MORGAN STANLEY ASSET FUNDING
INC.
1221 Avenue of the Americas, 27 th Floor
New York, New York 10020
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OUR NO.
1A
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ACCOUNT
PARTY
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Fillmore
Strategic Investors, L.L.C.
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140 Pacific
Avenue
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San Francisco,
California 94111
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STATED
AMOUNT
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Beverly
Enterprises, Inc.
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$50,000,000
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EXPIRY
DATE
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April 18,
2006
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Morgan Stanley
Asset Funding Inc., a Delaware corporation (“
Issuer ”) hereby issue, at the request and for
the account of the Account Party, in your favor, our Irrevocable
Standby Letter of Credit No.1A in an amount not to exceed in the
aggregate FIFTY MILLION DOLLARS ($50,000,000) (the “
Stated Amount ”), effective immediately and
expiring at our office at 1221 Avenue of the America, 27
th Floor, New York, New York 10020 or at any other
office in the city and state of New York which may be designated by
us by written notice delivered to you, with our close of business,
New York time, April 18, 2006 (the “ Expiry
Date ”), unless earlier terminated by Beneficiary in
accordance with the terms below.
This Letter of
Credit is being issued pursuant to that certain Revolving Credit
Agreement dated November 18, 2005, as the same may be amended,
restated or modified from time to time (“ Credit
Agreement ”), by and among Account Party, Morgan
Stanley Asset Funding Inc., a Delaware corporation, as agent for
Issuer and each of the other lending institutions thereto (in such
capacity, “ Agent ”).
Purpose and
Confirmation :
This Letter of
Credit shall be used as a deposit for the benefit of the
Beneficiary pursuant to Section 6.18 of the Agreement
and Plan of Merger by and among SBEV Property Holdings LLC,
Beneficiary, and the
other parties
thereto dated as of August 16, 2005, as amended by that
certain First Amendment thereto dated as of August 23, 2005,
and as further amended by that certain Second Amendment thereto
dated as of September 22, 2005 and as further amended by that
certain Third Amendment thereto dated on or about November 18,
2005 (as amended and restated and as the same may be further
amended, restated or modified from time to time (the “
Merger Agreement ”); and by Beneficiary’s
acceptance of this Letter of Credit, Beneficiary hereby confirms
that this Letter of Credit satisfies Section 6.18 of
the Merger Agreement or hereby waives any variation from such
requirements.
The Stated
Amount shall be automatically reduced by the amount of any drawing
hereunder.
An amount up to
the Stated Amount under this Letter of Credit is available to the
Beneficiary from time to time upon the following
conditions:
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1.
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Presentation of this Letter of
Credit (in case of a drawing of the entire Stated Amount) and a
dated drawing request (“ Drawing Request
”), in the form of Exhibit A , drawn on us
bearing the number of this Letter of Credit duly executed and
delivered by the Beneficiary, accompanied by a statement of the
Beneficiary setting forth the following:
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“We hereby certify and confirm
to you that we are permitted to draw upon Morgan Stanley Asset
Funding Inc. Irrevocable Letter of Credit No.1A dated
November 18, 2005, issued by Morgan Stanley Asset Funding Inc.
in favor of Beverly Enterprises, Inc., as Beneficiary, pursuant to
the terms and conditions of the Agreement and Plan of Merger by and
among SBEV Property Holdings LLC, Beneficiary, and other parties
thereto dated as of August 16, 2005, as amended by that
certain First Amendment thereto dated as of August 23, 2005,
and as further amended by that certain Second Amendment thereto
dated as of September 22, 2005 and as further amended by that
certain Third Amendment thereto dated on or about November 18,
2005.”
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2
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Issuer shall not have any obligation
to honor any Drawing Request under this Letter of Credit, unless,
prior to the date of initial drawing, Agent shall have received, in
form and substance acceptable to Agent, in its sole and absolute
discretion, a Drawing Request duly executed by
Beneficiary.
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Partial and/or
multiple drawings are permitted. This Letter of Credit is not
assignable or transferable in whole or in part.
The above
drawing request and all communications with respect to this Letter
of Credit shall be in writing, addressed to us at 1221 Avenue of
the Americas, 27 th Floor, New York, New York 10020, fax no.
212-507-4950, Attention: Peter Woroniecki, referencing this Letter
of Credit No. 1A and presented to us by delivery in person or
facsimile transmission at such address, and the original of the
above drawing request or such communications, as the case may be,
shall be sent to us at such address by overnight courier for
receipt by us within one (1) Business Day of the date of any
such facsimile transmission.
If the drawing
request and any accompanied documents are presented in compliance
with the terms of this Letter of Credit to us at such address by
11:00 a.m. New York City time on any Business Day on or prior
to the Expiry Date, payment will be made not later than the close
of business, New York City time, on the third Business
Day
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