Document:

Exhibit
10.6

 

 

[EXECUTION VERSION]

 

 

Published CUSIP
Number                      

 

CREDIT AGREEMENT

 

Dated as of March 22, 2004

 

among

 

OHI ASSET, LLC

OHI ASSET (ID), LLC

OHI ASSET (LA), LLC

OHI ASSET (TX), LLC

OHI ASSET (CA), LLC

DELTA INVESTORS I, LLC

DELTA INVESTORS II, LLC

 

as Borrowers,

 

THE LENDERS PARTY HERETO,

 

BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender and L/C Issuer,

 

and

 

BANC OF AMERICA SECURITIES LLC,

as Sole Lead Arranger and Sole Book Manager

 

and

 

DEUTSCHE BANK TRUST COMPANY AMERICAS and UBS SECURITIES LLC,

as Co-Syndication Agents

 

and

 

GENERAL ELECTRIC CAPITAL CORPORATION,

as Documentation Agent

 

 

 

TABLE OF CONTENTS

 

	
  Article and Section

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
   

  	
  1.01

  	
  Defined Terms.

  	
   

  
	
   

  	
  1.02

  	
  Interpretive Provisions.

  	
   

  
	
   

  	
  1.03

  	
  Accounting Terms.

  	
   

  
	
   

  	
  1.04

  	
  Rounding.

  	
   

  
	
   

  	
  1.05

  	
  References to
  Agreements and Laws.

  	
   

  
	
   

  	
  1.06

  	
  Times of Day.

  	
   

  
	
   

  	
  1.07

  	
  Letter of Credit Amounts.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II COMMITMENTS AND EXTENSION OF
  CREDITS

  	
   

  
	
   

  	
  2.01

  	
  Commitments.

  	
   

  
	
   

  	
  2.02

  	
  Borrowings,
  Conversions and Continuations.

  	
   

  
	
   

  	
  2.03

  	
  Additional
  Provisions with respect to Letters of Credit.

  	
   

  
	
   

  	
  2.04

  	
  Additional
  Provisions with respect to Swing Line Loans.

  	
   

  
	
   

  	
  2.05

  	
  Repayment
  of Loans.

  	
   

  
	
   

  	
  2.06

  	
  Prepayments.

  	
   

  
	
   

  	
  2.07

  	
  Termination or
  Reduction of Commitments.

  	
   

  
	
   

  	
  2.08

  	
  Interest.

  	
   

  
	
   

  	
  2.09

  	
  Fees.

  	
   

  
	
   

  	
  2.10

  	
  Computation of
  Interest and Fees.

  	
   

  
	
   

  	
  2.11

  	
  Payments
  Generally.

  	
   

  
	
   

  	
  2.12

  	
  Sharing
  of Payments.

  	
   

  
	
   

  	
  2.13

  	
  Evidence
  of Debt.

  	
   

  
	
   

  	
  2.14

  	
  Joint and
  Several Liability of the Borrowers.

  	
   

  
	
   

  	
  2.15

  	
  Appointment
  of Parent as Legal Representative for Credit Parties.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III TAXES, YIELD PROTECTION AND
  ILLEGALITY

  	
   

  
	
   

  	
  3.01

  	
  Taxes.

  	
   

  
	
   

  	
  3.02

  	
  Illegality.

  	
   

  
	
   

  	
  3.03

  	
  Inability to Determine
  Rates.

  	
   

  
	
   

  	
  3.04

  	
  Increased
  Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.

  	
   

  
	
   

  	
  3.05

  	
  Funding Losses.

  	
   

  
	
   

  	
  3.06

  	
  Matters
  Applicable to all Requests for Compensation.

  	
   

  
	
   

  	
  3.07

  	
  Survival.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV CONDITIONS PRECEDENT TO EXTENSION
  OF CREDITS

  	
   

  
	
   

  	
  4.01

  	
  Conditions
  to Initial Extensions of Credit.

  	
   

  
	
   

  	
  4.02

  	
  Conditions to
  Extensions of Credit.

  	
   

  
					

 

i

 

	
  ARTICLE V REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
  5.01

  	
  Financial
  Statements; No Material Adverse Effect.

  	
   

  
	
   

  	
  5.02

  	
  Corporate Existence and
  Power.

  	
   

  
	
   

  	
  5.03

  	
  Corporate
  and Governmental Authorization; No Contravention.

  	
   

  
	
   

  	
  5.04

  	
  Binding Effect.

  	
   

  
	
   

  	
  5.05

  	
  Litigation.

  	
   

  
	
   

  	
  5.06

  	
  Compliance with ERISA.

  	
   

  
	
   

  	
  5.07

  	
  Environmental Matters.

  	
   

  
	
   

  	
  5.08

  	
  Margin
  Regulations; Investment Company Act; Public Utility Holding Company Act.

  	
   

  
	
   

  	
  5.09

  	
  Compliance with Laws.

  	
   

  
	
   

  	
  5.10

  	
  Ownership of Property;
  Liens.

  	
   

  
	
   

  	
  5.11

  	
  Corporate
  Structure; Capital Stock, Etc.

  	
   

  
	
   

  	
  5.12

  	
  Real Property Assets;
  Leases.

  	
   

  
	
   

  	
  5.13

  	
  Material
  Contracts; Additional Contractual Obligations.

  	
   

  
	
   

  	
  5.14

  	
  Investments.

  	
   

  
	
   

  	
  5.15

  	
  Solvency.

  	
   

  
	
   

  	
  5.16

  	
  Taxes.

  	
   

  
	
   

  	
  5.17

  	
  REIT Status.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
  6.01

  	
  Financial Statements.

  	
   

  
	
   

  	
  6.02

  	
  Certificates; Other
  Information.

  	
   

  
	
   

  	
  6.03

  	
  Preservation
  of Existence and Franchises.

  	
   

  
	
   

  	
  6.04

  	
  Books and Records.

  	
   

  
	
   

  	
  6.05

  	
  Compliance with Law.

  	
   

  
	
   

  	
  6.06

  	
  Payment of Taxes and Other
  Indebtedness.

  	
   

  
	
   

  	
  6.07

  	
  Insurance.

  	
   

  
	
   

  	
  6.08

  	
  Maintenance of Property.

  	
   

  
	
   

  	
  6.09

  	
  Performance of Obligations.

  	
   

  
	
   

  	
  6.10

  	
  Visits and Inspections.

  	
   

  
	
   

  	
  6.11

  	
  Use
  of Proceeds/Purpose of Loans and Letters of Credit.

  	
   

  
	
   

  	
  6.12

  	
  Financial Covenants.

  	
   

  
	
   

  	
  6.13

  	
  Environmental Matters.

  	
   

  
	
   

  	
  6.14

  	
  REIT Status.

  	
   

  
	
   

  	
  6.15

  	
  New Subsidiaries.

  	
   

  
	
   

  	
  6.16

  	
  Pledged Assets.

  	
   

  
	
   

  	
  6.17

  	
  Appraisals.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII NEGATIVE COVENANTS

  	
   

  
	
   

  	
  7.01

  	
  Liens.

  	
   

  
	
   

  	
  7.02

  	
  Indebtedness.

  	
   

  
	
   

  	
  7.03

  	
  Fundamental Changes.

  	
   

  
	
   

  	
  7.04

  	
  Dispositions; Acquisitions.

  	
   

  
	
   

  	
  7.05

  	
  Business Activities.

  	
   

  
	
   

  	
  7.06

  	
  Transactions
  with Affiliates and Insiders.

  	
   

  
	
   

  	
  7.07

  	
  Organization
  Documents; Fiscal Year.

  	
   

  

 

ii

 

	
   

  	
  7.08

  	
  Modifications to
  Other Documents.

  	
   

  
	
   

  	
  7.09

  	
  Ownership of Subsidiaries.

  	
   

  
	
   

  	
  7.10

  	
  No Further Negative
  Pledges.

  	
   

  
	
   

  	
  7.11

  	
  Limitation on
  Restricted Actions.

  	
   

  
	
   

  	
  7.12

  	
  Addition/Replacement
  of Borrowing Base Assets.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII EVENTS OF DEFAULT AND
  REMEDIES

  	
   

  
	
   

  	
  8.01

  	
  Events of Default.

  	
   

  
	
   

  	
  8.02

  	
  Remedies Upon Event of
  Default.

  	
   

  
	
   

  	
  8.03

  	
  Application of Funds.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
  9.01

  	
  Appointment
  and Authorization of Administrative Agent.

  	
   

  
	
   

  	
  9.02

  	
  Delegation of Duties.

  	
   

  
	
   

  	
  9.03

  	
  Liability of
  Administrative Agent.

  	
   

  
	
   

  	
  9.04

  	
  Reliance by
  Administrative Agent.

  	
   

  
	
   

  	
  9.05

  	
  Notice of Default.

  	
   

  
	
   

  	
  9.06

  	
  Credit
  Decision; Disclosure of Information by Administrative Agent.

  	
   

  
	
   

  	
  9.07

  	
  Indemnification
  of Administrative Agent.

  	
   

  
	
   

  	
  9.08

  	
  Administrative
  Agent in its Individual Capacity.

  	
   

  
	
   

  	
  9.09

  	
  Successor
  Administrative Agent.

  	
   

  
	
   

  	
  9.10

  	
  Administrative
  Agent May File Proofs of Claim.

  	
   

  
	
   

  	
  9.11

  	
  Guaranty Matters.

  	
   

  
	
   

  	
  9.12

  	
  Other Agents;
  Arrangers and Managers.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X MISCELLANEOUS

  	
   

  
	
   

  	
  10.01

  	
  Amendments, Etc.

  	
   

  
	
   

  	
  10.02

  	
  Notices
  and Other Communications; Facsimile Copies.

  	
   

  
	
   

  	
  10.03

  	
  No Waiver; Cumulative
  Remedies.

  	
   

  
	
   

  	
  10.04

  	
  Attorney Costs, Expenses and Taxes.

  	
   

  
	
   

  	
  10.05

  	
  Indemnification by
  the Borrower.

  	
   

  
	
   

  	
  10.06

  	
  Payments Set Aside.

  	
   

  
	
   

  	
  10.07

  	
  Successors and Assigns.

  	
   

  
	
   

  	
  10.08

  	
  Confidentiality.

  	
   

  
	
   

  	
  10.09

  	
  Set-off.

  	
   

  
	
   

  	
  10.10

  	
  Interest Rate Limitation.

  	
   

  
	
   

  	
  10.11

  	
  Counterparts.

  	
   

  
	
   

  	
  10.12

  	
  Integration.

  	
   

  
	
   

  	
  10.13

  	
  Survival of
  Representations and Warranties.

  	
   

  
	
   

  	
  10.14

  	
  Severability.

  	
   

  
	
   

  	
  10.15

  	
  Tax
  Forms.

  	
   

  
	
   

  	
  10.16

  	
  Replacement of Lenders.

  	
   

  
	
   

  	
  10.17

  	
  Source of Funds.

  	
   

  
	
   

  	
  10.18

  	
  GOVERNING LAW.

  	
   

  
	
   

  	
  10.19

  	
  WAIVER OF RIGHT TO
  TRIAL BY JURY.

  	
   

  
	
   

  	
  10.20

  	
  No Conflict.

  	
   

  
	
   

  	
  10.21

  	
  USA Patriot Act Notice.

  	
   

  

 

iii

 

	
   

  	
  10.22

  	
  Entire Agreement.

  	
   

  

 

iv

 

	
  SCHEDULES

  
	
   

  	
   

  
	
  2.01

  	
  Lenders
  and Commitments

  
	
  5.11

  	
  Corporate
  Structure; Capital Stock

  
	
  5.12

  	
  Real
  Property Asset Matters

  
	
   

  	
  Part I    Borrowing Base Assets

  
	
   

  	
  Part II   Other Real Property Assets

  
	
   

  	
  Part III  Delinquent Tenants

  
	
   

  	
  Part
  IV  Facility Leases

  
	
   

  	
  Part
  V   Material Sub-leases

  
	
  5.13

  	
  Material
  Contracts; Contracts Subject to Assignment of Claims Act

  
	
  5.18

  	
  Insurance
  Certificates

  
	
  7.01

  	
  Liens

  
	
  7.02

  	
  Borrowers
  Indebtedness

  
	
  10.02

  	
  Notice
  Addresses

  
	
   

  	
   

  
	
  EXHIBITS

  
	
   

  	
   

  
	
  A

  	
  Form
  of Loan Notice

  
	
  B

  	
  Form
  of Revolving Note

  
	
  C-1

  	
  Form
  of Compliance Certificate

  
	
  C-2

  	
  Form
  of Borrowing Base Certificate

  
	
  D

  	
  Form
  of Assignment and Assumption

  
	
  E-1

  	
  Form
  of Borrower Joinder Agreement

  
	
  E-2

  	
  Form
  of Subsidiary Guarantor Joinder Agreement

  
	
  F

  	
  Form
  of Lender Joinder Agreement

  
	
  G

  	
  Form
  of Guaranty

  
	
  H

  	
  Form
  of Security Agreement

  

 

v

 

CREDIT AGREEMENT

 

This
CREDIT AGREEMENT (as amended, modified, restated or supplemented from time to
time, this “Credit Agreement” or this “Agreement”) is entered
into as of March 22, 2004 by and among OHI ASSET, LLC, a Delaware limited
liability company, OHI ASSET (ID), LLC, a Delaware limited liability company,
OHI ASSET (LA), LLC, a Delaware limited liability company, OHI ASSET (TX), LLC,
a Delaware limited liability company, OHI ASSET (CA), LLC, a Delaware limited
liability company, DELTA INVESTORS I, LLC, a Maryland limited liability
company, DELTA INVESTORS II, LLC, a Maryland limited liability company (each of
the foregoing entities and each of the entities from time to time executing a
Joinder Agreement pursuant to Section 6.15 hereof shall be
hereinafter referred to individually as a “Borrower” and collectively as
the “Borrowers”), the Lenders (as defined herein), and BANK OF AMERICA,
N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (each, as
defined herein).

 

WHEREAS,
the Borrowers have requested that the Lenders provide revolving credit
facilities in an initial amount of up to $125,000,000 for the purposes set
forth herein; and

 

WHEREAS,
the Lenders have agreed to make the requested facilities available on the terms
and conditions set forth herein;

 

NOW,
THEREFORE, in consideration of these premises and the mutual covenants and
agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

1.01                        Defined Terms.

 

As used in this Credit
Agreement, the following terms have the meanings set forth below:

 

“Acquisition” means
the purchase or acquisition by any Person of (a) more than 50% of the Capital
Stock with ordinary voting power of another Person or (b) all or any
substantial portion of the property (other than Capital Stock) of another
Person, whether or not involving a merger or consolidation with such Person.

 

“Administrative Agent”
means Bank of America in its capacity as administrative agent for the Lenders
under any of the Credit Documents, or any successor administrative agent.

 

“Administrative Agent’s
Fee Letter” means the letter agreement dated as of February 27, 2004
among the Parent, the Arranger and the Administrative Agent, as amended and
modified.

 

 

“Administrative Agent’s
Office” means the Administrative Agent’s address and, as appropriate,
account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify the Borrowers
and the Lenders.

 

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

 

“Affiliate” means,
with respect to any Person, another Person that directly, or indirectly through
one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.

 

“Agent-Related Persons”
means the Administrative Agent, together with its Affiliates (including, in the
case of Bank of America in its capacity as the Administrative Agent, the
Arranger), and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.

 

“Aggregate Commitments”
means the Commitments of all the Lenders.

 

“Aggregate
Mortgageability Amount” means, with respect to any pool of Borrowing Base
Assets as of any date of determination, the sum of the respective
Mortgageability Amounts of each of the Borrowing Base Assets in such pool.

 

“Aggregate Revolving
Commitments” means the Revolving Commitments of all the Lenders.

 

“Aggregate Revolving
Committed Amount” has the meaning provided in Section 2.01(a).

 

“Agreement” has the
meaning provided in the introductory paragraph hereof.

 

“Applicable Percentage”
means each of the following percentages per annum, as applicable, based upon
the Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(a):

 

Applicable Percentage

 

	
  Pricing

  Level

  	
   

  	
  Consolidated
  Leverage Ratio

  	
   

  	
  Eurodollar
  Rate

  Loans

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  Letter of
  Credit

  Fees

  	
   

  	
  Unused Fee

  	
   

  
	
  1

  	
   

  	
  < 3.00 to 1.00

  	
   

  	
  2.25

  	
  %

  	
  0.75

  	
  %

  	
  2.25

  	
  %

  	
  0.375

  	
  %

  
	
  2

  	
   

  	
  > 3.00 to 1.00 but < 3.50 to 1.00

  	
   

  	
  2.50

  	
  %

  	
  1.00

  	
  %

  	
  2.50

  	
  %

  	
  0.375

  	
  %

  
	
  3

  	
   

  	
  > 3.50 to 1.00 but < 4.00 to 1.00

  	
   

  	
  2.75

  	
  %

  	
  1.25

  	
  %

  	
  2.75

  	
  %

  	
  0.375

  	
  %

  
	
  4

  	
   

  	
  > 4.00 to 1.00 but < 4.50 to 1.00

  	
   

  	
  3.00

  	
  %

  	
  1.50

  	
  %

  	
  3.00

  	
  %

  	
  0.375

  	
  %

  
	
  5

  	
   

  	
  > 4.50 to 1.0

  	
   

  	
  3.25

  	
  %

  	
  1.75

  	
  %

  	
  3.25

  	
  %

  	
  0.375

  	
  %

  

 

2

 

Any
increase or decrease in the Applicable Percentage resulting from a change in
the Consolidated Leverage Ratio shall become effective as of the first Business
Day immediately following the date a Compliance Certificate is delivered
pursuant to Section 6.02(a); provided, however, that
if a Compliance Certificate is not delivered within ten (10) days after being
due in accordance with such Section, then Pricing Level 5 shall apply as of the
eleventh (11th) day after the date on which such Compliance
Certificate was required to have been delivered until the first Business Day
after the date on which such Compliance Certificate is delivered.  The Applicable Percentages in effect from
the Closing Date through the date that the Parent delivers the Compliance
Certificate for the fiscal quarter ending June 30, 2004 shall be determined based upon Pricing Level 4.

 

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

 

“Arranger” means Banc
of America Securities LLC, in its capacity as sole lead arranger and sole book
manager.

 

“Assignment and
Assumption” means an Assignment and Assumption substantially in the form of
Exhibit D.

 

“Assignment of Leases”
means an assignment of leases, rents and profits to the Administrative Agent
with respect to the applicable Borrower’s interests in a Borrowing Base Asset
(which assignment may be contained within the related Mortgage Instrument);
provided that each such Assignment of Leases shall, subject to the terms and
conditions of the applicable underlying lease, directly assign to the
Administrative Agent the following: (a) all existing and future leases,
subleases, tenancies, licenses, occupancy agreements or agreements to lease all
or any portion of such Borrowing Base Asset (including, without limitation, any
applicable Facility Lease), whether written or oral or for a definite period or
month-to-month, together with any extensions, renewals, amendments,
modifications or replacements thereof, and any options, rights of first refusal
or guarantees of any tenant’s obligations under any lease now or hereafter in
effect with respect to the Borrowing Base Asset (individually, for the purposes
of this definition, a “Lease” and collectively, the “Leases”); and (b) all
rents (including, without limitation, base rents, minimum rents, additional
rents, percentage rents, parking, maintenance and deficiency rents and payments
which are characterized under the terms of the applicable Lease as payments of
interest and/or principal with respect to the applicable Borrowing Base Asset),
security deposits, tenant escrows, income, receipts, revenues, reserves, issues
and profits of the Borrowing Base Asset from time to time accruing, including,
without limitation, (i) all rights to receive payments arising under, derived
from or relating to any Lease, (ii) all lump sum payments for the cancellation
or termination of any Lease, the waiver of any term thereof, or the exercise of
any right of first refusal, call option, put option or option to purchase, and
(iii) the return of any insurance premiums or ad valorem tax payments made in
advance and subsequently

 

3

 

refunded.  
In furtherance (and not limitation) of the foregoing, each Assignment of
Leases shall assign to the Administrative Agent any and all of the applicable
Borrower’s rights to collect or receive any payments with respect to the applicable
Borrowing Base Asset.  Finally, each
Assignment of Leases shall, in any case, be in form and substance satisfactory
to the Administrative Agent in its discretion and suitable for recording in the
applicable jurisdiction; and “Assignments of Leases” means a collective
reference to each such Assignment of Leases.

 

“Attorney Costs”
means and includes all reasonable and documented fees, expenses and
disbursements of any law firm or other external counsel and, without
duplication, the allocated reasonable and documented cost of internal legal
services and all expenses and disbursements of internal counsel.

 

“Attributable Principal
Amount” means (a) in the case of capital leases, the amount of capital
lease obligations determined in accordance with GAAP, (b) in the case of
Synthetic Leases, an amount determined by capitalization of the remaining lease
payments thereunder as if it were a capital lease determined in accordance with
GAAP, (c) in the case of Securitization Transactions, the outstanding principal
amount of such financing, after taking into account reserve amounts and making
appropriate adjustments, determined by the Administrative Agent in its
reasonable judgment and (d) in the case of Sale and Leaseback Transactions, the
present value (discounted in accordance with GAAP at the debt rate implied in
the applicable lease) of the obligations of the lessee for rental payments
during the term of such lease).

 

“Audited Financial
Statements” means the audited consolidated balance sheet of the Parent and its
consolidated Subsidiaries for the fiscal year ended December 31, 2003, and the related consolidated
statements of earnings, shareholders’ equity and cash flows for such fiscal
year of the Parent and its consolidated Subsidiaries, including the notes thereto;
provided, that the Administrative Agent hereby agrees that the Form 10-K of the
Parent delivered to it by the Parent and containing information for the fiscal
year ended December 31, 2003 shall constitute all information required to be
delivered as part of the “Audited Financial Statements” for purposes of this
Agreement.

 

“Bank of America”
means Bank of America, N.A., together with its successors.

 

“Bankruptcy Event”
means, with respect to any Person, the occurrence of any of the following: (i)
the entry of a decree or order for relief by a court or governmental agency in
an involuntary case under any applicable Debtor Relief Law or any other
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
appointment by a court or governmental agency of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or the ordering of the winding up
or liquidation of its affairs by a court or governmental agency and such
decree, order or appointment is not vacated or discharged within ninety (90)
days of its filing; or (ii) the commencement against such Person of an
involuntary case under any applicable Debtor Relief Law or any other
bankruptcy, insolvency or other similar law now or hereafter in effect, or of
any case, proceeding or other action for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
such Person or for any substantial part of its Property or for the winding up
or liquidation of its affairs, and such involuntary case or other

 

4

 

case, proceeding or other action shall remain
undismissed for a period of ninety (90) consecutive days, or the
repossession or seizure by a creditor of such Person of a substantial part of
its Property; or (iii) such Person shall commence a voluntary case under any
applicable Debtor Relief Law or any other bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or consent to the appointment
of or the taking possession by a receiver, liquidator, assignee, creditor in
possession, custodian, trustee, sequestrator (or similar official) of such
Person or for any substantial part of its Property or make any general
assignment for the benefit of creditors; or (iv) the filing of a petition by
such Person seeking to take advantage of any Debtor Relief Law or any other
applicable Law, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, or (v) such
Person shall fail to contest in a timely and appropriate manner (and if not
dismissed within ninety (90) days or shall consent to any petition filed
against it in an involuntary case under such bankruptcy laws or other
applicable Law or consent to any proceeding or action relating to any
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts with respect to its assets or existence, or (vi) such
Person shall admit in writing, or such Person’s financial statements shall
reflect, an inability to pay its debts generally as they become due.

 

“BAS” means Banc of
America Securities LLC, together with its successors.

 

“Base Rate” means for
any day a fluctuating rate per annum equal to the higher of (a) the Federal
Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day
as publicly announced from time to time by Bank of America as its “prime
rate.”  The “prime rate” is a rate set
by Bank of America based upon various factors including Bank of America’s costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above, or
below such announced rate.  Any change
in the prime rate announced by Bank of America shall take effect at the opening
of business on the day specified in the public announcement of such change.

 

“Base Rate Loan”
means a Loan that bears interest based on the Base Rate.

 

“Borrower” and “Borrowers”
shall have the meanings given to such terms in the introductory paragraph
hereof.

 

“Borrower Joinder
Agreement” means a joinder agreement in the form of Exhibit E-1
to be executed by each new Subsidiary of the Parent that is required to become
a Borrower in accordance with Section 6.15(a) hereof.

 

“Borrower Representative”
has the meaning given to such term in Section 2.15 hereof.

 

“Borrowing” means (a)
a borrowing consisting of simultaneous Loans of the same Type and, in the case
of Eurodollar Loans, having the same Interest Period, or (b) a borrowing of
Swing Line Loans, as appropriate.

 

“Borrowing Base Amount”
means:

 

5

 

(a)                                  for any date during the term of this Credit
Agreement prior to the first day of the fiscal quarter commencing on or
immediately following the Retail Syndication Date, an amount equal to the
lesser of: (i) the Aggregate Revolving Committed Amount and (ii) an amount
equal to (A) sixty percent (60%) multiplied by (B) the Total Collateral
Value as of such date for the Qualified Borrowing Base Assets; and

 

(b)                                 for any date on and after the date referenced
in clause (a) above, an amount equal to the lesser of: (i) the Aggregate
Revolving Committed Amount and (ii) the Aggregate Mortgageability Amount as of
such date for the Qualified Borrowing Base Assets.

 

“Borrowing Base Asset”
means a Real Property Asset which, as of any date of determination, satisfies
all of the following requirements:  (a)
such Real Property Asset is 100% owned by a Borrower in fee simple or pursuant
to the terms of an Eligible Ground Lease; (b) the Administrative Agent, on
behalf of the Lenders, shall have received each of the Borrowing Base Asset
Deliverables with respect to such Real Property Asset, in each case in form and
substance acceptable to the Administrative Agent and Required Lenders in their
discretion; (c) such Real Property Asset is not subject to any Lien (other than
a Permitted Lien) or any Negative Pledge; (d) such Real Property Asset is free
of all material mechanical and structural defects, environmental conditions (as
evidenced by environmental reports acceptable to Administrative Agent) or other
adverse matters except for defects, conditions or matters individually or
collectively which are not material to the profitable operation of such Real
Property Asset and the most recently-delivered FIRREA-compliant MAI appraisal
with respect to such Real Property Asset is acceptable to the Administrative
Agent in its discretion; (e) such Real Property Asset has been fully developed
for use as a skilled nursing facility, domestic assisted living facility,
independent living facility, rehabilitation hospital or other healthcare
facility acceptable to the Administrative Agent and Required Lenders; (f) such
Real Property Asset is leased to and operated by an Eligible Tenant pursuant to
a Facility Lease reasonably acceptable to the Administrative Agent; (g) no
required rental payment, principal or interest payment, payments of real
property taxes or payments of premiums on insurance policies payable to the
applicable Borrower-owner with respect to such Real Property Asset is past due
beyond the earlier of the applicable grace period with respect thereto, if any,
and sixty (60) days; (h) no event of default has occurred and is
then-continuing under any Material Contract applicable to such Borrowing Base
Asset; (i) no Material Contract applicable to such Borrowing Base Asset shall have
been terminated without the prior written consent of the Required Lenders; (j)
no condemnation or condemnation proceeding shall have been instituted (and
remain undismissed for a period of ninety (90) consecutive days), in each
case, with respect to a material portion of the Real Property Asset; (k) no
material casualty event shall have occurred with respect to the improvements
located on such Real Property Asset which is not able to be fully remediated
with available insurance proceeds; and (l) no Hazardous Substances are located
on or under such Real Property Asset and no other environmental conditions
exist in connection with such Real Property Asset which constitute a violation
of any Environmental Law.  “Borrowing
Base Assets” means a collective reference to all Borrowing Base Assets in
existence at any given time.

 

“Borrowing Base Asset
Deliverables” means, with respect to any Real Property Asset which is
proposed for qualification as a “Borrowing Base Asset” hereunder, a collective

 

6

 

reference to each of the following (with each
such item to be in form and substance acceptable to the Administrative Agent):

 

(a)                                  a fully executed and notarized Mortgage
Instrument and Assignments of Leases with respect to such Real Property Asset
and a related legal opinion from special local counsel to the Borrowers opining
as to the propriety of the form of such documents for recording in the
applicable jurisdiction and such other matters as may be required by the Administrative
Agent;

 

(b)                                 a fully executed copy of the Facility Lease
with respect to such Real Property Asset, together with an estoppel certificate
from the applicable Eligible Tenant and a subordination, non-disturbance and
attornment agreement with respect to such Facility Lease;

 

(c)                                  in the case of a Real Property Asset which
constitutes a leasehold interest, evidence that the applicable lease, a
memorandum of lease with respect thereto, or other evidence of such lease in
form and substance reasonably satisfactory to the Administrative Agent, has
been properly recorded in all places to the extent necessary or desirable, in
the reasonable judgment of the Administrative Agent, so as to enable the
Mortgage Instrument encumbering such leasehold interest to effectively create a
valid and enforceable first priority lien (subject to Permitted Liens and
required landlord consents) on such leasehold interest in favor of the
Administrative Agent (or such other Person as may be required or desired under
local law) for the benefit of Lenders and that such lease qualifies as an
Eligible Ground Lease hereunder, together with such estoppels, waivers and/or
consents from the lessor under such Eligible Ground Lease as are required by
the terms thereof or otherwise reasonably requested by the Administrative
Agent;

 

(d)                                 maps or plats of an as-built survey of the
site constituting the Real Property Asset sufficient in all cases to delete the
standard survey exception from the applicable Mortgage Policy;

 

(e)                                  a FIRREA-compliant MAI appraisal,
commissioned, reviewed and approved by the Administrative Agent (or otherwise
acceptable to the Administrative Agent, in its discretion) with respect to such
Real Property Asset;

 

(f)                                    evidence as to the compliance of such Real
Property Asset and the improvements related thereto with applicable zoning and
use requirements;

 

(g)                                 an ALTA mortgagee title insurance policy (or
its equivalent in non-ALTA jurisdictions) with respect to the applicable Real
Property Asset (the “Mortgage Policy”), assuring the Lender that the Mortgage
Instrument creates a valid and enforceable first priority mortgage lien on the
applicable Real Property Asset, free and clear of all defects and encumbrances
except Permitted Liens, which Mortgage Policy shall (i) be in an amount
acceptable to the Administrative Agent, (ii) be from an insurance company
reasonably acceptable to the Administrative Agent, (iii) include such available
endorsements and reinsurance as the Administrative Agent may reasonably require
and

 

7

 

(iv)
otherwise satisfy the reasonable title insurance requirements of the
Administrative Agent;

 

(h)                                 evidence as to whether the applicable Real
Property Asset is in an area designated by the Federal Emergency Management
Agency as having special flood or mud slide hazards (a  “Flood Hazard Property”) and if such Real
Property Asset is a Flood Hazard Property, (i) the applicable Borrower’s
written acknowledgment of receipt of written notification from the
Administrative Agent (A) as to the fact that such Real Property Asset is a
Flood Hazard Property and (B) as to whether the community in which each such
Flood Hazard Property is located is participating in the National Flood
Insurance Program and (ii) copies of insurance policies or certificates of
insurance evidencing flood insurance satisfactory to the Administrative Agent
and naming the Administrative Agent as sole loss payee on behalf of the Lenders
under a standard mortgagee endorsement;

 

(i)                                     copies of all existing material subleases
which would be required to be disclosed on Part V of Schedule 5.12
hereof with respect to such Real Property Asset if approved as a Borrowing Base
Asset;

 

(j)                                     evidence that the Tenant under the applicable
Facility Lease is an Eligible Tenant;

 

(k)                                  a Phase I environmental assessment from an
environmental consultant acceptable to the Administrative Agent, dated as of a
date acceptable to the Administrative Agent and indicating that, as of such
date, no Hazardous Substances or other conditions on, under or with respect to
the applicable Real Property Asset constitute a violation of any Environmental
Laws and that, in any case, no commercially unreasonable amount of any
Hazardous Substances are located on or under such Real Property Asset; and

 

(l)                                     evidence of insurance coverage with respect
to such Real Property Asset meeting the requirements set forth herein and
establishing the Administrative Agent as loss payee, as required pursuant to
the terms hereof.

 

“Borrowing
Base Certificate” shall mean a certificate substantially in the form of Exhibit C-2
hereto delivered to the Administrative Agent pursuant to Section 6.02(b)
or more frequently at the option of the Borrower Representative and (a) setting
forth each Real Property Asset of the Borrowers, identifying which such Real
Property Assets are Borrowing Base Assets, which such Borrowing Base Assets are
Qualified Borrowing Base Assets used and certifying the Collateral Value and
Mortgageability Amount with respect to each such Qualified Borrowing Base
Asset, (b) certifying (based upon its own information and the information made
available to the Parent by the applicable Tenants, which information the Parent
believes in good faith to be is true and correct in all material respects) (i)
as to the calculation of the Borrowing Base Amount as of the date of such
certificate and (ii) that each Real Property Asset used in the calculation of
the Borrowing Base Amount meets each of the criteria for qualification as a
Borrowing Base Asset and (c) providing such other information with respect to
the Real Property Assets,

 

8

 

Borrowing Base Assets and/or the Qualified
Borrowing Base Assets as the Administrative Agent may reasonably require.

 

“Braswell
Indebtedness” means that certain Indebtedness of Regency
Health Services, Inc.  owing to C. Allen Braswell, Braswell
Management, Inc., Dorothy Norton and Cecil Mays pursuant to that
certain Promissory Note Secured by Deeds of Trust in the
original principal amount of $4,114,035 (of which
approximately $3,245,711 is outstanding as of the Closing Date).

 

“Business”
or “Businesses” means, at any time,
a collective reference to the businesses operated by the respective Borrowers
or Parent, as applicable, at such time.

 

“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, in the State of New York
or the state where the
Administrative Agent’s Office is located and, if such day relates to any
Eurodollar Loan, means any such day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.

 

“Capital
Lease” means a lease that would be capitalized on a balance sheet of the
lessee prepared in accordance with GAAP.

 

“Capital
Stock” means (a) in the case of a corporation, capital stock, (b) in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (c) in the case of a partnership, partnership interests (whether general
or limited), (d) in the case of a limited liability company, membership
interests and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.

 

“Cash
Collateral” means cash or deposit account balances pursuant to
documentation in form and substance reasonably satisfactory to the Administrative
Agent and the L/C Issuer pledged and deposited with or delivered to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations.

 

“Cash
Equivalents” means (a) securities issued or directly and fully guaranteed
or insured by (i) the United States or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof) having maturities of not more than twelve months from the date
of acquisition, (b) time deposits and certificates of deposit of (i) any
Lender, (ii) any domestic commercial bank of recognized standing having capital
and surplus in excess of $500,000,000 or (iii) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof
or from Moody’s is at least P-1 or the equivalent thereof (each an “Approved
Bank”), in each case with maturities of not more than two hundred seventy
(270) days from the date of acquisition, (c) commercial paper and variable or
fixed rate notes issued by any Approved Bank (or by the parent company thereof)
or any variable rate notes issued by, or guaranteed by, any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1
(or the equivalent thereof) or better by Moody’s and maturing within six months
of the date of acquisition, (d) repurchase agreements entered into by any

 

9

 

Person with a bank or trust company
(including any of the Lenders) or recognized securities dealer having capital
and surplus in excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States in which such Person shall have a perfected
first priority security interest (subject to no other Liens) and having, on the
date of purchase thereof, a fair market value of at least 100% of the amount of
the repurchase obligations and (e) Investments (classified in accordance with
GAAP as current assets) in money market investment programs registered under
the Investment Company Act of 1940, as amended, that are administered by
reputable financial institutions having capital of at least $500,000,000 and
the portfolios of which are limited to Investments of the character described
in the foregoing subclauses hereof.

 

“Change
of Control” means the occurrence of any of the following events:  (i) any Person or two or more Persons acting
in concert shall have acquired beneficial ownership, directly or indirectly,
of, or shall have acquired by contract or otherwise, or shall have entered into
a contract or arrangement that, upon consummation, will result in its or their
acquisition of or control over, voting stock of the Parent (or other securities
convertible into such voting stock) representing thirty-five percent (35%) or
more of the combined voting power of all voting stock of the Parent, (ii)
during any period of up to twenty-four (24) consecutive months, commencing
after the Closing Date, individuals who at the beginning of such twenty-four
(24) month period were directors of the Parent (together with any new director
whose election by the Parent’s Board of Directors or whose nomination for
election by the Parent’s shareholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors of the Parent then in office. 
As used herein, “beneficial ownership” shall have the meaning provided
in Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, (iii) the Parent shall fail to own 100% of the
Capital Stock of each of the Borrowers or (iv) the occurrence of a “Change
of Control” or any equivalent term or concept under the Note Documents.

 

“Closing
Date” means the date hereof.

 

“Collateral”  means a collective reference to all real
and personal Property (including without limitation, the Borrowing Base Assets)
with respect to which Liens in favor of the Administrative Agent are either
executed, identified or purported to be granted pursuant to and in accordance
with the terms of the Collateral Documents.

 

“Collateral
Value” means, with respect to any Real Property Asset, an amount equal to
the “as-is” appraised value of such Real Property Asset, as determined by the
most recently delivered FIRREA-compliant MAI appraisals commissioned, reviewed
and approved by the Administrative Agent or otherwise acceptable to the Administrative
Agent in its discretion.

 

“Collateral
Documents”  means a collective
reference to the Mortgage Instruments, the Security Agreement, the Assignments
of Leases and any UCC financing statements securing payment hereunder, or any
other documents securing the Obligations under this Credit Agreement or any
other Credit Document.

 

10

 

“Commitment”
means the Revolving Commitment, the L/C Commitment and the Swing Line
Commitment.

 

“Commitment
Period” means the period from and including the Closing Date to the earlier
of (a) in the case of Revolving Loans and Swing Line Loans, the Termination
Date, and, in the case of the Letters of Credit, the Letter of Credit
Expiration Date, or (b) the date on which the Revolving Commitments shall have
been terminated as provided herein.

 

“Compliance
Certificate” means a certificate substantially in the form of Exhibit C-1;
provided, that each such Compliance Certificate shall, in any case, include
(without limitation): (a) a Borrowing Base Certificate in the form of Exhibit C-2;
(b) an updated version of Schedules 5.11, 5.12, 5.13
and 5.18, along with a summary of changes made to such schedules since
the previous delivery thereof; provided, further, that upon the delivery of
such updated schedules, then Schedule 5.11, Schedule 5.12,
Schedule 5.13 and Schedule 5.18 shall each be deemed to
have been amended and restated to read in accordance with the applicable
updated schedule and the representations and warranties with respect thereto
shall apply to such amended and restated schedules and (c) supporting documents
and materials reasonably required by the Administrative Agent for the
evidencing of the calculations and certifications made in connection therewith.

 

“Confidential
Information” has the meaning provided in Section 10.08.

 

“Consolidated
Adjusted EBITDA” means, for the most recently ended fiscal quarter for
which financial information has been delivered to the Administrative Agent
pursuant to the terms of this Credit Agreement, the sum (which will be an
annualized amount) of (a) Consolidated EBITDA as of such date (as calculated on
an annualized basis for the most recently ended fiscal quarter for which
financial information has been delivered to the Administrative Agent pursuant
to the terms of this Credit Agreement) plus (b) an annualized amount
based on the Special Charges Adjustment (without duplication to the extent
included in the determination of Consolidated Interest Expense and added back
to net income in the calculation of Consolidated EBITDA) with respect to the
applicable fiscal quarter.

 

“Consolidated
EBITDA” means, for the Consolidated Parties as of most recently ended
fiscal quarter for which financial information has been delivered to the
Administrative Agent pursuant to the terms of this Credit Agreement, the
annualized sum of (a) net income of the Consolidated Parties, in each case,
excluding any non-recurring or extraordinary gains and losses, plus (b)
an amount which, in the determination of net income for such fiscal quarter
pursuant to clause (a) above, has been deducted for or in connection with
(i) Consolidated Interest Expense (plus, amortization of deferred financing
costs, to the extent included in the determination of Consolidated Interest
Expense per GAAP), (ii) income taxes, and (iii) depreciation and amortization,
all determined in accordance with GAAP.

 

“Consolidated
Fixed Charge Coverage Ratio” means, as of any date of determination, the
ratio of (a) Consolidated Adjusted EBITDA to (b) Consolidated Fixed Charges.

 

11

 

“Consolidated
Fixed Charges” means, for the Consolidated Parties for the most recently
ended fiscal quarter for which financial information has been delivered to the
Administrative Agent pursuant to the terms of this Credit Agreement, the
annualized sum of (a) Consolidated Interest Expense (excluding, for purposes
hereof and without duplication, Special Charges to the extent included in the
calculation of Consolidated Interest Expense) for such quarter, plus (b)
current scheduled principal payments of Funded Debt for such quarter
(including, for purposes hereof, current scheduled reductions in commitments,
but excluding any payment of principal under the Credit Documents and any “balloon”
payment or final payment at maturity that is significantly larger than the
scheduled payments that preceded it) for a period beginning the day after the
date of determination and lasting for the same length of time as the applicable
period referenced at the beginning of this definition, plus (c)
dividends and distributions on preferred stock, if any, for such quarter, in
each case, on a consolidated basis determined in accordance with GAAP.

 

“Consolidated
Funded Debt” means, as of any date of determination, all Funded Debt of the
Consolidated Parties determined on a consolidated basis.

 

“Consolidated
Interest Expense” means, for the Consolidated Parties for the most recently
ended fiscal quarter for which financial information has been delivered to the
Administrative Agent pursuant to the terms of this Credit Agreement, all
interest expense and letter of credit fee expense, on a consolidated basis in
accordance with GAAP during such period, annualized; provided, that interest
expenses shall, in any event, (a) include the interest component under Capital
Leases and the implied interest component under Securitization Transactions and
(b) exclude the amortization of any deferred financing fees.

 

“Consolidated
Leverage Ratio” means, as of any date of determination, the ratio of (a)
Consolidated Funded Debt to (b) Consolidated Adjusted EBITDA (as calculated on
an annualized basis for the most recently ended fiscal quarter for which
financial information has been delivered to the Administrative Agent pursuant
to the terms of this Credit Agreement); provided, that for purposes of
calculating the “Consolidated Leverage Ratio,” the Consolidated EBITDA
component of Consolidated Adjusted EBITDA shall be adjusted to give pro forma
effect to assets of the Consolidated Parties acquired during the fiscal quarter
for which the net income component for such Consolidated EBITDA calculation is
calculated by annualizing the Consolidated EBITDA generated by such asset over
the period such asset is actually owned by a Consolidated Party and adding such
amount to the base Consolidated EBITDA calculation for such Consolidated
Parties (and thereby to the Consolidated Adjusted EBITDA calculations).

 

“Consolidated
Parties” means the Parent and its consolidated subsidiaries, as determined
in accordance with GAAP.

 

“Consolidated
Subsidiary” means at any date any Subsidiary or other entity the accounts
of which would be consolidated with those of the Parent in its consolidated
financial statements if such statements were prepared as of such date.

 

“Consolidated
Tangible Net Worth” means, for the Consolidated Parties as of any date of
determination, (a) stockholders’ equity on a consolidated basis determined in
accordance with

 

12

 

GAAP, but with no upward adjustments due to
any revaluation of assets, less (b) all Intangible Assets, plus (c) all
accumulated depreciation, all determined in accordance with GAAP; provided,
that the Consolidated Parties will be permitted to exclude (i.e.  add back to stockholder’s equity) up to
$25,000,000 in potential future impairment charges incurred during the term of
this Credit Agreement (such exclusions to be clearly reflected, however, in the
calculations of Consolidated Tangible Net Worth delivered to the Administrative
Agent by the Borrowers from time to time pursuant to the terms of this Credit
Agreement.

 

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

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings
correlative thereto.  Without limiting
the generality of the foregoing, a Person shall be deemed to be Controlled by
another Person if such other Person possesses, directly or indirectly, power to
vote twenty-five percent (25%) or more of the securities having ordinary voting
power for the election of directors, managing general partners or the
equivalent.

 

“Credit
Agreement” has the meaning given to such term in the introductory paragraph
hereof.

 

“Credit
Documents” means this Credit Agreement, the Collateral Documents, the
Notes, the Guaranty, the Administrative Agent’s Fee Letter, the Letters of
Credit, the Lender Joinder Agreements, the Joinder Agreements, the Borrowing
Base Certificates and the Compliance Certificates.

 

“Credit
Party” means, as of any date, the Borrower or any Guarantor which is a
party to the Guaranty as of such date; and “Credit Parties” means a
collective reference to each of them.

 

“Daily
Floating Eurodollar Rate” means, for each day, a fluctuating rate of
interest equal to Eurodollar Rate applicable on such day for an Interest Period
of one month beginning two (2) Business Days thereafter.  The Daily Floating Eurodollar Rate shall be
determined and adjusted on each Business Day and shall remain in effect until
the next Business Day.

 

“Daily
Unused Fee” means, for any day during the Commitment Period, an amount
equal to (a) a daily percentage rate derived from the then-applicable per annum
Applicable Percentage multiplied by (b) the amount by which the
Aggregate Revolving Commitments exceed the sum of the Outstanding Amount of
Revolving Obligations (excluding the amount of any then-outstanding Swing Line
Loans) as of the beginning of such day.

 

“Debtor
Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the

 

13

 

United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

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

 

“Default
Rate” means an interest rate equal to (a) the Base Rate plus (b) the
Applicable Percentage, if any, applicable to Base Rate Loans plus (c) three
percent (3%) per annum; provided, however, that with respect to a Eurodollar
Loan, the Default Rate shall be an interest rate equal to the interest rate
(including any Applicable Percentage) otherwise applicable to such Loan plus
three percent (3%) per annum, in each case to the fullest extent permitted by
applicable Law.

 

“Defaulting
Lender” means any Lender that (a) has failed to fund any portion of the
Loans, participations in L/C Obligations or participations in Swing Line Loans
required to be funded by it hereunder within one Business Day of the date
required to be funded by it hereunder and has not cured such failure prior to
the date of determination, (b) has otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject
of a good faith dispute, and has not cured such failure prior to the date of
determination, or (c) has been deemed insolvent or become the subject of a
bankruptcy or insolvency proceeding.

 

“Disposition”
or “Dispose” means the sale, transfer, license, lease or other
disposition (including any Sale and Leaseback Transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

 

“Dollar”
or “$” means the lawful currency of the United States.

 

“Domestic
Subsidiary” means any Subsidiary that is organized under the laws of any
State of the United States or the District of Columbia.

 

“EBITDA”
means, for any Person or group of Persons, as applicable, for the most recently
ended fiscal quarter for which financial information has been delivered to the
Administrative Agent pursuant to the terms of this Credit Agreement, the
annualized sum of (a) net income of such Person(s), in each case, excluding any
non-recurring or extraordinary gains and losses, plus (b) an amount which, in
the determination of net income for such fiscal quarter pursuant to clause (a)
above, has been deducted for or in connection with (i) Consolidated Interest
Expense, (ii) income taxes, and (iii) depreciation and amortization, all
determined in accordance with GAAP.

 

“Eligible
Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved
Fund; and (d) any other Person (other than a natural person) approved by (i)
the Administrative Agent, and (ii) unless an Event of Default has occurred and
is continuing, the Borrower Representative (each such approval not to be
unreasonably withheld or delayed); provided that

 

14

 

notwithstanding the foregoing, “Eligible
Assignee” shall not include the Parent or any of the Parent’s Affiliates or
Subsidiaries.

 

“Eligible
Ground Lease” means, at any time, a ground lease (a) under which a Borrower
is the lessee or holds equivalent rights and is the fee owner of the
improvements located thereon, (b) that has a remaining term of not less than
thirty (30) years, (c) under which any required rental payment, principal
or interest payment or other payment due under such lease from such Borrower to
the ground lessor is not more than sixty (60) days past due and any
required rental payment, principal or interest payment or other payment due to
such Borrower under any sublease of the applicable real property lessor is not
more than sixty (60) days past due, (d) where no party to such lease is
subject to a then-continuing Bankruptcy Event, (e) such ground lease (or a
related document executed by the applicable ground lessor) contains customary
provisions protective of any lender to the lessee and (f) where the Borrower’s
interest in the underlying Real Property Asset or the lease is not subject to
(i) any Lien other than Permitted Liens and other encumbrances acceptable to
the Administrative Agent and the Required Lenders, in their discretion, or (ii)
any Negative Pledge.

 

“Eligible
Tenant” means a Tenant which (a) is not in arrears on any required rental
payment, principal or interest payment, payments of real property taxes or
payments of premiums on insurance policies with respect to its lease beyond the
later of (i) the applicable grace period with respect thereto, if any, and (ii)
forty five (45) days; (b) is not subject to a then-continuing Bankruptcy Event;
and (c) is reasonably acceptable in all material respects to the Administrative
Agent and the Required Lenders (it being understood that for purposes of this
clause (c), each Tenant set forth on Schedule 5.12 hereto on the Closing
Date is deemed acceptable).

 

“Environmental
Laws” means any and all federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental restrictions
relating to pollution and the protection of the environment or the release of
any materials into the environment, including those related to hazardous
substances or wastes, air emissions and discharges to waste or public systems.

 

“Equity
Transaction” means, with respect to any member of the Consolidated Parties,
any issuance or sale of shares of its Capital Stock, other than an issuance (a)
to a Consolidated Party, (b) in connection with a conversion of debt securities
to equity, (c) in connection with the exercise by a present or former employee,
officer or director under a stock incentive plan, stock option plan or other
equity-based compensation plan or arrangement, or (d) in connection with any
Acquisition permitted hereunder.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974.

 

“ERISA
Affiliate” means any trade or business (whether or not incorporated) under
common control with the Parent within the meaning of Section 414(b) or (c)
of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal
Revenue Code for purposes of provisions relating to Section 412 of the
Internal Revenue Code).

 

15

 

“ERISA
Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Parent or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Parent or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition that could
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Parent or any ERISA
Affiliate.

 

“Eurodollar
Loan” means a Loan that bears interest at a rate based on the Eurodollar
Rate.

 

“Eurodollar
Base Rate” means, for any Interest Period with respect to any Eurodollar
Loan:

 

(a)                                  the rate per annum equal to the rate
determined by the Administrative Agent to be the offered rate that appears on
the page of the Telerate screen (or any successor thereto) that displays an
average British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately
11:00 a.m.  (London time)
two (2) Business Days prior to the first day of such Interest Period, or

 

(b)                                 if the rate referenced in the preceding
clause (a) does not appear on such page or service or such page or service
shall not be available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other service
that displays an average British Bankers Association Interest Settlement Rate
for deposits in Dollars (for delivery on the first day of such Interest Period)
with a term equivalent to such Interest Period, determined as of approximately
11:00 a.m.  (London time)
two (2) Business Days prior to the first day of such Interest Period, or

 

(c)                                  if the rates referenced in the preceding
clauses (a) and (b) are not available, the rate per annum determined by
the Administrative Agent as the rate of interest at which deposits in Dollars
for delivery on the first day of such Interest Period in same day funds in the
approximate amount of the Eurodollar Loan being made, continued or converted by
Bank of America and with a term equivalent to such Interest Period would be
offered by Bank of America’s London Branch to major banks

 

16

 

in
the London interbank eurodollar market at their request at approximately
4:00 p.m.  (London time)
two (2) Business Days prior to the first day of such Interest Period.

 

“Eurodollar
Rate” means for any Interest Period with respect to any Eurodollar Loan, a
rate per annum determined by the Administrative Agent pursuant to the following
formula:

 

	
  Eurodollar
  Rate  =

  	
   

  	
  Eurodollar Base Rate

  1.00 - Eurodollar
  Reserve Percentage

  

 

“Eurodollar
Reserve Percentage” means, for any day during any Interest Period, the
reserve percentage (expressed as a decimal, carried out to five decimal places)
in effect on such day, whether or not applicable to any Lender, under
regulations issued from time to time by the FRB for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to eurocurrency funding (currently referred
to as “eurocurrency liabilities”).  The
Eurodollar Rate for each outstanding Eurodollar Loan shall be adjusted
automatically as of the effective date of any change in the Eurodollar Reserve
Percentage.

 

“Event
of Acceleration” means any of the events or conditions set forth in Sections 8.01(f),
(g) or (j) with respect to the Parent or any Borrower.

 

“Event
of Default” has the meaning provided in Section 8.01.

 

“Extension
of Credit” means (i) any Borrowing and (ii) any L/C Credit Extension.

 

“Facility
Lease” means a lease or master lease
with respect to any Real Property Asset owned or ground leased by a Borrower
from the applicable Borrower as lessor, to an Eligible Tenant, which, in the reasonable judgment of the
Administrative Agent, is a triple net lease such that such Eligible Tenant is
required to pay all taxes,
utilities, insurance, maintenance, casualty insurance payments and other
expenses with respect to the subject Real Property Asset (whether in the form
of reimbursements or additional rent) in addition to the base rental payments
required thereunder such that net operating income for such Real Property Asset
(before non-cash items) equals the base rent paid thereunder; provided,
that each such lease or master lease shall be in form and substance reasonably
satisfactory to the Administrative Agent.

 

“Federal
Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day
immediately succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the immediately preceding Business Day as so published on the
immediately succeeding Business Day, and (b) if no such rate is so published on
such immediately succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate (rounded upward, if necessary, to the next 1/100th
of 1%) charged to Bank of America on such day on such transactions as
determined by the Administrative Agent.

 

17

 

“Foreign
Lender” has the meaning provided in Section 10.15(a)(i).

 

“Foreign
Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“FRB”
means the Board of Governors of the Federal Reserve System of the United
States.

 

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

 

“Funded
Debt” means, as to any Person (or consolidated group of Persons) at a
particular time, without duplication, all of the following, whether or not
included as indebtedness or liabilities in accordance with GAAP:

 

(a)                                  all obligations for borrowed money, whether
current or long-term (including the Obligations hereunder), and all obligations
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments;

 

(b)                                 all purchase money indebtedness (including
indebtedness and obligations in respect of conditional sales and title
retention arrangements, except for customary conditional sales and title
retention arrangements with suppliers that are entered into in the ordinary
course of business) and all indebtedness and obligations in respect of the
deferred purchase price of property or services (other than trade accounts
payable incurred in the ordinary course of business and payable on customary
trade terms);

 

(c)                                  all direct obligations under letters of
credit (including standby and commercial), bankers’ acceptances and similar
instruments (including bank guaranties, surety bonds, comfort letters,
keep-well agreements and capital maintenance agreements) to the extent such
instruments or agreements support financial, rather than performance,
obligations;

 

(d)                                 the Attributable Principal Amount of capital
leases and Synthetic Leases;

 

(e)                                  the Attributable Principal Amount of
Securitization Transactions;

 

(f)                                    all preferred stock and comparable equity
interests providing for mandatory redemption, sinking fund or other like
payments;

 

(g)                                 Support Obligations in respect of Funded Debt
of another Person (other than Persons in such group, if applicable);

 

(h)                                 Funded Debt of any partnership or joint
venture or other similar entity in which such Person is a general partner or
joint venturer, and, as such, has personal liability for such obligations, but
only to the extent there is recourse to such Person (or, if applicable, any
Person in such consolidated group) for payment thereof.

 

18

 

For
purposes hereof, the amount of Funded Debt shall be determined based on the
outstanding principal amount in the case of borrowed money indebtedness under
clause (a) and purchase money indebtedness and the deferred purchase
obligations under clause (b), based on the maximum amount available to be
drawn in the case of letter of credit obligations and the other obligations
under clause (c), and based on the amount of Funded Debt that is the
subject of the Support Obligations in the case of Support Obligations under
clause (g).  For purposes of
clarification, “Funded Debt” of Person constituting a consolidated group shall
not include inter-company indebtedness of such Persons, general accounts
payable of such Persons which arise in the ordinary course of business, accrued
expenses of such Persons incurred in the ordinary course of business or
minority interests in joint ventures or limited partnerships (except to the
extent set forth in clause (h) above).

 

“Funds
From Operations” means, with respect to the immediately prior fiscal
quarter period, the Parent’s net income (or loss), plus depreciation and
amortization and after adjustments for unconsolidated partnerships and joint
ventures as hereafter provided. 
Notwithstanding contrary treatment under GAAP, for purposes hereof, (a)
“Funds From Operations” shall include, and be adjusted to take into account,
the Borrower’s interests in unconsolidated partnerships and joint ventures, on
the same basis as consolidated partnerships and subsidiaries, as provided in
the “white paper” issued in April 2002 by the National Association of Real
Estate Investment Trusts, a copy of which has been provided to the
Administrative Agent and the Lenders and (b) net income (or loss) shall not
include gains (or, if applicable, losses) resulting from or in connection with
(i) restructuring of indebtedness, (ii) sales of property, (iii) sales or
redemptions of preferred stock, or (iv) any other Special Charges.

 

“GAAP”
means generally accepted accounting principles in effect in the United States
as set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board from time to
time applied on a consistent basis, subject to the provisions of Section 1.03.

 

“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, authority, instrumentality, regulatory
body, court, administrative tribunal, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers
or functions of or pertaining to government.

 

“Guarantor” means, as of any date, the Parent
or any Subsidiary Guarantor which is a party to the Guaranty as of such date;
and “Guarantors” means a collective reference to each of them.

 

“Guaranty”
means the guaranty in the form of Exhibit G dated as of the date hereof
executed by the Parent and the existing Subsidiary Guarantors, as amended,
supplemented or otherwise modified from time to time and as the same may be
joined by Persons that become Subsidiary Guarantors following the date hereof.

 

19

 

“Hazardous
Substance” means any toxic or hazardous substance, including petroleum and
its derivatives regulated under the Environmental Laws.

 

“Healthcare
Facilities” means any skilled nursing facilities, mentally retarded and
developmentally disabled facilities, rehab hospitals, long term acute care
facilities, intermediate care facilities for the mentally disabled, medical
office buildings, domestic assisted living facilities, independent living
facilities or Alzheimer’s care facilities and any ancillary businesses that are
incidental to the foregoing.

 

“Healthcare
Laws” has the meaning given to such term in Section 5.19(a) hereof.

 

“HMO”
means any health maintenance organization, managed care organization, any
Person doing business as a health maintenance organization or managed care
organization, or any Person required to qualify or be licensed as a health
maintenance organization or managed care organization under applicable federal
or state law (including, without limitation, HMO Regulations).

 

“Indebtedness”
means, as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:

 

(a)                                  all Funded Debt;

 

(b)                                 all contingent obligations under letters of
credit (including standby and commercial), bankers’ acceptances and similar
instruments (including bank guaranties, surety bonds, comfort letters,
keep-well agreements and capital maintenance agreements) to the extent such
instruments or agreements support financial, rather than performance,
obligations;

 

(c)                                  net obligations under any Swap Contract;

 

(d)                                 Support Obligations in respect of
Indebtedness of another Person; and

 

(e)                                  Indebtedness of any partnership or joint
venture or other similar entity in which such Person is a general partner or
joint venturer, and, as such, has personal liability for such obligations, but
only to the extent there is recourse to such Person for payment thereof.

 

For purposes hereof, the amount of Indebtedness
shall be determined based on Swap Termination Value in the case of net
obligations under Swap Contracts under clause (c) and based on the
outstanding principal amount of the Indebtedness that is the subject of the
Support Obligations in the case of Support Obligations under clause (d).

 

“Indemnified
Liabilities” has the meaning provided in Section 10.05.

 

“Indemnitees”
has the meaning provided in Section 10.05.

 

20

 

“Interest
Payment Date” means, (a) as to any Base Rate Loan (including Swing Line
Loans), the last Business Day of each March, June, September and
December and the Termination Date and, in the case of any Swing Line Loan,
any other dates reasonably determined by the Swing Line Lender, and (b) as to
any Eurodollar Loan (other than Swing Line Loans), the last Business Day of
each Interest Period for such Loan, the date of repayment of principal of such
Loan, and where the applicable Interest Period exceeds three months, the date
every three months after the beginning of such Interest Period.  If an Interest Payment Date falls on a date
that is not a Business Day, such Interest Payment Date shall be deemed to be
the immediately succeeding Business Day.

 

“Intangible
Assets” means all assets consisting of goodwill, patents, trade names,
trademarks, copyrights, franchises, experimental expense, organization expense,
unamortized debt discount and expense, deferred assets (other than prepaid
insurance and prepaid taxes), the excess of cost of shares acquired over book
value of related assets and such other assets as are properly classified as
“intangible assets” in accordance with GAAP.

 

“Interest
Period” means, as to each Eurodollar Loan, the period commencing on the
date such Eurodollar Loan is disbursed or converted to or continued as a
Eurodollar Loan and ending on the date one, two, three or six months
thereafter, as selected by the applicable Borrower in its Loan Notice; provided
that:

 

(a)                                  any Interest Period that would otherwise end
on a day that is not a Business Day shall be extended to the immediately
succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the immediately
preceding Business Day;

 

(b)                                 any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at the end of such
Interest Period; and

 

(c)                                  no Interest Period shall extend beyond the
Termination Date.

 

“Internal
Revenue Code” means the Internal Revenue Code of 1986.

 

“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
Capital Stock of another Person, (b) a loan, advance or capital contribution
to, guaranty or assumption of debt of, or purchase or other acquisition of any
other debt or equity participation or interest in, another Person, including
any partnership or joint venture interest in such other Person, or (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit.  For purposes of covenant compliance, the
amount of any Investment shall be the amount actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment.

 

“IRS”
means the United States Internal Revenue Service.

 

21

 

“JCAHO”
has the meaning given to such term in Section 5.19(b).

 

“Laws”
means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

“L/C
Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing.

 

“L/C
Borrowing” means any extension of credit resulting from a drawing under any
Letter of Credit that has not been reimbursed or refinanced as a Borrowing of
Revolving Loans.

 

“L/C
Commitment” means, with respect to the L/C Issuer, the commitment of the
L/C Issuer to issue and to honor payment obligations under Letters of Credit,
and, with respect to each Lender, the commitment of such Lender to purchase
participation interests in L/C Obligations up to such Lender’s Revolving
Commitment Percentage thereof.

 

“L/C
Committed Amount” has the meaning provided in Section 2.01(b).

 

“L/C
Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.

 

“L/C
Issuer” means Bank of America in its capacity as issuer of Letters of
Credit hereunder, in each case together with its successors in such capacity.

 

“L/C
Issuer Fees” shall have the meaning given such term in Section 2.09(c)(ii).

 

“L/C
Obligations” means, at any time, the sum of (a) the maximum amount
available to be drawn under Letters of Credit then outstanding, assuming
compliance with all requirements for drawings referenced therein, plus (b) the
aggregate amount of all Unreimbursed Amounts, including L/C Borrowings.

 

“Lender”
means each of the Persons identified as a “Lender” on the signature pages
hereto (and, as appropriate, includes the L/C Issuer and the Swing Line Lender)
and each Person who joins as a Lender pursuant to the terms hereof, together
with their respective successors and assigns.

 

“Lender
Joinder Agreement” means a joinder agreement in the form of Exhibit F,
executed and delivered in accordance with the provisions of Section 2.01(d).

 

22

 

“Lending
Office” means, as to any Lender, the office or offices of such Lender set
forth in such Lender’s Administrative Questionnaire or such other office or
offices as a Lender may from time to time notify the Borrowers and the
Administrative Agent.

 

“Letter
of Credit” means each standby (non-commercial) letter of credit issued
hereunder.

 

“Letter
of Credit Application” means an application and agreement for the issuance
or amendment of a Letter of Credit in the form from time to time in use by the
L/C Issuer.

 

“Letter
of Credit Expiration Date” means the day that is five (5) Business
Days prior to the Termination Date then in effect (or, if such day is not a
Business Day, the immediately preceding Business Day).

 

“Letter
of Credit Fee” shall have the meaning given such term in Section 2.09(c)(i).

 

“Lien”
means any mortgage, deed of trust, deed to secured debt, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
charge, or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, and any financing lease having substantially
the same economic effect as any of the foregoing).

 

“Loan”
means any Revolving Loan or Swing Line Loan, and the Base Rate Loans and
Eurodollar Loans comprising such Loans.

 

“Loan
Notice” means a notice of (a) a Borrowing of Loans (including Swing Line
Loans), (b) a conversion of Loans from one Type to the other, or (c) a
continuation of Eurodollar Loans, which, if in writing, shall be substantially
in the form of Exhibit A.

 

“Material
Adverse Effect” means a material adverse effect on (i) the condition
(financial or otherwise), operations, business, assets, liabilities or
prospects of (A) the Parent and its Consolidated Subsidiaries taken as a whole
or (B) the Borrowers taken as a whole, (ii) the ability of the Parent or the
Borrowers to perform any material obligation under the Credit Documents, or
(iii) the rights and remedies of the Administrative Agent and the Lenders under
the Credit Documents.

 

“Material
Contract” means, collectively, any Facility Lease, any cash management
agreement, or any similar agreement with respect to any Borrowing Base Asset.

 

“Medicaid” means the medical assistance programs
administered by state agencies and approved by CMS pursuant to the terms of
Title XIX of the Social Security Act, codified at 42 U.S.C. 1396 et seq

 

“Medical Services” means medical and health
care services provided to a Person, including, but not limited to, medical and
health care services provided to a Person which are covered by a policy of
insurance, and includes physician services, nurse and therapist services,

 

23

 

dental services,
hospital services, skilled nursing facility services, comprehensive outpatient
rehabilitation services, home health care services, residential and out-patient
behavioral healthcare services, and medicine or health care equipment provided
to a Person for a necessary or specifically requested valid and proper medical
or health purpose.

.

“Medicare” means the program of health benefits for the
aged and disabled administered by CMS pursuant to the terms of Title XVIII of
the Social Security Act, codified at 42 U.S.C. 1395 et seq.

 

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

 

“Mortgageability
Amount” means, with respect to any Borrowing Base Asset and as of any date
of determination, the maximum principal amount of a mortgage loan that would be
available to be borrowed against such Borrowing Base Asset assuming (a) an
annual interest rate equal to the greater of (i) 7.00% and (ii) the
then-applicable Treasury Rate  plus
2.00%, (b) a 30-year amortization schedule and (c) a debt service coverage
ratio on such loan of 1.65 to 1.00 (based on the most-recently calculated Mortgageability
Cash Flow of such Borrowing Base Asset).

 

“Mortgageability
Cash Flow” means, with respect to any Borrowing Base Asset and for the most
recently ended fiscal quarter for which financial information has been
delivered to the Administrative Agent pursuant to the terms of this Credit
Agreement, an amount equal to the most-recently calculated Net Revenues
received by the applicable Borrower with respect to such Borrowing Base Asset
(as calculated on an annualized basis for the most recently ended fiscal
quarter for which financial information has been delivered to the
Administrative Agent pursuant to the terms of this Credit Agreement) in
connection with a so-called triple net lease entered into between the
applicable Borrower and a Person which is not an Affiliate of any Consolidated
Party.

 

“Mortgage
Instrument” means, for any Real Property Asset, a first lien priority
mortgage, deed of trust or deed to secure debt in favor of the Administrative
Agent (for the benefit of the Lenders) with respect to such Real Property
Asset.  Each Mortgage Instrument shall
be in form and substance satisfactory to the Administrative Agent and suitable
for recording in the applicable jurisdiction.

 

“Mortgage
Policies” shall have the meaning assigned to such term in the definition of
“Borrowing Base Asset Deliverables” contained in this Section 1.01.

 

“Multiemployer
Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Parent or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.

 

“Negative
Pledge”  means any agreement
(other than this Credit Agreement or any other Credit Document) that in whole
or in part prohibits the creation of any Lien on any assets of a Person;
provided, however, that an agreement that establishes a maximum ratio of
unsecured

 

24

 

debt to unencumbered assets, or of secured
debt to total assets, or that otherwise conditions a Person’s ability to
encumber its assets upon the maintenance of one or more specified ratios that
limit such Person’s ability to encumber its assets but that do not generally
prohibit the encumbrance of its assets, or the encumbrance of specific assets,
shall not constitute a “Negative Pledge” for purposes of this Credit Agreement.

 

“Net
Revenues” shall mean, with respect to any Real Property Asset for the most
recently ended fiscal quarter for which financial information has been
delivered to the Administrative Agent pursuant to the terms of this Credit
Agreement, the annualized sum of (a) rental payments received in cash by the
applicable Borrower (whether in the nature of base rent, minimum rent,
percentage rent, additional rent or otherwise, but exclusive of security
deposits, earnest money deposits, advance rentals, reserves for capital
expenditures, charges, expenses or items required to be paid or reimbursed by
the tenant thereunder and proceeds from a sale or other disposition) pursuant
to the Facility Leases applicable to such Real Property Asset, minus (b)
expenses of the Borrowers allocated to such Real Property Asset.

 

“Note
Documents” means a collective reference to the following: (a) the Senior
Notes; and (b) the Senior Note Indenture.

 

“Note
Issuance” means the $200,000,000 Senior Notes due 2014 of the Parent,
issued pursuant to the terms and conditions of the Note Documents.

 

“Notes”
means the Revolving Notes; and “Note” means any one of them.

 

“Obligations”
means, without duplication, (a) all advances to, and debts, liabilities,
obligations, covenants and duties of, any Credit Party arising under any Credit
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against
any Credit Party or any Affiliate thereof of any proceeding under any Debtor
Relief Laws naming such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such proceeding and (b)
all obligations under any Swap Contract of any Credit Party to which a Lender
or any Affiliate of a Lender is a party.

 

“Occupancy
Rate” means, with respect to any Real Property Asset, the percentage of
rentable area of such Real Property Asset that is (a) leased pursuant to a
lease that is in form and substance acceptable to the Administrative Agent and
(b) actually occupied by an Eligible Tenant.

 

“Organization
Documents” means, (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S.  jurisdiction); (b) with respect to any limited liability company,
the certificate or articles of formation or organization and operating
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
applicable agreement of formation or

 

25

 

organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles
of formation or organization of such entity.

 

“Outstanding
Amount” means (a) with respect to Revolving Loans and Swing Line Loans on
any date, the aggregate outstanding principal amount thereof after giving
effect to any Borrowings and prepayments or repayments of Revolving Loans and
Swing Line Loans, as the case may be, occurring on such date and (b) with respect
to any L/C Obligations on any date, the amount of such L/C Obligations on such
date after giving effect to any L/C Credit Extension occurring on such date and
any other changes in the aggregate amount of the L/C Obligations as of such
date, including as a result of any reimbursements of outstanding unpaid
drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date.

 

“Parent”
means Omega Healthcare Investors, Inc.

 

“Participant”
has the meaning provided in Section 10.07(d).

 

“PBGC”
means the Pension Benefit Guaranty Corporation.

 

“Pension
Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject
to Title IV of ERISA and is sponsored or maintained by the Parent or any
ERISA Affiliate or to which the Parent or any ERISA Affiliate contributes or
has an obligation to contribute, or in the case of a multiple employer or other
plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

 

“Permitted
Liens” means, as to any Person: (a) Liens securing taxes, assessments and
other charges or levies imposed by any Governmental Authority (excluding any
Lien imposed pursuant to any of the provisions of ERISA), in each case, which
are not yet due and payable; (b) Liens evidencing the claims of materialmen,
mechanics, carders, warehousemen or landlords for labor, materials, supplies or
rentals, in each case, incurred in the ordinary course of business and which
are not at the time required to be paid or discharged; provided, that with
respect to any Borrowing Base Asset, no exception is taken therefor in the
related Mortgage Policy or such Mortgage Policy otherwise affirmatively insures
over such Liens in form and substance satisfactory to the Administrative Agent;
(c) Liens consisting of deposits or pledges made, in the ordinary course of
business, in connection with, or to secure payment of, obligations under
workmen’s compensation, unemployment insurance or similar applicable Laws; (d)
zoning restrictions, easements, rights-of-way, covenants, reservations and
other rights, restrictions or encumbrances of record on the use of Real
Property Assets, which do not materially detract from the value of such
property or materially impair the use thereof for the business of such Person;
(e) Liens in existence as of the Closing Date as set forth on Schedule 7.01
and, with respect to the Borrowing Base Assets, as set forth on the Mortgage
Policies (or updates thereto) delivered in connection herewith; (f) Liens, if any, in favor of the
Administrative Agent for the benefit of the Lenders; (g) Liens arising pursuant
to leases or subleases of immaterial portions of any Real Property Asset owned
by any of the Borrowers granted to others not interfering in any material

 

26

 

respect with such Real Property Asset or the
business of the applicable Borrower and (h) Liens in existence as of the
Closing Date with respect to certain of the Borrowing Base Assets to secure the
Braswell Indebtedness, to the extent that such Liens will not be set forth
on the Mortgage Polices (or updates thereto) permitted pursuant to clause (e)
above.

 

“Person”
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other
entity.

 

“Plan”
means any “employee benefit plan” (as such term is defined in Section 3(3)
of ERISA) established by the Parent or, with respect to any such plan that is
subject to Section 412 of the Internal Revenue Code or Title IV of
ERISA, any ERISA Affiliate.

 

“Qualified
Borrowing Base Assets” means, as of any date of determination, the set of
then-existing Borrowing Base Assets which, in the aggregate, have an Occupancy
Rate equal to or greater than seventy percent 70% and (a) for any date prior to
the first day of the fiscal quarter commencing on or immediately following the
Retail Syndication Date, produce the greatest Total Collateral Value; or (b)
for any date thereafter, produce the greatest Aggregate Mortgageability Amount.

 

“Qualified
REIT Subsidiary” shall have the meaning given to such term in the Internal
Revenue Code.

 

“Real
Property Asset” means, a parcel of real property, together with all
improvements (if any) thereon, owned in fee simple or leased pursuant to an
Eligible Ground Lease by  any
Person; “Real Property Assets” means a collective reference to each Real
Property Asset.

 

“Register”
has the meaning provided in Section 10.07(c).

 

“Regulation T”
means Regulation T of the Board of Governors of the Federal Reserve
System, as in effect from time to time.

 

“Regulation U”
means Regulation U of the Board of Governors of the Federal Reserve
System, as in effect from time to time.

 

“Regulation X”
means Regulation X of the Board of Governors of the Federal Reserve
System, as in effect from time to time.

 

“REIT”
means a real estate investment trust as defined in Sections 856-860 of the
Internal Revenue Code.

 

“Reportable
Event” means any of the events set forth in Section 4043(c) of ERISA,
other than events for which the thirty-day notice period has been waived.

 

“Request
for Extension of Credit” means (a) with respect to a Borrowing of Loans
(including Swing Line Loans) or the conversion or continuation of Loans, a Loan
Notice and (b) with respect to an L/C Credit Extension, a Letter of Credit
Application.

 

27

 

“Required
Lenders” means, as of any date of determination, two or more Lenders
(except to the extent only one Lender exists as of such date) having at least
66-2/3% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Article VIII, Lenders holding in the
aggregate at least 66-2/3% of the Revolving Obligations (including, in each
case, the aggregate amount of each Lender’s risk participation and funded
participation in L/C Obligations and Swing Line Loans); provided that the
Commitment of, and the portion of the Revolving Obligations held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a determination
of Required Lenders.

 

“Responsible
Officer” means the chief executive officer, president, chief operating
officer and chief financial officer of any Credit Party.  Any document delivered hereunder that is
signed by a Responsible Officer of a Credit Party shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such Credit Party and such Responsible Officer
shall be conclusively presumed to have acted on behalf of such Credit Party.

 

“Retail
Syndication Date” means the earlier of (a) the date on which the
Administrative Agent declares that retail syndication of the credit facilities
provided herein is complete and (b) the date occurring ninety (90) days
following the Closing Date.

 

“Revolving
Commitment” means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans and to share in the Revolving Obligations
hereunder up to such Lender’s Revolving Commitment Percentage thereof.

 

“Revolving
Commitment Percentage” means, at any time for each Lender, a fraction
(expressed as a percentage carried to the ninth decimal place), the numerator
of which is such Lender’s Revolving Committed Amount and the denominator of
which is the Aggregate Revolving Committed Amount.  The initial Revolving Commitment Percentages are set forth on Schedule 2.01.

 

“Revolving
Committed Amount” means, with respect to each Lender, the amount of such
Lender’s Revolving Commitment.  The
initial Revolving Committed Amounts are set forth on Schedule 2.01.

 

“Revolving
Loan” has the meaning provided in Section 2.01.

 

“Revolving
Note” means the promissory notes in the form of Exhibit B, if
any, given to each Lender to evidence the Revolving Loans and Swing Line Loans
of such Lender, as amended, restated, modified, supplemented, extended, renewed
or replaced.

 

“Revolving
Obligations” means the Revolving Loans, the L/C Obligations and the Swing
Line Loans.

 

28

 

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

 

“Sale
and Leaseback Transaction” means, with respect to the Parent or any
Subsidiary, any arrangement, directly or indirectly, with any person whereby
the Parent or such Subsidiary shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
being sold or transferred.

 

“SEC”
means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.

 

“Securitization
Transaction” means any financing or factoring or similar transaction (or
series of such transactions) entered by any member of the Consolidated Parties
pursuant to which such member of the Consolidated Parties may sell, convey or
otherwise transfer, or grant a security interest in, accounts, payments,
receivables, rights to future lease payments or residuals or similar rights to
payment (the “Securitization Receivables”) to a special purpose
subsidiary or affiliate (a “Securitization Subsidiary”) or any other
Person.

 

“Security
Agreement” means the security agreement dated as of the date hereof in the
form of Exhibit H, as amended, supplemented, restated or otherwise
modified from time to time.  

 

“Senior
Note” means any one of the 7.0% Senior Notes due 2014 issued by the Parent
in favor of the Senior Noteholders pursuant to the Senior Note Indenture, as
such Senior Notes may be amended, restated, supplemented or otherwise modified
from time to time.

 

“Senior
Note Indenture” means the Indenture, dated as of March 22, 2004 by and
among the Parent and the Senior Noteholders, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

 

“Senior
Noteholder” means any one of the holders from time to time of the Senior
Notes.

 

“Solvent”
means, with respect to any person on a particular date, that on such date (a)
the fair value of the property of such Person is greater than the total amount
of liabilities, including, without limitation, contingent liabilities, of such
Person, (b) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such Person
is able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature, (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, and (e) such Person is not engaged in a business or a transaction, and
is not about to engage in a business or a transaction, for which such Person’s
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person
is engaged.  In computing the amount of
contingent liabilities at any time, it is intended that such liabilities will
be computed at the amount which, in light of all the facts and

 

29

 

circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

“Special
Charges” means, for the most recently ended fiscal quarter for which
financial information has been delivered to the Administrative Agent pursuant
to the terms of this Credit Agreement, all charges, costs or expenses of the
Consolidated Parties related to any of the following:

 

(a)                                  cash litigation charges incurred by the
Consolidated Parties; provided that such amount shall not exceed an aggregate
amount of $5,000,000 during the term of this Credit Agreement and any such
amounts in excess of $5,000,000 shall not be included in the determination of
the Special Charges Adjustment for any fiscal quarter;

 

(b)                                 non-cash charges associated with the write-down
of the value of accounts and/or notes receivable of the Consolidated Parties;
provided that such amount shall not exceed an aggregate amount of $5,000,000
during the term of this Credit Agreement and any such amounts in excess of
$5,000,000 shall not be included in the determination of the Special Charges
Adjustment for any fiscal quarter;

 

(c)                                  non-cash charges related to preferred stock
redemptions;

 

(d)                                 non-cash charges incurred by the Consolidated
Parties in association with the write-down of the value of any real properties;

 

(e)                                  the satisfaction of outstanding unamortized
loan fees with respect to the Terminated Facility;

 

(f)                                    the satisfaction of any outstanding
prepayment/make whole provisions with respect to the Terminated Facility;

 

(g)                                 non-cash charges associated with the sale or
settlement of the outstanding interest rate cap in existence with respect to
the obligations outstanding under the Terminated Facility; and

 

(h)                                 any other non-cash charges associated with
the sale or settlement by any Consolidated Party of any Swap Contract.

 

“Special
Charges Adjustment” means, for any fiscal quarter, the amount which has
been deducted for or in connection with any Special Charges (without
duplication among such items or items taken into account for previous fiscal
quarters) in the determination of net income for the applicable fiscal quarter
for which a given Consolidated EBITDA calculation has been performed.

 

“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than

 

30

 

securities or interests having such power
only by reason of the happening of a contingency) are at the time beneficially
owned, or the management of which is otherwise controlled, directly, or
indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise provided, “Subsidiary”
shall refer to a Subsidiary of the Parent.

 

“Subsidiary
Guarantor” means each Subsidiary of the Parent other than (a) the Borrowers
and (b) the Unrestricted Subsidiaries.

 

“Subsidiary
Guarantor Joinder Agreement” means a joinder agreement in the form of Exhibit E-2
to be executed by each new Subsidiary of the Parent that is required to become
a Subsidiary Guarantor in accordance with Section 6.15(b) hereof.

 

“Support
Obligations” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or indirectly,
and including any obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such Indebtedness
or other obligation of the payment or performance thereof or to protect such
obligee against loss in respect thereof (in whole or in part), or (b) any Lien
on any assets of such Person securing any Indebtedness or other obligation of
any other Person, whether or not such Indebtedness or other obligation is
assumed by such Person.  The amount of
any Support Obligations shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in
respect of which such Support Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the guaranteeing Person in good faith.

 

“Swap
Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, that are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules,

 

31

 

a “Master Agreement”), including any
such obligations or liabilities under any Master Agreement.

 

“Swap
Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the
date such Swap Contracts have been closed out and termination values determined
in accordance therewith, such termination values, and (b) for any date prior to
the date referenced in clause (a), the amounts determined as the
mark-to-market values for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).

 

“Swing
Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.01(c).

 

“Swing
Line Commitment” means, with respect to the Swing Line Lender, the
commitment of the Swing Line Lender to make Swing Line Loans, and with respect
to each Lender, the commitment of such Lender to purchase participation
interests in Swing Line Loans.

 

“Swing
Line Committed Amount” has the meaning provided in Section 2.01(c).

 

“Swing
Line Lender” means Bank of America in its capacity as such, together with
any successor in such capacity.

 

“Swing
Line Loan” has the meaning provided in Section 2.01(c).

 

“Synthetic
Lease” means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing arrangement that
is considered borrowed money indebtedness for tax purposes but is classified as
an operating lease under GAAP.

 

“Tenant”
means any Person who is a lessee with respect to any lease held by a Borrower
as lessor or as an assignee of the lessor thereunder.

 

“Terminated
Facility” means a collective reference to (a) the Loan Agreement, dated as
of June 23, 2003, among the Borrowers, General Electric Capital
Corporation (“GECC”), as agent, and the lenders identified therein and (b) the
Loan Agreement, dated as of December 31, 2003, among Omega Acquisition Facility
I, LLC and GECC, as agent and lender.

 

“Termination
Date” means March 22, 2008.

 

“Threshold
Amount” means (a) for any provision relating to the Borrowers as a whole,
the Parent or the Consolidated Parties as a whole, $10,000,000, (b) for any
provision relating to Delta Investors I, LLC, Delta investors II, LLC, OHI
Asset, LLC and OHI Asset (CA), LLC as a whole, $2,500,000 and (c) for any
provision relating to OHI Asset (ID), LLC, OHI Asset (LA), LLC, OHI Asset (TX),
LLC and any other Borrower made a party hereto following the Closing Date,
individually, $500,000.

 

32

 

“Total
Collateral Value” means, as of any date of calculation with respect to any
pool of Real Property Assets, the sum of the Collateral Values with respect to
each of the Real Property Assets in such pool.

 

“Treasury
Rate” means, as of any date of determination, the yield reported, as of
10:00 a.m.  (New York City time) on
such date (or to the extent such date is not a Business Day, the Business Day
immediately preceding such date) on the display designated as page “PX-1” of
the Bloomberg Financial Markets Services Screen (or such other display as may
replace page “PX-1” of the Bloomberg Financial Markets Services Screen) for
actively traded U.S.  Treasury
securities having a ten (10) year maturity as of such date, or (b) if such
yields are not reported as of such time or the yields reported as of such time
are not ascertainable, the Treasury Constant Maturity Series Yields
reported, for the latest day for which such yields have been so reported as of
such day in Federal Reserve Statistical Release H.15(519) (or any comparable
successor publication) for actively traded U.S.  Treasury securities having a constant maturity equal to
ten (10) years.

 

“Type”
means, with respect to any Revolving Loan, its character as a Base Rate Loan or
a Eurodollar Loan.

 

“Unfunded
Pension Liability” means the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension
Plan’s assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Internal Revenue Code for
the applicable plan year.

 

“United
States” or “U.S.” means the United States of America.

 

“Unreimbursed
Amount” has the meaning provided in Section 2.03(c)(i).

 

“Unrestricted
Subsidiaries” means the “Unrestricted Subsidiaries” as such term is defined
from time to time in the Senior Note Indenture; provided, that to the extent
the Senior Note Indenture is, for any reason, terminated, the term
“Unrestricted Subsidiaries” shall, for the remainder of the term of this
Agreement, have the meaning assigned to such term in the Senior Note Indenture
immediately prior to the termination thereof.

 

“Unused
Fee” shall have the meaning given such term in Section 2.09(a).

 

“Wholly
Owned” means, with respect to any direct or indirect Subsidiary of any
Person, that 100% of the Capital Stock with ordinary voting power issued by
such Subsidiary (other than directors’ qualifying shares and investments by
foreign nationals mandated by applicable Law) is beneficially owned, directly
or indirectly, by such Person.

 

1.02                        Interpretive
Provisions.

 

With
reference to this Credit Agreement and each other Credit Document, unless
otherwise provided herein or in such other Credit Document:

 

33

 

(a)                                  The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.

 

(b)                                 (i)                                     The words “herein,” “hereto,” “hereof” and
“hereunder” and words of similar import when used in any Credit Document shall
refer to such Credit Document as a whole and not to any particular provision
thereof.

 

(ii)                                  Unless otherwise provided or required by
context, Article, Section, Exhibit and Schedule references are to the
Credit Document in which such reference appears.

 

(iii)                               The term “including” is by way of example and not limitation.

 

(iv)                              The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

 

(c)                                  In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including”; the words “to” and “until” each mean “to but excluding”; and the
word “through” means “to and including.”

 

(d)                                 Section headings herein and in the other
Credit Documents are included for convenience of reference only and shall not
affect the interpretation of this Credit Agreement or any other Credit
Document.

 

1.03                        Accounting Terms.

 

(a)                                  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Credit Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the audited financial
statements for the fiscal year ended December 31,
2003, except as otherwise specifically prescribed herein.

 

(b)                                 The Parent will provide a written summary of
material changes in GAAP or in the consistent application thereof with each
annual and quarterly Compliance Certificate delivered in accordance with Section 6.02(a).  If at any time any change in GAAP or in the
consistent application thereof would affect the computation of any financial
ratio or requirement set forth in any Credit Document, and either the Parent or
the Required Lenders shall object in writing to determining compliance based on
such change, then such computations shall continue to be made on a basis
consistent with the most recent financial statements delivered pursuant to Section 6.01(a)
or (b) as to which no such objection has been made.

 

34

 

1.04                        Rounding.

 

Any
financial ratios required to be maintained by the Parent pursuant to this
Credit Agreement shall be calculated by dividing the appropriate component by
the other component, carrying the result to one place more than the number of
places by which such ratio is expressed herein and rounding the result up or
down to the nearest number (with a rounding-up if there is no nearest number).

 

1.05                        References
to Agreements and Laws.

 

Unless
otherwise expressly provided herein, (a) references to Organization Documents,
agreements (including the Credit Documents) and other contractual instruments
shall be deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are
not prohibited by any Credit Document; and (b) references to any Law shall
include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such Law.

 

1.06                        Times of Day.

 

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

 

1.07                        Letter of Credit Amounts.

 

Unless
otherwise provided, all references herein to the amount of a Letter of Credit
at any time shall be deemed to mean the maximum face amount of such Letter of
Credit after giving effect to all increases thereof contemplated by such Letter
of Credit or the Letter of Credit Application therefor, whether or not such
maximum face amount is in effect at such time.

 

ARTICLE II

COMMITMENTS AND EXTENSION OF CREDITS

 

2.01                        Commitments.

 

Subject
to the terms and conditions set forth herein:

 

(a)                                  Revolving Loans.  During the Commitment Period, each Lender severally agrees to
make revolving credit loans (the “Revolving Loans”) to the Borrower
Representative on any Business Day; provided that after giving effect to any
such Revolving Loan, (i) with regard to the Lenders collectively, the aggregate
outstanding principal amount of Revolving Obligations shall not exceed the
lesser of (x) ONE HUNDRED TWENTY FIVE MILLION DOLLARS ($125,000,000) (as such
amount may be increased or decreased in accordance with the provisions hereof,
the “Aggregate Revolving Committed Amount”) and (y) the Borrowing Base
Amount for such date and (ii) with regard to each Lender individually, such
Lender’s Revolving

 

35

 

Commitment Percentage of Revolving
Obligations shall not exceed its respective Revolving Committed Amount.  Revolving Loans may consist of Base Rate
Loans, Eurodollar Loans, or a combination thereof, as provided herein, and may
be repaid and reborrowed in accordance with the provisions hereof.

 

(b)                                 Letters of Credit.  During the Commitment Period, (i) the L/C Issuer, in reliance
upon the commitments of the Lenders set forth herein, agrees (A) to issue
Letters of Credit for the account of a
Borrower  on any Business
Day, (B) to amend or renew Letters of Credit previously issued hereunder, and
(C) to honor drafts under Letters of Credit; and (ii) the Lenders severally
agree to purchase from the L/C Issuer a participation interest in the Letters of Credit issued hereunder
in an amount equal to such Lender’s Revolving Commitment Percentage thereof;
provided that (A) the aggregate principal amount of L/C Obligations shall not
exceed TWENTY FIVE MILLION DOLLARS ($25,000,000) (as such amount may be
decreased in accordance with the provisions hereof, the “L/C Committed
Amount”), (B) with regard to the Lenders collectively, the aggregate
principal amount of Revolving Obligations shall not exceed the lesser of (x)
the Aggregate Revolving Committed Amount and (y) the Borrowing Base Amount for
such date, and (C) with regard to each Lender individually, such Lender’s
Revolving Commitment Percentage of Revolving Obligations shall not exceed its
respective Revolving Committed Amount. 
Subject to the terms and conditions hereof, the Borrowers’ ability to
obtain Letters of Credit shall be fully revolving, and accordingly the
Borrowers may obtain Letters of Credit to replace Letters of Credit that have
expired or that have been drawn upon and reimbursed.

 

(c)                                  Swing Line Loans.  During the Commitment Period, the Swing Line Lender agrees to
make revolving credit loans (the “Swing Line Loans”) to the Borrower
Representative on any Business Day; provided, that (i) the aggregate
principal amount of Swing Line Loans shall not exceed TEN MILLION DOLLARS
($10,000,000) (as such amount may be decreased in accordance with the
provisions hereof, the “Swing Line Committed Amount”), (ii) with respect
to the Lenders collectively, the aggregate principal amount of Revolving
Obligations shall not exceed the lesser of (x) the Aggregate Revolving
Committed Amount and (y) the Borrowing Base Amount on such date, and (iii) the
Borrowers shall not use the proceeds of any Swing Line Loan to refinance any outstanding
Swing Line Loan.  Swing Line Loans shall
be comprised solely of Eurodollar Loans, and may be repaid and reborrowed in
accordance with the provisions hereof. 
Immediately upon the making of a Swing Line Loan, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Swing Line Lender a participation interest in such Swing Line Loan in an
amount equal to the product of such Lender’s Revolving Commitment Percentage
thereof.  No Swing Line Loan shall
remain outstanding for longer than three (3) Business Days.

 

(d)                                 Increase in Revolving Commitments.  Subject to the terms and conditions set
forth herein, the Borrower Representative may, at any time during the period
commencing as of the Closing Date and ending as of the date three (3)
years following the Closing Date, upon written notice to the Administrative
Agent, cause an increase in the Aggregate Revolving Committed Amount by up to
FIFTY MILLION DOLLARS ($50,000,000) (to an aggregate amount not more than ONE
HUNDRED SEVENTY FIVE MILLION DOLLARS

 

36

 

($175,000,000)); provided that such increase
shall be conditioned and effective upon the satisfaction of the following
conditions:

 

(i)            the Borrowers shall obtain (whether
through the Arranger or otherwise) commitments for the amount of the increase
from existing Lenders or other commercial banks or financial institutions
reasonably acceptable to the Administrative Agent, which other commercial banks
and financial institutions shall join in this Credit Agreement as Lenders by a
Lender Joinder Agreement substantially in the form of Exhibit F
attached hereto or other arrangement reasonably acceptable to the
Administrative Agent (it being understood that 
in no case shall any Lender be required to increase its Revolving
Commitment without its written consent);

 

(ii)           any such increase shall be in a
minimum aggregate principal amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof (or the remaining amount, if less);

 

(iii)          if any Revolving Loans are outstanding
at the time of any such increase, the Borrowers shall make such payments and
adjustments on the Revolving Loans (including payment of any break-funding
amounts owing under Section 3.05) as may be necessary to give
effect to the revised commitment percentages and commitment amounts;

 

(iv)          the Borrowers shall pay to the
Administrative Agent and the Arranger all fees required under the
Administrative Agent’s Fee Letter due in connection with the syndication of the
increase in the Revolving Committed Amount;

 

(v)           the Borrowers shall have executed any
new or amended and restated Notes (to the extent requested by the Lenders) to reflect the revised
commitment amounts; and

 

(vi)          the conditions to the making of a
Revolving Loan set forth in Section 4.02 shall be satisfied.

 

In connection with any such increase in the
Revolving Commitments, Schedule 2.01 shall be revised to reflect
the modified commitments and commitment percentages of the Lenders, and the
Borrowers shall provide supporting corporate resolutions, legal opinions,
promissory notes and other items as may be reasonably requested by the
Administrative Agent and the Lenders in connection therewith.  The Borrower Representative  shall not be permitted to cause more than
three (3) increases in the Aggregate Revolving Committed Amount during the term
of this Agreement.

 

2.02                        Borrowings, Conversions and Continuations.

 

(a)           Each Borrowing, each conversion of Loans from one Type to
the other, and each continuation of Eurodollar Loans shall be made upon the
Borrower Representative’s irrevocable notice to the Administrative Agent, which
may be given by telephone.  Each such
notice must be received by the Administrative Agent not later than
11:00 a.m.  (i) with respect to
Eurodollar 

 

37

 

Loans, three (3) Business Days prior to,
or (ii) with respect to Base Rate Loans, on the requested date of, the
requested date of any Borrowing, conversion or continuation.  Each telephonic notice pursuant to this Section 2.02(a)
must be confirmed promptly by delivery to the Administrative Agent of a written
Loan Notice, appropriately completed and signed by a Responsible Officer of the
Parent.  Except as provided in Sections 2.03(c)
and 2.04(c), each Borrowing, conversion or continuation shall be in a
principal amount of (i) with respect to Eurodollar Loans, $1,000,0000 or a
whole multiple of $1,000,000 in excess thereof or (ii) with respect to Base
Rate Loans, $500,000 or a whole multiple of $100,000 in excess thereof.  Each Loan Notice (whether telephonic or
written) shall specify (i) whether the applicable request is with respect to
Revolving Loans, (ii) whether such request is for a Borrowing, conversion, or
continuation, (ii) the requested date of such Borrowing, conversion or
continuation (which shall be a Business Day), (iii) the principal amount of
Loans to be borrowed, converted or continued, (iv) the Type of Loans to be
borrowed, converted or continued, and (v) if applicable, the duration of the
Interest Period with respect thereto. 
If the Borrower Representative fails to specify a Type of Loan in a Loan
Notice or if the Borrower Representative fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be
made as, or converted to, Base Rate Loans. 
Any automatic conversion to Base Rate Loans shall be effective as of the
last day of the Interest Period then in effect with respect to the applicable
Eurodollar Loans.  If the Borrower
Representative requests a Borrowing of, conversion to, or continuation of
Eurodollar Loans in any Loan Notice, but fails to specify an Interest Period,
the Interest Period will be deemed to be one month.

 

(b)           Following receipt of a Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Commitment Percentage
of the applicable Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower Representative, the Administrative
Agent shall notify each Lender of the details of any automatic conversion to
Base Rate Loans described in the preceding subsection.  In the case of a Borrowing, each Lender
shall make the amount of its Loan available to the Administrative Agent in
immediately available funds at the Administrative Agent’s Office not later than
2:00 p.m. on the Business Day specified in the applicable Loan
Notice.  Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such
Borrowing is the initial Extension of Credit, Section 4.01), the
Administrative Agent shall make all funds so received available to the party
referenced in the applicable Loan Notice in like funds as received by the
Administrative Agent either by (i) crediting the account of the applicable
party on the books of the Administrative Agent with the amount of such funds or
(ii) wire transfer of such funds, in each case in accordance with instructions
provided to (and reasonably acceptable to) the Administrative Agent by the
Borrower Representative; provided, however, that if, on the date the Loan
Notice with respect to such Borrowing is given by the Borrower Representative,
there are Swing Line Loans or L/C Borrowings outstanding, then the proceeds of
such Borrowing shall be applied, first, to the payment in full of any such L/C
Borrowings, second, to the payment in full of any such Swing Line Loans, and
third, to the party identified in the applicable Loan Notice as provided above.

 

(c)           Except as otherwise provided herein, without the consent
of the Required Lenders, (i) a Eurodollar Loan may be continued or converted
only on the last day of an Interest Period for such Eurodollar Loan and (ii)
any conversion into, or continuation as, a Eurodollar Loan may be made only if
the conditions to Extension of Credits in Section 4.02 have been 

 

38

 

satisfied. 
During the existence of a Default or Event of Default, (i) no Loan may
be requested as, converted to or continued as a Eurodollar Loan and (ii) at the
request of the Required Lenders, any outstanding Eurodollar Loan shall be
converted immediately to a Base Rate Loan.

 

(d)           The Administrative Agent shall promptly notify the
Borrower Representative and the Lenders of the interest rate applicable to any
Interest Period for Eurodollar Loans upon determination of such interest
rate.  The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error.  At any time that
Base Rate Loans are outstanding, the Administrative Agent shall notify the
Borrower Representative and the Lenders of any change in Bank of America’s
prime rate used in determining the Base Rate promptly following the public
announcement of such change.

 

(e)           After giving effect to all Borrowings, all conversions of
Loans from one Type to the other, and all continuations of Loans as the same
Type, there shall not be more than five (5) Interest Periods in effect
with respect to Loans.

 

2.03                        Additional
Provisions with respect to Letters of Credit.

 

(a)           Obligation to Issue or Amend.

 

(i)            The L/C Issuer shall not issue any Letter of Credit if:

 

(A)                              the issuance of such Letter of Credit would
violate one or more policies of the L/C Issuer; or

 

(B)                                such Letter of Credit is in an initial amount
less than $50,000, is to be denominated in a currency other than Dollars or is
not a standby letter of credit.

 

(ii)           The L/C Issuer shall be under no obligation to issue any
Letter of Credit if:

 

(A)                              any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from issuing such Letter of Credit, or any Law
applicable to the L/C Issuer or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over the
L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular or shall
impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense that was not
applicable on the Closing Date and that the L/C Issuer in good faith deems
material to it;

 

39

 

(B)                                the expiry date of such requested Letter of
Credit would occur more than twelve (12) months after the date of issuance or
last renewal, unless the Required Lenders have approved such expiry date;

 

(C)                                the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date;

 

(D)                               one or more applicable conditions contained
in Section 4.02 shall not then be satisfied and the L/C Issuer
shall have received written notice thereof from any Lender or any Credit Party
at least one Business Day prior to the requested date of issuance of such
Letter of Credit;

 

(E)                                 a default of any Lender’s obligations to fund
under Section 2.03(c) exists or any Lender is at such time a
Defaulting Lender hereunder, unless the L/C Issuer has entered into
satisfactory arrangements with the Borrower or such Lender to eliminate the L/C
Issuer’s risk with respect to such Lender; or

 

(F)                                 the Revolving Commitments have been terminated
pursuant to Article VIII.

 

(iii)          The L/C Issuer shall be under no obligation to amend any
Letter of Credit if:

 

(A)                              the L/C Issuer would have no obligation at
such time to issue such Letter of Credit in its amended form under the terms
hereof; or

 

(B)                                the beneficiary of such Letter of Credit does
not accept the proposed amendment to such Letter of Credit.

 

(iv)          The L/C Issuer shall not amend any Letter of Credit if:

 

(A)                              one or more applicable conditions contained
in Section 4.02 shall not then be satisfied and the L/C Issuer
shall have received written notice thereof from any Lender or any Credit Party
at least one Business Day prior to the requested date of amendment of such
Letter of Credit; or

 

(B)                                the Revolving Commitments have been
terminated pursuant to Article VIII.

 

40

 

(b)           Procedures for Issuance and Amendment.

 

(i)            Each Letter of Credit shall be
issued or amended, as the case may be, upon the request of the Borrower
Representative delivered to the L/C Issuer (with a copy to the Administrative
Agent) in the form of a Letter of Credit Application, appropriately completed
and signed by a Responsible Officer of the Parent.  Such Letter of
Credit Application must be received by the L/C Issuer and the Administrative
Agent not later than 11:00 a.m. at least two (2) Business Days (or
such later date and time as the L/C Issuer may agree in a particular instance
in its sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be.  In the
case of a request for an initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in form and detail satisfactory to the L/C
Issuer:  (A) the proposed issuance date
of the requested Letter of Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as the L/C Issuer may require. 
In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the
proposed date of amendment thereof (which shall be a Business Day); (C) the
nature of the proposed amendment; and (D) such other matters as the L/C Issuer
may require.

 

(ii)           Promptly after receipt of any Letter
of Credit Application, the L/C Issuer will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has received a
copy of such Letter of Credit Application from the Borrower Representative and,
if not, the L/C Issuer will provide the Administrative Agent with a copy
thereof.  Upon receipt by the L/C Issuer
of confirmation from the Administrative Agent that the requested issuance or
amendment is permitted in accordance with the terms hereof, then, subject to
the terms and conditions hereof, the L/C Issuer shall, on the requested date,
issue a Letter of Credit for the account of the applicable Person or enter into
the applicable amendment, as the case may be, in each case in accordance with
the L/C Issuer’s usual and customary business practices.  Immediately upon the issuance of each Letter
of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the L/C Issuer a risk participation in
such Letter of Credit in an amount equal to the product of such Lender’s
Revolving Commitment Percentage of such Letter of Credit.

 

(iii)          Promptly after its delivery of any
Letter of Credit or any amendment to a Letter of Credit to an advising bank
with respect thereto or to the beneficiary thereof, the L/C Issuer will also
deliver to the Borrower Representative and the Administrative Agent a true and
complete copy of such Letter of Credit or amendment.

 

(c)           Drawings and Reimbursements; Funding of Participations.

 

41

 

(i)            Upon any drawing under any Letter of
Credit, the L/C Issuer shall notify the Borrower Representative and the
Administrative Agent thereof.  Not later
than 11:00 a.m.  on the date of any
payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor
Date”), the Borrower Representative shall reimburse the L/C Issuer through
the Administrative Agent in an amount equal to the amount of such drawing.  If the Borrower Representative fails to so
reimburse the L/C Issuer by such time, the Administrative Agent shall promptly
notify each Lender of the Honor Date, the amount of the unreimbursed drawing
(the “Unreimbursed Amount”), and the amount of such Lender’s Revolving
Commitment Percentage thereof.  In such
event, the Borrower Representative shall be deemed to have requested a
Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount
equal to the Unreimbursed Amount, without regard to the minimum and multiples
specified in Section 2.02 for the principal amount of Base Rate
Loans, the amount of the unutilized portion of the Aggregate Revolving
Commitments or the conditions set forth in Section 4.02.  Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be
given by telephone if immediately confirmed in writing; provided that the lack
of such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.

 

(ii)           Each Lender (including the Lender
acting as L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i)
make funds available to the Administrative Agent for the account of the L/C
Issuer at the Administrative Agent’s Office in an amount equal to its Revolving
Commitment Percentage of the Unreimbursed Amount not later than
1:00 p.m.  on the Business Day
specified in such notice by the Administrative Agent, whereupon, subject to the
provisions of Section 2.03(c)(iii), each Lender that so makes funds
available shall be deemed to have made a Revolving Loan that is a Base Rate
Loan to the Borrower Representative in such amount.  The Administrative Agent shall remit the funds so received to the
L/C Issuer.

 

(iii)          With respect to any Unreimbursed
Amount that is not fully refinanced by a Borrowing of Base Rate Loans for any
reason, the Borrower Representative shall be deemed to have incurred from the
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is
not so refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate.  In such event, each Lender’s payment to the
Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii)
shall be deemed payment in respect of its participation in such L/C Borrowing
and shall constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.03.

 

(iv)          Until each Lender funds its Revolving
Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse
the L/C Issuer for any amount drawn under any Letter of Credit, interest in
respect of such Lender’s Revolving Commitment Percentage of such amount shall
be solely for the account of the L/C Issuer.

 

(v)           Each Lender’s obligation to make
Revolving Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn
under Letters of Credit, as contemplated by 

 

42

 

this Section 2.03(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment, defense or
other right that such Lender may have against the L/C Issuer, the Borrowers or
any other Person for any reason whatsoever; (B) the occurrence or continuance
of a Default or Event of Default, (C) non-compliance with the conditions set
forth in Section 4.02, or (D) any other occurrence, event or
condition, whether or not similar to any of the foregoing.  No such making of an L/C Advance shall
relieve or otherwise impair the obligation of the Borrowers to reimburse the
L/C Issuer for the amount of any payment made by the L/C Issuer under any
Letter of Credit, together with interest as provided herein.

 

(vi)          If any Lender fails to make available
to the Administrative Agent for the account of the L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.03(c) by the time specified in Section 2.03(c)(ii),
the L/C Issuer shall be entitled to recover from such Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the L/C Issuer at a rate per annum equal to the Federal
Funds Rate from time to time in effect. 
A certificate of the L/C Issuer submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this
clause (vi) shall be conclusive absent manifest error.

 

(d)           Repayment of Participations.

 

(i)            At any time after the L/C Issuer has
made a payment under any Letter of Credit and has received from any Lender such
Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c),
if the Administrative Agent receives for the account of the L/C Issuer any
payment in respect of the related Unreimbursed Amount or interest thereon
(whether directly from a Credit Party or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Revolving Commitment Percentage
thereof (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender’s L/C Advance was outstanding) in
the same funds as those received by the Administrative Agent.

 

(ii)           If any payment received by the
Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i)
is required to be returned under any of the circumstances described in Section 10.06
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Lender shall pay to the Administrative Agent for the account
of the L/C Issuer its Revolving Commitment Percentage thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect.

 

(e)           Obligations Absolute. 
The obligations of the Borrowers to reimburse the L/C Issuer for each
drawing under each Letter of Credit and to repay each L/C Borrowing shall be 

 

43

 

absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Credit Agreement
under all circumstances, including the following:

 

(i)            any lack of validity or
enforceability of such Letter of Credit, this Credit Agreement, any other
Credit Document or any other agreement or instrument relating thereto;

 

(ii)           the existence of any claim,
counterclaim, set-off, defense or other right that the Borrowers may have at
any time against any beneficiary or any transferee of such Letter of Credit (or
any Person for whom any such beneficiary or any such transferee may be acting),
the L/C Issuer or any other Person, whether in connection with this Credit
Agreement, the transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)          any draft, demand, certificate or
other document presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under such
Letter of Credit;

 

(iv)          any payment by the L/C Issuer under
such Letter of Credit against presentation of a draft or certificate that does
not strictly comply with the terms of such Letter of Credit; or any payment
made by the L/C Issuer under such Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising
in connection with any proceeding under any Debtor Relief Law; or

 

(v)           any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrowers.

 

The Borrower Representative shall promptly
examine a copy of each Letter of Credit and each amendment thereto that is
delivered to it and, in the event of any claim of noncompliance with the
Borrower Representative’s instructions or other irregularity, the Borrower
Representative will immediately notify the L/C Issuer.  The Borrowers shall be conclusively deemed
to have waived any such claim against the L/C Issuer and its correspondents
unless such notice is given as aforesaid.

 

(f)            Role of L/C Issuer. 
Each Revolving Lender and each Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.  None of the 

 

44

 

L/C Issuer, any Agent-Related Person nor any
of the correspondents, participants or assignees of the L/C Issuer shall be
liable to any Revolving Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the
absence of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Letter of Credit Application.  The Borrowers hereby assume all risks of the
acts or omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit; provided, however, that this assumption is not intended
to, and shall not, preclude a Borrower’s pursuing such rights and remedies as
it may have against the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuer, any Agent-Related
Person, nor any of the respective correspondents, participants or assignees of
the L/C Issuer, shall be liable or responsible for any of the matters described
in clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the
Borrowers may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrowers, to the extent, but only to the extent, of any direct,
as opposed to consequential or exemplary, damages suffered by the Borrowers
which the Borrowers prove were caused by the L/C Issuer’s willful misconduct or
gross negligence or the L/C Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit.  In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason.

 

(g)           Cash Collateral. 
Upon the request of the Administrative Agent or the Required Lenders,
(i) if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any Letter of Credit may for any
reason remain outstanding and partially or wholly undrawn, the Borrower
Representative shall immediately Cash Collateralize the then Outstanding Amount
of all L/C Obligations (in an amount equal to such Outstanding Amount
determined as of the date of such L/C Borrowing or the Letter of Credit
Expiration Date, as the case may be). 
For purposes hereof, “Cash Collateralize” means to pledge and
deposit with or deliver to the Administrative Agent, for the benefit of the L/C
Issuer and the Revolving Lenders, as collateral for the L/C Obligations, cash
or deposit account balances pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the L/C Issuer (which documents
are hereby consented to by the Revolving Lenders).  Derivatives of such term have corresponding meanings.  Each Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the Revolving
Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing.  Cash collateral shall be maintained in blocked, non-interest
bearing deposit accounts with the Administrative Agent.

 

(h)           Applicability of ISP98 and UCP.  Unless otherwise expressly agreed by the L/C Issuer and the
Borrower Representative when a Letter of Credit is issued, the rules of the
“International Standby Practices 1998” published by the Institute of
International Banking Law 

 

45

 

& Practice (or such later version thereof
as may be in effect at the time of issuance) shall apply to each Letter of
Credit.

 

(i)            Letter of Credit Fees. 
The Borrowers shall pay Letter of Credit fees as set forth in Section 2.09.

 

(j)            Conflict with Letter of Credit Application.  In the event of any conflict between the
terms hereof and the terms of any Letter of Credit Application, the terms
hereof shall control.

 

2.04                        Additional
Provisions with respect to Swing Line Loans.

 

(a)           Borrowing Procedures.  Each Swing Line Borrowing shall be made upon the Borrower Representative’s  irrevocable notice to the Swing Line Lender
and the Administrative Agent, which may be given by telephone.  Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than
1:00 p.m.  on the requested borrowing
date, and shall specify (i) the amount to be borrowed, which shall be a minimum
of $100,000, and (ii) the requested borrowing date, which shall be a Business
Day.  Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Loan Notice, appropriately completed and
signed by a Responsible Officer of the Parent.  Promptly after receipt by the Swing Line
Lender of any telephonic Loan Notice, the Swing Line Lender will confirm with
the Administrative Agent (by telephone or in writing) that the Administrative
Agent has also received such Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of the
contents thereof.  Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Lender) prior to 2:00 p.m.  on the date of the proposed Swing Line
Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan
as a result of the limitations set forth in this Article II, or (B) that
one or more of the applicable conditions specified in Section 4.02
is not then satisfied, then, subject to the terms and conditions hereof, the
Swing Line Lender will, not later than 3:00 p.m.  on the borrowing date specified in such Loan Notice, make the
amount of its Swing Line Loan available to the Borrower Representative by
crediting the account of the Borrower Representative on the books of the Swing
Line Lender in immediately available funds.

 

(b)           Refinancing.

 

(i)            The Swing Line Lender at any time in
its sole and absolute discretion may request, on behalf of the Borrowers (which
hereby irrevocably authorizes the Swing Line Lender to so request on its behalf),
that each Lender make a Revolving Loan that is a Base Rate Loan in an amount
equal to such Lender’s Revolving Commitment Percentage of Swing Line Loans then
outstanding.  Such request shall be made
in writing (which written request shall be deemed to be a Loan Notice for
purposes hereof) and in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, the unutilized portion of the Aggregate Commitments
or the conditions set forth in Section 4.02.  The Swing Line Lender shall furnish the
Borrower Representative with a copy of the applicable Loan Notice promptly
after delivering such notice to the Administrative Agent.  

 

46

 

Each Lender shall make an
amount equal to its Revolving Commitment Percentage of the amount specified in
such Loan Notice available to the Administrative Agent in immediately available
funds for the account of the Swing Line Lender at the Administrative Agent’s
Office not later than 2:00 p.m.  on
the day specified in such Loan Notice, whereupon, subject to Section 2.04(c)(ii),
each Lender that so makes funds available shall be deemed to have made a
Revolving Loan that is a Base Rate Loan to the Borrowers in such amount.  The Administrative Agent shall remit the
funds so received to the Swing Line Lender.

 

(ii)           If for any reason any Swing Line Loan
cannot be refinanced by such a Borrowing of Revolving Loans in accordance with Section 2.04(c)(i),
the request for Revolving Loans submitted by the Swing Line Lender as set forth
herein shall be deemed to be a request by the Swing Line Lender that each of
the Lenders fund its risk participation in the relevant Swing Line Loan and
each Lender’s payment to the Administrative Agent for the account of the Swing
Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment
in respect of such participation.

 

(iii)          If any Lender fails to make available
to the Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.04(c) by the time specified in Section 2.04(c)(i),
the Swing Line Lender shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which such
payment is immediately available to the Swing Line Lender at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  A certificate of the Swing Line Lender
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (iii) shall be conclusive absent manifest
error.

 

(iv)         Each Lender’s obligation
to make Revolving Loans or to purchase and fund risk participations in Swing
Line Loans pursuant to this Section 2.04(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right that such Lender may
have against the Swing Line Lender, the Borrowers or any other Person for any
reason whatsoever, (B) the occurrence or continuance of a Default or Event of
Default, (C) non-compliance with the conditions set forth in Section 4.02,
or (D) any other occurrence, event or condition, whether or not similar to any
of the foregoing.  No such purchase or
funding of risk participations shall relieve or otherwise impair the obligation
of the Borrowers to repay Swing Line Loans, together with interest as provided
herein.

 

(c)           Repayment of Participations.

 

(i)            At any time after any Lender has
purchased and funded a risk participation in a Swing Line Loan, if the Swing
Line Lender receives any payment on account of such Swing Line Loan, the Swing
Line Lender will distribute to such Lender its Revolving Commitment Percentage
of such payment (appropriately adjusted, in the case of interest 

 

47

 

payments, to reflect the period
of time during which such Lender’s risk participation was funded) in the same
funds as those received by the Swing Line Lender.

 

(ii)           If any payment received by the Swing
Line Lender in respect of principal or interest on any Swing Line Loan is
required to be returned by the Swing Line Lender under any of the circumstances
described in Section 9.06 (including pursuant to any settlement entered
into by the Swing Line Lender in its discretion), each Lender shall pay to the
Swing Line Lender its Revolving Commitment Percentage thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned, at a rate per annum equal to the Federal Funds
Rate.  The Administrative Agent will
make such demand upon the request of the Swing Line Lender.

 

(d)           Interest for Account of Swing Line Lender.  The Swing Line Lender shall be responsible
for invoicing the Borrowers (by delivery of an invoice or other notice to the
Borrower Representative) for interest on the Swing Line Loans.  Until each Lender funds its Revolving Loan
or risk participation pursuant to this Section 2.04 to refinance
such Lender’s Revolving Commitment Percentage of any Swing Line Loan, interest
in respect thereof shall be solely for the account of the Swing Line Lender.

 

(e)           Payments Directly to Swing Line Lender.  The Borrower Representative shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.

 

2.05                        Repayment of
Loans.

 

(a)           Revolving Loans. 
The Borrowers shall repay to the Lenders on the Termination Date the
aggregate principal amount of Revolving Loans outstanding on such date.

 

(b)           Swing Line Loans. 
The Borrowers shall repay each Swing Line Loan on the earliest to occur of
(i) the date five (5) Business Days after such Loan is made and (ii) the
Termination Date.

 

2.06                        Prepayments.

 

(a)           Voluntary Prepayments.  The Loans may be repaid in whole or in part without premium or
penalty (except, in the case of Loans other than Base Rate Loans, amounts
payable pursuant to Section 3.05); provided that (i) notice thereof
must be received by 11:00 a.m.  by
the Administrative Agent (A) at least three (3) Business Days prior to the
date of prepayment of Eurodollar Loans, and (B) on the Business Day prior to
the date of prepayment of Base Rate Loans, and (ii) any such prepayment shall
be in a minimum principal amount of $1,000,000 and integral multiples of
$1,000,000 in excess thereof, in the case of Eurodollar Loans, and a minimum
principal amount of $500,000 and integral multiples of $100,000 in excess
thereof, in the case of Base Rate Loans, or, in each case, the entire principal
amount thereof, if less.  Each such
notice of voluntary repayment hereunder shall be irrevocable and shall specify
the date and amount of prepayment and the Loans and Types of Loans which are to
be prepaid.  The 

 

48

 

Administrative Agent will give prompt notice
to the applicable Lenders of any prepayment on the Loans and the Lender’s
interest therein.  Prepayments of
Eurodollar Loans hereunder shall be accompanied by accrued interest thereon and
breakage amounts, if any, under Section 3.05.

 

(b)           Mandatory Prepayments.  If at any time (A) the aggregate principal amount of Revolving
Obligations shall exceed the lesser of (x) the Aggregate Revolving Committed
Amount and (y) the Borrowing Base Amount for such date, (B) the aggregate
principal amount of L/C Obligations shall exceed the L/C Committed Amount, (C)
the aggregate principal amount of Swing Line Loans shall exceed the Swing Line
Committed Amount, immediate prepayment will be made on the Revolving Loans
and/or to provide Cash Collateral to the L/C Obligations in an amount equal to
such excess; provided, however, that Cash Collateral will not be provided to
the L/C Obligations hereunder until the Revolving Loans and Swing Line Loans
have been paid in full.

 

(c)           Application. 
Within each Loan, prepayments will be applied first to Base Rate Loans,
then to Eurodollar Loans in direct order of Interest Period maturities.  In addition:

 

(i)            Voluntary Prepayments.  Voluntary prepayments shall be applied as
specified by the Borrowers.  Voluntary
prepayments on the Revolving Obligations will be paid by the Administrative Agent
to the Lenders ratably in accordance with their respective interests therein.

 

(ii)           Mandatory Prepayments.  Mandatory prepayments on the Revolving
Obligations will be paid by the Administrative Agent to the Lenders ratably in
accordance with their respective interests therein; provided that mandatory
prepayments in respect of the Revolving Commitments under
subsection (b)(i) above shall be applied to the respective Revolving
Obligations as appropriate.

 

2.07                        Termination or Reduction of Commitments.

 

The
Commitments hereunder may be permanently reduced in whole or in part by notice
from the Borrower Representative to the Administrative Agent; provided that (i)
any such notice thereof must be received by 11:00 a.m.  at least five (5) Business Days prior
to the date of reduction or termination and any such prepayment shall be in a
minimum principal amount of $5,000,000 and integral multiples of $1,000,000 in
excess thereof; and (ii) the Commitments may not be reduced to an amount less
than the Revolving Obligations then outstanding.  The Administrative Agent will give prompt notice to the Lenders
of any such reduction in Commitments. 
Any reduction of the Aggregate Commitments shall be applied to the
Commitment of each Lender according to its Commitment Percentage thereof.  All commitment or other fees accrued until
the effective date of any termination of the Aggregate Commitments shall be
paid on the effective date of such termination.

 

2.08                        Interest.

 

(a)           Subject to the provisions of
subsection (b) below, (i) each Eurodollar Loan (other than Swing Line
Loans) shall bear interest on the outstanding principal amount thereof for each

 

49

 

Interest Period at a rate per annum equal to
the Eurodollar Rate for such Interest Period plus the Applicable Percentage;
(ii) each Loan that is a Base Rate Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Base Rate plus the Applicable Percentage; and (iii) each Swing
Line Loan shall bear interest on the outstanding principal amount thereof from
the applicable borrowing date at a rate per annum equal to the Daily Floating
Eurodollar Rate plus the Applicable Percentage.

 

(b)           If any amount payable by the Borrowers under any Credit
Document is not paid when due (without regard to any applicable grace periods),
whether at stated maturity, by acceleration or otherwise, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable
Law.  Furthermore, upon the written
request of the Required Lenders, while any Event of Default exists, the
Borrowers shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable
Law.  Accrued and unpaid interest on
past due amounts (including interest on past due interest) shall be due and
payable upon demand.

 

(c)           Interest on each Loan shall be due and payable in arrears
on each Interest Payment Date applicable thereto and at such other times as may
be specified herein.  Interest hereunder
shall be due and payable in accordance with the terms hereof before and after
judgment, and before and after the commencement of any proceeding under any
Debtor Relief Law.

 

2.09                        Fees.

 

(a)           Unused Fee. 
From and after the Closing Date, the Borrowers agree to pay the
Administrative Agent for the ratable benefit of the Lenders an unused fee (the
“Unused Fee”) for each calendar quarter (or portion thereof) in an
amount equal to the sum of the Daily Unused Fees incurred during such
period.  The Unused Fee shall accrue at
all times during the Commitment Period (and thereafter so long as Revolving
Obligations shall remain outstanding), including periods during which the
conditions to Extensions of Credit in Section 4.02 may not be met,
and shall be payable quarterly in arrears on the last day of each March, June,
September and December, commencing with the first such date to occur after
the Closing Date, and on the Termination Date (and, if applicable, thereafter
on demand).  The Administrative Agent shall
distribute the Unused Fee to the Lenders pro rata in accordance with the
respective Revolving Commitments of the Lenders.

 

(b)           Upfront and Other Fees.  The Borrowers agree to pay to the Administrative Agent for the
benefit of the Lenders the upfront and other fees provided in the
Administrative Agent’s Fee Letter.

 

(c)           Letter of Credit Fees.

 

(i)            Letter of Credit Fee.  In consideration of the L/C Commitment
hereunder, the Borrowers agree to pay to the Administrative Agent for the
ratable benefit of the Lenders an annual fee (the “Letter of Credit Fee”)
with respect to each Letter of Credit 

 

50

 

issued hereunder equal to
(A) the Applicable Percentage per annum multiplied by (B) the average daily
maximum amount available to be drawn under such Letter of Credit (whether or
not such maximum amount is then in effect under such Letters of Credit) from
the date of issuance to the date of expiration.  The Letter of Credit Fee shall be computed on a quarterly basis
in arrears and shall be payable quarterly in arrears on the first Business Day
after the end of each March, June, September and December, commencing on
the first such date to occur after the Closing Date, and on the Letter of
Credit Expiration Date (and, if applicable, thereafter on demand).

 

(ii)           L/C Issuer Fees.  In addition to the Letter of Credit Fee, the
Borrowers agree to pay to the L/C Issuer for its own account without sharing by
the other Lenders (A) concurrently with the issuance of each such Letter of
Credit, a fronting and negotiation fee of one eighth of one
percent (0.125%) per annum on the maximum amount available to be drawn
under Letters of Credit issued by it from the date of issuance to the date of
expiration, and (B) upon the issuance, amendment, transfer and/or conversion of
any Letters of Credit or any other action or circumstance requiring
administrative action on the part of the L/C Issuer with respect thereto,
customary charges of the L/C Issuer with respect thereto (collectively, the “L/C
Issuer Fees”).

 

(d)           Administrative Agent’s Fees.  The Borrowers agree to pay the Administrative Agent such fees as
provided in the Administrative Agent’s Fee Letter or as may be otherwise agreed
by the Administrative Agent and the Borrowers from time to time.

 

(e)           Other Fees.

 

(i)            The Borrowers shall pay to the
Arranger and the Administrative Agent for their own respective accounts fees in
the amounts and at the times specified in the Administrative Agent’s Fee
Letter.  Such fees shall be fully earned
when paid and shall not be refundable for any reason whatsoever.

 

(ii)           The Borrowers shall pay to the
Lenders such fees as shall have been separately agreed upon in writing in the
amounts and at the times so specified. 
Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.

 

2.10                        Computation
of Interest and Fees.

 

All
computations of interest for Base Rate Loans when the Base Rate is determined
by Bank of America’s “prime rate” shall be made on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed (which
results in more fees or interest, as applicable, being paid than if computed on
the basis of a 365-day year).  Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid, provided that any Loan that is repaid on the same day on which
it is made shall, subject to Section 2.12(a), bear interest for one
day.

 

51

 

2.11                        Payments Generally.

 

(a)           All payments to be made by the Borrowers shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff.  Except as otherwise expressly
provided herein, all payments by the Borrowers hereunder shall be made to the
Administrative Agent, for the account of the Lenders to which such payment is owed,
at the Administrative Agent’s Office in Dollars and in immediately available
funds not later than 2:00 p.m.  on
the date specified herein.  The
Administrative Agent will promptly distribute to each Lender its Commitment
Percentage (or other applicable share as provided herein) of such payment in
like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m.  shall be
deemed received on the immediately succeeding Business Day and any applicable
interest or fee shall continue to accrue.

 

(b)           Subject to the definition of “Interest Period,” if any
payment to be made by the Borrowers shall come due on a day other than a
Business Day, payment shall be made on the next following Business Day, and
such extension of time shall be reflected in computing interest or fees, as the
case may be.

 

(c)           Unless the Borrowers or any Lender has notified the
Administrative Agent, prior to the date any payment is required to be made by
it to the Administrative Agent hereunder, that the Borrowers or such Lender, as
the case may be, will not make such payment, the Administrative Agent may
assume that the Borrowers or such Lender, as the case may be, has timely made
such payment and may (but shall not be so required to), in reliance thereon, make
available a corresponding amount to the Person entitled thereto.  If and to the extent that such payment was
not in fact made to the Administrative Agent in immediately available funds,
then:

 

(i)            if the Borrowers fail to make such
payment, each Lender shall forthwith on demand repay to the Administrative
Agent the portion of such assumed payment that was made available to such
Lender in immediately available funds, together with interest thereon in
respect of each day from and including the date such amount was made available
by the Administrative Agent to such Lender to the date such amount is repaid to
the Administrative Agent in immediately available funds at the Federal Funds
Rate from time to time in effect; and

 

(ii)           if any Lender failed to make such
payment, such Lender shall forthwith on demand pay to the Administrative Agent
the amount thereof in immediately available funds, together with interest
thereon for the period from the date such amount was made available by the
Administrative Agent to the Borrowers to the date such amount is recovered by
the Administrative Agent (the “Compensation Period”) at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in the applicable Borrowing. 
If such Lender does not pay such amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative Agent may make a
demand therefor upon the Borrower, and the Borrowers shall pay such amount to
the Administrative Agent, together with interest thereon for the Compensation
Period at a rate per annum equal to the rate of interest applicable to the
applicable 

 

52

 

Borrowing.  Nothing herein shall be deemed to relieve
any Lender from its obligation to fulfill its Commitment or to prejudice any
rights that the Administrative Agent or the Borrowers may have against any
Lender as a result of any default by such Lender hereunder.

 

A notice of the Administrative Agent to any
Lender or the Borrowers with respect to any amount owing under this
subsection (c) shall be conclusive, absent manifest error.

 

(d)           If any Lender makes available to the Administrative Agent
funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this Article II, and such funds are not made available to
the Borrowers by the Administrative Agent because the conditions to the
applicable Extension of Credit set forth in Section 4.02 are not
satisfied or waived in accordance with the terms hereof or for any other
reason, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.

 

(e)           The obligations of the Lenders hereunder to make Loans and
to fund participations in Letters of Credit and Swing Line Loans are several
and not joint.  The failure of any
Lender to make any Loan or to fund any such participation on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, nor relieve Borrowers from any obligations hereunder to the
Lenders which fulfill such obligations and no Lender shall be responsible for
the failure of any other Lender to so make its Loan or purchase its
participation.

 

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

 

(g)           If at any time insufficient funds are received by or are
available to the Administrative Agent to pay fully all amounts of principal,
L/C Borrowings, interest and fees then due hereunder, such funds shall be
applied (i) first, toward costs and expenses (including Attorney Costs and
amounts payable under Article III) incurred by the Administrative Agent
and each Lender, (ii) second, toward repayment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (iii) third, toward
repayment of principal and L/C Borrowings then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal and L/C
Borrowings then due to such parties.

 

2.12                        Sharing of
Payments.

 

If
any Lender shall obtain on account of the Loans made by it, or the
participations in L/C Obligations or in Swing Line Loans held by it (excluding
any amounts applied by the Swing Line Lender to outstanding Swing Line Loans),
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise, but excluding any payments made to a Lender in error
by the Administrative Agent (which such payments shall be returned by the
Lender to the Administrative Agent immediately upon such Lender’s obtaining
knowledge that such payment was made in error)) in excess of its ratable share
(or other share contemplated 

 

53

 

hereunder) thereof, such Lender shall
immediately (a) notify the Administrative Agent of such fact, and (b) purchase
from the other Lenders such participations in the Loans made by them and/or
such subparticipations in the participations in L/C Obligations or Swing Line
Loans held by them, as the case may be, as shall be necessary to cause such
purchasing Lender to share the excess payment in respect of such Loans or such
participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described
in Section 10.06 (including pursuant to any settlement entered into
by the purchasing Lender in its discretion), such purchase shall to that extent
be rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the amount of such
paying Lender’s required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon.  The Borrowers agree
that any Lender so purchasing a participation from another Lender may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 10.09) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation. 
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under
this Section and will in each case notify the Lenders following any such
purchases or repayments.  Each Lender
that purchases a participation pursuant to this Section shall from and
after such purchase have the right to give all notices, requests, demands,
directions and other communications under this Credit Agreement with respect to
the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.

 

2.13                        Evidence of Debt.

 

(a)           The Extension of Credits made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Extension of Credits made by the Lenders to the Borrowers
and the interest and payments thereon. 
Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrowers hereunder to pay any
amount owing with respect to the Obligations. 
In the event of any conflict between the accounts and records maintained
by any Lender and the accounts and records of the Administrative Agent in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.  The Borrowers shall execute and deliver to the Administrative
Agent a Note for each Lender, requesting a Note, which Note shall evidence such
Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its Note
and endorse thereon the date, Type (if applicable), amount and maturity of its
Loans and payments with respect thereto.

 

(b)           In addition to the accounts and records referred to in
subsection (a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit 

 

54

 

and Swing Line Loans.  In the event of any conflict between the
accounts and records maintained by the Administrative Agent and the accounts
and records of any Lender in respect of such matters, the accounts and records
of the Administrative Agent shall control in the absence of manifest error.

 

2.14                        Joint and Several Liability of the Borrowers.

 

(a)           Each of the Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided by the
Lenders under this Credit Agreement, for the mutual benefit, directly and
indirectly, of each of the Borrowers and in consideration of the undertakings
of each of the Borrowers to accept joint and several liability for the
obligations of each of them.

 

(b)           Each of the Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers with respect to
the payment and performance of all of the Obligations arising under this Credit
Agreement and the other Credit Documents, it being the intention of the parties
hereto that all the Obligations shall be the joint and several obligations of
each of the Borrowers without preferences or distinction among them.

 

(c)           If and to the extent that any of the Borrowers shall fail
to make any payment with respect to any of the obligations hereunder as and
when due or to perform any of such obligations in accordance with the terms
thereof, then in each such event, the other Borrowers will make such payment
with respect to, or perform, such obligation.

 

(d)           The obligations of each Borrower under the provisions of
this Section 2.14 constitute full recourse obligations of such
Borrower, enforceable against it to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Credit Agreement or any other circumstances whatsoever.

 

(e)           Except as otherwise expressly provided herein, each
Borrower hereby waives notice of acceptance of its joint and several liability,
notice of occurrence of any Default or Event of Default (except to the extent
notice is expressly required to be given pursuant to the terms of this Credit
Agreement), or of any demand for any payment under this Credit Agreement
(except to the extent demand is expressly required to be given pursuant to the
terms of this Agreement), notice of any action at any time taken or omitted by
the Lender under or in respect of any of the Obligations hereunder, any
requirement of diligence and, generally, all demands, notices and other
formalities of every kind in connection with this Credit Agreement.  Each Borrower hereby assents to, and waives
notice of, any extension or postponement of the time for the payment of any of
the Obligations hereunder, the acceptance of any partial payment thereon, any
waiver, consent or other action or acquiescence by the Lenders at any time or
times in respect of any default by any Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this Credit
Agreement, any and all other indulgences whatsoever by the Lenders in respect
of any of the Obligations hereunder, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
such Obligations or the addition, substitution or release, in whole or in part,
of any Borrower.  Without limiting the 

 

55

 

generality of the foregoing, each Borrower
assents to any other action or delay in acting or any failure to act on the
part of the Lender, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully with
applicable laws or regulations thereunder which might, but for the provisions
of this Section 2.14, afford grounds for terminating, discharging
or relieving such Borrower, in whole or in part, from any of its obligations
under this Section 2.14, it being the intention of each Borrower
that, so long as any of the Obligations hereunder remain unsatisfied, the
obligations of such Borrower under this Section 2.14 shall not be
discharged except by performance and then only to the extent of such
performance.  The obligations of each
Borrower under this Section 2.14 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any
reconstruction or similar proceeding with respect to any Borrower or any
Lender.  The joint and several liability
of the Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any
Borrower or any Lender.

 

(f)            The provisions of this Section 2.14 are made
for the benefit of the Administrative Agent, L/C issuer, Swing Line Lender, the
Lenders and their respective successors and assigns, and may be enforced by any
such Person from time to time against any of the Borrowers as often as occasion
therefor may arise and without requirement on the part of any Lender first to
marshal any of its claims or to exercise any of its rights against any of the
other Borrowers or to exhaust any remedies available to it against any of the
other Borrowers or to resort to any other source or means of obtaining payment
of any of the Obligations or to elect any other remedy.  The provisions of this Section 2.14
shall remain in effect until all the Obligations hereunder shall have been paid
in full or otherwise fully satisfied. 
If at any time, any payment, or any part thereof, made in respect of any
of the Obligations, is rescinded or must otherwise be restored or returned by
the Lenders upon the insolvency, bankruptcy or reorganization of any of the
Borrowers, or otherwise, the provisions of this Section 2.14 will
forthwith be reinstated and in effect as though such payment had not been made.

 

(f)            Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents, the obligations of each
Borrower hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of
any applicable state law.

 

2.15                        Appointment of Parent as Legal Representative
for Credit Parties.

 

Each of the Credit Parties
hereby appoints the Parent to
act as its exclusive legal representative for all purposes under this Credit
Agreement and the other Credit Documents (including, without limitation, with
respect to all matters related to Borrowings and the repayment of Loans and Letters
of Credit as described in Article II and Article III
hereof) (in such capacity, the “Borrower Representative”).  Each of the Credit Parties acknowledges and
agrees that (a) the Borrower Representative may execute such documents on
behalf of all the Credit Parties (whether as Borrowers or Guarantors) as the
Borrower Representative deems appropriate in its reasonable discretion and each
Credit Party shall be bound by and obligated by 

 

56

 

all of the terms of any such document
executed by the Borrower Representative on its behalf, (b) any notice or other
communication delivered by the Administrative Agent or any Lender hereunder to
the Borrower Representative shall be deemed to have been delivered to each of
the Credit Parties and (c) the Administrative Agent and each of the Lenders
shall accept (and shall be permitted to rely on) any document or agreement
executed by the Borrower Representative on behalf of the Credit Parties (or any
of them).  The Borrowers must act
through the Borrower Representative for all purposes under this Credit
Agreement and the other Credit Documents. 
Notwithstanding anything contained herein to the contrary, to the extent
any provision in this Credit Agreement requires any Credit Party to interact in
any manner with the Administrative Agent or the Lenders, such Credit Party
shall do so through the Borrower Representative.

 

ARTICLE III 

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01                        Taxes.

 

(a)           Any and all payments by any Credit Party to or for the
account of the Administrative Agent or any Lender under any Credit Document
shall be made free and clear of and without deduction for any and all present
or future taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and all liabilities with respect thereto,
excluding, in the case of the Administrative Agent and each Lender, taxes
imposed on or measured by its overall net income, and franchise and excise
taxes imposed on it (in lieu of net income taxes), as a result of a present or
former connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent’s or such Lender’s
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Credit Agreement or any other Credit Document) (all
such non-excluded taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and liabilities being hereinafter
referred to as “Taxes”).  If any
Credit Party shall be required by any Laws to deduct any Taxes from or in
respect of any sum payable under any Credit Document to the Administrative
Agent or any Lender, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section), each of the Administrative Agent
and such Lender receives an amount equal to the sum it would have received had
no such deductions been made, (ii) such Credit Party shall make such
deductions, (iii) such Credit Party shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable Laws, and
(iv) within thirty (30) days after the date of such payment, such Credit Party
shall furnish to the Administrative Agent (which shall forward the same to such
Lender) the original or a certified copy of a receipt evidencing payment
thereof.

 

(b)           In addition, the Borrowers agree to pay any and all
present or future stamp, court or documentary taxes or charges or similar
levies which arise from any payment made under any Credit Document or from the
execution, delivery, performance, enforcement or registration of, or otherwise
with respect to, any Credit Document (hereinafter referred to as “Other
Taxes”).  For 

 

57

 

the avoidance of doubt, “Other Taxes” shall
not include any taxes assessed on the net or gross income of a taxpayer,
regardless of whether such taxes are designated excise or property taxes.

 

(c)           If the Borrowers shall be required to deduct or pay any
Taxes or Other Taxes from or in respect of any sum payable under any Credit
Document to the Administrative Agent or any Lender, the Borrowers shall also
pay to the Administrative Agent or to such Lender, as the case may be, at the
time interest is paid, such additional amount that the Administrative Agent or
such Lender specifies is necessary to preserve the after-tax yield (after
factoring in all taxes, including taxes imposed on or measured by net income)
that the Administrative Agent or such Lender would have received if such Taxes
or Other Taxes had not been imposed.

 

(d)           The Borrowers agree to indemnify the Administrative Agent
and each Lender for (i) the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) that are paid by the Administrative Agent and such Lender
and that are the responsibility of the Borrowers, (ii) amounts payable under Section 3.01(c)
and (iii) any liability (including additions to tax, penalties, interest and
expenses) arising therefrom or with respect thereto, in each case whether or
not such Taxes or Other Taxes were correctly or legally imposed or asserted by
the relevant Governmental Authority. 
Payment under this subsection (d) shall be made within thirty (30)
days after the date the Lender or the Administrative Agent makes a written
demand therefor.

 

3.02                        Illegality.

 

If any Lender determines
that any Law has made it unlawful, or that any Governmental Authority has
asserted that it is unlawful, for any Lender or its applicable Lending Office
to make, maintain or fund Eurodollar Rate Loans, or to determine or charge
interest rates based upon the Eurodollar Rate, then, on notice thereof by such
Lender to the Borrowers through the Administrative Agent, any obligation of
such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate
Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies
the Administrative Agent and the Borrowers that the circumstances giving rise to
such determination no longer exist. 
Upon receipt of such notice, the Borrowers shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such prepayment or conversion, the
Borrowers shall also pay accrued interest on the amount so prepaid or
converted.  Each Lender agrees to
designate a different Lending Office if such designation will avoid the need
for such notice and will not, in the good faith judgment of such Lender,
otherwise be materially disadvantageous to such Lender.

 

3.03                        Inability to Determine Rates.

 

If the Required Lenders
determine that for any reason adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan, or that the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan does
not adequately and fairly reflect the cost to 

 

58

 

such Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Parent and each Lender.  Thereafter, the obligation of the Lenders to
make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice.  Upon receipt of such
notice, the Borrowers may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or, failing that, will
be deemed to have converted such request into a request for a Borrowing of Base
Rate Loans in the amount specified therein.

 

3.04                        Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.

 

(a)           If any Lender determines that as a result of the
introduction of or any change in or in the interpretation of any Law, or such
Lender’s compliance therewith, there shall be any increase in the cost to such
Lender of agreeing to make or making, funding or maintaining Eurodollar Rate
Loans or (as the case may be) issuing or participating in Letters of Credit, or
a reduction in the amount received or receivable by such Lender in connection
with any of the foregoing (excluding for purposes of this subsection (a)
any such increased costs or reduction in amount resulting from (i) Taxes or
Other Taxes (as to which Section 3.01 shall govern), (ii) changes
in the basis of taxation of overall net income or overall gross income by the
United States or any foreign jurisdiction or any political subdivision of
either thereof under the Laws of which such Lender is organized or has its
Lending Office, and (iii) reserve requirements contemplated by Section 3.04(c)),
then from time to time upon demand of such Lender (with a copy of such demand
to the Administrative Agent), the Borrowers shall pay to such Lender such
additional amounts as will compensate such Lender for such increased cost or
reduction.

 

(b)           If any Lender determines that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender’s
obligations hereunder (taking into consideration its policies with respect to
capital adequacy and such Lender’s desired return on capital), then from time
to time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrowers shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction.

 

(c)           The Borrowers shall pay to each Lender, as long as such
Lender shall be required to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as “Eurocurrency liabilities”), additional interest on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive), which shall be due and
payable on each date on which interest is payable on such Loan, provided the
Borrowers shall have received at least fifteen (15) days’ prior written notice
(with a copy to the Administrative Agent) of such additional interest from such
Lender.  If a Lender fails to give
notice fifteen (15) days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable fifteen (15) days from receipt of
such notice.

 

59

 

3.05                        Funding Losses.

 

Upon demand of any Lender
(with a copy to the Administrative Agent) from time to time, the Borrowers
shall promptly compensate such Lender for and hold such Lender harmless from
any loss, cost or expense incurred by it as a result of:

 

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

 

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

 

(c)           any assignment of a Eurodollar Rate
Loan on a day other than the last day of the Interest Period therefor as a
result of a request by the Borrowers pursuant to Section 10.16;

 

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

 

For purposes of calculating amounts payable
by the Borrowers to the Lenders under this Section 3.05, each
Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at
the Eurodollar Base Rate used in determining the Eurodollar Rate for such Loan
by a matching deposit or other borrowing in the London interbank eurodollar
market for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.

 

3.06                        Matters Applicable to all Requests for Compensation.

 

(a)           A certificate of the Administrative Agent or any Lender
claiming compensation under this Article III and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error.  In
determining such amount, the Administrative Agent or such Lender may use any
reasonable averaging and attribution methods.

 

(b)           Upon any Lender’s making a claim for compensation under Section 3.01
or 3.04, the Borrowers may replace such Lender in accordance with Section 10.16.

 

3.07                        Survival.

 

All
of the Borrowers’ obligations under this Article III shall survive
termination of the Aggregate Revolving Commitments and repayment of all other
Obligations hereunder.

 

60

 

ARTICLE IV

CONDITIONS PRECEDENT TO EXTENSION OF CREDITS

 

The
obligation of each Lender to make Extensions of Credit hereunder is subject to
satisfaction of the following conditions precedent:

 

4.01                        Conditions to Initial Extensions of Credit.

 

The obligation of the
Lenders to make the initial Extension of Credit hereunder is subject to the
satisfaction of such of the following conditions in all material respects on or
prior to the Closing Date as shall not have been expressly waived in writing by
the Administrative Agent and Lenders.

 

(a)           Credit Documents, Organization
Documents, Etc.  The Administrative
Agent’s receipt of the following, each of which shall be originals or
facsimiles (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Credit Party, each
dated the Closing Date (or, in the case of certificates of governmental
officials, a recent date before the Closing Date) and each in form and
substance satisfactory to the Administrative Agent and its legal counsel:

 

(i)            executed counterparts of this Credit
Agreement and the other Credit Documents;

 

(ii)           a Note executed by the Borrowers in
favor of each Lender requesting a Note;

 

(iii)          copies of the Organization Documents
of each Credit Party certified to be true and complete as of a recent date by
the appropriate Governmental Authority of the state or other jurisdiction of
its incorporation or organization (other that with respect to the Subsidiary
Guarantors, which Organization Documents shall be certified by a secretary or
assistant secretary), where applicable, and certified by a secretary or
assistant secretary of such Credit Party to be true and correct as of the
Closing Date;

 

(iv)          such certificates of resolutions or
other action, incumbency certificates and/or other certificates of Responsible
Officers of each Credit Party as the Administrative Agent may require
evidencing the identity, authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer in connection with this
Credit Agreement and the other Credit Documents to which such Credit Party is a
party; and

 

(v)           such documents and certifications as
the Administrative Agent may reasonably require to evidence that each Credit
Party is duly organized or formed, and is validly existing, in good standing
and qualified to engage in business in (A) the jurisdiction of its incorporation
or organization and (B) each jurisdiction where its ownership, lease or
operation of properties or the conduct 

 

61

 

of its business requires
such qualification, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

(b)           Opinions of Counsel.  The Administrative Agent shall have
received, in each case dated as of the Closing Date and in form and substance
reasonably satisfactory to the Administrative Agent:

 

(i)            a legal opinion of LeBoeuf, Lamb,
Greene & MacRae, LLP, special New York counsel for the Credit Parties;

 

(ii)           a legal opinion of special local
counsel for the Borrowers for the states of Maryland, California, West
Virginia, Ohio, North Carolina, Washington, Massachusetts, Alabama, Tennessee,
Idaho, Louisiana, Texas  and any other
state in which any Borrowing Base Asset in existence as of the Closing Date is
located or any other state in which the Parent or any Borrower is organized, in
each case addressed to the Administrative Agent, its counsel and the Lenders.

 

(c)           Personal Property Collateral.  The Administrative Agent shall have received
(in each case in form and substance reasonably satisfactory to the
Administrative Agent):

 

(i)            searches of Uniform Commercial Code
filings in the state of incorporation of each Borrower or where a filing would
need to be made in order to perfect the Administrative Agent’s security
interest in the tangible personal property Collateral, copies of the financing
statements on file in such jurisdictions and evidence that no Liens exist other
than Permitted Liens;

 

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

 

(iii)          duly executed notices of grant of
security interest as are necessary, in the Administrative Agent’s sole
discretion, to perfect the Administrative Agent’s security interest in the
Collateral;

 

(iv)          all instruments and chattel paper in
the possession of any of the Borrowers, together with allonges or assignments
as may be necessary or appropriate to perfect the Administrative Agent’s
security interest in the Collateral;

 

(v)           duly executed consents as are
necessary, in the Administrative Agent’s sole discretion, to perfect the
Administrative Agent’s security interest in the Collateral;

 

(vi)          in the case of any tangible personal
property Collateral located at a premises leased by a Borrower, such estoppel
letters, consents and waivers from 

 

62

 

the landlords on such real
property as may be required by the Administrative Agent.; and

 

(vii)         a copy of each Material Contract.

 

(d)           Real Property Collateral
(Borrowing Base Assets).  The
Administrative Agent shall have received, in form and substance reasonably
satisfactory to the Administrative Agent, each of the Borrowing Base Asset
Deliverables with respect to each Real Property Asset set forth on Schedule 5.12
attached hereto and shall have approved each such Real Property Asset as a
Borrowing Base Asset hereunder.

 

(e)           Property and Liability Insurance.  The Administrative Agent shall have received
copies of all insurance policies held by (or for the benefit of) the Parent,
Borrowers or Tenants with respect to the Real Property Assets of the Borrowers,
each such policy shall name the Administrative Agent (on behalf of the Lenders)
as an additional insured or sole loss payee under a standard mortgagee endorsement,
as applicable and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Administrative Agent, that it will give the
Administrative Agent (i) thirty (30) days prior written notice before any
such policy or policies shall be canceled and (ii) fifteen (15) days prior
written notice before any such policy or policies shall be altered.

 

(f)            Officer’s Certificates.  The Administrative Agent shall have received
a certificate or certificates executed by a Responsible Officer of the Parent
as of the Closing Date, in a form satisfactory to the Administrative Agent,
stating that (i) each Credit Party is in compliance with all existing financial
obligations (whether pursuant to the terms and conditions of this Credit
Agreement or otherwise), (ii) all governmental, shareholder and third party
consents and approvals, if any, with respect to the Credit Documents and the
transactions contemplated thereby have been obtained, (iii) no action, suit,
investigation or proceeding is pending or threatened in any court or before any
arbitrator or governmental instrumentality that purports to affect any
Consolidated Party or any transaction contemplated by the Credit Documents, if such
action, suit, investigation or proceeding could have a Material Adverse Effect,
(iv) immediately prior to and following the transactions contemplated herein,
each of the Credit Parties shall be Solvent, and (v) immediately after the
execution of this Credit Agreement and the other Credit Documents, (A) no
Default or Event of Default exists and (B) all representations and warranties
contained herein and in the other Credit Documents are true and correct in all
material respects.

 

(g)           Financial Statements.  Receipt by the Administrative Agent and the
Lenders of (i) the Audited Financial Statements, (ii) pro forma projections of
financial statements (balance sheet, income and cash flows) for each of the
following four (4) fiscal quarters of the Consolidated Parties and each of
the following four (4) fiscal years of the Consolidated Parties and (iii)
such other information relating to the Consolidated Parties as the
Administrative Agent may reasonably require in connection with the structuring
and syndication of credit facilities of the type described herein.

 

63

 

(h)          Opening Compliance
Certificate.  Receipt by the
Administrative Agent of a Compliance Certificate as of the Closing Date signed
by a Responsible Officer of the Parent and including (i) pro forma calculations
for the current fiscal quarter based on the amounts set forth in the Audited
Financial Statements and taking into account the termination of the Terminated
Facility and any Extension of Credit made or requested hereunder as of such
date; (ii) pro forma calculations of all financial covenants contained herein
for each of the following four (4) fiscal quarters (based on the
projections set forth in the materials delivered pursuant to clause (g) of
this Section 4.01); and (iii) pro forma calculations of all
financial covenants contained herein for each of the following four (4)
fiscal years (based on the projections set forth in the materials delivered
pursuant to clause (g) of this Section 4.01).

 

(i)            Consents/Approvals.  The Credit Parties shall have received all
approvals, consents and waivers, and shall have made or given all necessary
filings and notices as shall be required to consummate the transactions
contemplated hereby without the occurrence of any default under, conflict with
or violation of (i) any applicable Law or (ii) any agreement, document or
instrument to which any Credit Party is a party or by which any of them or
their respective properties is bound, except for such approvals, consents,
waivers, filings and notices the receipt, making or giving of which would not
reasonably be likely to (A) have a Material Adverse Effect, or (B) restrain or
enjoin, impose materially burdensome conditions on, or otherwise materially and
adversely affect the ability of any Borrower or any other Credit Party to
fulfill its respective obligations under the Credit Documents to which it is a
party.

 

(j)            Material Adverse Change.  No material adverse change shall have
occurred since December 31, 2003
in the condition (financial or otherwise), business, assets, operations,
management or prospects of (i) the Parent, (ii) the Parent and its Consolidated
Subsidiaries taken as a whole, or (iii) the Borrowers taken as a whole.

 

(k)           Litigation.  There shall not exist any pending or
threatened action, suit, investigation or proceeding against any Credit Party
or any of their Affiliates that could reasonably be expected to have a Material
Adverse Effect or could otherwise materially and adversely effect the transactions
set forth herein or contemplated hereby.

 

(l)            Terminated Facility.  Receipt by the Administrative Agent of
evidence that (i) the loans and other obligations under the Terminated Facility
have been fully, finally and irrevocably repaid (or will be repaid with the
initial Loans made hereunder on the Closing Date), (ii) the commitments under
the Terminated Facility have been fully and finally terminated, and (iii) all
liens and security interests held with respect thereto have been terminated and
released and that all required lender(s) and agent(s) under such Terminated
Facility have executed and delivered to either the Borrowers or the applicable
recording or filing office notices of termination with respect to such liens
and security interests;

 

64

 

(m)          Note Issuance.  Receipt by the Administrative Agent of
evidence that the Note Issuance has occurred, that the Note Documents have been
fully executed and delivered, that the obligations of the Credit Parties thereunder
are unsecured.

 

(n)           Fees and Expenses.  Payment by the Credit Parties to the
Administrative Agent of all fees and expenses relating to the preparation,
execution and delivery of this Credit Agreement and the other Credit Documents
which are due and payable on the Closing Date, including, without limitation,
payment to the Administrative Agent of the fees set forth in the Administrative
Agent’s Fee Letter, and reasonable and documented Attorney Costs, consultants’
fees, travel expenses and all fees and expenses associated with the due
diligence done in connection with and the preparation of documentation with
respect to the Borrowing Base Assets or other Collateral.

 

(o)           Other.  Receipt by the Lenders or the Administrative
Agent of such other documents, instruments, agreements or information as
reasonably requested by any Lender or the Administrative Agent, including, but
not limited to, additional legal opinions, contribution agreements, corporate
resolutions, indemnifications, information regarding litigation, tax,
accounting, labor, insurance, pension liabilities (actual or contingent), real
estate leases, material contracts, debt agreements, property ownership and
contingent liabilities of the Credit Parties.

 

4.02                        Conditions
to Extensions of Credit.

 

The obligation of any Lender
to make any Extension of Credit hereunder is subject to the satisfaction of
such of the following conditions on or prior to the proposed date of the making
of such Extension of Credit:

 

(a)           The Administrative Agent shall receive
the applicable Request for Extension of Credit and the conditions set forth in Section
4.01 for the initial Extension of Credit shall have been met as of the
Closing Date;

 

(b)           No Default shall have occurred and be
continuing immediately before the making of such Extension of Credit and no
Default shall exist immediately thereafter;

 

(c)           The representations and warranties of
the Borrowers made in or pursuant to the Credit Documents shall be true in all
material respects on and as of the date of such Extension of Credit;

 

(d)           Immediately following the making of
such Extension of Credit the sum of the outstanding principal balance of the
Revolving Obligations shall not exceed the lesser of (i) the Aggregate
Revolving Committed Amount and (ii) the Borrowing Base Amount for such date.

 

The making of such Extension of Credit
hereunder shall be deemed to be a representation and warranty by the Borrowers
on the date thereof as to the facts specified in clauses (b), (c), and (d)
of this Section.

 

65

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

The Borrowers hereby represent and warrant
(on behalf of themselves, the Parent or the Credit Parties as a whole, as
applicable) that:

 

5.01                        Financial Statements; No Material Adverse Effect.

 

(a)           The Audited Financial Statements (i) were prepared in
accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein; (ii) fairly present the
financial condition of the Consolidated Parties as of the date thereof and
their results of operations for the period covered thereby in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) show all material indebtedness and
other liabilities, direct or contingent, of the Consolidated Parties as of the
date thereof, including liabilities for taxes, material commitments and
Indebtedness.

 

(b)           During the period from December 31, 2003, to and including
the Closing Date, there has been no sale, transfer or other disposition by any
Consolidated Party of any material part of the business or Property of the
Consolidated Parties, taken as a whole, and no purchase or other acquisition by
any of them of any business or property (including any Capital Stock of any
other Person) material in relation to the consolidated financial condition of
the Consolidated Parties, taken as a whole, in each case, which is not
reflected in the foregoing financial statements or in the notes thereto and has
not otherwise been disclosed in writing to the Lenders on or prior to the
Closing Date.

 

(c)           The financial statements delivered pursuant to Section 6.01(a)
and (b) have been prepared in accordance with GAAP (except as may
otherwise be permitted under Section 6.01(a) and (b)) and
present fairly (on the basis disclosed in the footnotes to such financial
statements) the consolidated financial condition, results of operations and
cash flows of the Consolidated Parties as of such date and for such periods.

 

(d)           Since the date of the Audited Financial Statements, there
has been no event or circumstance, either individually or in the aggregate,
that has had or could reasonably be expected to have a Material Adverse Effect.

 

5.02                        Corporate
Existence and Power.

 

Each of the Credit Parties
is a corporation, partnership or limited liability company duly organized or
formed, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has all organizational powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and is duly qualified as a
foreign entity and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its business 

 

66

 

requires such qualification, other than in
such jurisdictions where the failure to be so qualified and in good standing
would not, in the aggregate, have a Material Adverse Effect.

 

5.03                        Corporate and Governmental Authorization; No Contravention.

 

The execution, delivery and
performance by each Credit Party of each Credit Document to which such Person
is party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, (i) any
Contractual Obligation to which such Person is a party or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law
(including Regulation U or Regulation X issued by the FRB).

 

5.04                        Binding Effect.

 

This Credit Agreement has
been, and each other Credit Document, when delivered hereunder, will have been,
duly executed and delivered by each Credit Party that is a party thereto.  This Credit Agreement constitutes, and each
other Credit Document when so delivered will constitute, a legal, valid and
binding obligation of such Credit Party, enforceable against each Credit Party
that is a party thereto in accordance with its terms except as enforceability
may be limited by applicable Debtor Relief Laws and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).

 

5.05                        Litigation.

 

There are no actions, suits,
proceedings, claims or disputes pending or, to the knowledge of the Responsible
Officers of the Credit Parties, threatened at law, in equity, in arbitration or
before any Governmental Authority, by or against any Credit Party or against
any of its properties or revenues that (a) purport to affect or pertain to this
Credit Agreement or any other Credit Document, or any of the transactions
contemplated hereby or (b) either individually or in the aggregate, can
reasonably be expected to be determined adversely, and if so determined to have
a Material Adverse Effect.

 

5.06                        Compliance
with ERISA.

 

(a)           Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other Federal or state
Laws.  Each Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the knowledge
of the Responsible Officers of the Credit Parties, nothing has occurred which
would prevent, or cause the loss of, such qualification.  The Parent and each ERISA Affiliate have
made all required contributions to each Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.

 

67

 

(b)           There are no pending or, to the knowledge of the
Responsible Officers of the Credit Parties, threatened claims (other than routine
claims for benefits), actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan that could reasonably be expected to have a
Material Adverse Effect.  Neither the
Parent nor any ERISA Affiliate or, to the knowledge of the Responsible Officers
of the Credit Parties, any other Person has engaged in any prohibited
transaction or violation of the fiduciary responsibility rules under ERISA or
the Code with respect to any Plan that has resulted or could reasonably be
expected to result in a Material Adverse Effect.

 

(c)           (i)            No
ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension
Plan has any Unfunded Pension Liability; (iii) the Parent nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) the Parent nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and
(v) the Parent nor any ERISA Affiliate has engaged in a transaction that could
be subject to Sections 4069 or 4212(c) of ERISA.

 

5.07                        Environmental
Matters.

 

Except as could not
reasonably be expected to have a Material Adverse Effect:

 

(a)           To the knowledge of the Responsible
Officers of the Parent and the Borrowers, each of the Borrowing Base Assets and
all operations with respect to each of the Borrowing Base Assets and the Real
Property Assets owned by the Borrowers are in compliance with all applicable
Environmental Laws in all material respects and there are no conditions
relating to the Borrowing Base Assets, the other Real Property Assets owned by
the Borrowers or the Businesses of the Borrowers that are likely to give rise
to liability under any applicable Environmental Laws.

 

(b)           To the knowledge of the Responsible Officers
of the Parent and the Borrowers, none of the Borrowing Base Assets or other
Real Property Assets owned by the Borrowers contains, or has previously
contained, any Hazardous Substances at, on or under such property in amounts or
concentrations that constitute a violation of, or could give rise to liability
under, applicable Environmental Laws.

 

(c)           Neither the Parent nor any Borrower
has received any written or verbal notice of, or inquiry from any Governmental
Authority regarding, any violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or compliance
with Environmental Laws with regard to any of the Borrowing Base Assets, any of
the other Real Property Assets owned by the Borrowers or the Businesses of the
Borrowers, nor does any Responsible Officer of the Parent or any Borrower have
knowledge or reason to believe that any such notice will be received or is
being threatened.

 

68

 

(d)           Neither the Parent nor any Borrower
has generated, treated, stored or disposed of Hazardous Substances at, on or
under any of the Borrowing Base Assets or any of the other Real Property Assets
owned by the Borrowers in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law.  To the knowledge of the Responsible Officers of the Parent and
the Borrowers, Hazardous Substances have not been transported or disposed of
from the Borrowing Base Assets or the other Real Property Assets owned by the
Borrowers, in each case by or on behalf of any Borrower, in violation of, or in
a manner that is likely to give rise to liability under, any applicable
Environmental Law.

 

(e)           To the knowledge of the Responsible
Officers of the Parent and the Borrowers, no judicial proceeding or
governmental or administrative action is pending or threatened, under any
Environmental Law to which any Borrower is or will be named as a party, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Borrowers, the
Borrowing Base Assets, the other Real Property Assets owned by the Borrowers or
the Businesses of the Borrowers.

 

5.08                        Margin Regulations; Investment Company Act; Public Utility Holding Company Act.

 

(a)           No Credit Party is engaged or will
engage, principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U
issued by the FRB), or extending credit for the purpose of purchasing or
carrying margin stock and no part of the Letters of Credit or proceeds of the
Loans will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin stock.

 

(b)           None of the Parent or any Borrower
(i) is a “holding company,” or a “subsidiary company” of a “holding company,”
or an “affiliate” of a “holding company” or of a “subsidiary company” of a
“holding company,” within the meaning of the Public Utility Holding Company Act
of 1935, (ii) is or is required to be registered as an “investment company”
under the Investment Company Act of 1940 or (iii) subject to regulation under
any other Law which limits its ability to incur the Obligations.

 

5.09                        Compliance
with Laws.

 

(a)           Each Credit Party is in compliance in
all material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its properties, except in such
instances in which (a) such requirement of Law or order, writ, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith, either individually or in the
aggregate, could not reasonably be expected to have a  Material Adverse Effect.

 

(b)           To the knowledge of the Responsible
Officers of the Borrowers, each of the Borrowing Base Assets, and the uses of
the Borrowing Base Assets, are in 

 

69

 

compliance in all material
respects with the requirements of all Laws and all orders, writs, injunctions
and decrees applicable to the Borrowing Base Assets (including, without
limitation, building and zoning laws and Healthcare Laws), except in such instances
in which (i) such requirement of Law or order, writ, injunction or decree is
being contested in good faith by appropriate proceedings diligently conducted
or (ii) the failure to comply therewith, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

5.10                        Ownership
of Property; Liens.

 

Each Borrower has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of its business
(including, in any case, each of the Borrowing Base Assets), except for such
defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. 
The property of the Borrowers is subject to no Liens, other than
Permitted Liens.

 

5.11                        Corporate
Structure; Capital Stock, Etc.

 

As of the Closing Date and
as of each date on which such schedule is subsequently updated pursuant to the
terms hereof through the delivery of a Compliance Certificate, Schedule 5.11
correctly sets forth the corporate structure of Parent and each of its
Subsidiaries (including each of the Subsidiary Guarantors), as well as the
entity and ownership structure of the Parent and the Borrowers and the correct
legal name and the jurisdiction of formation of the Parent and each of its
Subsidiaries.  Also included on Schedule
5.11 is a listing of the number of shares of each class of Capital Stock
outstanding with respect to each Borrower, the Persons holding equity interests
in such Borrowers, their percentage equity or voting interest in the Borrowers
and the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and all other similar rights with respect
thereto.  Except as set forth on Schedule
5.11, as of the Closing Date: (i) no Borrower has issued to any third party
any securities convertible into any equity interest in such Borrower, or any
options, warrants or other rights to acquire any securities convertible into
any such equity interest, and (ii) the outstanding Capital Stock of each
Borrower is owned by the Persons indicated on Schedule 5.11, is
validly issued, fully paid and non-assessable, and is free and clear of all
Liens, warrants, options and rights of others of any kind whatsoever.  Each Person owning a Borrowing Base Property
is a Borrower hereunder.  Each Borrower
is a Wholly Owned Subsidiary of the Parent. 
No Borrower holds or otherwise has any interest in any Capital Stock of
any other Person.   Each Subsidiary of
the Parent is either a Borrower, a Subsidiary Guarantor or an Unrestricted
Subsidiary.

 

5.12                        Real
Property Assets; Leases.

 

(a)           Part I of Schedule 5.12
(as updated pursuant to the terms hereof through the delivery of a Compliance
Certificate) is a true and complete list as of the Closing Date of (i) the
street address of each Borrowing Base Asset, (ii) the Borrower which owns each
such Borrowing Base Asset, (iii) the facility type of each such Borrowing Base
Asset, (iv) the Facility Leases to which each such Borrowing Base Asset is
subject, and (v) the name and address of the applicable Tenant.  The applicable Borrower has a 

 

70

 

fee simple title to or holds
a ground lease interest pursuant to an Eligible Ground Lease in each Borrowing
Base Asset listed on Schedule 5.12 hereto and such schedule correctly sets
forth the type of interest (fee or leasehold) held by each Borrower in each
Borrowing Base Asset.  Each parcel of
real property identified on Part I of Schedule 5.12 is a Real
Property Asset that qualifies as a Borrowing Base Asset pursuant to the terms
hereof and which is subject to a first priority lien (subject to Permitted
Liens) in favor of the Administrative Agent (for the benefit of the Lenders)
pursuant to a properly-recorded Mortgage Instrument and Assignment of Leases.

 

(b)           Part II of Schedule 5.12
(as updated pursuant to the terms hereof through the delivery of a Compliance
Certificate) is a true and complete list as of the Closing Date of (i) the
street address of each other Real Property Asset owned by any Borrower, (ii)
the applicable Borrower which owns each such other Real Property Asset, (iii)
the facility type of each such other Real Property Asset, (iv) the lease(s) to
which each such other Real Property Asset is subject, and (v) the name and
address of the Tenants with respect to each such other Real Property Asset.

 

(c)           Part III of Schedule 5.12
(as updated pursuant to the terms hereof through the delivery of a Compliance
Certificate) properly sets forth the names and addresses of all Tenants with
respect to the Real Property Assets who are, to the knowledge of any
Responsible Officer of the Borrowers, (i) delinquent in paying any franchise,
business, intangible, personal property taxes or real estate taxes due beyond
the later of the applicable grace period with respect thereto, if any, and
forty five (45) days and/or (ii) the subject of any Bankruptcy Event.

 

(d)           Part IV of Schedule 5.12
(as updated pursuant to the terms hereof through the delivery of a Compliance
Certificate) properly identifies all Facility Leases in existence as of the
date hereof with respect to the Borrowing Base Assets, together with the
applicable Tenant and the remaining term of each such Facility Lease.

 

(e)           Part V of Schedule 5.12
(as updated pursuant to the terms hereof through the delivery of a Compliance
Certificate) properly sets forth all subleases with respect to the Facility
Leases relating to any of the Borrowing Base Assets, the termination of which
could result in a material adverse effect on the applicable Tenant’s ability to
continue to make scheduled payments to the applicable Borrower under the
applicable Facility Lease, together with the applicable tenant with respect
thereto, the remaining term of the sublease and whether or not such tenant is
current on payments due thereunder.

 

(f)            To the knowledge of the Responsible
Officers of the Borrowers, each of the facilities located on the Borrowing Base
Assets owned by the Borrowers is currently in good repair, working order and
condition without any material structural or engineering defects or
conditions.  To the knowledge of the
Responsible Officers of the Borrowers, no condemnation or condemnation
proceeding has been instituted and remained undismissed for a period in excess
of thirty (30) consecutive days, in each case, with respect to a material
portion of any Real Property Asset listed as a Borrowing Base 

 

71

 

Asset on Part I of Schedule
5.12.  To the knowledge of the
Responsible Officers of the Borrowers, no material casualty event has occurred
with respect to the improvements located on any Real Property Asset listed as a
Borrowing Base Asset on Part I of Schedule 5.12 which has not been (or,
if applicable) will not be able to be) fully remediated with available
insurance proceeds.

 

5.13                        Material Contracts; Additional Contractual Obligations.

 

Schedule 5.13 (as updated pursuant to the terms hereof
through the delivery of a Compliance Certificate) is a true, correct and
complete listing of all Material Contracts as of the Closing Date (other than
those set forth on Part V of Schedule 5.12).  No event of default, or event or condition which with the giving
of notice, the lapse of time, a determination of materiality, the satisfaction
of any other condition or any combination of the foregoing, would constitute
such an event of default, exists with respect to any such Material
Contract.  Except as set forth on Schedule
5.13, no Borrower is a party to any contract or agreement that is subject
to the Federal Assignment of Claims Act, as amended (31 U.S.C.
Section 3727) or any similar state or local law.

 

5.14                        Investments.

 

All Investments of each
Borrower are Investments permitted pursuant to Section 7.04(b).

 

5.15                        Solvency.

 

The Credit Parties are
Solvent on a consolidated basis.

 

5.16                        Taxes.

 

The Credit Parties have
filed all Federal, state and other material tax returns and reports required to
be filed, and have paid all Federal, state and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties (including all Real Property Assets), income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings diligently conducted and for which adequate reserves
have been established in accordance with GAAP. 
To the knowledge of the Responsible Officers of the Parent and the
Borrowers, there is no proposed tax assessment against any Credit Party that
would, if made, have a Material Adverse Effect.

 

5.17                        REIT Status.

 

The Parent is taxed as a
“real estate investment trust” within the meaning of Section 856(a) of the
Code and each of the Borrowers are Qualified REIT Subsidiaries.

 

5.18                        Insurance.

 

All insurance coverage of
the Borrowers and all insurance coverage of the Tenants with respect to the
Real Property Assets of the Borrowers, in each case, as in existence as of the 

 

72

 

Closing Date and as of each date on which
such schedule is subsequently updated pursuant to the terms hereof through the
delivery of a Compliance Certificate, is described on the certificates attached
hereto as Schedule 5.18.

 

5.19                        Healthcare;
Facility Representations and Warranties.

 

(a)           Compliance With Healthcare Laws.  Without limiting the generality
of Section 5.09 hereof or any other representation or warranty made
herein, neither the Parent nor any of the Borrowers and, to the knowledge of
the Responsible Officers of the Parent and the Borrowers, no Tenant, is in
material violation of any applicable statutes, laws, ordinances, rules and
regulations of any Governmental Authority with respect to regulatory matters
primarily relating to patient healthcare (including without limitation
Section 1128B(b) of the Social Security Act, as amended, 42 U.S.C.
Section 1320a-7(b) (Criminal Penalties Involving Medicare or State Health
Care Programs), commonly referred to as the “Federal Anti-Kickback Statute,”
and the Social Security Act, as amended, Section 1877, 42 U.S.C.
Section 1395nn (Prohibition Against Certain Referrals), commonly referred
to as “Stark Statute” (collectively, “Healthcare Laws”) where such
violation would result in a Material Adverse Effect.  The Parent and each of the Borrowers (if applicable) and, to the
knowledge of the Responsible Officers of the Parent and the Borrowers, each of
the Tenants, have maintained in all material respects all records required to
be maintained by the Joint Commission on Accreditation of Healthcare
Organizations, the Food and Drug Administration, Drug Enforcement Agency and
State Boards of Pharmacy and the federal and state Medicare and Medicaid
programs as required by the Healthcare Laws and, to the knowledge of the
Responsible Officers of the Parent and the Borrowers, there are no notices of
material violations of the Healthcare Laws with respect to the Parent, the
Borrowers, any Tenant or any of the Real Property Assets owned by any Borrower.

 

(b)           Licenses,
Permits, and Certifications.

 

(i)            To
the knowledge of the Responsible Officers of the Parent and the Borrowers, each
Tenant has such permits, licenses, franchises, certificates and other approvals
or authorizations of Governmental Authorities as are necessary under applicable
law or regulations to own its properties and to conduct its business and to
receive reimbursement under Medicare and Medicaid (including without limitation
such permits as are required under such federal, state and other health care
laws, and under such HMO or similar licensure laws and such insurance laws and
regulations, as are applicable thereto), if the failure to obtain such permits,
licenses, franchises, certificates and other approvals or authorizations could
reasonably be expected to result in a Material Adverse Effect.  Notwithstanding the foregoing, no Borrower is the owner of any licenses or
permits required for the provision of Medical Services at any of the Real
Property Assets.

 

(ii)           To
the knowledge of the Responsible Officers of the Parent and the Borrowers, each
Tenant has all Medicare, Medicaid and related agency supplier 

 

73

 

billing
number(s) and related documentation necessary to submit reimbursement claims to
Medicare and/or Medicaid for any Medical Service furnished by such Person in
any jurisdiction where it conducts business if the failure to obtain billing
number(s) or related documentation could reasonably be expected to result in a
Material Adverse Effect.  To the
knowledge of the Responsible Officers of the Parent and the Borrowers, no
Tenant is currently subject to suspension, revocation, renewal or denial of its
Medicare and/or Medicaid certification, supplier billing number(s), or Medicare
and/or Medicaid participation agreement(s).

 

(iii)          To
the knowledge of the Responsible Officers of the Parent and the Borrowers, each of the facilities located on the Real
Property Assets owned by the Borrowers are currently accredited by the Joint Commission on Accreditation of
Healthcare Organizations (“JCAHO”) or any other required
Governmental Authority and is duly licensed to operate in the manner currently
operated, as required under applicable Laws. 
In addition, to the knowledge of
the Responsible Officers of the Parent and the Borrowers, each such facility
is in compliance in all material respects with the applicable provisions of
every law, ordinance, statute, regulation, order, standard, restriction or rule
of any federal, state or local government or quasi-governmental body, agency,
board or authority having jurisdiction over the operation thereof, including,
without limitation, health care and fire safety codes.

 

(c)           HIPAA
Compliance.  Neither the Parent nor
any Borrower is a “covered entity” within the meaning of HIPAA.  In addition, to the knowledge of the
Responsible Officers of the Parent and the Borrowers, neither the Parent nor
any Borrower is the subject of any civil or criminal penalty, process, claim,
action or proceeding, or any administrative or other regulatory review, survey,
process or proceeding (other than routine surveys or reviews conducted by any
government health plan or other accreditation entity) that could reasonably be
expected to cause a Material Adverse Effect.

 

(d)           Medical
Services.  No Credit Party is in the
business of providing Medical Services.

 

ARTICLE VI

AFFIRMATIVE COVENANTS

 

The
Borrowers hereby covenant and agree (on their own behalf and on behalf of the
Subsidiary Guarantors and/or Parent, as applicable) that until the Obligations,
together with interest, fees and other obligations hereunder, have been paid in
full and the Revolving Commitments hereunder shall have terminated:

 

74

 

6.01                        Financial
Statements.

 

The Borrowers shall deliver
to the Administrative Agent (and the Administrative Agent shall disseminate
such information pursuant to the terms of Section 6.02 hereof), in
form and detail reasonably satisfactory to the Administrative Agent and the
Required Lenders:

 

(a)           as soon as available, but in any
event within one hundred fifteen (115) days after the end of each fiscal year
of the Parent, a consolidated balance sheet of the Consolidated Parties as at
the end of such fiscal year, and the related consolidated statements of
earnings, shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal
year, all in reasonable detail and prepared in accordance with GAAP, audited
and accompanied by a report and opinion of an independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject to any “going
concern” or like assumption, qualification or exception or any assumption,
qualification or exception as to the scope of such audit; provided, that the
Administrative Agent hereby agrees that a Form 10-K of the Parent in form
similar to that delivered as part of the Audited Financial Statements shall
satisfy the requirements of this Section 6.01(a); and

 

(b)           commencing with the fiscal quarter
beginning on March 31, 2004 (regardless of whether the Closing Date occurs
prior to or following such date), as soon as available, but in any event within
sixty (60) days after the end of each of the first three (3) fiscal quarters of
each fiscal year of the Parent, a consolidated balance sheet of the
Consolidated Parties as at the end of such fiscal quarter, and the related
consolidated statements of earnings, shareholders’ equity and cash flows for
such fiscal quarter and for the portion of the Parent’s fiscal year then ended,
setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by
a Responsible Officer of the Parent as fairly presenting the financial
condition, results of operations, shareholders’ equity and cash flows of the
Consolidated Parties in accordance with GAAP, subject only to normal year-end
audit adjustments and the absence of footnotes; provided, that the
Administrative Agent hereby agrees that a Form 10-Q of the Parent in form
similar to that delivered to the SEC shall satisfy the requirements of this Section
6.01(b).

 

6.02                        Certificates;
Other Information.

 

The Borrowers shall deliver
to the Administrative Agent (and the Administrative Agent shall disseminate
such information pursuant to the terms of this Section 6.02), in
form and detail reasonably satisfactory to the Administrative Agent and the
Required Lenders:

 

(a)           concurrently with the delivery of the
financial statements referred to in Sections 6.01(a) and (b),
a duly completed Compliance Certificate signed by a Responsible Officer of the
Parent;

 

75

 

(b)           within fifty (50) days after the end
of each fiscal quarter, a Borrowing Base Certificate calculated as of the end
of the immediately prior fiscal quarter, duly completed and executed by a
Responsible Officer of the Parent; provided, however, the Borrower
Representative may, at its option, provide an updated Borrowing Base
Certificate more frequently than quarterly;

 

(c)           within forty five (45) days following
the date on which such statements and calculations are due to the respective
Borrowers from the respective Tenants, quarterly operating statements and
Occupancy Rate calculations concerning each of the then-existing Borrowing Base
Assets;

 

(d)           within thirty (30) days after the end
of each fiscal year of the Parent, beginning with the fiscal year ending
December 31, 2004, an annual operating forecast of the Parent containing,
among other things, pro forma financial statements for the then current fiscal
year and updated versions of the pro forma financial projections delivered in
connection with Section 4.01(g) hereof;

 

(e)           promptly after any request by the
Administrative Agent, copies of any detailed audit reports, management letters
or recommendations submitted to the board of directors by the independent
accountants of the Parent (or the audit committee of the board of directors of
the Parent) in respect of the Parent (and, to the extent any such reports,
letters or recommendations are prepared separately for any one or more of the
Borrowers, such Borrower(s)) by independent accountants in connection with the
accounts or books of the Parent (or such Borrower(s)) or any audit of the
Parent (or such Borrower(s));

 

(f)            promptly after the same are
available, (i) copies of each annual report, proxy or financial statement or
other report or communication sent to the stockholders of the Parent, and
copies of all annual, regular, periodic and special reports and registration
statements which the Parent may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934 or to a holder
of any Indebtedness owed by the Parent in its capacity as such holder and not
otherwise required to be delivered to the Administrative Agent pursuant hereto
and (ii) upon the request of the Administrative Agent, all reports and written
information to and from the United States Environmental Protection Agency, or
any state or local agency responsible for environmental matters, the United
States Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor agencies or
authorities concerning environmental, health or safety matters;

 

(g)           promptly upon receipt thereof, a copy
of any other report or “management letter” submitted by independent accountants
to the Parent or any Borrower in connection with any annual, interim or special
audit of the books of the Parent (or any such Borrower(s));

 

76

 

(h)           promptly upon any Responsible Officer
of the Parent or the Borrowers becoming aware thereof, notice of (i) the
existence of any contemplated offering, placement or arrangement which will
constitute an Event of Default under the terms of Section 8.01(l),
(ii) any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect and (iii) any other Default or Event of Default; and

 

(i)            promptly, such additional
information regarding the business, financial or corporate affairs of the
Borrowers, or compliance with the terms of the Credit Documents, as the
Administrative Agent or any Lender (through the Administrative Agent) may from
time to time reasonably request.

 

Documents required to be delivered pursuant
to Section 6.01(a) or (b) or Section 6.02(b), (c),
(d), or (e) may be delivered electronically and if so delivered,
shall be deemed to have been delivered on the date (i) on which the Parent or
the Borrowers post such documents, or provides a link thereto on the Parent’s
website on the Internet at the website address listed on Schedule 10.02;
or (ii) on which such documents are posted by the Administrative Agent (on the
Borrowers’ behalf) on IntraLinks/IntraAgency or another relevant website, if
any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided that: (A) the Borrowers shall deliver paper copies of such
documents to the Administrative Agent or any Lender (through the Administrative
Agent) that requests the Borrowers to deliver such paper copies until a written
request to cease delivering paper copies is given by the Administrative Agent
or such Lender (through the Administrative Agent) and (B) the Borrowers shall
notify (which may be by facsimile or electronic mail) the Administrative Agent
and each Lender (through the Administrative Agent) of the posting of any such
documents (each Lender to which delivery of such documents shall be made by posting
to any such website shall have been given access to such website on or prior to
the date of such posting) and provide to the Administrative Agent by electronic
mail electronic versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein,
in every instance the Parent shall be required to provide paper copies of the
Compliance Certificates required by Section 6.02(a) to the
Administrative Agent and each of the Lenders (through the Administrative
Agent).  Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Parent or the
Borrowers with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

 

The Borrowers (and
the Borrower Representative) hereby acknowledge that (x) the Administrative
Agent will make available to the Lenders materials and/or information provided
by or on behalf of the Borrowers hereunder (collectively, the “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (y) certain of the
Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with
respect to the Borrowers or their securities) (each, a “Public Lender”).  The Borrowers (and the Borrower Representative)
hereby further agree that (ww) all Borrower Materials that are to be made
available to Public Lenders shall be clearly and conspicuously marked “PUBLIC”
which, at a minimum, shall mean that the word “PUBLIC” 

 

77

shall appear prominently
on the first page thereof (xx) by marking Borrower Materials “PUBLIC,” the
Borrowers shall be deemed to have authorized the Administrative Agent and the
Lenders to treat such Borrower Materials as either publicly available information
or not material information (although it may be sensitive and proprietary) with
respect to the Borrowers or their securities for purposes of United States
federal and state securities laws; (yy) all Borrower Materials marked “PUBLIC”
are permitted to be made available through a portion of the Platform designated
as “Public;” and (zz) the Administrative Agent shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not marked as “Public.”

 

6.03                        Preservation of Existence and Franchises.

 

Each
Credit Party will do all things necessary to preserve and keep in full force
and effect its existence, rights, franchises and authority.  Each Credit Party shall remain qualified and
in good standing in each jurisdiction in which the failure to so qualify and be
in good standing could have a Material Adverse Effect.

 

6.04                        Books and Records.

 

Each
Credit Party will keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP.

 

6.05                        Compliance with Law.

 

Each
Credit Party will comply with all Laws, rules, regulations and orders, and all
applicable restrictions imposed by all Governmental Authorities (including,
without limitation, building and zoning laws and all Healthcare Laws),
applicable to it and all of its real and personal property (including, without
limitation, each Real Property Asset owned by any Borrower) if noncompliance
with any such law, rule, regulation, order or restriction could have a Material
Adverse Effect.  Each Borrower will
comply with all terms and conditions of all Material Contracts to which it is a
party to the extent that that such non-compliance could have a Material Adverse
Effect.

 

6.06                        Payment of Taxes and Other Indebtedness.

 

Each
Credit Party will pay and discharge (or cause to be paid or discharged) (a) all
taxes (including, without limitation, any corporate or franchise taxes),
assessments and governmental charges or levies imposed upon it, or upon its
income or profits, or upon any of its properties (including, without
limitation, each Real Property Asset owned by any Borrower), before they shall
become delinquent, (b) all lawful claims (including claims for labor, materials
and supplies) which, if unpaid, might give rise to a Lien (other than a
Permitted Lien) upon any of its properties, and (c) except as prohibited
hereunder, all of its other Indebtedness as it shall become due; provided,
however, that no Credit Party shall be required to pay any such tax,
assessment, charge, levy, claim or Indebtedness which is being contested in
good faith by appropriate proceedings and as to which adequate reserves
therefor have been established in accordance with GAAP, unless the failure to
make any such payment (i) could give rise to an immediate right to

 

78

 

foreclose on a Lien
securing such amounts in respect of any Real Property Assets owned by the
Borrower or (ii) could have a Material Adverse Effect.

 

6.07                        Insurance.

 

In
addition to the requirements of any of the other Credit Documents, the Parent
and the Borrowers shall maintain, or with respect to any Borrowing Base Asset
leased by a Borrower to an Eligible Tenant, cause the applicable Eligible
Tenant, to maintain, insurance policies and coverages indicated on the
certificates attached hereto as Schedule 5.18, subject to changes
in policies and coverages based on the availability of insurance for Persons
engaged in similar types of properties in the applicable location, in each case
as approved by the Administrative Agent in its reasonable discretion.  The Borrowers will deliver to the
Administrative Agent (a) within ten (10) days of receipt of notice from any
insurer a copy of any notice of cancellation or material change in coverage
from that existing on the date hereof and (b) promptly upon receipt, notice of
any cancellation or nonrenewal of coverage by the Parent or any Borrower
thereof.  The Administrative Agent shall
be named as loss payee or mortgagee, as its interest may appear, and/or
additional insured with respect to any insurance procured with respect to the
Borrowing Base Assets and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Administrative Agent, that it will give the
Administrative Agent (i) thirty (30) days prior written notice before any
such policy or policies shall be canceled and (ii) fifteen (15) days prior written
notice before any policy or policies shall be altered.

 

6.08                        Maintenance of Property.

 

In
addition to the requirements of any of the other Credit Documents, the
Borrowers shall (a) protect and preserve, or cause to be protected and
preserved all Borrowing Base Assets and maintain, or cause to be maintained, in
good repair, working order and condition all Borrowing Base Assets, ordinary
wear and tear excepted, and (b) from time to time make, or cause to be made,
all needed and appropriate repairs, renewals, replacements and additions to
such Borrowing Base Assets, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.  No Borrower owns any material intellectual
property.

 

6.09                        Performance
of Obligations.

 

The
Credit Parties will pay and discharge at or before maturity, or prior to
expiration of applicable notice, grace and curative periods, all their
respective material obligations and liabilities, including, without limitation,
tax liabilities, except where the same may be contested in good faith by
appropriate proceedings, and will maintain, in accordance with GAAP,
appropriate reserves for the accrual of any of the same.

 

6.10                        Visits and Inspections.

 

The
Borrowers (subject to applicable Facility Leases), shall permit representatives
or agents of any Lender or the Administrative Agent, from time to time, and, if
no Event of Default

 

79

 

shall have occurred and
be continuing, after reasonable prior notice, but not more than twice annually
and only during normal business hours to: (a) visit and inspect all Borrowing
Base Assets to the extent any such right to visit or inspect is within the
control of such Person; (b) inspect and make extracts from their respective
books and records, including but not limited to management letters prepared by
independent accountants; and (c) discuss with its principal officers, and its
independent accountants, its business, properties, condition (financial or
otherwise), results of operations and performance.  If requested by the Administrative Agent, the Parent or the
Borrowers, as applicable, shall execute an authorization letter addressed to
its accountants authorizing the Administrative Agent or any Lender to discuss
the financial affairs of the Parent or any Borrower with its accountants.

 

6.11                        Use
of Proceeds/Purpose of Loans and Letters of Credit.

 

The
Borrowers shall use the proceeds of all Loans and use Letters of Credit only
for the purpose of financing general corporate working capital (including asset
acquisitions) or other corporate purposes of the Borrowers and the other Credit
Parties (to the extent not inconsistent with the Credit Parties’ covenants and
obligations under this Credit Agreement and the other Credit Documents).

 

6.12                        Financial Covenants.

 

(a)                                  Consolidated Leverage Ratio.  The
Borrowers shall cause the Consolidated Leverage Ratio, as of any date of
calculation, to be equal to or less than 5.00 to 1.00.

 

(b)                                 Consolidated Fixed Charge Coverage Ratio.  The
Borrowers shall cause the Consolidated Fixed Charge Coverage Ratio, as of any
date of calculation, to be equal to or greater than 1.50 to 1.00.

 

(c)                                  Consolidated Tangible Net Worth.  The
Borrowers shall cause the Consolidated Tangible Net Worth as of the end of any
fiscal quarter to be equal to or greater than the sum of (i) $500,000,000 plus
(ii) an amount equal to 100% of the net cash proceeds received by the
Consolidated Parties from Equity Transactions during the period commencing as
of the Closing Date and ending as of the last day of the fiscal quarter for
which such calculation is being performed minus (iii) the amount of all
repurchases and redemptions by the Parent of its Series A preferred stock and
its Series B preferred stock following the Closing Date, in an aggregate amount
not to exceed $107,500,000.

 

(d)                                Distribution Limitation.  The
Borrowers shall cause the cash distributions to the Parent’s shareholders made
or declared by the Parent  during any fiscal quarter to be equal
to or less than ninety-five percent (95%) of Funds From Operations for the immediately prior fiscal quarter
(or such greater amount as is required for the Parent to maintain REIT status).

 

6.13                        Environmental Matters.

 

(a)                                  Each of the Parent and the Borrowers shall
comply with all Environmental Laws in respect of the Borrowing Base
Assets.  The Parent and the Borrowers
shall promptly take all

 

80

 

actions necessary to
prevent the imposition of any Liens on any of the Borrowing Base Assets arising
out of or related to any Environmental Laws.

 

(b)                                 In respect of any Borrowing Base Asset, if
any of the Parent or any Borrower shall (a) receive notice that any violation
of any Environmental Law may have been committed or is about to be committed by
such Person, (b) receive notice that any administrative or judicial complaint
or order has been filed or is about to be filed against the Parent or any
Borrower alleging violations of any Environmental Law or requiring any such
Person to take any action in connection with the release of any Hazardous
Substance or (c) receive any notice from a Governmental Authority or private
party alleging that any such Person may be liable or responsible for costs
associated with a response to or cleanup of a release of a Hazardous Substance
or any damages caused thereby, the Parent or the applicable Borrower shall
provide the Administrative Agent with a copy of such notice within ten (10)
days after the receipt thereof by the Parent or any Borrower.  To the extent requested by the
Administrative Agent, any Borrower owning any Borrowing Base Asset or any Real
Property Asset which is proposed for qualification as such shall execute and
deliver to the Administrative Agent an environmental indemnity agreement with
respect to thereto in form and substance acceptable to the Administrative
Agent.

 

6.14                        REIT Status.

 

(a)                                  The Borrowers shall, for the entire term of
this Credit Agreement, retain their Qualified REIT Subsidiary status.

 

(b)                                 The Parent shall, at all times during the
term hereof, maintain its status as a REIT.

 

6.15                        New Subsidiaries.

 

(a)                                  Upon the acquisition, incorporation or other
creation of any direct or indirect Subsidiary of the Parent which owns or is to
own a Borrowing Base Asset, the Borrowers shall (i) cause such Subsidiary to
become a Borrower hereunder through the execution and delivery to the
Administrative Agent of a Borrower Joinder Agreement on or before the earlier
of (A) the date on which a Real Property Asset owned by such Subsidiary is
included in any calculation (pro forma or otherwise) of the Borrowing Base
Amount and (B) the deadline for the delivery of the next Compliance Certificate
pursuant to Section 6.02(a)), and (ii) cause such Subsidiary to
deliver such other documentation as the Administrative Agent may reasonably
request in connection with the foregoing, including, without limitation,
certified resolutions and other organizational and authorizing documents of
such Subsidiary, favorable opinions of counsel to such Subsidiary (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above), all in form, content
and scope reasonably satisfactory to the Administrative Agent.

 

(b)                                 Upon the acquisition, incorporation or other
creation of any other direct or indirect Subsidiary of the Parent (other than
an Unrestricted Subsidiary), the Borrowers shall (i) cause such Subsidiary to
become a Subsidiary Guarantor hereunder through the execution and delivery to
the Administrative Agent of a Subsidiary Guarantor Joinder Agreement within
thirty

 

81

 

(30) days of the
acquisition, incorporation or creation of such Subsidiary, and (ii) cause such
Subsidiary to deliver such other documentation as the Administrative Agent may
reasonably request in connection with the foregoing, including, without
limitation, certified resolutions and other organizational and authorizing
documents of such Subsidiary.

 

6.16                        Pledged Assets.

 

The
Borrowers shall at all times subject all Borrowing Base Assets and all of their
respective personal property to first priority Liens (subject in any case to
Permitted Liens) in favor of the Administrative Agent to secure the Obligations
pursuant to the terms and conditions of the Credit Documents and such other
additional security documents as the Administrative Agent shall reasonably
request, and deliver all Borrowing Base Deliverables (and any updates to any of
the information or materials delivered as a portion thereof) and such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, all in form, content and scope reasonably satisfactory to
the Administrative Agent.  In
furtherance of the Borrowers’ obligations under this Section 6.16,
each of the Borrowers hereby agree that they shall, from time to time, at their
own expense, promptly execute, deliver, file and/or record all further
instruments and documents, and take all further action, that may be necessary
or desirable, or that the Administrative Agent may reasonably request
(including, without limitation, the procurement of landlord consents with
respect to the assignment of the applicable Borrower’s interests in any
Borrowing Base Assets), in order to (a) properly evidence the Borrowers’
Obligations hereunder or under any Credit Document or (b) perfect, continue and
protect the Liens and security interests granted or purported to be granted by
any Collateral Documents and to enable the Administrative Agent to exercise and
enforce its rights and remedies hereunder and under any other Credit Document
with respect to any Collateral.  The
applicable Borrower(s) shall promptly deliver to the Administrative Agent a
copy of each such instrument and evidence of its proper filing or recording, as
necessary.

 

6.17                        Appraisals.

 

The
Borrowers agree that the Administrative Agent shall have the right to request
appraisals with respect to the Borrowing Base Assets and other Real Property
Assets owned by them, that the Administrative Agent shall engage all appraisers
with respect to such appraisals and that the Borrowers shall pay or reimburse
to the Administrative Agent all reasonable and documented costs and expenses
associated therewith to the extent required by and subject to the provisions of
Section 10.04 hereof.

 

ARTICLE VII

NEGATIVE COVENANTS

 

The
Borrowers hereby covenant and agree (on their own behalf and on behalf of the
Subsidiary Guarantors and/or Parent, as applicable) that until the Obligations,
together with interest, fees and other obligations hereunder, have been paid in
full and the Revolving Commitments hereunder shall have terminated:

 

82

 

7.01                        Liens.

 

No
Borrower shall, at any time, create, incur, assume or suffer to exist any Lien
upon any of its assets or revenues, whether now owned or hereafter acquired,
other than Permitted Liens.  The Parent
shall not create any Lien upon the Capital Stock of any Borrower.

 

7.02                        Indebtedness.

 

No
Borrower shall create, incur, assume or suffer to exist any Indebtedness,
except:

 

(a)                                  Indebtedness under the Credit Documents;

 

(b)                                 Indebtedness of the Borrowers set forth in Schedule 7.02
(and renewals, refinancings and extensions thereof on terms and conditions no
less favorable to such Person than such existing Indebtedness); and

 

(c)                                  unsecured intercompany Indebtedness of any
Borrower to any Credit Party; provided, that such Indebtedness shall be
expressly subordinate in all respects to the Obligations on terms reasonably acceptable
to the Administrative Agent.

 

7.03                        Fundamental Changes.

 

Neither
the Parent nor any Borrower shall merge, dissolve, liquidate, consolidate with
or into another Person; provided, that, notwithstanding the foregoing
provisions of this Section 7.03, (a) any Borrower may merge or
consolidate with any other Borrower, (b) any Consolidated Party (including any
Unrestricted Subsidiary) which is not a Credit Party may be merged or
consolidated with or into any Credit Party provided that such Credit Party shall
be the continuing or surviving corporation, (c) any Subsidiary Guarantor may be
merged or consolidated with or into any other Subsidiary Guarantor and (d) any Subsidiary Guarantor may
dissolve, liquidate or wind up its affairs at any time provided that such
dissolution, liquidation or winding up, as applicable, could not reasonably be
expected to have a Material Adverse Effect.

 

7.04                        Dispositions; Acquisitions.

 

(a)                                  The Borrowers shall not make any sale, lease,
transfer or other disposition of (i) any Borrowing Base Asset, except to the
extent permitted pursuant to Section 7.12 hereof; or (ii) any other
material assets of the Borrowers unless (A) such sale, lease, transfer or other
disposition is performed in the ordinary course of the Borrowers’ Businesses or
(B) the consideration paid in connection with such other material assets (1) is
in cash or Cash Equivalents, (2) is in an amount not less than the fair market
value of the Property disposed of and (3) does not exceed, in the aggregate
during any calendar year (for the all Borrowers and all such sales, leases,
transfers or other dispositions) $500,000. 
The Parent shall not, in any case, transfer, sell, lease, pledge or
otherwise dispose of the Capital Stock of the Borrowers held by it without the
prior written consent of the Administrative Agent (which consent may be granted
or withheld in the sole discretion of the Administrative Agent).

 

83

 

(b)                                 The Borrowers shall not, without the prior
written consent of the Administrative Agent (which consent may be granted or
withheld in the sole discretion of the Administrative Agent), make any
Investments or otherwise acquire any material real or personal property other
than: (i) acquisitions of personal property in the ordinary course of business
to the extent required to continue to operate the Borrowers’ Businesses in the
manner in which they are currently being operated and (ii) investments in cash
or Cash Equivalents.

 

7.05                        Business Activities.

 

No
Borrower shall engage in any business activities other than owning, developing,
managing and providing secured financing for real and personal property and
similar interests in leasehold properties which are owned by or net leased to
healthcare operators for use as Healthcare Facilities.

 

7.06                        Transactions with Affiliates and Insiders.

 

No
Borrower shall, at any time, enter into or permit to exist any transaction or
series of transactions with any officer, director or Affiliate of such Person
other than (a) advances of working capital to any such Borrower, (b) transfers
of cash and assets to any Borrower, (c) intercompany transactions expressly
permitted by Section 7.02, Section 7.03 or Section 7.04,
(d) normal compensation and reimbursement of expenses of officers and directors
and (e) except as otherwise specifically limited in this Credit Agreement,
other transactions which are entered into in the ordinary course of such
Borrower’s business on terms and conditions substantially as favorable to such
Borrower as would be obtainable by it in a comparable arms-length transaction
with a Person other than an officer, director or Affiliate.

 

7.07                        Organization Documents; Fiscal Year.

 

No
Credit Party shall (a) amend, modify or change its organization documents in a
manner adverse to the Lenders or (b) change its fiscal year.

 

7.08                        Modifications
to Other Documents.

 

(a)                                  The Credit Parties shall not, without the
prior written consent of the Required Lenders, enter into any material
amendment or modification to any Note Documents.

 

(b)                                 The Borrowers shall not, without the prior
written consent of the Required Lenders enter into any material amendment or
modification or cancel or terminate any Material Contract prior to its stated
maturity (subject to the provisions of this Section 7.08(b) with
respect to Facility Leases) prior to its stated maturity.  Notwithstanding the foregoing, with respect
to any Facility Lease, the Borrowers may amend or modify or permit the
amendment or modification of any Facility Lease without the Required Lenders’
prior written consent, except to the extent such amendment or modification:
(i) decreases the rent or any other monetary obligations under any
Facility Lease (except as set forth in the proviso to this sentence);
(ii) shortens the term of any

 

84

 

Facility Lease;
(iii) releases or limits the liability of any guarantor under any Facility
Lease; (iv) releases any security deposits or letters of credit or any
other security or collateral under any Facility Lease; (v) consents to the
assignment, delegation or other transfer of rights and obligations under any
Facility Lease; or (vi) makes any other material change to the terms and
conditions of any Facility Lease or increases in any material respect the
obligations or liabilities of the applicable Borrower thereunder; provided,
however, that to the extent such amendment, modification or restructuring of a
Facility Lease involves the replacement of a Tenant, (A) the Borrowers shall
have delivered to the Lenders and the Administrative Agent the (1) identity of
such proposed new tenant (the “New Tenant”), (2) the proposed lease with such
New Tenant (the “New Lease”) and (3) such other information as reasonably
requested and (B) provided that (1) such New Tenant is an Eligible Tenant, (2)
the New Lease provides for rent payments in each year which are at least eighty
percent (80%) of the rent payments in each year due under the lease being
amended, modified or replaced (the “Existing Facility Lease”) and (3) the New
Lease is otherwise substantially similar in all material respects to the
Existing Facility Lease, then within twenty (20) Business Days after receiving
the foregoing information from the Borrowers, if the Required Lenders have not
either approved or disapproved such proposal, the Required Lenders shall be
deemed to have approved such proposal.

 

7.09                        Ownership
of Subsidiaries.

 

Notwithstanding
any other provisions of this Credit Agreement to the contrary, (a) no Borrower
shall own any Capital Stock of any other entity; (b) no Person other than the
Parent shall own any Capital Stock of any Borrower; and (c) no Borrower shall
permit, create, incur, assume or suffer to exist any Lien on any Capital Stock
of any Borrower.

 

7.10                        No
Further Negative Pledges.

 

No
Borrower will enter into, assume or become subject to any Negative Pledges or
agreement prohibiting or otherwise restricting the existence of any Lien upon
any of its Property in favor of the Administrative Agent (for the benefit of
the Lenders) for the purpose of securing the Obligations, whether now owned or
hereafter acquired, or requiring the grant of any security for any obligation
if such Property is given as security for the Obligations, except (a) in
connection with any Permitted Lien or any document or instrument governing any
Permitted Lien, provided that any such restriction contained therein relates
only to the asset or assets subject to such Permitted Lien, and (b) pursuant to
customary restrictions and conditions contained in any agreement relating to
the sale of any Property permitted under Section 7.04, pending the
consummation of such sale.

 

7.11                        Limitation
on Restricted Actions.

 

The
Borrowers will not directly or indirectly, create or otherwise cause or suffer
to exist or become effective any encumbrance or restriction on the ability of
any such Person to (a) pay dividends or make any other distributions to the
Parent on its Capital Stock or with respect to any other interest or
participation in, or measured by, its profits, (b) pay any Indebtedness or
other obligation owed to any Credit Party, (c) make loans or advances to any
Credit Party, (d) sell, lease or transfer any of its properties or assets to
any Credit Party, or (e) act as a Borrower and

 

85

 

pledge its assets
pursuant to the Credit Documents or any renewals, refinancings, exchanges,
refundings or extension thereof, except (in respect of any of the matters
referred to in clauses (a)-(d) above) for such encumbrances or restrictions
existing under or by reason of (i) this Credit Agreement and the other Credit
Documents, (ii) applicable Law, (iii) any Lien or any documentation or
instrument governing any Lien permitted under Section 7.01 provided
that any such restriction contained therein relates only to the asset or assets
subject to such Lien, or (v) customary restrictions and conditions contained in
any agreement relating to the sale of any Borrowing Base Assets permitted under
Section 7.04, pending the consummation of such sale.

 

7.12                        Addition/Replacement of Borrowing Base Assets.

 

(a)                                  The Borrowers shall not request a release of
any Borrowing Base Assets from the Liens established pursuant to the applicable
Mortgage Instrument and Assignment of Leases with respect thereto or add any
Real Property Assets as Borrowing Base Assets hereunder except in accordance
with the following:

 

(i)                                     The Borrowers may at any time include
additional Real Property Assets (which satisfy the requirements set forth in
the definition of Borrowing Base Assets, including, without limitation,
delivery of each of the Borrowing Base Asset Deliverables with respect thereto)
as Borrowing Base Assets with the written approval of the Administrative Agent
and Required Lenders.

 

(ii)                                  The Borrowers may obtain releases of
Borrowing Base Assets from the Liens and security interests of the
Administrative Agent hereunder and under the Collateral Documents relating
thereto through satisfaction of each of the following conditions: (A) the
applicable Borrower shall deliver to the Administrative Agent, not less than
five (5) days prior to the date of such requested release a written
request for release of the applicable Borrowing Base Asset, (B) the applicable
Borrower shall deliver, together with such request for release, a pro forma
Compliance Certificate showing that, on a pro forma basis, after giving effect
to such release, (1) all financial covenants contained herein shall be
satisfied and (2) the outstanding principal amount of Obligations shall not
exceed the lesser of the Aggregate Revolving Committed Amount and the Borrowing
Base Amount (after giving effect to the removal of such Borrowing Base Asset
from the calculation of the Borrowing Base Amount, if applicable), (C) a
Responsible Officer of the Borrowers shall certify in writing to the
Administrative Agent that no Default or Event of Default shall exist
immediately after giving effect to the applicable release and (D) the
Administrative Agent shall have received evidence, acceptable to it in its
discretion that the matters set forth in such request, Compliance Certificate
and certification are true and correct in all material respects.  To the extent all such conditions to release
are satisfied, the Administrative Agent will, at the Borrowers’ expense,
deliver to the applicable Borrower such documentation as is reasonably
necessary to evidence the release of the Administrative Agent’s security
interest, if any, in the released Borrowing Base Asset(s).  The Borrowers shall not otherwise actively
cause or willfully fail to take any commercially reasonable action that causes
any Borrowing Base Asset to fail to qualify as such during the term of this
Credit Agreement.

 

86

 

(iii)                               Notwithstanding anything herein to the contrary,
the appraised value of the Borrowing Base Assets released and substituted in
any fiscal year pursuant to this Section 7.12 shall not exceed
$25,000,000 in the aggregate and the appraised value of the Borrowing Base
Assets released and substituted during the entire term hereof shall not, in any
case (and regardless of whether the $25,000,000/year limitation is met during
any given year), exceed $75,000,000 in the aggregate.

 

(b)                                 The Borrowers shall not fail to deliver to
the Administrative Agent, immediately upon a Responsible Officer of any
Borrower obtaining knowledge of a Borrowing Base Asset failing to qualify as
such, a pro forma Borrowing Base Certificate (which certificate shall include
an update to the information set forth on Schedule 5.12) demonstrating
that, upon giving effect to the removal from the calculation of the Borrowing
Base Amount of the Collateral Value or Mortgageability Amount (as applicable)
attributable to such former Borrowing Base Asset, the Borrowers shall be in
compliance with Section 2.01(a) hereof.

 

(c)                                  The Borrowers shall not include any Real
Property Asset as a Borrowing Base Asset on any schedule, Borrowing Base
Certificate or Compliance Certificate delivered in connection with this Credit
Agreement unless (i) such Real Property Asset has been approved as a Borrowing
Base Asset as evidenced by its inclusion on Part I of Schedule 5.12
hereof as of the Closing Date or has been approved in writing by the
Administrative Agent and Required Lenders and (ii) such Real Property Asset
continues to qualify as a Borrowing Base Asset as of the date of such
inclusion.

 

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

 

8.01                        Events of Default.

 

The
occurrence and continuation of any of the following shall constitute an Event
of Default:

 

(a)                                  Non-Payment.  The Borrowers or any other
Credit Party fails to pay when and as required to be paid herein, (i) any
amount of principal of any Loan or any L/C Obligation, (ii) within five (5)
days after the same becomes due, any interest on any Loan or on any L/C
Obligation or any Unused Fee or (iii) within ten (10) days after the earlier of
(A) a Responsible Officer of the Parent or any Borrower becoming aware that the
same has become due or (B) written notice from the Administrative Agent to the
Borrowers, any other fee payable herein or any other amount payable herein or
under any other Credit Document becomes due; or

 

(b)                                 Specific Covenants.  The
Borrowers fail to perform or observe any term, covenant or agreement contained
in (i) any of Sections 6.01  6.02 or 6.10 within ten (10)
days after the same becomes due or required or (ii) any of Sections 6.03,
6.06, 6.07, 6.11, 6.12, 6.14, 6.15 or
6.16 or Article VII; or

 

87

 

(c)                                  Other Defaults.  Any
Credit Party fails to perform or observe any other covenant or agreement (not
specified in subsection (a) or (b) above) contained in any Credit Document
on its part to be performed or observed and such failure continues for thirty
(30) days after the earlier of (i) a Responsible Officer of the Parent or any
Borrower becoming aware of such default or (ii) written notice thereof by the
Administrative Agent to the Borrowers (or, if such failure cannot be reasonably
cured within such period, sixty (60) days, so long as the applicable Credit
Party has diligently commenced such cure and is diligently pursuing completion
thereof); or

 

(d)                                 Representations and Warranties.  Any
representation, warranty, certification or statement of fact made or deemed
made by the Borrowers on behalf of the Borrowers, the Parent or any other
Credit Party and contained in this Credit Agreement, in any other Credit
Document, or in any document delivered in connection herewith or therewith
shall be incorrect or misleading in any material respect when made or deemed
made; or

 

(e)                                  Cross-Default.  (i)
there occurs any event of default under any of the Note Documents; (ii) the
Parent or any Borrower (A) fails to perform or observe (beyond the applicable
grace or cure period with respect thereto, if any) any Contractual Obligation
if such failure could reasonably be expected to have a Material Adverse Effect,
(B) fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise and beyond the applicable grace
or cure period with respect thereto, if any) in respect of any Indebtedness
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) or
otherwise fails to observe or perform any other agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which event of default is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or holders)
to cause, with the giving of notice if required, such Indebtedness to be
demanded or to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or
redeem such Indebtedness to be made, prior to its stated maturity, or cash
collateral in respect thereof to be demanded, in each case to the extent such
Indebtedness or other obligation is in an amount (including undrawn committed
or available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount;
or (iii) there occurs under any Swap Contract an Early Termination Date (as
defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which a Borrower is the Defaulting Party (as defined
in such Swap Contract) or (B) any Termination Event (as so defined) under such
Swap Contract as to which a Borrower is an Affected Party (as so defined) and,
in either event, the Swap Termination Value owed by such Borrower as a result
thereof is greater than the Threshold Amount; or

 

(f)                                    Insolvency Proceedings, Etc.  The
Parent or any Borrower institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit
of creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer
for

 

88

 

it
or for all or any material part of its properties; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of the Parent or such Borrower and
the appointment continues undischarged or unstayed for ninety (90) calendar
days; or any proceeding under any Debtor Relief Law relating to the Parent or
any Borrower or to all or any material part of its property is instituted
without the consent of the Parent or such Borrower, as the case may be, and
continues undismissed or unstayed for ninety (90) calendar days, or an order
for relief is entered in any such proceeding; or

 

(g)                                 Inability to Pay Debts; Attachment.  (i)
The Parent or any Borrower becomes unable or admits in writing its inability or
fails generally to pay its debts as they become due, or (ii) any writ or
warrant of attachment or execution or similar process in an amount in excess of
the Threshold Amount is issued or levied against all or any material part of
the properties of the Parent or any Borrower and is not released, vacated or
fully bonded within sixty (60) days after its issue or levy; or

 

(h)                                 Judgments.  There is entered against the
Parent or any Borrower (i) any one or more final judgments or orders for the
payment of money in an aggregate amount exceeding the Threshold Amount (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect and, in either case, (A)
enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of ten (10) consecutive days during which a
stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, is not in effect; or

 

(i)                                     ERISA.  (i) An ERISA Event occurs
with respect to a Pension Plan or Multiemployer Plan which has resulted or
could reasonably be expected to result in liability of a Borrower under
Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in
an aggregate amount in excess of the Threshold Amount, or (ii) a Borrower or
any ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of the Threshold Amount; or

 

(j)                                     Invalidity of Credit Documents; Guaranty.  (i)
Any Credit Document, at any time after its execution and delivery and for any
reason other than as expressly permitted hereunder or as a result of
satisfaction in full of all the Obligations or as a result of the
Administrative Agent’s failure to record and/or file where and/or when
appropriate any Collateral Documents or any continuation statements, ceases to
be in full force and effect; or any Credit Party contests in any manner the
validity or enforceability of any Credit Document; or any Credit Party denies
that it has any or further liability or obligation under any Credit Document,
or purports to revoke, terminate or rescind any Credit Document; or (ii) except
as the result of or in connection with a dissolution, merger or disposition of
a Subsidiary Guarantor not prohibited by the terms of this Credit Agreement,
the Guaranty shall cease to be in full force and effect, or any Guarantor

 

89

 

hereunder
shall deny or disaffirm such Guarantor’s obligations under such Guaranty, or
any Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to the
Guaranty; or

 

(k)                                  Change of Control. 
There occurs any Change of Control; or

 

(l)                                     Competing Offerings; Etc.  At
any time during the period commencing as of the Closing Date and continuing
until the Retail Syndication Date, there exists any competing offering,
placement or arrangement of any debt securities or any other bank or fund
financing (other than the Note Issuance) by or on behalf of any Consolidated
Party.

 

8.02                        Remedies
Upon Event of Default.

 

If
any Event of Default occurs and is continuing, the Administrative Agent shall,
at the request of, or may, with the consent of, the Required Lenders, upon
written notice to the Borrowers in any instance, take any or all of the
following actions:

 

(a)                                  declare the commitment of each Lender to make
Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;

 

(b)                                 declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Credit Document to be
immediately due and payable, without presentment, demand, protest or additional
notice of any kind, all of which are hereby expressly waived by the Borrowers;

 

(c)                                  require that the Borrowers Cash Collateralize
the L/C Obligations (in an amount equal to the then Outstanding Amount
thereof); and

 

(d)                                 exercise on behalf of itself and the Lenders
all rights and remedies available to it and the Lenders under the Credit
Documents or applicable law;

 

provided,
however, that upon the occurrence of an actual or deemed entry of an order for
relief with respect to the Borrowers under the Bankruptcy Code of the United
States, the obligation of each Lender to make Loans and any obligation of the
L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrowers to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further
act of the Administrative Agent or any Lender.

 

8.03                        Application of Funds.

 

After
the exercise of remedies in accordance with the provisions of Section 8.02
(or after the Loans have automatically become immediately due and payable and
the L/C Obligations

 

90

 

have automatically been
required to provide Cash Collateral as set forth in the proviso to Section 8.02),
any amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:

 

First, to payment of that portion of the
Obligations constituting fees, indemnities, expenses and other amounts
(including Attorney Costs and amounts payable under Article III)
payable to the Administrative Agent in its capacity as such;

 

Second, to payment of that portion of the
Obligations constituting fees, indemnities and other amounts (other than
principal and interest) payable to the Lenders (including Attorney Costs and
amounts payable under Article III), ratably among the Lenders in
proportion to the amounts described in this clause Second payable to them;

 

Third, to payment of that portion of the
Obligations constituting accrued and unpaid interest on the Loans and L/C
Borrowings, ratably among the Lenders in proportion to the respective amounts
described in this clause Third payable to them;

 

Fourth, to (a) payment of that portion of the
Obligations constituting unpaid principal of the Loans and L/C Borrowings and
(b) the Administrative Agent for the account of the L/C Issuer, to provide Cash
Collateral for that portion of the L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit, ratably among such parties in proportion
to the respective amounts described in this clause Fourth held by them;

 

Fifth, to payment of that portion of the
Obligations constituting obligations under Swap Contracts between any Borrower
and any Lender or Affiliate of any Lender (including, without limitation,
payment of breakage, termination or other amounts owing in respect of any Swap
Contract between any Borrower and any Lender, or any Affiliate of a Lender, to
the extent such Swap Contract is permitted hereunder); and

 

Last, the balance, if any, after all of the
Obligations have been indefeasibly paid in full, to the Borrowers or as
otherwise required by Law.

 

Subject
to Section 2.03(c), amounts used to provide Cash Collateral for the
aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above
shall be applied to satisfy drawings under such Letters of Credit as they
occur.  If any amount remains on deposit
as Cash Collateral after all Letters of Credit have either been fully drawn or
expired, such remaining amount shall be applied to the other Obligations, if
any, in the order set forth above.

 

ARTICLE IX

ADMINISTRATIVE AGENT

 

9.01                        Appointment and Authorization of Administrative Agent.

 

(a)                                  Each Lender hereby irrevocably appoints,
designates and authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Credit

 

91

 

Agreement and each other
Credit Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Credit Agreement or any other
Credit Document, together with such powers as are reasonably incidental
thereto.  Notwithstanding any provision
to the contrary contained elsewhere herein or in any other Credit Document, the
Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Administrative Agent have or be
deemed to have any fiduciary relationship with any Lender or participant, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Credit Agreement or any other Credit
Document or otherwise exist against the Administrative Agent.  Without limiting the generality of the
foregoing sentence, the use of the term “agent” herein and in the other Credit
Documents with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law. 
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between
independent contracting parties.

 

(b)                                 The L/C Issuer shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith, and the L/C Issuer shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Article VIII
with respect to any acts taken or omissions suffered by the L/C Issuer in
connection with Letters of Credit issued by it or proposed to be issued by it
and the applications and agreements for letters of credit pertaining to such
Letters of Credit as fully as if the term “Administrative Agent” as used
in this Article VIII and in the definition of “Agent-Related
Person” included the L/C Issuer with respect to such acts or omissions, and
(ii) as additionally provided herein with respect to the L/C Issuer.

 

9.02                        Delegation of Duties.

 

The
Administrative Agent may execute any of its duties under this Credit Agreement
or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects in the absence of gross negligence or willful misconduct.

 

9.03                        Liability
of Administrative Agent.

 

No
Agent-Related Person shall (a) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Credit Agreement or any
other Credit Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any Lender
or participant for any recital, statement, representation or warranty made by
any Credit Party or any officer thereof, contained herein or in any other
Credit Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under
or in connection with, this Credit Agreement or any other Credit Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Credit Agreement or any other Credit Document, or for any failure of any Credit
Party or any

 

92

 

other party to any Credit
Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions of,
this Credit Agreement or any other Credit Document, or to inspect the
properties, books or records of any Credit Party or any Affiliate thereof.

 

9.04                        Reliance
by Administrative Agent.

 

(a)                                  The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing, communication,
signature, resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, electronic mail
message, statement or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel to
any Credit Party), independent accountants and other experts selected by the
Administrative Agent.  The
Administrative Agent shall be fully justified in failing or refusing to take
any action under any Credit Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action.  The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Credit Agreement or any other
Credit Document in accordance with a request or consent of the Required Lenders
(or such greater number of Lenders as may be expressly required hereby in any
instance) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders.

 

(b)                                 For purposes of determining compliance with
the conditions specified in Section 4.01, each Lender that has
signed this Credit Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to a
Lender unless the Administrative Agent shall have received notice from such
Lender prior to the proposed Closing Date specifying its objection thereto.

 

9.05                        Notice of Default.

 

The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default, except with respect to defaults
in the payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender or any Borrower
referring to this Credit Agreement, describing such Default or Event of Default
and stating that such notice is a “notice of default.”  The Administrative Agent will notify the
Lenders of its receipt of any such notice. 
The Administrative Agent shall take such action with respect to such
Default or Event of Default as may be directed by the requisite Lenders in
accordance herewith; provided, however, that unless and until the
Administrative Agent has received any such direction, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.

 

93

 

9.06                        Credit Decision; Disclosure of Information by Administrative Agent.

 

Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by the Administrative Agent hereafter taken,
including any consent to and acceptance of any assignment or review of the
affairs of any Credit Party or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession (in each case, except to the extent
the Administrative Agent has confirmed to any Lender in writing the
satisfaction of conditions to funding as of the Closing Date).  Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Credit Parties and their respective Subsidiaries, and
all applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Credit
Agreement and to extend credit to the Borrowers and the other Credit Parties
hereunder.  Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Credit Agreement and the other Credit
Documents, and to make such investigations as it deems necessary to inform itself
as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Borrowers and the other Credit
Parties.  Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Credit Parties or any of their
respective Affiliates that may come into the possession of any Agent-Related
Person.

 

9.07                        Indemnification of Administrative Agent.

 

Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand each Agent-Related Person (to the extent not reimbursed
by or on behalf of any Credit Party and without limiting the obligation of any
Credit Party to do so), pro rata, and hold harmless each Agent-Related Person
from and against any and all Indemnified Liabilities incurred by it; provided,
however, that no Lender shall be liable for the payment to any Agent-Related
Person of any portion of such Indemnified Liabilities to the extent determined
in a final, nonappealable judgment by a court of competent jurisdiction to have
resulted from such Agent-Related Person’s own gross negligence or willful
misconduct; provided, however, that no action taken in accordance with the
directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section.  Without limitation of the foregoing, each
Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal

 

94

 

proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this Credit
Agreement, any other Credit Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrowers.  The undertaking in this Section shall
survive termination of the Aggregate Commitments, the payment of all other
Obligations and the resignation of the Administrative Agent.

 

9.08                        Administrative Agent in its Individual Capacity.

 

Bank
of America and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with each of the Credit Parties and their respective Affiliates as
though Bank of America were not the Administrative Agent or the L/C Issuer
hereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to
such activities, Bank of America or its Affiliates may receive information
regarding any Credit Party or its Affiliates (including information that may be
subject to confidentiality obligations in favor of such Credit Party or such Affiliate)
and acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them.  With
respect to its Loans, Bank of America shall have the same rights and powers
under this Credit Agreement as any other Lender and may exercise such rights
and powers as though it were not the Administrative Agent or the L/C Issuer,
and the terms “Lender” and “Lenders” include Bank of America in its individual
capacity.

 

9.09                        Successor
Administrative Agent.

 

The
Administrative Agent may resign as Administrative Agent upon thirty (30)
days’ notice to the Lenders; provided that any such resignation by Bank of
America shall also constitute its resignation as L/C Issuer and Swing Line
Lender.  If the Administrative Agent
resigns under this Credit Agreement, the Required Lenders shall appoint from
among the Lenders a successor administrative agent for the Lenders, which
successor administrative agent shall be consented to by the Borrower
Representative at all times other than during the existence of an Event of
Default (which consent of the Borrower Representative shall not be unreasonably
withheld or delayed).  If no successor
administrative agent is appointed prior to the effective date of the resignation
of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders and the Borrower Representative, a successor
administrative agent from among the Lenders. 
Upon the acceptance of its appointment as successor administrative agent
hereunder, the Person acting as such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent, L/C Issuer and Swing Line Lender and the respective terms
“Administrative Agent,” “L/C Issuer” and “Swing Line Lender” thereafter shall
mean such successor administrative agent, Letter of Credit issuer and swing
line lender, and the retiring Administrative Agent’s appointment, powers and
duties as Administrative Agent shall be terminated and the retiring L/C
Issuer’s and Swing Line Lender’s rights, powers and duties as such shall be
terminated, without any other or further act or deed on the part of such
retiring L/C Issuer or Swing Line Lender or any other Lender, other than the
obligation of the successor L/C Issuer to issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or to make other arrangements

 

95

 

satisfactory to the
retiring L/C Issuer to effectively assume the obligations of the retiring L/C
Issuer with respect to such Letters of Credit. 
After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Article IX and Sections 10.04
and 10.05 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Credit
Agreement.  If no successor
administrative agent has accepted appointment as Administrative Agent by the
date thirty (30) days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of
the duties of the Administrative Agent hereunder until such time, if any, as
the Required Lenders appoint a successor agent as provided for above.

 

9.10                        Administrative Agent May File Proofs of Claim.

 

In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Credit Party, the Administrative Agent (irrespective
of whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrowers)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:

 

(a)                                  to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans,
L/C Obligations and all other Obligations (other than obligations under Swap
Contracts to which the Administrative Agent is not a party) that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent
under Sections 2.03(i) and (j), 2.09 and 10.04)
allowed in such judicial proceeding; and

 

(b)                                 to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same;

 

and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.

 

Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.

 

96

 

9.11                        Guaranty Matters.

 

The
Lenders irrevocably authorize the Administrative Agent, at its option and in
its discretion to release any Guarantor (other than the Parent) from its
obligations under the Guaranty if such Person either (i) ceases to be a
Subsidiary as a result of a transaction permitted hereunder or (ii) has been
designated as an Unrestricted Subsidiary. 
Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the authority of the Administrative Agent to
release any Guarantor from its obligations hereunder pursuant to this Section 9.11.  Upon the release of any Guarantor pursuant
to this Section 9.11, the Administrative Agent shall (to the
extent applicable) deliver to the Credit Parties, upon the Credit Parties’
request and at the Credit Parties’ expense, such documentation as is reasonably
necessary to evidence the release of such Guarantor from its obligations under
the Credit Documents.

 

9.12                        Other Agents; Arrangers and Managers.

 

None
of the Lenders or other Persons identified on the facing page or signature
pages of this Credit Agreement as a “syndication agent,” “documentation agent,”
“co-agent,” “book manager,” “lead manager,” “arranger,” “lead arranger” or
“co-arranger” shall have any right, power, obligation, liability,
responsibility or duty under this Credit Agreement other than, in the case of
such Lenders, those applicable to all Lenders as such.  Without limiting the foregoing, none of the
Lenders or other Persons so identified shall have or be deemed to have any
fiduciary relationship with any Lender. 
Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into
this Credit Agreement or in taking or not taking action hereunder.

 

ARTICLE X

MISCELLANEOUS

 

10.01                 Amendments, Etc.

 

No
amendment or waiver of, or any consent to deviation from, any provision of this
Credit Agreement or any other Credit Document shall be effective unless in
writing and signed by the Borrowers, the Guarantors (if applicable) and the
Required Lenders and acknowledged by the Administrative Agent, and each such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it is given; provided, however, that:

 

(a)                                  unless also signed by each Lender directly
affected thereby, no such amendment, waiver or consent shall:

 

(i)                                     extend or increase the Commitment of any
Lender (or reinstate any Commitment terminated pursuant to Section 8.02),
it being understood that the amendment or waiver of an Event of Default or a
mandatory reduction or a mandatory prepayment in Commitments shall not be
considered an increase in Commitments,

 

97

 

(ii)                                  waive non-payment or postpone any date fixed
by this Credit Agreement or any other Credit Document for any payment of
principal, interest, fees or other amounts due to any Lender hereunder or under
any other Credit Document,

 

(iii)                               reduce the principal of, or the rate of interest specified herein on,
any Loan or L/C Borrowing, or any fees or other amounts payable hereunder or
under any other Credit Document; provided, however, that only the consent of
the Required Lenders shall be necessary (A) to amend the definition of “Default
Rate” or to waive any obligation of the Borrowers to pay interest at the
Default Rate or (B) to amend any financial covenant hereunder (or any defined
term used therein) even if the effect of such amendment would be to reduce the
rate of interest on any Loan or L/C Borrowing or to reduce any fee payable
hereunder,

 

(iv)                              change any provision of this Credit Agreement regarding pro rata
sharing or pro rata funding with respect to (A) the making of advances
(including participations), (B) the manner of application of payments or
prepayments of principal, interest, or fees, (C) the manner of application of
reimbursement obligations from drawings under Letters of Credit, or (D) the
manner of reduction of commitments and committed amounts,

 

(v)                                 change any provision of this Section 10.01(a)
or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, or

 

(vi)                              release the Parent or all or substantially all of the Subsidiary
Guarantors from their obligations hereunder (other than as provided herein or
as appropriate in connection with transactions permitted hereunder);

 

(b)                                 unless also signed by the L/C Issuer, no such
amendment, waiver or consent shall affect the rights or duties of the L/C
Issuer under this Credit Agreement or any Letter of Credit Application relating
to any Letter of Credit issued or to be issued by it;

 

(c)                                  unless also signed by the Swing Line Lender,
no such amendment, waiver or consent shall affect the rights or duties of the
Swing Line Lender under this Credit Agreement; and

 

(d)                                 unless also signed by the Administrative
Agent, no such amendment, waiver or consent shall affect the rights or duties
of the Administrative Agent under this Credit Agreement or any other Credit
Document;

 

provided,
however, that notwithstanding anything to the contrary contained herein, (i) no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased

 

98

 

or extended without the
consent of such Lender, (ii) each Lender is entitled to vote as such Lender
sees fit on any bankruptcy or insolvency reorganization plan that affects the
Loans, (iii) each Lender acknowledged that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein, (iv) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding, and (v) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties
thereto.

 

10.02                 Notices and Other Communications; Facsimile Copies.

 

(a)                                  General.  Unless otherwise expressly
provided herein, all notices and other communications provided for hereunder
shall be in writing (including by facsimile transmission).  All such written notices shall be mailed
certified or registered mail, faxed or delivered to the applicable address,
facsimile number or (subject to subsection (c) below) electronic mail
address, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

 

(i)                                     if to any Borrower, the Administrative Agent,
the L/C Issuer or the Swing Line Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on
Schedule 10.02 or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a notice to
the other parties; and

 

(ii)                                  if to any other Lender, to the address,
facsimile number, electronic mail address or telephone number specified in its
Administrative Questionnaire or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by such
party in a notice to any Borrower, the Administrative Agent, the L/C Issuer and
the Swing Line Lender.

 

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

 

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

 

99

 

(c)                                  Effectiveness of Facsimile Documents and
Signatures.  Credit Documents may be transmitted and/or
signed by facsimile.  The effectiveness
of any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Administrative Agent and the Lenders.  The Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.

 

(d)                                 Reliance by Administrative Agent and Lenders.  The
Administrative Agent and the Lenders shall be entitled to rely and act upon any
notices (including telephonic Committed Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of the Borrowers even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof.  The Borrowers shall indemnify
each Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrowers.  All telephonic notices to and other communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

 

10.03                 No
Waiver; Cumulative Remedies.

 

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

 

10.04                 Attorney Costs, Expenses and Taxes.

 

The
Borrowers agree (a) to pay directly to the provider thereof or to pay or
reimburse the Administrative Agent for all reasonable and documented costs and
expenses incurred in connection with the development, preparation, negotiation
and execution of this Credit Agreement and the other Credit Documents, the preservation
of any rights or remedies under this Credit Agreement and the other Credit
Documents, and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all Attorney Costs,
(b) to pay or reimburse the Administrative Agent and each Lender for all
reasonable costs and expenses incurred following an Event of Default in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Credit Agreement or the other Credit Documents
(including all such costs and expenses incurred during any “workout” or
restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs and (c) all reasonable and documented appraisal costs incurred by the
Administrative Agent in connection with the

 

100

 

Administrative Agent’s
procurement of FIRREA-compliant MAI appraisals with respect to (i) prior to the
Retail Syndication Date, any Borrowing Base Asset with respect to which the most
recent such appraisal is more than twelve (12) months old; (ii) following the
Retail Syndication Date, any Borrowing Base Asset or any other Real Property
Asset owned by any Borrower, to the extent any such appraisal is requested by
the Administrative Agent (provided, that the Borrowers shall not be required to
pay the costs and expenses associated with any Administrative Agent-requested
appraisal more than once in any two (2) calendar year period with respect
to any Real Property Asset); and (iii) any re-appraisals requested by any
Borrower.  The foregoing costs and
expenses shall include all search, filing, recording, title insurance and
appraisal charges and fees and taxes related thereto, and other reasonable and
documented out-of-pocket expenses incurred by the Administrative Agent and the
reasonable and documented cost of independent public accountants and other
outside experts retained by the Administrative Agent or any Lender.  All amounts due under this Section 10.04
shall be payable within twenty (20) Business Days after written invoice
therefor is received by the Borrowers. 
The agreements in this Section shall survive the termination of the
Aggregate Commitments and repayment of all other Obligations.

 

10.05                 Indemnification
by the Borrowers.

 

The
Borrowers shall indemnify and hold harmless each Agent-Related Person, each
Lender and their respective Affiliates, directors, officers, employees,
counsel, agents, trustees, advisors and attorneys-in-fact (collectively the “Indemnitees”)
from and against any and all liabilities, obligations, losses, damages,
penalties, claims, litigation, investigation, proceeding, demands, actions,
judgments, suits, costs, expenses and disbursements (including Attorney Costs)
of any kind or nature whatsoever (subject to the provisions of Section 3.01
with respect to Taxes and Other Taxes) that may at any time be imposed on,
incurred by or asserted against any such Indemnitee (whether by a Credit Party
or any other party) in any way relating to or arising out of or in connection
with (a) the execution, delivery, enforcement, performance or administration of
any Credit Document or any other agreement, letter or instrument delivered in
connection with the transactions contemplated thereby or the consummation of
the transactions contemplated thereby, (b) any Commitment, Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any
refusal by the L/C Issuer to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not
strictly comply with the terms of such Letter of Credit), or (c) any actual or
threatened claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”); provided, that such indemnification shall not, as to
any Indemnitee, be available to the extent that such liabilities, obligations,
losses, damages, penalties, claims, litigation, investigation, proceeding,
demands, actions, judgments, suits, costs, expenses or disbursements are
determined to have resulted from the gross negligence or willful misconduct of
any Indemnitee.  No Indemnitee shall be
liable for any damages arising from the use by others of any information or
other materials obtained through IntraLinks or other similar information
transmission systems in connection with this Credit Agreement, and no
Indemnitee shall have any liability for any indirect or consequential damages
relating to this Credit Agreement or any other Credit Document or arising out
of its activities in connection herewith or therewith (whether before or

 

101

 

after the Closing
Date).  All amounts that may become due
under this Section 10.05 shall be payable within twenty (20)
Business Days after written invoice therefor is received by the Borrowers.  The agreements in this Section 10.05
shall survive the resignation of the Administrative Agent, the assignment by
any Lender of any of its interests hereunder, the replacement of any Lender,
the termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

 

10.06                 Payments Set Aside.

 

To
the extent that any payment by or on behalf of the Borrowers is made to the
Administrative Agent or any Lender, or the Administrative Agent or any Lender
exercises its right of set-off, and such payment or the proceeds of such
set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and
effect as if such payment had not been made or such set-off had not occurred,
and (b) each Lender severally agrees to pay to the Administrative Agent upon
demand its applicable share of any amount so recovered from or repaid by the
Administrative Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Federal Funds Rate
from time to time in effect.

 

10.07                 Successors and Assigns.

 

(a)                                  The provisions of this Credit Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Borrower may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of subsection (b) of this
Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section, or (iii) by way of pledge or assignment of
a security interest subject to the restrictions of subsection (f) or (i)
of this Section (and any other attempted assignment or transfer by any
party hereto shall be null and void). 
Nothing in this Credit Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent
expressly contemplated hereby, the Indemnitees) any legal or equitable right,
remedy or claim under or by reason of this Credit Agreement.

 

(b)                                 Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Credit Agreement (including all or a portion of its Commitment and the
Loans (including for purposes of this subsection (b), participations in
L/C Obligations and in Swing Line Loans) at the time owing to it); provided
that (i) except in the case of an assignment of the entire remaining amount of
the assigning Lender’s Commitment and the Loans at the time owing to it or in
the case of an assignment to a Lender or an Affiliate of a

 

102

 

Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which
for this purpose includes Loans outstanding thereunder) subject to each such
assignment, determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $1,000,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the
Borrower Representative otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender’s rights
and obligations under this Credit Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not apply to
rights in respect of Swing Line Loans; (iii) any assignment of a Commitment
must be approved by the Administrative Agent and, with respect to any
assignment of a Revolving Commitment, the L/C Issuer and the Swing Line Lender
(each such consent not to be unreasonably withheld or delayed), unless the
Person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and (iv)
the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation
fee of $3,500 (for which the applicable assignee shall be responsible in the absence
of the agreement of any other party to pay such fee).  Subject to acceptance and recording thereof by the Administrative
Agent pursuant to subsection (c) of this Section, from and after the
effective date specified in each Assignment and Assumption, the Eligible
Assignee thereunder shall be a party to this Credit Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Credit Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Credit Agreement (and, in the case of an Assignment and Assumption covering all
of the assigning Lender’s rights and obligations under this Credit Agreement,
such Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 3.01, 3.04, 3.05, 10.04
and 10.05 with respect to facts and circumstances occurring prior to the
effective date of such assignment). 
Upon request, the Borrowers (at their expense) shall execute and deliver
a Note to the assignee Lender.  Any
assignment or transfer by a Lender of rights or obligations under this Credit
Agreement that does not comply with this subsection shall be treated for
purposes of this Credit Agreement as a sale by such Lender of a participation
in such rights and obligations in accordance with subsection (d) of this
Section.

 

(c)                                  The Administrative Agent, acting solely for
this purpose as an agent of the Borrowers, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrower
Representative at any reasonable time and from time to time upon reasonable
prior notice.  In addition, at any time
that a request for a consent for a material or other substantive change to the
Credit Documents is

 

103

 

pending, any Lender wishing
to consult with other Lenders in connection therewith may request and receive
from the Administrative Agent a copy of the Register.

 

(d)                                 Any Lender may at any time, without the
consent of, or notice to, the Borrowers or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrowers or
any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Credit Agreement (including all or a portion of its Commitment and/or the Loans
(including such Lender’s participations in L/C Obligations and/or Swing Line
Loans) owing to it); provided that (i) such Lender’s obligations under this
Credit Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrowers, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Credit Agreement.  Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Credit Agreement and to approve any
amendment, modification or waiver of any provision of this Credit Agreement;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment, waiver or
other modification that extends the time for, reduces the amount or alters the
application of proceeds with respect to such obligations and payments required
therein that directly affects such Participant.  Subject to subsection (e) of this Section, the Borrowers
agree that each Participant shall be entitled to the benefits of Sections 3.01,
3.04 and 3.05 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to subsection (b) of this
Section.  To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.09
as though it were a Lender, provided such Participant agrees to be subject to Section 2.12
as though it were a Lender.

 

(e)                                  A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant. 
A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 3.01 unless the Borrower
Representative is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the Borrowers, to comply with Section 10.15
as though it were a Lender.

 

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

 

(g)                                 Notwithstanding anything to the contrary
contained herein, any Lender that is a Fund may (without notice to or the
consent of any of the parties hereto) create a security interest in all or any
portion of the Loans owing to it and the Note, if any, held by it to the
trustee for holders of obligations owed, or securities issued, by such Fund as
security for such obligations or

 

104

 

securities, provided that
unless and until such trustee actually becomes a Lender in compliance with the
other provisions of this Section 10.07, (i) no such pledge shall
release the pledging Lender from any of its obligations under the Credit
Documents and (ii) such trustee shall not be entitled to exercise any of the
rights of a Lender under the Credit Documents even though such trustee may have
acquired ownership rights with respect to the pledged interest through
foreclosure or otherwise.

 

(h)                                 Notwithstanding anything to the contrary
contained herein, if at any time Bank of America assigns all of its Commitment
and Loans pursuant to subsection (b) above, Bank of America may, (i) upon
thirty (30) days’ notice to the Borrower Representative and the Lenders,
resign as L/C Issuer and/or (ii) upon thirty (30) days’ notice to the
Borrower Representative, resign as Swing Line Lender.  In the event of any such resignation as L/C Issuer or Swing Line
Lender, the Borrower Representative shall be entitled to appoint from among the
Lenders a successor L/C Issuer or Swing Line Lender hereunder (with the consent
of the Lender so-appointed); provided, however, that no failure by the Borrower
Representative to appoint any such successor shall affect the resignation of
Bank of America as L/C Issuer or Swing Line Lender, as the case may be.  If Bank of America resigns as L/C Issuer, it
shall retain all the rights and obligations of the L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Revolving Loans that are
Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to
Section 2.03(c)).  If Bank
of America resigns as Swing Line Lender, it shall retain all the rights of the
Swing Line Lender provided for hereunder with respect to Swing Line Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to make Revolving Loans that are Base Rate
Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c).

 

10.08                 Confidentiality.

 

Each
of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of Confidential Information, except that Confidential
Information may be disclosed (a) to its and its Affiliates’ directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Confidential Information
and instructed to keep such Confidential Information confidential); (b) to the
extent requested by any regulatory authority; (c) to the extent required by
applicable Law or regulations or by any subpoena or similar legal process; (d)
to any other party to this Credit Agreement; (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating
to this Credit Agreement or the enforcement of rights hereunder (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Confidential Information and instructed to keep
such Confidential Information confidential); (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any Eligible Assignee of or Participant in, or any prospective Eligible
Assignee of or Participant in, any of its rights or obligations under this
Credit Agreement or (ii) any direct or indirect contractual counterparty or
prospective counterparty (or such contractual counterparty’s or prospective
counterparty’s professional advisor) to any credit derivative transaction
relating to obligations of the Credit

 

105

 

Parties; (g) with the
consent of the Borrower Representative; (h) to the extent such Confidential
Information (i) becomes publicly available other than as a result of a breach
of this Section or (ii) becomes available to the Administrative Agent or
any Lender on a nonconfidential basis from a source other than the Borrowers;
(i) to the National Association of Insurance Commissioners or any other similar
organization (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Confidential
Information and instructed to keep such Confidential Information confidential);
or (j) to any nationally recognized rating agency that requires access to a
Lender’s or an Affiliate’s investment portfolio in connection with ratings
issued with respect to such Lender or Affiliate.  In addition, the Administrative Agent and the Lenders may
disclose the existence of this Credit Agreement and information about this
Credit Agreement to market data collectors, similar service providers to the
lending industry, and service providers to the Administrative Agent and the
Lenders in connection with the administration and management of this Credit
Agreement, the other Credit Documents, the Commitments, and the Extension of
Credits.  Any Person required to
maintain the confidentiality of Confidential Information as provided in this
Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Confidential Information as such Person would accord to
its own confidential information.  For
the purposes of this Section, “Confidential Information” means all
information received from any Credit Party relating to any Credit Party, any of
the other Consolidated Parties, or its or their business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by any Credit Party; provided,
that, in the case of information received from a Credit Party after the date
hereof, such information is clearly identified in writing at the time of
delivery as confidential.

 

10.09                 Set-off.

 

In
addition to any rights and remedies of the Lenders provided by law, upon the
occurrence and during the continuance of any Event of Default, each Lender and
each of its Affiliates are authorized at any time and from time to time,
without prior notice to the Borrowers or any other Credit Party, any such
notice being waived by the Borrowers (on their own behalf and on behalf of each
Credit Party) to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by, and other indebtedness at any time owing by, such Lender or
Affiliate to or for the credit or the account of the respective Credit Parties
against any and all Obligations owing to such Lender hereunder or under any
other Credit Document, now or hereafter existing, irrespective of whether or
not the Administrative Agent or such Lender shall have made demand under this
Credit Agreement or any other Credit Document and although such Obligations may
be contingent or unmatured or denominated in a currency different from that of
the applicable deposit or indebtedness. 
Each Lender agrees promptly to notify the Borrowers and the
Administrative Agent after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.

 

106

 

10.10                 Interest Rate Limitation.

 

Notwithstanding
anything to the contrary contained in any Credit Document, the interest paid or
agreed to be paid under the Credit Documents shall not exceed the maximum rate
of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the Borrowers. 
In determining whether the interest contracted for, charged, or received
by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any payment
that is not principal as an expense, fee, or premium rather than interest, (b)
exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.

 

10.11                 Counterparts.

 

This
Credit Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

 

10.12                 Integration.

 

This
Credit Agreement, together with the other Credit Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and thereof and supersedes all prior agreements, written or oral, on such
subject matter.  In the event of any
conflict between the provisions of this Credit Agreement and those of any other
Credit Document, the provisions of this Credit Agreement shall control;
provided that the inclusion of specific supplemental rights or remedies in
favor of the Administrative Agent or the Lenders in any other Credit Document
shall not be deemed a conflict with this Credit Agreement.  Each Credit Document was drafted with the
joint participation of the respective parties thereto and shall be construed
neither against nor in favor of any party, but rather in accordance with the
fair meaning thereof.

 

10.13                 Survival of Representations and Warranties.

 

All
representations and warranties made hereunder and in any other Credit Document
or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof.  Such representations and
warranties have been or will be relied upon by the Administrative Agent and
each Lender, regardless of any investigation made by the Administrative Agent
or any Lender or on their behalf and notwithstanding that the Administrative
Agent or any Lender may have had notice or knowledge of any Default or Event of
Default at the time of any Extension of Credit, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

107

 

10.14                 Severability.

 

If
any provision of this Credit Agreement or the other Credit Documents is held to
be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Credit Agreement and the
other Credit Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

10.15                 Tax Forms.

 

(a)                                  (i) Each Lender that is not a “United States
person” within the meaning of Section 7701(a)(30) of the Internal Revenue
Code (a “Foreign Lender”) shall deliver to the Administrative Agent,
prior to receipt of any payment subject to withholding under the Internal
Revenue Code (or upon accepting an assignment of an interest herein), two duly
signed completed copies of either IRS Form W-8BEN or any successor thereto
(relating to such Foreign Lender and entitling it to an exemption from, or
reduction of, withholding tax on all payments to be made to such Foreign Lender
by the Borrowers pursuant to this Credit Agreement) or IRS Form W-8ECI or
any successor thereto (relating to all payments to be made to such Foreign
Lender by the Borrowers pursuant to this Credit Agreement) or such other evidence
satisfactory to the Borrowers and the Administrative Agent that such Foreign
Lender is entitled to an exemption from, or reduction of, U.S.  withholding tax, including any exemption
pursuant to Section 881(c) of the Internal Revenue Code.  Thereafter and from time to time, each such
Foreign Lender shall (A) promptly submit to the Administrative Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United States
taxing authorities) as may then be available under then current United States
laws and regulations to avoid, or such evidence as is satisfactory to the
Borrowers and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by the Borrowers pursuant to this Credit Agreement,
(B) promptly notify the Administrative Agent of any change in circumstances
that would modify or render invalid any claimed exemption or reduction, and (C)
take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any requirement
of applicable Law that the Borrowers make any deduction or withholding for
taxes from amounts payable to such Foreign Lender.

 

(ii)                                  Each Foreign Lender, to the extent it does
not act or ceases to act for its own account with respect to any portion of any
sums paid or payable to such Lender under any of the Credit Documents (for
example, in the case of a typical participation by such Lender), shall deliver
to the Administrative Agent on the date when such Foreign Lender ceases to act
for its own account with respect to any portion of any such sums paid or
payable, and at such other times as may be necessary in the determination of
the Administrative Agent (in the reasonable exercise of its discretion), (A)
two duly signed completed copies of the forms or statements required to be
provided by such Lender as set forth above, to establish the portion of any
such sums paid or payable with respect to

 

108

 

which
such Lender acts for its own account that is not subject to U.S.  withholding tax, and (B) two duly signed
completed copies of IRS Form W-8IMY (or any successor thereto), together
with any information such Lender chooses to transmit with such form, and any
other certificate or statement of exemption required under the Internal Revenue
Code, to establish that such Lender is not acting for its own account with
respect to a portion of any such sums payable to such Lender.

 

(iii)                               The Borrowers shall not be required to pay
any additional amount to any Foreign Lender under Section 3.01 (A)
with respect to any Taxes required to be deducted or withheld on the basis of
the information, certificates or statements of exemption such Lender transmits
with an IRS Form W-8IMY pursuant to this Section 10.15(a) or
(B) if such Lender shall have failed to satisfy the foregoing provisions of
this Section 10.15(a); provided that if such Lender shall have
satisfied the requirement of this Section 10.15(a) on the date such
Lender became a Lender or ceased to act for its own account with respect to any
payment under any of the Credit Documents, nothing in this Section 10.15(a)
shall relieve the Borrowers of their obligation to pay any amounts pursuant to Section 3.01
in the event that, as a result of any change in any applicable Law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Credit Documents is not
subject to withholding or is subject to withholding at a reduced rate.

 

(iv)                              The Administrative Agent may, without reduction,
withhold any Taxes required to be deducted and withheld from any payment under
any of the Credit Documents with respect to which the Borrowers are not
required to pay additional amounts under this Section 10.15(a).

 

(b)                                 Upon the request of the Administrative Agent,
each Lender that is a “United States person” within the meaning of
Section 7701(a)(30) of the Internal Revenue Code shall deliver to the
Administrative Agent two duly signed completed copies of IRS Form W-9.  If such Lender fails to deliver such forms,
then the Administrative Agent may withhold from any interest payment to such
Lender an amount equivalent to the applicable back-up withholding tax imposed
by the Internal Revenue Code, without reduction.

 

(c)                                  If any Governmental Authority asserts that
the Administrative Agent did not properly withhold or backup withhold, as the
case may be, any tax or other amount from payments made to or for the account
of any Lender, such Lender shall indemnify the Administrative Agent therefor,
including all penalties and interest, any taxes imposed by any jurisdiction on
the amounts payable to the Administrative Agent under this Section, and costs
and expenses (including Attorney Costs) of the Administrative Agent.  The obligation of the Lenders under this
Section shall survive the termination of the Aggregate Commitments,
repayment of all other Obligations hereunder and the resignation of the
Administrative Agent.

 

109

 

10.16                 Replacement of Lenders.

 

To
the extent that Section 3.06(b) provides that the Borrowers shall
have the right to replace a Lender as a party to this Credit Agreement, the
Borrowers may, upon notice to such Lender and the Administrative Agent, replace
such Lender by causing such Lender to assign its Commitment (with the related
assignment fee to be paid by the Borrowers) pursuant to Section 10.07(b)
to one or more Eligible Assignees procured by the Borrowers; provided, however,
that if the Borrowers elect to exercise such right with respect to any Lender
pursuant to such Section 3.06(b), they shall be obligated to
replace all Lenders that have made similar requests for compensation pursuant
to Section 3.01 or 3.04. 
The Borrowers shall pay in full all principal, interest, fees and other
amounts owing to such Lender through the date of replacement (including any
amounts payable pursuant to Section 3.05).  Any Lender being replaced shall execute and
deliver an Assignment and Assumption with respect to such Lender’s Commitment
and outstanding Loans and participations in L/C Obligations and Swing Line
Loans.

 

10.17                 Source of
Funds.

 

Each
of the Lenders hereby represents and warrants to the Borrowers that at least
one of the following statements is an accurate representation as to the source
of funds to be used by such Lender in connection with the financing hereunder:

 

(a)                                  no part of such funds constitutes assets
allocated to any separate account maintained by such Lender in which any
employee benefit plan (or its related trust) has any interest;

 

(b)                                 to the extent that any part of such funds
constitutes assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrowers the name of each employee benefit
plan whose assets in such account exceed ten percent (10%) of the total assets
of such account as of the date of such purchase (and, for purposes of this
subsection (b), all employee benefit plans maintained by the same employer
or employee organization are deemed to be a single plan);

 

(c)                                  to the extent that any part of such funds
constitutes assets of an insurance company’s general account, such insurance
company has complied with all of the requirements of the regulations issued
under Section 401(c)(1)(A) of ERISA; or

 

(d)                                 such funds constitute assets of one or more
specific benefit plans that such Lender has identified in writing to the
Borrowers.

 

As
used in this Section, the terms “employee benefit plan” and “separate account”
shall have the respective meanings provided in Section 3 of ERISA.

 

10.18                 GOVERNING LAW.

 

(a)                                  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO

 

110

 

AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES; PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN
ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)                                 ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWERS, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS.  THE BORROWERS, THE
ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.  THE BORROWERS, THE ADMINISTRATIVE AGENT AND
EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.

 

10.19                 WAIVER OF RIGHT TO TRIAL BY JURY.

 

EACH
PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY CREDIT DOCUMENT
OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY CREDIT DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

10.20                 No Conflict.

 

To
the extent there is any conflict or inconsistency between the provisions hereof
and the provisions of any other Credit Document, this Credit Agreement shall
control.

 

111

 

10.21                 USA Patriot Act Notice.

 

Each
Lender and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrowers that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. 
L.  107-56 (signed into law
October 26, 2001)) (the “Act”), it is required to obtain, verify
and record information that identifies the Borrowers (and to the extent
applicable, the Parent), which information includes the name and address of the
respective Borrowers (and to the extent applicable, the Parent) and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrowers (and to the extent applicable, the
Parent) in accordance with the Act.

 

10.22                 Entire Agreement.

 

THIS
CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT
AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK -

SIGNATURE PAGES AND SCHEDULES AND EXHIBITS TO FOLLOW]

 

112

 

IN
WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be
duly executed as of the date first above written.

 

 

	
  BORROWERS:

  	
  OHI ASSET, LLC

  
	
   

  	
  OHI
  ASSET (ID), LLC

  
	
   

  	
  OHI ASSET (LA), LLC

  
	
   

  	
  OHI
  ASSET (TX), LLC

  
	
   

  	
  OHI
  ASSET (CA), LLC

  
	
   

  	
  DELTA
  INVESTORS I, LLC

  
	
   

  	
  DELTA
  INVESTORS II, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Omega
  Healthcare Investors, Inc.,

  the Sole Member of each such company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Daniel J. Booth

  
	
   

  	
   

  	
  Name:

  	
  Daniel
  J. Booth

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Operating Officer

  
					

 

S-1

 

 

	
  LENDERS:

  	
  BANK
  OF AMERICA, N.A.,

  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kevin Wagley

  	
   

  
	
   

  	
  Name:
  Kevin Wagley

  
	
   

  	
  Title:
  Principal

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A., as L/C Issuer, Swing Line Lender and as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kevin Wagley

  	
   

  
	
   

  	
  Name:
  Kevin Wagley

  
	
   

  	
  Title:
  Principal

  

 

S-2

 

	
   

  	
  UBS
  LOAN FINANCE LLC

  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Barbara Ezell-McMichael

  	
   

  
	
   

  	
  Name:
  Barbara Ezell-McMichael

  
	
   

  	
  Title:
  Banking Products Services US

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Juan Zuniga

  	
   

  
	
   

  	
  Name:
  Juan Zuniga

  
	
   

  	
  Title:
  Banking Products Services US

  

 

S-3

 

	
   

  	
  DEUTSCHE
  BANK TRUST COMPANY

  AMERICAS, as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stephen Cayer

  	
   

  
	
   

  	
  Name:
  Stephen Cayer

  
	
   

  	
  Title:
  Director

  

 

S-4

 

	
   

  	
  GENERAL
  ELECTRIC CAPTIAL CORPORATION,

  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

S-5

 

Exhibit A

 

FORM OF LOAN NOTICE

 

Date: 
                    ,
200    

 

To:                              Bank
of America, N.A., as Administrative Agent

 

Re:                               Credit
Agreement (as amended, modified, supplemented and extended from time to time,
the “Credit Agreement”), dated as of March 22, 2004, by and among
OHI Asset, LLC, a Delaware limited liability company,  OHI Asset (ID), LLC, a Delaware limited liability company, OHI
Asset (LA), LLC, a Delaware limited liability company, OHI Asset (TX) LLC, a
Delaware limited liability company, OHI Asset (CA) LLC, a Delaware limited
liability company, Delta Investors I, LLC a Maryland limited liability company
and Delta Investors II, LLC, a Maryland limited liability company
(collectively, the “Borrowers”), the Lenders identified therein, and
Bank of America, N.A., as Administrative Agent.  Capitalized terms used but not otherwise defined herein have the
meanings provided in the Credit Agreement.

 

Ladies and Gentlemen:

 

The undersigned hereby
requests (select one):

 

	
  o  A Borrowing

  	
   

  	
  o  A Continuation

  	
   

  	
  o  A Conversion

  

 

of Revolving Loans:

 

1.                                       On: 
                              ,
200     (which is a Business Day).

 

2.                                       In
the amount of: 
                                      .

 

3.                                       Comprised
of: 
                                
(Type of Loan).

 

4.                                       For
Eurodollar Loans:  with an Interest
Period of
                            
months.

 

With respect to any
Borrowing or any conversion or continuation requested herein, the undersigned
Borrower Representative hereby represents and warrants that (i) in the case of
a Borrowing of Revolving Loans, such request complies with the requirements of Section 2.01(a)
of the Credit Agreement and (ii) in the case of a Borrowing or any conversion
or continuation, each of the conditions set forth in Section 2.02
of the Credit Agreement have been satisfied on and as of the date of such
Borrowing or such conversion or continuation.

 

	
   

  	
  OMEGA HEALTHCARE
  INVESTORS, INC.,

  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

Exhibit B

 

FORM OF REVOLVING
NOTE

 

March 22,
2004

 

FOR VALUE RECEIVED, the
undersigned (collectively, the “Borrowers”), hereby promise to pay to
[INSERT LENDER] or its registered assigns (the “Lender”), in accordance
with the terms and conditions of the Credit Agreement (as hereinafter defined),
the principal amount of each Revolving Loan from time to time made by the
Lender to the Borrowers under that certain Credit Agreement (as amended,
modified, supplemented and extended from time to time, the “Credit Agreement”),
dated as of March  22, 2004 by and among the Borrowers, the Lenders
identified therein and Bank of America, N.A., as Administrative Agent.  Capitalized terms used but not otherwise
defined herein have the meanings provided in the Credit Agreement.

 

The Borrowers promise to
pay interest on the unpaid principal amount of each Revolving Loan from the
date of such Revolving Loan until such principal amount is paid in full, at
such interest rates and at such times as provided in the Credit Agreement.  All payments of principal and interest shall
be made to the Administrative Agent for the account of the Lender in Dollars in
immediately available funds at the Administrative Agent’s Office.  If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Credit
Agreement.

 

This Note is one of the
Notes referred to in the Credit Agreement, is entitled to the benefits thereof
and may be prepaid in whole or in part subject to the terms and conditions
provided therein.  Upon the occurrence
and continuation of one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note, upon written
notice to the Borrowers, may be declared to be, immediately due and payable all
as provided in the Credit Agreement. 
Revolving Loans made by the Lender may be evidenced by one or more loan
accounts or records maintained by the Lender in the ordinary course of
business. The Lender may also attach schedules to this Note and endorse thereon
the date, amount and maturity of its Revolving Loans and payments with respect
thereto.

 

Except as otherwise
provided for in the Credit Agreement, each Borrower, for itself, its respective
successors and assigns, hereby waives diligence, presentment, protest and
demand and notice of protest, demand, dishonor and nonpayment of this Note.

 

 

THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

	
   

  	
  OHI ASSET, LLC

  OHI ASSET (ID), LLC

  OHI ASSET (LA), LLC
OHI ASSET (TX), LLC

  OHI ASSET (CA), LLC

  DELTA INVESTORS I, LLC

  DELTA INVESTORS II, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Omega Healthcare
  Investors, Inc., 

  the Sole Member of each such company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Daniel J.
  Booth

  
	
   

  	
  Title:  
  Chief Operating Officer

  
					

 

 

Exhibit C-1

 

FORM OF COMPLIANCE
CERTIFICATE

 

Financial Statement Date:
                    ,
200    

 

To:                              Bank
of America, N.A., as Administrative Agent

 

Re:                               Credit
Agreement (as amended, modified, supplemented and extended from time to time,
the “Credit Agreement”), dated as of March 22, 2004, by and among
OHI Asset, LLC, a Delaware limited liability company,  OHI Asset (ID), LLC, a Delaware limited
liability company, OHI Asset (LA), LLC, a Delaware limited liability company,
OHI Asset (TX) LLC, a Delaware limited liability company, OHI Asset (CA) LLC, a
Delaware limited liability company, Delta Investors I, LLC a Maryland limited
liability company and Delta Investors II, LLC, a Maryland limited liability
company (collectively, the “Borrowers”), the Lenders identified therein,
and Bank of America, N.A., as Administrative Agent.  Capitalized terms used but not otherwise defined herein have the
meanings provided in the Credit Agreement.

 

Ladies and Gentlemen:

 

The undersigned
Responsible Officer of the Parent hereby certifies as of the date hereof that
[he/she] is the
                              
of the Parent, and that, in [his/her] capacity as such, [he/she] is authorized
to execute and deliver this Compliance Certificate to the Administrative Agent
on the behalf of the Borrowers, and that:

 

[Use following paragraph
1 for fiscal year-end financial statements:]

 

[1.                                   Attached
hereto as Schedule 1 is the Form 10-K of the Parent as required by Section 6.01(a)
of the Credit Agreement for the fiscal year of the Borrower ended as of the
above date.]

 

[Use following paragraph
1 for fiscal quarter-end financial statements:]

 

[1.                                   Attached
hereto as Schedule 1 is the Form 10-Q of the Parent, as required by
Section 6.01(b) of the Credit Agreement for the fiscal quarter of
the Borrower ended as of the above date. 
Such financial statements fairly present the financial condition,
results of operations and cash flows of the Consolidated Parties in accordance
with GAAP as at such date and for such period, subject only to normal year-end
audit adjustments and the absence of footnotes.]

 

2.                                       The
undersigned has reviewed and is familiar with the terms of the Credit Agreement
and has made, or has caused to be made, a review of the transactions and
condition (financial or otherwise) of each Borrower and the Parent during the
accounting period covered by the attached financial statements.

 

3.                                       A
review of the activities of each member of the Credit Parties during such
fiscal period has been made under the supervision of the undersigned with a
view to determining whether during such fiscal period the Credit Parties have
performed and observed in all material respects all their respective
Obligations under the Credit Documents, and

 

[select one:]

 

 

[to the best knowledge of
the undersigned Responsible Officer during such fiscal period, each of the
Credit Parties has performed and observed in all material respects each
covenant and condition of the Credit Documents applicable to it.]

 

[or:]

 

[the following covenants
or conditions of the Credit Documents have not been performed or observed in
all material respects and the following is a list of any Default and its nature
and status:]

 

4.                                       The
representations and warranties of the Credit Parties contained in the Credit
Agreement, any other Credit Document or any other certificate or document
furnished at any time under or in connection with the Credit Documents, are
true and correct in all material respects on and as of the date hereof, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date.

 

5.                                       The
financial covenant analyses and information set forth on Schedule 2
hereto are true and accurate in all material respects on and as of the date of
this Compliance Certificate.

 

IN WITNESS WHEREOF, the
undersigned has executed this Compliance Certificate as of
                    ,
200    .

 

 

	
   

  	
  OMEGA HEALTHCARE
  INVESTORS, INC.,

  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

Schedule 2

 

Financial Covenant Analysis

 

	
  Consolidated
  Leverage Ratio

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Consolidated
  Funded Debt:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
  Obligations for
  borrowed money

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  Purchase money
  indebtedness

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
  all direct obligations
  under letters of credit and similar agreements

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
  the Attributable
  Principal Amount of capital leases and Synthetic Leases

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
  the Attributable
  Principal Amount of Securitization Transactions

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
  all preferred stock and
  comparable equity interests providing for mandatory redemption, sinking fund
  or other like payments

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (g)

  	
  Support Obligations in
  respect of Funded Debt of another Person

  (other than Persons in such group, if applicable)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (h)

  	
  Funded Debt of any
  partnership or joint venture or other similar entity in which such Person is
  a general partner or joint venturer, and, as such, has personal liability for
  such obligations, but only to the extent there is recourse to such Person
  (or, if applicable, any Person in such consolidated group) for payment
  thereof

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i)

  	
  Sum
  of Lines (a) through (h)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Consolidated Adjusted
  EBITDA (as calculated on an annualized basis):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
  net income of the
  Consolidated Parties, in each case, excluding any non-recurring or
  extraordinary gains and losses

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  an amount which, in the
  determination of net income for such fiscal quarter pursuant to Line (a)
  above, has been deducted for or in connection with:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Consolidated Interest
  Expense (plus, amortization of deferred financing costs, to the extent
  included in the determination of Consolidated Interest Expense per GAAP)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  income taxes

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  depreciation and
  amortization

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  Sum
  of Lines (b)(i) through (b)(iii)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
  Sum
  of Lines (a) and (b)(iv)

  	
   

  	
  $

  	
   

  
							

 

 

	
  (d)

  	
  Special
  Charges:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  cash litigation charges
  incurred by the Consolidated Parties

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  non-cash charges
  associated with the write-down of the value of accounts and/or notes
  receivable of the Consolidated Parties

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  non-cash charges
  related to preferred stock redemptions

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  non-cash charges
  incurred by the Consolidated Parties in association with the write-down of
  the value of any real properties

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (v)

  	
  the satisfaction of
  outstanding unamortized loan fees with respect to the Terminated Facility

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (vi)

  	
  the satisfaction of any
  outstanding prepayment/make whole provisions with respect to the Terminated
  Facility

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (vii)

  	
  non-cash charges
  associated with the sale or settlement of the outstanding interest rate cap
  in existence with respect to the obligations outstanding under the Terminated
  Facility

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (viii)

  	
  any other non-cash
  charges associated with the sale or settlement by any Consolidated Party of
  any Swap Contract

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ix)

  	
  Sum of Lines (d)(i)
  through (d)(viii)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
  Sum
  of Lines (c) and (d)(ix)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Consolidated
  Leverage Ratio equals
  Line 1(i) divided by Line 2(e)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  
	
  Consolidated
  Fixed Charge Coverage Ratio

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Consolidated
  Adjusted EBITDA (Line 2(e) above):

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Consolidated
  Fixed Charges (as calculated on an annualized basis):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a)

  	
  Consolidated
  Interest Expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
  current
  scheduled principal payments of Funded Debt

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
  dividends
  and distributions on preferred stock

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
  Sum
  of Lines (a) through (c)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
  Special
  Charges included in Line 2(a)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
  Line
  2(d) minus Line 2(e)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Consolidated
  Fixed Charge Coverage Ratio

  equals Line 1 divided by Line 2(f)

  	
   

  	
  $

  	
   

  
								

 

 

	
  Consolidated
  Tangible Net Worth

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  stockholders’ equity on
  a consolidated basis determined in accordance with GAAP, but with no upward
  adjustments due to any revaluation of assets

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  all Intangible Assets

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  all accumulated
  depreciation

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  impairment charges

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Consolidated Tangible Net Worth equals

  Line 1 minus Line 2 plus Line 3 plus Line 4

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Tangible Net Worth per
  Credit Agreement

  	
   

  	
  $

  	
  500,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Series A and Series B
  Preferred Stock redeemed

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  100% of net cash
  proceeds of equity transactions

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  Line (6) minus
  Line (7) plus Line (8)

  (Note: Line 5 must be greater than Line (9)

  	
   

  	
  $

  	
   

  

 

 

Exhibit C-2

 

FORM OF BORROWING
BASE CERTIFICATE

 

Bank
of America

Agency
Management

1455
Market Street

CA5-701-05-19

San
Francisco, CA 94103-1399

Attn:  Cassandra McCain

 

The undersigned
[                              ],
Responsible Officer of the Parent hereby refers to the Credit Agreement dated
as of March 22, 2004 (as it may be amended, modified, extended or restated
from time to time, the “Credit Agreement”), by and among OHI Asset, LLC,
a Delaware limited liability company, 
OHI Asset (ID), LLC, a Delaware limited liability company, OHI Asset
(LA), LLC, a Delaware limited liability company, OHI Asset (TX) LLC, a Delaware
limited liability company, OHI Asset (CA) LLC, a Delaware limited liability
company, Delta Investors I, LLC a Maryland limited liability company and Delta
Investors II, LLC, a Maryland limited liability company (collectively, the “Borrowers”),
the Guarantors (as defined therein), the Lenders (as defined therein) and Bank
of America, N.A., as Administrative Agent and as Issuing Lender.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement.

 

The undersigned, on
behalf of the Borrowers, hereby represents, warrants and certifies that, based
upon the Borrowers’ own information and the information made available to the
Borrowers by the respective Tenants of the Real Property Assets, which
information the undersigned believes in good faith to be true and correct in
all material respects, for the fiscal quarter ended
                              ,
20    :

 

(a)                                  Each
Real Property Asset used in the calculation of the Borrowing Base Amount set
forth on  Schedule I hereto
is a Borrowing Base Asset;

 

(b)                                 Schedule I
hereto accurately sets forth the Collateral Value and Mortgageability Amount of
each of the Borrowing Base Assets with respect thereto; and

 

(c)                                  Schedule I
hereto accurately sets forth the calculation of the Borrowing Base Amount as of
the end of the fiscal quarter referred to above.

 

The undersigned
[                      ]
Responsible Officer of the Parent hereby represents and warrants that he/she has
the necessary power and authority to execute this Borrowing Base Certificate on
behalf of the Borrowers and that such action has been duly authorized by all
necessary action of the Borrowers prior to or on the date hereof.

 

 

	
   

  	
  OMEGA HEALTHCARE
  INVESTORS, INC.,

  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

Schedule 1

 

BORROWING BASE AMOUNT CALCULATIONS

 

 

Exhibit D

 

FORM OF ASSIGNMENT AND ASSUMPTION

 

This Assignment and
Assumption (this “Assignment and Assumption”) is dated as of the Effective
Date set forth below and is entered into by and between [Insert name of
Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined
herein have the meanings provided in the Credit Agreement identified below,
receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth
in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.

 

For an agreed
consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the
Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to
the amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including, without limitation, Letters of Credit and Guaranty
included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned
pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the “Assigned Interest”); provided, however,
the Assignor shall remain entitled to the indemnities set forth in Section 10.05
of the Credit Agreement pursuant to the terms thereof.  Such sale and assignment is without recourse
to the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.

 

	
  1.

  	
  Assignor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Assignee:

  	
   

  	
   [and is an

  
	
   

  	
   

  	
  Affiliate/Approved Fund
  of [identify Lender]]

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Borrowers:

  	
  OHI Asset, LLC, a
  Delaware limited liability company, 
  OHI Asset (ID), LLC, a Delaware limited liability company, OHI Asset
  (LA), LLC, a Delaware limited liability company, OHI Asset (TX) LLC, a
  Delaware limited liability company, OHI Asset (CA) LLC, a Delaware limited
  liability company, Delta Investors I, LLC a Maryland limited liability
  company and Delta Investors II, LLC, a Maryland limited liability company
  (collectively, the “Borrowers”)

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Administrative Agent:

  	
  Bank of America, N.A.

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Credit Agreement:

  	
  The Credit Agreement
  dated as of March 22, 2004, by and among the Borrowers, the Lenders
  party thereto and the Administrative Agent

  

 

 

	
  6.

  	
  Assigned Interest:

  	
   

  

 

	
  Facility Assigned(1)

  	
   

  	
  Aggregate
  Amount of

  Commitment/Loans

  for all Lenders

  	
   

  	
  Amount of

  Commitment/Loans

  Assigned(2)

  	
   

  	
  Percentage
  Assigned of

  Commitment/Loans(3)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  7.

  	
  Trade Date:

  	
   

  	
  (4)

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Effective Date:

  	
   

  	
  (5)

  

 

 

(1) Fill in the
appropriate terminology for the types of facilities under the Credit Agreement
that are being assigned under this Assignment (e.g. “Revolving
Commitment”)

(2) Amount to be adjusted
by the counterparties to take into account any payments or prepayments made
between the Trade Date and the Effective Date.

(3) Set forth, to at
least 9 decimals, as a percentage of the Commitment/Loans of all Lenders
thereunder.

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

(5) To be inserted by
Administrative Agent and shall be the effective date of recordation of transfer
in the register therefor.

 

 

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

 

	
  ASSIGNOR:

  	
  [NAME OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  ASSIGNEE:

  	
  [NAME OF ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  [Consented to and](6)
  Accepted:

  	
   

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A.,
  as Administrative Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  [Consented to:](7)

  	
   

  
	
   

  	
   

  
	
  OMEGA HEALTHCARE
  INVESTORS, INC.

  a Maryland corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  [Consented to:]  (8)

  	
   

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A.,
  as L/C Issuer

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
								

 

 

(6) To be added only if
the consent of the Administrative Agent is required by the terms of the Credit
Agreement.

(7) To be deleted only if
the consent of the Borrower is not required by the terms of the Credit
Agreement.

(8) To be added only if
the consent of the L/C Issuer is required by the terms of the Credit Agreement.

 

 

Annex 1 to
Assignment and Assumption

 

STANDARD TERMS AND
CONDITIONS

 

1.                                       Representations
and Warranties.

 

1.1.                              Assignor.  The Assignor (a) represents and
warrants that (i) it is the legal and beneficial owner of the Assigned
Interest, (ii) the Assigned Interest is free and clear of any lien,
encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Credit Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of their Subsidiaries or Affiliates or any other
Person obligated in respect of any Credit Document or (iv) the performance
or observance by the Borrower or any Guarantors, any of their Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Credit Document.

 

1.2.                              Assignee.  The Assignee (a) represents and
warrants that (i) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under
the Credit Agreement, (ii) it meets all requirements of an Eligible
Assignee under the Credit Agreement (subject to receipt of such consents as may
be required under the Credit Agreement), (iii) from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement as
a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Foreign Lender, attached hereto is
any documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by the Assignee; and (b) agrees
that (i) it will, independently and without reliance on the Administrative
Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Documents, and
(ii) it will perform in accordance with their terms all of the obligations
which by the terms of the Credit Documents are required to be performed by it
as a Lender.

 

2.                                       Payments.  From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned
interest (including payments of principal, interest, fees and other amounts) to
the Assignor for amounts which have accrued to but excluding the Effective Date
and to the Assignee for amounts which have accrued from and after the Effective
Date.

 

3.                                       General
Provisions.  This Assignment and
Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a
signature page of this Assignment and Assumption by telecopy shall be effective
as delivery of a manually executed counterpart of this Assignment and
Assumption.  This Assignment and
Assumption shall be governed by, and construed in accordance with, the law of
the State of New York, without regard to conflict of laws principles.

 

 

Exhibit E-1

 

FORM OF BORROWER JOINDER AGREEMENT

 

THIS
JOINDER AGREEMENT
(this “Agreement”), dated as of
                          ,
20    , is by and between [INSERT NEW BORROWER], a
Delaware limited liability company (the “Subsidiary”), and BANK OF
AMERICA, N. A., in its capacity as Administrative Agent under that
certain Credit Agreement (as it may be amended, modified, restated or
supplemented from time to time, the “Credit Agreement”), dated as of
March 22, 2004, by and among OHI Asset, LLC, a Delaware limited liability
company,  OHI Asset (ID), LLC, a
Delaware limited liability company, OHI Asset (LA), LLC, a Delaware limited
liability company, OHI Asset (TX) LLC, a Delaware limited liability company,
OHI Asset (CA) LLC, a Delaware limited liability company, Delta Investors I,
LLC a Maryland limited liability company and Delta Investors II, LLC, a
Maryland limited liability company (collectively, the “Borrowers”) the
Lenders and Bank of America, N. A., as Administrative Agent.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement.

 

The
Credit Parties are required under the provisions of Section 6.15 of the
Credit Agreement to cause the Subsidiary to become a “Borrower”.

 

Accordingly,
the Subsidiary hereby agrees as follows with the Administrative Agent, for the
benefit of the Lenders:

 

1.                                       The Subsidiary hereby acknowledges, agrees
and confirms that, by its execution of this Agreement, the Subsidiary will be
deemed to be a party to the Credit Agreement and a “Borrower” for all purposes
of the Credit Agreement, and shall have all of the obligations of a Borrower
thereunder as if it had executed the Credit Agreement.  The Subsidiary hereby ratifies, as of the
date hereof, and agrees to be bound by, all of the terms, provisions and
conditions applicable to the Borrowers contained in the Credit Agreement.  Without limiting the generality of the
foregoing terms of this paragraph 1, the Subsidiary hereby (i) jointly and
severally together with the other Borrowers, guarantees to each Lender and the
Administrative Agent, the prompt payment and performance of the Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof.

 

2.                                       The Subsidiary hereby acknowledges, agrees
and confirms that, by its execution of this Agreement, the Subsidiary will be
deemed to be a party to the Security Agreement, and shall have all the
obligations of an “Obligor” (as such term is defined in the Security Agreement)
thereunder as if it had executed the Security Agreement.  The Subsidiary hereby ratifies, as of the
date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Security Agreement.  Without limiting generality of the foregoing terms of this
paragraph 2, the Subsidiary hereby grants to the Administrative Agent, for the
benefit of the Lenders, a continuing security interest in, and, subject to the
terms and conditions of the Security Agreement, a right of set off against any
and all right, title and interest of the Subsidiary in and to the Collateral
(as such term is defined in Section 2 of the Security Agreement) of the
Subsidiary.  The Subsidiary hereby
represents and warrants to the Administrative Agent that:

 

(i)                                     The Subsidiary’s chief executive office and
chief place of business are (and for the prior four (4) months have been)
located at the locations set forth on Schedule 1 hereto and the
Subsidiary keeps its books and records at such locations.

 

(ii)                                  The type of Collateral owned by the
Subsidiary and the location of all Collateral owned by the Subsidiary is as
shown on Schedule 2 hereto.

 

 

(iii)                               The Subsidiary’s legal name is as shown in
this Agreement and the Subsidiary has not in the past four (4) months changed
its name, been party to a merger, consolidation or other change in structure or
used any tradename except as set forth in Schedule 3 hereto.

 

4.                                       The address of the Subsidiary for purposes of
all notices and other communications is described on Schedule 10.02 of the
Credit Agreement.

 

5.                                       The Subsidiary hereby waives acceptance by
the Administrative Agent and the Lenders of the guaranty by the Subsidiary upon
the execution of this Agreement by the Subsidiary.

 

6.                                       This Agreement may be executed in one or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute one contract.

 

7.                                       This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of New York,
without regard to conflict of laws principles.

 

IN
WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to be duly
executed by its authorized officer, and the Administrative Agent, for the
benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.

 

	
   

  	
  [INSERT
  NEW BORROWER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Acknowledged
  and accepted:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N. A.,

  as Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 

Schedule 1

 

TO FORM OF JOINDER AGREEMENT

 

 

c/o Omega Healthcare
Investors, Inc.

9690 Deereco Road, Suite 100

Timonium, Maryland  21093

 

 

Schedule 2

 

TO FORM OF JOINDER AGREEMENT

 

[Insert Types and
Locations of Collateral]

 

 

Schedule 3

 

TO FORM OF JOINDER AGREEMENT

 

[Insert
Tradenames]

 

 

Exhibit E-2

 

FORM OF GUARANTY JOINDER AGREEMENT

 

THIS
GUARANTY JOINDER AGREEMENT (this “Agreement”), dated as of
                          ,
20    , is by and between [INSERT NEW GUARANTOR], a
[INSERT TYPE OF ORGANIZATION] (the “Subsidiary”), and BANK OF
AMERICA, N. A., in its capacity as Administrative Agent under that
certain Credit Agreement (as it may be amended, modified, restated or
supplemented from time to time, the “Credit Agreement”), dated as of
March 22, 2004, by and among OHI Asset, LLC, a Delaware limited liability
company,  OHI Asset (ID), LLC, a
Delaware limited liability company, OHI Asset (LA), LLC, a Delaware limited
liability company, OHI Asset (TX) LLC, a Delaware limited liability company,
OHI Asset (CA) LLC, a Delaware limited liability company, Delta Investors I,
LLC a Maryland limited liability company and Delta Investors II, LLC, a
Maryland limited liability company (collectively, the “Borrowers”) the
Lenders and Bank of America, N. A., as Administrative Agent.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement.

 

The
Credit Parties are required under the provisions of Section 6.15 of the
Credit Agreement to cause the Subsidiary to become a “Guarantor”.

 

Accordingly,
the Subsidiary hereby agrees as follows with the Administrative Agent, for the
benefit of the Lenders:

 

1.                                       The Subsidiary hereby acknowledges, agrees
and confirms that, by its execution of this Agreement, the Subsidiary will be
deemed to be a party to the Guaranty and a “Guarantor” for all purposes of the
Guaranty, and shall have all of the obligations of a Guarantor thereunder as if
it had executed the Guaranty.  The
Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by,
all of the terms, provisions and conditions applicable to the Guarantor
contained in the Guaranty.  Without
limiting the generality of the foregoing terms of this paragraph 1, the
Subsidiary hereby (i) jointly and severally together with the other Guarantors,
guarantees to each Lender and the Administrative Agent, the prompt payment and
performance of the Obligations in full when due (whether at stated maturity, as
a mandatory prepayment, by acceleration or otherwise) strictly in accordance
with the terms thereof.

 

2.                                       The address of the Subsidiary for purposes of
all notices and other communications is described on Schedule 10.02 of the
Credit Agreement.

 

3.                                       The Subsidiary hereby waives acceptance by
the Administrative Agent and the Lenders of the guaranty by the Subsidiary upon
the execution of this Agreement by the Subsidiary.

 

4.                                       This Agreement may be executed in one or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute one contract.

 

5.                                       This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of New York,
without regard to conflict of laws principles.

 

 

IN
WITNESS WHEREOF, the Subsidiary has caused this Guaranty Joinder Agreement to
be duly executed by its authorized officer, and the Administrative Agent, for
the benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.

 

	
   

  	
  [INSERT
  NEW GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Acknowledged
  and accepted:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N. A.,

  as Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 

Exhibit F

 

FORM OF LENDER JOINDER AGREEMENT

 

THIS LENDER JOINDER
AGREEMENT (this “Agreement”) dated as of
                    ,
200     to the Credit Agreement referenced below is by and
among [INSERT NEW LENDER] (the “New Lender”), OHI Asset, LLC, a Delaware
limited liability company,  OHI Asset
(ID), LLC, a Delaware limited liability company, OHI Asset (LA), LLC, a
Delaware limited liability company, OHI Asset (TX) LLC, a Delaware limited
liability company, OHI Asset (CA) LLC, a Delaware limited liability company,
Delta Investors I, LLC a Maryland limited liability company and Delta Investors
II, LLC, a Maryland limited liability company (the “Borrowers”), certain
Lenders identified therein, and Bank of America, N.A., as administrative agent
(in such capacity, the “Administrative Agent”) for the Lenders.  All of the defined terms of the Credit
Agreement are incorporated herein by reference.

 

W I T N E S S E T
H

 

WHEREAS, pursuant to that
Credit Agreement dated as of March 22, 2004 (as amended and modified from
time to time, the “Credit Agreement”), by and among the Borrowers, the
Lenders and the Administrative Agent, the Lenders have agreed to provide the
Borrowers with a revolving credit facility;

 

WHEREAS, pursuant to
Section 2.01(d) of the Credit Agreement, the Borrowers have requested that
the New Lender provide an additional Revolving Commitment under the Credit
Agreement; and

 

WHEREAS, the New Lender
has agreed to provide the additional Revolving Commitment on the terms and
conditions set forth herein and to become a “Lender” under the Credit Agreement
in connection therewith;

 

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

 

1.                                       The
New Lender hereby agrees to provide Commitments to the Borrowers in the amounts
set forth on Schedule 2.01 to the Credit Agreement as attached
hereto. The Revolving Commitment Percentage of the New Lender shall be as set
forth on Schedule 2.01.

 

2.                                       The
New Lender shall be deemed to have purchased without recourse a risk
participation from the L/C Issuer in all Letters of Credit issued or existing
under the Credit Agreement (including Existing Letters of Credit) and the
obligations arising thereunder in an amount equal to its pro rata share of the
obligations under such Letters of Credit (based on the Revolving Commitment
Percentages of the Lenders as set forth on Schedule 2.01 as
attached hereto), and shall absolutely, unconditionally and irrevocably assume,
as primary obligor and not as surety, and be obligated to pay to the L/C Issuer
therefor and discharge when due, its pro rata share of the obligations arising
under such Letter of Credit.

 

3.                                       The
New Lender (a) represents and warrants that it is a commercial lender,
other financial institution or other “accredited” investor (as defined in SEC
Regulation D) that makes or acquires loans in the ordinary course of business
and that it will make or acquire Loans for its own account in the ordinary
course of business, (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 6.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Agreement; (c) agrees that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (d) appoints and authorizes the Administrative Agent to take
such action as agent on

 

 

its behalf and to
exercise such powers and discretion under the Credit Agreement as are delegated
to the Administrative Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; and (e) agrees that, as
of the date hereof, the New Lender shall (i) be a party to the Credit Agreement
and the other Credit Documents, (ii) be a “Lender” for all purposes of the
Credit Agreement and the other Credit Documents, (iii) perform all of the
obligations that by the terms of the Credit Agreement are required to be
performed by it as a “Lender” under the Credit Agreement and (iv) shall have
the rights and obligations of a Lender under the Credit Agreement and the other
Credit Documents.

 

4.                                       Each
of the Borrowers and the Guarantors agree that, as of the date hereof, the New
Lender shall (i) be a party to the Credit Agreement and the other Credit
Documents, (ii) be a “Lender” for all purposes of the Credit Agreement and the
other Credit Documents, and (iii) have the rights and obligations of a Lender
under the Credit Agreement and the other Credit Documents.

 

5.                                       The
address of the New Lender for purposes of all notices and other communications
is
                                    ,
                                                    ,
Attention of
                            
(Facsimile No.
                              ).

 

6.                                       This
Agreement may be executed in any number of counterparts and by the various
parties hereto 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 contract.  Delivery of an executed
counterpart of this Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.

 

7.                                       This
Agreement shall be governed by and construed and interpreted in accordance with
the laws of the State of New York, without regard to conflict of laws
principles.

 

 

IN WITNESS WHEREOF, each
of the parties hereto has caused this Lender Joinder Agreement to be executed
by a duly authorized officer as of the date first above written.

 

	
  NEW LENDER:

  	
  [INSERT NEW LENDER],

  
	
   

  	
  as New Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  BORROWERS:

  	
  OHI ASSET, LLC

  
	
   

  	
  OHI ASSET (ID), LLC

  
	
   

  	
  OHI ASSET (LA), LLC

  
	
   

  	
  OHI ASSET (TX), LLC

  
	
   

  	
  OHI ASSET (CA), LLC

  
	
   

  	
  DELTA INVESTORS I, LLC

  
	
   

  	
  DELTA INVESTORS II, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Omega Healthcare Investors, Inc.,

  
	
   

  	
   

  	
  the Sole Member of each such company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Daniel J. Booth

  
	
   

  	
   

  	
  Title:   Chief Operating Officer

  
	
   

  	
   

  
	
  GUARANTORS:

  	
  OMEGA HEALTHCARE
  INVESTORS, INC.,

  
	
   

  	
  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  of each of the
  foregoing

  
	
   

  	
   

  
	
  Accepted and Agreed:

  	
   

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A.,

  as Administrative Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
											

 

 

EXHIBIT G

 

FORM OF GUARANTY

 

THIS GUARANTY (this “Guaranty”),
dated as of March 22, 2004, is given by Omega Healthcare Investors, Inc.,
a Maryland corporation (the “Parent”) and each of the subsidiary
guarantors identified as a “Subsidiary Guarantor” on the signature pages hereto
and from time to time joined as a Guarantor hereunder (the Subsidiary Guarantors,
together with the Parent, shall be collectively referred to herein as the “Guarantors”
or, individually, as a “Guarantor”), in favor of BANK OF AMERICA, N.A.,
in its capacity as administrative agent (in such capacity, the “Administrative
Agent”) for the Lenders under the Credit Agreement, dated as of
March 22, 2004 (as amended and modified, the “Credit Agreement”)
among OHI Asset, LLC, a Delaware limited liability company, OHI Asset (ID),
LLC, a Delaware limited liability company, OHI Asset (LA), LLC, a Delaware
limited liability company, OHI Asset (TX) LLC, a Delaware limited liability
company, OHI Asset (CA) LLC, a Delaware limited liability company, Delta
Investors I, LLC a Maryland limited liability company and Delta Investors II,
LLC, a Maryland limited liability company (collectively, the “Borrowers”),
the Lenders identified therein and the Administrative Agent.  Capitalized terms used but not otherwise
defined herein shall have the meanings provided in the Credit Agreement.

 

RECITALS:

 

WHEREAS, pursuant to the
Credit Agreement, the Lenders have agreed, subject to the terms and conditions
contained therein, to make available loans and letters of credit to the
Borrowers; and

 

WHEREAS, in connection
with the Credit Agreement, the Lenders have required, among other things, each
of the Guarantors to guarantee all of the Borrowers’ obligations arising under
the Credit Agreement and the other Credit Documents referred to therein;

 

NOW, THEREFORE, for and
in consideration of the execution and delivery by the Lenders of the Credit
Agreement, and other good and valuable consideration, receipt whereof is hereby
acknowledged, each Guarantor hereby agrees as follows:

 

1.                                       Guaranty
of Payment.  The Guarantors hereby
irrevocably and unconditionally guarantee, jointly and severally, to the
Administrative Agent and the Lenders as primary obligor and not as surety, the
prompt payment, when due, by acceleration or otherwise, of the
Indebtedness.  For the purposes hereof,
“Indebtedness” shall mean, without duplication, (a) all Obligations of
the Borrowers (including, without limitation, interest accruing after an event
of bankruptcy or insolvency, regardless of whether such interest is allowed as
a claim under any Debtor Relief Laws and all related Attorney Costs) to the
Lenders and the Administrative Agent, whenever arising, under the Credit
Agreement, the Notes or the other Credit Documents, and (b) all
liabilities and obligations, whenever arising, owing from the Borrowers to any
Lender, or any affiliate of a Lender, arising under any Swap Contract (if
applicable) relating to the Obligations under the Credit Agreement or entered
into in the ordinary course of business and not for speculative purposes,
whether such Indebtedness is now existing or hereafter arising, due or to
become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, as such Indebtedness may be modified, extended,
renewed or replaced from time to

 

 

time.  The guaranty of the Guarantors as set forth
in this section is a guaranty of payment and not of collection.

 

Notwithstanding any
provision to the contrary contained herein or in any other of the Credit
Documents, the obligations of each Guarantor hereunder shall be limited to an
aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of any applicable state
law.

 

2.                                       Release
of Collateral, Parties Liable, etc. 
Each of the Guarantors agrees that the whole or any part of the security
now or hereafter held for the Indebtedness may be exchanged, compromised,
released or surrendered from time to time; that neither the Administrative
Agent nor the Lenders shall have any obligation to protect, perfect, secure or
insure any Liens now or hereafter held for the Indebtedness or the properties
subject thereto; that the time or place of payment of the Indebtedness may be
changed or extended, in whole or in part, to a time certain or otherwise, and
may be renewed or accelerated, in whole or in part; that the Borrowers may be
granted indulgences generally; that any provisions of the Credit Documents or
any other documents executed in connection with this transaction, may be
modified, amended or waived; that any party liable for the payment of the
Indebtedness may be granted indulgences or released; and that any deposit
balance for the credit of the Borrowers or any other party liable for the
payment of the Indebtedness or liable upon any security therefor may be
released, in whole or in part, at, before and/or after the stated, extended or
accelerated maturity of the Indebtedness, all without notice to or further
assent by the Guarantors, who shall remain bound thereon, notwithstanding any such
exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence or release.

 

3.                                       Waiver
of Rights.  Each of the Guarantors
expressly waives:  (a) notice of
acceptance of this Guaranty by the Administrative Agent and the Lenders and of
all extensions of credit to the Borrowers by the Administrative Agent or any
Lender; (b) presentment and demand for payment of any of the Indebtedness; (c)
protest and notice of dishonor or of default to such Guarantor or to any other
party with respect to the Indebtedness or with respect to any security
therefor; (d) notice of the Administrative Agent or any Lender obtaining,
amending, substituting for, releasing, waiving or modifying the Indebtedness,
any security interest, liens, or the encumbrances now or hereafter securing the
Indebtedness, or the Administrative Agent’s or any Lender’s subordinating,
compromising, discharging or releasing such security interests, liens or
encumbrances; (e) all other notices to which such Guarantor might otherwise be
entitled; (f) demand for payment under this Guaranty; and (g) any right to
assert against the Administrative Agent or any Lender, as a defense,
counterclaim, set-off, or cross-claim any defense (legal or equitable),
set-off, counterclaim or claim which such Guarantor may now or hereafter have
against the Administrative Agent or any Lender or any Borrower, but such waiver
shall not prevent such Guarantor from asserting against the Administrative
Agent or any Lender in a separate action, any claim, action, cause of action,
or demand that such Guarantor might have, whether or not arising out of this
Guaranty.

 

4.                                       Primary
Liability of the Guarantors.  Each
of the Guarantors agrees that this Guaranty may be enforced by the
Administrative Agent and the Lenders without the necessity at any time of
resorting to or exhausting any other security or collateral and without the
necessity at any time of having recourse to the Notes or any collateral now or
hereafter securing the

 

 

Indebtedness or
otherwise, and each of the Guarantors hereby waives the right to require the
Administrative Agent and the Lenders to proceed against the Borrowers or any
other person (including a co-Guarantor) or to require the Administrative Agent
and the Lenders to pursue any other remedy or enforce any other right.  Without limiting the generality of the
foregoing, each of the Guarantors hereby specifically waives, to the extent
permitted by applicable law, the benefits of North Carolina General Statutes
Sections 26-7 through 26-9, inclusive. 
In addition, each of the Guarantors hereby waives and renounces any and
all rights it has or may have for subrogation, indemnity, reimbursement or
contribution against the Borrowers for amounts paid under this Guaranty.  This waiver is expressly intended to prevent
the existence of any claim in respect of such subrogation, indemnity,
reimbursement or contribution by a Guarantor against the estate of any Borrower
within the meaning of Section 101 of the United States Bankruptcy Code,
and to prevent such Guarantor from being deemed a “creditor” of such Borrower
in respect of such subrogation, indemnity, reimbursement or contribution within
the meaning of Section 547(b) of the United States Bankruptcy Code in the
event of a subsequent case involving any Borrower.  Each of the Guarantors further agrees that nothing contained
herein shall prevent the Administrative Agent or the Lenders from suing on the
Notes or foreclosing its security interest in or lien on any collateral now or
hereafter securing the Indebtedness or from exercising any other rights
available to the Administrative Agent or the Lenders under the Notes, or any
other instrument of security if neither the Borrowers nor the Guarantors timely
perform the obligations of the Borrowers thereunder, and the exercise of any of
the aforesaid rights and the completion of any foreclosure proceedings shall
not constitute a discharge of any Guarantor’s obligations hereunder; it being
the purpose and intent of each of the Guarantors that such Guarantor’s obligations
hereunder shall be absolute, independent and unconditional under any and all
circumstances.  Neither the Guarantors’
obligations under this Guaranty nor any remedy for the enforcement thereof
shall be impaired, modified, changed or released in any manner whatsoever by an
impairment, modification, change, release or limitation of the liability of the
Borrowers, by reason of any Borrower’s bankruptcy or insolvency or by reason of
the invalidity or unenforceability of all or any portion of the Indebtedness.  Each of the Guarantors acknowledges that the
term “Indebtedness” as used herein includes any payments made by the Borrowers
to the Administrative Agent or any Lender and subsequently recovered by the
Borrowers or a trustee for the Borrowers pursuant to the Borrowers’ bankruptcy
or insolvency and that the guaranty of each of the Guarantors hereunder shall
be reinstated to the extent of such recovery.

 

5.                                       Security
Interests and Setoff.  As security
for such Guarantor’s obligations hereunder, each Guarantor agrees that in the
event such Guarantor fails to pay its obligations hereunder when due and
payable under this Guaranty, (a) any of such Guarantor’s assets of any kind,
nature or description (including, without limitation, deposit accounts) in the
possession, control or custody of the Administrative Agent or any Lender may,
without prior notice (but promptly confirmed in writing by the Administrative
Agent or such Lender, as applicable, to such Guarantor, provided that
failure to provide such written confirmation will not affect the liabilities of
such Guarantor hereunder) to such Guarantor, be reduced to cash or the like and
applied by the Administrative Agent or such Lender in reduction or payment of
such Guarantor’s obligations hereunder; and (b) the Administrative Agent and
each Lender shall have the right, immediately and without further action by
them, to set off pro tanto against the Indebtedness all money owed by
the Administrative Agent or such Lender in any capacity to such Guarantor,
whether or not due, and the Administrative Agent or such Lender shall be deemed
to have made a charge against any such money immediately upon the occurrence of
such obligation becoming

 

 

due even though such
charge is made or entered on the books of the Administrative Agent or such
Lender subsequent thereto.

 

6.                                       Term
of this Guaranty; Warranties.  This
Guaranty shall continue in full force and effect until the Indebtedness is
fully and indefeasibly paid, performed and discharged and all Commitments under
the Credit Agreement shall have been terminated.  This Guaranty covers the Indebtedness whether presently
outstanding or arising subsequent to the date hereof including all amounts
advanced by the Administrative Agent or any Lender in stages or
installments.  Each Guarantor warrants
and represents to the Administrative Agent (a) that such Guarantor is a
corporation or limited liability company, duly incorporated or organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, (b) that such Guarantor has all corporate or
organizational powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted,
(c) that the execution and delivery by such Guarantor of this Guaranty and
the other Credit Documents to which it is a party and the performance by such
Guarantor of its obligations hereunder and thereunder are within the corporate
or organizational power of such Guarantor, have been duly authorized by all
necessary corporate or other action, require no action by or in respect of, or
filing with, any governmental body, agency or official (except for any such
action or filing that has been taken and is in full force and effect) and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or bylaws or operating
agreement (or other constitutional documents) of such Guarantor or of any
material agreement, judgment, injunction, order, decree, or other material
instrument binding upon such Guarantor or result in the creation or imposition
(other than pursuant to the Credit Documents) of any Lien on any asset of such
Guarantor, (d) that this Guaranty and the other Credit Documents to which such
Guarantor may be a party constitute valid and binding agreements of such
Guarantor and, when executed and delivered, will constitute valid and binding
obligations of such Guarantor enforceable in accordance with their terms and
(e) all representations and warranties set forth in this Section 6 and all
representations, warranties and covenants of the Guarantors contained in any
certificate, or any of the Credit Documents (including, but not limited to, any
such representation, warranty or covenant made in or in connection with any
amendment thereto) shall constitute representations, warranties and covenants
under this Guaranty to the same extent and with the same force as if fully set
forth herein.

 

7.                                       Further
Representations and Warranties. 
Each Guarantor agrees that the Administrative Agent and the Lenders will
have no obligation to investigate the financial condition or affairs of the
Borrowers for the benefit of such Guarantor nor to advise such Guarantor of any
fact respecting, or any change in, the financial condition or affairs of the
Borrowers which might come to the knowledge of the Administrative Agent or any
Lender at any time, whether or not the Administrative Agent or any Lender knows
or believes or has reason to know or believe that any such fact or change is
unknown to such Guarantor or might (or does) materially increase the risk of
such Guarantor as guarantor or might (or would) affect the willingness of such
Guarantor to continue as guarantor with respect to the Indebtedness.

 

8.                                       Additional
Liability of Guarantors.  If any
Guarantor is or becomes liable for any indebtedness owing by the Borrowers to
the Administrative Agent or any Lender by endorsement or otherwise other than
under this Guaranty, such liability shall not be in any manner impaired or
reduced hereby but shall have all and the same force and effect it would

 

 

have had if this Guaranty
had not existed and such Guarantor’s liability hereunder shall not be in any
manner impaired or reduced thereby.

 

9.                                       Cumulative
Rights.  All rights of the
Administrative Agent and the Lenders hereunder or otherwise arising under any
documents executed in connection with or as security for the Indebtedness are
separate and cumulative and may be pursued separately, successively or concurrently,
or not pursued, without affecting or limiting any other right of the
Administrative Agent or any Lender and without affecting or impairing the
liability of the Guarantors.

 

10.                                 Usury.  Notwithstanding any other provisions herein
contained, no provision of this Guaranty shall require or permit the collection
from any Guarantor of interest in excess of the maximum rate or amount that
such Guarantor may be required or permitted to pay pursuant to any applicable
law.  In the event any such interest is
collected, it shall be applied in reduction of the Guarantors’ obligations
hereunder, and the remainder of such excess collected shall be returned to the
Guarantors once such obligations have been fully satisfied.

 

11.                                 The
Administrative Agent.  In acting
under or by virtue of this Guaranty, the Administrative Agent shall be entitled
to all the rights, authority, privileges and immunities provided in
Article IX of the Credit Agreement, all of which provisions are
incorporated by reference herein with the same force and effect as if set forth
herein.  Each of the Guarantors hereby
releases the Administrative Agent from any liability for any act or omission
relating to this Guaranty, except such as may result from the Administrative
Agent’s gross negligence or willful misconduct.

 

12.                                 Successors
and Assigns.  This Guaranty shall be
binding on and enforceable against each Guarantor and its successors and
assigns.  This Guaranty is intended for
and shall inure to the benefit of the Administrative Agent and each Lender and
each and every person who shall from time to time be or become the owner or
holder of any of the Indebtedness, and each and every reference herein to
“Administrative Agent” or “Lender” shall include and refer to each and every
successor or assignee of the Administrative Agent or any Lender at any time
holding or owning any part of or interest in any part of the Indebtedness.  This Guaranty shall be transferable and
negotiable with the same force and effect, and to the same extent, that the
Indebtedness is transferable and negotiable, it being understood and stipulated
that upon assignment or transfer by the Administrative Agent or any Lender of
any of the Indebtedness the legal holder or owner of the Indebtedness (or a
part thereof or interest therein thus transferred or assigned by the
Administrative Agent or any Lender) shall (except as otherwise stipulated by
the Administrative Agent or any such Lender in its assignment) have and may
exercise all of the rights granted to the Administrative Agent or such Lender
under this Guaranty to the extent of that part of or interest in the
Indebtedness thus assigned or transferred to said person.  Each Guarantor expressly waives notice of
transfer or assignment of the Indebtedness, or any part thereof, or of the
rights of the Administrative Agent or any Lender hereunder.  Failure to give notice will not affect the
liabilities of the Guarantors hereunder.

 

13.                                 Application
of Payments.  The Administrative
Agent and each Lender shall apply any payments received pursuant to this
Guaranty as follows: first, to all costs and expenses of the
Administrative Agent (including without limitation reasonable and documented
attorneys’ fees and expenses) incurred in connection with the implementation
and/or enforcement of this Guaranty and/or any of the other Credit Documents; second,
to all reasonable and documented

 

 

costs and expenses of the
Lenders (including without limitation reasonable attorneys’ fees and expenses)
incurred in connection with the implementation and/or enforcement of this
Guaranty and/or any of the other Credit Documents; third, to the
principal amount of the Indebtedness (including without limitation to the cash
collateralization term of the available undrawn amount of outstanding Letters
of Credit); fourth, to such of the Indebtedness consisting of accrued
but unpaid interest and fees; fifth, to all other amounts payable with
respect to the Indebtedness; and sixth, to the surplus, if any, to the
Guarantors or as otherwise required by Law.

 

14.                                 Modifications.  This Guaranty and the provisions hereof may
be changed, discharged or terminated only by an instrument in writing signed by
each of the Guarantors affected thereby and the Administrative Agent.

 

15.                                 Discharge
and Release.  In the event that the
Indebtedness shall have been paid in full and the obligations of the Lenders to
extend credit to the Borrower under the Credit Agreement shall have terminated,
the Administrative Agent, on behalf of the Lenders, shall discharge and release
the Guarantors from all of their obligations under this Guaranty.  Upon any such release and discharge, the
Administrative Agent, on behalf of the Lenders, will execute and deliver to the
Guarantors such documents as their guarantors shall reasonably request to
evidence such discharge and release.

 

16.                                 Notices.  All communications provided for herein shall
be in writing (including bank wire, telex, facsimile transmission or similar
writing) and shall be given to such party (a) at its address, facsimile number
or telex number shown below or (b) at such other address, facsimile number or
telex number as such party may hereafter specify for the purpose by notice to
the other party hereto:

 

if to
any Guarantor:

 

	
   

  	
  Omega Healthcare
  Investors, Inc.

  
	
   

  	
  9690 Deereco Road -
  Suite 100

  
	
   

  	
  Timonium, Maryland
  21093

  
	
   

  	
  Attention:

  	
  Daniel J. Booth

  
	
   

  	
  Telephone:

  	
  (410) 427-1724

  
	
   

  	
  Facsimile:

  	
  (410) 427-8824

  
	
   

  	
  E-mail:

  	
  dbooth@omegahealthcare.com

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
  LeBoeuf, Lamb, Greene
  & MacRae, LLP

  
	
   

  	
  125 West 55th Street

  
	
   

  	
  New York, New York  10019

  
	
   

  	
  Attention:

  	
  John R. Fallon, Jr.,
  Esq.

  
	
   

  	
  Telephone:

  	
  (212) 424-8279

  
	
   

  	
  Facsimile:

  	
  (212) 424-8500

  
	
   

  	
  Email:

  	
  jrfallon@llgm.com

  

 

 

if to the Administrative
Agent:

 

	
   

  	
  Bank of America, N.A.

  
	
   

  	
  Agency Management

  
	
   

  	
  1455 Market Street

  
	
   

  	
  CA5-701-05-19

  
	
   

  	
  San Francisco, CA  94103-1399

  
	
   

  	
  Attention:

  	
  Cassandra McCain

  
	
   

  	
  Telephone:

  	
  415-436-3400

  
	
   

  	
  Facsimile:

  	
  415-503-5133

  
	
   

  	
  Email:

  	
  cassandra.g.mccain@bankofamerica.com

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  100 N. Tryon Street

  
	
   

  	
  17th Floor

  
	
   

  	
  Charlotte, North
  Carolina 28255

  
	
   

  	
  Attention:

  	
  Kevin Wagley, Principal

  
	
   

  	
  Telephone:

  	
  (704) 388-6006

  
	
   

  	
  Facsimile:

  	
  (704) 388-6002

  
	
   

  	
  Email:

  	
  kevin.r.wagley@bankofamerica.com

  

 

Each such notice, request
or other communication shall be effective (i) if given by telex, when such telex
is transmitted to the telex number specified in or pursuant to this
Section and the appropriate answerback is received, (ii) if given by mail,
three (3) business days after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when delivered at the address specified in or pursuant to this
Section.

 

17.                                 Severability.  In the event that any provision hereof shall
be deemed to be invalid by reason of the operation of any law or by reason of
the interpretation placed thereon by any court, this Guaranty shall be
construed as not containing such provision, but only as to such jurisdictions
where such law or interpretation is operative, and the invalidity of such
provision shall not affect the validity of any remaining provision hereof, and
any and all other provisions hereof which are otherwise lawful and valid shall
remain in full force and effect.

 

18.                                 Applicable
Law; Consent to Jurisdiction and Venue; Waiver of Jury Trial.  THIS GUARANTY AND THE OTHER CREDIT DOCUMENTS
AND ALL MATTERS RELATING THERETO SHALL, EXCEPT TO THE EXTENT OTHERWISE REQUIRED
BY APPLICABLE LAW, BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.  EACH OF THE GUARANTORS
HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF THE STATE AND FEDERAL COURTS OF
NEW YORK AND AGREES THAT THE ADMINISTRATIVE AGENT AND THE LENDERS MAY, AT THEIR
OPTION, ENFORCE THEIR RESPECTIVE RIGHTS HEREUNDER AND UNDER THE OTHER CREDIT
DOCUMENTS IN SUCH COURTS.  EACH OF THE
GUARANTORS HEREBY IRREVOCABLY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM FOR
MAINTENANCE OF ANY ACTION OR PROCEEDING

 

 

BY THE ADMINISTRATIVE
AGENT OR THE LENDERS IN SUCH COURTS. 
EACH OF THE GUARANTORS AND THE ADMINISTRATIVE AGENT, (ON BEHALF OF
ITSELF AND THE LENDERS) HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
GUARANTY OR ANY OTHER OF THE CREDIT DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

19.                                 Headings.  The headings in this instrument are for
convenience of reference only and shall not limit or otherwise affect the
meaning of any provisions hereof.

 

20.                                 Counterparts.  This Guaranty may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
constituting an original, but all together one and the same instrument.

 

21.                                 Rights
of the Required Lenders.  All rights
of the Administrative Agent hereunder, if not exercised by the Administrative
Agent, may be exercised by the Required Lenders.

 

[SIGNATURE PAGES FOLLOW]

 

IN WITNESS WHEREOF, each
of the Guarantors has caused this Guaranty to be duly executed as of the date
first above written.

 

	
  PARENT:

  	
  OMEGA HEALTHCARE
  INVESTORS, INC.,

  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Daniel J. Booth

  	
   

  
	
   

  	
  Title:

  	
  Chief Operating Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SUBSIDIARY GUARANTORS:

  	
  ARIZONA LESSOR –
  INFINIA, INC.

  
	
   

  	
  BAYSIDE ALABAMA
  HEALTHCARE

  SECOND, INC.

  
	
   

  	
  BAYSIDE ARIZONA
  HEALTHCARE

  ASSOCIATES, INC.

  
	
   

  	
  BAYSIDE ARIZONA
  HEALTHCARE

  SECOND, INC.

  
	
   

  	
  BAYSIDE COLORADO
  HEALTHCARE

  ASSOCIATES, INC.

  
	
   

  	
  BAYSIDE COLORADO
  HEALTHCARE

  SECOND, INC.

  
	
   

  	
  BAYSIDE INDIANA
  HEALTHCARE

  ASSOCIATES, INC.

  
	
   

  	
  BAYSIDE STREET
  II, INC.

  

 

 

	
   

  	
  BAYSIDE
  STREET, INC.

  
	
   

  	
  CARE
  HOLDINGS, INC.

  
	
   

  	
  CENTER HEALTHCARE
  ASSOCIATES, INC.

  
	
   

  	
  CHERRY STREET – SKILLED
  NURSING, INC.

  
	
   

  	
  COLORADO LESSOR –
  CONIFER, INC.

  
	
   

  	
  DALLAS – SKILLED
  NURSING, INC.

  
	
   

  	
  FLORIDA LESSOR –
  CRYSTAL SPRINGS, INC.

  
	
   

  	
  FLORIDA LESSOR –
  EMERALD, INC.

  
	
   

  	
  FLORIDA LESSOR – FIVE
  FACILITIES, INC.

  
	
   

  	
  FLORIDA LESSOR –
  LAKELAND, INC.

  
	
   

  	
  FLORIDA LESSOR –
  MEADOWVIEW, INC.

  
	
   

  	
  FLORIDA LESSOR – WEST
  PALM BEACH AND

  SOUTHPOINT, INC.

  
	
   

  	
  GEORGIA LESSOR –
  BONTERRA/

  PARKVIEW, INC.

  
	
   

  	
  HERITAGE TEXARKANA
  HEALTHCARE

  ASSOCIATES, INC.

  
	
   

  	
  INDIANA LESSOR –
  JEFFERSONVILLE, INC.

  
	
   

  	
  INDIANA LESSOR –
  WELLINGTON

  MANOR, INC.

  
	
   

  	
  JEFFERSON
  CLARK, INC.

  
	
   

  	
  LAKE PARK SKILLED
  NURSING, INC.

  
	
   

  	
  LONG TERM CARE –
  MICHIGAN, INC.

  
	
   

  	
  LONG TERM CARE – NORTH
  CAROLINA, INC.

  
	
   

  	
  LONG TERM CARE
  ASSOCIATES –

  ILLINOIS, INC.

  
	
   

  	
  LONG TERM CARE
  ASSOCIATES –

  INDIANA, INC.

  
	
   

  	
  LONG TERM CARE
  ASSOCIATES –

  TEXAS, INC.

  
	
   

  	
  OHI
  (CLEMMONS), INC.

  
	
   

  	
  OHI
  (CONNECTICUT), INC.

  
	
   

  	
  OHI
  (FLORIDA), INC.

  
	
   

  	
  OHI
  (GREENSBORO), INC.

  
	
   

  	
  OHI
  (ILLINOIS), INC.

  
	
   

  	
  OHI
  (INDIANA), INC.

  
	
   

  	
  OHI (IOWA), INC.

  
	
   

  	
  OHI (KANSAS), INC.

  
	
   

  	
  OHIO LESSOR – WATERFORD
  &

  CRESTWOOD, INC.

  
	
   

  	
  OHI OF
  KENTUCKY, INC.

  
	
   

  	
  OHI OF TEXAS, INC.

  
	
   

  	
  OHI SUNSHINE, INC.

  
	
   

  	
  OHIMA, INC.

  
	
   

  	
  OMEGA
  (KANSAS), INC.

  
	
   

  	
  OMEGA TRS I, INC.

  

 

 

	
   

  	
  OS LEASING COMPANY

  
	
   

  	
  PARKVIEW – SKILLED
  NURSING, INC.

  
	
   

  	
  PINE TEXARKANA
  HEALTHCARE

  ASSOCIATES, INC.

  
	
   

  	
  REUNION TEXARKANA
  HEALTHCARE

  ASSOCIATES, INC.

  
	
   

  	
  SAN AUGUSTINE
  HEALTHCARE

  ASSOCIATES, INC.

  
	
   

  	
  SKILLED NURSING –
  GASTON, INC.

  
	
   

  	
  SKILLED NURSING –
  HERRIN, INC.

  
	
   

  	
  SKILLED NURSING –
  HICKSVILLE, INC.

  
	
   

  	
  SKILLED NURSING –
  PARIS, INC.

  
	
   

  	
  SOUTH ATHENS HEALTHCARE

  ASSOCIATES, INC.

  
	
   

  	
  STERLING ACQUISITION
  CORP.

  
	
   

  	
  STERLING ACQUISITION
  CORP. II

  
	
   

  	
  TEXAS LESSOR –
  TREEMONT, INC.

  
	
   

  	
  WASHINGTON LESSOR –
  SILVERDALE, INC.

  
	
   

  	
  WAXAHACHIE HEALTHCARE

  ASSOCIATES, INC.

  
	
   

  	
  WEST ATHENS HEALTHCARE

  ASSOCIATES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Daniel J. Booth

  	
   

  
	
   

  	
  Title:

  	
  Chief Operating Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OHI ASSET (FL), LLC

  
	
   

  	
  OHI ASSET (IN), LLC

  
	
   

  	
  OHI ASSET (MI/NC), LLC

  
	
   

  	
  OHI ASSET (MO), LLC

  
	
   

  	
  OHI ASSET (OH), LLC

  
	
   

  	
  OHI ASSET II (CA), LLC

  
	
   

  	
  OHI ASSET (FL) TARPON
  SPRINGS,

  
	
   

  	
  PINELLAS PARK &
  GAINESVILLE, LLC

  
	
   

  	
  NRS VENTURES, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Omega Healthcare
  Investors, Inc., as the

  Sole Member of each of the companies

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Daniel J. Booth

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Operating Officer

  	
   

  
							

 

 

	
   

  	
  TEXAS LESSOR – STONEGATE,
  LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  TEXAS LESSOR –
  STONEGATE GP, Inc.,

  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Daniel J. Booth

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Operating Officer

  	
   

  

 

 

EXHIBIT H

 

FORM OF SECURITY
AGREEMENT

 

THIS SECURITY AGREEMENT,
dated as of March 22, 2004 (this “Security Agreement”), is made by
the signatories from time to time party hereto (each, an “Obligor” and,
collectively, the “Obligors”) in favor of  Bank of America, N.A., in its capacity as Administrative Agent
(in such capacity, the “Administrative Agent”) for the Lenders (as
defined in the Credit Agreement described below).

 

RECITALS

 

WHEREAS, pursuant
to the Credit Agreement, dated as of the date hereof (as amended, modified,
extended, renewed or replaced from time to time, the “Credit Agreement”),
by and among OHI Asset, LLC, a Delaware limited liability company,  OHI Asset (ID), LLC, a Delaware limited
liability company, OHI Asset (LA), LLC, a Delaware limited liability company,
OHI Asset (TX) LLC, a Delaware limited liability company, OHI Asset (CA) LLC, a
Delaware limited liability company, Delta Investors I, LLC a Maryland limited
liability company and Delta Investors II, LLC, a Maryland limited liability
company, the Lenders party thereto and the Administrative Agent, the Lenders
have agreed to make Loans and issue Letters of Credit upon the terms and
subject to the conditions set forth therein; and

 

WHEREAS, it is a
condition precedent to the effectiveness of the Credit Agreement and the
obligations of the Lenders to make their respective Loans and to participate
in  Letters of Credit under the Credit
Agreement that the Obligors shall have executed and delivered this Security
Agreement to the Administrative Agent for the ratable benefit of the Lenders.

 

NOW, THEREFORE, in
consideration of these premises and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

 

1.                                       Definitions.

 

(a)           Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed to such terms in
the Credit Agreement, and the following terms which are defined in the Uniform
Commercial Code (the “UCC”) in effect in the State of New York on the
date hereof are used herein as so defined: Accession, Account, As-Extracted
Collateral, Chattel Paper, Commercial Tort Claim, Consumer Goods, Deposit
Account, Document, Equipment, Farm Products, Fixtures, General Intangible,
Goods, Instrument, Inventory, Investment Property, Letter-of-Credit Right,
Proceeds, Software, Supporting Obligation and Tangible Chattel Paper. For
purposes of this Security Agreement, the term “Lender” shall include any
Affiliate of any Lender which has entered into a Swap Contract with any Credit
Party in connection with the Loans.

 

(b)                                 In
addition, the following terms shall have the following meanings:

 

 

“Secured
Obligations”: the collective reference to all of the Obligations, now
existing or hereafter arising pursuant to the Credit Documents, owing from the
Borrowers or any other Credit Party to any Lender or the Administrative Agent,
howsoever evidenced, created, incurred or acquired, whether primary, secondary,
direct, contingent, or joint and several, including, without limitation, all
liabilities arising under Swap Contracts in connection with the Loans between any
Obligor and any Lender, or any Affiliate of a Lender, and all obligations and
liabilities incurred in connection with collecting and enforcing the foregoing.

 

“SNDAs”
means the subordination, non-disturbance and attornment agreements to which
Tenants under the Facility Leases are parties.

 

2.                                       Grant
of Security Interest in the Collateral. 
To secure the prompt payment and performance in full when due, whether
by lapse of time, acceleration, mandatory prepayment or otherwise, of the
Secured Obligations, each Obligor hereby grants to the Administrative Agent,
for the benefit of the Lenders, a continuing security interest in, and a right
to set off against (subject to the terms and conditions of this Security
Agreement), any and all right, title and interest of such Obligor in and to all
personal property of such Obligor of whatever type or description, whether now
owned or existing or owned, acquired, or arising hereafter, including, without
limitation, the following (collectively, the “Collateral”):

 

(a)                                  all
Accounts;

 

(b)                                 all
cash and currency;

 

(c)                                  all
Chattel Paper;

 

(d)                                 all
Commercial Tort Claims identified on Schedule 2(d) attached hereto;

 

(e)                                  all
Deposit Accounts;

 

(f)                                    all
Documents;

 

(g)                                 all
Equipment;

 

(h)                                 all
Fixtures;

 

(i)                                     all
General Intangibles;

 

(j)                                     all
Instruments;

 

(k)                                  all
Inventory;

 

(l)                                     all
Investment Property;

 

(m)                               all
Letter-of-Credit Rights;

 

 

(n)                                 all
Software;

 

(o)                                 all
Supporting Obligations; and

 

(p)                                 to
the extent not otherwise included, all Accessions and all Proceeds of any and
all of the foregoing.

 

Any grant of a security
interest and right of set off contained in this Section 2 shall not extend
to any of the foregoing Collateral to the extent that (i) such rights are not
assignable or capable of being encumbered as a matter of law or under the terms
of any agreement applicable thereto (but solely to the extent that any such
restriction shall be enforceable under applicable law), without the consent of
the applicable parties thereto and (ii) such consent has not been obtained; provided,
however, that the foregoing grant of a security interest and right of
set off shall extend to any and all proceeds of the foregoing to the extent
that the assignment or encumbering of such proceeds is not so restricted by
applicable law or under the terms of such agreements applicable thereto.

 

The Obligors and the
Administrative Agent, on behalf of the Lenders, hereby acknowledge and agree
that the security interest created hereby in the Collateral (i) constitutes
continuing collateral security for all of the Secured Obligations, whether now
existing or hereafter arising and (ii) is not to be construed as an assignment
of any Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks or
Trademark Licenses.

 

3.                                       Provisions
Relating to Accounts.

 

(a)                                  Anything
herein to the contrary notwithstanding, each of the Obligors shall remain
liable under each of the Accounts 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 to each such Account or as required
in the ordinary course of its business, as applicable.  Neither the Administrative Agent nor any
Lender shall have any obligation or liability under any Account (or any
agreement giving rise thereto) by reason of or arising out of this Security
Agreement or the receipt by the Administrative Agent or any Lender of any
payment relating to such Account pursuant hereto, nor shall the Administrative
Agent or any Lender be obligated in any manner to perform any of the
obligations of an Obligor under or pursuant to any Account (or any agreement
giving rise thereto), 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 under any Account (or any agreement giving rise
thereto), to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

 

(b)                                 The
Administrative Agent shall have the right, but not the obligation, to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and the Obligors shall furnish all such
assistance and information as the Administrative Agent may reasonably require
in connection with such test verifications. Upon the occurrence of an Event of
Default and during the continuation

 

 

thereof, the
Administrative Agent in its own name or in the name of others may communicate
with account debtors on the Accounts to verify with them, to the Administrative
Agent’s reasonable satisfaction, the existence, amount and terms of any
Accounts.

 

4.                                       Representations
and Warranties. Each Obligor hereby represents and warrants to the
Administrative Agent, for the benefit of the Lenders, that so long as any of
the Secured Obligations remain outstanding or any Credit Document or any Swap
Contract between any Credit Party and any Lender in connection with the Loans
is in effect or any Letter of Credit shall remain outstanding, and until all of
the Revolving Commitments shall have been terminated:

 

(a)                                  Legal
Name; Chief Executive Office.

 

(i)                                     Each
Obligor’s exact legal name, state of incorporation or formation, principal
place of business and chief executive office are (and for the four (4) months
prior to the date hereof has been) as set forth on Schedule 4(a)(i)
attached hereto.

 

(ii)                                  Other
than as set forth on Schedule 4(a)(ii) attached hereto, no Obligor
has been party to a merger, consolidation or other change in structure or used
any tradename in the four (4) months prior to the date hereof.

 

(b)                                 Ownership.  Each Obligor is the legal and beneficial
owner of its Collateral and has the right to pledge, sell, assign or transfer
the same.

 

(c)           Security Interest/Priority.  This Security Agreement creates a valid
security interest in favor of the Administrative Agent, for the benefit of the
Lenders, in the Collateral of such Obligor and, when properly perfected by
filing, shall constitute a valid perfected security interest in such
Collateral, to the extent such security can be perfected by filing under the
UCC, free and clear of all Liens except for Permitted Liens.

 

(d)                                 Types
of Collateral.  None of the
Collateral consists of, or is the Accessions or the Proceeds of, As-Extracted
Collateral, Consumer Goods, Standing Timber (as used in the UCC) or Farm
Products.

 

(e)           Accounts.  (i) Each Account of the Obligors and the
papers and documents relating thereto are genuine and in all material respects
what they purport to be, (ii) each Account arises out of (A) a bona fide
sale of goods sold and delivered by such Obligor (or is in the process of being
delivered) or (B) services theretofore actually rendered by such Obligor to,
the account debtor named therein, (iii) no Account of an Obligor is evidenced
by any Instrument or Chattel Paper unless such Instrument or Chattel Paper has
been theretofore endorsed over and delivered to, or submitted to the control of,
the Administrative Agent and (iv) no surety bond was required or given in
connection with any Account of an Obligor or the contracts or purchase orders
out of which they arose.

 

 

(f)                                    Inventory.  No Inventory is held by an Obligor pursuant
to consignment, sale or return, sale on approval or similar arrangement.

 

5.                                       Covenants.  Each Obligor covenants that, so long as any
of the Secured Obligations remain outstanding or any Credit Document or any
Swap Contract between any Credit Party and any Lender in connection with the
Loans is in effect or any Letter of Credit shall remain outstanding, and until
all of the Revolving Commitments shall have been terminated, such Obligor
shall:

 

(a)                                  Other
Liens.  Defend the Collateral
against the claims and demands of all other parties claiming an interest
therein, keep the Collateral free from all Liens, except for Permitted Liens,
and not sell, exchange, transfer, assign, lease or otherwise dispose of the
Collateral or any interest therein, except as permitted under the Credit
Agreement.

 

(b)                                 Preservation
of Collateral.  Not use the
Collateral in violation of the provisions of this Security Agreement or any
other agreement relating to the Collateral or any policy insuring the
Collateral or any applicable statute, law, bylaw, rule, regulation or
ordinance.

 

(c)                                  Instruments/Tangible
Chattel Paper/Documents.  If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any Instrument or Tangible Chattel Paper, or if any
property constituting Collateral shall be stored or shipped subject to a
Document, such Obligor shall ensure that such Instrument, Tangible Chattel
Paper or Document is either in the possession of such Obligor at all times or,
if requested by the Administrative Agent, is immediately delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent.  Such Obligor
shall ensure that any Collateral consisting of Tangible Chattel Paper is marked
with a legend reasonably acceptable to the Administrative Agent indicating the
Administrative Agent’s security interest in such Tangible Chattel Paper.

 

(d)                                 Change
in Structure, Location or Type. 
Not, without providing at least twenty (20) days prior written notice to
the Administrative Agent and without authorizing the filing of such financing
statements and amendments to any previously filed financing statements as the
Administrative Agent may require, change its name or state of formation or be
party to a merger, consolidation or other change in structure or use any
tradename.

 

(e)                                  Authorization.  Authorize the Administrative Agent to
prepare and file such financing statements (including renewal statements),
amendments and supplements or such other instruments as the Administrative
Agent may from time to time reasonably deem necessary, appropriate or
convenient in order to perfect and maintain the security interests granted
hereunder in accordance with the UCC.  Each Obligor agrees that any financing
statement filed by the Administrative Agent may contain a general description
of the collateral covered thereby, as permitted by the UCC, which states that
the security interest attaches to all personal property of the Obligor granted
under this Security Agreement.

 

 

(f)                                    Perfection
of Security Interest.  Execute and
deliver to the Administrative Agent such agreements, assignments or instruments
(including affidavits, notices, reaffirmations and amendments and restatements
of existing documents, as the Administrative Agent may reasonably request) and
do all such other things as the Administrative Agent may reasonably deem
necessary or appropriate (i) to assure to the Administrative Agent its security
interests hereunder, including such financing statements (including renewal
statements) or amendments thereof or supplements thereto or other instruments
as the Administrative Agent may from time to time reasonably request in order
to perfect and maintain the security interests granted hereunder in accordance
with the UCC, (ii) to consummate the transactions contemplated hereby and (iii)
to otherwise protect and reasonably assure the Administrative Agent of its
rights and interests hereunder.  Each
Obligor hereby agrees that a carbon, photographic or other reproduction of this
Security Agreement or any such financing statement is sufficient for filing as
a financing statement by the Administrative Agent without notice thereof to
such Obligor wherever the Administrative Agent may in its reasonable discretion
desire to file the same.  In the event
for any reason the law of any jurisdiction other than New York becomes or is
applicable to the Collateral of any Obligor or any part thereof, or to any of
the Secured Obligations, such Obligor agrees to execute and deliver all such
instruments and to do all such other things as the Administrative Agent in its
sole discretion reasonably deems necessary or appropriate to preserve, protect
and enforce the security interests of the Administrative Agent under the law of
such other jurisdiction (and, if an Obligor shall fail to do so promptly upon
the request of the Administrative Agent, then the Administrative Agent may
execute any and all such requested documents on behalf of such Obligor pursuant
to the power of attorney granted hereinabove). 
If any Collateral is in the possession or control of an Obligor’s agents
and the Administrative Agent so requests, such Obligor agrees to notify such
agents in writing of the Administrative Agent’s security interest therein and,
upon the Administrative Agent’s request, instruct them to hold all such
Collateral for the Lenders’ account and subject to the Administrative Agent’s
instructions.

 

(g)                                 Control.  Execute and deliver all agreements,
assignments, instruments or other documents as the Administrative Agent shall
reasonably request for the purpose of obtaining and maintaining control within
the meaning of the UCC with respect to any Collateral consisting of Deposit
Accounts, Investment Property, Letter-of-Credit Rights and Electronic Chattel
Paper.

 

(h)                                 Collateral
held by Warehouseman, Bailee, etc. 
If any Collateral is at any time in the possession or control of a
warehouseman, bailee, agent or processor of such Obligor, (i) notify the
Administrative Agent of such possession or control, (ii) at the Administrative
Agent’s request, notify such Person of the Administrative Agent’s security
interest in such Collateral, (iii) at the Administrative Agent’s request,
instruct such Person to hold all such Collateral for the Administrative Agent’s
account and subject to the Administrative Agent’s instructions and (iv) at the
Administrative Agent’s request, use its commercially reasonable efforts to
obtain an acknowledgment from such Person that it is holding such Collateral
for the benefit of the Administrative Agent.

 

 

(i)            Treatment of Accounts.  Not grant or extend the time for payment of
any Account, or compromise or settle any Account for less than the full amount
thereof, or release any person or property, in whole or in part, from payment
thereof, or allow any credit or discount thereon, other than as normal and
customary in the ordinary course of an Obligor’s business or as provided for in
the Credit Agreement.

 

(j)            Insurance.  Insure, repair and replace the Collateral of
such Obligor in accordance with the terms and conditions of the Credit
Agreement.  All insurance proceeds from
insurance with respect to the Collateral shall be subject to the security
interest of the Administrative Agent hereunder.

 

(k)                                  Commercial
Tort Claims.

 

(i)                                     Promptly
notify the Administrative Agent in writing of the initiation of any Commercial
Tort Claim before any Governmental Authority by or in favor of such Obligor or
any of its Subsidiaries.

 

(ii)                                  Execute
and deliver such statements, documents and notices and do and cause to be done
all such things as the Administrative Agent may reasonably deem necessary,
appropriate or convenient, or as are required by law, to create, perfect and
maintain the Administrative Agent’s security interest in any Commercial Tort
Claim.

 

6.                                       Advances
by Lenders.  On failure of any
Obligor to perform any of the covenants and agreements contained herein, in
each case after the expiration of any applicable grace or cure period provided
for herein or provided for in the Credit Agreement, the Administrative Agent
may, upon prior written notice to the Obligor and at its sole option and in its
reasonable discretion, perform the same or cause the performance of same and in
so doing may expend such sums as the Administrative Agent may reasonably deem
advisable in the performance thereof, including, without limitation, the
payment of any insurance premiums, the payment of any taxes, a payment to
obtain a release of a Lien or potential Lien, expenditures made in defending
against any adverse claim and all other expenditures which the Administrative
Agent or the Lenders may make for the protection of the security hereof or
which may be compelled to make by operation of law.  All such sums and amounts so expended shall be repayable by the
Obligors on a joint and several basis pursuant to Section 24 hereof within
twenty (20) Business Days after a reasonably detailed written invoice therefor
is received by the Obligors (or upon demand if there is then a continuing Event
of Default), shall constitute additional Secured Obligations and shall bear interest
from the date said amounts are expended at the Default Rate for Revolving Loans
that are Base Rate Loans.  No such
performance of any covenant or agreement by the Administrative Agent or the
Lenders on behalf of any Obligor, and no such advance or expenditure therefor,
shall relieve the Obligors of any default under the terms of this Security
Agreement, the other Credit Documents or any Swap Contract between any Credit
Party and any Lender in connection with the Loans.  The Lenders may make any payment hereby authorized in accordance
with any bill, statement or estimate procured from the appropriate public
office or holder of the claim to be discharged without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax assessment,
sale, forfeiture, tax lien,

 

 

title or claim except to
the extent such payment is being contested in good faith by an Obligor in
appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.

 

7.                                       Events
of Default.

 

The occurrence and
continuation of an event which under the Credit Agreement would constitute an
Event of Default shall be an Event of Default hereunder (an “Event of
Default”).

 

8.                                       Remedies.

 

(a)                                  General
Remedies.  Upon the occurrence of an
Event of Default and during continuation thereof, and upon either acceleration
of the Secured Obligations pursuant to the terms and conditions of the Credit
Agreement or the maturity of the Secured Obligations and the Obligors’ failure
to pay the Secured Obligations, the Lenders shall have, in addition to the
rights and remedies provided herein, in the Credit Documents, in any Swap
Contract between any Obligor and any Lender in connection with the Loans or by
law (including, but not limited to, levy of attachment, garnishment, and the
rights and remedies set forth in the UCC of the jurisdiction applicable to the
affected Collateral), the rights and remedies of a secured party under the UCC
(regardless of whether the UCC is the law of the jurisdiction where the rights
and remedies are asserted and regardless of whether the UCC applies to the
affected Collateral). Further, the Administrative Agent may, with or without
judicial process or the aid and assistance of others, subject to the applicable
rights of the Tenants under the Facility Leases and the SNDAs, upon the
occurrence of an Event of Default and during the continuation thereof, and upon
either acceleration of the Secured Obligations pursuant to the terms and
conditions of the Credit Agreement or the maturity of the Secured Obligations
and the Obligors’ failure to pay the Secured Obligations, (i) enter on any
premises on which any of the Collateral may be located and, without resistance
or interference by the Obligors, take possession of the Collateral, (ii)  dispose of any Collateral on any such
premises, (iii) require the Obligors to assemble and make available to the
Administrative Agent at the expense of the Obligors any Collateral at any place
and time designated by the Administrative Agent which is reasonably convenient
to both parties, (iv) remove any Collateral from any such premises for the
purpose of effecting sale or other disposition thereof, and/or (v) with ten (10
Business Days prior written notice to Obligors, at any place and time or times,
sell and deliver any or all Collateral held by or for it at public or private
sale, by one or more contracts, in one or more parcels, for cash, upon credit
or otherwise, at such prices and upon such terms as the Administrative Agent
deems advisable, in its sole discretion (subject to any and all mandatory legal
requirements).  Neither the
Administrative Agent’s compliance with applicable law nor its disclaimer of
warranties relating to the Collateral shall be considered to adversely affect
the commercial reasonableness of any sale. 
In addition to all other sums due the Administrative Agent and the
Lenders with respect to the Secured Obligations, the Obligors shall pay the
Administrative Agent and each of the Lenders upon demand all reasonable and
documented costs and expenses incurred by the Administrative Agent or any such
Lender, including, but not limited to, Attorney Costs and court costs, in
obtaining or liquidating the Collateral, in enforcing payment of the Secured
Obligations, or in the prosecution or defense of any action or proceeding by or
against the

 

 

Administrative Agent or
the Lenders or the Obligors concerning any matter arising out of or connected
with this Security Agreement, any Collateral or the Secured Obligations,
including, without limitation, any of the foregoing arising in, arising under
or related to a case under the Debtor Relief Law.  Each Obligor agrees that any requirement of reasonable notice
shall be met if such notice is personally served on or mailed, postage prepaid,
to the Borrower in accordance with the notice provisions of Section 10.02
of the Credit Agreement at least ten (10) Business Days before the time of sale
or other event giving rise to the requirement of such notice.  The Administrative Agent and the Lenders
shall not be obligated to make any sale or other disposition of the Collateral
regardless of notice having been given. 
To the extent permitted by law, any Lender may be a purchaser at any
such sale.  To the extent permitted by
applicable law, each of the Obligors hereby waives all of its rights of
redemption with respect to any such sale. 
Subject to the provisions of applicable law, the Administrative Agent
and the Lenders may postpone or cause the postponement of the sale of all or
any portion of the Collateral by announcement at the time and place of such
sale, and such sale may, without further notice, to the extent permitted by
law, be made at the time and place to which the sale was postponed, or the
Administrative Agent and the Lenders may further postpone such sale by
announcement made at such time and place.

 

(b)                                 Remedies
Relating to Accounts.  Upon the
occurrence of an Event of Default and during the continuation thereof, and upon
either acceleration of the Secured Obligations pursuant to the terms and
conditions of the Credit Agreement or the maturity of the Secured Obligations
and the Obligors’ failure to pay the Secured Obligations, whether or not the
Administrative Agent has exercised any or all of its rights and remedies
hereunder, each Obligor will promptly upon request of the Administrative Agent
instruct all account debtors to remit all payments in respect of Accounts to a
mailing location selected by the Administrative Agent.  In addition, the Administrative Agent or its
designee shall have the right to enforce any Obligor’s rights against its
customers and account debtors and may notify any Obligor’s customers and
account debtors that the Accounts of such Obligor have been assigned to the
Administrative Agent or of the Administrative Agent’s security interest
therein, and may (either in its own name or in the name of an Obligor or both)
demand, collect (including without limitation by way of a lockbox arrangement),
receive, take receipt for, sell, sue for, compound, settle, compromise and give
acquittance for any and all amounts due or to become due on any Account, and,
in the Administrative Agent’s discretion, file any claim or take any other
action or proceeding to protect and realize upon the security interest of the
Lenders in the Accounts.  Each Obligor
acknowledges and agrees that the Proceeds of its Accounts remitted to or on
behalf of the Administrative Agent in accordance with the provisions hereof
shall be solely for the Administrative Agent’s own convenience and that such
Obligor shall not have any right, title or interest in such Accounts or in any
such other amounts except as expressly provided herein.  The Administrative Agent and the Lenders
shall have no liability or responsibility to any Obligor for acceptance in good
faith of a check, draft or other order for payment of money bearing the legend
“payment in full” or words of similar import or any other restrictive legend or
endorsement or be responsible for determining the correctness of any
remittance.  Each Obligor hereby agrees
to indemnify the Administrative Agent and the Lenders from and against all
liabilities, damages, losses, actions, claims, judgments, costs, expenses,
charges and reasonable attorneys’ fees suffered or incurred by the
Administrative Agent or the Lenders

 

 

(each, an “Indemnified
Party”) because of the maintenance of the foregoing arrangements except as
relating to or arising out of the gross negligence or willful misconduct of an
Indemnified Party or its officers, employees or agents.  In the case of any investigation, litigation
or other proceeding, the foregoing indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by an Obligor, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any other Indemnified Party is otherwise a party thereto.

 

(c)           Access.  In addition to the rights and remedies
hereunder, upon the occurrence of an Event of Default and during the
continuance thereof, and upon either acceleration of the Secured Obligations
pursuant to the terms and conditions of the Credit Agreement or the maturity of
the Secured Obligations and the Obligors’ failure to pay the Secured
Obligations, subject to the rights of the Tenants under the Facility Leases and
the SNDAs, (i) the Administrative Agent shall have the right to enter and
remain upon the various premises of the Obligors without cost or charge to the
Administrative Agent, and use the same, together with materials, supplies,
books and records of the Obligors for the purpose of collecting and liquidating
the Collateral, or for preparing for sale and conducting the sale of the
Collateral, whether by foreclosure, auction or otherwise; and (ii)  in addition, the Administrative Agent may
remove Collateral, or any part thereof, from such premises and/or any records
with respect thereto, in order to effectively collect or liquidate such
Collateral.

 

(d)                                 Nonexclusive
Nature of Remedies.  Failure by the
Administrative Agent or the Lenders to exercise any right, remedy or option under
this Security Agreement, any other Credit Document, any Swap Contract between
any Credit Party and any Lender in connection with the Loans or as provided by
law, or any delay by the Administrative Agent or the Lenders in exercising the
same, shall not operate as a waiver of any such right, remedy or option.  No waiver hereunder shall be effective
unless it is in writing, signed by the party against whom such waiver is sought
to be enforced and then only to the extent specifically stated, which in the case
of the Administrative Agent or the Lenders shall only be granted as provided
herein.  To the extent permitted by law,
neither the Administrative Agent, the Lenders, nor any party acting as attorney
for the Administrative Agent or the Lenders, shall be liable hereunder for any
acts or omissions or for any error of judgment or mistake of fact or law other
than their gross negligence or willful misconduct hereunder.  The rights and remedies of the
Administrative Agent and the Lenders under this Security Agreement shall be
cumulative and not exclusive of any other right or remedy which the
Administrative Agent or the Lenders may have.

 

(e)           Retention of Collateral.  The Administrative Agent may, after
providing the notices required by Sections 9-620 and 9-621 of the UCC or
otherwise complying with the requirements of applicable law of the relevant
jurisdiction, accept or retain all or any portion of the Collateral in
satisfaction of the Secured Obligations. 
Unless and until the Administrative Agent shall have provided such
notices, however, the Administrative Agent shall not be deemed to have accepted
or retained any Collateral in satisfaction of any Secured Obligations for any
reason.

 

 

(f)                                    Deficiency.  In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which the
Administrative Agent or the Lenders are legally entitled, the Obligors shall be
jointly and severally liable for the deficiency, together with interest thereon
at the Default Rate for Revolving Loans that are Base Rate Loans, together with
the reasonable and documented costs of collection and Attorney Costs of any
attorneys employed by the Administrative Agent to collect such deficiency.  Any surplus remaining after the full payment
and satisfaction of the Secured Obligations shall be returned to the Obligors
or as otherwise required by Law.

 

9.                                       Rights
of the Administrative Agent.

 

(a)           Limited Power of Attorney.  In addition to other powers of attorney
contained herein, each Obligor hereby designates and appoints the
Administrative Agent, on behalf of the Lenders, and each of its designees or
agents, as attorney-in-fact of such Obligor, irrevocably and with power of
substitution, with authority to take any or all of the following actions with respect
to the Collateral upon the occurrence and during the continuance of an Event of
Default, and upon either acceleration of the Secured Obligations pursuant to
the terms and conditions of the Credit Agreement or the maturity of the Secured
Obligations and the Obligors’ failure to pay the Secured Obligations:

 

(i)                                     to
demand, collect, settle, compromise, adjust, give discharges and releases, all
as the Administrative Agent may reasonably determine;

 

(ii)           to commence and prosecute any actions
at any court for the purposes of collecting any Collateral and enforcing any
other right in respect thereof;

 

(iii)                               to
defend, settle or compromise any action brought and, in connection therewith,
give such discharge or release as the Administrative Agent may deem reasonably
appropriate;

 

(iv)                              to
receive, open and dispose of mail addressed to an Obligor and endorse checks,
notes, drafts, acceptances, money orders, bills of lading, warehouse receipts
or other instruments or documents evidencing payment, shipment or storage of
the goods giving rise to the Collateral of such Obligor on behalf of and in the
name of such Obligor, or securing, or relating to such Collateral;

 

(v)                                 to
sell, assign, transfer, make any agreement in respect of, or otherwise deal
with or exercise rights in respect of, any Collateral or the goods or services
which have given rise thereto, as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes;

 

 

(vi)                              to
adjust and settle claims under any insurance policy relating to the Collateral;

 

(vii)                           to
execute and deliver all assignments, conveyances, statements, financing
statements, renewal financing statements, security agreements, affidavits,
notices and other agreements, instruments and documents that the Administrative
Agent may reasonably determine necessary in order to perfect and maintain the
security interests and liens granted in this Security Agreement and in order to
fully consummate all of the transactions contemplated therein;

 

(viii)                        to institute
any foreclosure proceedings that the Administrative Agent may deem appropriate;
and

 

(ix)                                to
do and perform all such other acts and things as the Administrative Agent may
reasonably deem to be necessary, proper or convenient in connection with the
Collateral.

 

This limited power
of attorney is a power coupled with an interest and shall be irrevocable (i)
for so long as any of the Secured Obligations remain outstanding, any Credit
Document or any Swap Contract between any Credit Party and any Lender in connection
with the Loans is in effect or any Letter of Credit shall remain outstanding
and (ii) until all of the Revolving Commitments shall have been
terminated.  The Administrative Agent
shall be under no duty to exercise or withhold the exercise of any of the
rights, powers, privileges and options expressly or implicitly granted to the
Administrative Agent in this Security Agreement, and shall not be liable for
any failure to do so or any delay in doing so. 
The Administrative Agent shall not be liable for any act or omission or
for any error of judgment or any mistake of fact or law in its individual
capacity or its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct.  This limited power of attorney is conferred on the Administrative
Agent solely to protect, preserve and realize upon its security interest in the
Collateral.

 

(b)                                 Assignment
by the Administrative Agent. 
Subject to the terms of the Credit Agreement, the Administrative Agent
may from time to time assign the Secured Obligations and any portion thereof
and/or the Collateral and any portion thereof, and the assignee shall be
entitled to all of the rights and remedies of the Administrative Agent under
this Security Agreement in relation thereto.

 

(c)                                  The
Administrative Agent’s Duty of Care. 
Other than the exercise of reasonable care to assure the safe custody of
the Collateral while being held by the Administrative Agent hereunder, the
Administrative Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that the Obligors shall be
responsible for preservation of all rights in the Collateral, and the
Administrative Agent shall be relieved of all responsibility for the Collateral
upon surrendering it or tendering the surrender of it to the Obligors.  The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the
Collateral in its possession if the

 

 

Collateral is accorded
treatment substantially equal to that which the Administrative Agent accords
its own property, which shall be no less than the treatment employed by a
reasonable and prudent agent in the industry, it being understood that the
Administrative Agent shall not have responsibility for taking any necessary
steps to preserve rights against any parties with respect to any of the
Collateral.

 

10.           Application of Proceeds.  Upon the acceleration of the Obligations
pursuant to Section 8.02 of the Credit Agreement, any payments in respect
of the Secured Obligations and any proceeds of the Collateral, when received by
the Administrative Agent or any of the Lenders in cash or its equivalent, will
be applied in reduction of the Secured Obligations in the order set forth in
Section 8.03 of the Credit Agreement, and each Obligor irrevocably waives
the right to direct the application of such payments and proceeds and
acknowledges and agrees that the Administrative Agent shall have the continuing
and exclusive right to apply and reapply any and all such payments and proceeds
in the Administrative Agent’s sole discretion (but subject to Section 8.03
of the Credit Agreement0, notwithstanding any entry to the contrary upon any of
its books and records.

 

11.                                 Costs
of Counsel.  If at any time hereafter,
whether upon the occurrence of an Event of Default or not, the Administrative
Agent employs counsel to prepare or consider reasonably necessary amendments,
waivers or consents with respect to this Security Agreement, or to take action
or make a response in or with respect to any legal or arbitral proceeding
relating to this Security Agreement or relating to the Collateral, or to
protect the Collateral or exercise any rights or remedies under this Security
Agreement or with respect to the Collateral, then the Obligors agree to pay
within twenty (20) Business Days after a reasonably detailed written invoice
therefor is received by the Obligors (or upon demand if there is then a
continuing Event of Default) any and all such reasonable and documented costs
and expenses of the Administrative Agent, all of which costs and expenses shall
constitute Secured Obligations hereunder.

 

12.                                 Continuing
Agreement.

 

(a)           This Security Agreement shall be a
continuing agreement in every respect and shall remain in full force and effect
so long as any of the Secured Obligations remain outstanding or any Credit
Document or any Swap Contract between any Obligor and any Lender in connection
with the Loans is in effect or any Letter of Credit shall remain outstanding,
and until all of the Revolving Commitments thereunder shall have terminated
(other than any obligations with respect to the indemnities and the
representations and warranties set forth in the Credit Documents).  Upon such payment and termination, this
Security Agreement shall be automatically terminated and the Administrative
Agent and the Lenders shall, upon the request and at the expense of the
Obligors, forthwith release all of its liens and security interests hereunder
and shall execute and deliver all UCC termination statements and/or other
documents reasonably requested by the Obligors evidencing such
termination.  Notwithstanding the
foregoing all releases and indemnities provided hereunder shall survive
termination of this Security Agreement.

 

(b)           This Security Agreement shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time payment, in whole or in part, of any of the Secured Obligations is
rescinded or must otherwise be restored or returned by the

 

 

Administrative Agent or
any Lender as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had not been
made; provided that in the event payment of all or any part of the Secured
Obligations is rescinded or must be restored or returned, all reasonable costs
and expenses (including without limitation any reasonable legal fees and
disbursements) incurred by the Administrative Agent or any Lender in defending
and enforcing such reinstatement shall be deemed to be included as a part of
the Secured Obligations.

 

13.                                 Amendments;
Waivers; Modifications.  This
Security Agreement and the provisions hereof may not be amended, waived,
modified, changed, discharged or terminated except as set forth in
Section 10.01 of the Credit Agreement.

 

14.                                 Successors
in Interest.  This Security
Agreement shall create a continuing security interest in the Collateral and
shall be binding upon each Obligor, its successors and assigns and shall inure,
together with the rights and remedies of the Administrative Agent and the
Lenders hereunder, to the benefit of the Administrative Agent and the Lenders
and their successors and permitted assigns; provided, however,
that none of the Obligors may assign its rights or delegate its duties
hereunder without the prior written consent of each Lender or the Required
Lenders, as required by the Credit Agreement. 
To the fullest extent permitted by law, each Obligor hereby releases the
Administrative Agent and each Lender, and its successors and assigns, from any
liability for any act or omission relating to this Security Agreement or the
Collateral, except for any liability arising from the gross negligence or
willful misconduct of the Administrative Agent or such Lender.

 

15.                                 Notices.  All notices required or permitted to be
given under this Security Agreement shall be in conformance with
Section 10.02 of the Credit Agreement.

 

16.                                 Counterparts.  This Security Agreement may be executed in
any number of counterparts, each of which where so executed and delivered shall
be an original, but all of which shall constitute one and the same
instrument.  It shall not be necessary
in making proof of this Security Agreement to produce or account for more than
one such counterpart.

 

17.                                 Headings.  The headings of the sections and subsections
hereof are provided for convenience only and shall not in any way affect the
meaning or construction of any provision of this Security Agreement.

 

18.                                 Governing
Law; Submission to Jurisdiction; Venue.

 

(a)                                  THIS
SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.  Any legal action or proceeding with respect
to this Security Agreement may be brought in the courts of the State of New
York sitting in New York City, or of the United States for the Southern
District of New York, and, by execution and delivery of this Security
Agreement, each Obligor hereby irrevocably accepts for itself and in respect of
its property, generally and

 

 

unconditionally, the
jurisdiction of such courts.  Each
Obligor further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to it at the
address for notices pursuant to Section 10.02 of the Credit Agreement,
such service to become effective three (3) Business Days after such mailing.
Nothing herein shall affect the right of the Administrative Agent to serve
process in any other manner permitted by law or to commence legal proceedings
or to otherwise proceed against any Obligor in any other jurisdiction.

 

(b)                                 Each
Obligor hereby irrevocably waives any objection which it may now or hereafter
have to the laying of venue of any of the aforesaid actions or proceedings
arising out of or in connection with this Security Agreement brought in the
courts referred to in subsection (a) hereof and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum.

 

19.                                 Waiver
of Jury Trial.  TO THE EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES TO THIS SECURITY AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

20.                                 Severability.  If any provision of this Security Agreement
is determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect  to the illegal, invalid or unenforceable provisions.

 

21.                                 Entirety.  This Security Agreement, the other Credit
Documents and any Swap Contract between any Obligor and any Lender in
connection with the Loans represent the entire agreement of the parties hereto
and thereto, and supersede all prior agreements and understandings, oral or
written, if any, including any commitment letters or correspondence relating to
the Credit Documents, any Swap Contract between any Obligor and any Lender in
connection with the Loans or the transactions contemplated herein and therein.

 

22.                                 Survival.  All representations and warranties of the
Obligors hereunder shall survive the execution and delivery of this Security
Agreement, the other Credit Documents and any Swap Contract between any Obligor
and any Lender in connection with the Loans, the delivery of the Revolving
Notes and the making of the Loans and the issuance of the Letters of Credit
under the Credit Agreement.

 

23.                                 Other
Security.  To the extent that any of
the Secured Obligations are now or hereafter secured by property other than the
Collateral (including, without limitation, real property and securities owned
by an Obligor), or by a guarantee, endorsement or property of any other Person,
then the Administrative Agent and the Lenders shall have the right to proceed
against such other property, guarantee or endorsement upon the occurrence of
any Event of Default and during the continuation thereof, and upon either
acceleration of the Secured Obligations pursuant to the

 

 

terms and conditions of
the Credit Agreement or the maturity of the Secured Obligations and the
Obligors’ failure to pay the Secured Obligations, and the Administrative Agent
and the Lenders have the right, in their sole discretion, to determine which
rights, security, liens, security interests or remedies the Administrative
Agent and the Lenders shall at any time pursue, relinquish, subordinate, modify
or take with respect thereto, without in any way modifying or affecting any of
them or any of the Administrative Agent’s and the Lenders’ rights or the
Secured Obligations under this Security Agreement, under any other of the
Credit Documents or under any Swap Contract between any Obligor and any Lender
in connection with the Loans.

 

24.                                 Joint
and Several Obligations of Obligors.

 

(a)           Each of the Obligors is accepting
joint and several liability hereunder in consideration of the financial
accommodation to be provided by the Lenders under the Credit Agreement, for the
mutual benefit, directly and indirectly, of each of the Obligors and in
consideration of the undertakings of each of the Obligors to accept joint and
several liability for the obligations of each of them.

 

(b)           Each of the Obligors jointly and
severally hereby irrevocably and unconditionally accepts, not merely as a
surety but also as a co-debtor, joint and several liability with the other
Obligors with respect to the payment and performance of all of the Secured
Obligations arising under this Security Agreement, the other Credit Documents
and any Swap Contract between any Obligor and any Lender in connection with the
Loans, it being the intention of the parties hereto that all the Secured
Obligations shall be the joint and several obligations of each of the Obligors
without preferences or distinction among them.

 

(c)                                  Notwithstanding
any provision to the contrary contained herein or in any other of the Credit
Documents, to the extent the obligations of any Guarantor shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers), then the obligations of such Guarantor under the
Credit Documents shall be limited to an aggregate amount equal to the largest
amount that would not render such obligation subject to avoidance under
applicable law (whether federal or state and including, without limitation,
Section 548 of the Bankruptcy Code).

 

25.                                 Rights
of Required Lenders.  All rights of
the Administrative Agent hereunder, if not exercised by the Administrative
Agent, may be exercised by the Required Lenders.

 

 

26.                                 Credit
Agreement and SNDA.  The Loan is
governed by the terms and conditions set forth in the Credit Agreement and the
other Credit Documents and in the event of any conflict between the terms and
conditions of this Security Agreement and the terms and conditions of the
Credit Agreement, the terms and conditions of the Credit Agreement shall
control.  In addition, to the extent
that the Obligors and the Administrative Agent are parties to the SNDAs, and
the terms and conditions of this Security Agreement are in conflict with the
terms and conditions of such SNDAs, the terms and conditions of the SNDAs shall
govern and control.

 

 

SIGNATURE PAGE
FOLLOWS

 

 

Each of the parties
hereto has caused this Security Agreement to be duly executed and delivered as
of the date first above written.

 

 

	
  OBLIGORS:

  	
   

  	
  OHI
  ASSET, LLC

  OHI ASSET (ID), LLC

  OHI ASSET (LA), LLC

  OHI ASSET (TX), LLC

  OHI ASSET (CA), LLC

  DELTA INVESTORS I, LLC

  DELTA INVESTORS II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Omega Healthcare
  Investors, Inc.,

  the Sole Member of each such company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Daniel J.
  Booth

  
	
   

  	
   

  	
  Title:  Chief
  Operating Officer

  

 

 

	
  Accepted and Agreed to
  as of the date first above written:

  
	
   

  
	
  BANK OF AMERICA, N.A.,

  
	
  in its capacity as the
  Administrative Agent

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  TitleExhibit
10.7

 

GUARANTY

 

THIS GUARANTY (this “Guaranty”), dated as of
March 22, 2004, is given by Omega Healthcare Investors, Inc., a Maryland
corporation (the “Parent”) and each of the subsidiary guarantors
identified as a “Subsidiary Guarantor” on the signature pages hereto and from
time to time joined as a Guarantor hereunder (the Subsidiary Guarantors,
together with the Parent, shall be collectively referred to herein as the “Guarantors”
or, individually, as a “Guarantor”), in favor of BANK OF AMERICA, N.A.,
in its capacity as administrative agent (in such capacity, the “Administrative
Agent”) for the Lenders under the Credit Agreement, dated as of
March 22, 2004 (as amended and modified, the “Credit Agreement”)
among OHI Asset, LLC, a Delaware limited liability company, OHI Asset (ID),
LLC, a Delaware limited liability company, OHI Asset (LA), LLC, a Delaware
limited liability company, OHI Asset (TX) LLC, a Delaware limited liability
company, OHI Asset (CA) LLC, a Delaware limited liability company, Delta
Investors I, LLC a Maryland limited liability company and Delta Investors II,
LLC, a Maryland limited liability company (collectively, the “Borrowers”),
the Lenders identified therein and the Administrative Agent.  Capitalized terms used but not otherwise
defined herein shall have the meanings provided in the Credit Agreement.

 

RECITALS:

 

WHEREAS, pursuant to the Credit Agreement, the Lenders
have agreed, subject to the terms and conditions contained therein, to make
available loans and letters of credit to the Borrowers; and

 

WHEREAS, in connection with the Credit Agreement, the
Lenders have required, among other things, each of the Guarantors to guarantee
all of the Borrowers’ obligations arising under the Credit Agreement and the
other Credit Documents referred to therein;

 

NOW, THEREFORE, for and in consideration of the
execution and delivery by the Lenders of the Credit Agreement, and other good
and valuable consideration, receipt whereof is hereby acknowledged, each
Guarantor hereby agrees as follows:

 

1.                                       Guaranty
of Payment.  The Guarantors hereby
irrevocably and unconditionally guarantee, jointly and severally, to the
Administrative Agent and the Lenders as primary obligor and not as surety, the
prompt payment, when due, by acceleration or otherwise, of the
Indebtedness.  For the purposes hereof,
“Indebtedness” shall mean, without duplication, (a) all Obligations of
the Borrowers (including, without limitation, interest accruing after an event
of bankruptcy or insolvency, regardless of whether such interest is allowed as
a claim under any Debtor Relief Laws and all related Attorney Costs) to the
Lenders and the Administrative Agent, whenever arising, under the Credit
Agreement, the Notes or the other Credit Documents, and (b) all liabilities and
obligations, whenever arising, owing from the Borrowers to any Lender, or any
affiliate of a Lender, arising under any Swap Contract (if applicable) relating
to the Obligations under the Credit Agreement or entered into in the ordinary
course of business and not for speculative purposes, whether such Indebtedness
is now existing or hereafter arising, due or to become due, direct or indirect,
absolute or contingent, and howsoever evidenced, held or acquired, as such
Indebtedness may be modified, extended, renewed or replaced from time to
time.  The guaranty of the Guarantors as
set forth in this section is a guaranty of payment and not of collection.

 

 

Notwithstanding any provision to the contrary
contained herein or in any other of the Credit Documents, the obligations of
each Guarantor hereunder shall be limited to an aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law.

 

2.                                       Release
of Collateral, Parties Liable, etc. 
Each of the Guarantors agrees that the whole or any part of the security
now or hereafter held for the Indebtedness may be exchanged, compromised,
released or surrendered from time to time; that neither the Administrative
Agent nor the Lenders shall have any obligation to protect, perfect, secure or
insure any Liens now or hereafter held for the Indebtedness or the properties
subject thereto; that the time or place of payment of the Indebtedness may be
changed or extended, in whole or in part, to a time certain or otherwise, and
may be renewed or accelerated, in whole or in part; that the Borrowers may be
granted indulgences generally; that any provisions of the Credit Documents or
any other documents executed in connection with this transaction, may be
modified, amended or waived; that any party liable for the payment of the
Indebtedness may be granted indulgences or released; and that any deposit
balance for the credit of the Borrowers or any other party liable for the
payment of the Indebtedness or liable upon any security therefor may be
released, in whole or in part, at, before and/or after the stated, extended or
accelerated maturity of the Indebtedness, all without notice to or further
assent by the Guarantors, who shall remain bound thereon, notwithstanding any
such exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence or release.

 

3.                                       Waiver
of Rights.  Each of the Guarantors
expressly waives:  (a) notice of
acceptance of this Guaranty by the Administrative Agent and the Lenders and of
all extensions of credit to the Borrowers by the Administrative Agent or any
Lender; (b) presentment and demand for payment of any of the Indebtedness; (c) protest
and notice of dishonor or of default to such Guarantor or to any other party
with respect to the Indebtedness or with respect to any security therefor; (d)
notice of the Administrative Agent or any Lender obtaining, amending,
substituting for, releasing, waiving or modifying the Indebtedness, any
security interest, liens, or the encumbrances now or hereafter securing the
Indebtedness, or the Administrative Agent’s or any Lender’s subordinating,
compromising, discharging or releasing such security interests, liens or
encumbrances; (e) all other notices to which such Guarantor might otherwise be
entitled; (f) demand for payment under this Guaranty; and (g) any right to
assert against the Administrative Agent or any Lender, as a defense,
counterclaim, set-off, or cross-claim any defense (legal or equitable),
set-off, counterclaim or claim which such Guarantor may now or hereafter have
against the Administrative Agent or any Lender or any Borrower, but such waiver
shall not prevent such Guarantor from asserting against the Administrative
Agent or any Lender in a separate action, any claim, action, cause of action,
or demand that such Guarantor might have, whether or not arising out of this
Guaranty.

 

4.                                       Primary
Liability of the Guarantors.  Each
of the Guarantors agrees that this Guaranty may be enforced by the
Administrative Agent and the Lenders without the necessity at any time of
resorting to or exhausting any other security or collateral and without the
necessity at any time of having recourse to the Notes or any collateral now or
hereafter securing the Indebtedness or otherwise, and each of the Guarantors
hereby waives the right to require the Administrative Agent and the Lenders to
proceed against the Borrowers or any other person

 

 

(including a co-Guarantor) or to require the
Administrative Agent and the Lenders to pursue any other remedy or enforce any
other right.  Without limiting the
generality of the foregoing, each of the Guarantors hereby specifically waives,
to the extent permitted by applicable law, the benefits of North Carolina
General Statutes Sections 26-7 through 26-9, inclusive.  In addition, each of the Guarantors hereby
waives and renounces any and all rights it has or may have for subrogation,
indemnity, reimbursement or contribution against the Borrowers for amounts paid
under this Guaranty.  This waiver is
expressly intended to prevent the existence of any claim in respect of such
subrogation, indemnity, reimbursement or contribution by a Guarantor against
the estate of any Borrower within the meaning of Section 101 of the United
States Bankruptcy Code, and to prevent such Guarantor from being deemed a
“creditor” of such Borrower in respect of such subrogation, indemnity,
reimbursement or contribution within the meaning of Section 547(b) of the
United States Bankruptcy Code in the event of a subsequent case involving any
Borrower.  Each of the Guarantors
further agrees that nothing contained herein shall prevent the Administrative
Agent or the Lenders from suing on the Notes or foreclosing its security
interest in or lien on any collateral now or hereafter securing the
Indebtedness or from exercising any other rights available to the
Administrative Agent or the Lenders under the Notes, or any other instrument of
security if neither the Borrowers nor the Guarantors timely perform the
obligations of the Borrowers thereunder, and the exercise of any of the
aforesaid rights and the completion of any foreclosure proceedings shall not
constitute a discharge of any Guarantor’s obligations hereunder; it being the
purpose and intent of each of the Guarantors that such Guarantor’s obligations
hereunder shall be absolute, independent and unconditional under any and all
circumstances.  Neither the Guarantors’
obligations under this Guaranty nor any remedy for the enforcement thereof
shall be impaired, modified, changed or released in any manner whatsoever by an
impairment, modification, change, release or limitation of the liability of the
Borrowers, by reason of any Borrower’s bankruptcy or insolvency or by reason of
the invalidity or unenforceability of all or any portion of the
Indebtedness.  Each of the Guarantors
acknowledges that the term “Indebtedness” as used herein includes any payments
made by the Borrowers to the Administrative Agent or any Lender and
subsequently recovered by the Borrowers or a trustee for the Borrowers pursuant
to the Borrowers’ bankruptcy or insolvency and that the guaranty of each of the
Guarantors hereunder shall be reinstated to the extent of such recovery.

 

5.                                       Security
Interests and Setoff.  As security
for such Guarantor’s obligations hereunder, each Guarantor agrees that in the
event such Guarantor fails to pay its obligations hereunder when due and
payable under this Guaranty, (a) any of such Guarantor’s assets of any kind,
nature or description (including, without limitation, deposit accounts) in the
possession, control or custody of the Administrative Agent or any Lender may,
without prior notice (but promptly confirmed in writing by the Administrative
Agent or such Lender, as applicable, to such Guarantor, provided that
failure to provide such written confirmation will not affect the liabilities of
such Guarantor hereunder) to such Guarantor, be reduced to cash or the like and
applied by the Administrative Agent or such Lender in reduction or payment of
such Guarantor’s obligations hereunder; and (b) the Administrative Agent and
each Lender shall have the right, immediately and without further action by
them, to set off pro tanto against the Indebtedness all money owed by
the Administrative Agent or such Lender in any capacity to such Guarantor,
whether or not due, and the Administrative Agent or such Lender shall be deemed
to have made a charge against any such money immediately upon the occurrence of
such obligation becoming due even though such charge is made or entered on the
books of the Administrative Agent or such Lender subsequent thereto.

 

 

6.                                       Term
of this Guaranty; Warranties.  This
Guaranty shall continue in full force and effect until the Indebtedness is
fully and indefeasibly paid, performed and discharged and all Commitments under
the Credit Agreement shall have been terminated.  This Guaranty covers the Indebtedness whether presently
outstanding or arising subsequent to the date hereof including all amounts
advanced by the Administrative Agent or any Lender in stages or
installments.  Each Guarantor warrants
and represents to the Administrative Agent (a) that such Guarantor is a
corporation or limited liability company, duly incorporated or organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, (b) that such Guarantor has all corporate or
organizational powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted, (c)
that the execution and delivery by such Guarantor of this Guaranty and the
other Credit Documents to which it is a party and the performance by such
Guarantor of its obligations hereunder and thereunder are within the corporate
or organizational power of such Guarantor, have been duly authorized by all
necessary corporate or other action, require no action by or in respect of, or
filing with, any governmental body, agency or official (except for any such
action or filing that has been taken and is in full force and effect) and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or bylaws or operating
agreement (or other constitutional documents) of such Guarantor or of any
material agreement, judgment, injunction, order, decree, or other material
instrument binding upon such Guarantor or result in the creation or imposition
(other than pursuant to the Credit Documents) of any Lien on any asset of such
Guarantor, (d) that this Guaranty and the other Credit Documents to which such
Guarantor may be a party constitute valid and binding agreements of such
Guarantor and, when executed and delivered, will constitute valid and binding
obligations of such Guarantor enforceable in accordance with their terms and
(e) all representations and warranties set forth in this Section 6 and all
representations, warranties and covenants of the Guarantors contained in any
certificate, or any of the Credit Documents (including, but not limited to, any
such representation, warranty or covenant made in or in connection with any
amendment thereto) shall constitute representations, warranties and covenants
under this Guaranty to the same extent and with the same force as if fully set
forth herein.

 

7.                                       Further
Representations and Warranties. 
Each Guarantor agrees that the Administrative Agent and the Lenders will
have no obligation to investigate the financial condition or affairs of the
Borrowers for the benefit of such Guarantor nor to advise such Guarantor of any
fact respecting, or any change in, the financial condition or affairs of the
Borrowers which might come to the knowledge of the Administrative Agent or any
Lender at any time, whether or not the Administrative Agent or any Lender knows
or believes or has reason to know or believe that any such fact or change is
unknown to such Guarantor or might (or does) materially increase the risk of
such Guarantor as guarantor or might (or would) affect the willingness of such
Guarantor to continue as guarantor with respect to the Indebtedness.

 

8.                                       Additional
Liability of Guarantors.  If any
Guarantor is or becomes liable for any indebtedness owing by the Borrowers to
the Administrative Agent or any Lender by endorsement or otherwise other than
under this Guaranty, such liability shall not be in any manner impaired or
reduced hereby but shall have all and the same force and effect it would have
had if this Guaranty had not existed and such Guarantor’s liability hereunder
shall not be in any manner impaired or reduced thereby.

 

 

9.                                       Cumulative
Rights.  All rights of the
Administrative Agent and the Lenders hereunder or otherwise arising under any
documents executed in connection with or as security for the Indebtedness are
separate and cumulative and may be pursued separately, successively or
concurrently, or not pursued, without affecting or limiting any other right of
the Administrative Agent or any Lender and without affecting or impairing the
liability of the Guarantors.

 

10.                                 Usury.  Notwithstanding any other provisions herein
contained, no provision of this Guaranty shall require or permit the collection
from any Guarantor of interest in excess of the maximum rate or amount that
such Guarantor may be required or permitted to pay pursuant to any applicable
law.  In the event any such interest is
collected, it shall be applied in reduction of the Guarantors’ obligations
hereunder, and the remainder of such excess collected shall be returned to the
Guarantors once such obligations have been fully satisfied.

 

11.                                 The
Administrative Agent.  In acting
under or by virtue of this Guaranty, the Administrative Agent shall be entitled
to all the rights, authority, privileges and immunities provided in
Article IX of the Credit Agreement, all of which provisions are
incorporated by reference herein with the same force and effect as if set forth
herein.  Each of the Guarantors hereby
releases the Administrative Agent from any liability for any act or omission
relating to this Guaranty, except such as may result from the Administrative
Agent’s gross negligence or willful misconduct.

 

12.                                 Successors
and Assigns.  This Guaranty shall be
binding on and enforceable against each Guarantor and its successors and
assigns.  This Guaranty is intended for
and shall inure to the benefit of the Administrative Agent and each Lender and
each and every person who shall from time to time be or become the owner or
holder of any of the Indebtedness, and each and every reference herein to “Administrative
Agent” or “Lender” shall include and refer to each and every successor or
assignee of the Administrative Agent or any Lender at any time holding or
owning any part of or interest in any part of the Indebtedness.  This Guaranty shall be transferable and
negotiable with the same force and effect, and to the same extent, that the
Indebtedness is transferable and negotiable, it being understood and stipulated
that upon assignment or transfer by the Administrative Agent or any Lender of
any of the Indebtedness the legal holder or owner of the Indebtedness (or a
part thereof or interest therein thus transferred or assigned by the
Administrative Agent or any Lender) shall (except as otherwise stipulated by
the Administrative Agent or any such Lender in its assignment) have and may
exercise all of the rights granted to the Administrative Agent or such Lender
under this Guaranty to the extent of that part of or interest in the
Indebtedness thus assigned or transferred to said person.  Each Guarantor expressly waives notice of
transfer or assignment of the Indebtedness, or any part thereof, or of the
rights of the Administrative Agent or any Lender hereunder.  Failure to give notice will not affect the
liabilities of the Guarantors hereunder.

 

13.                                 Application
of Payments.  The Administrative
Agent and each Lender shall apply any payments received pursuant to this
Guaranty as follows: first, to all costs and expenses of the
Administrative Agent (including without limitation reasonable and documented
attorneys’ fees and expenses) incurred in connection with the implementation
and/or enforcement of this Guaranty and/or any of the other Credit Documents; second,
to all reasonable and documented costs and expenses of the Lenders (including
without limitation reasonable attorneys’ fees and expenses) incurred in
connection with the implementation and/or enforcement of this Guaranty and/or
any of the other Credit Documents; third, to the principal amount of the
Indebtedness

 

 

(including without limitation to the cash
collateralization term of the available undrawn amount of outstanding Letters
of Credit); fourth, to such of the Indebtedness consisting of accrued
but unpaid interest and fees; fifth, to all other amounts payable with
respect to the Indebtedness; and sixth, to the surplus, if any, to the
Guarantors or as otherwise required by Law.

 

14.                                 Modifications.  This Guaranty and the provisions hereof may
be changed, discharged or terminated only by an instrument in writing signed by
each of the Guarantors affected thereby and the Administrative Agent.

 

15.                                 Discharge
and Release.  In the event that the
Indebtedness shall have been paid in full and the obligations of the Lenders to
extend credit to the Borrower under the Credit Agreement shall have terminated,
the Administrative Agent, on behalf of the Lenders, shall discharge and release
the Guarantors from all of their obligations under this Guaranty.  Upon any such release and discharge, the
Administrative Agent, on behalf of the Lenders, will execute and deliver to the
Guarantors such documents as their guarantors shall reasonably request to
evidence such discharge and release.

 

16.                                 Notices.  All communications provided for herein shall
be in writing (including bank wire, telex, facsimile transmission or similar writing)
and shall be given to such party (a) at its address, facsimile number or telex
number shown below or (b) at such other address, facsimile number or telex
number as such party may hereafter specify for the purpose by notice to the
other party hereto:

 

	
   

  	
  if to any Guarantor:

  
	
   

  	
   

  
	
   

  	
  Omega Healthcare Investors, Inc.

  
	
   

  	
  9690 Deereco Road - Suite 100

  
	
   

  	
  Timonium, Maryland 21093

  
	
   

  	
  Attention:

  	
  Daniel J. Booth

  
	
   

  	
  Telephone:

  	
  (410) 427-1724

  
	
    

  	
  Facsimile:

  	
  (410) 427-8824

  
	
   

  	
  E-mail:

  	
  dbooth@omegahealthcare.com

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  LeBoeuf, Lamb, Greene & MacRae, LLP

  
	
   

  	
  125 West 55th Street

  
	
   

  	
  New York, New York 
  10019

  
	
   

  	
  Attention:

  	
  John R. Fallon, Jr., Esq.

  
	
   

  	
  Telephone:

  	
  (212) 424-8279

  
	
   

  	
  Facsimile:

  	
  (212) 424-8500

  
	
   

  	
  Email:

  	
  jrfallon@llgm.com

  
				

 

 

	
   

  	
  if to the Administrative Agent:

  
	
   

  	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  Agency Management

  
	
   

  	
  1455 Market Street

  
	
   

  	
  CA5-701-05-19

  
	
   

  	
  San Francisco, CA 
  94103-1399

  
	
   

  	
  Attention:

  	
  Cassandra McCain

  
	
   

  	
  Telephone:

  	
  415-436-3400

  
	
   

  	
  Facsimile:

  	
  415-503-5133

  
	
   

  	
  Email:

  	
  cassandra.g.mccain@bankofamerica.com

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Bank of America, N.A.

  
	
   

  	
  100 N. Tryon Street

  
	
   

  	
  17th Floor

  
	
   

  	
  Charlotte, North Carolina 28255

  
	
   

  	
  Attention:

  	
  Kevin Wagley, Principal

  
	
   

  	
  Telephone:

  	
  (704) 388-6006

  
	
   

  	
  Facsimile:

  	
  (704) 388-6002

  
	
   

  	
  Email:

  	
  kevin.r.wagley@bankofamerica.com

  
				

 

Each such notice, request or other communication shall
be effective (i) if given by telex, when such telex is transmitted to the telex
number specified in or pursuant to this Section and the appropriate
answerback is received, (ii) if given by mail, three (3) business days after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in or pursuant to this Section.

 

17.                                 Severability.  In the event that any provision hereof shall
be deemed to be invalid by reason of the operation of any law or by reason of
the interpretation placed thereon by any court, this Guaranty shall be
construed as not containing such provision, but only as to such jurisdictions
where such law or interpretation is operative, and the invalidity of such
provision shall not affect the validity of any remaining provision hereof, and
any and all other provisions hereof which are otherwise lawful and valid shall
remain in full force and effect.

 

18.                                 Applicable
Law; Consent to Jurisdiction and Venue; Waiver of Jury Trial.  THIS GUARANTY AND THE OTHER CREDIT DOCUMENTS
AND ALL MATTERS RELATING THERETO SHALL, EXCEPT TO THE EXTENT OTHERWISE REQUIRED
BY APPLICABLE LAW, BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.  EACH OF THE GUARANTORS
HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF THE STATE AND FEDERAL COURTS OF
NEW YORK AND AGREES THAT THE ADMINISTRATIVE AGENT AND THE LENDERS MAY, AT THEIR
OPTION, ENFORCE THEIR RESPECTIVE RIGHTS HEREUNDER AND UNDER THE OTHER CREDIT
DOCUMENTS IN SUCH COURTS.  EACH OF THE
GUARANTORS HEREBY IRREVOCABLY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM FOR MAINTENANCE
OF ANY ACTION OR PROCEEDING

 

 

BY THE ADMINISTRATIVE AGENT OR THE LENDERS IN SUCH
COURTS.  EACH OF THE GUARANTORS AND THE
ADMINISTRATIVE AGENT, (ON BEHALF OF ITSELF AND THE LENDERS) HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER OF THE CREDIT
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

19.                                 Headings.  The headings in this instrument are for
convenience of reference only and shall not limit or otherwise affect the
meaning of any provisions hereof.

 

20.                                 Counterparts.  This Guaranty may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
constituting an original, but all together one and the same instrument.

 

21.                                 Rights
of the Required Lenders.  All rights
of the Administrative Agent hereunder, if not exercised by the Administrative
Agent, may be exercised by the Required Lenders.

 

 

[SIGNATURE
PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, each of the Guarantors has caused
this Guaranty to be duly executed as of the date first above written.

 

	
  PARENT:

  	
  OMEGA HEALTHCARE INVESTORS, INC.,

  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel J. Booth

  	
   

  
	
   

  	
  Name:

  	
  Daniel J. Booth

  	
   

  
	
   

  	
  Title:

  	
  Chief Operating Officer

  	
   

  
	
   

  	
   

  
	
  SUBSIDIARY GUARANTORS:

  	
  ARIZONA LESSOR - INFINIA, INC.

  
	
   

  	
  BAYSIDE ALABAMA HEALTHCARE SECOND, INC.

  
	
   

  	
  BAYSIDE ARIZONA HEALTHCARE ASSOCIATES, INC.

  
	
   

  	
  BAYSIDE ARIZONA HEALTHCARE SECOND, INC.

  
	
   

  	
  BAYSIDE COLORADO HEALTHCARE ASSOCIATES, INC.

  
	
   

  	
  BAYSIDE COLORADO HEALTHCARE SECOND, INC.

  
	
   

  	
  BAYSIDE INDIANA HEALTHCARE ASSOCIATES, INC.

  
	
   

  	
  BAYSIDE STREET II, INC.

  
	
   

  	
  BAYSIDE STREET, INC.

  
	
   

  	
  CARE HOLDINGS, INC.

  
	
   

  	
  CENTER HEALTHCARE ASSOCIATES, INC.

  
	
   

  	
  CHERRY STREET - SKILLED NURSING, INC.

  
	
   

  	
  COLORADO LESSOR - CONIFER, INC.

  
	
   

  	
  DALLAS - SKILLED NURSING, INC.

  
	
   

  	
  FLORIDA LESSOR - CRYSTAL SPRINGS, INC.

  
	
   

  	
  FLORIDA LESSOR - EMERALD, INC.

  
	
   

  	
  FLORIDA LESSOR - FIVE FACILITIES, INC.

  
	
   

  	
  FLORIDA LESSOR - LAKELAND, INC.

  
	
   

  	
  FLORIDA LESSOR - MEADOWVIEW, INC.

  
	
   

  	
  FLORIDA LESSOR - WEST PALM BEACH AND SOUTHPOINT,
  INC.

  
	
   

  	
  GEORGIA LESSOR - BONTERRA/ PARKVIEW, INC.

  
	
   

  	
  HERITAGE TEXARKANA HEALTHCARE ASSOCIATES, INC.

  
	
   

  	
  INDIANA LESSOR - JEFFERSONVILLE, INC.

  
	
   

  	
  INDIANA LESSOR - WELLINGTON MANOR, INC.

  

 

 

	
   

  	
  JEFFERSON CLARK, INC.

  
	
   

  	
  LAKE PARK SKILLED NURSING, INC.

  
	
   

  	
  LONG TERM CARE - MICHIGAN, INC.

  
	
   

  	
  LONG TERM CARE - NORTH CAROLINA, INC.

  
	
   

  	
  LONG TERM CARE ASSOCIATES - ILLINOIS, INC.

  
	
   

  	
  LONG TERM CARE ASSOCIATES - INDIANA, INC.

  
	
   

  	
  LONG TERM CARE ASSOCIATES - TEXAS, INC.

  
	
   

  	
  OHI (CLEMMONS), INC.

  
	
   

  	
  OHI (CONNECTICUT), INC.

  
	
   

  	
  OHI (FLORIDA), INC.

  
	
   

  	
  OHI (GREENSBORO), INC.

  
	
   

  	
  OHI (ILLINOIS), INC.

  
	
   

  	
  OHI (INDIANA), INC.

  
	
   

  	
  OHI (IOWA), INC.

  
	
   

  	
  OHI (KANSAS), INC.

  
	
   

  	
  OHIO LESSOR - WATERFORD & CRESTWOOD, INC.

  
	
   

  	
  OHI OF KENTUCKY, INC.

  
	
   

  	
  OHI OF TEXAS, INC.

  
	
   

  	
  OHI SUNSHINE, INC.

  
	
   

  	
  OHIMA, INC.

  
	
   

  	
  OMEGA (KANSAS), INC.

  
	
   

  	
  OMEGA TRS I, INC.

  
	
   

  	
  OS LEASING COMPANY

  
	
   

  	
  PARKVIEW - SKILLED NURSING, INC.

  
	
   

  	
  PINE TEXARKANA HEALTHCARE ASSOCIATES, INC.

  
	
   

  	
  REUNION TEXARKANA HEALTHCARE ASSOCIATES, INC.

  
	
   

  	
  SAN AUGUSTINE HEALTHCARE ASSOCIATES, INC.

  
	
   

  	
  SKILLED NURSING - GASTON, INC.

  
	
   

  	
  SKILLED NURSING - HERRIN, INC.

  
	
   

  	
  SKILLED NURSING - HICKSVILLE, INC.

  
	
   

  	
  SKILLED NURSING - PARIS, INC.

  
	
   

  	
  SOUTH ATHENS HEALTHCARE ASSOCIATES, INC.

  
	
   

  	
  STERLING ACQUISITION CORP.

  
	
   

  	
  STERLING ACQUISITION CORP. II

  
	
   

  	
  TEXAS LESSOR - TREEMONT, INC.

  
	
   

  	
  WASHINGTON LESSOR - SILVERDALE, INC.

  
	
   

  	
  WAXAHACHIE HEALTHCARE ASSOCIATES, INC.

  
	
   

  	
  WEST ATHENS HEALTHCARE ASSOCIATES, INC.

  

 

 

	
   

  	
  By:

  	
  /s/ Daniel J. Booth

  	
   

  
	
   

  	
  Name:

  	
  Daniel J. Booth

  	
   

  
	
   

  	
  Title:

  	
  Chief Operating Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OHI ASSET (FL), LLC

  
	
   

  	
  OHI ASSET (IN), LLC

  
	
   

  	
  OHI ASSET (MI/NC), LLC

  
	
   

  	
  OHI ASSET (MO), LLC

  
	
   

  	
  OHI ASSET (OH), LLC

  
	
   

  	
  OHI ASSET II (CA), LLC  OHI ASSET (FL) TARPON SPRINGS, 
  PINELLAS PARK & GAINESVILLE, LLC 
  NRS VENTURES, LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Omega Healthcare Investors, Inc., as the

  Sole Member of each of the companies

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Daniel J. Booth

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Daniel J. Booth

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Operating Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  TEXAS LESSOR - STONEGATE, LP

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  TEXAS LESSOR - STONEGATE GP, Inc.,

  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Daniel J. Booth

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Daniel J. Booth

  	
   

  
	
   

  	
   

  	
  Title: 

  	
  Chief Operating Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}]]