Document:

EX-10.e

EXHIBIT 10.e

ADC TELECOMMUNICATIONS, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

	 	 	 	 	 
	Optionee:

	 	 	 	Option Number:
	 

	 	 
	 	

	Optionee ID:

	 	 	 	Plan: GSIP/1991
	
 
	 	 
	 	

This Nonqualified Stock Option Agreement (the “Agreement”) is entered into effective by and between
ADC Telecommunications, Inc., a Minnesota corporation, (the “Company”), and the above-identified
Optionee pursuant to the Company’s Global Stock Incentive Plan (the “Plan”).

Effective the date written above, the Optionee has been granted an option (the “Option”) to
purchase all or any part of an aggregate of shares of common stock, par value US$.20 per share, of
the Company (the “Common Stock”) at the price of US$    per share subject to the terms and conditions
set forth herein the Plan and Exhibits A and B to this Agreement. This Option is not intended to
be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”).

The total aggregate purchase price for all of the shares purchasable under this Option is US$.

Subject to the terms and conditions of this Agreement, Exhibits A and B to this Agreement and the
Plan, this Option shall in all events terminate ten (10) years after the date of grant (the
“Expiration Date”). The shares subject to this Option shall vest and may be exercised in whole or
in part by the Optionee according to the following vesting schedule:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Number of Option	 	 
	Vesting Date	 	Shares Vesting	 	Expiration Date

Subject to the provisions of the Plan and Exhibits A and B, the Optionee must be actively employed
by the Company or any of its Affiliates on each Vesting Date for vesting to occur. Termination of
employment after a Vesting Date may accelerate the Expiration Date (see terms of the Plan and
Exhibits A and B).

Optionee and the Company agree that these Options are granted under and governed by the terms and
conditions of this Agreement, Exhibits A and B to this Agreement, and the Plan. Each of these
documents and a Prospectus related to shares covered by the Plan has been provided to Optionee.
Optionee specifically acknowledges that Exhibit A to this Agreement contains an agreement by
Optionee not to solicit employees of the Company or its Affiliates on behalf of any other employer,
a data privacy consent by Optionee and certain other acknowledgements by Optionee. In addition,
Optionee acknowledges that Exhibit B includes country-specific terms which apply to the Option.

Optionee acknowledges that this Option is subject to the ongoing discretionary authority of the
Company to determine: (i) the permissible manner of exercise of the Option (including but not
limited to the authority of the Company to require a mandatory cashless exercise); (ii) the
permissible timing of exercise of the Option; and (iii) any other restrictions that the Company
deems necessary and advisable, including but not limited to restrictions pertaining to applicable
law. Optionee further acknowledges that in the event the Optionee chooses to effect a simultaneous
exercise and sale of all or a portion of the shares that are subject to this Option, neither the
Company nor its third party stock option administrator will guarantee any particular market price
for the sale of the shares, nor shall the Company or its third party administrator be responsible
for any failure to obtain any particular market price due to delays in the exercise of this Option
or any other reason.

ADC TELECOMMUNICATIONS, INC.

Jeffrey D. Pflaum, Vice President, Corporate Secretary Date

& General Counsel

OPTIONEE

     

Date

	 	 	 	 	 
	Government/Taxpayer ID#______________________

	Home Address
	 	 	—	 

     

THE OPTIONEE MUST PROMPTLY SIGN AND RETURN THIS AGREEMENT TO THE COMPANY AT THE ADDRESS LISTED
BELOW. IF THIS AGREEMENT IS NOT SIGNED AND RETURNED WITHIN SIXTY (60) DAYS FROM THE DATE OF
MAILING THIS AGREEMENT, THIS OPTION SHALL BE VOID AND HAVE NO FORCE OR EFFECT.

Postal Mail:

ADC

Attn: HR Stock Compensation, MS 56

P.O. Box 1101

Minneapolis, MN 55440-1101 USA

Express Mail:

ADC

Attn: HR Stock Compensation, MS 56

13625 Technology Drive

Eden Prairie, MN 55344 USA

For questions regarding this Option, please contact ADC’s HR Stock Compensation Group as follows:

	 	 	 	 	 
	Email: stockprograms@adc.com

	 

	Facsimile:
	 	 	952-238-1525	 
	 
	 	 	 	 
	Telephone:
	 	 	952-917-0576	 
	 
	 	 	 	 
	 
	 	800-366-3889 ext. 70576

1

EXHIBIT A

TO THE

ADC TELECOMMUNICATIONS, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

This Exhibit A is part of and incorporated by reference into the Nonqualified Stock Option
Agreement (the “Agreement”) issued by ADC Telecommunications, Inc. (the “Company”) pursuant to the
Company’s Global Stock Incentive Plan (the “Plan”).

Unless otherwise defined herein, capitalized terms shall have the meaning given such term in the
Agreement.

2

1. Grant of Option

Refer to the Agreement for a description of the Option grants, including the total number of shares
of Common Stock covered by this Option, the exercise price per share, and the schedule for vesting.
This Option is not intended to be an incentive stock option within the meaning of Section 422 of
the U.S. Internal Revenue Code.

2. Duration and Exercisability

	 	(a)	 	This Option shall vest and become exercisable in accordance with the schedule
set forth on the Agreement. This Option shall in all events terminate ten (10) years
after the date of grant, if not earlier in the event of termination of employment.

	 	(b)	 	Notwithstanding the provisions contained in Section 2(a) above, but subject to
the other terms and conditions set forth herein, this Option shall become fully vested
and exercisable on the date of a “Change in Control” (as hereinafter defined). For
purposes of the Agreement and this Exhibit A to the Agreement, the following terms
shall have the definitions set forth below:

(i) “Change in Control” shall mean:

	 	(A)	 	a change in control of the Company of a nature
that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), whether or not
the Company is then subject to such reporting requirement;

	 	(B)	 	the public announcement (which, for purposes of
this definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Exchange Act) by the Company or any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) that such person has become the “beneficial owner” (as
defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more of
the combined voting power of the Company’s then outstanding securities,
determined in accordance with Rule 13d-3, excluding, however, any
securities acquired directly from the Company (other than an
acquisition by virtue of the exercise of a conversion privilege unless
the security being so converted was itself acquired directly from the
Company); however, that for purposes of this clause the term “person”
shall not include the Company, any subsidiary of the Company or any
employee benefit plan of the Company or of any subsidiary of the
Company or any entity holding shares of Common Stock organized,
appointed or established for, or pursuant to the terms of, any such
plan;

	 	(C)	 	the Continuing Directors cease to constitute a
majority of the Company’s Board of Directors;

	 	(D)	 	consummation of a reorganization, merger or
consolidation of, or a sale or other disposition of all or
substantially all of the assets of, the Company (a “Business
Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the persons who were the
beneficial owners of the Company’s outstanding voting securities
immediately prior to such Business Combination beneficially own voting
securities of the corporation resulting from such Business Combination
having more than 50% of the combined voting power of the outstanding
voting securities of such resulting Corporation and (B) at least a
majority of the members of the Board of Directors of the corporation
resulting from such Business Combination were Continuing Directors at
the time of the action of the Board of Directors of the Company
approving such Business Combination;

	 	(E)	 	approval by the shareholders of the Company of
a complete liquidation or dissolution of the Company; or

	 	(F)	 	the majority of the Continuing Directors
determine in their sole and absolute discretion that there has been a
change in control of the Company.

	 	(G)	 	The definition of “Change in Control” is
subject to changes as may be determined by the Compensation Committee
of the Company’s Board of Directors as necessary to comply with the
requirements of Section 409A of the Internal Revenue Code, as added by
the American Jobs Creation Act.

	 	(ii)	 	“Continuing Director” shall mean any person who is a member of
the Board of Directors of the Company, while such person is a member of the
Board of Directors, who is not an Acquiring Person (as defined below) or an
Affiliate or Associate (as defined below) of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate,
and who (x) was a member of the Board of Directors on the date of this
Agreement as first written above or (y) subsequently becomes a member of the
Board of Directors, if such person’s initial nomination for election or
initial election to the Board of Directors is recommended or approved by a
majority of the Continuing Directors. For purposes of this subparagraph (ii),
“Acquiring Person” shall mean any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) who or which, together with all Affiliates
and Associates of such person, is the “beneficial owner” (as defined in Rule
13d-3 promulgated under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined voting power
of the Company’s then outstanding securities, but shall not include the
Company, any subsidiary of the Company or any employee benefit plan of the
Company or of any subsidiary of the Company or any entity holding shares of
Common Stock organized, appointed or established for, or pursuant to the terms
of, any such plan; and “Affiliate” and “Associate” shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange
Act.

	 	(c)	 	This Option shall not be assignable or transferable except to a designated
beneficiary (under procedures established by the Company) or by the laws of descent and
distribution in the case of the death of Optionee, and except that for U.S. resident
employees, upon written notice to the Company, U.S. resident employees may transfer
this Option during his or her lifetime to any “family member” (as such term is used on
Form S-8 under the Securities Act of 1933) of Optionee provided that (i) there is no
consideration for such transfer or such transfer is effected pursuant to a domestic
relations order in settlement of marital property rights, and (ii) this Option held by
such transferees shall continue to be subject to the same terms and conditions
(including restrictions on subsequent transfers) as were applicable to this Option
immediately prior to such transfer. This Option may not be pledged, alienated,
attached or otherwise encumbered, and any purported pledge, alienation, attachment or
encumbrance thereof shall be void and unenforceable against the Company or any
Affiliate of the Company.

	 	(d)	 	This Option may be exercised, during the lifetime of Optionee, only by
Optionee, a permitted transferee pursuant to a transfer permitted by Section 2(c)
above, or, if permissible under applicable law, by Optionee’s or such transferee’s
guardian or legal representative.

3. Effect of Termination of Employment

	 	(a)	 	For all purposes of the Agreement and this Exhibit A, the term “Employment
Termination Date” shall mean the earlier of:

	 	(i)	 	the date, as determined by the Company, that Optionee is no
longer actively employed by the Company or an Affiliate of the Company, and in
the case of an involuntarily termination, such date shall not be extended by
any notice period mandated under local law (e.g., active employment would not
include a period of “garden leave” or similar period pursuant to local law); or

	 	(ii)	 	the date, as determined by the Company, that Optionee’s
employer is no longer an Affiliate of the Company.

	 	(b)	 	In the event the Optionee ceases to be an employee of the Company or any of its
Affiliates for any reason other than death, Optionee shall have the right to exercise
the Option at any time within one year after the Employment Termination Date to the
extent of the number of vested shares Optionee was entitled to purchase under the
Option on the Employment Termination Date, subject to the condition that no Option
shall be exercisable after the Expiration Date.

	 	(c)	 	In the event the Optionee dies while an employee of the Company or any of its
Affiliates or within three months after the Employment Termination Date, this Option
may be exercised at any time within two years after his or her death by the executors
or administrators of Optionee, or by any person or persons to whom the Option is
transferred by the prior designation of a beneficiary or the applicable laws of descent
and distribution, to the extent of the number of vested shares Optionee was entitled to
purchase under the Option on the date of death, subject to the condition that no Option
shall be exercisable after the Expiration Date.

	 	(d)	 	No further vesting of this Option shall occur after the Employment Termination
Date, and this Option shall be exercisable in accordance with this Section 3 following
the Employment Termination Date only to the extent that it is exercisable on the
Employment Termination Date, pursuant to the vesting schedule set forth in the
Agreement and Section 2 hereof.

4. Manner of Exercise

The Option can be exercised only by Optionee or other proper party within the option period by
notice to the Company or the Company’s third-party stock option administrator (UBS PaineWebber Inc.
as of the date of this grant) in a form specified by the Company or such third-party stock option
administrator, or in such other manner as the Company may specify from time-to-time. The Company
shall have the right to specify all conditions of the manner of exercise, and such conditions may
vary by country and may be subject to change from time to time.

5. Adjustments

If Optionee exercises all or any portion of the Option subsequent to any change in the number or
character of the Common Stock (through stock dividend, recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or
exchange of shares of Common Stock or other securities of the Company, issuance of warrants or
other rights to purchase shares of Common Stock or other securities of the Company or other similar
corporate transaction or event affecting the Common Stock such that an adjustment is determined by
the Committee to be appropriate in order to prevent dilution or enlargement of the Option),
Optionee shall then receive for the aggregate price paid by him or her on such exercise of the
Option, the number and type of securities or other consideration which he would have received if
such Option had been exercised prior to the event changing the number or character of outstanding
shares.

6. Responsibility for Taxes

Regardless of any action taken by the Company or Optionee’s employer (the “Employer”) with respect
to any or all income tax, social insurance, payroll tax, payment on account or other tax-related
withholding (“Tax-Related Items”), Optionee acknowledges that the ultimate liability for all
Tax-Related Items is and remains Optionee’s responsibility and that the Company and/or the Employer
(i) make no representations or undertakings regarding the treatment of any Tax-Related Items in
connection with any aspect of the Option grant, including the grant, vesting or exercise of the
Option, the subsequent sale of shares acquired pursuant to such exercise and the receipt of any
dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the Option
to reduce or eliminate Optionee’s liability for Tax-Related Items.

Prior to exercise of the Option, Optionee shall pay or make adequate arrangements satisfactory to
the Company and/or the Employer to satisfy all withholding and payment on account obligations of
the Company and/or the Employer. In this regard, Optionee authorizes the Company and/or the
Employer to withhold all applicable Tax-Related Items legally payable by Optionee from Optionee’s
wages or other cash compensation paid to Optionee by the Company and/or the Employer or from
proceeds of the sale of the shares. Alternatively, or in addition, if permissible under local law,
the Company may (i) sell or arrange for the sale of shares that Optionee acquires to meet the
withholding obligation for Tax-Related Items, and/or (ii) withhold in shares, provided that the
Company only withholds the amount of shares necessary to satisfy the minimum withholding amount.
Finally, Optionee shall pay to the Company or the Employer any amount of Tax-Related Items that the
Company or the Employer may be required to withhold as a result of Optionee’s participation in the
Plan or Optionee’s purchase of shares that cannot be satisfied by the means previously described.
The Company may refuse to honor the exercise and refuse to deliver the shares if Optionee fails to
comply with his or her obligations in connection with the Tax-Related Items as described in this
section.

7. Non-solicitation Agreement and Confidential Information

	 	(a)	 	In consideration of the grant of the Option, the Optionee shall not, directly
or indirectly, during the period the Optionee is employed by the Company or its
Affiliates and for a period of one year after the Employment Termination Date: (i)
induce or attempt to induce any other employee to leave the employ of the Company or
any of its Affiliates, or in any way interfere adversely with the relationship between
any such employee and the Company or any of its Affiliates; (ii) induce or attempt to
induce any other employee of the Company or any of its Affiliates to work for, render
services or provide advice to or supply confidential business information or trade
secrets of the Company or its Affiliates to any person or entity other than the Company
or its Affiliates; or (iii) employ, or otherwise pay for services rendered by, any
other employee of the Company or any of its Affiliates in any other business
enterprise.

	 	(b)	 	In further consideration of the grant of the Option, the Optionee specifically
acknowledges and agrees that Optionee is bound to protect the Company’s confidential
information which includes but is not limited to proprietary information, confidential
data and any other representation of Company knowledge, whether verbal, printed,
written or electronically recorded or transmitted. This includes confidential
information concerning any technologies, concepts, engineering, sales and financial
details, customer names and information, pricing, business strategies and other related
or similar confidential data. Optionee acknowledges that the obligation to protect the
Company’s confidential information continues after Optionee leaves the Company,
regardless of the reason. Optionee agrees to refrain from giving future employers any
confidential information belonging to the Company. This obligation to preserve
confidential information exists independently of and in addition to any obligation to
which the Optionee is subject under the terms of the Company’s Invention, Copyright and
Trade Secret Agreement, or other similar document.

	 	(c)	 	The Optionee acknowledges that breach of this Section 7 would be highly
injurious to the Company, and the Company reserves its rights to pursue all available
remedies, including but not limited to equitable and injunctive relief and damages.
The Optionee specifically agrees that the Company shall be entitled to obtain temporary
and permanent injunctive relief from a court of law to enforce the provisions of this
Section 7, and that such relief may be granted without the necessity of proving actual
damages and without necessity of posting any bond. This provision with respect to
injunctive relief shall not, however, diminish the right of the Company to claim and
recover damages or to seek and obtain any other relief available to it. The Optionee
further acknowledges that this Section 7 shall be enforceable by the Company even if no
portion of the Option becomes vested and exercisable.

8. Data Privacy Consent

Optionee hereby explicitly consents to the collection, use and transfer, in electronic or other
form, of his or her personal data as described in this document by and among, as applicable, the
Company and its Affiliates for the exclusive purpose of implementing, administering and managing
Optionee’s participation in the Plan.

Optionee understands that the Company and its Affiliates hold certain personal information about
Optionee, including, but not limited to, Optionee’s name, home address and telephone number, date
of birth, social insurance number or other identification number, salary, nationality, job title,
any shares of stock or directorships held in the Company or its Affiliates, details of all options
or any other entitlement to shares of stock awarded, cancelled, exercised, vested, unvested or
outstanding in Optionee’s favor, for the purpose of implementing, administering and managing the
Plan (“Data”). Optionee understands that Data may be transferred to any third parties assisting in
the implementation, administration and management of the Plan, that these recipients may be located
in Optionee’s country or elsewhere, and that the recipient’s country may have different data
privacy laws and protections than Optionee’s country. Optionee understands that Optionee may
request a list with the names and addresses of any potential recipients of the Data by contacting
ADC’s HR Stock Compensation Group. Optionee authorizes the recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of implementing,
administering and managing Optionee’s participation in the Plan, including any requisite transfer
of such Data as may be required to a broker or other third party with whom Optionee may elect to
deposit any shares of stock acquired upon exercise of the Option. Optionee understands that Data
will be held only as long as is necessary to implement, administer and manage Optionee’s
participation in the Plan and that Optionee may, at any time, view Data, request additional
information about the storage and processing of Data, require any necessary amendments to Data or
refuse or withdraw the consents herein, in any case without cost, by contacting in writing ADC’s HR
Stock Compensation Group. Optionee understands, however, that refusing or withdrawing his or her
consent may affect Optionee’s ability to participate in the Plan. For more information on the
consequences of Optionee’s refusal to consent or withdrawal of consent, Optionee may contact ADC’s
HR Stock Compensation Group.

9. Nature of Grant

In accepting the grant, Optionee acknowledges that:

	 	(a)	 	The Plan is established voluntarily by the Company, it is discretionary in
nature and it may be modified, suspended or terminated by the Company at any time, as
provided in the Plan and this Agreement. The Option is subject in all respects to the
terms and conditions of the Plan and this Agreement.

	 	(b)	 	The grant of the Option is voluntary and occasional and does not create any
contractual or other right to receive future grants of options, or benefits in lieu of
options, even if options have been granted repeatedly in the past.

	 	(c)	 	All decisions with respect to future option grants, if any, will be at the sole
discretion of the Company.

	 	(d)	 	Optionee’s participation in the Plan shall not create a right to further
employment with the Company or any of its Affiliates and shall not interfere with the
ability of the Company or its Affiliates to terminate Optionee’s employment
relationship at any time with or without cause.

(e) Optionee is voluntarily participating in the Plan.

	 	(f)	 	The Option is an extraordinary item that does not constitute compensation of
any kind for services of any kind rendered to the Company or the Employer, and is
outside the scope of Optionee’s employment contract, if any.

	 	(g)	 	The Option is not part of normal or expected compensation or salary for any
purposes, including, but not limited to, calculating any severance, resignation,
termination, redundancy, end of service payments, bonuses, long-service awards, pension
or retirement benefits or similar payments.

	 	(h)	 	In the event that Optionee is not an employee of the Company, the Option grant
will not be interpreted to form an employment contract or relationship with the
Company; and furthermore, the Option grant will not be interpreted to form an
employment contract with any Affiliate of the Company.

	 	(i)	 	The future value of the underlying shares is unknown and cannot be predicted
with certainty.

	 	(j)	 	If the underlying shares do not increase in value, the Option will have no
value.

	 	(k)	 	If Optionee exercises the Option and obtains shares, the value of those shares
acquired upon exercise may increase or decrease in value, even below the exercise
price.

	 	(l)	 	No claim or entitlement to compensation or damages arises from termination of
the Option or diminution in value of the Option or shares purchased through exercise of
the Option which results from the termination of Optionee’s employment by the Company
or the Employer (for any reason and regardless of whether in breach of contract), and
Optionee irrevocably releases the Company and its Affiliates from any such claim that
may arise; if, notwithstanding the foregoing, any such claim is found by a court of
competent jurisdiction to have arisen, Optionee shall be deemed irrevocably to have
waived his/her entitlement to pursue such claim.

	 	(m)	 	Optionee consents to the delivery by electronic means of any documents related
to the Option, the Plan or future options that may be granted under the Plan.

10. Miscellaneous

	 	(a)	 	Optionee shall have none of the rights of a shareholder with respect to shares
subject to this Option until such shares shall have been issued upon exercise of this
Option.

	 	(b)	 	This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Minnesota without giving effect to any choice or
conflict of law provision or rule (whether of the State of Minnesota or any other
jurisdiction) that would cause the application of the laws of any jurisdiction other
than the State of Minnesota. The Company and the Optionee submit to the jurisdiction
of any state or federal court sitting in Minneapolis, Minnesota, in any action or
proceeding arising out of or relating to this Agreement, and agree that all claims in
respect of the action or proceeding may be heard and determined in any such court.
Each of the Company and the Optionee also agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the Company
and the Optionee waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety, or other security that
might be required of the other party with respect thereto. The Company and the
Optionee agree that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner provided
by law or in equity.

	 	(c)	 	To the extent any provision of this Agreement shall be determined by any court
to be invalid or unenforceable in any jurisdiction, such provision shall be deemed to
be deleted from this Agreement, and the validity and enforceability of the remainder of
such provision and of this Agreement shall be unaffected. In furtherance of and not in
limitation of the foregoing, the Optionee expressly agrees that should the duration of,
geographical extent of, or business activities covered by Section 7 of this Agreement
be in excess of that which is valid or enforceable under applicable law, then such
provision shall be construed to cover only that duration, extent or activities that may
validly or enforceably be covered. The Optionee expressly stipulates that this
Agreement shall be construed in a manner that renders its provisions valid and
enforceable to the maximum extent (not exceeding its express terms) possible under
applicable law.

	 	(d)	 	If Optionee has received this Agreement or any other document related to the
Plan translated into a language other than English and if the translated version is
different than the English version, the English version will control.

3

EXHIBIT B

TO THE

ADC TELECOMMUNICATIONS, INC.

NONQUALIFIED STOCK OPTION AGREEMENT

This Exhibit B to the Nonqualified Stock Option Agreement (the “Agreement”) includes
additional terms and conditions of the grant of Options that will apply to any residents of the
countries listed below. Capitalized terms used but not defined herein shall have the same meanings
assigned to them in the Plan, the Agreement and Exhibit A to the Agreement.

Argentina

The benefits received under the Plan, if any, do not accrue on a monthly basis and will not be
granted on a regular or monthly basis. In addition, the Option is granted by Company on behalf of
the local employer.

The Option granted pursuant to the Plan, and the Shares which may be purchased upon exercise of the
Option, are offered in a private transaction and are not subject to the supervision of any
Argentine governmental authority. This is not an offer to the public.

Please note that exchange controls in Argentina are currently in a state of flux. Therefore,
Optionee should consult with his/her legal advisor regarding any approval or reporting obligations
that Optionee may have with respect to the exercise of Options, the ownership of foreign Shares
and/or the receipt of cash payments from abroad.

Australia

Optionee’s Option is granted pursuant to the Australian Addendum which is an addendum to the Plan,
and therefore, Optionee’s Option is subject to the terms and conditions as stated in the Australian
Addendum, the Plan, the Agreement and Exhibits A and B to the Agreement.

Austria

If Optionee holds Shares obtained through the Plan outside Austria (even if Optionee holds them
outside of Austria with an Austrian bank), Optionee must submit a report to the Austrian National
Bank using the form “Standmeldung.” An exemption applies if the value of the securities on
December 31 does not exceed €75,000. The reporting date is December 31; the deadline for filing
the report is March 31 of the following year. The forms can be obtained at the Austrian National
Bank. If the Options are exercised under the cashless exercise method or when Shares are sold,
there may be exchange control obligations if the cash received is held outside Austria. A separate
reporting requirement applies to Optionee’s non-Austrian cash accounts. A non-Austrian cash
account must be reported to the Austrian National Bank at the postal address listed above on or
before the tenth day of the month following the month in which the account is opened. In addition,
if the transaction volume of all accounts abroad exceeds €2.5 million, the movements and the
balance of all accounts must be reported monthly, as of the last day of the month, on or before the
tenth day of the following month by filing the form “Auslandskontenmeldung.” If the transaction
value of all cash accounts abroad is below €2.5 million, no ongoing reporting requirements apply.

Optionee should be aware that he/she may be entitled to revoke his/her Option acceptance on the
basis of the Austrian Consumer Protection Act under the following conditions:

	 	(i)	 	If Optionee agrees to receive Options, he/she may be entitled to revoke his/her
acceptance of the Option. The revocation must be made within one week of the day
Optionee signed the Agreement; or

	 	(ii)	 	Optionee may be entitled revoke his/her acceptance of the Agreement if
circumstances relevant to Optionee’s decision to enter into the Agreement, as presented
by the Company, either do not materialize or materialize to a significantly reduced
extent, through no fault of Optionee’s. This revocation must be made within one week
of the time it is foreseeable that the circumstances mentioned above do not materialize
or materialize at a significantly reduced extent, provided Optionee received written
information on this right of revocation.

Please note the revocation must be in written form to be valid. It is sufficient if Optionee
returns the Agreement to the Company or the Company’s representative with language which can be
understood as his/her refusal to conclude or honor the terms contained in the Agreement. It is
sufficient if the revocation is sent within the period discussed above.

Belgium

Optionee must accept the Option within 60 days after this Agreement is distributed to him/her.
Failure to do so will result in forfeiture of the Option. In order to properly accept, Optionee
must sign the Acceptance Form and return it to ADC’s HR Stock Option Group (at the address
specified in the Agreement) within 60 days of the offer date specified in Optionee’s offer letter.
If Optionee’s Option is forfeited, he/she will not be entitled to any payment or compensation in
lieu of the Option.

Optionee is required to report any security or bank account maintained outside of Belgium on
his/her annual tax return.

Brazil

Due to exchange control restrictions in Brazil, Optionee must exercise the Option using the
cashless-sell all method of exercise. Pursuant to a cashless-sell all exercise, Optionee will
authorize the stockbroker to sell all the Shares that he/she is entitled to at exercise and remit
the sale proceeds less the exercise price, broker’s fees and any applicable taxes to Optionee in
cash.

By accepting this Option, Optionee acknowledges that he/she agrees to comply with applicable
Brazilian laws and pay any and all applicable taxes associated with the exercise of the Option,
sale of Shares obtained pursuant to exercise of the Option.

Canada (Quebec only)

The parties acknowledge that it is their express wish that this Agreement, as well as all
documents, notices and legal proceeds entered into, given or instituted pursuant hereto or relating
directly or indirectly hereto, be provided to them in English.

Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention, ainsi que de
tous documents exécutés, avis donnés et procédures judiciaries intentées, directement ou
indirectement, relativement à ou suite à la présente convention.

Canada (all provinces)

Optionee is permitted to sell Shares acquired upon exercise of the Option through the designated
broker appointed by the Company provided the resale of Shares takes place outside of Canada through
the facilitates of the stock exchange which the Shares are listed. Currently, the Company’s Shares
are listed on NASDAQ.

China

Due to legal restrictions in China, Optionee must exercise the Option using the cashless-sell all
method of exercise. Pursuant to a cashless-sell all exercise, Optionee will authorize the
stockbroker to sell all the Shares that he/she is entitled to at exercise and remit the sale
proceeds less the exercise price, broker’s fees and any applicable taxes to Optionee in cash.

Denmark

If Optionee make or receives payments in excess of DKK250,000 (a per transaction limit), the
transaction should be reported to the Danish National Bank. If Optionee instructs a local bank to
transfer an amount in excess of DKK250,000 to a foreign recipient, the local bank will request that
Optionee inform it of the reason for the transfer; it will then submit the relevant information to
the Danish National Bank on Optionee’s behalf. If Optionee transfers in excess of DKK250,000 to a
local bank (e.g., as a result of the sale of Shares), the local bank similarly will request certain
information regarding the transaction from Optionee; it will then submit the relevant information
to the Danish National Bank on Optionee’s behalf. Therefore, in most circumstances, the local bank
involved in the transaction will satisfy the reporting obligation.

If Optionee establishes a “safety-deposit account” (i.e., an account holding Shares) or a “deposit
account” (i.e., an account holding cash) abroad, Optionee will not be required to report the
account to the Danish National Bank. (Please note that these obligations are separate from and in
addition to the obligations described below.)

Optionee may hold Shares acquired through the Plan in a safety-deposit account (e.g., a brokerage
account) with either a Danish bank or with an approved foreign broker or bank. If the Shares are
held with a foreign broker or bank, Optionee is required to inform the Danish Tax Administration
about the safety-deposit account. For this purpose, Optionee must file a Form V (Erklaering V)
with the Danish Tax Administration. Both Optionee and the broker or bank must sign the Form V. By
signing the Form V, the broker or bank undertakes an obligation, without further request each year,
to forward information to the Danish Tax Administration concerning the Shares in the account. By
signing the Form V, Optionee authorizes the Danish Tax Administration to examine the account. A
sample of the Form V can be found at the following website:
www.erhverv.toldskat.dk/blanketter/49023.pdf.

In addition, if Optionee opens a brokerage account (or a deposit account with a U.S. bank), the
brokerage account (or bank account, as applicable) will be treated as a deposit account because
cash can be held in the account. Therefore, Optionee must also file a Form K (Erklaering K) with
the Danish Tax Administration. Both Optionee and the broker must sign the Form K. By signing the
Form K, the broker undertakes an obligation, without further request each year, to forward
information to the Danish Tax Administration concerning the content of the deposit account. By
signing the Form K, Optionee authorizes the Danish Tax Administration to examine the account. A
sample of Form K can be found at the following website:
www.erhverv.toldskat.dk/blanketter/49021.pdf.

If Optionee uses the cashless-sale all method of exercise, Optionee is not required to file a Form
V because Optionee will not hold any Shares. However if Optionee opens a deposit account with a
foreign broker or bank to hold the cash proceeds, Optionee is required to file a Form K as
described above.

By accepting this Option, Optionee acknowledges that he/she understands and agrees that this grant
relates to future services to be performed and is not a bonus or compensation for past services.

Finland

This offer is private and not subject to regulations under the Finnish Securities Market Act.

France

Optionee may hold Shares purchased under the Option outside of France provided he/she declares all
foreign accounts, whether open, current, or closed, in his/her income tax return. Optionee must
also declare to the customs and excise authorities any cash or securities he/she imports or exports
without the use of a financial institution when the value of the cash or securities is equal to or
exceeds €7,600.

Germany

Cross-border payments in excess of €12,500 must be reported monthly. If Optionee uses a German
bank to transfer a cross-border payment in excess of €12,500 in connection with the purchase or
sale of Company Shares, the bank will make the report. In addition, Optionee must report any
receivables or payables or debts in foreign currency exceeding an amount of €5,000,000 on a monthly
basis. Finally, Optionee must also report his/her holding annually in the unlikely event that
Optionee holds Shares representing 10% or more of the total or voting capital of the Company.

Hong Kong

The Company specifically intends that the Plan will not be an occupational retirement scheme for
the purposes of the Occupational Retirement Schemes Ordinance (“ORSO”). Notwithstanding the
foregoing, if the Plan is deemed to constitute an occupational retirement scheme for the purposes
of ORSO, Optionee’s Option grant shall be void.

In the event that Optionee dies prior to six months after the grant date, Optionee’s legal
representative or designated beneficiary will be entitled to exercise this Option, as provided in
paragraph 3 of this Agreement, provided that such representative or beneficiary executes an
undertaking satisfactory to Company not to sell the Shares acquired through exercise of this Option
prior to six months after the grant date.

In the event of termination of employment, other than termination due to death, Optionee will not
be entitled to exercise this Option until at least six months after the grant date.

Hungary

This offering is not regulated by Act CXI of 1996 on the Offering of Securities, Investment
Services and the Stock Exchange.

India

Due to exchange control regulations in India, Optionee will not be permitted to engage in a
cashless-sell to cover exercise. However, Optionee may engage in a cashless-sell all exercise or a
cash exercise, provided that Optionee does not remit more than US$25,000 in any calendar year for
any purpose, including sending cash out of India pursuant to a cash exercise, or pursuant to
participation in another plan, or for any other reason unrelated to the purchase of foreign shares.
All proceeds from the exercise of the Option must be repatriated to India within a reasonable time
of receiving payment. Optionee will receive a foreign inward remittance certificate (“FIRC”) from
the bank where he/she deposits the foreign currency. Optionee should maintain the FIRC as evidence
of the repatriation of funds in the event that the Reserve Bank of India or his/her employer
requests proof of repatriation.

Compliance with the exchange controls in India is Optionees’ sole responsibility and the Company
nor the Optionee’s employer accepts any responsibly for Optionee’s compliance.

Optionee acknowledges and agrees that: (i) his/her decision to exercise the Option is voluntary;
and (ii) an Option granted under the Plan does not constitute a customary right or privilege.

Ireland

This Option is granted pursuant to the Plan and the Shares which may be purchased on exercise of
the Option are offered in a private transaction. This is not an offer to the public.

Optionee must exercise his/her Option by using a handwritten letter, an electronic notification, or
a voice response system. Optionee may not use a standard Option exercise form provided by the
Company or its agent, if any.

If Optionee is a director, shadow director or secretary of an Irish subsidiary of Company, Optionee
is subject to certain notification requirements under the Companies Act, 1990. Among these
requirements is an obligation to notify the Irish subsidiary in writing when Optionee receives an
interest (e.g., Options, Shares) in Company and the number and class of Shares or rights to which
the interest relates. In addition, Optionee must notify the Irish subsidiary when Optionee sells
Shares acquired through the exercise of Options. Optionee must notify the Irish subsidiary of the
acquisition or disposal of an interest in Shares within five days following the day of acquisition
or disposal of the interest in Shares. These notification requirements also apply to any rights or
Shares acquired by Optionee’s spouse or children under the age of 18. Please contact Company to
obtain a copy of the notification form.

Israel

Optionee must exercise the Option using the cashless-sell all method of exercise. Pursuant to a
cashless-sell all exercise, Optionee will authorize the stockbroker to sell all the Shares that
he/she is entitled to at exercise and remit the sale proceeds less the exercise price, broker’s
fees and any applicable taxes to Optionee in cash.

Italy

By accepting this Option, Optionee acknowledges that he/she has received a copy of the Plan,
reviewed the Plan and this Agreement in their entirety and fully understands and accepts all
provisions of the Plan and this Agreement. In addition, Optionee acknowledges that the Option is
not meant to incentivize, compensate or reward Optionee for his/her efforts for his/her employer.

Exchange control reporting is required if Optionee transfers cash or Shares to or from Italy in
excess of €12,500 or the equivalent amount in U.S. dollars. If the payment is made through an
authorized broker resident in Italy, the broker will comply with the reporting obligation. In
addition, the Optionee will have exchange control reporting obligations if Optionee has any foreign
investment (including stock) held outside Italy in excess of €12,500 or the equivalent amount in
U.S. dollars. The reporting must be done on Optionee’s individual tax return.

Japan

If Optionee acquires Shares valued at more than ¥100,000,000 in a single transaction, Optionee must
file a report with the Ministry of Finance through the Bank of Japan within 20 days of the purchase
of the Shares. The reporting requirements vary depending on whether or not the relevant payment is
made through a bank in Japan.

Malaysia

Optionee must comply with the following exchange control reporting obligations if Optionee is a
Malaysian resident for exchange control purposes: (i) if Optionee remits more than RM50,000 (or
its equivalent in foreign currency) to exercise his/her Option, Optionee will be required to file a
Form P with the Foreign Exchange Department of Bank Negara; (ii) Optionee must repatriate all
proceeds from the sale of Shares and all dividend payments (if any) to Malaysian as soon as the
proceeds/dividends are received; (iii) Optionee must file a Form R with Bank Negara if the amount
of funds repatriated exceeds RM50,000 (or its equivalent in foreign currency); and (iv) if Company
and/or Optionee’s employer do not obtain a blanket exchange control approval, then Optionee must
notify Bank Negara of the remittance of funds to exercise his/her Option at least seven working
days before the remittance (Optionee can estimate the amount that he/she intends to remit). These
requirements apply to both cash and cashless exercises.

If Optionee is a director of a Malaysian affiliate of ADC, he/she is subject to certain
notification requirements under the Malaysian Companies Act, 1965. Among these requirements is an
obligation to notify the Malaysian affiliate in writing when Optionee receives an interest (e.g.,
Options, Shares, etc.) in Company or any related companies. In addition, Optionee must notify the
Malaysian affiliate when he/she sells Shares of Company or any related company (including when
Optionee sells Shares acquired through exercise of his/her Option). Additionally, Optionee must
also notify the Malaysian affiliate of Company if there are any subsequent changes in Optionee’s
interest in Company or any related companies. These notifications must be made within 14 days of
acquiring or disposing of any interest in Company or any related company.

Mexico

The invitation the Company is making under the Plan is unilateral and discretionary and, therefore,
the Company reserves the absolute right to amend it and discontinue it at any time without any
liability to Optionee.

This invitation and, in Optionee’s case, the acquisition of Shares does not, in any way, establish
a labor relationship between Optionee and the Company, and it does not establish any rights between
Optionee and his/her employer.

La invitación que the Company hace en relación con el Plan es unilateral y discrecional, por lo
tanto, the Company se reserva el derecho absoluto para modificar o terminar el mismo, sin ninguna
responsabilidad para usted.

Esta invitación y, en su caso, la adquisición de acciones, de ninguna manera establecen relación
laboral alguna entre usted y the Company y tampoco establece derecho alguno entre usted y su
empleador.

The Netherlands

By accepting this Option, Optionee acknowledges that: (i) the grant is intended as an incentive
for the Optionee to remain employed with his/her current employer and is not intended as
remuneration for labor performed; (ii) the grant is not intended to replace any pension rights or
compensation; and (iii) in the case of a merger, take-over or transfer of liability, the benefits
granted under the Plan will not transfer automatically to another company.

If Optionee would like to defer taxation until the time of exercise, he/she must sign a deferral
election form and accompanying documents for the purposes of deferring tax until exercise.

Poland

It is no longer necessary to obtain a foreign exchange permit to participate in the Plan. However,
if Optionee transfers €10,000 or more in connection with the exercise of an Option, Optionee must
transfer the funds via a bank account. Please note that if Optionee uses a cashless method of
exercise, this requirement will not apply because no funds will be transferred out of Poland. If
Optionee acquires Shares through participation in the Plan, Optionee must file an annual report
with the National Bank of Poland declaring ownership of foreign shares.

Singapore

If Optionee is a director, associate director or shadow director of a Singapore affiliate of
Company, Optionee is subject to certain notification requirements under the Singapore Companies
Act. Among these requirements is an obligation to notify the Singaporean affiliate in writing when
Optionee receives an interest (e.g., Options, Shares) in Company or any related companies. Please
contact Company to obtain a copy of the notification form. In addition, Optionee must notify the
Singapore affiliate when Optionee sells Shares of Company or any related company (including when
Optionee sell Shares acquired through exercise of his/her Option). These notifications must be
made within two days of acquiring or disposing of any interest in Company or any related company.
In addition, a notification must be made of Optionee’s interests in Company or any related company
within two days of becoming a director.

South Africa

To participate in the Plan, Optionee must comply with exchange control regulations in South Africa.
The Exchange Control Department of the South African Reserve Bank (the “Exchange Control”)
requires that approval be sought for the participation by South African residents in foreign share
incentive schemes. Although this approval is Optionee’s obligation (not Company’s or Optionee’s
Employer obligation), the Company may obtain this approval on Optionee’s behalf.

Optionee must exercise the Option using the cashless-sell all method of exercise. Pursuant to a
cashless-sell all exercise, Optionee will authorize the stockbroker to sell all the Shares that
he/she is entitled to at exercise and remit the sale proceeds less the exercise price, broker’s
fees and any applicable taxes to Optionee in cash.

Because the exchange control regulations change frequently and without notice, Optionee should
consult his/her legal advisor prior to exercise of this Option to ensure compliance with current
regulations. It is Optionee’s responsibility to comply with South African exchange control laws,
and neither Company nor Optionee’s employer will be liable for any resulting fines or penalties.

South Korea

When Optionee exercises an Option, his/her remittance of funds must be “confirmed” by a foreign
exchange bank in Korea. This procedure does not require approval of the remittance from the bank.
Optionee must submit the following documents to the bank with a confirmation application available
from the bank: (i) the notice of grant, if any; (ii) the Plan; (iii) the Agreement indicating the
type of Shares to be acquired and the amount of Shares; and (iv) a certificate of employment from
Optionee’s local employer.

Exchange control laws also require Korean residents who realize US$100,000 or more from the sale of
Shares to repatriate the proceeds back to Korea within six months of the sale.

Spain

By accepting this Option, Optionee acknowledges that: (i) he/she understands and agrees to the
terms of the Plan; (ii) he/she consents to participation in the Plan; (iii) and he/she has received
a copy of the Plan.

Optionee understands that Company has unilaterally, gratuitously, and discretionally decided to
distribute Options under the Plan to individuals who may be employees of the Company or its
affiliates throughout the world. The decision is a temporary decision that is entered into upon
the express assumption and condition that any grant will not economically or otherwise bind Company
or any of its affiliates presently or in the future. Consequently, Optionee understands that any
grant is given on the assumption and condition that it shall not become a part of any employment
contract (either with Company or any of its affiliates) and shall not be considered a mandatory
benefit, salary for any purpose (including severance compensation) or any other right whatsoever.
Further, Optionee understands and freely accepts that there is no guarantee that any benefit
whatsoever shall arise from any gratuitous and discretionary grant since the future value of the
Options and underlying Shares is unknown and unpredictable. In addition, Optionee understands that
this grant would not be made to Optionee but for the assumptions and conditions referred to above;
thus, Optionee acknowledges and freely accepts that should any or all of the assumptions be
mistaken or should any of the conditions not be met for any reason, then any grant of Options shall
be null and void and the Plan shall not have any effect whatsoever.

It is Optionee’s responsibility to comply with exchange control regulations in Spain. The purchase
of Company Shares must be declared for the purchaser for statistical purposes to the Spanish
Dirección General de Comercio e Inversiones of the Ministry of Economy (the “DGCI”). If Optionee
purchases Shares through the use of a Spanish financial institution, that institution will
automatically make the declaration to the DGCI for Optionee. Otherwise, Optionee must make the
declaration himself/herself by filing the appropriate form with the DGCI.

When receiving foreign currency payments derived from the ownership of Company Shares (i.e., as a
result of the sale of the Shares), Optionee must inform the financial institution receiving the
payment, the basis upon which such payment is made. Optionee will need to provide the institution
with the following information: (i) Optionee’s name, address, and fiscal identification number;
(ii) the name and corporate domicile of Company; (iii) the amount of the payment; (iv) the currency
used; (v) the country of origin; (vi) the reasons for the payment; and (vii) additional information
that may be required.

If Optionee wishes to import the ownership title of the Company Shares (i.e., share certificates)
into Spain, Optionee must declare the importation of such securities to the DGCI.

This offer is considered a private placement outside of the scope of Spanish law on public
offerings and issuances.

Sweden

No special provisions.

Switzerland

The grant is considered a private offering in Switzerland and is therefore not subject to
registration in Switzerland.

United Arab Emirates

The Plan is only being offered to qualified employees and is in the nature of providing equity
incentives to employees of the Company’s affiliate in the United Arab Emirates.

United Kingdom

Optionee agrees that if Company does not withhold the amount of income tax and National Insurance
Contributions that Optionee is responsible for as a result of the exercise, release, assignment or
cancellation of the Option (the “Taxable Event”) from Optionee within 90 days after the Taxable
Event, that the amount that should have been withheld from Optionee shall constitute a loan owed by
Optionee to Optionee’s employer (“Employer”), effective 90 days after the Taxable Event. Optionee
agrees that the loan will bear interest at the UK official rate of interest and it will be
immediately due and repayable and Company and/or Employer may recover it at any time thereafter by
withholding the funds from Optionee’s salary, bonus or any other funds due by Employer to Optionee,
by withholding in Shares acquired upon exercise of the Option or by demanding cash or a check from
Optionee.

Venezuela

Optionee acknowledges and agrees that any modification of the Plan or its termination shall not
constitute a change or impairment of the terms and conditions of Optionee’s employment.

Optionee also acknowledges that: (i) this offer is personal, private, exclusive and
non-transferable; (ii) Optionee has been selected to receive a grant only because he/she meets the
eligibility requirements contained in the Plan; and (iii) this offer is not being communicated
using any means of publicity.

Recently, the Government of Venezuela established an exchange control regime. Optionee should
consult with his/her legal advisor to determine how these new requirements impact his/her
participation in the Plan.

4EX-4.1

EXECUTION COPY

FIRST AMENDMENT

FIRST AMENDMENT, dated as of November 2, 2004 (this “Amendment”), to the Second
Amended and Restated Credit Agreement, dated as of April 22, 2004 (as amended, supplemented or
otherwise modified, the “Credit Agreement”), among EXTENDICARE HOLDINGS, INC., a Wisconsin
corporation (“Holdings”), EXTENDICARE HEALTH SERVICES, INC., a Delaware corporation (the
“Borrower”), the several banks and other financial institutions or entities from time to
time parties to the Credit Agreement, US BANK, NATIONAL ASSOCIATION, as syndication agent, GENERAL
ELECTRIC CAPITAL CORPORATION, RESIDENTIAL FUNDING CORPORATION and LASALLE BANK NATIONAL
ASSOCIATION, as co-documentation agents, and LEHMAN COMMERCIAL PAPER INC., as administrative agent
(in such capacity, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make and have made loans
and other extensions of credit to the Borrower;

WHEREAS, pursuant to a purchase agreement (the “Purchase Agreement”) to be entered
into among Holdings, the Borrower and Assisted Living Concepts, Inc., a Delaware corporation
(“Assisted Living”), the Borrower intends to agreed to acquire all of the outstanding
Capital Stock of Assisted Living in exchange for consideration consisting of approximately
$140,000,000 in cash and the assumption of certain indebtedness of Assisted Living in an aggregate
principal amount of up to approximately $155,000,000;

WHEREAS, Holdings and the Borrower have requested that certain provisions of the Credit
Agreement be amended in the manner provided for in this Amendment; and

NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, and for
other valuable consideration the receipt of which is hereby acknowledged, the parties hereto hereby
agree as follows:

SECTION 1. DEFINITIONS. Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit Agreement.

	 	 	 
	SECTION 2.AMENDMENTS TO THE CREDIT AGREEMENT.

	 
	 	 
	 

	 
	 	 
	2.1

	 	Amendments to Section 1.1 of the Credit Agreement.
	
 
	 	 

(a) Section 1.1 of the Credit Agreement is hereby amended by inserting the following new
definitions in the appropriate alphabetical order:

“First Amendment”: the amendment to this Agreement dated as of November
2, 2004.

“First Amendment Commitment Increase Effective Date”: the date on which
the conditions set forth in Section 4.1(b) of the First Amendment are waived or
satisfied.

“First Amendment Effective Date”: the date on which the conditions set
forth in Section 4.1(a) of the First Amendment are waived or satisfied.

“First Amendment Pricing Change Effective Date”: the date on which the
conditions set forth in Section 4.1(c) of the First Amendment are waived or
satisfied.

“Lender Consent Letter”: as defined in Section 4.1(a) of the First
Amendment.

“New Lender Supplement”: as defined in Section 4.1(b) of the First
Amendment.

(b) The definition of “Revolving Credit Commitment” in Section 1.1 of the Credit Agreement is
hereby amended by inserting the following sentence at the end thereof:

“The aggregate amount of the Total Revolving Credit Commitments as of the First
Amendment Commitment Increase Effective Date is $     [not in excess of
$200,000,000].”

2.2 Amendment to Section 2.1 of the Credit Agreement.  Section 2.1 of the Credit
Agreement is hereby amended by adding at the end thereof the following new paragraph (d):

“(d) On the First Amendment Commitment Increase Effective Date, (i) each
Lender shall make or increase the amount of its Revolving Credit Commitment in the
manner and by the amount, if any, set forth in such Lender’s Lender Consent Letter
or New Lender Supplement, as applicable and (ii) the Borrower shall make such
borrowings and repayments of Revolving Credit Loans such that, after giving effect
thereto, the percentage of the Total Revolving Extensions of Credit held by each
Lender will equal (as nearly as shall be practicable) the Revolving Credit
Percentage of such Lender. In the event that the any repayment made pursuant to
clause (ii) of the preceding sentence shall result in any Eurodollar Loans being
repaid on a date other than the last day of an Interest Period applicable thereto,
Borrower shall pay any amounts owing to any Lender pursuant to Section 2.16 as a
result of such payment.”

2.3 Amendment to Annex A (Pricing Grid). Annex A to the Credit Agreement is hereby
amended by deleting Annex A in its entirety and substituting in lieu thereof the pricing grid
attached to this First Amendment as Exhibit A. 

2.4 Amendment to Disclosure Schedules. The schedules to the Credit Agreement are
hereby amended by inserting as new Schedule 7.2(i) thereto the schedule attached to this First
Amendment as Exhibit B.

2.5 Amendment to Section 7.2 of the Credit Agreement. Section 7.2(i) of the Credit
Agreement is hereby amended by deleting clause (i) in its entirety and substituting the following
in lieu thereof:

“(i) Indebtedness listed on Schedule 7.2(i) and any refinancings, refundings,
renewals or extensions thereof (without any increase in the principal amount thereof
or any shortening of the maturity of any principal amount thereof); and”.

2.6 Amendment to Section 7.3 of the Credit Agreement. Section 7.3(j) of the Credit
Agreement is hereby amended by deleting clause (j) in its entirety and substituting the following
in lieu thereof:

“(j) Liens in existence on the First Amendment Effective Date securing
Indebtedness permitted by Section 7.2(i), provided that no such Lien is spread to
cover any additional Property after the First Amendment Effective Date and that the
amount of Indebtedness secured thereby is not increased;”.

SECTION 3. OPTION TO BORROW TERM LOANS. The Lenders hereby agree that the Borrower
may at any time add one or more term loan facilities to the Credit Agreement in an aggregate
principal amount which, together with the aggregate principal amount of the Revolving Credit
Commitments then in effect, does not exceed $250,000,000. In the event that the Borrower wishes to
borrow, and one or more banks, financial institutions or entities reasonably acceptable to the
Administrative Agent is willing to provide, such term loans, the Lenders agree to enter into any
amendments and modifications to the Credit Agreement which are necessary to establish the terms and
conditions applicable to such term loans and otherwise approved by the Required Lenders. No Lender
shall have any obligation to participate in any term loans to be made in accordance with this
Section unless it agrees to do so in its sole discretion.

SECTION 4. CONDITIONS PRECEDENT; CONDITION SUBSEQUENT.

4.1 Effectiveness of the Amendment. The amendments to the Credit Agreement described
in this First Amendment shall become effective as follows:

(a) All amendments to the Credit Agreement described herein (other than the amendments
described in Section 2.1(a) hereof with respect to the definitions “Lender Consent Letter” and “New
Lender Supplement” and in Section 2.1(b), 2.2 and 2.3 hereof) shall become effective on and as of
the date (the “First Amendment Effective Date”) on which:

(i) the Administrative Agent shall have received (A) an executed counterpart of this
Amendment, duly executed and delivered by a duly authorized officer of each of Holdings and
the Borrower, (B) Lender Consent Letters (or facsimile transmissions thereof), substantially
in the form of Exhibit C hereto (“Lender Consent Letters”), executed by the Required
Lenders and (C) an Acknowledgement and Consent, substantially in the form of Exhibit D
hereto, executed by each Loan Party other than the Borrower;

(ii) the Borrower shall have acquired Assisted Living pursuant to the Purchase
Agreement, and no provision of the Purchase Agreement shall have been waived, amended,
supplemented or otherwise modified in a manner materially adverse to the Lenders without the
consent of the Administrative Agent. All governmental and material third party approvals
necessary in connection with such acquisition and the continuing operations of Holdings and
its Subsidiaries (including any new Subsidiaries acquired by the Borrower pursuant to the
Purchase Agreement) and in connection with the financing related thereto shall have been
obtained and be in full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority that would
restrain, prevent or otherwise impose adverse conditions on such acquisition or the related
financing;

(iii) the Borrower shall have paid to each Lender executing a Lender Consent Letter
with respect to this First Amendment on or prior to 5:00 pm, New York City time, on November
2, 2004 an amendment fee equal to 0.125% of the aggregate of such Lender’s Revolving Credit
Commitment (without giving effect to any increase in such Lender’s Revolving Credit
Commitment effected pursuant to Section 2.2 hereof); and

(iv) the Borrower shall have paid all fees required to be paid, and all expenses for
which invoices have been presented, relating to the preparation and delivery of this
Amendment and the transactions contemplated hereby (including fees, disbursements and other
charges of counsel to the Administrative Agent).

(b) The amendments to the Credit Agreement described in Section 2.1(a) hereof with respect to
the definitions “Lender Consent Letter” and “New Lender Supplement” and in Section 2.1(b) and 2.2
hereof shall become effective on and as of the date (the “First Amendment Commitment Increase
Effective Date”) on which:

(i) the First Amendment Effective Date shall have occurred (or shall occur
contemporaneously with the occurrence to the First Amendment Commitment Increase Effective
Date);

(ii) the Administrative Agent shall have received (A) an executed Lender Consent
Letter (or a facsimile transmission thereof) from each Lender electing to increase its
existing Revolving Credit Commitment, specifying the amount of such Lender’s increase and
(B) an executed New Lender Supplement (or facsimile transmissions thereof), substantially in
the form of Exhibit F hereto (a “New Lender Supplement”), from each institution
electing to become a Lender hereunder and to provide a Revolving Credit Commitment;

(iii) the Administrative Agent shall have received, or shall be reasonably satisfied
that it shall receive within 30 days after the First Amendment Commitment Increase Effective
Date, (A) such executed amendments to the existing Mortgages as are necessary to cause such
Mortgages to continue to secure the Obligations to the same extent, and with the same
priority, as such Mortgages secured the Obligations of the Borrower and its Affiliates under
the Credit Agreement immediately prior to the First Amendment Commitment Increase Effective
Date, and (B) in respect of each of the existing mortgagee title insurance policies an
endorsement from the issuing title insurance company which shall (i) insure that the
Mortgage insured thereby (as amended) shall continue to be a valid first Lien on the
Mortgaged Property encumbered thereby as of the effective date of such existing mortgagee
title insurance policy, to the same extent and with the same priority as such existing
mortgagee title insurance policy insured the existing Mortgage, (ii) name the Administrative
Agent for the benefit of the Secured Parties as the insured thereunder; and (iii) be in form
and substance reasonably satisfactory to the Administrative Agent;

(iv) the Administrative Agent shall have received a legal opinion from Foley & Lardner,
counsel to the Borrower and its Subsidiaries, in form and substance reasonably satisfactory
to the Administrative Agent; and

(v) the Administrative Agent shall have received an executed officer certificate,
substantially in the form of Exhibit E hereto, from the Borrower.

(c) The amendments to the Credit Agreement described in Section 2.3 hereof shall become
effective on and as of the date (the “First Amendment Pricing Change Effective Date”) on
which:

(i) the First Amendment Effective Date and the First Amendment Commitment Increase
Effective Date shall have occurred (or shall occur contemporaneously with the occurrence to
the First Amendment Pricing Change Effective Date); and

(ii) the Administrative Agent shall have received (A) an executed Lender Consent
Letter (or a facsimile transmission thereof) from each Lender, specifying that such Lender
consents to the amendments to the pricing change effected by Section 2.3 hereof.

4.2 Delivery of Mortgage Amendments and Title Insurance Endorsements. The Borrower
agrees that any amendments to the Mortgages and endorsements to title insurance policies required
to be delivered by the Borrower pursuant to Section 4.1(b) (iii) of this Amendment that are not
delivered on or before the First Amendment Commitment Increase Effective Date shall be delivered to
the Administrative Agent within 30 days after the First Amendment Commitment Increase Effective
Date; and the Borrower agrees that any failure to make such deliveries within 30 days after the
First Amendment Commitment Increase Effective Date shall constitute an Event of Default.

SECTION 5. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. On and as of the date hereof,
and after giving effect to this Amendment, (a) each of Holdings and the Borrower certifies that no
Default or Event of Default has occurred and is continuing and (b) each of Holdings and the
Borrower confirms, reaffirms and restates that the representations and warranties made by the Loan
Parties in the Loan Documents are true and correct in all material respects, except to the extent
such representations and warranties expressly relate to a specific earlier date, in which case such
representations and warranties were true and correct in all material respects as of such earlier
date.

SECTION 6. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. On and after the date on
which any amendment described herein becomes effective in accordance with the terms hereof, each
reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like
import referring to the Credit Agreement, and each reference in the other Loan Documents to “the
Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit
Agreement, shall mean and be a reference to the Credit Agreement after giving effect to such
amendment. Except as expressly amended herein, all of the provisions of the Credit Agreement and
the other Loan Documents are and shall remain in full force and effect in accordance with the terms
thereof and are hereby in all respects ratified and confirmed. The execution, delivery and
effectiveness of this Amendment shall not be deemed to be a waiver of, or consent to, or a
modification or amendment of, any other term or condition of the Credit Agreement or any other Loan
Document or to prejudice any other right or rights which the Agents or the Lenders may now have or
may have in the future under or in connection with the Credit Agreement or any of the instruments
or agreements referred to therein, as the same may be amended from time to time.

SECTION 7. COUNTERPARTS. This Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of an executed signature page of this
Amendment by facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Amendment signed by all the parties shall be
lodged with the Borrower and the Administrative Agent.

SECTION 8. PAYMENT OF EXPENSES. The Borrower agrees to pay or reimburse the
Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in
connection with this Amendment and any other documents prepared in connection herewith and the
transactions contemplated hereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent.

SECTION 9. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.

1

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly
executed and delivered by their respective duly authorized officers as of the day and year first
above written.

EXTENDICARE HOLDINGS, INC.

By:  /s/ Richard L. Bertrand 

	 	 	 	Name: Richard L. Bertrand

Title: Senior Vice President and

Chief Financial Officer

EXTENDICARE HEALTH SERVICES, INC.

By:  /s/ Richard L. Bertrand 

	 	 	 	Name: Richard L. Bertrand

Title: Senior Vice President and

Chief Financial Officer

LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent

By:  /s/ Tesha Spann 

	 	 	 	Name: Tesha Spann

Title: Authorized Signatory

2

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