exv10w2





Exhibit 10.2




EXECUTION COPY




GUARANTY AND SECURITY AGREEMENT




Dated as of February 18, 2011




among




ASSISTED LIVING CONCEPTS, INC.




and




ALC REAL ESTATE, LLC, ALC PROPERTIES II, INC.,
and TEXAS ALC II, INC. AND 

EACH OTHER GRANTOR FROM TIME TO TIME PARTY HERETO




and




U.S. BANK NATIONAL ASSOCIATION,

as Administrative Agent and Collateral Agent




 












 







TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Article 1 DEFINED TERMS
	 	 	1	 
	Section 1.1 Definitions
	 	 	1	 
	Section 1.2 Certain Other Terms
	 	 	4	 
	 
	 	 	 	 
	Article 2 GUARANTY
	 	 	4	 
	Section 2.1 Guaranty
	 	 	4	 
	Section 2.2 Limitation of Guaranty
	 	 	4	 
	Section 2.3 Contribution
	 	 	5	 
	Section 2.4 Authorization; Other Agreements
	 	 	5	 
	Section 2.5 Guaranty Absolute and Unconditional
	 	 	6	 
	Section 2.6 Waivers
	 	 	6	 
	Section 2.7 Reliance
	 	 	7	 
	 
	 	 	 	 
	Article 3 GRANT OF SECURITY INTEREST
	 	 	7	 
	Section 3.1 Collateral
	 	 	7	 
	Section 3.2 Grant of Security Interest in Collateral
	 	 	8	 
	 
	 	 	 	 
	Article 4 REPRESENTATIONS AND WARRANTIES
	 	 	8	 
	Section 4.1 Title; No Other Liens
	 	 	8	 
	Section 4.2 Perfection and Priority
	 	 	8	 
	Section 4.3 Jurisdiction of Organization; Chief Executive Office
	 	 	9	 
	Section 4.4 Locations of Inventory, Equipment and Books and Records
	 	 	9	 
	Section 4.5 Pledged Collateral
	 	 	9	 
	Section 4.6 Instruments and Tangible Chattel Paper Formerly Accounts
	 	 	10	 
	Section 4.7 Intellectual Property
	 	 	10	 
	Section 4.8 Commercial Tort Claims
	 	 	11	 
	Section 4.9 Specific Collateral
	 	 	11	 
	Section 4.10 Enforcement
	 	 	11	 
	Section 4.11 Representations and Warranties of the Credit Agreement
	 	 	11	 
	 
	 	 	 	 
	Article 5 COVENANTS
	 	 	11	 
	Section 5.1 Maintenance of Perfected Security Interest; Further Documentation and
Consents
	 	 	11	 
	Section 5.2 Changes in Locations, Name, Etc.
	 	 	12	 
	Section 5.3 Pledged Collateral
	 	 	13	 
	Section 5.4 Accounts
	 	 	13	 
	Section 5.5 Commodity Contracts
	 	 	14	 
	Section 5.6 Delivery of Instruments and Tangible Chattel Paper and Control of
Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper
	 	 	14	 
	Section 5.7 Intellectual Property
	 	 	14	 
	Section 5.8 Notices
	 	 	16	 
	Section 5.9 Notice of Commercial Tort Claims
	 	 	16	 
	Section 5.10 Compliance with Credit Agreement
	 	 	16	 






 


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	 	 	Page	 
	 
	Article 6 REMEDIAL PROVISIONS
	 	 	16	 
	Section 6.1 Code and Other Remedies
	 	 	16	 
	Section 6.2 Accounts and Payments in Respect of General Intangibles
	 	 	19	 
	Section 6.3 Pledged Collateral
	 	 	20	 
	Section 6.4 Proceeds to be Turned over to and Held by Administrative Agent
	 	 	21	 
	Section 6.5 Registration Rights
	 	 	21	 
	Section 6.6 Deficiency
	 	 	22	 
	 
	 	 	 	 
	Article 7 THE ADMINISTRATIVE AGENT
	 	 	23	 
	Section 7.1 Administrative Agent’s Appointment as Attorney-in-Fact
	 	 	23	 
	Section 7.2 Authorization to File Financing Statements
	 	 	24	 
	Section 7.3 Authority of Administrative Agent
	 	 	24	 
	Section 7.4 Duty; Obligations and Liabilities
	 	 	25	 
	 
	 	 	 	 
	Article 8 MISCELLANEOUS
	 	 	25	 
	Section 8.1 Reinstatement
	 	 	25	 
	Section 8.2 Release of Collateral
	 	 	26	 
	Section 8.3 Independent Obligations
	 	 	26	 
	Section 8.4 No Waiver by Course of Conduct
	 	 	26	 
	Section 8.5 Amendments in Writing
	 	 	27	 
	Section 8.6 Additional Grantors; Additional Pledged Collateral
	 	 	27	 
	Section 8.7 Notices
	 	 	27	 
	Section 8.8 Successors and Assigns
	 	 	27	 
	Section 8.9 Counterparts
	 	 	27	 
	Section 8.10 Severability
	 	 	27	 
	Section 8.11 Governing Law
	 	 	28	 
	Section 8.12 WAIVER OF JURY TRIAL
	 	 	28	 






 


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ANNEXES AND SCHEDULES




	 	 	 
	Annex 8.6(b)

	 	Form of Pledge Amendment
	Annex 8.6(a)

	 	Form of Joinder Agreement
	Annex 5.7

	 	Form of Intellectual Property Security Agreement
	 
	Schedule 3.1

	 	Commercial Tort Claims
	Schedule 4.2

	 	Filings
	Schedule 4.3

	 	Jurisdiction of Organization; Chief Executive Office
	Schedule 4.4

	 	Location of Inventory and Equipment
	Schedule 4.5

	 	Pledged Collateral
	Schedule 4.7

	 	Intellectual Property





 


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THIS GUARANTY AND SECURITY AGREEMENT, dated as of February 18, 2011, by ASSISTED LIVING CONCEPTS, INC., a Nevada corporation (the
“Borrower”), ALC REAL ESTATE, LLC, a Wisconsin
limited liability company, TEXAS ALC II, INC., a Nevada corporation, ALC PROPERTIES II, INC., a
Nevada corporation, and each of the other entities listed on the signature pages hereof or that
becomes a party hereto pursuant to Section 8.6 (together with the Borrower, the
“Grantors”), in favor of U.S. Bank National Association (“U.S. Bank”), as
administrative agent and collateral agent (in such capacity, together with its successors and
permitted assigns, the “Administrative Agent”) for the Lenders and the L/C Issuers and each
other Secured Party (each as defined in the Credit Agreement referred to below).



W I T N E S S E T H:




WHEREAS, pursuant to the Credit Agreement dated as of the date hereof (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among the Borrower, the Lenders and the L/C Issuers from time to time party thereto
and U.S. Bank, as administrative agent and collateral agent for the Lenders and the L/C Issuers,
the Lenders and the L/C Issuers have severally agreed to make extensions of credit to the Borrower
upon the terms and subject to the conditions set forth therein;



WHEREAS, each Grantor (other than the Borrower) has agreed to guaranty the Obligations (as
defined in the Credit Agreement) of the Borrower;



WHEREAS, each Grantor will derive substantial direct and indirect benefits from the making of
the extensions of credit under the Credit Agreement; and



WHEREAS, it is a condition precedent to the obligation of the Lenders and the L/C Issuers to
make their respective extensions of credit to the Borrower under the Credit Agreement that the
Grantors shall have executed and delivered this Agreement to the Administrative Agent;



NOW, THEREFORE, in consideration of the premises and to induce the Lenders, the L/C Issuers
and the Administrative Agent to enter into the Credit Agreement and to induce the Lenders and the
L/C Issuers to make their respective extensions of credit to the Borrower thereunder, each Grantor
hereby agrees with the Administrative Agent as follows:



ARTICLE 1 DEFINED TERMS




Section 1.1 Definitions. (a) Capital terms used herein without definition are used as defined in the Credit
Agreement.



(b) The following terms have the meanings given to them in the UCC and terms used herein
without definition that are defined in the UCC have the meanings given to them in the UCC (such
meanings to be equally applicable to both the singular and plural forms of the terms defined):
“account”, “account debtor”, “as-extracted collateral”, “certificated

security”, “chattel paper”, “commercial tort claim”, “commodity
contract”, “deposit account”, “electronic chattel paper”, “equipment”,
“farm products”, “fixture”, “general intangible”, “goods”,
“health-care-insurance receivable”, “instruments”, “inventory”,
“investment property”, “letter-of-credit right”, “proceeds”,
“record”, “securities account”, “security”, “supporting obligation”
and “tangible chattel paper”.



GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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(c) The following terms shall have the following meanings:



“Agreement” means this Guaranty and Security Agreement.



“Applicable IP Office” means the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency within or outside the United States.



“Collateral” has the meaning specified in Section 3.1.



“Excluded Equity” means any voting stock in excess of 66% of the outstanding voting
stock of any Excluded Foreign Subsidiary. For the purposes of this definition, “voting
stock” means, with respect to any issuer, the issued and outstanding shares of each class of
Stock of such issuer entitled to vote (within the meaning of Treasury Regulations § 1.956-2(c)(2)).



“Excluded Property” means, collectively, (i) Excluded Equity, (ii) any right, title or
interest in any permit, license or any Contractual Obligation entered into by any Grantor (A) that
prohibits or requires the consent of any Person other than the Borrower and its Affiliates as a
condition to the creation by such Grantor of a Lien on any right, title or interest in such permit,
license or Contractual Obligation or any Stock or Stock Equivalent related thereto or (B) to the
extent that any Requirement of Law applicable thereto prohibits the creation of a Lien thereon, but
only, with respect to the prohibition in Subsections (A) and (B), to the extent, and for as long
as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by
the UCC or any other Requirement of Law, (iii) fixed or capital assets owned by any Grantor that is
subject to a purchase money Lien or a Capital Lease if the Contractual Obligation pursuant to which
such Lien is granted (or if the document providing for such Capital Lease) prohibits or requires
the consent of any Person other than the Borrower and its Affiliates as a condition to the creation
of any other Lien on such equipment and (iv) any “intent to use” Trademark applications for which a
statement of use has not been filed (but only until such statement is filed); provided,
however, “Excluded Property” shall not include any proceeds, products,
substitutions or replacements of Excluded Property (unless such proceeds, products, substitutions
or replacements would otherwise constitute Excluded Property).



“Grantor” means each of the Borrower and the Guarantors and any Person who joins this
Agreement as a Grantor pursuant to Section 8.6(a).



“Guaranteed Obligations” has the meaning set forth in Section 2.1.



“Guarantor” means each Grantor other than the Borrower.



“Guaranty” means the guaranty of the Guaranteed Obligations made by the Guarantors as
set forth in this Agreement.





GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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“Material Intellectual Property” means Intellectual Property that is owned by or
licensed to a Grantor and material to the conduct of any Grantor’s business.



“Pledged Certificated Stock” means all certificated securities and any other Stock or
Stock Equivalent of any Person evidenced by a certificate, instrument or other similar document (as
defined in the UCC), in each case owned by any Grantor, and any distribution of property made on,
in respect of or in exchange for the foregoing from time to time, exceeding $100,000 in the
aggregate including all Stock and Stock Equivalents listed on Schedule 4.5. Pledged
Certificated Stock excludes any Excluded Property and any Cash Equivalents that are not held in
Controlled Securities Accounts to the extent permitted by Section 7.11 of the Credit
Agreement.



“Pledged Collateral” means, collectively, the Pledged Stock and the Pledged Debt
Instruments.



“Pledged Debt Instruments” means all right, title and interest of any Grantor in
instruments evidencing any Indebtedness owed to such Grantor or other obligations, and any
distribution of property made on, in respect of or in exchange for the foregoing from time to time,
exceeding $100,000 in the aggregate including all Indebtedness described on Schedule 4.5,
issued by the obligors named therein. Pledged Debt Instruments excludes any Cash Equivalents that
are not held in Controlled Securities Accounts to the extent permitted by Section 7.11 of
the Credit Agreement.



“Pledged Investment Property” means any investment property of any Grantor, and any
distribution of property made on, in respect of or in exchange for the foregoing from time to time,
exceeding $100,000 in the aggregate other than any Pledged Stock or Pledged Debt Instruments.
Pledged Investment Property excludes any Cash Equivalents that are not held in Controlled
Securities Accounts to the extent permitted by Section 7.11 of the Credit Agreement.



“Pledged Stock” means all Pledged Certificated Stock and all Pledged Uncertificated
Stock.



“Pledged Uncertificated Stock” means any Stock or Stock Equivalent of any Person that
is not Pledged Certificated Stock, including all right, title and interest of any Grantor as a
limited or general partner in any partnership or as a member of any limited liability company, all
right, title and interest of any Grantor in, to and under any Constituent Document of any
partnership or limited liability company to which it is a party, and any distribution of property
made on, in respect of or in exchange for the foregoing from time to time, exceeding $100,000 in
the aggregate including in each case those interests set forth on Schedule 4.5, to the
extent such interests are not certificated. Pledged Uncertificated Stock excludes any Excluded
Property and any Cash Equivalents that are not held in Controlled Securities Accounts to the extent
permitted by Section 7.11 of the Credit Agreement.



“Security Cash Collateral Account” means a Cash Collateral Account that is not a L/C
Cash Collateral Account.




GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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“Software” means (a) all computer programs, including source code and object code
versions, (b) all data, databases and compilations of data, whether machine readable or otherwise,
and (c) all documentation, training materials and configurations related to any of the foregoing.



“UCC” means the Uniform Commercial Code as from time to time in effect in the State of
Wisconsin; provided, however, that, in the event that, by reason of mandatory
provisions of any applicable Requirement of Law, any of the attachment, perfection or priority of
the Administrative Agent’s or any other Secured Party’s security interest in any Collateral is
governed by the Uniform Commercial Code of a jurisdiction other than the State of Wisconsin,
“UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or priority and for
purposes of the definitions related to or otherwise used in such provisions.



“Vehicles” means all vehicles covered by a certificate of title under the law of any
state.



Section 1.2 Certain Other Terms. (a) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms. The terms “herein”, “hereof” and similar
terms refer to this Agreement as a whole and not to any particular Article, Section or clause in
this Agreement. References herein to an Annex, Schedule, Article, Section or clause refer to the
appropriate Annex or Schedule to, or Article, Section or clause in this Agreement. Where the
context requires, provisions relating to any Collateral when used in relation to a Grantor shall
refer to such Grantor’s Collateral or any relevant part thereof.



(b) Section 1.5 (Interpretation) of the Credit Agreement is applicable to this
Agreement as and to the extent set forth therein.



ARTICLE 2 GUARANTY




Section 2.1 Guaranty. To induce the Lenders to make the Loans and the L/C Issuers to Issue Letters of Credit,
each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, the full and punctual payment when due,
whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise
in accordance with any Loan Document, of all the Obligations of the Loan Parties whether existing
on the date hereof or hereinafter incurred or created (the “Guaranteed Obligations”). This
Guaranty by each Guarantor hereunder constitutes a guaranty of payment and not of collection.



Section 2.2 Limitation of Guaranty. Any term or provision of this Guaranty or any other Loan Document to the contrary
notwithstanding, the maximum aggregate amount for which any Guarantor shall be liable hereunder
shall not exceed the maximum amount for which such Guarantor can be liable without rendering this
Guaranty or any other Loan Document, as it relates to such Guarantor, subject to avoidance under
applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer (including
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of title
11 of the United States Code or any applicable provisions of comparable Requirements of Law)
(collectively, “Fraudulent Transfer Laws”). Any analysis of the provisions of this
Guaranty for purposes of Fraudulent Transfer Laws shall take into account the right of contribution
established in Section 2.3 and, for purposes of such analysis, give effect to any discharge
of intercompany debt as a result of any payment made under the Guaranty.



GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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Section 2.3 Contribution. To the extent that any Guarantor shall be required hereunder to pay any portion of any
Guaranteed Obligation exceeding the greater of (a) the amount of the economic benefit actually
received by such Guarantor from the Loans and other Obligations and (b) the amount such Guarantor
would otherwise have paid if such Guarantor had paid the aggregate amount of the Guaranteed
Obligations (excluding the amount thereof repaid by the Borrower) in the same proportion as such
Guarantor’s net worth on the date enforcement is sought hereunder bears to the aggregate net worth
of all the Guarantors on such date, then such Guarantor shall be reimbursed by such other
Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other
Guarantors on such date.



Section 2.4 Authorization; Other Agreements. The Secured Parties are hereby authorized, without notice to, consent of or demand upon any
Guarantor, and without discharging or otherwise affecting the obligations of any Guarantor
hereunder and without incurring any liability hereunder, from time to time, to do each of the
following:



(a) (i) extend additional credit under, (ii) modify, amend, supplement, extend, refinance or
otherwise change, (iii) accelerate or otherwise change the time of payment or (iv) waive or
otherwise consent to noncompliance with, any Guaranteed Obligation or any Loan Document;



(b) apply to the Guaranteed Obligations any sums, by whomever paid or however realized, in
such order as provided in the Loan Documents;



(c) refund at any time any payment received by any Secured Party in respect of any Guaranteed
Obligation;



(d) (i) sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon,
fail to perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise
alter or release any Collateral for any Guaranteed Obligation or any other guaranty therefor in any
manner, (ii) receive, take and hold additional Collateral to secure any Guaranteed
Obligation, (iii) add, release or substitute any one or more other Guarantors, makers or
endorsers of any Guaranteed Obligation or any part thereof and (iv) otherwise deal in any manner
with the Borrower and any other Guarantor, maker or endorser of any Guaranteed Obligation or any
part thereof; and



(e) settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.



GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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Section 2.5 Guaranty Absolute and Unconditional. Each Guarantor hereby waives and agrees not to assert any defense, whether arising in
connection with or in respect of any of the following or otherwise, and hereby agrees that its
obligations under this Agreement are irrevocable, absolute and unconditional and shall not be
discharged as a result of or otherwise affected by any Secured Party taking or not taking any of
the following actions or the occurrence or non-occurrence of any of the following (which may not be
pleaded and evidence of which may not be introduced in any proceeding with respect to this
Guaranty, in each case except as otherwise agreed in writing by the Administrative Agent):



(a) the invalidity or unenforceability of any obligation of the Borrower or any other
Guarantor under any Loan Document or any other agreement or instrument relating thereto (including
any amendment, consent or waiver thereto), or any security for, or other guaranty of, any
Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or
failure of priority of any security for the Guaranteed Obligations or any part thereof;



(b) the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof
from the Borrower or any other Guarantor or other action to enforce the same or (ii) any action to
enforce any Loan Document or any Lien thereunder;



(c) the failure by any Person to take any steps to perfect and maintain any Lien on, or to
preserve any rights with respect to, any Collateral;



(d) any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation
or dissolution by or against the Borrower, any other Guarantor or any of the Borrower’s other
Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission
thereunder, including any discharge or disallowance of, or bar or stay against collecting, any
Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding;



(e) any foreclosure, whether or not through judicial sale, and any other Sale of any
Collateral or any election following the occurrence of an Event of Default by any Secured Party to
proceed separately against any Collateral in accordance with such Secured Party’s rights under any
applicable Requirement of Law; or



(f) any other defense, setoff, counterclaim or any other circumstance that might otherwise
constitute a legal or equitable discharge of the Borrower, any other Guarantor or
any of the Borrower’s other Subsidiaries, in each case other than the payment in full of the
Guaranteed Obligations.



Section 2.6 Waivers. Each Guarantor hereby unconditionally and irrevocably waives and agrees not to assert any
claim, defense, setoff or counterclaim based on diligence, promptness, presentment, requirements
for any demand or notice hereunder including any of the following: (a) any demand for payment or
performance and protest and notice of protest, (b) any notice of acceptance or notice of creation
of (c) any presentment, demand, protest, notice of nonpayment or nonperformance or further notice
or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued
but unpaid interest thereon) becoming immediately due and payable and (d) any other notice in
respect of any Guaranteed Obligation or any part thereof, and any defense arising by reason of any
disability or other defense of the Borrower or any other Guarantor. Each Guarantor further
unconditionally and irrevocably agrees not to (x) enforce or otherwise exercise any right of
subrogation or any right of reimbursement or contribution or similar right against the Borrower or
any other Guarantor by reason of any Loan Document or any payment made thereunder or (y) assert any
claim, defense, setoff or counterclaim it may have against any other Loan Party or set off any of
its obligations to such other Loan Party against obligations of such Loan Party to such Guarantor.
No obligation of any Guarantor hereunder shall be discharged other than by complete performance.




GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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Section 2.7 Reliance. Each Guarantor hereby assumes responsibility for keeping itself informed of the financial
condition of the Borrower, each other Guarantor and any other guarantor, maker or endorser of any
Guaranteed Obligation or any part thereof, and of all other circumstances bearing upon the risk of
nonpayment of any Guaranteed Obligation or any part thereof that diligent inquiry would reveal, and
each Guarantor hereby agrees that no Secured Party shall have any duty to advise any Guarantor of
information known to it regarding such condition or any such circumstances. No Guarantor has
relied upon any such information provided by a Secured Party in entering this Agreement. In the
event any Secured Party, in its sole discretion, undertakes at any time or from time to time to
provide any such information to any Guarantor, such Secured Party shall be under no obligation to
(a) undertake any investigation, (b) disclose any information that such Secured Party wishes to
maintain confidential or (c) make any further or future disclosures of such information or any
other information to any Guarantor.



ARTICLE 3 GRANT OF SECURITY INTEREST




Section 3.1 Collateral. For the purposes of this Agreement, all of the following property now owned or at any time
hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may
acquire any right, title or interest is collectively referred to as the “Collateral”:



(a) all accounts, chattel paper, deposit accounts and cash balances therein, documents (as
defined in the UCC), equipment, general intangibles, instruments, inventory,
investment property, letter of credit rights, insurance claims and proceeds, all other
contract rights or rights to the payment of money, financial assets, securities (whether
certificated or uncertificated, and including investment company securities), security
entitlements, securities accounts, commodity contracts, and commodity accounts, including all
substitutions and additions thereto, and all dividends, distributions and sums distributable or
payable from, upon or in respect of such property, and any supporting obligations related thereto;



(b) the commercial tort claims described on Schedule 3.1 and on any supplement thereto
received by the Administrative Agent pursuant to Section 5.9;



(c) all books and records pertaining to the other property described in this Section
3.1;



(d) all property of such Grantor held by any Secured Party, including all property of every
description, in the custody of or in transit to such Secured Party for any purpose, including
safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor may
have any right or power, including but not limited to cash;



GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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(e) all other goods (including but not limited to fixtures) and personal property of such
Grantor, whether tangible or intangible and wherever located; and



(f) to the extent not otherwise included, all proceeds of the foregoing; provided,
however, that “Collateral” shall not include any Excluded Property; and provided,
further, that if and when any property shall cease to be Excluded Property, such property shall be
deemed at all times from and after the date thereof to constitute Collateral.



Section 3.2 Grant of Security Interest in Collateral. Each Grantor, as collateral security for the prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the Obligations (the
“Secured Obligations”), hereby mortgages, pledges and hypothecates to the Administrative
Agent for the benefit of the Secured Parties, and grants to the Administrative Agent for the
benefit of the Secured Parties a Lien on and security interest in, all of its right, title and
interest in, to and under the Collateral of such Grantor.



ARTICLE 4 REPRESENTATIONS AND WARRANTIES




To induce the Lenders, the L/C Issuers and the Administrative Agent to enter into the Loan
Documents, each Grantor hereby represents and warrants each of the following to the Administrative
Agent, the Lenders, the L/C Issuers and the other Secured Parties:



Section 4.1 Title; No Other Liens. Except for the Lien granted to the Administrative Agent pursuant to this Agreement and
other Permitted Liens under any Loan Document (including Section 4.2), such Grantor owns
each item of the Collateral free and clear of any and all Liens or claims of others. Such Grantor
(a) is the record and beneficial owner of the Collateral pledged by it hereunder
constituting instruments or certificates and (b) has rights in or the power to transfer each
other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other
Lien.



Section 4.2 Perfection and Priority. The security interest granted pursuant to this Agreement constitutes a valid and continuing
perfected security interest in favor of the Administrative Agent in all Collateral subject, for the
following Collateral, to the occurrence of the following: (i) in the case of all Collateral in
which a security interest may be perfected by filing a financing statement under the UCC, the
completion of the filings and other actions specified on Schedule 4.2 (which, in the case
of all filings and other documents referred to on such schedule, have been delivered to the
Administrative Agent in completed and duly authorized form), (ii) with respect to any deposit
account, the execution of Control Agreements, (iii) in the case of all Copyrights, Trademarks and
Patents for which UCC filings are insufficient, any appropriate filings having been made with the
United States Copyright Office or the United States Patent and Trademark Office, as applicable,
(iv) in the case of letter-of-credit rights that are not supporting obligations of Collateral, the
execution of a Contractual Obligation granting control to the Administrative Agent over such
letter-of-credit rights, (v) in the case of electronic chattel paper, the completion of all steps
necessary to grant control to the Administrative Agent over such electronic chattel paper and (vi)
in the case of Vehicles, the actions required under Section 5.1(e). Such security interest
shall be prior to all other Liens on the Collateral except for Permitted Liens having priority over
the Administrative Agent’s Lien by operation of




GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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law or unless otherwise permitted by any Loan
Document upon (i) in the case of all Pledged Certificated Stock, Pledged Debt Instruments and
Pledged Investment Property, the delivery thereof to the Administrative Agent of such Pledged
Certificated Stock, Pledged Debt Instruments and Pledged Investment Property consisting of
instruments and certificates, in each case properly endorsed for transfer to the Administrative
Agent or in blank, (ii) in the case of all Pledged Investment Property not in certificated form,
the execution of Control Agreements or an agreement the Issuer will comply with instructions
originated by Administrative Agent with respect to such investment property, (iii) in the case of
all other instruments and tangible chattel paper that are not Pledged Certificated Stock, Pledged
Debt Instruments or Pledged Investment Property, the delivery thereof to the Administrative Agent
of such instruments and tangible chattel paper and (iv) in the case of other Collateral in which a
security interest may be perfected by filing, upon the filing of a financing statement under the
UCC. Except as set forth in this Section 4.2, all actions by each Grantor necessary or
desirable to protect and perfect the Lien granted hereunder on the Collateral have been duly taken.



Section 4.3 Jurisdiction of Organization; Chief Executive Office. Such Grantor’s jurisdiction of organization, legal name, federal employer
identification
number and organizational identification number, if any, and the location of such Grantor’s chief
executive office or sole place of business, in each case as of the date hereof, is specified on
Schedule 4.3 and such Schedule 4.3 also lists all jurisdictions of incorporation,
legal names, trade names or trade styles and locations of such Grantor’s chief executive office or
sole place of business for the five years preceding the date hereof.



Section 4.4 Locations of Inventory, Equipment and Books and Records. On the date hereof, such Grantor’s inventory and equipment (other than
inventory or
equipment in transit) and books and records concerning the Collateral are kept at the locations
listed on Schedule 4.4.



Section 4.5 Pledged Collateral.



(a) The Pledged Stock pledged by such Grantor hereunder (a) is listed on Schedule 4.5
and constitutes that percentage of the issued and outstanding equity of all classes of each issuer
thereof as set forth on Schedule 4.5, (b) has been duly authorized, validly issued and is
fully paid and nonassessable (other than Pledged Stock in limited liability companies and
partnerships) and (c) constitutes the legal, valid and binding obligation of the obligor with
respect thereto, enforceable in accordance with its terms.



(b) As of the Closing Date, all Pledged Collateral (other than Pledged Uncertificated Stock)
and all Pledged Investment Property consisting of instruments and certificates has been delivered
to the Administrative Agent in accordance with Section 5.3(a).



(c) Upon the occurrence and during the continuance of an Event of Default, the Administrative
Agent shall be entitled to exercise all of the rights of the Grantor granting the security interest
in any Pledged Stock, and a transferee or assignee of such Pledged Stock shall become a holder of
such Pledged Stock to the same extent as such Grantor and be entitled to participate in the
management of the issuer of such Pledged Stock and, upon the transfer of the entire interest of
such Grantor, such Grantor shall, by operation of law, cease to be a holder of such Pledged Stock.



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Section 4.6 Instruments and Tangible Chattel Paper Formerly Accounts. No amount payable to such Grantor under or in connection with any account is
evidenced by
any instrument or tangible chattel paper that has not been delivered to the Administrative Agent,
properly endorsed for transfer, to the extent delivery is required by Section 5.6(a).



Section 4.7 Intellectual Property.



(a) Schedule 4.7 sets forth a true and complete list of the following Intellectual
Property such Grantor owns, licenses or otherwise has the right to use: (i) Intellectual Property
that is registered or subject to applications for registration, (ii) Internet Domain Names and
(iii) Material Intellectual Property and material Software, separately identifying that owned and
licensed to such Grantor and including for each of the foregoing items (1) the owner, (2) the
title, (3) the jurisdiction in which such item has been registered or
otherwise arises or in which an application for registration has been filed, if applicable,
(4) as applicable, the registration or application number and registration or application date and
(5) any IP Licenses or other rights (including franchises) granted by the Grantor with respect
thereto.



(b) On the Closing Date, all Material Intellectual Property owned by such Grantor is valid, in
full force and effect, subsisting, unexpired and enforceable, and no Material Intellectual Property
has been abandoned. No breach or default of any material IP License shall be caused by any of the
following, and none of the following shall limit or impair the ownership, use, validity or
enforceability of, or any rights of such Grantor in, any Material Intellectual Property: (i) the
consummation of the transactions contemplated by any Loan Document or (ii) any holding, decision,
judgment or order rendered by any Governmental Authority. There are no pending (or, to the
knowledge of such Grantor, threatened) actions, investigations, suits, proceedings, audits, claims,
demands, orders or disputes challenging the ownership, use, validity, enforceability of, or such
Grantor’s rights in, any Material Intellectual Property of such Grantor. To such Grantor’s
knowledge, no Person has been or is infringing, misappropriating, diluting, violating or otherwise
impairing any Intellectual Property of such Grantor. Such Grantor, and to such Grantor’s knowledge
each other party thereto, is not in material breach or default of any material IP License.



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Section 4.8 Commercial Tort Claims. To the knowledge of each Grantor, the only commercial tort claims of any Grantor existing
on the date hereof (regardless of whether the amount, defendant or other material facts can be
determined and regardless of whether such commercial tort claim has been asserted, threatened or
has otherwise been made known to the obligee thereof or whether litigation has been commenced for
such claims) are those listed on Schedule 3.1, which sets forth such information separately
for each Grantor.



Section 4.9 Specific Collateral. None of the Collateral is or is proceeds or products of farm products, as-extracted
collateral, health-care-insurance receivables or timber to be cut.



Section 4.10 Enforcement. No Permit, notice to or filing with any Governmental Authority or any other Person or any
consent from any Person is required for the exercise by the Administrative Agent of its rights
(including voting rights) provided for in this Agreement or the enforcement of remedies in respect
of the Collateral pursuant to this Agreement, including the transfer of any Collateral, except as
may be required in connection with the disposition of any portion of the Pledged Collateral by laws
affecting the offering and sale of securities generally or any approvals that may be required to be
obtained from any bailees or landlords to collect the Collateral.



Section 4.11 Representations and Warranties of the Credit Agreement. The representations and warranties as to such Grantor and its Subsidiaries made by the
Borrower in Article IV (Representations and Warranties) of the Credit Agreement are
true and correct on each date as required by Section 3.2(b) of the Credit Agreement.



ARTICLE 5 COVENANTS




Each Grantor agrees with the Administrative Agent to the following, as long as any Obligation
or Commitment remains outstanding and, in each case, unless the Required Lenders otherwise consent
in writing:



Section 5.1 Maintenance of Perfected Security Interest; Further Documentation and
Consents.



(a) Generally. Such Grantor shall (i) not use or permit any Collateral to be used
unlawfully or in violation of any provision of any Loan Document, any Requirement of Law or any
policy of insurance covering the Collateral and (ii) not enter into any Contractual Obligation or
undertaking restricting the right or ability of such Grantor or the Administrative Agent to Sell
any Collateral if such restriction would have a Material Adverse Effect.



(b) Other than with respect to filing any continuation statements, such Grantor shall maintain
the security interest created by this Agreement as a perfected security interest having at least
the priority described in Section 4.2 and shall defend such security interest and such
priority against the claims and demands of all Persons.



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(c) Pursuant to Section 6.1(d) of the Credit Agreement, such Grantor shall furnish to
the Administrative Agent from time to time statements and schedules further identifying and
describing the Collateral and such other documents in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail and in form and substance
satisfactory to the Administrative Agent.



(d) At any time and from time to time, upon the written request of the Administrative Agent,
such Grantor shall, for the purpose of obtaining or preserving the full benefits of this Agreement
and of the rights and powers herein granted, (i) promptly and duly execute and deliver, and have
recorded, such further documents, including an authorization to file (or, as applicable, the
filing) of any financing statement or amendment under the UCC (or other filings under similar
Requirements of Law) in effect in any jurisdiction with respect to the security interest created
hereby and (ii) take such further action as the Administrative Agent may reasonably request,
including (A) using its best efforts to secure all approvals necessary or appropriate for the
assignment to or for the benefit of the Administrative Agent of any Contractual Obligation,
including any IP License, held by such Grantor and to enforce the security interests granted
hereunder and (B) executing and delivering any Control Agreements with respect to deposit accounts
and securities accounts.



(e) If requested by the Administrative Agent, the Grantor shall arrange for the Administrative
Agent’s first priority security interest to be noted on the certificate of title of each
Vehicle and shall file any other necessary documentation in each jurisdiction that the
Administrative Agent shall deem advisable to perfect its security interests in any Vehicle.



(f) To ensure that any of the Excluded Property set forth in clause (ii) of the
definition of “Excluded Property” becomes part of the Collateral, such Grantor shall use its best
efforts to obtain any required consents from any Person other than the Borrower and its Affiliates
with respect to any permit or license or any Contractual Obligation with such Person entered into
by such Grantor that requires such consent as a condition to the creation by such Grantor of a Lien
on any right, title or interest in such permit, license or Contractual Obligation or any Stock or
Stock Equivalent related thereto.



Section 5.2 Changes in Locations, Name, Etc.
Except upon 30 days’ prior written notice to the Administrative Agent and delivery to the
Administrative Agent of (a) all documents reasonably requested by the Administrative Agent to
maintain the validity, perfection and priority of the security interests provided for herein and
(b) if applicable, a written supplement to Schedule 4.4 showing any additional locations at
which inventory or equipment shall be kept, such Grantor shall not do any of the following:



(i) permit any inventory or equipment to be kept at a location other than those listed on
Schedule 4.4, except for inventory or equipment in transit;



(ii) change its jurisdiction of organization or its location, in each case from that referred
to in Section 4.3; or



(iii) change its legal name or organizational identification number, if any, or corporation,
limited liability company, partnership or other organizational structure to such an extent that any
financing statement filed in connection with this Agreement would become misleading.



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Section 5.3 Pledged Collateral.



(a) Delivery of Pledged Collateral. Such Grantor shall (i) deliver to the
Administrative Agent, in suitable form for transfer and in form and substance satisfactory to the
Administrative Agent, (A) all Pledged Certificated Stock, (B) all Pledged Debt Instruments and (C)
all certificates and instruments evidencing Pledged Investment Property and (ii) maintain all other
Pledged Investment Property in a Controlled Securities Account.



(b) Event of Default. During the continuance of an Event of Default, the
Administrative Agent shall have the right, at any time in its discretion and without notice to the
Grantor, to (i) transfer to or to register in its name or in the name of its nominees any Pledged
Collateral or any Pledged Investment Property and (ii) exchange any certificate or instrument
representing or evidencing any Pledged Collateral or any Pledged Investment Property for
certificates or instruments of smaller or larger denominations.



(c) Cash Distributions with respect to Pledged Collateral. Except as provided in
Article VI, such Grantor shall be entitled to receive all cash distributions paid in
respect of the Pledged Collateral.



(d) Voting Rights. Except as provided in Article VI, such Grantor shall be
entitled to exercise all voting, consent and corporate, partnership, limited liability company and
similar rights with respect to the Pledged Collateral; provided, however, that no
vote shall be cast, consent given or right exercised or other action taken by such Grantor that
would impair the Collateral or any Secured Party’s rights in any Collateral or be inconsistent with
or result in any violation of any provision of any Loan Document.



Section 5.4 Accounts.



(a) Such Grantor shall not, other than in the ordinary course of business, (i) grant any
extension of the time of payment of any account, (ii) compromise or settle any account for less
than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment
of any account, (iv) allow any credit or discount on any account or (v) amend, supplement or modify
any account in any manner that could adversely affect the value thereof.



(b) The Administrative Agent shall have the right to make test verifications of the Accounts
in any manner and through any medium that it reasonably considers advisable, and such Grantor shall
furnish all such assistance and information as the Administrative Agent may reasonably require in
connection therewith. At any time and from time to time, upon the Administrative Agent’s request,
such Grantor shall cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, aging
and test verifications of, and trial balances for, the accounts; provided, however, that unless a
Default shall be continuing, the Administrative Agent shall request no more than four such reports
during any calendar year.



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Section 5.5 Commodity Contracts. Such Grantor shall not have any commodity contract other than with a Person approved by the
Administrative Agent and subject to a Control Agreement.



Section 5.6 Delivery of Instruments and Tangible Chattel Paper and Control of
Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper.



(a) If any amount in excess of $100,000 payable under or in connection with any Collateral
owned by such Grantor shall be or become evidenced by an instrument or tangible chattel paper other
than such instrument delivered in accordance with Section 5.3(a) and in the possession of
the Administrative Agent, such Grantor shall so inform Administrative Agent and shall mark all such
instruments and tangible chattel paper with the following legend: “This writing and the
obligations evidenced or secured hereby are subject to the security interest of
U.S. Bank National Association, as Administrative Agent” and, at the request of the
Administrative Agent, shall immediately deliver such instrument or tangible chattel paper to the
Administrative Agent, duly indorsed in a manner satisfactory to the Administrative Agent.



(b) Such Grantor shall not grant “control” (within the meaning of such term under Article
9-106 of the UCC) over any investment property to any Person other than the Administrative Agent.



(c) If such Grantor is or becomes the beneficiary of a letter of credit that is (i) not a
supporting obligation of any Collateral and (ii) in excess of $100,000, such Grantor shall
promptly, and in any event within 2 Business Days after becoming a beneficiary, notify the
Administrative Agent thereof and shall use commercially reasonable efforts to enter into a
Contractual Obligation with the Administrative Agent, the issuer of such letter of credit or any
nominated person with respect to the letter-of-credit rights under such letter of credit. Such
Contractual Obligation shall assign such letter-of-credit rights to the Administrative Agent and
such assignment shall be sufficient to grant control for the purposes of Section 409.107 of the UCC
(or any similar section under any equivalent UCC). Such Contractual Obligation shall also direct
all payments thereunder to a Security Cash Collateral Account. The provisions of the Contractual
Obligation shall be in form and substance reasonably satisfactory to the Administrative Agent.



(d) If any amount in excess of $100,000 payable under or in connection with any Collateral
owned by such Grantor shall be or become evidenced by electronic chattel paper, such Grantor shall
take all steps necessary to grant the Administrative Agent control of all such electronic chattel
paper for the purposes of Section 409.105 of the UCC (or any similar section under any equivalent
UCC) and all “transferable records” as defined in each of the Uniform Electronic Transactions Act
and the Electronic Signatures in Global and National Commerce Act.



Section 5.7 Intellectual Property.



(a) Within 60 days after any change to Schedule 4.7 for such Grantor, such Grantor
shall provide the Administrative Agent notification thereof and the short-form intellectual
property agreements and assignments as described in this Section 5.7 and other documents
that the Administrative Agent reasonably requests with respect thereto.



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(b) Such Grantor shall (and shall cause all its licensees to) (i) (1) continue to use each
Trademark included in the Material Intellectual Property in order to maintain such Trademark in
full force and effect with respect to each class of goods for which such Trademark is currently
used, free from any claim of abandonment for non-use, (2) maintain at least the same standards of
quality of products and services offered under such Trademark as are currently maintained, (3) use
such Trademark with the appropriate notice of registration and all other notices and legends
required by applicable Requirements of Law, (4) not adopt or use any other Trademark that is
confusingly similar or a colorable imitation of such Trademark unless the Administrative Agent
shall obtain a perfected security interest in such other Trademark pursuant
to this Agreement and (ii) not do any act or omit to do any act whereby (w) such Trademark (or
any goodwill associated therewith) may become destroyed, invalidated, impaired or harmed in any
way, (x) any Patent included in the Material Intellectual Property may become forfeited, misused,
unenforceable, abandoned or dedicated to the public, (y) any portion of the Copyrights included in
the Material Intellectual Property may become invalidated, otherwise impaired or fall into the
public domain or (z) any Trade Secret that is Material Intellectual Property may become publicly
available or otherwise unprotectable.



(c) Such Grantor shall notify the Administrative Agent immediately if it knows, or has reason
to know, that any application or registration relating to any Material Intellectual Property may
become forfeited, misused, unenforceable, abandoned or dedicated to the public, or of any adverse
determination or development regarding the validity or enforceability or such Grantor’s ownership
of, interest in, right to use, register, own or maintain any Material Intellectual Property
(including the institution of, or any such determination or development in, any proceeding relating
to the foregoing in any Applicable IP Office). Such Grantor shall take all actions that are
necessary or reasonably requested by the Administrative Agent to maintain and pursue each
application (and to obtain the relevant registration or recordation) and to maintain each
registration and recordation included in the Material Intellectual Property.



(d) Such Grantor shall not knowingly do any act or omit to do any act to infringe,
misappropriate, dilute, violate or otherwise impair the Intellectual Property of any other Person.
In the event that any Material Intellectual Property of such Grantor is or has been infringed,
misappropriated, violated, diluted or otherwise impaired by a third party, such Grantor shall take
such action as it reasonably deems appropriate under the circumstances in response thereto,
including promptly bringing suit and recovering all damages therefor.



(e) Such Grantor shall execute and deliver to the Administrative Agent in form and substance
reasonably acceptable to the Administrative Agent and suitable for (i) filing in the Applicable IP
Office the short-form intellectual property security agreements in the form attached hereto as
Annex 5.7 for all Copyrights, Trademarks, Patents and IP Licenses of such Grantor and (ii)
recording with the appropriate Internet domain name registrar, a duly executed form of assignment
for all Internet Domain Names of such Grantor (together with appropriate supporting documentation
as may be requested by the Administrative Agent).



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Section 5.8 Notices. Such Grantor shall promptly notify the Administrative Agent in writing of its acquisition
of any interest hereafter in property that is of a type where a security interest or lien must be
or may be registered, recorded or filed under, or notice thereof given under, any federal statute
or regulation.



Section 5.9 Notice of Commercial Tort Claims. Such Grantor agrees that, if it shall acquire any interest in any commercial tort claim
(whether from another Person or because such commercial tort claim shall have come into existence),
(i) such Grantor shall, immediately upon such acquisition, deliver to the
Administrative Agent, in each case in form and substance satisfactory to the Administrative
Agent, a notice of the existence and nature of such commercial tort claim and a supplement to
Schedule 3.1 containing a specific description of such commercial tort claim, (ii) this
Agreement shall apply to such commercial tort claim and (iii) such Grantor shall execute and
deliver to the Administrative Agent, in each case in form and substance satisfactory to the
Administrative Agent, any document, and take all other action, deemed by the Administrative Agent
to be reasonably necessary or appropriate for the Administrative Agent to obtain, on behalf of the
Lenders, a perfected security interest having at least the priority set forth in Section
4.2 in all such commercial tort claims. Any supplement to Schedule 3.1 delivered
pursuant to this Section 5.9 shall, after the receipt thereof by the Administrative Agent,
become part of Schedule 3.1 for all purposes hereunder other than in respect of
representations and warranties made prior to the date of such receipt.



Section 5.10 Compliance with Credit Agreement. Such Grantor agrees to comply with all covenants and other provisions applicable to it
under the Credit Agreement, including Sections 2.17 (Taxes), 11.3
(Costs and Expenses) and 11.4 (Indemnities) of the Credit Agreement and
agrees to the same submission to jurisdiction as that agreed to by the Borrower in the Credit
Agreement.



ARTICLE 6 REMEDIAL PROVISIONS




Section 6.1 Code and Other Remedies.



(a) UCC Remedies. During the continuance of an Event of Default, the Administrative
Agent may exercise, in addition to all other rights and remedies granted to it in this Agreement
and in any other instrument or agreement securing, evidencing or relating to any Secured
Obligation, all rights and remedies of a secured party under the UCC or any other applicable law.



(b) Disposition of Collateral. Without limiting the generality of the foregoing, the
Administrative Agent may, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), during the continuance of any Event of Default (personally or through
its agents or attorneys), (i) enter upon the premises where any Collateral is located, without any
obligation to pay rent, through self-help, without judicial process, without first obtaining a
final judgment or giving any Grantor or any other Person notice or opportunity for a hearing on the
Administrative Agent’s claim or action, (ii) collect, receive, appropriate and realize upon any
Collateral and (iii) Sell, grant option or options to purchase and deliver any Collateral (enter
into Contractual Obligations to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker’s board or office of any Secured Party or elsewhere
upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk. The Administrative
Agent shall have the right, upon any such public sale or sales and, to the
extent permitted by the UCC and other applicable Requirements of Law, upon any such private
sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of
redemption of any Grantor, which right or equity is hereby waived and released.



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(c) Management of the Collateral. Each Grantor further agrees, that, during the
continuance of any Event of Default, (i) at the Administrative Agent’s request, it shall assemble
the Collateral and make it available to the Administrative Agent at places that the Administrative
Agent shall reasonably select, whether at such Grantor’s premises or elsewhere, (ii) without
limiting the foregoing, the Administrative Agent also has the right to require that each Grantor
store and keep any Collateral pending further action by the Administrative Agent and, while any
such Collateral is so stored or kept, provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain such Collateral in good condition, (iii)
until the Administrative Agent is able to Sell any Collateral, the Administrative Agent shall have
the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of
preserving the Collateral or its value or for any other purpose deemed appropriate by the
Administrative Agent and (iv) the Administrative Agent may, if it so elects, seek the appointment
of a receiver or keeper to take possession of any Collateral and to enforce any of the
Administrative Agent’s remedies (for the benefit of the Secured Parties), with respect to such
appointment without prior notice or hearing as to such appointment. The Administrative Agent shall
not have any obligation to any Grantor to maintain or preserve the rights of any Grantor as against
third parties with respect to any Collateral while such Collateral is in the possession of the
Administrative Agent.



(d) Application of Proceeds. The Administrative Agent shall apply the cash proceeds
of any action taken by it pursuant to this Section 6.1, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental to the care or
safekeeping of any Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and any other Secured Party hereunder, including reasonable attorneys’ fees
and disbursements, to the payment in whole or in part of the Secured Obligations, as set forth in
the Credit Agreement, and only after such application and after the payment by the Administrative
Agent of any other amount required by any Requirement of Law, need the Administrative Agent account
for the surplus, if any, to any Grantor.



(e) Direct Obligation. Neither the Administrative Agent nor any other Secured Party
shall be required to make any demand upon, or pursue or exhaust any right or remedy against, any
Grantor, any other Loan Party or any other Person with respect to the payment of the Obligations or
to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or
indirect guaranty thereof. All of the rights and remedies of the Administrative Agent and any
other Secured Party under any Loan Document shall be cumulative, may be exercised individually or
concurrently and not exclusive of any other rights or remedies provided by any Requirement of Law.
To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and
relinquishes the benefit and advantage of, and covenants not to assert any valuation, stay,
appraisement, extension, redemption or similar laws and any and all rights or defenses it may have
as a surety, now or hereafter existing, arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other
disposition of any Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least 10 days before such sale or other disposition.



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(f) Commercially Reasonable. To the extent that applicable Requirements of Law impose
duties on the Administrative Agent to exercise remedies in a commercially reasonable manner, each
Grantor acknowledges and agrees that it is not commercially unreasonable for the Administrative
Agent to do any of the following:



(i) fail to incur significant costs, expenses or other Liabilities reasonably deemed as such
by the Administrative Agent to prepare any Collateral for disposition or otherwise to complete raw
material or work in process into finished goods or other finished products for disposition;



(ii) fail to obtain Permits, or other consents, for access to any Collateral to Sell or for
the collection or Sale of any Collateral, or, if not required by other Requirements of Law, fail to
obtain Permits or other consents for the collection or disposition of any Collateral;



(iii) fail to exercise remedies against account debtors or other Persons obligated on any
Collateral or to remove Liens on any Collateral or to remove any adverse claims against any
Collateral;



(iv) advertise dispositions of any Collateral through publications or media of general
circulation, whether or not such Collateral is of a specialized nature or to contact other Persons,
whether or not in the same business as any Grantor, for expressions of interest in acquiring any
such Collateral;



(v) exercise collection remedies against account debtors and other Persons obligated on any
Collateral, directly or through the use of collection agencies or other collection specialists,
hire one or more professional auctioneers to assist in the disposition of any Collateral, whether
or not such Collateral is of a specialized nature or, to the extent deemed appropriate by the
Administrative Agent, obtain the services of other brokers, investment bankers, consultants and
other professionals to assist the Administrative Agent in the collection or disposition of any
Collateral, or utilize Internet sites that provide for the auction of assets of the types included
in the Collateral or that have the reasonable capacity of doing so, or that match buyers and
sellers of assets to dispose of any Collateral;



(vi) dispose of assets in wholesale rather than retail markets;



(vii) disclaim disposition warranties, such as title, possession or quiet enjoyment; or



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(viii) purchase insurance or credit enhancements to insure the Administrative Agent against
risks of loss, collection or disposition of any Collateral or to provide to the Administrative
Agent a guaranteed return from the collection or disposition of any Collateral.



Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a
non-exhaustive list of actions or omissions that are commercially reasonable when exercising
remedies against
any Collateral and that other actions or omissions by the Secured Parties shall not be deemed
commercially unreasonable solely on account of not being indicated in this Section 6.1.
Without limitation upon the foregoing, nothing contained in this Section 6.1 shall be
construed to grant any rights to any Grantor or to impose any duties on the Administrative Agent
that would not have been granted or imposed by this Agreement or by applicable Requirements of Law
in the absence of this Section 6.1.



(g) IP Licenses. For the sole purpose of enabling the Administrative Agent to
exercise rights and remedies under this Section 6.1 (including in order to take possession
of, collect, receive, assemble, process, appropriate, remove, realize upon, Sell or grant options
to purchase any Collateral) at such time as the Administrative Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Administrative Agent, for the
benefit of the Secured Parties, (i) an irrevocable, nonexclusive, worldwide license (exercisable
without payment of royalty or other compensation to such Grantor), including in such license the
right to sublicense, use and practice any Intellectual Property now owned or hereafter acquired by
such Grantor and access to all media in which any of the licensed items may be recorded or stored
and to all Software and programs used for the compilation or printout thereof and (ii) an
irrevocable license (without payment of rent or other compensation to such Grantor) to use, operate
and occupy all Real Property owned, operated, leased, subleased or otherwise occupied by such
Grantor.



Section 6.2 Accounts and Payments in Respect of General Intangibles.



(a) In addition to, and not in substitution for, any similar requirement in the Credit
Agreement, if required by the Administrative Agent at any time during the continuance of an Event
of Default, any payment of accounts or payment in respect of general intangibles, when collected by
any Grantor, shall be promptly (and, in any event, within 2 Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the Administrative Agent, in a
Security Cash Collateral Account, subject to withdrawal by the Administrative Agent as provided in
Section 6.4. Until so turned over, such payment shall be held by such Grantor in trust for
the Administrative Agent, segregated from other funds of such Grantor. Each such deposit of
proceeds of accounts and payments in respect of general intangibles shall be accompanied by a
report identifying in reasonable detail the nature and source of the payments included in the
deposit.



(b) At any time during the continuance of an Event of Default:



(i) each Grantor shall, upon the Administrative Agent’s request, deliver to the Administrative
Agent all original and other documents evidencing, and relating to, the Contractual Obligations and
transactions that gave rise to any account or any payment in respect of general intangibles,
including all original orders, invoices and shipping receipts and notify account debtors that the
accounts or general intangibles have been collaterally assigned to the Administrative Agent and
that payments in respect thereof shall be made directly to the Administrative Agent;



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(ii) the Administrative Agent may, without notice, at any time during the continuance of an
Event of Default, limit or terminate the authority of a Grantor to collect its accounts or amounts
due under general intangibles or any thereof and, in its own name or in the name of others,
communicate with account debtors to verify with them to the Administrative Agent’s satisfaction the
existence, amount and terms of any account or amounts due under any general intangible. In
addition, the Administrative Agent may at any time enforce such Grantor’s rights against such
account debtors and obligors of general intangibles; and



(iii) each Grantor shall take all actions, deliver all documents and provide all information
necessary or reasonably requested by the Administrative Agent to ensure any Internet Domain Name is
registered.



(c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under
each account and each payment in respect of general intangibles to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in accordance with
the terms of any agreement giving rise thereto. No Secured Party shall have any obligation or
liability under any agreement giving rise to an account or a payment in respect of a general
intangible by reason of or arising out of any Loan Document or the receipt by any Secured Party of
any payment relating thereto, nor shall any Secured Party be obligated in any manner to perform any
obligation of any Grantor under or pursuant to any agreement giving rise to an account or a payment
in respect of a general intangible, to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency of any performance by any
party thereunder, to present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts that may have been assigned to it or to which it may be entitled
at any time or times.



Section 6.3 Pledged Collateral.



(a) Voting Rights. During the continuance of an Event of Default, upon notice by the
Administrative Agent to the relevant Grantor or Grantors, the Administrative Agent or its nominee
may exercise (A) any voting, consent, corporate and other right pertaining to the Pledged
Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant
issuer or issuers of Pledged Collateral or otherwise and (B) any right of conversion, exchange and
subscription and any other right, privilege or option pertaining to the Pledged Collateral as if it
were the absolute owner thereof (including the right to exchange at its discretion any Pledged
Collateral upon the merger, amalgamation, consolidation, reorganization, recapitalization or other
fundamental change in the corporate or equivalent structure of any issuer of Pledged Stock, the
right to deposit and deliver any Pledged Collateral with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the Administrative Agent may
determine), all without liability except to account for property actually received by it;
provided, however, that the Administrative Agent shall have no duty to any Grantor
to exercise any such right, privilege or option and shall not be responsible for any failure to do
so or delay in so doing.



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(b) Proxies. In order to permit the Administrative Agent to exercise the voting and
other consensual rights that it may be entitled to exercise pursuant hereto and to receive all
dividends and other distributions that it may be entitled to receive hereunder, (i) during the
continuance of an Event of Default, each Grantor shall promptly execute and deliver (or cause to be
executed and delivered) to the Administrative Agent all such proxies, dividend payment orders and
other instruments as the Administrative Agent may from time to time reasonably request and (ii)
without limiting the effect of clause (i) above, such Grantor hereby grants to the
Administrative Agent an irrevocable proxy to vote all or any part of the Pledged Collateral and to
exercise all other rights, powers, privileges and remedies to which a holder of the Pledged
Collateral would be entitled (including giving or withholding written consents of shareholders,
partners or members, as the case may be, calling special meetings of shareholders, partners or
members, as the case may be, and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of any Pledged
Collateral on the record books of the issuer thereof) by any other person (including the issuer of
such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of
Default and which proxy shall only terminate upon the payment in full of the Secured Obligations.



(c) Authorization of Issuers. Each Grantor hereby expressly irrevocably authorizes
and instructs, without any further instructions from such Grantor, each issuer of any Pledged
Collateral pledged hereunder by such Grantor to (i) comply with any instruction received by it from
the Administrative Agent in writing that states that an Event of Default is continuing and is
otherwise in accordance with the terms of this Agreement and each Grantor agrees that such issuer
shall be fully protected from Liabilities to such Grantor in so complying and (ii) unless otherwise
expressly permitted hereby, pay any dividend or make any other payment with respect to the Pledged
Collateral directly to the Administrative Agent.



Section 6.4 Proceeds to be Turned over to and Held by Administrative Agent. Unless otherwise expressly provided in the Credit Agreement or this
Security Agreement, all
proceeds of any Collateral received by any Grantor hereunder in cash or Cash Equivalents shall be
held by such Grantor in trust for the Administrative Agent and the other Secured Parties,
segregated from other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be
turned over to the Administrative Agent in the exact form received (with any necessary
endorsement). All such proceeds of Collateral and any other proceeds of any Collateral received by
the Administrative Agent in cash or Cash Equivalents shall be held by the Administrative Agent in a
Security Cash Collateral Account. All proceeds being held by the Administrative Agent in a
Security Cash Collateral Account (or by such Grantor in trust for the Administrative Agent) shall
continue to be held as collateral security for the Secured Obligations and shall not constitute
payment thereof until applied as provided in the Credit Agreement.



Section 6.5 Registration Rights.



(a) If, in the opinion of the Administrative Agent, it is necessary or advisable to Sell any
portion of the Pledged Collateral by registering such Pledged Collateral under the
provisions of the Securities Act of 1933 (the “Securities Act”), each relevant Grantor
shall use its best efforts to cause the issuer thereof to do or cause to be done all acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to register such Pledged
Collateral or that portion thereof to be Sold under the provisions of the Securities Act, all as
directed by the Administrative Agent in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission applicable thereto and in
compliance with the securities or “Blue Sky” laws of any jurisdiction that the
Administrative Agent shall designate.



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(b) Each Grantor recognizes that the Administrative Agent may be unable to effect a public
sale of any Pledged Collateral by reason of certain prohibitions contained in the Securities Act
and applicable state or foreign securities laws or otherwise or may determine that a public sale is
impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or
more private sales thereof to a restricted group of purchasers that shall be obliged to agree,
among other things, to acquire such securities for their own account for investment and not with a
view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner. The Administrative Agent shall be under no
obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the
issuer thereof to register such securities for public sale under the Securities Act or under
applicable state securities laws even if such issuer would agree to do so.



(c) Each Grantor agrees to use its best efforts to do or cause to be done all such other acts
as may be necessary to make such sale or sales of any portion of the Pledged Collateral pursuant to
this Section 6.5 valid and binding and in compliance with all applicable Requirements of
Law. Each Grantor further agrees that a breach of any covenant contained in this Section
6.5 will cause irreparable injury to the Administrative Agent and other Secured Parties, that
the Administrative Agent and the other Secured Parties have no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant contained in this Section
6.5 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and
agrees not to assert any defense against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred under the Credit Agreement.



Section 6.6 Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other
disposition of any Collateral are insufficient to pay the Secured Obligations and the fees and
disbursements of any attorney employed by the Administrative Agent or any other Secured Party to
collect such deficiency.



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ARTICLE 7 THE ADMINISTRATIVE AGENT




Section 7.1  Administrative Agent’s Appointment as Attorney-in-Fact.



(a) Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any
Related Person thereof, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of the Loan Documents,
to take any appropriate action and to execute any document or instrument that may be necessary or
desirable to accomplish the purposes of the Loan Documents, and, without limiting the generality of
the foregoing, each Grantor hereby gives the Administrative Agent and its Related Persons the power
and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any of the
following when an Event of Default shall be continuing:



(i) in the name of such Grantor, in its own name or otherwise, take possession of and indorse
and collect any check, draft, note, acceptance or other instrument for the payment of moneys due
under any account or general intangible or with respect to any other Collateral and file any claim
or take any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any such moneys due under any
account or general intangible or with respect to any other Collateral whenever payable;



(ii) in the case of any Intellectual Property owned by or licensed to the Grantors, execute,
deliver and have recorded any document that the Administrative Agent may request to evidence,
effect, publicize or record the Administrative Agent’s security interest in such Intellectual
Property and the goodwill and general intangibles of such Grantor relating thereto or represented
thereby;



(iii) pay or discharge taxes and Liens levied or placed on or threatened against any
Collateral, effect any repair or pay any insurance called for by the terms of the Credit Agreement
(including all or any part of the premiums therefor and the costs thereof);



(iv) execute, in connection with any sale provided for in Section 6.1 or Section
6.5, any document to effect or otherwise necessary or appropriate in relation to evidence the
Sale of any Collateral; or



(v) (A) direct any party liable for any payment under any Collateral to make payment of any
moneys due or to become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct, (B) ask or demand for, and collect and receive payment of and
receipt for, any moneys, claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral, (C) sign and indorse any invoice, freight or express bill, bill of
lading, storage or warehouse receipt, draft against debtors, assignment, verification, notice and
other document in connection with any Collateral, (D) commence and prosecute any suit, action or
proceeding at law or in equity in any court of competent jurisdiction to collect any Collateral and
to enforce any other right in respect of any Collateral, (E) defend any actions, suits,
proceedings, audits, claims, demands, orders or disputes brought against such Grantor with respect
to any Collateral, (F) settle, compromise or adjust any such actions, suits, proceedings, audits,
claims, demands, orders or disputes and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem appropriate, (G) assign any Intellectual
Property owned by the Grantors or any IP Licenses of the Grantors throughout the world on such
terms and conditions and in such manner as the Administrative Agent shall in its sole discretion
determine, including the execution and filing of any document necessary to effectuate or record
such assignment and (H) generally, Sell, grant a Lien on, make any Contractual Obligation with
respect to and otherwise deal with, any Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes and do, at the Administrative
Agent’s option, at any time or from time to time, all acts and things that the Administrative Agent
deems necessary to protect, preserve or realize upon any Collateral and the Secured Parties’
security interests therein and to effect the intent of the Loan Documents, all as fully and
effectively as such Grantor might do.



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(b) If any Grantor fails to perform or comply with any Contractual Obligation contained
herein, the Administrative Agent, at its option, but without any obligation so to do, may perform
or comply, or otherwise cause performance or compliance, with such Contractual Obligation.



(c) The expenses of the Administrative Agent incurred in connection with actions undertaken as
provided in this Section 7.1, together with interest thereon at a rate set forth in
Section 2.9 (Interest) of the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Administrative Agent on demand.



(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue of this Section 7.1. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and
the security interests created hereby are released.



Section 7.2 Authorization to File Financing Statements. Each Grantor authorizes the Administrative Agent and its Related Persons, at any time and
from time to time, to file or record financing statements, amendments thereto, and other filing or
recording documents or instruments with respect to any Collateral in such form and in such offices
as the Administrative Agent reasonably determines appropriate to perfect the security interests of
the Administrative Agent under this Agreement, and such financing statements and amendments may
describe the Collateral covered thereby as “all assets of the debtor”. A photographic or other
reproduction of this Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any jurisdiction. Such Grantor also
hereby ratifies its authorization for the Administrative Agent to have filed any initial financing
statement or amendment thereto under the UCC (or other similar laws) in effect in any jurisdiction
if filed prior to the date hereof.



Section 7.3 Authority of Administrative Agent. Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative Agent or the exercise
or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Administrative Agent and the other Secured
Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Administrative Agent and the Grantors,
the Administrative Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation or entitlement to make any inquiry respecting such authority.





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Section 7.4 Duty; Obligations and Liabilities.



(a) Duty of Administrative Agent. The Administrative Agent’s sole duty with respect
to the custody, safekeeping and physical preservation of the Collateral in its possession shall be
to deal with it in the same manner as the Administrative Agent deals with similar property for its
own account. The powers conferred on the Administrative Agent hereunder are solely to protect the
Administrative Agent’s interest in the Collateral and shall not impose any duty upon the
Administrative Agent to exercise any such powers. The Administrative Agent shall be accountable
only for amounts that it receives as a result of the exercise of such powers, and neither it nor
any of its Related Persons shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction. In addition, the Administrative Agent shall not be liable or
responsible for any loss or damage to any Collateral, or for any diminution in the value thereof,
by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or
other bailee if such Person has been selected by the Administrative Agent in good faith.



(b) Obligations and Liabilities with respect to Collateral. No Secured Party and no
Related Person thereof shall be liable for failure to demand, collect or realize upon any
Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Grantor or any other Person or to take any other
action whatsoever with regard to any Collateral. The powers conferred on the Administrative Agent
hereunder shall not impose any duty upon any other Secured Party to exercise any such powers. The
other Secured Parties shall be accountable only for amounts that they actually receive as a result
of the exercise of such powers, and neither they nor any of their respective officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction.



ARTICLE 8 MISCELLANEOUS




Section 8.1 Reinstatement. Each Grantor agrees that, if any payment made by any Loan Party or other Person and applied
to the Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated,
declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the
proceeds of any Collateral are required to be returned by any Secured
Party to such Loan Party, its estate, trustee, receiver or any other party, including any
Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, any Lien or other Collateral securing such liability shall
be and remain in full force and effect, as fully as if such payment had never been made. If, prior
to any of the foregoing, (a) any Lien or other Collateral securing such Grantor’s liability
hereunder shall have been released or terminated by virtue of the foregoing or (b) any provision of
the Guaranty hereunder shall have been terminated, cancelled or surrendered, such Lien, other
Collateral or provision shall be reinstated in full force and effect and such prior release,
termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise
affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such
obligation or the amount of such payment.




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Section 8.2 Release of Collateral.



(a) At the time provided in clause (b)(iii) of Section 10.10 (Release of
Collateral or Guarantors) of the Credit Agreement, the Collateral shall be released from the
Lien created hereby and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Grantor hereunder shall terminate,
all without delivery of any instrument or performance of any act by any party, and all rights to
the Collateral shall revert to the Grantors. Each Grantor is hereby authorized to file UCC
amendments at such time evidencing the termination of the Liens so released. At the request of any
Grantor following any such termination, the Administrative Agent shall deliver to such Grantor any
Collateral of such Grantor held by the Administrative Agent hereunder and execute and deliver to
such Grantor such documents as such Grantor shall reasonably request to evidence such termination.



(b) If the Administrative Agent shall be directed or permitted pursuant to clause (i)
or (ii) of Section 10.10(b) of the Credit Agreement to release any Lien or any
Collateral, the Administrative Agent shall release such Collateral from the Lien created hereby to
the extent provided under, and subject to the terms and conditions set forth in, such clauses
(i) and (ii). In connection therewith, the Administrative Agent, at the request of any
Grantor, shall execute and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such release.



(c) At the time provided in Section 10.10(a) of the Credit Agreement and at the
request of the Borrower, a Grantor shall be released from its obligations hereunder in the event
that all the Securities of such Grantor shall be Sold to any Person that is not an Affiliate of
the Borrower and the Subsidiaries of the Borrower in a transaction permitted by the Loan Documents.



Section 8.3 Independent Obligations. The obligations of each Grantor hereunder are independent of and separate from the Secured
Obligations and the Guaranteed Obligations. If any Secured Obligation or Guaranteed Obligation is
not paid when due, or upon any Event of Default, the Administrative
Agent may, at its sole election, proceed directly and at once, without notice, against any
Grantor and any Collateral to collect and recover the full amount of any Secured Obligation or
Guaranteed Obligation then due, without first proceeding against any other Grantor, any other Loan
Party or any other Collateral and without first joining any other Grantor or any other Loan Party
in any proceeding.



Section 8.4 No Waiver by Course of Conduct. No Secured Party shall by any act (except by a written instrument pursuant to Section
8.6), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor
any delay in exercising, on the part of any Secured Party, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. A waiver by any Secured Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy that such Secured Party would
otherwise have on any future occasion.



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Section 8.5 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or
otherwise modified except in accordance with Section 11.1 of the Credit Agreement;
provided, however, that annexes to this Agreement may be supplemented (but no
existing provisions may be modified and no Collateral may be released) through Pledge Amendments
and Joinder Agreements, in substantially the form of Annex 8.6(b) and Annex 8.6(a),
respectively, in each case duly executed by the Administrative Agent and each Grantor directly
affected thereby.



Section 8.6 Additional Grantors; Additional Pledged Collateral.



(a) Joinder Agreements. If, at the option of the Borrower or as required pursuant to
Section 7.10 of the Credit Agreement, the Borrower shall cause any Subsidiary that is not a
Grantor to become a Grantor hereunder, such Subsidiary shall execute and deliver to the
Administrative Agent a Joinder Agreement substantially in the form of Annex 8.6(a) and
shall thereafter for all purposes be a party hereto and have the same rights, benefits and
obligations as a Grantor party hereto on the Closing Date.



(b) Pledge Amendments. To the extent any Pledged Collateral has not been delivered as
of the Closing Date, such Grantor shall deliver a pledge amendment duly executed by the Grantor in
substantially the form of Annex 8.6(b) (each, a “Pledge Amendment”). Such Grantor
authorizes the Administrative Agent to attach each Pledge Amendment to this Agreement.



Section 8.7 Notices. All notices, requests and demands to or upon the Administrative Agent or any Grantor
hereunder shall be effected in the manner provided for in Section 11.11 of the Credit
Agreement; provided, however, that any such notice, request or demand to or upon
any Grantor shall be addressed to the Borrower’s notice address set forth in such Section
11.11.



Section 8.8 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall
inure to the benefit of each Secured Party and their successors and assigns; provided,
however, that no Grantor may assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Administrative Agent.



Section 8.9 Counterparts. This Agreement may be executed in any number of counterparts and by different parties in
separate counterparts, each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Signature pages may be detached
from multiple separate counterparts and attached to a single counterpart. Delivery of an executed
signature page of this Agreement by facsimile transmission or by Electronic Transmission shall be
as effective as delivery of a manually executed counterpart hereof.



Section 8.10 Severability. Any provision of this Agreement being held illegal, invalid or unenforceable in any
jurisdiction shall not affect any part of such provision not held illegal, invalid or
unenforceable, any other provision of this Agreement or any part of such provision in any other
jurisdiction.



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Section 8.11 Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed by,
and construed and interpreted in accordance with, the law of the State of Wisconsin



Section 8.12 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREIN OR RELATED THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
8.12.



Section 8.13 Limitation of Liability for Certain Damages. In no event shall
any Indemnitee be liable on any theory of liability for any special, indirect, consequential or
punitive damages (including any loss of profits, business or anticipated savings). Each Grantor
hereby waives, releases and agrees not to sue upon any such claim for any special, indirect,
consequential or punitive damages, whether or not accrued and whether or not known or suspected to
exist in its favor.



Section 8.14 Jurisdiction. 



(a) Submission to Jurisdiction. Any legal action or proceeding with respect to any
Loan Document may be brought in the courts of the State of Wisconsin located in the City of
Milwaukee, Wisconsin, or of the United States of America sitting in the City of Milwaukee,
Wisconsin and, by execution and delivery of this Agreement, each Grantor hereby accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The parties hereto hereby irrevocably waive any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens, that any of them may now or
hereafter have to the bringing of any such action or proceeding in such jurisdictions.



(b) Service of Process. Each Grantor hereby irrevocably waives personal service of any
and all legal process, summons, notices and other documents and other service of process of any
kind and consents to such service in any suit, action or proceeding brought in the United States of
America with respect to or otherwise arising out of or in connection with any Loan Document by any
means permitted by applicable Requirements of Law, including by the mailing thereof (by registered
or certified mail, postage prepaid) to the address of Borrower specified in Section 11.11
of the Credit Agreement (and shall be effective when such mailing shall be effective, as provided
therein). Each Grantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.



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(c) Non-Exclusive Jurisdiction. Nothing contained in this Section shall affect the
right of the Administrative Agent or any Lender to serve process in any other manner permitted by
applicable Requirements of Law or commence legal proceedings or otherwise proceed against any Loan
Party in any other jurisdiction.



Section 11.18 Entire Agreement. The Loan Documents embody the entire agreement of the
parties and supersede all prior agreements and understandings relating to the subject matter
thereof and any prior letter of interest, commitment letter, fee letter, confidentiality and
similar agreements involving any Loan Party and any of the Administrative Agent, any Lender or any
L/C Issuer or any of their respective Affiliates relating to a financing of substantially similar
form, purpose or effect. In the event of any conflict between the terms of this Agreement and the
Credit Agreement, the terms of the Credit Agreement shall govern (unless such terms of this
Agreement are necessary to comply with applicable Requirements of Law, in which case such terms
shall govern to the extent necessary to comply therewith).



[SIGNATURE PAGES FOLLOW]


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IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty and Security Agreement to
be duly executed and delivered as of the date first above written.



	 	 	 	 	 
	 	GRANTORS:





ASSISTED LIVING CONCEPTS, INC., a 
Nevada
corporation

 	 
	 	By:  	 	 
	 	 	Name:  	John Buono 	 
	 	 	Title:  	Senior Vice President, Chief Financial
Officer and Treasurer 	 
	 
	 	ALC REAL ESTATE, LLC, a Wisconsin limited

liability company
 	 
	 	 	 
	 	By:  	    Assisted Living Concepts, Inc., its sole member
 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	John Buono 	 
	 	 	Title:  	Senior Vice President, Chief Financial
Officer and Treasurer 	 




GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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	 	ALC PROPERTIES II, INC., a Nevada corporation

 	 
	 	By:  	 	 
	 	 	Name:  	John Buono 	 
	 	 	Title:  	Treasurer 	 
	 
	 	TEXAS ALC II, INC., a Nevada corporation

 	 
	 	By:  	 	 
	 	 	Name:  	John Buono 	 
	 	 	Title:  	Treasurer 	 
	 



GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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	ACCEPTED AND AGREED
  
as of the date first above written:
	 
	 	 	 	 
	U.S. BANK NATIONAL ASSOCIATION

as Administrative Agent
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name: Matthew J. Schulz	 	 
	 

	 	Title:   Vice President	 	 





GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.





 


3









 





ANNEX 8.6(A)

TO

GUARANTY AND SECURITY AGREEMENT

FORM OF JOINDER AGREEMENT




This JOINDER AGREEMENT, dated as of
 _____ ___, 20_____, is delivered pursuant to Section
8.6 of the Guaranty and Security Agreement, dated as of February 18, 2011, by ASSISTED LIVING CONCEPTS, INC., a Nevada corporation (the “Borrower”), and the Affiliates of the Borrower
from time to time party thereto as Grantors in favor of the U.S. Bank National Association, as
administrative agent and collateral agent for the Secured Parties referred to therein (the
“Guaranty and Security Agreement”). Capitalized terms used herein without definition are
used as defined in the Guaranty and Security Agreement.



By executing and delivering this Joinder Agreement, the undersigned, as provided in
Section 8.6 of the Guaranty and Security Agreement, hereby becomes a party to the Guaranty
and Security Agreement as a Guarantor and Grantor thereunder with the same force and effect as if
originally named as a Guarantor and Grantor therein and, without limiting the generality of the
foregoing, as collateral security for the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of the
undersigned, hereby mortgages, pledges and hypothecates to the Administrative Agent for the benefit
of the Secured Parties, and grants to the Administrative Agent for the benefit of the Secured
Parties a lien on and security interest in, all of its right, title and interest in, to and under
the Collateral of the undersigned and expressly assumes all obligations and liabilities of a
Guarantor and Grantor thereunder. The undersigned hereby agrees to be bound as a Guarantor and
Grantor for the purposes of the Guaranty and Security Agreement.



The information set forth in Annex 8.6(b)-A is hereby added to the information set
forth in the Schedules to the Guaranty and Security Agreement. By acknowledging and
agreeing to this Joinder Agreement, the undersigned hereby agree that this Joinder Agreement may be
attached to the Guaranty and Security Agreement and that the Pledged Collateral listed on Annex
8.6(b)-A to this Joinder Amendment shall be and become part of the Collateral referred to in
the Guaranty and Security Agreement and shall secure the Secured Obligations.



The undersigned hereby represents and warrants that each of the representations and warranties
contained in Article IV of the Guaranty and Security Agreement applicable to it is true and
correct on and as the date hereof as if made on and as of such date.



GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


4









 





 IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and
delivered as of the date first above written.



	 	 	 	 	 
	 	[ADDITIONAL GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	ACKNOWLEDGED AND AGREED 

as of the date first above written:

[EACH GRANTOR PLEDGING

ADDITIONAL COLLATERAL]
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	U.S. BANK NATIONAL ASSOCIATION

as Administrative Agent
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 






GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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ANNEX 8.6(B)

TO

GUARANTY AND SECURITY AGREEMENT1


FORM OF PLEDGE AMENDMENT




This PLEDGE AMENDMENT, dated as of
 _____ ___, 20_____, is delivered pursuant to Section
8.6 of the Guaranty and Security Agreement, dated as of February 18, 2011, by ASSISTED LIVING CONCEPTS, INC., a Nevada corporation (the “Borrower”), the undersigned Grantor and the
other Affiliates of the Borrower from time to time party thereto as Grantors in favor of U.S. Bank
National Association, as administrative agent and collateral agent for the Secured Parties referred
to therein (the “Guaranty and Security Agreement”). Capitalized terms used herein without
definition are used as defined in the Guaranty and Security Agreement.



The undersigned hereby agrees that this Pledge Amendment may be attached to the Guaranty and
Security Agreement and that the Pledged Collateral listed on Annex 8.6(b)-A to this Pledge
Amendment shall be and become part of the Collateral referred to in the Guaranty and Security
Agreement and shall secure the Secured Obligations.



The undersigned hereby represents and warrants that each of the representations and warranties
contained in Sections 4.1, 4.2, 4.5 and 4.10 of the Guaranty and
Security Agreement is true and correct and as of the date hereof as if made on and as of such date.



	 	 	 	 	 
	 	[GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 







	 	 	 
	1	 	To be used for pledge of Additional Pledged Collateral
by existing Grantor.





GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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Annex 8.6(b)-A




PLEDGED STOCK




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	NUMBER OF	 
	 	 	 	 	 	 	 	 	 	 	PAR	 	 	SHARES,

UNITS OR	 
	ISSUER	 	CLASS	 	 	CERTIFICATE NO(S).	 	 	VALUE	 	 	INTERESTS	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 






PLEDGED DEBT INSTRUMENTS




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	DESCRIPTION	 	 	 	 	 	 	FINAL	 	 	PRINCIPAL	 
	ISSUER	 	OF DEBT	 	 	CERTIFICATE NO(S).	 	 	MATURITY	 	 	AMOUNT	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 






ACKNOWLEDGED AND AGREED

as of the date first above written:



U.S. BANK NATIONAL ASSOCIATION

as Administrative Agent



	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 






GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.




 


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ANNEX 5.7

TO

GUARANTY AND SECURITY AGREEMENT




FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT




THIS [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT, dated as of
 _____ ___, 20_____, is
made by each of the entities listed on the signature pages hereof (each a “Grantor” and,
collectively, the “Grantors”), in favor of U.S. Bank National Association (“U.S.
Bank”), as administrative agent and collateral agent (in such capacity, together with its
successors and permitted assigns, the “Administrative Agent”) for the Lenders and the L/C
Issuers (as defined in the Credit Agreement referred to below).



W I T N E S S E T H:




WHEREAS, pursuant to the Credit Agreement, dated as of February 18, 2011 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, the Lenders and the L/C Issuers from time to time party
thereto and U.S. Bank, as Administrative Agent for the Lenders and the L/C Issuers, the Lenders and
the L/C Issuers have severally agreed to make extensions of credit to the Borrower upon the terms
and subject to the conditions set forth therein;



WHEREAS, each Grantor (other than the Borrower) has agreed, pursuant to a Guaranty and
Security Agreement of even date herewith in favor of the Administrative Agent (the “Guaranty
and Security Agreement”), to guarantee the Obligations (as defined in the Credit Agreement) of
the Borrower; and



WHEREAS, all of the Grantors are party to the Guaranty and Security Agreement pursuant to
which the Grantors are required to execute and deliver this [Copyright] [Patent] [Trademark]
Security Agreement;



NOW, THEREFORE, in consideration of the premises and to induce the Lenders, the L/C Issuers
and the Administrative Agent to enter into the Credit Agreement and to induce the Lenders and the
L/C Issuers to make their respective extensions of credit to the Borrower thereunder, each Grantor
hereby agrees with the Administrative Agent as follows:



Section 1. Defined Terms. Capitalized terms used herein without definition
are used as defined in the Guaranty and Security Agreement.



Section 2. Grant of Security Interest in [Copyright] [Trademark] [Patent]
Collateral. Each Grantor, as collateral security for the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Administrative
Agent for the benefit of the Secured Parties, and grants to the Administrative Agent for the
benefit of the Secured Parties a Lien on and security interest in, all of its right, title and
interest
in, to and under the following Collateral of such Grantor (the “[Copyright] [Patent]
[Trademark] Collateral”):




(a) [all of its Copyrights and all IP Licenses providing for the grant by or to such Grantor
of any right under any Copyright, including, without limitation, those referred to on Schedule
I hereto;






 


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(b) all renewals, reversions and extensions of the foregoing; and



(c) all income, royalties, proceeds and Liabilities at any time due or payable or asserted
under and with respect to any of the foregoing, including, without limitation, all rights to sue
and recover at law or in equity for any past, present and future infringement, misappropriation,
dilution, violation or other impairment thereof.]



or



(a) [all of its Patents and all IP Licenses providing for the grant by or to such Grantor of
any right under any Patent, including, without limitation, those referred to on Schedule I
hereto;



(b) all reissues, reexaminations, continuations, continuations-in-part, divisionals, renewals
and extensions of the foregoing; and



(c) all income, royalties, proceeds and Liabilities at any time due or payable or asserted
under and with respect to any of the foregoing, including, without limitation, all rights to sue
and recover at law or in equity for any past, present and future infringement, misappropriation,
dilution, violation or other impairment thereof.]



or



(a) [all of its Trademarks and all IP Licenses providing for the grant by or to such Grantor
of any right under any Trademark, including, without limitation, those referred to on Schedule
I hereto;



(b) all renewals and extensions of the foregoing;



(c) all goodwill of the business connected with the use of, and symbolized by, each such
Trademark; and



(d) all income, royalties, proceeds and Liabilities at any time due or payable or asserted
under and with respect to any of the foregoing, including, without limitation, all rights to sue
and recover at law or in equity for any past, present and future infringement, misappropriation,
dilution, violation or other impairment thereof.]





 


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Section 3. Guaranty and Security Agreement. The security interest granted
pursuant to this [Copyright] [Patent] [Trademark] Security Agreement is granted in conjunction
with the security interest granted to the Administrative Agent pursuant to the Guaranty and
Security Agreement and each Grantor hereby acknowledges and agrees that the rights and
remedies of the Administrative Agent with respect to the security interest in the [Copyright]
[Patent] [Trademark] Collateral made and granted hereby are more fully set forth in the Guaranty
and Security Agreement, the terms and provisions of which are incorporated by reference herein as
if fully set forth herein.



Section 4. Grantor Remains Liable. Each Grantor hereby agrees that, anything
herein to the contrary notwithstanding, such Grantor shall assume full and complete responsibility
for the prosecution, defense, enforcement or any other necessary or desirable actions in
connection with their [Copyrights] [Patents] [Trademarks] and IP Licenses subject to a security
interest hereunder.



Section 5. Counterparts. This [Copyright] [Patent] [Trademark] Security
Agreement may be executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Signature pages may be detached from
multiple separate counterparts and attached to a single counterpart.



Section 6. Governing Law. This [Copyright] [Patent] [Trademark] Security
Agreement and the rights and obligations of the parties hereto shall be governed by, and construed
and interpreted in accordance with, the law of the State of Wisconsin.



[SIGNATURE PAGES FOLLOW]





 


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IN WITNESS WHEREOF, each Grantor has caused this [Copyright] [Patent] [Trademark] Security
Agreement to be executed and delivered by its duly authorized officer as of the date first set
forth above.



	 	 	 	 	 
	 	Very truly yours,




[GRANTOR]

as Grantor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




ACCEPTED AND AGREED

as of the date first above written:



U.S. BANK NATIONAL ASSOCIATION

as Administrative Agent



	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 






[SIGNATURE PAGE TO [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT]




 


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ACKNOWLEDGMENT OF GRANTOR




	 	 	 	 	 
	STATE OF
                                   

	 	)	 	 
	 

	 	)       ss.	 	 
	COUNTY OF

	 	)	 	 






On this
 _____ 
day of
 _____ ___, 20_____ 
before me personally appeared
 _____,
proved to me on the basis of satisfactory evidence to be the person who executed the foregoing
instrument on behalf of
 _____, who being by me duly sworn did depose and say that he is
an authorized officer of said corporation, that the said instrument was signed on behalf of said
corporation as authorized by its Board of Directors and that he acknowledged said instrument to be
the free act and deed of said corporation.



	 	 	 	 	 
	 

	 	 

Notary Public
	 	 






[ACKNOWLEDGEMENT OF GRANTOR FOR [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT]




 


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SCHEDULE I




TO




[COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT




[Copyright] [Patent] [Trademark] Registrations





	A.	 	REGISTERED [COPYRIGHTS] [PATENTS] [TRADEMARKS]


[Include Registration Number and Date]

	 
	B.	 	[COPYRIGHT] [PATENT] [TRADEMARK] APPLICATIONS


[Include Application Number and Date]

	 
	C.	 	IP LICENSES 

[Include complete legal description of agreement (name of agreement, parties and date)]






GUARANTY AND SECURITY AGREEMENT

ASSISTED LIVING CONCEPTS, INC.





 


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