation or responsibility to advise it of any such facts or other
information, whether now known or hereafter ascertained, and each Guarantor
hereby waives any such duty, obligation or responsibility on the part of the
Beneficiaries to disclose such facts or other information to such Guarantor.

 

When pursuing its rights and remedies hereunder against any of the Guarantors,
any Beneficiary may, but shall be under no obligation to, pursue such rights and
remedies as it may have against any other Credit Party or any other Person under
a guaranty of the Guaranteed Obligations or any right of setoff with respect
thereto, and any failure by such Beneficiary to pursue such other rights or
remedies or to collect any payments from any such other Credit Party or Person
or to realize upon any such guaranty or to exercise any such right of setoff, or
any release of any such other Credit Party or Person or any such guaranty or
right of setoff, shall not relieve the Guarantors of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of each of the Beneficiaries against the
Guarantors.  This Multiparty Guaranty shall remain in full force and effect
until all Guaranteed Obligations shall have been satisfied by payment or
performance in full, upon the occurrence of which this Multiparty Guaranty
shall, subject to Section 20.5 below, terminate.

 

45

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(b)        Termination.  Each Guarantor shall be released and discharged
automatically from its obligations under this Multiparty Guaranty provided that
(i) such Guarantor concurrently is released and discharged from its obligations
as a guarantor under the Credit Agreement, the Prudential Note Agreement and
each other Principal Credit Facility, (ii) no Default or Event of Default exists
or would exist after giving effect to such release and discharge, (iii) no
remuneration (whether by way of supplemental or additional interest, fee or
otherwise) or alternative credit support (whether by way of another guaranty,
collateral security, a letter of credit or otherwise) is provided to any lender
under the Credit Agreement, the Prudential Note Agreement or any other Principal
Credit Facility as compensation for such release of such Guarantor under the
Credit Agreement, the Prudential Note Agreement or such other Principal Credit
Facility (provided that the foregoing shall not apply to facility fees,
structuring fees, arrangement fees or similar up-front fees in connection with
the extension or replacement of the Credit Agreement, the Prudential Note
Agreement or any other Principal Credit Facility so long as the primary purpose
of such fees is not compensation for the release of any Guarantor), and (iv) the
Company has delivered an Officer’s Certificate certifying as to the conditions
in each of the immediately preceding clauses (i), (ii) and (iii) and setting
forth the date of effectiveness for such release and discharge.

 

20.5.    Reinstatement.

 

This Multiparty Guaranty shall continue to be effective, or be reinstated, as
the case may be, if at any time the payment, or any part thereof, of any of the
Guaranteed Obligations is rescinded or otherwise must be restored or returned by
any Beneficiary in connection with the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Credit Party upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, any Credit Party or any substantial part of their respective
property or assets, or otherwise, all as though such payments had not been made.

 

20.6.    Payments.

 

Each Guarantor hereby agrees that the Guaranteed Obligations will be paid to
each of the Beneficiaries pursuant to this Agreement without setoff or
counterclaim in immediately available funds at the location and in the currency
or currencies specified by such Beneficiary pursuant to this Agreement.

 

20.7.    Bound by Other Provisions.

 

Each Guarantor agrees that it is bound by each covenant set forth in this
Agreement and that it shall make each representation and warranty set forth in
this Agreement, in each case to the extent the applicable provision pertains to
a Subsidiary.

 

20.8.    Additional Guarantors.

 

The initial Guarantors shall be such Persons as are identified as “Guarantors”
on the signature pages hereof.  From time to time subsequent to the date hereof,
additional Persons that are Subsidiaries or other Affiliates of any Credit Party
may become parties hereto, as additional Guarantors (each an “Additional
Guarantor”), by executing a Joinder to Multiparty Guaranty.

 

46

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Upon delivery of any such Joinder to Multiparty Guaranty to each of the
Beneficiaries, notice of which is hereby waived by the Guarantors, each such
Additional Guarantor shall be a Guarantor and shall be as fully a party hereto
in such capacity as if such Additional Guarantor were an original signatory
hereof.  Each Guarantor expressly agrees that its obligations arising hereunder
shall not be affected or diminished by the addition or release of any other
Guarantor hereunder, nor by any election of the Beneficiaries not to cause any
Subsidiary of any Credit Party to become an Additional Guarantor hereunder. 
This Multiparty Guaranty shall be fully effective as to any Guarantor that is or
becomes a party hereto regardless of whether any other Person becomes or fails
to become or ceases to be a Guarantor hereunder.

 

21.                            CONFIDENTIALITY.

 

For the purposes of this Section 21, “Confidential Information” means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Purchaser as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to such Purchaser prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by such
Purchaser or any person acting on such Purchaser’s behalf, (c) otherwise becomes
known to such Purchaser other than through disclosure by the Company or any
Subsidiary, or (d) constitutes financial statements delivered to such Purchaser
under Section 7.1 that are otherwise publicly available.  Each Purchaser will
maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that such
Purchaser may deliver or disclose Confidential Information to (i) its directors,
officers, employees, agents, attorneys, trustees and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by its Notes), (ii) its financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 21, (iii) any other
holder of any Note, (iv) any Institutional Investor to which it sells or offers
to sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 21), (v) any Person
from which it offers to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 21), (vi) any federal or state
regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or
the SVO or, in each case, any similar organization, or any nationally recognized
rating agency that requires access to information about such Purchaser’s
investment portfolio, or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to such Purchaser, (x) in response to
any subpoena or other legal process, (y) in connection with any litigation to
which such Purchaser is a party, or (z) if an Event of Default has occurred and
is continuing, to the extent such Purchaser may reasonably determine such
delivery and disclosure to be necessary or appropriate in the enforcement or for
the protection of the rights and remedies under such Purchaser’s Notes and this
Agreement.  Each holder of a Note, by its acceptance of a Note, will be deemed
to have agreed to be bound by and to be entitled to the benefits of this
Section 21 as though it were a party to this Agreement.  On

 

47

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reasonable request by the Company in connection with the delivery to any holder
of a Note of information required to be delivered to such holder under this
Agreement or requested by such holder (other than a holder that is a party to
this Agreement or its nominee), such holder will enter into an agreement with
the Company embodying the provisions of this Section 21.

 

22.                            SUBSTITUTION OF PURCHASER.

 

Each Purchaser shall have the right to substitute any one of its Affiliates as
the purchaser of the Notes that it has agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both such Purchaser and
such Affiliate, shall contain such Affiliate’s agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6.  Upon receipt
of such notice, any reference to such Purchaser in this Agreement (other than in
this Section 21), shall be deemed to refer to such Affiliate in lieu of such
original Purchaser.  In the event that such Affiliate is so substituted as a
Purchaser hereunder and such Affiliate thereafter transfers to such original
Purchaser all of the Notes then held by such Affiliate, upon receipt by the
Company of notice of such transfer, any reference to such Affiliate as a
“Purchaser” in this Agreement (other than in this Section 22), shall no longer
be deemed to refer to such Affiliate, but shall refer to such original
Purchaser, and such original Purchaser shall again have all the rights of an
original holder of the Notes under this Agreement.

 

23.                            MISCELLANEOUS.

 

23.1.    Successors and Assigns.

 

All covenants and other agreements contained in this Agreement by or on behalf
of any of the parties hereto bind and inure to the benefit of their respective
successors and assigns (including, without limitation, any subsequent holder of
a Note) whether so expressed or not.

 

23.2.    Payments Due on Non-Business Days.

 

Anything in this Agreement or the Notes to the contrary notwithstanding (but
without limiting the requirement in Section 8.5 that the notice of any optional
prepayment specify a Business Day as the date fixed for such prepayment), any
payment of principal of or Make-Whole Amount or interest on any Note that is due
on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day; provided that if the
maturity date of any Note is a date other than a Business Day, the payment
otherwise due on such maturity date shall be made on the next succeeding
Business Day and shall include the additional days elapsed in the computation of
interest payable on such next succeeding Business Day.

 

23.3.    Accounting Terms.

 

All accounting terms used herein which are not expressly defined in this
Agreement have the meanings respectively given to them in accordance with GAAP. 
Except as otherwise specifically provided herein, (i) all computations made
pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all
financial statements shall be prepared in accordance with

 

48

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

 

GAAP.  If, after the date of this Agreement, there shall occur any change in
GAAP from that used in the preparation of the financial statements referred to
in Section 7.1(b) hereof for the fiscal year ended December 31, 2011 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 Company or the
Required Holders may by notice to the holders of the Notes and the Company,
respectively, require that the holders of the Notes and the Company negotiate in
good faith to amend such covenants, standards, and terms so as equitably to
reflect such change in accounting principles, with the desired result being that
the criteria for evaluating the financial condition of the Company and its
Subsidiaries shall be the same as if such change had not been made.  No delay by
the Company or the Required Holders 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 23.3, financial covenants shall be computed and
determined in accordance with GAAP in effect prior to such change in accounting
principles.

 

23.4.    Severability.

 

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

 

23.5.    Construction, Etc.

 

Each covenant contained herein shall be construed (absent express provision to
the contrary) as being independent of each other covenant contained herein, so
that compliance with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with any other covenant.  Where any
provision herein refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such Person.

 

For the avoidance of doubt, all Schedules and Exhibits attached to this
Agreement shall be deemed to be a part hereof.

 

23.6.    Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which
shall be an original but all of which together shall constitute one instrument. 
Each counterpart may consist of a number of copies hereof, each signed by less
than all, but together signed by all, of the parties hereto.

 

23.7.    Governing Law.

 

This Agreement shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law

 

49

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

 

principles of the law of such state that would permit the application of the
laws of a jurisdiction other than such state.

 

23.8.    Jurisdiction and Process; Waiver of Jury Trial.

 

(a)       Each Credit Party irrevocably submits to the non-exclusive
jurisdiction of any New York State or federal court sitting in the Borough of
Manhattan, The City of New York, over any suit, action or proceeding arising out
of or relating to this Agreement (including the Multiparty Guaranty) or the
Notes.  To the fullest extent permitted by applicable law, each Credit Party
irrevocably waives and agrees not to assert, by way of motion, as a defense or
otherwise, any claim that it is not subject to the jurisdiction of any such
court, any objection that it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

 

(b)       Each Credit Party consents to process being served by or on behalf of
any holder of Notes in any suit, action or proceeding of the nature referred to
in Section 23.8(a) by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, return receipt
requested, to it at its address specified in Section 18 or at such other address
of which such holder shall then have been notified pursuant to said Section. 
Each Credit Party agrees that such service upon receipt (i) shall be deemed in
every respect effective service of process upon it in any such suit, action or
proceeding, and (ii) shall, to the fullest extent permitted by applicable law,
be taken and held to be valid personal service upon and personal delivery to
it.  Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

 

(c)       Nothing in this Section 23.8 shall affect the right of any holder of a
Note to serve process in any manner permitted by law, or limit any right that
the holders of any of the Notes may have to bring proceedings against any Credit
Party in the courts of any appropriate jurisdiction or to enforce in any lawful
manner a judgment obtained in one jurisdiction in any other jurisdiction.

 

(d)       THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON
OR WITH RESPECT TO THIS AGREEMENT (INCLUDING THE MULTIPARTY GUARANTY), THE NOTES
OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

 

WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY, if an action or other proceeding is
brought in the State of California and if the above waiver of the right to a
trial by jury is not enforceable, the parties hereto agree that any and all
disputes or controversies of any nature between them concerning this Agreement
(including the Multiparty Guaranty), the Notes, the other Transaction Documents
and the matters contemplated hereby or thereby (each, a “Claim”), including any
and all

 

50

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

 

questions of law or fact relating thereto, shall be determined by judicial
reference pursuant to the California Code of Civil Procedure (“Reference”).  The
parties shall select a single neutral referee, who shall be a retired state or
federal judge.  In the event that the parties cannot agree upon a referee, the
referee shall be appointed by the court.  The referee shall report a statement
of decision to the court.  Nothing in this paragraph shall limit the right of
any party at any time to exercise any self-help remedies, foreclose against any
collateral or obtain provisional remedies.  The Company shall bear the fees and
expenses of the referee unless the referee orders otherwise.  The referee shall
also determine all issues relating to the applicability, interpretation, and
enforceability of this paragraph.

 

*    *    *    *    *

 

51

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

 

If you are in agreement with the foregoing, please sign the form of agreement on
a counterpart of this Agreement and return it to the Company, whereupon this
Agreement shall become a binding agreement between you and the Company and the
Guarantors.

 

 

 

 

Very truly yours,

 

 

 

THE COMPANY:

 

 

 

 

LTC PROPERTIES, INC.

 

 

 

 

 

 

 

 

 

By:

/s/ Wendy Simpson

 

 

 

Name:

Wendy Simpson

 

 

 

Title:

Chief Executive Officer and President

 

 

 

 

 

 

 

 

 

By:

/s/ Pamela J. Shelley-Kessler

 

 

 

Name:

Pamela J. Shelley-Kessler

 

 

 

Title:

Executive Vice President, Chief Financial

 

 

 

Officer and Secretary

 

 

 

 

 

 

THE GUARANTORS:

 

 

 

 

FLORIDA-LTC, INC.

 

 

LTC GP I, INC.

 

 

LTC-GARDNER, INC.

 

 

LTC-GRIFFIN, INC.

 

 

LTC-JONESBORO, INC.

 

 

 

 

 

On behalf of each of the foregoing Guarantors:

 

 

 

 

 

 

 

 

By:

/s/ Wendy Simpson

 

 

 

Name:

Wendy Simpson

 

 

 

Title:

Chief Executive Officer and President

 

 

 

 

 

 

On behalf of each of the foregoing Guarantors

 

 

 

 

 

 

 

 

By:

/s/ Pamela J. Shelley-Kessler

 

 

 

Name:

Pamela J. Shelley-Kessler

 

 

 

Title:

Executive Vice President, Chief Financial

 

 

 

Officer and Secretary

 

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

 

 

 

ALBUQUERQUE REAL ESTATE INVESTMENTS, INC.

 

 

 

 

 

 

 

 

By:

/s/ Wendy Simpson

 

 

 

Name:

Wendy Simpson

 

 

 

Title:

Chief Executive Officer and President

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Pamela J. Shelley-Kessler

 

 

 

Name:

Pamela J. Shelley-Kessler

 

 

 

Title:

Chief Financial Officer and Treasurer

 

 

 

 

 

 

 

 

BEAUMONT REAL ESTATE INVESTMENTS, LP

 

 

 

 

 

 

By:

L-Tex GP, Inc., its General Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Wendy Simpson

 

 

 

 

Name:

Wendy Simpson

 

 

 

 

Title:

Chief Executive Officer and President

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Pamela J. Shelley-Kessler

 

 

 

 

Name:

Pamela J. Shelley-Kessler

 

 

 

 

Title:

Executive Vice President, Chief

 

 

 

 

Financial Officer and Corporate

 

 

 

 

Secretary

 

 

 

 

 

 

 

 

 

 

LTC PARTNERS IX, L.P.

 

 

 

 

 

 

 

By:

LTC GP VI, Inc., its General Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Wendy Simpson

 

 

 

 

Name:

Wendy Simpson

 

 

 

 

Title:

Chief Executive Officer and President

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Pamela J. Shelley-Kessler

 

 

 

 

Name:

Pamela J. Shelley-Kessler

 

 

 

 

Title:

Executive Vice President, Chief

 

 

 

 

Financial Officer and Corporate

 

 

 

 

Secretary

 

2

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

 

 

 

TEXAS-LTC LIMITED PARTNERSHIP

 

 

 

 

 

 

 

By:

L-Tex GP, Inc., its General Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Wendy Simpson

 

 

 

 

Name:

Wendy Simpson

 

 

 

 

Title:

Chief Executive Officer and President

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Pamela J. Shelley-Kessler

 

 

 

 

Name:

Pamela J. Shelley-Kessler

 

 

 

 

Title:

Executive Vice President, Chief

 

 

 

 

Financial Officer and Corporate

 

 

 

 

Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TEXAS-LTC WOODRIDGE LIMITED PARTNERSHIP

 

 

 

 

 

 

By:

L-Tex GP, Inc., its General Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Wendy Simpson

 

 

 

 

Name:

Wendy Simpson

 

 

 

 

Title:

Chief Executive Officer and President

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Pamela J. Shelley-Kessler

 

 

 

 

Name:

Pamela J. Shelley-Kessler

 

 

 

 

Title:

Executive Vice President, Chief

 

 

 

 

Financial Officer and Corporate

 

 

 

 

Secretary

 

3

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

 

 

 

NORTH CAROLINA REAL ESTATE INVESTMENTS, LLC

 

 

 

 

 

 

By:

LTC-Dearfield, Inc., its Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Wendy Simpson

 

 

 

 

Name:

Wendy Simpson

 

 

 

 

Title:

Chief Executive Officer and President

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Pamela J. Shelley-Kessler

 

 

 

 

Name:

Pamela J. Shelley-Kessler

 

 

 

 

Title:

Executive Vice President, Chief

 

 

 

 

Financial Officer and Corporate

 

 

 

 

Secretary

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

LTC-Richmond, Inc., its Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Wendy Simpson

 

 

 

 

Name:

Wendy Simpson

 

 

 

 

Title:

Chief Executive Officer and President

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Pamela J. Shelley-Kessler

 

 

 

 

Name:

Pamela J. Shelley-Kessler

 

 

 

 

Title:

Executive Vice President, Chief

 

 

 

 

Financial Officer and Corporate

 

 

 

 

Secretary

 

4

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

 

This Agreement is hereby accepted and agreed to as of

the date thereof.

 

 

THE UNITED STATES LIFE INSURANCE COMPANY

IN THE CITY OF NEW YORK

LEXINGTON INSURANCE COMPANY

SUNAMERICA ANNUITY AND LIFE ASSURANCE COMPANY

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

CHARTIS SPECIALTY INSURANCE COMPANY

 

By:

AIG Asset Management (U.S.) LLC, Investment Adviser

 

 

 

 

 

By:

/s/ Peter DeFazio

 

 

Name:

Peter DeFazio

 

Title:

Managing Director

 

 

BANKERS LIFE AND CASUALTY COMPANY

 

WASHINGTON NATIONAL INSURANCE COMPANY

By:

40|86 Advisors, Inc. acting as Investment Advisor

 

 

 

 

 

By:

/s/ Timothy L. Powell

 

 

Name:

Timothy L. Powell

 

Title:

Vice President

 

 

FARM BUREAU LIFE INSURANCE COMPANY OF MICHIGAN

FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN

FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN

INDUSTRIAL ALLIANCE PACIFIC INSURANCE AND

FINANCIAL SERVICES, INC.

AMERICAN REPUBLIC INSURANCE COMPANY

TRUSTMARK INSURANCE COMPANY

CATHOLIC UNITED FINANCIAL

EQUITABLE LIFE & CASUALTY INSURANCE COMPANY

 

By:

Advantus Capital Management, Inc.

 

 

 

 

 

By:

/s/ Robert G. Diedrich

 

 

Name:

Robert G. Diedrich

 

Title:

Vice President

 

5

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

 

SCHEDULE A

 

INFORMATION RELATING TO PURCHASERS

 

 

 

Purchaser Name

THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK

Name in which to register Note(s)

APPLEFISH & CO.

Note Registration Number(s); Principal Amount(s)

R-1; $20,000,000

Payment on account of Note(s)

Method

Account information

 

 

Federal Funds Wire Transfer

 

State Street Bank & Trust Company

ABA # 011-000-028

Account Name:  THE U.S. LIFE INS. CO. – FSA.;  Fund Number PAT6

Account Number:  1013-088-8

Ref. “Accompanying Information” below

Accompanying information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Fax # for notices related to payments

The U.S. Life Ins. Co. – FSA (PAT6)

c/o AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Portfolio Operations

Fax:  (713) 831-1072

or

Email: AIGGIGPVTPLACEMENTOPERATIONS@aig.com

 

Duplicate payment notices to:

 

The U.S. Life Ins. Co. – FSA (PAT6)

c/o State Street Bank Corporation, Insurance Services

Fax:  (816) 871-5539

 

Schedule A-1

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

 

 

 

Purchaser Name

THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK

Address / Fax # for all other notices

The U.S. Life Ins. Co. – FSA (PAT6)

c/o AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Portfolio Operations

Fax:  (713) 831-1072

or

Email: AIGGIGPVTPLACEMENTOPERATIONS@aig.com

 

With a copy of compliance reporting information to:

 

AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Compliance

Email: Complianceprivateplacements@aig.com

 

With a copy to:

 

AIG Asset Management

101 Montgomery Street, Suite 2550

San Francisco, CA  94104

Attn:  Marcy Lyons and/or Griff Behncke

Email:  marcy.lyons@aig.com and/or griff.behncke@aig.com

Instructions re Delivery of Notes

DTC / New York Window

55 Water Street

New York, N.Y.  10041

Attention:  Robert Mendez for the account of State Street Bank

Account Name:  THE U.S. LIFE INS. CO. – FSA

Fund Number:  PA T6

Contact:  Brenda J. Sharp, Phone:  (816) 871-9154

 

Cc:  lavonia.kimani@aig.com and kirk.orr@aig.com.

Upon receipt of executed versions of the transmittal letter from the custodian,
please forward a copy of the same to rachel.lewis@aig.com

Signature Block

THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK

 

By:

AIG Asset Management (U.S.) LLC, Investment Adviser

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Title:

 

Tax identification number

13-5459480 (The United States Life Insurance Company in the City of New York)

04-3475133 (Applefish & Co.)

 

Schedule A-2

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

 

 

 

Purchaser Name

LEXINGTON INSURANCE COMPANY

Name in which to register Note(s)

HARE & CO.

Note Registration Number(s); Principal Amount(s)

R-2; $15,000,000

Payment on account of Note(s)

 

Method

 

Account information

 

 

Federal Funds Wire Transfer

 

The Bank of New York Mellon

ABA #:  021-000-018

Account Number:  GLA111566

For further Credit to: Lexington Insurance Co.;

Account No.  554916

Ref. “Accompanying Information” below

Accompanying information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Fax # for notices related to payments

Lexington Insurance Company (554916)

c/o AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Portfolio Operations

Fax:  (713) 831-1072

or

Email: AIGGIGPVTPLACEMENTOPERATIONS@aig.com

 

Duplicate payment notices to:

 

Lexington Insurance Company (554916)

c/o The Bank of New York Mellon

Attn:  P & I Department

Fax:  (718) 315-3076

 

Schedule A-3

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

 

 

 

Purchaser Name

LEXINGTON INSURANCE COMPANY

Address / Fax # for all other notices

Lexington Insurance Company (554916)

c/o AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Portfolio Operations

Fax:  (713) 831-1072

or

Email: AIGGIGPVTPLACEMENTOPERATIONS@aig.com

 

With a copy of compliance reporting information to:

 

AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Compliance

Email: Complianceprivateplacements@aig.com

 

With a copy to:

 

AIG Asset Management

101 Montgomery Street, Suite 2550

San Francisco, CA  94104

Attn:  Marcy Lyons and/or Griff Behncke

Email:  marcy.lyons@aig.com and/or griff.behncke@aig.com

Instructions re Delivery of Notes

The Bank of New York Mellon

One Wall Street – 3rd Floor Window - A

New York, N.Y.  10286

Attention:  Sammy Yankanah, Phone:  (212) 635-7077

Ref:  Account Name:  Lexington Insurance Company; Account, Number:  554916

 

Cc:  lavonia.kimani@aig.com and kirk.orr@aig.com.

Upon receipt of executed versions of the transmittal letter from the custodian,
please forward a copy of the same to rachel.lewis@aig.com

Signature Block

LEXINGTON INSURANCE COMPANY

 

By:

AIG Asset Management (U.S.) LLC, as Investment Adviser

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Title:

 

Tax identification number

25-1149494 (Lexington Insurance Company)

13-6062916 (Hare & Co.)

 

Schedule A-4

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

 

 

 

Purchaser Name

SUNAMERICA ANNUITY AND LIFE ASSURANCE COMPANY

Name in which Notes are to be registered

HARE & CO.

Note registration number(s); principal amount(s)

R-3; $10,000,000

Payment on account of Note

 

Method

 

Account Information

 

 

Federal Funds Wire Transfer

 

The Bank of New York

ABA #: 021-000-018

ABA # GLA111566

For Further Credit to: SunAmerica Annuity & Life Assurance Co.; Account No. 
113629

Ref. “Accompanying Information” below

Accompanying Information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address/Fax for Notices Relating to Payments

SunAmerica Annuity and Life Assurance Company (113629)

c/o AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas 77019-2155

Attn: Private Placements - Portfolio Operations

Fax: (713) 831-1072

or

Email: AIGGIGPVTPLACEMENTOPERATIONS@aig.com

 

Duplicate payment notices to:

 

SunAmerica Annuity & Life Assurance Co. (113629)

c/o The Bank of New York

Attn: P & I Department

Fax: (718) 315-3076

 

Schedule A-5

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

 

 

 

Purchaser Name

SUNAMERICA ANNUITY AND LIFE ASSURANCE COMPANY

Address/Fax for All Other Notices

SunAmerica Annuity & Life Assurance Co. (113629)

c/o AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas 77019-2155

Attn: Private Placements - Portfolio Operations

Fax: (713) 831-1072

or

Email: AIGGIGPVTPLACEMENTOPERATIONS@aig.com

 

With a copy of compliance reporting information to:

 

AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas 77019-2155

Attn: Private Placements - Compliance

Email: Compliance-AIGGIG@aig.com

 

With a copy to:

 

AIG Asset Management

101 Montgomery Street, Suite 2550

San Francisco, CA 94104

Attn: Marcy Lyons and/or Griff Behncke

Email: marcy.lyons@aig.com and/or griff.behncke@aig.com

Instructions re: Delivery of Notes

The Bank of New York

One Wall Street – 3rd Floor Window - A

New York, N.Y. 10286

Attention: Sammy Yankanah, Phone: (212) 635-7077

Ref: Account Name: SunAmerica Annuity and Life Assurance Company
Account Number: 113629

 

Cc: lavonia.kimani@aig.com and kirk.orr@aig.com.

Upon receipt of executed versions of the transmittal letter from the custodian,
please forward a copy of the same to rachel.lewis@aig.com

Signature Block Format

SUNAMERICA ANNUITY AND LIFE ASSURANCE COMPANY

 

 

 

 

 

By:

AIG Asset Management (U.S.), LLC, investment adviser

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Title:

 

Tax Identification Number

86-0198983 (SunAmerica Annuity and Life Assurance Company)

13-6062916 (Hare & Co.)

 

Schedule A-6

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

 

 

 

Purchaser Name

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

Name in which to register Note(s)

HARE & CO.

Note Registration Number(s); Principal Amount(s)

R-4; $10,000,000

Payment on account of Note(s)

 

Method

 

Account information

 

 

Federal Funds Wire Transfer

 

The Bank of New York Mellon

ABA #:  021-000-018

Account # GLA111566

For Credit to: Variable Annuity Life Insurance Co.; Account No.  260735

Ref. “Accompanying Information” below

Accompanying Information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

5.03% Senior Notes due July 19, 2024

502175 B*2

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Fax # For Notices Relating To Payments

The Variable Annuity Life Insurance Company (260735)

c/o AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Portfolio Operations

Fax:  (713) 831-1072

or

Email: AIGGIGPVTPLACEMENTOPERATIONS@aig.com

 

Duplicate payment notices to:

 

The Variable Annuity Life Insurance Company (260735)

c/o The Bank of New York Mellon

Attn:  P & I Department

Fax:  (718) 315-3076

 

Schedule A-7

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

 

 

 

Purchaser Name

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

Address / Fax # For All Other Notices

The Variable Annuity Life Insurance Company (260735)

c/o AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Portfolio Operations

Fax:  (713) 831-1072

or

Email: AIGGIGPVTPLACEMENTOPERATIONS@aig.com

 

With a copy of compliance reporting information to:

 

AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Compliance

Email: Complianceprivateplacements@aig.com

 

With a copy to:

 

AIG Asset Management

101 Montgomery Street, Suite 2550

San Francisco, CA  94104

Attn:  Marcy Lyons and/or Griff Behncke

Email:  marcy.lyons@aig.com and/or griff.behncke@aig.com

Instructions re Delivery of Notes

The Bank of New York Mellon

One Wall Street – 3rd Floor Window - A

New York, N.Y.  10286

Attention:  Sammy Yankanah, Phone:  (212) 635-7077

Ref:  Account Name:  The Variable Annuity Life Insurance Company

Account Number:  260735

 

Cc:  lavonia.kimani@aig.com and kirk.orr@aig.com.

Upon receipt of executed versions of the transmittal letter from the custodian,
please forward a copy of the same to rachel.lewis@aig.com

Signature Block Format

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

 

By:

AIG Asset Management (U.S.), LLC, investment adviser

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Title:

 

Tax Identification Number

74-1625348(The Variable Annuity Life Insurance Company)

13-6062916 (Hare & Co.)

 

Schedule A-8

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

 

 

 

Purchaser Name

CHARTIS SPECIALTY INSURANCE COMPANY

Name in which to register Note(s)

HARE & CO.

Note Registration Number(s); Principal Amount(s)

R-5; $5,000,000

Payment on account of Note(s)

 

Method

 

Account information

 

 

Federal Funds Wire Transfer

 

The Bank of New York Mellon

ABA #:  021-000-018

Account # GLA111566

For Credit to: Chartis Specialty Insurance Co.; Account No.  554901

Ref. “Accompanying Information” below

Accompanying information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Fax # for notices related to payments

 

Chartis Specialty Insurance Company (554901)

c/o AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Portfolio Operations

Fax:  (713) 831-1072

or

Email: AIGGIGPVTPLACEMENTOPERATIONS@aig.com

 

Duplicate payment notices to:

 

Chartis Specialty Insurance Company (554901)

c/o The Bank of New York Mellon

Attn:  P & I Department

Fax:  (718) 315-3076

 

Schedule A-9

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

 

 

 

Purchaser Name

CHARTIS SPECIALTY INSURANCE COMPANY

Address / Fax # for all other notices

Chartis Specialty Insurance Company (554901)

c/o AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Portfolio Operations

Fax:  (713) 831-1072

or

Email: AIGGIGPVTPLACEMENTOPERATIONS@aig.com

 

With a copy of compliance reporting information to:

 

AIG Asset Management

2929 Allen Parkway, A36-04

Houston, Texas  77019-2155

Attn:  Private Placements - Compliance

Email: Complianceprivateplacements@aig.com

 

With a copy to:

 

AIG Asset Management

101 Montgomery Street, Suite 2550

San Francisco, CA  94104

Attn:  Marcy Lyons and/or Griff Behncke

Email:  marcy.lyons@aig.com and/or griff.behncke@aig.com

Instructions re Delivery of Notes

The Bank of New York Mellon

One Wall Street – 3rd Floor Window - A

New York, N.Y.  10286

Attention:  Sammy Yankanah, Phone:  (212) 635-7077

Ref:  Account Name:  Chartis Specialty Insurance Co.

Account Number:  554901

 

Cc:  lavonia.kimani@aig.com and kirk.orr@aig.com.

Upon receipt of executed versions of the transmittal letter from the custodian,
please forward a copy of the same to rachel.lewis@aig.com

Signature Block

CHARTIS SPECIALTY INSURANCE COMPANY

 

By:

AIG Asset Management (U.S.), LLC, investment adviser

 

 

 

By:

 

 

 

 

Name:

Title:

Tax identification number

02-0309086(Chartis Specialty Insurance Company)

13-6062916 (Hare & Co.)

 

 

 

Schedule A-10

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

 

 

 

Purchaser Name

BANKERS LIFE AND CASUALTY COMPANY

Name in which to register Note(s)

HARE & CO.

Note Registration Number(s); Principal Amount(s)

R-6; $10,000,000

Payment on account of Note

 

Method

 

Account information

 

 

Federal Funds Wire Transfer

 

The Bank of New York

ABA#:  021000018

BNF:  IOC566

Attn:  P&I Department (Purisima Teylan)

Ref:  Bankers Life and Casualty Company, A/C# 0000014814

Further Ref:  (See “Accompanying information” below)

Accompanying information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Fax # for notices related to payments

John K. Nasser

Manager, Investment Operations

40|86 Advisors, Inc.

535 N. College Drive

Carmel, IN 46032

Tel:   317-817-6069

Fax:   317-817-2589

Address / Fax # for all other notices

Timothy L. Powell

Vice President

40|86 Advisors, Inc.

535 N. College Drive

Carmel, IN 46032

Tel:   317-817-3633

Fax:   317-817-2589

Instructions re Delivery of Notes

The Bank of New York

One Wall Street, 3rd Floor

Window A

New York, NY 10286

Attn:  Michael Visone (212-635-1262)

FAO:  Bankers Life and Cas.; a/c# 014814; $10mm Note

Signature Block

BANKERS LIFE AND CASUALTY COMPANY

 

By: 40|86 Advisors, Inc. acting as Investment Advisor

 

 

 

By:

 

 

 

Name: Timothy L. Powell

Title:   Vice President

Tax identification number

36-0770740

 

Schedule A-11

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

 

 

 

Purchaser Name

WASHINGTON NATIONAL INSURANCE COMPANY

Name in which to register Note(s)

HARE & CO.

Note Registration Number(s); Principal Amount(s)

R-7; $5,000,000

Payment on account of Note

 

Method

 

Account information

 

 

Federal Funds Wire Transfer

 

The Bank of New York

ABA#:  021000018

BNF:  IOC566

Attn:  P&I Department (Purisima Teylan)

Ref:  Washington National Insurance Co., A/C# 0000379363

Further Ref:  (See “Accompanying information” below)

Accompanying information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Fax # for notices related to payments

John K. Nasser

Manager, Investment Operations

40|86 Advisors, Inc.

535 N. College Drive

Carmel, IN 46032

Tel:   317-817-6069

Fax:   317-817-2589

Address / Fax # for all other notices

Timothy L. Powell

Vice President

40|86 Advisors, Inc.

535 N. College Drive

Carmel, IN 46032

Tel:   317-817-3633

Fax:   317-817-2589

Instructions re Delivery of Notes

The Bank of New York

One Wall Street, 3rd Floor

Window A

New York, NY 10286

Attn:  Michael Visone (212-635-1262)

FAO:  Washington National Ins.; a/c# 379363; $5mm Note

Signature Block

WASHINGTON NATIONAL INSURANCE COMPANY

 

By: 40|86 Advisors, Inc. acting as Investment Advisor

 

 

 

By:

 

 

 

Name: Timothy L. Powell

Title:   Vice President

Tax identification number

36-1933760

 

Schedule A-12

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

 

 

 

Purchaser Name

FARM BUREAU LIFE INSURANCE COMPANY OF MICHIGAN

Name in which to register Note(s)

FARM BUREAU LIFE INSURANCE COMPANY OF MICHIGAN

Note Registration Number(s); Principal Amount(s)

R-8; $4,000,000

 

Payment on account of Note(s)

 

Method

 

Account Information

 

 

To be provided to the Company prior to closing

 

Accompanying Information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Email for all notices and communications

All notices and statements should be sent electronically via Email to:
privateplacements@advantuscapital.com.

 

If Email is unavailable or if the Email is returned for any reason (including
receipt of a message that the Email is undeliverable), such notice and
statements should be sent to the following address:

 

Farm Bureau Life Insurance Company of Michigan

c/o Advantus Capital Management, Inc.

400 Robert Street North

St. Paul, MN  55101

Attn:  Client Administrator

Instructions re: delivery of Notes

Instructions to be provided to Bingham McCutchen prior to closing

 

Form signature block

FARM BUREAU LIFE INSURANCE COMPANY OF MICHIGAN

 

By:

Advantus Capital Management, Inc.

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Title:  

 

Tax Identification Number

38-6056370

 

Schedule A-13

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

 

 

 

Purchaser Name

FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN

Name in which to register Note(s)

FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN

Note Registration Number(s); Principal Amount(s)

R-9; $1,000,000

 

Payment on account of Note(s)

 

Method

 

Account Information

 

 

To be provided to the Company prior to closing

 

Accompanying Information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Email for all notices and communications

All notices and statements should be sent electronically via Email to:
privateplacements@advantuscapital.com.

 

If Email is unavailable or if the Email is returned for any reason (including
receipt of a message that the Email is undeliverable), such notice and
statements should be sent to the following address:

 

Farm Bureau General Insurance Company of Michigan

c/o Advantus Capital Management, Inc.

400 Robert Street North

St. Paul, MN  55101

Attn:  Client Administrator

Instructions re: delivery of Notes

Instructions to be provided to Bingham McCutchen prior to closing

 

Form signature block

FARM BUREAU General INSURANCE COMPANY OF MICHIGAN

 

By:

Advantus Capital Management, Inc.

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Title:  

 

Tax Identification Number

38-6056228

 

Schedule A-14

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

 

 

 

Purchaser Name

FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN

Name in which to register Note(s)

FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN

Note Registration Number(s); Principal Amount(s)

R-10; $1,000,000

 

Payment on account of Note(s)

 

Method

 

Account Information

 

 

To be provided to the Company prior to closing

 

Accompanying Information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Email for all notices and communications

All notices and statements should be sent electronically via Email to:
privateplacements@advantuscapital.com.

 

If Email is unavailable or if the Email is returned for any reason (including
receipt of a message that the Email is undeliverable), such notice and
statements should be sent to the following address:

 

Farm Bureau Mutual Insurance Company of Michigan

c/o Advantus Capital Management, Inc.

400 Robert Street North

St. Paul, MN  55101

Attn:  Client Administrator

Instructions re: delivery of Notes

Instructions to be provided to Bingham McCutchen prior to closing

 

Form signature block

FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN

 

By:

Advantus Capital Management, Inc.

 

 

 

 

 

 

By:

 

 

 

 

Name:

Title:  

 

Tax identification number

38-1316179

 

Schedule A-15

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

 

 

 

Purchaser Name

INDUSTRIAL ALLIANCE PACIFIC INSURANCE AND FINANCIAL SERVICES, INC.

Name in which to register Note(s)

HARE & CO.

Note Registration Number(s); Principal Amount(s)

R-11; $1,500,000

 

Payment on account of Note(s)

 

Method

 

Account Information

 

 

To be provided to the Company prior to closing

 

Accompanying Information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Email for all notices and communications

All notices and statements should be sent electronically via Email to:
privateplacements@advantuscapital.com.

 

If Email is unavailable or if the Email is returned for any reason (including
receipt of a message that the Email is undeliverable), such notice and
statements should be sent to the following address:

 

Industrial Alliance Pacific Insurance and Financial Services, Inc.

c/o Advantus Capital Management, Inc.

400 Robert Street North

St. Paul, MN  55101

Attn:  Client Administrator

Instructions re: delivery of Notes

Instructions to be provided to Bingham McCutchen prior to closing

 

Form signature block

INDUSTRIAL ALLIANCE PACIFIC INSURANCE AND FINANCIAL SERVICES, INC.

 

By:

 Advantus Capital Management, Inc.

 

 

 

 

 

By:

 

 

 

 

Name:

Title:  

Tax Identification Number

74-6036463

 

Schedule A-16

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

 

 

 

Purchaser Name

AMERICAN REPUBLIC INSURANCE COMPANY

Name in which to register Note(s)

WELLS FARGO BANK N.A. AS CUSTODIAN FOR AMERICAN REPUBLIC INSURANCE COMPANY

Note Registration Number(s); Principal Amount(s)

R-12; $1,000,000

Payment on account of Note(s)

 

Method

 

Account Information

 

 

To be provided to the Company prior to closing

 

Accompanying Information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Email for all notices and communications

All notices and statements should be sent electronically via Email to:
privateplacements@advantuscapital.com.

 

If Email is unavailable or if the Email is returned for any reason (including
receipt of a message that the Email is undeliverable), such notice and
statements should be sent to the following address:

 

American Republic Insurance Company

c/o Advantus Capital Management, Inc.

400 Robert Street North

St. Paul, MN  55101

Attn:  Client Administrator

Instructions re: delivery of Notes

Instructions to be provided to Bingham McCutchen prior to closing

 

Form signature block

AMERICAN REPUBLIC INSURANCE COMPANY

 

By:

Advantus Capital Management, Inc.

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Title:  

 

Tax Identification Number

42-0113630

 

Schedule A-17

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

 

 

 

Purchaser Name

TRUSTMARK INSURANCE COMPANY

Name in which to register Note(s)

ELL & CO.

Note Registration Number(s); Principal Amount(s)

R-13; $1,000,000

 

Payment on account of Note(s)

 

Method

 

Account Information

 

 

To be provided prior to closing

 

Accompanying Information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Email for all notices and communications

All notices and statements should be sent electronically via Email to:
privateplacements@advantuscapital.com.

 

If Email is unavailable or if the Email is returned for any reason (including
receipt of a message that the Email is undeliverable), such notice and
statements should be sent to the following address:

 

Trustmark Insurance Company

c/o Advantus Capital Management, Inc.

400 Robert Street North

St. Paul, MN  55101

Attn:  Client Administrator

Instructions re: delivery of Notes

Instructions to be provided to Bingham McCutchen prior to closing

 

Form signature block

TRUSTMARK INSURANCE COMPANY

 

By:

Advantus Capital Management, Inc.

 

 

 

 

 

By:

 

 

 

 

Name:

Title:  

 

Tax Identification Number

36-0792925

 

Schedule A-18

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

 

 

 

Purchaser Name

CATHOLIC UNITED FINANCIAL

Name in which to register Note(s)

WELLS FARGO BANK N.A. FBO CATHOLIC UNITED FINANCIAL

Note Registration Number(s); Principal Amount(s)

R-14; $1,000,000

 

Payment on account of Note(s)

 

Method

 

Account Information

 

 

To be provided prior to closing

 

Accompanying Information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Email for all notices and communications

All notices and statements should be sent electronically via Email to:
privateplacements@advantuscapital.com.

 

If Email is unavailable or if the Email is returned for any reason (including
receipt of a message that the Email is undeliverable), such notice and
statements should be sent to the following address:

 

Catholic United Financial

c/o Advantus Capital Management, Inc.

400 Robert Street North

St. Paul, MN  55101

Attn:  Client Administrator

Instructions re: delivery of Notes

Instructions to be provided to Bingham McCutchen prior to closing

 

Form signature block

CATHOLIC UNITED FINANCIAL

 

By:

Advantus Capital Management, Inc.

 

 

 

 

 

 

 

By:

 

 

 

 

Name:
Title:  

 

Tax Identification Number

41-0182070

 

Schedule A-19

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

 

 

 

Purchaser Name

EQUITABLE LIFE & CASUALTY INSURANCE COMPANY

Name in which to register Note(s)

WELLS FARGO BANK N.A. AS CUSTODIAN FOR EQUITABLE LIFE & CASUALTY INSURANCE
COMPANY

Note Registration Number(s); Principal Amount(s)

R-15; $300,000

 

Payment on account of Note(s)

 

Method

 

Account Information

 

 

To be provided prior to closing

 

Accompanying Information

Name of Company:

 

Description of Security:

 

PPN:

 

LTC PROPERTIES, INC.

 

5.03% Senior Notes due July 19, 2024

 

502175 B*2

 

 

Due date and application (as among principal, interest and Make-Whole Amount) of
the payment being made:

Address / Email for all notices and communications

All notices and statements should be sent electronically via Email to:
privateplacements@advantuscapital.com.

 

If Email is unavailable or if the Email is returned for any reason (including
receipt of a message that the Email is undeliverable), such notice and
statements should be sent to the following address:

 

Equitable Life & Casualty Insurance Company

c/o Advantus Capital Management, Inc.

400 Robert Street North

St. Paul, MN  55101

Attn:  Client Administrator

Instructions re: delivery of Notes

Instructions to be provided to Bingham McCutchen prior to closing

 

Form signature block

EQUITABLE LIFE & CASUALTY INSURANCE COMPANY

 

By:

Advantus Capital Management, Inc.

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Title:  

 

Tax Identification Number

87-0129771

 

Schedule A-20

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

 

SCHEDULE B

 

DEFINED TERMS

 

As used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:

 

“Additional Guarantor” is defined in Section 20.8.

 

“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
other 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.

 

“Affiliated Entity” means any of the Subsidiaries of the Company and any of
their or the Company’s respective Controlled Affiliates.  As used in this
definition, “Control” means the possession, directly or indirectly, by a first
Person of the power to direct or cause the direction of the management and
policies of a second Person (with such second Person being a “Controlled”
Person), whether through the ownership of voting securities, by contract or
otherwise.

 

“Agreement” is defined in Section 17.3.

 

“ALFs” means assisted living facilities.

 

“Applicable Total Asset Value” means, at any time of determination thereof, the
Total Asset Value at such time as determined based on the most recent financial
statements delivered pursuant to Section 7.1(b) (or, if no financial statements
have yet been delivered pursuant to Section 7.1(b) at such time, the most recent
audited financial statements of the Company and its Subsidiaries referenced in
Schedule 5.5).

 

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

 

“Bank Facility” means the credit facility or facilities from time to time
provided in connection with the Credit Agreement.

 

“Beneficiaries” is defined in Section 20.

 

“Blocked Person” is defined in Section 5.16.

 

“Business Day” means any day other than a Saturday, a Sunday or a day on which

 

Schedule B-1

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

 

commercial banks in New York City are required or authorized to be closed.

 

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

 

“Capitalization Rate” means 8.25% for ALFs, or 10% for SNFs.  The Capitalization
Rates for continuum of care facilities will be 9% for facilities where <50% of
beds are classified as SNF beds, and shall otherwise be 10%.

 

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

 

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

 

“Change 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 Company 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 2% of the Applicable Total Asset Value shall occur,
or (c) during any twelve (12) month period on or after the date hereof,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by the
Board of Directors or whose nomination for election by the shareholders of the
Company 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” is defined in Section 3.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.

 

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

 

“Confidential Information” is defined in Section 21.

 

“Credit Agreement” means that certain Credit Agreement, dated as of April 18,
2011, by and among the Company, the Guarantors, the Lenders named therein and
from time to time party thereto and the other parties from time to time party
thereto, as amended, restated, supplemented, replaced or otherwise modified from
time to time.

 

“Credit Parties” means the Company and the Guarantors.

 

Schedule B-2

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

 

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

 

“Default” means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.

 

“Default Rate” means that rate of interest that is the greater of (i) 2% per
annum above the rate of interest stated in clause (a) of the first paragraph of
the Notes or (ii) 2% over the rate of interest publicly announced by JPMorgan
Chase Bank in New York, New York as its “base” or “prime” rate.

 

“Disclosure Documents” is defined in Section 5.3.

 

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

 

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

 

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

 

“Eligible Property NOI” means, for any given period, the aggregate Property NOI
attributable to the UAP Properties.

 

“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

 

Schedule B-3

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

 

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
from time to time, and the rules and regulations promulgated thereunder from
time to time in effect.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is treated as a single employer together with the Company under section 414 of
the Code.

 

“Event of Default” is defined in Section 11.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time
in effect.

 

“Financial Covenant” means any covenant (whether set forth as a covenant,
undertaking, event of default, restriction or other such provision, and
including all defined terms used with respect thereto) similar in nature to the
covenants set out in Section 10.9 of this Agreement or that otherwise provides
for limitations on indebtedness or interest expense, or a minimum level of
interest coverage, net worth or any other minimum or maximum metric of financial
performance (however expressed and whether stated as a ratio or as a fixed
threshold or otherwise).

 

“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.

 

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination; provided, that (except with respect to SEC filings referenced in
Section 7.1(a) and (b)) “GAAP” shall exclude the effects of Accounting Standards
Codification 825-10-25 (previously referred to as SFAS 159) or any successor or
similar provision to the extent it relates to “fair value” accounting for
liabilities.

 

“Governmental Authority” means

 

(a)        the government of

 

(i)          the United States of America or any state or other political
subdivision thereof, or

 

Schedule B-4

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

 

(ii)         any other jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts jurisdiction over any
properties of the Company or any Subsidiary, or

 

(b)        any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

 

“Guaranteed Obligations” is defined in Section 20.1(a).

 

“Guarantors” means the Persons from time to time party hereto and obligated
under the Multiparty Guaranty, including (i) the Persons signatory hereto and
identified on the signature pages hereto as “Guarantors”, and (ii) each other
Person which from time to time hereafter executes and delivers a Joinder to
Multiparty Guaranty pursuant to the requirements of Section 9.8; as any of the
foregoing Persons in clauses (i) and (ii) from time to time may be released and
discharged from its obligations under the Multiparty Guaranty pursuant to the
provisions of Section 20.4.

 

“Guaranty” shall mean, with respect to any Person, any direct or indirect
obligation or liability, contingent or otherwise, of such Person guaranteeing or
having the economic effect of guaranteeing any Indebtedness for Borrowed Money,
lease, dividend or other obligation payable or performable by another Person in
any manner, including, without limitation, any obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business) or discounted or sold with recourse by such Person, or in
respect of which such Person is otherwise directly or indirectly liable or
obligated, and including, without limitation, any obligation of such Person
(contingent or otherwise, direct or indirect) to:  (i) maintain working capital,
equity capital, the solvency or any balance sheet condition or other financial
condition or liquidity or level of income or cash flow of another Person in any
manner; (ii) to purchase the obligations of or equity interests in another
Person from the holders of such obligations or interests; (iii) to purchase or
lease property, securities or services or supply or advance any funds, goods or
services to or on behalf of another Person in any manner; (iv) to guarantee
(a) the completion of any work or any other schedule or deliverable obligations
or requirements of another Person in any manner, (b) the quality of any
construction work, means or methods of another Person in any manner, (c) any
warranty or indemnity obligations of another Person in any manner, or (d) any
other payment, performance or contractual obligations of another Person in any
manner; or (v) purchase or otherwise pay (or advance or supply funds for the
purchase or payment of) any Indebtedness for Borrowed Money or other obligation
of another Person or to purchase or otherwise make payment for (or advance or
supply funds for the purchase or payment for) any products, materials, supplies
or other property, or for any transportation or services, regardless of the
non-delivery or non-furnishing thereof, in any such case if the purpose or
effect of such agreement is to provide assurance that such obligation will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such obligation will be protected against loss in
respect thereof.  Guaranties shall include obligations of partnerships and joint
ventures of which such Person is a general partner or co-venturer that are not
expressly non-recourse to such Person.  In any computation of the indebtedness
or other liabilities of the obligor under any Guaranty, the indebtedness or
other obligations that are the subject of such Guaranty shall be assumed to be
direct obligations of such obligor.

 

Schedule B-5

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

 

“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.

 

“holder” means, with respect to any Note, the Person in whose name such Note is
registered in the register maintained by the Company pursuant to Section 13.1.

 

“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.

 

“include” or “including” means, unless the context clearly requires otherwise,
“including without limitation.”

 

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

 

“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a
Note holding (together with one or more of its affiliates) more than 5% of the
aggregate principal amount of the Notes then outstanding, (c) any bank, trust
company, savings and loan association or other financial institution, any
pension plan, any investment company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form, and (d) any Related Fund of any holder of any Note.

 

“Interest Expense” means, for any period of determination, the interest expense,
whether paid, accrued or capitalized (without deduction of consolidated interest
income) of the Company and its Subsidiaries on a consolidated basis 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).

 

“Joinder to Multiparty Guaranty” means a joinder agreement entered into by an
Additional Guarantor in substantially the form of Exhibit 20.8.

 

Schedule B-6

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

 

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

 

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

 

“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.

 

“Make-Whole Amount” is defined in Section 8.7.

 

“Material” means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Credit Parties
taken as a whole.

 

“Material Adverse Effect” means a material and adverse effect on (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Company and its Subsidiaries taken as a whole, (b) the ability
of the Company or any Guarantor to perform its obligations under the Transaction
Documents to which it is a party, or (c) the validity or enforceability of any
of the Transaction Documents or the rights or remedies of the holders of Notes
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
Unencumbered Asset Pool.

 

“Memorandum” is defined in Section 5.3.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

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

 

“Multiparty Guaranty” is defined in Section 20.

 

“NAIC” means the National Association of Insurance Commissioners or any
successor thereto.

 

“Notes” is defined in Section 1.

 

“OFAC Listed Person” is defined in Section 5.16.

 

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of
any other officer of the Company whose responsibilities extend to the subject
matter of such certificate.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in

 

Schedule B-7

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

 

ERISA or any successor thereto.

 

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

 

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

 

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

 

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

 

(d)        if a new Subsidiary is formed or acquired as a result of or in
connection with the investment or acquisition, the Company shall have complied
with the requirements of Section 9.8 hereof (to the extent applicable) in
connection therewith; and

 

(e)        after giving effect to the investment or acquisition, no Event of
Default shall exist, including with respect to the financial covenants contained
in Section 10.9 hereof, provided, further, that if such investment or
acquisition, together with any other investments or acquisitions made during 
such Fiscal Quarter have an aggregate cost exceeding 20% of the Total Asset
Value of the Company and its Subsidiaries as of the last day of the most
recently ended Fiscal Quarter for which financial statements have been delivered
pursuant to Section 7.1 hereof, then for such investment or acquisition, the
Company shall provide to the holders of Notes which are Institutional Investors
an executed certificate of a Senior Financial Officer showing the Company’s pro
forma compliance with the covenants contained in Section 10.9 after giving
effect to the proposed investment or acquisition, including giving effect in
terms of additional asset value, liabilities incurred, if any, and additional
revenues and expenses associated therewith which have been contemplated and have
been projected into the expected operating results and financial position of the
Company for the Fiscal Quarter in which the investment or acquisition occurs.

 

“Permitted Lien” means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding has been commenced: 
(a) Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 9.4; (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

 

Schedule B-8

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

 

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
Company 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 Unencumbered Asset Pool.

 

“Person” means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, joint venture or other entity, or a Governmental Authority.

 

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA)
subject to Title I of ERISA that is or, within the preceding five years, has
been established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.

 

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

 

“Principal Credit Facility” means any loan agreement, credit agreement, note
purchase agreement or similar agreement under which credit facilities in the
aggregate original principal or commitment amount of at least $50,000,000 are
provided for.

 

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

 

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

 

“Property Income” means cash rents (excluding, as an abundance of caution,
non-cash straight-line rent) and other cash revenues received by the Company or
a Guarantor in the ordinary course for any UAP Property, but excluding security
deposits and prepaid rent except to the extent applied in satisfaction of
tenants’ obligations for rent.

 

“Property Net Operating Income” or “Property NOI” means, with respect to any
property and for the four most recently ended Fiscal Quarters the aggregate
amount of (i) Property Income for such period minus (ii) Property Expenses for
such period.

 

“Proposed Prepayment Date” is defined in Section 8.3(b).

 

“Prudential Note Agreement” means that certain Amended and Restated Note
Purchase

 

Schedule B-9

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

 

and Private Shelf Agreement, dated as of October 19, 2011, by and among the
Company, the Guarantors, Prudential, and the other Prudential affiliates named
therein or from time to time party thereto, as amended, restated, supplemented,
replaced or otherwise modified from time to time.

 

“Prudential” means Prudential Investment Management, Inc., and its successors
and assigns.

 

“Prudential Noteholders” means the holders from time to time of the notes issued
from time to time under the Prudential Note Agreement.

 

“Purchaser” is defined in the  first paragraph of this Agreement.

 

“Qualified Institutional Buyer” means any Person who is a “qualified
institutional buyer” within the meaning of such term as set forth in
Rule 144A(a)(1) under the Securities Act.

 

“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.

 

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

 

“REIT” means a Person that is qualified to be treated for tax purposes as a real
estate investment trust under Sections 856-860 of the Code.

 

“Related Fund” means, with respect to any holder of any Note, any fund or entity
that (i) invests in Securities or bank loans, and (ii) is advised or managed by
such holder, the same investment advisor as such holder or by an affiliate of
such holder or such investment advisor.

 

“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.

 

“Required Holders” means, at any time, the holder or holders of more than 50% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by any Credit Party, any Subsidiary or any of their respective
Affiliates).

 

“Responsible Officer” means any Senior Financial Officer and any other officer
of the Company or any other Credit Party, as applicable, with responsibility for
the administration of the relevant portion of this Agreement or any other
Transaction Document.

 

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

 

“Securities” or “Security” shall have the meaning specified in Section 2(1) of
the Securities Act.

 

Schedule B-10

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

 

“Secured Debt” means, as of any given date, the aggregate principal amount of
all Total Indebtedness outstanding at such date that is secured by a Lien.

 

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

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

 

“Senior Financial Officer” means the chief executive officer, chief financial
officer, principal accounting officer, treasurer or controller of the Company.

 

“Senior Housing Assets” means any Properties 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 Properties primarily used for
senior citizen residences or health care services, together with other
improvements incidental thereto.

 

“Significant Lease” means, for any specified calendar year, any Lease under
which the Company or one of its Subsidiaries is the lessor and which Lease
provides for annual minimum cash rent payments of $2,000,000 or more during such
calendar year (notwithstanding the amount of lease payments in prior or
subsequent years).

 

“SNFs” means skilled nursing facilities.

 

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

 

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

 

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

 

“Subsidiary” of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate (i) of which (or in which) more than
50% of (a) the issued and outstanding capital stock having ordinary voting power
to elect a majority of the Board of Directors of such corporation (irrespective
of whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company, or (c) the beneficial interest in
such trust or estate, in each case, is at the time directly or indirectly owned
or controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person’s other Subsidiaries, or (ii) the
accounts of which would appear on the consolidated financial statements of such
Person in accordance with

 

Schedule B-11

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

 

GAAP.  Unless the context otherwise clearly requires, any reference to a
“Subsidiary” is a reference to a Subsidiary of the Company.

 

“SVO” means the Securities Valuation Office of the NAIC or any successor to such
Office.

 

“Tangible Net Worth” means for each applicable period, total stockholders’
equity on the Company’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.

 

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

 

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

 

“Transaction Documents” means this Agreement (including the Multiparty
Guaranty), the Notes, and any and all other agreements, documents, certificates
and instruments from time to time executed and delivered by or on behalf of any
Credit Party related thereto.

 

“UAP Property” is defined in the definition of “Unencumbered Asset Pool.”

 

“Unencumbered Asset Pool” means, a pool of unencumbered Properties consisting of
properties (each a “UAP Property” and collectively, the “UAP Properties”) owned
by the Company or a Guarantor, and (i) listed on Schedule 5.24 on the date
hereof or (ii) deemed to be listed on Schedule 5.24 after such properties’
designation by the Company as a UAP Property in writing to the holders of Notes
in accordance with Section 9.9 hereof; that meet the following criteria:

 

(a)                               is real property 100% owned in fee simple by
the Company and/or a Guarantor;

 

(b)                              is currently in service (not under development
or non stabilized);

 

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

 

(d)                              if such Property is owned by the Company,
(i) neither the Company’s beneficial ownership interest in such Property nor the
Property is subject to any Lien (other than Permitted Liens and Liens in favor
of a collateral agent for the ratable benefit of the holders from time to time
of the Notes, the Prudential Noteholders, the Lenders under (and as defined in)
the Credit Agreement and other indebtedness (subject to compliance with
Section 10.1)) or to any negative pledge other than the negative pledge set
forth herein or in the Credit Agreement or the Prudential Note Agreement or
agreement governing such other indebtedness and (ii) the Company has the
unilateral right to (x) sell, transfer or otherwise dispose of such Property and
(y) to create a Lien on such Property as security for indebtedness of the
Company (other than

 

Schedule B-12

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

 

restrictions imposed by the negative pledge set forth herein or in the Credit
Agreement or the Prudential Note Agreement or agreement governing such other
indebtedness);

 

(e)        if such Property is owned by a Guarantor, (i) none of the Company’s
beneficial ownership interest in such Guarantor or the Property is subject to
any Lien (other than Permitted Liens and Liens in favor of a collateral agent
for the ratable benefit of the holders from time to time of the Notes, the
Prudential Noteholders, the Lenders under (and as defined in) the Credit
Agreement and other indebtedness (subject to compliance with Section 10.1)) or
to any negative pledge other than the negative pledge set forth herein or in the
Credit Agreement or the Prudential Note Agreement or agreement governing such
other indebtedness and (ii) the Guarantor has the unilateral right to (x) sell,
transfer or otherwise dispose of such Property and (y) to create a Lien on such
Property as security for indebtedness of the Company or such Guarantor (other
than restrictions imposed by the negative pledge set forth herein or in the
Credit Agreement or the Prudential Note Agreement or agreement governing such
other indebtedness);

 

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

 

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

 

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

 

(a)        for all UAP Properties owned for more than twelve (12) months prior
to the date of determination, the quotient of (i) the Property NOI from such UAP
Properties divided by (ii) the Capitalization Rate, plus

 

(b)        for all UAP Properties owned for twelve (12) months or less prior to
the date of determination, the lesser of (i) the book value (as defined by GAAP)
of any such UAP Property or (ii) the value of any such UAP Property as
determined by the calculation in clause (a) above.

 

“Unsecured Debt” means, as of any date of determination, the aggregate principal
amount of all Total Indebtedness outstanding at such date that is not Secured
Debt.

 

“USA Patriot Act” means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

 

“Voting Interests” means shares of capital stock issued by a corporation, or
equivalent equity interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even if
the right so to vote has been suspended by the happening of such a contingency.

 

Schedule B-13

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

 

“Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred percent
of all of the equity interests (except directors’ qualifying shares) and voting
interests of which are owned by any one or more of the Company and the Company’s
other Wholly-Owned Subsidiaries at such time.

 

Schedule B-14

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

 

EXHIBIT 1

 

[FORM OF NOTE]

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE
REGISTRATION UNDER SAID ACT IS IN EFFECT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SAID ACT OR IF SAID ACT DOES NOT APPLY.

 

LTC PROPERTIES, INC.

 

5.03% SENIOR NOTE DUE JULY 19, 2024

 

No. [          ]

 

[Date]

$[              ]

 

PPN: 502175 B*2

 

For Value Received, the undersigned, LTC PROPERTIES, INC. (herein called the
“Company”), a corporation organized and existing under the laws of the State of
Maryland, hereby promises to pay to [                        ], or registered
assigns, the principal sum of [                                          ]
Dollars (or so much thereof as shall not have been prepaid) on July 19, 2024,
with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) on the unpaid balance hereof at the rate of 5.03% per annum from the date
hereof, payable at maturity and semiannually, on the 19th day of January and
July in each year, commencing with the January 19 or July 19 next succeeding the
date hereof, until the principal hereof shall have become due and payable, and
(b) to the extent permitted by law, on any overdue payment of interest and,
during the continuance of an Event of Default, on such unpaid balance and on any
overdue payment of any Make-Whole Amount, at a rate per annum from time to time
equal to the greater of (i) 7.03% or (ii) 2% over the rate of interest publicly
announced by JPMorgan Chase Bank from time to time in New York, New York as its
“base” or “prime” rate, payable semiannually as aforesaid (or, at the option of
the registered holder hereof, on demand).

 

Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in lawful money of the United States of America at the
address shown in the register maintained by the Company for such purpose or at
such other place as the Company shall have designated by written notice to the
holder of this Note as provided in the Note Purchase Agreement referred to
below.

 

This Note is one of a series of Senior Notes (herein called the “Notes”) issued
pursuant to the Note Purchase Agreement, dated as of July 19, 2012 (as from time
to time amended, restated, supplemented or otherwise modified, the “Note
Purchase Agreement”), between the Company and the other Credit Parties named
therein, on the one hand, and the respective Purchasers named therein, on the
other hand, and is entitled to the benefits thereof.  Each holder of this Note
will be deemed, by its acceptance hereof, to have (i) agreed to the
confidentiality provisions set forth in Section 21 of the Note Purchase
Agreement and (ii) made the representation set forth in Section 6.2 of the Note
Purchase Agreement.  Unless otherwise indicated, capitalized terms used

 

Exhibit 1-1

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

 

in this Note shall have the respective meanings ascribed to such terms in the
Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement,
upon surrender of this Note for registration of transfer accompanied by a
written instrument of transfer duly executed, by the registered holder hereof or
such holder’s attorney duly authorized in writing, a replacement Note for a like
principal amount will be issued to, and registered in the name of, the
transferee.  Prior to due presentment for registration of transfer, the Company
may treat the person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes, and the Company
will not be affected by any notice to the contrary.

 

The Company will make required prepayments of principal on the dates and in the
amounts specified in the Note Purchase Agreement.  This Note is also subject to
optional prepayment, in whole or from time to time in part, at the times and on
the terms specified in the Note Purchase Agreement, but not otherwise.

 

The Notes have been unconditionally guaranteed by certain of the Company’s
Subsidiaries and other Affiliates pursuant to the terms of the Multiparty
Guaranty.

 

If an Event of Default occurs and is continuing, the principal of this Note may
be declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in the
Note Purchase Agreement.

 

This Note shall be construed and enforced in accordance with, and the rights of
the Company and the holder of this Note shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such state
that would permit the application of the laws of a jurisdiction other than such
state.

 

 

Very truly yours,

 

 

 

LTC PROPERTIES, INC.

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Exhibit 1-2

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

 

EXHIBIT 4.4(a)

 

[FORM OF OPINION OF SPECIAL COUNSEL

FOR THE CREDIT PARTIES]

 

Exhibit 4.4(a)

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

 

EXHIBIT 4.4(b)

 

[FORM OF OPINION OF SPECIAL MARYLAND

COUNSEL FOR THE CREDIT PARTIES]

 

Exhibit 4.4(b)

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

 

EXHIBIT 4.4(c)

 

[FORM OF OPINION OF SPECIAL TEXAS

COUNSEL FOR THE CREDIT PARTIES]

 

Exhibit 4.4(c)

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

 

EXHIBIT 4.4(d)

 

[FORM OF OPINION OF SPECIAL NEVADA

COUNSEL FOR THE CREDIT PARTIES]

 

Exhibit 4.4(d)

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

 

EXHIBIT 4.4(e)

 

[FORM OF OPINION OF SPECIAL NORTH CAROLINA

COUNSEL FOR THE CREDIT PARTIES]

 

Exhibit 4.4(e)

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

 

EXHIBIT 4.4(f)

 

[FORM OF OPINION OF SPECIAL COUNSEL

FOR THE PURCHASERS]

 

Exhibit 4.4(f)

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

 

EXHIBIT 20.8

 

[FORM OF JOINDER TO MULTIPARTY GUARANTY]

 

JOINDER NO. [    ], dated as of [                ] (this “Joinder”), to the
Multiparty Guaranty set forth as Section 20 (as amended or otherwise modified
from time to time, the “Multiparty Guaranty”) to that certain Note Purchase
Agreement, dated as of July 19, 2012 (as amended or otherwise modified from time
to time, the “Note Purchase Agreement”), executed by LTC Properties, Inc. (the
“Company”), the Guarantors party thereto, and the Purchasers party thereto. 
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Note Purchase Agreement.

 

1.         Pursuant to the Multiparty Guaranty, certain obligations owing by the
Company to the holders of Notes under the Note Purchase Agreement and evidenced
by the Notes (together with their respective transferees, the “Beneficiaries”)
are guaranteed by the Guarantors.

 

2.         The undersigned (the “Additional Guarantor”) is executing this
Joinder in accordance with the requirements of Section 20.8 of the Multiparty
Guaranty.

 

3.         The Additional Guarantor by its signature below becomes a Guarantor
under the Multiparty Guaranty and the other provisions of the Note Purchase
Agreement with the same force and effect as if originally named therein as a
Guarantor and the Additional Guarantor hereby (a) agrees to all the terms and
provisions of the Note Purchase Agreement applicable to it as a Guarantor
thereunder, and (b) represents and warrants that the representations and
warranties made by it as a Guarantor set forth in Section 5 of the Note Purchase
Agreement are true and correct on and as of the date hereof.  Each reference to
a Guarantor in the Multiparty Guaranty and the other provisions of the Note
Purchase Agreement shall be deemed to include the Additional Guarantor.  The
Multiparty Guaranty and the other provisions of the Note Purchase Agreement are
hereby incorporated herein by reference.

 

4.         The Additional Guarantor represents and warrants to the Beneficiaries
that this Joinder has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.

 

5.         This Joinder may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.  Delivery of an executed signature page to this
Joinder by facsimile transmission shall be as effective as delivery of a
manually-signed original thereof.

 

6.         Except as expressly modified hereby, the Multiparty Guaranty and the
other provisions of the Note Purchase Agreement shall remain in full force and
effect.

 

7.         Any provision of this Joinder that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions thereof, and any such prohibition

 

Exhibit 20.8-1

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

 

or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

8.         All communications and notices hereunder to the Additional Guarantor
shall be given to it at the address set forth under its signature below.

 

IN WITNESS WHEREOF, the Additional Guarantor has executed this Joinder by its
duly authorized officer as of the day and year first above written.

 

 

[NAME], a [                ] [corporation]

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

 

Address:

c/o LTC Properties, Inc.

 

 

2829 Townsgate Road

Suite 350

Westlake Village, California 91361

Attn:  Pamela Shelley-Kessler

Chief Financial Officer and Executive Vice President

Facsimile:  (805) 981-8663

 

Exhibit 20.8-2

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