Document:

exv10w4

 

EXHIBIT 10.4

EMPLOYMENT AGREEMENT

     Technology Solutions Company, a Delaware corporation doing business as TSC, and David
Benjamin (“Employee”) enter into this Employment Agreement (“Agreement”) on March 15, 2006. This
Agreement shall be effective on April 1, 2006.

     In consideration of the agreements and covenants contained in this Agreement, TSC and Employee
agree as follows:

     1. Employment Duties: TSC shall employ Employee as its President. Employee shall have the
normal responsibilities, duties and authority of the President of TSC and shall, at the direction
of TSC’s management, participate in the administration and execution of TSC’s policies, business
affairs and operations. TSC’s Board of Directors or management may, from time to time, expand or
contract such duties and responsibilities and may change Employee’s title or position. Employee
shall perform faithfully the duties assigned to him to the best of his ability and shall devote his
full and undivided business time and attention to the transaction of TSC’s business.

     2. Term of Employment: The term of employment (“Term of Employment”) covered by this
Agreement shall commence as of the Effective Date and continue until terminated, subject to the
provisions of paragraph 3 below.

     3. Termination:

(a) TSC may terminate Employee’s employment at any time for any reason or for no reason (an
“Involuntary Termination”). If TSC elects an Involuntary Termination of Employee, TSC must: (i)
continue Employee’s normal salary and health insurance benefits until the end of the 365 day period
following the date of termination; (ii) pay Employee a lump sum of $150,000 on the 365th
day following his termination; (iii) pay Employee a pro-rated portion of any bonus to which he
otherwise would have been entitled pursuant to paragraph 6 of this Agreement on the date that such
bonus would have been paid but for Employee’s termination; and (iv) accelerate vesting of
Employee’s initial 35,000 share inducement option grant, which will thereafter be exercisable for
the ninety day period following Employee’s termination. In addition, TSC may terminate Employee’s
employment and this Agreement immediately without notice and with no salary and benefit
continuation, no lump sum payment and no bonus if Employee engages in “Serious Misconduct.” For
purposes of this Agreement, “Serious Misconduct” means embezzlement or misappropriation of
corporate funds, other acts of dishonesty, significant activities materially harmful to TSC’s
reputation, willful refusal to perform or substantial disregard of Employee’s assigned duties
(including, but not limited to, refusal to travel or work the requested hours), or any significant
violation of any statutory or common law duty of loyalty to TSC.

 

 

(b) Employee may terminate his employment upon giving TSC 90 days prior written notice. Upon
receiving notice, TSC may waive its rights under this paragraph and make Employee’s termination
effective immediately or anytime before the 90 day notice period ends. Except as expressly set
forth to the contrary in this Agreement, if Employee terminates his employment with TSC, Employee
will receive no bonus, no lump sum payment, no option acceleration and no salary or benefits
continuation.

(c) If, following a Change of Control, Employee’s title, position, duties, salary or benefits are
diminished and Employee resigns within 90 days after the diminishment becomes effective, or if
Employee is ordered to relocate his residence for a period in excess of six months to any location
outside of the Chicago metropolitan area and Employee declines and is terminated, Employee shall be
entitled to receive (in lieu of any payments set forth in paragraph 3(a) of this Agreement or
otherwise): (i) continuation of Employee’s base salary and health insurance benefits (at the time
of the Change in Control) for a one year period following acceptance of his resignation or his
termination; (ii) a lump-sum payment of $150,000 payable within (5) days following the acceptance
of his resignation or his termination; and (iii) a bonus equal to his high end annual bonus set
forth on Appendix A hereto payable within (5) days following the acceptance of his resignation or
his termination. Notwithstanding anything to the contrary in any of Employee’s stock option
agreements, Employee’s unvested shares at option shall vest automatically upon a Change of Control.
[A Change of Control is defined as (i) the acquisition by any individual, entity or group, of
beneficial ownership (within the meaning of Rule 13 d-3 promulgated under the Securities Exchange
Act of 1934) of 40% or more of the outstanding shares of common stock of TSC; (ii) the approval of
the stockholders of TSC of a merger, where immediately after the merger, persons who were the
holders of a majority of TSC’s outstanding common stock immediately prior to the merger fail to own
at least a majority of the outstanding common stock of the surviving entity in substantially the
same proportions as their holdings of TSC common stock immediately prior to the merger; or (iii)
the sale of substantially all of the assets of TSC other than to a corporation in which more than
60% of the outstanding shares are beneficially owned by the individuals and entities who are the
beneficial owners of the Company stock prior to the acquisition.

     4. Non-Succession. Employee may voluntarily terminate his employment with TSC (but have the
termination treated for all purposes hereunder as an Involuntary Termination) during the thirty
(30) day period commencing on the earliest of: (i) June 1, 2007; (ii) the date of the appointment
by TSC of a permanent (non-interim) Chief Executive Officer who is not Carl Dill or David Benjamin;
and (iii), the date of the appointment by TSC of an interim Chief Executive Officer who is not a
member of TSC’s Board of Directors. This option shall expire at the conclusion of this thirty (30)
day period. Notwithstanding anything else contained in this Agreement, this Section 4 shall be
null and void and of no force and effect if Employee is offered the position of Chief Executive
Officer of Employer on or prior to June 1, 2007 (whether or not Employee ultimately accepts or
rejects such offer).

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     5. Salary: As compensation for his services, TSC shall pay Employee a base salary in the
amount listed in Exhibit A to this Agreement. Employee’s base salary shall be subject to annual
review and may, at the discretion of TSC’s management, be adjusted upward or downward from that
listed in Exhibit A according to Employee’s responsibilities, capabilities and performance during
the preceding year.

     6. Bonuses: TSC may elect to pay Employee annual bonuses. Payment of such bonuses, if any,
shall be at the sole discretion of TSC. Notewithstanding the aforementioned, Employee shall be
paid a one time hire on bonus of $14,600.00 upon commencement of his employment with TSC.

     7. Employee Benefits; Stock Options: During the Term of Employment, Employee shall be
entitled to participate in such employee benefit plans, and shall receive all other fringe benefits
as TSC may make available generally to its senior executives. On or about the Effective date,
Employee will be granted an inducement option to purchase 35,000 shares of TSC common stock with a
strike price equal to TSC’s share price on the date of grant and subject to such terms and
conditions as are normally imposed on TSC’senior executives receiving stock options.

     8. Business Expenses: TSC shall reimburse Employee for all reasonable and necessary
business expenses incurred by Employee in performing his duties. Employee shall provide TSC with
supporting documentation sufficient to satisfy reporting requirements of the Internal Revenue
Service and TSC. TSC’s determination as to reasonableness and necessary shall be final.

     9. Noncompetition and Nondisclosure: Employee acknowledges that the successful development
and marketing of TSC’s professional services and products require substantial time and expense.
Such efforts generate for TSC valuable and proprietary information (“Confidential Information”)
which gives TSC a business advantage over others who do not have such information. Confidential
Information of TSC and its clients and prospects includes, but is not limited to, the following:
business strategies and plans; proposals; deliverables; prospects and customer lists;
methodologies; training materials; and computer software. Employee acknowledges that during the
Term of Employment, he will obtain knowledge of such Confidential Information. Accordingly,
Employee agrees to undertake the following obligations which he acknowledges to be reasonably
designed to protect TSC’s legitimate business interests without unnecessarily or unreasonably
restricting Employee’s post-employment opportunities:

     (a) Upon termination of the Term of Employment for any reason, Employee shall return all TSC
property, including but not limited to computer programs, files, notes, records, charts, or other
documents or things containing in whole or in part any of TSC’s Confidential Information;

     (b) During the Term of Employment and subsequent to termination, Employee agrees to treat all
such Confidential Information as confidential and to take all necessary

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precautions against
disclosure of such information to third parties during and after
Employee’s employment with TSC. Employee shall refrain from using or disclosing to any person,
without the prior written approval of TSC’s Chief Executive Officer any Confidential
Information unless at that time the information has become generally and lawfully known to
TSC’s competitors;

     (c) Without limiting the obligations of paragraph 9(b), Employee shall not, for a period of
two years following the termination of his employment for any reason, for himself or as an agent,
partner or employee of any person, firm or corporation, engage in the practice of consulting or
related services for or on behalf of or for the benefit of any client of TSC (including clients
acquired from Charter Consulting) or for any entity for whom Employee performed services on behalf
of TSC (including entities acquired from Charter Consulting), or for any entity to whom Employee
submitted, or assisted in the submission of a proposal on behalf of TSC;

     (d) During the two year period immediately following the termination of Employee’s
employment for any reason, Employee shall not directly or indirectly hire, employ, subcontract,
solicit, induce or assist any current TSC employee or contractor or any former TSC employee or
contractor (if the former employee or contractor was employed by TSC during any of the same time
period as Employee) away from TSC or from the faithful discharge of such party’s
contractual and fiduciary obligations to serve TSC’s interests with undivided loyalty.
For purposes of this paragraph 9(d), TSC employees and contractors include, without limitation,
former employees of Charter Consulting who were hired by TSC;

     (e) During the six-month period immediately following the termination of Employee’s
employment for any reason, Employee shall not engage in the practice of consulting or related
services through his own business or sole proprietorship or as a partner, part owner, shareholder,
executive officer or similar control person in a consulting business. The foregoing shall not
prevent Employee from taking employment at or becoming a partner or shareholder in an established
consulting business (a consulting business in operation at least one year and with 50 or more
employees) so long as Employee abides by all other provisions of this Agreement.

     (f) For the one year period following his termination of employment for any reason, Employee
shall keep TSC currently advised in writing of the name and address of each business organization
for which he acts as agent, partner, representative or employee.

     10. Remedies: Employee recognizes and agrees that a breach of any or all of the provisions
of paragraph 9 will constitute immediate and irreparable harm to TSC’s business advantage,
including but not limited to TSC’s valuable business relations, for which damages cannot be readily
calculated and for which damages are an inadequate remedy. Accordingly, Employee acknowledges that
TSC shall therefore be entitled to an order enjoining any further breaches by the Employee.

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     11. Intellectual Property: During the Term of Employment, Employee shall disclose to TSC
all ideas, inventions and business plans which he develops during the
course of his employment with TSC which relate directly or indirectly to TSC’s business, including
but not limited to any computer programs, processes, products or procedures which may, upon
application, be protected by patent or copyright. Employee agrees that any such ideas, inventions
or business plans shall be the property of TSC and that Employee shall at TSC’s request and cost,
provide TSC with such assurances as is necessary to secure a patent or copyright.

     12. Assignment: Employee acknowledges that the services to be rendered pursuant to this
Agreement are unique and personal. Accordingly, Employee may not assign any of his rights or
delegate any of his duties or obligations under this Agreement. TSC may assign its rights, duties
or obligations under this Agreement to a subsidiary or affiliated company of TSC or purchaser or
transferee of a majority of TSC’s outstanding capital stock or a purchaser of all, or substantially
all, of the assets of TSC.

     13. Notices: All notices shall be in writing, except for notice of termination of
employment, which may be oral if confirmed in writing within 14 days. Notices intended for TSC
shall be sent by registered or certified mail addressed to it at 205 North Michigan Avenue, 15th
Floor, Chicago, Illinois 60601 or its current principal office, and notices intended for Employee
shall be either delivered personally to him or sent by registered or certified mail addressed to
his last known address.

     14. Entire Agreement: This Agreement and Exhibit A attached hereto constitute the entire
agreement between TSC and Employee. Neither Employee nor TSC may modify this Agreement by oral
agreements, promises or representations. The parties may modify this Agreement only by a written
instrument signed by the parties.

     15. Applicable Law: This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois.

     16. Binding Arbitration: Employee and TSC agree that all claims or disputes relating to his
employment with TSC or the termination of such employment, and any and all other claims that
Employee might have against TSC, any TSC director, officer, employee, agent, or representative, and
any and all claims or disputes that TSC might have against Employee (except for any claims under
Paragraph 9 of this Agreement) shall be resolved under the Expedited Commercial Rules of the
American Arbitration Association. If either party pursues a claim and such claim results in an
Arbitrator’s decision, both parties agree to accept such decision as final and binding. TSC and
Employee agree that any litigation under Paragraph 9 of this Agreement shall be brought in the
Circuit Court for Cook County, Illinois.

     17. Severability: Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity,

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without invalidating the
remainder of such provision or the remaining provisions of this Agreement.

     18. Employee acknowledges that he has read, understood and accepts the provisions of this
Agreement.

	 	 	 	 	 	 	 
	Technology Solutions Company	 	 	 	David Benjamin
	 
	 	 	 	 	 	 
	By:

	 	/s/ CARL DILL
	 	 	 	/s/ DAVID BENJAMIN
	 

	 	 
	 	 	 	 
	 

	 	Position: CEO	 	 	 	 
	 

	 	Date: March 15, 2006
	 	 	 	Date: March 15, 2006

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EXHIBIT A

	 	 	 
	EMPLOYEE:

	 	David Benjamin
	 
	 	 
	POSITION:

	 	President
	 
	 	 
	BASE SALARY:

	 	$350,000
	 
	 	 
	BONUS:

	 	Any bonus paid to Employee pursuant to paragraph 6 of the Employment Agreement, will range
between a minimum of 50% of base salary at the low end and 100% of base salary at the high end.
	 
	 	 
	EFFECTIVE DATE:

	 	April 1, 2006

	 	 	 	 	 	 	 
	 

	 	 	 	/s/ DAVID BENJAMIN	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Date March 15, 2006	 	 
	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ CARL DILL	 	 
	 	 	 	 	 
	 	 	Technology Solutions Company	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Date March 15, 2006	 	 
	 	 	 	 	 
	 

	 	 	 	 	 	 

7exv10w3

 

Exhibit 10.3

EXECUTION VERSION

FIRST AMENDMENT, CONSENT AND WAIVER TO

CREDIT AGREEMENT

          FIRST AMENDMENT, CONSENT AND WAIVER, dated as of May 10, 2006 (this “Amendment”), to
the CREDIT AGREEMENT, dated as of February 10, 2006 (as the same may be further amended,
supplemented, extended or restated, or otherwise modified from time to time, the “Credit
Agreement”), among BROOKDALE SENIOR LIVING INC., a Delaware corporation (the
“Borrower”), the several banks and other financial institutions or entities from time to
time parties to this Agreement (the “Lenders”), LEHMAN BROTHERS INC., as advisor, sole lead
arranger and sole bookrunner (in such capacity, the “Lead Arranger”), GOLDMAN SACHS CREDIT
PARTNERS L.P., CITIGROUP GLOBAL MARKETS INC. and LASALLE BANK NATIONAL ASSOCIATION, as co-arrangers
(in such capacity, the “Co-Arrangers”), LASALLE BANK NATIONAL ASSOCIATION, as syndication
agent (in such capacity, the “Syndication Agent”), GOLDMAN SACHS CREDIT PARTNERS L.P. and
CITICORP NORTH AMERICA, INC., as co-documentation agents (in such capacity, the
“Co-Documentation Agents”) and LEHMAN COMMERCIAL PAPER INC., as administrative agent (in
such capacity, the “Administrative Agent”).

WITNESSETH:

          WHEREAS, pursuant to that certain Purchase and Sale Agreement, dated as of February 7, 2006
(the “AEW Acquisition Agreement”), the Borrower indirectly acquired (the “AEW
Acquisition”) five properties set forth on Schedule 1A for an aggregate purchase price
of approximately $179,500,000 comprised of approximately $124,500,000 financing provided by Merrill
Lynch Capital, a Division of Merrill Lynch Business Financial Services Inc. (the “AEW Merrill
Financing”) and $55,000,000 of equity; 

          WHEREAS, in connection with the AEW Acquisition, the Borrower created 14 Subsidiaries (the
“AEW Subsidiaries”), six of which are Management Subsidiaries, as more particularly
described on Schedule 2A;

          WHEREAS, the Merrill Financing is structured as (i) a $95,000,000 first-mortgage loan which is
secured by the properties acquired in the AEW Acquisition and (ii) a $29,500,000 mezzanine loan
(the “AEW Mezzanine Financing”) which is secured by a pledge of the Capital Stock of
certain of the AEW Subsidiaries (the “Pledged AEW Subsidiaries”) as more particularly set
forth on Schedule 2A;

          WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as of January 6, 2006 (the
“Liberty Acquisition Agreement”), the Borrower indirectly acquired (the “Liberty
Acquisition”) seven properties set forth on Schedule 1B for an aggregate purchase price
of approximately $92,100,000 comprised of approximately $65,200,000 financing provided by

 

 

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General Electric Capital Corporation (the “Liberty GE Financing”) and $26,900,000 of equity
with an additional $6,425,000 available for reimbursement of fifty percent of capital improvement
expenditures;

          WHEREAS, in connection with the Liberty Acquisition, the Borrower created eight Subsidiaries
(the “Liberty Subsidiaries”) as more particularly described on Schedule 2B;

          WHEREAS, the Liberty GE Financing is structured as a $65,200,000 first-mortgage loan which is
secured by the properties acquired in the Liberty Acquisition and a pledge of the Capital Stock of
certain of the Liberty Subsidiaries (the “Pledged Liberty Subsidiaries”) as more
particularly set forth on Schedule 2B;

          WHEREAS, pursuant to that certain Purchase and Sale Agreement, dated as of November 18, 2005
(the “Pin Oaks Acquisition Agreement”), the Borrower indirectly acquired (the “Pin Oaks
Acquisition”) one property (comprised of two facilities) set forth on Schedule 1C for
an aggregate purchase price of approximately $13,000,000 comprised of approximately $8,800,000
financing provided by Merrill Lynch Capital, a Division of Merrill Lynch Business Financial
Services Inc. (the “Pin Oaks Merrill Financing”), and $4,200,000 of equity;

          WHEREAS, in connection with the Pin Oaks Acquisition, the Borrower created two Subsidiaries
(the “Pin Oaks Subsidiaries”), one of which is a Management Subsidiary, as more
particularly described on Schedule 2C;

          WHEREAS, the Pin Oaks Merrill Financing is structured as a joinder by the Pin Oaks
Subsidiaries to an existing $20,955,233 credit facility with Merrill Lynch Capital, a Division of
Merrill Lynch Business Financial Services Inc., dated as of December 21, 2005, which is a
first-mortgage loan financing secured by certain real property including the property acquired in
connection with the Pin Oaks Acquisition, and a pledge of the Capital Stock of the Pin Oaks
Subsidiaries, as more particularly set forth on Schedule 2C;

          WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement to permit the
pledge of the Capital Stock of the Pledged AEW Subsidiaries, the Pledged Liberty Subsidiaries and
the Pin Oaks Subsidiaries and to make certain other amendments; and

          WHEREAS, the Lenders have agreed to amend the Credit Agreement solely upon the terms and
conditions set forth herein;

          NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the
parties hereto hereby agree as follows:

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

 

 

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          2. Amendment to Section 1.1 of the Credit Agreement (Defined Terms). (a)Section 1.1 of the Credit Agreement is hereby amended by adding the following new defined
terms in the appropriate alphabetical order:

     ‘“AEW Mezzanine Financing’: as defined in the First Amendment.

     “AEW Mezzanine Loan Agreement”: the Mezzanine Loan Agreement, dated as of
April 28, 2006, among Brookdale Gardens Holdings I, LLC, Brookdale Gardens Holdings II, LLC,
and Brookdale Gardens Holdings III, LLC, collectively as borrower, and Merrill Lynch
Capital, a Division of Merrill Lynch Business Financial Services Inc., as lender.

     “First Amendment”: the First Amendment to this Agreement, dated as of May 10,
2006.

     “First Amendment Effective Date”: the “Amendment Effective Date” as defined in
the First Amendment.

     “Liberty GE Financing”: as defined in the First Amendment.

     “Pin Oaks Loan Agreement”: the $20,955,233 Loan Agreement, dated as of
December 21, 2005, among AHC Properties, Inc. and KGC Operator, Inc., collectively as
borrowers, and Merrill Lynch Capital, a Division of Merrill Lynch Business Financial
Services, as lender.

     “Pin Oaks Merrill Financing”: as defined in the First Amendment.

     “Pin Oaks Subsidiaries”: as defined in the First Amendment.

     “Pledged AEW Subsidiaries”: as defined in the First Amendment.

     “Pledged Liberty Subsidiaries”: as defined in the First Amendment.”

          (b) Section 1.1 of the Credit Agreement is hereby further amended by deleting the definition
of “Excluded Guarantee Subsidiary” and substituting in lieu thereof the following:

     “‘Excluded Guarantee Subsidiary’: any Subsidiary of the Borrower which is
prohibited from providing a guarantee of the Obligations pursuant to (i) with respect to any
Subsidiary existing as of the date hereof, documentation evidencing Indebtedness permitted
by Section 7.2(d) or any other agreement, document or instrument to which such Subsidiary
(or its Properties) is a party or otherwise bound as of the date hereof or (ii) with respect
to any Subsidiary acquired or created to consummate any Acquisition permitted by Section
7.7(f) after the date hereof, either (x) documentation evidencing Indebtedness assumed by
such Subsidiary in connection with such Acquisition or any other agreement, document or instrument to which such Subsidiary (or its Properties) is
a party or otherwise bound assumed in connection with such Acquisition or (y) documentation
evidencing Indebtedness otherwise permitted by Section 7.2 to which such Subsidiary is a
party or by which it or any of its Property is bound.”

 

 

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          (c) Section 1.1 of the Credit Agreement is hereby amended by inserting the following at the
end of the definition of “Excluded Pledge Subsidiary”:

     “Solely for the purposes of Section 6.11, “Excluded Pledge Subsidiary” shall
include (i) until the termination of the AEW Mezzanine Financing, the Pledged AEW
Subsidiaries, (ii) until the termination of the Liberty Merrill Financing, the Pledged
Liberty Subsidiaries, and (iii) until the termination of the Pin Oaks Merrill Financing, the
Pin Oaks Subsidiaries.”

          3. Amendment to Section 7.2 of the Credit Agreement (Limitation on Indebtedness).
Section 7.2 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of
Section 7.2(i), (ii) deleting the period at the end of Section 7.2(j) and substituting in lieu
therefor the word “;and”, and (iii) inserting the following new Sections 7.2(k), (l) and (m) in the
appropriate order:

     “(k) Indebtedness of the Borrower and its Subsidiaries in respect of the AEW Mezzanine
Financing;

     (l) Indebtedness of the Borrower and its Subsidiaries in respect of the Liberty GE
Financing, provided that, the Liberty GE Financing would otherwise be permitted
under Section 7.2(f) except for the pledge of the Capital Stock of Pledged Liberty
Subsidiaries; and

     (m) Indebtedness of the Borrower and its Subsidiaries in respect of the Pin Oaks
Merrill Financing, provided that, the Pin Oaks Merrill Financing would otherwise be
permitted under Section 7.2(f) except for the pledge of the Capital Stock of Pin Oaks
Subsidiaries.”

          4. Amendment to Section 7.3 of the Credit Agreement (Limitation on Liens). Section
7.3 of the Credit Agreement is hereby amended by (i) deleting the word “and” at the end of Section
7.3(i), (ii) deleting the period at the end of Section 7.3(j) and substituting in lieu therefor the
word “;and”, and (iii) inserting the following new Sections 7.3(k), (l) and (m) in the appropriate
order:

     “(k) until the termination of the AEW Mezzanine Financing, Liens on the Capital Stock
of the Pledged AEW Subsidiaries which secure the AEW Mezzanine Financing;

     (l) until the termination of the Liberty GE Financing, Liens on the Capital Stock of
the Pledged Liberty Subsidiaries to secure the Liberty GE Financing permitted by Section
7.2(l); and

     (m) until the termination of the Pin Oaks Merrill Financing, Liens on the Capital Stock
of the Pin Oaks Subsidiaries to secure the Pin Oaks Merrill Financing permitted by Section
7.2(m).”

          5. Amendment to Section 7.13 of the Credit Agreement (Limitation on Restrictions on
Subsidiary Distributions). Section 7.13 of the Credit Agreement is hereby

 

 

5

amended by adding
the following at the end of such Section: “and except to the extent provided in Section 6.18 of
the AEW Mezzanine Loan Agreement as in effect on the First Amendment Effective Date.”

          6. Amendment to Section 7.19 of the Credit Agreement (Subsidiary Distributions).
Section 7.19 of the Credit Agreement is hereby amended by adding the following at end at of such
Section: “, other than any such dividends, distributions or transfers prohibited by Section 6.18
of the AEW Mezzanine Loan Agreement or Section 4.1(f) of the Pin Oaks Loan Agreement, in each case,
as such agreements are in effect on the First Amendment Effective Date.”

          7. Consent and Waiver. The Lenders hereby waive compliance with the terms and
conditions of Section 6.11 of the Credit Agreement solely with respect to the Capital Stock of the
Pledged AEW Subsidiaries, the Pledged Liberty Subsidiaries and the Pin Oaks Subsidiaries,
provided that, the Borrower shall comply with the provisions of Section 6.11 (i) with
respect to the Pledged AEW Subsidiaries upon the termination of the AEW Mezzanine Financing, (ii)
with respect to the Pledged Liberty Subsidiaries upon the termination of the Liberty Merrill
Financing, and (iii) with respect to the Pin Oaks Subsidiaries upon the termination of the Pin Oaks
Merrill Financing.

          8. Conditions to Effectiveness. This Amendment shall become effective upon the date
(the “Amendment Effective Date”) on which the Administrative Agent shall have received:

     (a) This Amendment, executed and delivered by a duly authorized officer of the Borrower
and the Administrative Agent.

     (b) An Acknowledgment and Consent, substantially in the form of Exhibit A hereto, duly
executed and delivered by each Grantor.

     (c) A Lender Consent Letter, substantially in the form of Exhibit B (a “Lender
Consent Letter”), duly executed and delivered by the Required Lenders.

     (d) An assumption agreement, substantially in the form of Annex I to the Guarantee and
Pledge Agreement, executed and delivered by a duly authorized officer of Brookdale Gardens,
Inc. (the “Assumption Agreement”).

     (e) A closing certificate of Brookdale Gardens, Inc., dated the Amendment Effective
Date, substantially in the form of Exhibit C to the Credit Agreement, with appropriate
insertions and attachments.

     (f) A long-form good standing certificate for Brookdale Gardens, Inc., dated as of a
recent date, issued by the Secretary of State of the State of Delaware.

     (g) A supplement to the Guarantee and Pledge Agreement, in form and substance
reasonably satisfactory to the Administrative Agent (the “Guarantee and Pledge
Supplement”), by the applicable Subsidiaries, granting a security interest in the
Capital Stock of Brookdale Gardens, Inc., Brookdale Gardens Holdings I, LLC and

 

 

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Brookdale
Liberty, Inc., to the extent permitted by the terms of the AEW Merrill Financing and
the Liberty GE Financing.

     (h) (i) The certificates (if any) representing the shares of Capital Stock of Brookdale
Gardens, Inc. and Brookdale Liberty, Inc. pledged pursuant to the Guarantee and Pledge
Agreement, together with an undated stock power for each such certificate, if applicable,
executed in blank by a duly authorized officer of the pledgor thereof, and (ii) an
Acknowledgment and Consent, substantially in the form of Annex II to the Guarantee and
Pledge Agreement, duly executed by Brookdale Gardens Holdings I, LLC and Brookdale Liberty,
Inc.

     (i) Copies of the documents creating or evidencing the AEW Merrill Financing, the
Liberty GE Financing and the Pin Oaks Merrill Financing, certified by the Borrower as true,
correct and complete.

     (j) A UCC-1 financing statement and a UCC-3 financing statement as may be reasonably
requested by the Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent.

          9. Representations and Warranties. The Borrower hereby represents and warrants to the
Administrative Agent and each Lender that as of the Amendment Effective Date (before and after
giving effect to this Amendment):

     (a) Each Loan Party has the requisite power and authority to make, deliver and perform
this Amendment, the Acknowledgment and Consent, the Assumption Agreement and the Guarantee
and Pledge Supplement (collectively, the “Amendment Documents”) to which it is a
party.

     (b) Each Loan Party has taken all necessary corporate or other action to authorize the
execution, delivery and performance of the Amendment Documents to which it is a party. No
consent or authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the Amendment
Documents, or the execution, delivery, performance, validity or enforceability of this
Amendment or the other Amendment Documents, except (i) consents, authorizations, filings and
notices which have been obtained or made and are in full force and effect and (ii) the
filings contemplated by Section 4.19 of the Credit Agreement. Each Amendment Document has
been duly executed and delivered on behalf of each Loan Party that is a party thereto. Each
Amendment Document and the Credit Agreement, as amended hereby (the “Amended Credit
Agreement”) constitutes a legal, valid and binding obligation of each Loan Party that is a party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

     (c) The execution, delivery and performance of the Amendment Documents will not violate
any Requirement of Law or any Contractual Obligation of the Borrower

 

 

7

or any of its
Subsidiaries and will not result in, or require, the creation or imposition of any Lien on
any of their respective properties or revenues pursuant to any Requirement of Law or any
such Contractual Obligation (other than the Liens created by the Security Documents).

     (d) Each of the representations and warranties made by any Loan Party herein or in or
pursuant to the Loan Documents is true and correct in all material respects on and as of the
Amendment Effective Date as if made on and as of such date (except that any representation
or warranty which by its terms is made as of an earlier date shall be true and correct in
all material respects as of such earlier date).

     (e) The Borrower and the other Loan Parties have performed in all material respects all
agreements and satisfied all conditions which this Amendment and the other Loan Documents
provide shall be performed or satisfied by the Borrower or the other Loan Parties on or
before the Amendment Effective Date.

     (f) After giving effect to this Amendment, no Default or Event of Default has occurred
and is continuing, or will result from the consummation of the transactions contemplated by
this Amendment.

     (g) Schedule 3 attached hereto sets forth as of the Amended Effective Date the
name and jurisdiction of incorporation of each Subsidiary created or acquired after the
Closing Date and, as to each Subsidiary, the percentage of each class of Capital Stock owned
by each Loan Party or any other Subsidiary, as applicable, and indicates whether each such
Subsidiary is (i) an Excluded Pledge Subsidiary, an Excluded Guarantee Subsidiary, a
Management Subsidiary, an Inactive Subsidiary, a Grand Court Subsidiary, a Pledged AEW
Subsidiary, a Pledged Liberty Subsidiary and/or a Pin Oaks Subsidiary or (ii) to be pledged
to the Administrative Agent for the benefit of the Lenders on or after the Amendment
Effective Date.

     (h) Schedule 4 attached hereto is a true, correct and complete corporate
structure chart setting forth the Borrower and each of its newly formed direct and indirect
Subsidiaries described in Schedule 3 as of the Amendment Effective Date.

          10. 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, 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.

          11. Limited Effect. Except as expressly provided hereby, all of the terms and
provisions of the Credit Agreement and the other Loan Documents are and shall remain in full force
and effect. The amendments contained herein shall not be construed as a waiver or amendment of any
other provision of the Credit Agreement or the other Loan Documents or for any purpose except as
expressly set forth herein or a consent to any further or future action on the part of the Borrower
that would require the waiver or consent of the Administrative Agent or the Lenders.

 

 

8

          12. Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.

          13. Counterparts. This Amendment may be executed in any number of counterparts, all
of which taken together shall constitute one and the same agreement, and any of the parties hereto
may execute this Amendment by signing any such counterpart. A set of the copies of this Amendment
and the Lender Consent Letters signed by all the parties shall be lodged with the Administrative
Agent. Delivery of an executed signature page of this Agreement or of a Lender Consent Letter by
facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

          14. Binding Effect. The execution and delivery of the Lender Consent Letter by any
Lender shall be binding upon each of its successors and assigns (including assignees of its Loans
in whole or in part prior to effectiveness hereof).

          15. Headings, etc. Section or other headings contained in this Amendment are for
reference purposes only and shall not in any way affect the meaning or interpretation of this
Amendment.

 

 

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

	 	 	 	 	 	 	 
	 	 	BROOKDALE SENIOR LIVING INC.	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ R. Stanley Young 	 
	 

	 	 	 	 	 
	 

	 	 	 	Name:	R. Stanley Young 	 
	 

	 	 	 	Title:	Executive Vice President and
Chief Financial Officer 	 
	 
	 	 	 	 	 	 
	 	 	LEHMAN COMMERCIAL PAPER INC., as

    Administrative Agent	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Francis X. Gilhool 	 
	 

	 	 	 	 	 
	 

	 	 	 	Name:	Francis X. Gilhool 	 
	 

	 	 	 	Title:	Authorized Signatory 	 

[Signature Page to First Amendment]

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