Exhibit 10.1

MULTIFAMILY LOAN AND SECURITY AGREEMENT

SENIORS HOUSING

(Revised 7-2-2014)

(FHLMC)

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Freddie Mac Loan Number: 708638015

Property Name: Ashford Court

MULTIFAMILY LOAN AND SECURITY AGREEMENT – SENIORS HOUSING

(Revised 7-2-2014)

 

Borrower:

NIC 11 Ashford Court Owner LLC, a Delaware limited liability company

Lender:

WALKER & DUNLOP, LLC, a Delaware limited liability company

Date:

March 27, 2015

Loan Amount:

$9,360,000

      

Reserve Fund Information

(See Article IV)

 

Imposition Reserves (fill in “Collect” or “Deferred” as appropriate for each
item)

Collect                         Insurance

Collect                         Taxes

Deferred                      water/sewer

N/A                             Ground Rents

Deferred                                    assessments/other charges

 

Repairs & Repair Reserve

Repairs required?

    X     Yes             No

If No, is radon testing required?

            Yes     X     No

If Yes, is a Reserve required?

    X     Yes             No

If Yes to Repairs, but No Reserve, is a Letter of Credit required?

            Yes             No                                

Replacement Reserve

    X       Yes  If Yes:    X     Funded            Deferred

   

              No

 

Rental Achievement Reserve

              Yes    If Yes:            Cash             Letter of Credit    

  X         No

 

Cap Agreement Reserve (Cap Collateral)                                          
 X     Yes                         No

 

Other Reserve(s)

            Yes        X     No

If Yes, specify:                                          
                                         
                                         
                                                                  

 

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Attached Riders

(See Article XIII)

 

Name of Rider

   Date Revised

Rider to Multifamily Loan and Security Agreement – Replacement Reserve Fund –
Immediate Deposits

   7-1-2014

Rider to Multifamily Loan and Security Agreement – Repair Reserve Fund

   7-1-2014

Rider to Multifamily Loan and Security Agreement – Property Improvement
Alterations

   9-25-2014

Rider to Multifamily Loan and Security Agreement – Limited Partner or
Non-Managing Member Transfer

   7-2-2014

Rider to Multifamily Loan and Security Agreement – Cooperation with Ratings
Agencies and Investors

   1-27-2015

Rider to Multifamily Loan and Security Agreement – Rate Cap Agreement and Rate
Cap Reserve Fund

   7-17-2014

Rider to Multifamily Loan and Security Agreement – Entity Guarantor

   3-1-2014

Rider to Multifamily Loan and Security Agreement – Recycled Borrower

   7-17-2014

Rider to Multifamily Loan And Security Agreement – Seniors Housing – Alzheimer’s
Care, Dementia Care And/Or Memory Care

   3-20-2015

Rider to Multifamily Loan And Security Agreement – Additional Provisions – Sale
Or Securitization Of Loan

   2-28-2015

Rider to Multifamily Loan and Security Agreement Medicare, Medicaid and
Governmental Payor Programs – Seniors Housing

   3-1-2014

Rider to Multifamily Loan and Security Agreement – Month To Month Leases

   3-1-2014

Rider to Multifamily Loan and Security Agreement – No Defeasance

   2-17-2015

Rider to Multifamily Loan and Security Agreement – Cross Collateralized
Transaction

   2-17-2015

Rider to Multifamily Loan and Security Agreement – Trade Names

   3-1-2014

 

 

Multifamily Loan and Security Agreement – Seniors Housing

   Page ii

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Exhibit B Modifications

(See Article XIV)

 

     

Are any Exhibit B modifications attached?

 

 

 

    X        Yes

 

  

 

 

 

          No

 

  

 

 

Multifamily Loan and Security Agreement – Seniors Housing

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TABLE OF CONTENTS

 

ARTICLE I        DEFINED TERMS; CONSTRUCTION

  1   

1.01

Defined Terms

  1   

1.02

Construction

  1   

ARTICLE II        LOAN

  2   

2.01

Loan Terms

  2   

2.02

Prepayment Premium

  2   

2.03

Exculpation

  2   

2.04

Application of Payments

  2   

2.05

Usury Savings

  2   

2.06

Floating Rate Mortgage – Third Party Cap Agreement

  3   

ARTICLE III        LOAN SECURITY AND GUARANTY

  3   

3.01

Security Instrument

  3   

3.02

Reserve Funds

  3   

3.03

Uniform Commercial Code Security Agreement

  4   

3.04

Cap Agreement and Cap Collateral Assignment

  4   

3.05

Guaranty

  4   

3.06

Assignment of Licenses, Certificates and Permits

  4   

3.07

Reserved

  5   

ARTICLE IV        RESERVE FUNDS AND REQUIREMENTS

  5   

4.01

Reserves Generally

  5   

4.02

Reserves for Taxes, Insurance and Other Charges

  6   

4.03

Repairs; Repair Reserve Fund

  7   

4.04

Replacement Reserve Fund

  7   

4.05

Rental Achievement Provisions

  7   

4.06

Debt Service Reserve

  7   

4.07

Rate Cap Agreement Reserve Fund

  8   

4.08

Reserved

  8   

4.09

Reserved

  8   

ARTICLE V        REPRESENTATIONS AND WARRANTIES

  8   

5.01

Review of Documents

  8   

5.02

Condition of Mortgaged Property

  8   

5.03

No Condemnation

  8   

5.04

Actions; Suits; Proceedings

  8   

5.05

Environmental

  9   

5.06

Commencement of Work; No Labor or Materialmen’s Claims

  10   

5.07

Compliance with Applicable Laws and Regulations

  10   

5.08

Access; Utilities; Tax Parcels

  11   

5.09

Licenses and Permits

  12   

5.10

No Other Interests

  13   

5.11

Term of Leases

  13   

 

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5.12

No Prior Assignment; Prepayment of Rents

  13   

5.13

Illegal Activity

  13   

5.14

Taxes Paid

  13   

5.15

Title Exceptions

  13   

5.16

No Change in Facts or Circumstances

  14   

5.17

Financial Statements

  14   

5.18

ERISA – Borrower Status

  14   

5.19

No Fraudulent Transfer or Preference

  14   

5.20

No Insolvency or Judgment

  15   

5.21

Working Capital

  15   

5.22

Cap Collateral

  15   

5.23

Ground Lease

  15   

5.24

Purpose of Loan

  15   

5.25

Intended Use

  16   

5.26

Furniture, Fixtures, Equipment, and Motor Vehicles

  17   

5.27

Participant in Federal Programs

  17   

5.28

Certificate of Need

  17   

5.29

Contracts

  18   

5.30

Material Contracts

  18   

5.31

No Financing Statements

  19   

5.32

Medicare and Medicaid

  19   

5.33

Third-Party Payor Programs and Private Commercial Insurance Managed Care and
Employee Assistance Programs

  20   

5.34

No Transfer or Pledge of Licenses

  21   

5.35

No Pledge of Receivables

  21   

5.36

Patient and Resident Care Agreements

  21   

5.37

Patient and Resident Records

  21   

5.38

No Facility Deficiencies, Enforcement Actions or Violations

  21   

5.39

Seniors Housing Operator

  21   

5.40

Recycled SPE Borrower

  21   

5.41

Recycled SPE Equity Owner

  21   

5.42

Through 5.50 Are Reserved

  21   

5.51

Survival

  21   

ARTICLE VI        BORROWER COVENANTS

  22   

6.01

Compliance with Laws

  22   

6.02

Compliance with Organizational Documents

  22   

6.03

Use of Mortgaged Property

  22   

6.04

Non-Residential Leases

  23   

6.05

Prepayment of Rents

  24   

6.06

Inspection

  24   

6.07

Books and Records; Financial Reporting

  25   

6.08

Taxes; Operating Expenses; Ground Rents

  29   

6.09

Preservation, Management and Maintenance of Mortgaged Property

  30   

6.10

Insurance

  32   

6.11

Condemnation

  38   

 

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6.12

Environmental Hazards

  40   

6.13

Single Purpose Entity Requirements

  43   

6.14

Repairs and Capital Replacements

  48   

6.15

Residential Leases Affecting the Mortgaged Property

  49   

6.16

Litigation; Government Proceedings

  49   

6.17

Further Assurances and Estoppel Certificates; Lender’s Expenses

  50   

6.18

Cap Collateral

  50   

6.19

Ground Lease

  50   

6.20

ERISA Requirements

  50   

6.21

Operation of the Facility

  51   

6.22

Facility Reporting

  52   

6.23

Covenants Regarding Material Contracts

  53   

6.24

Pledge of Receivables

  54   

6.25

Property Manager and Operator of the Facility

  54   

6.26

Residential Leases and Agreements

  54   

6.27

Performance Under Leases

  55   

6.28

Governmental Payor Programs

  55   

6.29

Additional Covenants Regarding Operator

  57   

6.30

Through 6.41 Are Reserved

  57   

ARTICLE VII         TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER

  57   

7.01

Permitted Transfers

  58   

7.02

Prohibited Transfers

  59   

7.03

Conditionally Permitted Transfers

  60   

7.04

Preapproved Intrafamily Transfers

  62   

7.05

Lender’s Consent to Prohibited Transfers

  62   

7.06

SPE Equity Owner Requirement Following Transfer

  65   

7.07

Additional Transfer Requirements - External Cap Agreement

  65   

7.08

Reserved

  66   

7.09

Reserved

  66   

ARTICLE VIII        SUBROGATION.

  66   

ARTICLE IX        EVENTS OF DEFAULT AND REMEDIES

  66   

9.01

Events of Default

  66   

9.02

Protection of Lender’s Security; Security Instrument Secures Future Advances

  71   

9.03

Remedies

  71   

9.04

Forbearance

  72   

9.05

Waiver of Marshalling

  73   

 

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ARTICLE X        RELEASE; INDEMNITY

  73   

10.01

Release

  73   

10.02

Indemnity

  73   

10.03

Reserved

  78   

ARTICLE XI        MISCELLANEOUS PROVISIONS

  78   

11.01

Waiver of Statute of Limitations, Offsets and Counterclaims

  78   

11.02

Governing Law; Consent to Jurisdiction and Venue

  79   

11.03

Notice

  79   

11.04

Successors and Assigns Bound

  80   

11.05

Joint and Several (and Solidary) Liability

  80   

11.06

Relationship of Parties; No Third Party Beneficiary

  80   

11.07

Severability; Amendments

  80   

11.08

Disclosure of Information

  81   

11.09

Determinations by Lender

  81   

11.10

Sale of Note; Change in Servicer; Loan Servicing

  81   

11.11

Supplemental Financing

  81   

11.12

Defeasance

  86   

11.13

Lender’s Rights to Sell or Securitize

  90   

11.14

Cooperation with Rating Agencies and Investors

  90   

11.15

Letter of Credit Requirements

  91   

11.16

Through 11.18 are Reserved

  92   

11.19

State Specific Provisions

  93   

11.20

Time is of the Essence

  93   

ARTICLE XII        DEFINITIONS

  93   

ARTICLE XIII         INCORPORATION OF ATTACHED RIDERS

  113   

ARTICLE XIV         INCORPORATION OF ATTACHED EXHIBITS

  113   

 

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MULTIFAMILY LOAN AND SECURITY AGREEMENT – SENIORS HOUSING

THIS MULTIFAMILY LOAN AND SECURITY AGREEMENT (“Loan Agreement”) is dated as of
March 27, 2015 and is made by and between NIC 11 Ashford Court Owner LLC, a
Delaware limited liability company (“Borrower”), and WALKER & DUNLOP, LLC, a
Delaware limited liability company (together with its successors and assigns,
“Lender”).

RECITAL

Lender has agreed to make and Borrower has agreed to accept a loan in the
original principal amount of $9,360,000 (“Loan”). Lender is willing to make the
Loan to Borrower upon the terms and subject to the conditions set forth in this
Loan Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of these promises, the mutual covenants
contained in this Loan Agreement and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as follows:

 

ARTICLE I        DEFINED

TERMS; CONSTRUCTION.

 

1.01

Defined Terms. Each defined term in this Loan Agreement will have the meaning
ascribed to that term in Article XII unless otherwise defined in this Loan
Agreement.

 

1.02

Construction.

 

  (a)

The captions and headings of the Articles and Sections of this Loan Agreement
are for convenience only and will be disregarded in construing this Loan
Agreement.

 

  (b)

Any reference in this Loan Agreement to an “Exhibit,” an “Article” or a
“Section” will, unless otherwise explicitly provided, be construed as referring,
respectively, to an Exhibit attached to this Loan Agreement or to an Article or
Section of this Loan Agreement.

 

  (c)

All Exhibits and Riders attached to or referred to in this Loan Agreement are
incorporated by reference in this Loan Agreement.

 

  (d)

Any reference in this Loan Agreement to a statute or regulation will be
construed as referring to that statute or regulation as amended from time to
time.

 

  (e)

Use of the singular in this Loan Agreement includes the plural and use of the
plural includes the singular.

 

Multifamily Loan and Security Agreement – Seniors Housing

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  (f)

As used in this Loan Agreement, the term “including” means “including, but not
limited to” and the term “includes” means “includes without limitation.”

 

  (g)

The use of one gender includes the other gender, as the context may require.

 

  (h)

Unless the context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document in this Loan Agreement will be construed
as referring to such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth in this Loan Agreement),
and (ii) any reference in this Loan Agreement to any Person will be construed to
include such Person’s successors and assigns.

 

  (i)

Any reference in this Loan Agreement to “Lender’s requirements,” “as required by
Lender,” or similar references will be construed, after Securitization, to mean
Lender’s requirements or standards as determined in accordance with Lender’s and
Loan Servicer’s obligations under the terms of the Securitization documents.

 

ARTICLE II        LOAN.

 

2.01

Loan Terms. The Loan will be evidenced by the Note and will bear interest and be
paid in accordance with the payment terms set forth in the Note.

 

2.02

Prepayment Premium. Borrower will be required to pay a prepayment premium in
connection with certain prepayments of the Indebtedness, including a payment
made after Lender’s exercise of any right of acceleration of the Indebtedness,
as provided in the Note.

 

2.03

Exculpation. Borrower’s personal liability for payment of the Indebtedness and
for performance of the other obligations to be performed by it under this Loan
Agreement is limited in the manner, and to the extent, provided in the Note.

 

2.04

Application of Payments. If at any time Lender receives, from Borrower or
otherwise, any amount applicable to the Indebtedness which is less than all
amounts due and payable at such time, then Lender may apply that payment to
amounts then due and payable in any manner and in any order determined by Lender
(unless otherwise required by applicable law), in Lender’s sole and absolute
discretion. Neither Lender’s acceptance of an amount that is less than all
amounts then due and payable, nor Lender’s application of such payment in the
manner authorized, will constitute or be deemed to constitute either a waiver of
the unpaid amounts or an accord and satisfaction. Notwithstanding the
application of any such amount to the Indebtedness, Borrower’s obligations under
this Loan Agreement, the Note and all other Loan Documents will remain
unchanged.

 

2.05

Usury Savings. If any applicable law limiting the amount of interest or other
charges permitted to be collected from Borrower is interpreted so that any
charge provided for in any Loan Document, whether considered separately or
together with other charges levied

 

Multifamily Loan and Security Agreement – Seniors Housing

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in connection with any other Loan Document, violates that law, and Borrower is
entitled to the benefit of that law, that charge is reduced to the extent
necessary to eliminate that violation. The amounts, if any, previously paid to
Lender in excess of the permitted amounts will be applied by Lender to reduce
the principal amount of the Indebtedness. For the purpose of determining whether
any applicable law limiting the amount of interest or other charges permitted to
be collected from Borrower has been violated, all Indebtedness which constitutes
interest, as well as all other charges levied in connection with the
Indebtedness which constitute interest, will be deemed to be allocated and
spread ratably over the stated term of the Note. Unless otherwise required by
applicable law, such allocation and spreading will be effected in such a manner
that the rate of interest so computed is uniform throughout the stated term of
the Note.

 

2.06

Floating Rate Mortgage – Third Party Cap Agreement. If (a) the Note does not
provide for interest to accrue at a floating or variable interest rate (other
than during any Extension Period, if applicable), and (b) a third party Cap
Agreement is not required, then this Section 2.06 and Section 3.04 will be of no
force or effect.

 

  (a)

So long as there is no Event of Default, Lender or Loan Servicer will remit to
Borrower each Cap Payment received by Lender or Loan Servicer with respect to
any month for which Borrower has paid in full the monthly installment of
principal and interest or interest only, as applicable, due under the Note.
Alternatively, at Lender’s option, so long as there is no Event of Default,
Lender may apply a Cap Payment received by Lender or Loan Servicer with respect
to any month to the applicable monthly payment of accrued interest due under the
Note if Borrower has paid in full the remaining portion of such monthly payment
of principal and interest or interest only, as applicable.

 

  (b)

Neither the existence of a Cap Agreement nor anything in this Loan Agreement
will relieve Borrower of its primary obligation to timely pay in full all
amounts due under the Note and otherwise due on account of the Indebtedness.

 

ARTICLE III        LOAN 

SECURITY AND GUARANTY.

 

3.01

Security Instrument. Borrower will execute the Security Instrument dated of even
date with this Loan Agreement. The Security Instrument will be recorded in the
applicable land records in the Property Jurisdiction.

 

3.02

Reserve Funds.

 

  (a)

Security Interest. To secure Borrower’s obligations under this Loan Agreement
and to further secure Borrower’s obligations under the Note and the other Loan
Documents, Borrower conveys, pledges, transfers and grants to Lender a security
interest pursuant to the Uniform Commercial Code of the Property Jurisdiction or
any other applicable law in and to all money in the Reserve Funds, as the same
may increase or decrease from time to time, all interest and dividends thereon
and all proceeds thereof.

 

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  (b)

Supplemental Loan. If this Loan Agreement is entered into in connection with a
Supplemental Loan and if the same Person is or becomes both Senior Lender and
Supplemental Lender, then:

 

  (i)

Borrower assigns and grants to Supplemental Lender a security interest in the
Reserve Funds established in connection with the Senior Indebtedness as
additional security for all of Borrower’s obligations under the Supplemental
Note.

 

  (ii)

In addition, Borrower assigns and grants to Senior Lender a security interest in
the Reserve Funds established in connection with the Supplemental Indebtedness
as additional security for all of Borrower’s obligations under the Senior Note.

 

  (iii)

It is the intention of Borrower that all amounts deposited by Borrower in
connection with either the Senior Loan Documents, the Supplemental Loan
Documents, or both, constitute collateral for the Supplemental Indebtedness
secured by the Supplemental Instrument and the Senior Indebtedness secured by
the Senior Instrument, with the application of such amounts to such Senior
Indebtedness or Supplemental Indebtedness to be at the discretion of Senior
Lender and Supplemental Lender.

 

3.03

Uniform Commercial Code Security Agreement. This Loan Agreement is also a
security agreement under the Uniform Commercial Code for any of the Mortgaged
Property which, under applicable law, may be subjected to a security interest
under the Uniform Commercial Code, for the purpose of securing Borrower’s
obligations under this Loan Agreement and to further secure Borrower’s
obligations under the Note, Security Instrument and other Loan Documents,
whether such Mortgaged Property is owned now or acquired in the future, and all
products and cash and non-cash proceeds thereof (collectively, “UCC
Collateral”), and by this Loan Agreement, Borrower grants to Lender a security
interest in the UCC Collateral.

 

3.04

Cap Agreement and Cap Collateral Assignment. Reserved.

 

3.05

Guaranty. Borrower will cause each Guarantor (if any) to execute a Guaranty of
all or a portion of Borrower’s obligations under the Loan Documents effective as
of the date of this Loan Agreement.

 

3.06

Assignment of Licenses, Certificates and Permits.

 

  (a)

Assignment of the Licenses. As additional security for the Loan, to the extent
they are assignable, Borrower hereby transfers, sets over and assigns to Lender,
and hereby grants to Lender a security interest in, all of Borrower’s right,
title and interest in and to the Licenses and any and all renewals or extensions
of the Licenses, together with all cash and non-cash proceeds thereof.

 

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  (b)

Lender’s Right Upon Event of Default. Without limiting Lender’s rights described
elsewhere, if an Event of Default exists under any Loan Document, then to the
extent permitted by applicable law, Lender will have the right to exercise all
the rights under the Licenses that Borrower has. Lender does not assume any
obligations or duties of Borrower concerning the Licenses.

 

  (c)

Attorney-in-Fact. Borrower irrevocably constitutes and appoints Lender as
Borrower’s attorney-in-fact to demand, receive and enforce Borrower’s rights
with respect to the Licenses and to do any and all acts in Borrower’s name or in
the name of Lender with the same force and effect as Borrower could do if this
Loan Agreement had not been made. This appointment will be deemed to be coupled
with an interest and irrevocable.

 

3.07

Reserved.

 

ARTICLE IV         RESERVE FUNDS AND REQUIREMENTS.

 

4.01

Reserves Generally.

 

  (a)

Establishment of Reserve Funds; Investment of Deposits. Unless otherwise
provided in Section 4.03 and/or Section 4.04, each Reserve Fund will be
established on the date of this Loan Agreement and each of the following will
apply:

 

  (i)

All Reserve Funds will be deposited in an Eligible Account at an Eligible
Institution or invested in “permitted investments” as then defined and required
by the Rating Agencies.

 

  (ii)

Lender will not be obligated to open additional accounts or deposit Reserve
Funds in additional institutions when the amount of any Reserve Fund exceeds the
maximum amount of the federal deposit insurance or guaranty. Borrower
acknowledges and agrees that it will not have the right to direct Lender as to
any specific investment of monies in any Reserve Fund. Lender will not be
responsible for any losses resulting from investment of monies in any Reserve
Fund or for obtaining any specific level or percentage of earnings on such
investment.

 

  (b)

Interest on Reserve Funds; Trust Funds. Unless applicable law requires, Lender
will not be required to pay Borrower any interest, earnings or profits on the
Reserve Funds. Any amounts deposited with Lender under this Article IV will not
be trust funds, nor will they operate to reduce the Indebtedness, unless applied
by Lender for that purpose pursuant to the terms of this Loan Agreement.

 

  (c)

Use of Reserve Funds. Each Reserve Fund will, except as otherwise provided in
this Loan Agreement, be used for the sole purpose of paying, or reimbursing

 

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Borrower for payment of, the item(s) for which the applicable Reserve Fund was
established. Borrower acknowledges and agrees that, except as specified in this
Loan Agreement, monies in one Reserve Fund will not be used to pay, or reimburse
Borrower for, matters for which another Reserve Fund has been established.

 

  (d)

Termination of Reserve Funds. Upon the payment in full of the Indebtedness,
Lender will pay to Borrower all funds remaining in any Reserve Funds.

 

  (e)

Reserved.

 

4.02

Reserves for Taxes, Insurance and Other Charges.

 

  (a)

Deposits to Imposition Reserve Deposits. Borrower will deposit with Lender on
the day monthly installments of principal or interest, or both, are due under
the Note (or on another day designated in writing by Lender), until the
Indebtedness is paid in full, an additional amount sufficient to accumulate with
Lender the entire sum required to pay, when due, the items marked “Collect”
below. Except as provided in Section 4.02(e), Lender will not require Borrower
to make Imposition Reserve Deposits with respect to the items marked “Deferred”
below.

 

[Collect]

Hazard Insurance premiums or premiums for other Insurance required by Lender
under Section 6.10

[Collect]

Taxes and payments in lieu of taxes

[Defer ]

water and sewer charges that could become a Lien on the Mortgaged Property

[ N/A ]

Ground Rents

[Defer ]

assessments or other charges that could become a Lien on the Mortgaged Property

The amounts deposited pursuant to this Section 4.02(a) are collectively referred
to in this Loan Agreement as the “Imposition Reserve Deposits.” The obligations
of Borrower for which the Imposition Reserve Deposits are required are
collectively referred to in this Loan Agreement as “Impositions.” The amount of
the Imposition Reserve Deposits must be sufficient to enable Lender to pay each
Imposition before the last date upon which such payment may be made without any
penalty or interest charge being added. Lender will maintain records indicating
how much of the monthly Imposition Reserve Deposits and how much of the
aggregate Imposition Reserve Deposits held by Lender are held for the purpose of
paying Taxes, Insurance premiums, Ground Rent (if applicable) and each other
Imposition.

 

  (b)

Disbursement of Imposition Reserve Deposits. Lender will apply the Imposition
Reserve Deposits to pay Impositions so long as no Event of Default has occurred
and is continuing. Lender will pay all Impositions from the Imposition Reserve
Deposits held by Lender upon Lender’s receipt of a bill or invoice for an

 

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Imposition. If Borrower holds a ground lessee interest in the Mortgaged Property
and Imposition Reserve Deposits are collected for Ground Rent, then Lender will
pay the monthly or other periodic installments of Ground Rent from the
Imposition Reserve Deposits, whether or not Lender receives a bill or invoice
for such installments. Lender will have no obligation to pay any Imposition to
the extent it exceeds the amount of the Imposition Reserve Deposits then held by
Lender. Lender may pay an Imposition according to any bill, statement or
estimate from the appropriate public office, Ground Lessor (if applicable) or
insurance company without inquiring into the accuracy of the bill, statement or
estimate or into the validity of the Imposition.

 

  (c)

Excess or Deficiency of Imposition Reserve Deposits. If at any time the amount
of the Imposition Reserve Deposits held by Lender for payment of a specific
Imposition exceeds the amount reasonably deemed necessary by Lender, the excess
will be credited against future installments of Imposition Reserve Deposits. If
at any time the amount of the Imposition Reserve Deposits held by Lender for
payment of a specific Imposition is less than the amount reasonably estimated by
Lender to be necessary, Borrower will pay to Lender the amount of the deficiency
within 15 days after Notice from Lender.

 

  (d)

Delivery of Invoices. Borrower will promptly deliver to Lender a copy of all
notices of, and invoices for, Impositions.

 

  (e)

Deferral of Collection of Any Imposition Reserve Deposits; Delivery of Receipts.
If Lender does not collect an Imposition Reserve Deposit with respect to an
Imposition either marked “Deferred” in Section 4.02(a) or pursuant to a separate
written deferral by Lender, then on or before the earlier of the date each such
Imposition is due, or the date this Loan Agreement requires each such Imposition
to be paid, Borrower will provide Lender with proof of payment of each such
Imposition. Upon Notice to Borrower, Lender may revoke its deferral and require
Borrower to deposit with Lender any or all of the Imposition Reserve Deposits
listed in Section 4.02(a), regardless of whether any such item is marked
“Deferred” (i) if Borrower does not timely pay any of the Impositions, (ii) if
Borrower fails to provide timely proof to Lender of such payment, (iii) at any
time during the existence of an Event of Default or (iv) upon placement of a
Supplemental Loan in accordance with Section 11.11.

 

  (f)

through (i) are Reserved.

 

4.03

Repairs; Repair Reserve Fund. Reserved.

 

4.04

Replacement Reserve Fund. Reserved.

 

4.05

Rental Achievement Provisions. Reserved.

 

4.06

Debt Service Reserve. Reserved.

 

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4.07

Rate Cap Agreement Reserve Fund. Reserved.

 

4.08

Reserved.

 

4.09

Reserved.

ARTICLE V         REPRESENTATIONS AND WARRANTIES.

Borrower represents and warrants to Lender as follows as of the date of this
Loan Agreement:

 

5.01

Review of Documents. Borrower has reviewed: (a) the Note, (b) the Security
Instrument, (c) the Commitment Letter, and (d) all other Loan Documents.

 

5.02

Condition of Mortgaged Property. Except as Borrower may have disclosed to Lender
in writing in connection with the issuance of the Commitment Letter, the
Mortgaged Property has not been damaged by fire, water, wind or other cause of
loss, or any previous damage to the Mortgaged Property has been fully restored.

 

5.03

No Condemnation. No part of the Mortgaged Property has been taken in
Condemnation or other like proceeding, and, to the best of Borrower’s knowledge
after due inquiry and investigation, no such proceeding is pending or threatened
for the partial or total Condemnation or other taking of the Mortgaged Property.

 

5.04

Actions; Suits; Proceedings.

 

  (a)

There are no judicial, administrative, mediation or arbitration actions, suits
or proceedings pending or, to the best of Borrower’s knowledge, threatened in
writing against or affecting Borrower (and, if Borrower is a limited
partnership, any of its general partners or if Borrower is a limited liability
company, any member of Borrower) or the Mortgaged Property which, if adversely
determined, would have a Material Adverse Effect.

 

  (b)

Without limiting the generality of subsection (a) above, none of Borrower (and,
if Borrower is a limited partnership, any of its general partners or if Borrower
is a limited liability company, any member of Borrower), any Facility Operator,
or the Facility are subject to any proceeding, suit or investigation by any
Governmental Authority and neither Borrower nor any Facility Operator has
received any notice from any Governmental Authority which may, directly or
indirectly, or with the passage of time, result in the imposition of a fine, or
interim or final sanction, or would do any of the following:

 

  (i)

Have a Material Adverse Effect.

 

  (ii)

Result in the appointment of a receiver or trustee.

 

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  (iii)

Affect Borrower’s or any Facility Operator’s ability to accept and retain
residents.

 

  (iv)

Result in the Downgrade, revocation, transfer, surrender or suspension, or
non-renewal or reissuance or other impairment of any License.

 

  (v)

Affect Borrower’s or operator’s continued participation in any Governmental
Payor Program, or any successor programs thereto, at current rate
certifications.

 

5.05

Environmental. Except as previously disclosed by Borrower to Lender in writing
(which written disclosure may be in certain environmental assessments and other
written reports accepted by Lender in connection with the funding of the
Indebtedness and dated prior to the date of this Loan Agreement), each of the
following is true:

 

  (a)

Borrower has not at any time engaged in, caused or permitted any Prohibited
Activities or Conditions on the Mortgaged Property.

 

  (b)

To the best of Borrower’s knowledge after due inquiry and investigation, no
Prohibited Activities or Conditions exist or have existed on the Mortgaged
Property.

 

  (c)

The Mortgaged Property does not now contain any underground storage tanks, and,
to the best of Borrower’s knowledge after due inquiry and investigation, the
Mortgaged Property has not contained any underground storage tanks in the past.
If there is an underground storage tank located on the Mortgaged Property that
has been previously disclosed by Borrower to Lender in writing, that tank
complies with all requirements of Hazardous Materials Laws.

 

  (d)

To the best of Borrower’s knowledge after due inquiry and investigation,
Borrower has complied with all Hazardous Materials Laws, including all
requirements for notification regarding releases of Hazardous Materials. Without
limiting the generality of the foregoing, all Environmental Permits required for
the operation of the Mortgaged Property in accordance with Hazardous Materials
Laws now in effect have been obtained and all such Environmental Permits are in
full force and effect.

 

  (e)

To the best of Borrower’s knowledge after due inquiry and investigation, no
event has occurred with respect to the Mortgaged Property that constitutes, or
with the passage of time or the giving of notice, or both, would constitute,
noncompliance with the terms of any Environmental Permit.

 

  (f)

There are no actions, suits, claims or proceedings pending or, to the best of
Borrower’s knowledge after due inquiry and investigation, threatened in writing,
that involve the Mortgaged Property and allege, arise out of, or relate to any
Prohibited Activity or Condition.

 

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  (g)

Borrower has received no actual or constructive notice of any written complaint,
order, notice of violation or other communication from any Governmental
Authority with regard to air emissions, water discharges, noise emissions or
Hazardous Materials, or any other environmental, health or safety matters
affecting the Mortgaged Property or any property that is adjacent to the
Mortgaged Property.

 

5.06

Commencement of Work; No Labor or Materialmen’s Claims. Except as set forth on
Exhibit E, prior to the recordation of the Security Instrument, no work of any
kind has been or will be commenced or performed upon the Mortgaged Property, and
no materials or equipment have been or will be delivered to or upon the
Mortgaged Property, for which the contractor, subcontractor or vendor continues
to have any rights including the existence of or right to assert or file a
mechanic’s or materialmen’s Lien. If any such work of any kind has been
commenced or performed upon the Mortgaged Property, or if any such materials or
equipment have been ordered or delivered to or upon the Mortgaged Property, then
prior to the execution of the Security Instrument, Borrower has satisfied each
of the following conditions:

 

  (a)

Borrower has fully disclosed in writing to the title insurance company issuing
the mortgagee title insurance policy insuring the Lien of the Security
Instrument that work has been commenced or performed on the Mortgaged Property,
or materials or equipment have been ordered or delivered to or upon the
Mortgaged Property.

 

  (b)

Borrower has obtained and delivered to Lender and the title company issuing the
mortgagee title insurance policy insuring the Lien of the Security Instrument
Lien waivers from all contractors, subcontractors, suppliers or any other
applicable party, pertaining to all work commenced or performed on the Mortgaged
Property, or materials or equipment ordered or delivered to or upon the
Mortgaged Property.

Borrower represents and warrants that all parties furnishing labor and materials
for which a Lien or claim of Lien may be filed against the Mortgaged Property
have been paid in full and, except for such Liens or claims insured against by
the policy of title insurance to be issued in connection with the Loan, there
are no mechanics’, laborers’ or materialmen’s Liens or claims outstanding for
work, labor or materials affecting the Mortgaged Property, whether prior to,
equal with or subordinate to the Lien of the Security Instrument.

 

5.07

Compliance with Applicable Laws and Regulations.

 

  (a)

To the best of Borrower’s knowledge after due inquiry and investigation, each of
the following is true:

 

  (i)

All Improvements and the use of the Mortgaged Property comply with all
applicable statutes, rules and regulations, including all applicable statutes,

 

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rules and regulations pertaining to requirements for equal opportunity,
anti-discrimination, fair housing, environmental protection, zoning and land use
(“legal, non-conforming” status with respect to uses or structures will be
considered to comply with zoning and land use requirements for the purposes of
this representation).

 

  (ii)

The Improvements comply with applicable health, fire, and building codes.

 

  (iii)

There is no evidence of any illegal activities relating to controlled substances
on the Mortgaged Property.

 

  (b)

Without limiting the generality of subsection (a) above, Borrower, any Facility
Operator, and the Facility (and its operation) and all residential care
agreements and residential Leases are in compliance with the applicable
provisions of all laws, regulations, ordinances, orders or standards of any
Governmental Authority having jurisdiction over the operation of the Facility
(including any Governmental Payor Program requirements and disclosure of
ownership and related information requirements), including:

 

  (i)

Healthcare Laws, Privacy Laws, fire and safety codes and building codes (and no
waivers of such requirements exist at the Facility).

 

  (ii)

Laws, rules, regulations and published interpretations thereof regulating the
preparation and serving of food.

 

  (iii)

Laws, rules, regulations and published interpretations thereof regulating the
handling and disposal of medical or biological waste.

 

  (iv)

The applicable provisions of all laws, rules, regulations and published
interpretations thereof to which Borrower or the Facility is subject by virtue
of its Intended Use.

 

  (v)

All criteria established to classify the Facility as housing for older persons
under the Fair Housing Amendments Act of 1988.

 

  (c)

Borrower has received no notice of, and is not aware of, any violation of
applicable antitrust laws or securities laws relating to the Facility, Borrower,
or any Facility Operator.

 

5.08

Access; Utilities; Tax Parcels. The Mortgaged Property: (a) has ingress and
egress via a publicly dedicated right of way or via an irrevocable easement
permitting ingress and egress, (b) is served by public utilities and services
generally available in the surrounding community or otherwise appropriate for
the use in which the Mortgaged Property is currently being utilized, and
(c) constitutes one or more separate tax parcels.

 

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5.09

Licenses and Permits.

 

  (a)

Borrower, any commercial tenant of the Mortgaged Property, any Facility
Operator, and or any Property Manager is in possession of all material licenses,
permits and authorizations required for use of the Mortgaged Property, which are
valid and in full force and effect as of the date of this Loan Agreement.

 

  (b)

Without limiting the generality of subsection (a) above, Borrower has obtained
or has caused any Facility Operator to obtain all Licenses necessary to use,
occupy or operate the Facility for its Intended Use (such Licenses being in its
own name or in the name of a Facility Operator, if any, and in any event in the
names of the Persons required by the applicable Governmental Authorities), and
all such Licenses are in full force and effect. Borrower has provided Lender
with complete and accurate copies of all Licenses. The Intended Use of the
Facility is in conformity with all certificates of occupancy and Licenses and
any other restrictions or covenants affecting the Facility. The Facility has all
equipment, staff and supplies necessary to use and operate the Facility for its
Intended Use.

 

  (c)

Borrower has timely filed or has caused to be timely filed all reports and other
information that the Licenses require to be filed.

 

  (d)

Each License, and the name of the Person in whose name each License is issued is
identified on Exhibit K, and a true and complete copy of each License is
attached as Exhibit K.

 

  (e)

As of the Closing Date, the Licenses attached as Exhibit K are current and
Borrower has not been subject to or received notice of any pending inquiry,
audit, investigative demand or violation that have not been brought to Lender’s
attention in writing.

 

  (f)

Borrower is not aware of any deficiencies, actions or inactions that, in the
aggregate, could result in a suspension, Downgrade, revocation, termination,
restriction, or conditioning of any License.

 

  (g)

There has been no previous assignment or encumbrance of the Licenses except
assignments or encumbrances terminated prior to Borrower entering into this Loan
Agreement or collateral assignments or encumbrances terminated by any Facility
Operator prior to Borrower entering into this Loan Agreement.

 

  (h)

Except as set forth on Exhibit K, other than the Licenses attached as Exhibit K,
as of the Closing Date, no other Licenses are required to operate the Facility
as it is currently being operated and for its Intended Use.

 

  (i)

Neither the execution and delivery of the Note, this Loan Agreement, the
Security Instrument nor any other Loan Document, Borrower’s performance under
the Loan Documents, nor the recordation of the Security Instrument, nor the
exercise of any remedies by Lender pursuant to the Loan Documents, at law or in
equity, will adversely affect the Licenses.

 

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5.10

No Other Interests. To the best of Borrower’s knowledge after due inquiry and
investigation, no Person has (a) any possessory interest in the Mortgaged
Property or right to occupy the Mortgaged Property except under and pursuant to
the provisions of existing Leases by and between tenants and Borrower (a form of
residential lease having been previously provided to Lender together with the
material terms of any and all Non-Residential Leases at the Mortgaged Property),
or (b) an option to purchase the Mortgaged Property or an interest in the
Mortgaged Property, except as has been disclosed to and approved in writing by
Lender.

 

5.11

Term of Leases. All Leases for residential dwelling units with respect to the
Mortgaged Property are on forms acceptable to Lender, are for initial terms of
at least 6 months and not more than 2 years (unless otherwise approved in
writing by Lender), and do not include options to purchase.

 

5.12

No Prior Assignment; Prepayment of Rents. Borrower has (a) not executed any
prior assignment of Rents (other than an assignment of Rents securing any prior
indebtedness that is being assigned to Lender, or that is being paid off and
discharged with the proceeds of the Loan evidenced by the Note or, if this Loan
Agreement is entered into in connection with a Supplemental Loan, other than an
assignment of Rents securing any Senior Indebtedness), and (b) not performed any
acts and has not executed, and will not execute, any instrument which would
prevent Lender from exercising its rights under any Loan Document. At the time
of execution of this Loan Agreement, unless otherwise approved by Lender in
writing, there has been no prepayment of any Rents for more than 2 months prior
to the due dates of such Rents.

 

5.13

Illegal Activity. No portion of the Mortgaged Property has been or will be
purchased with the proceeds of any illegal activity.

 

5.14

Taxes Paid. Borrower has filed all federal, state, county and municipal tax
returns required to have been filed by Borrower, and has paid all Taxes which
have become due pursuant to such returns or to any notice of assessment received
by Borrower, and Borrower has no knowledge of any basis for additional
assessment with respect to such taxes. To the best of Borrower’s knowledge after
due inquiry and investigation, there are not presently pending any special
assessments against the Mortgaged Property or any part of the Mortgaged
Property.

 

5.15

Title Exceptions. To the best of Borrower’s knowledge after due inquiry and
investigation, none of the items shown in the schedule of exceptions to coverage
in the title policy issued to and accepted by Lender contemporaneously with the
execution of this Loan Agreement and insuring Lender’s interest in the Mortgaged
Property will have a Material Adverse Effect on the: (a) ability of Borrower to
pay the Loan in full, (b) ability of Borrower to use all or any part of the
Mortgaged Property in the manner in which the Mortgaged Property is being used
on the Closing Date, except as set forth in Section 6.03, (c) operation of the
Mortgaged Property, or (d) value of the Mortgaged Property.

 

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5.16

No Change in Facts or Circumstances.

 

  (a)

All information in the application for the Loan submitted to Lender, including
all financial statements for the Mortgaged Property, Borrower, and any Borrower
Principal, and all Rent Schedules, reports, certificates, and any other
documents submitted in connection with the application (collectively, “Loan
Application”) is complete and accurate in all material respects as of the date
such information was submitted to Lender.

 

  (b)

There has been no change in any fact or circumstance since the Loan Application
was submitted to Lender that would make any information submitted as part of the
Loan Application materially incomplete or inaccurate.

 

  (c)

The organizational structure of Borrower is as set forth in Exhibit H.

 

5.17

Financial Statements. The financial statements of Borrower and each Borrower
Principal furnished to Lender as part of the Loan Application reflect in each
case a positive net worth as of the date of the applicable financial statement.

 

5.18

ERISA – BORROWER STATUS. BORROWER REPRESENTS AS FOLLOWS:

 

  (a)

Borrower is not an “investment company,” or a company under the Control of an
“investment company,” as such terms are defined in the Investment Company Act of
1940, as amended.

 

  (B)

BORROWER IS NOT AN “EMPLOYEE BENEFIT PLAN,” AS DEFINED IN SECTION 3(3) OF ERISA,
WHICH IS SUBJECT TO TITLE I OF ERISA OR A “PLAN” TO WHICH SECTION 4975 OF THE
TAX CODE APPLIES, AND THE ASSETS OF BORROWER DO NOT CONSTITUTE “PLAN ASSETS” OF
ONE OR MORE SUCH PLANS WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101, AS
MODIFIED BY SECTION 3(42) OF ERISA.

 

  (C)

BORROWER IS NOT A “GOVERNMENTAL PLAN” WITHIN THE MEANING OF SECTION 3(32) OF
ERISA, AND IS NOT SUBJECT TO STATE STATUTES REGULATING INVESTMENTS OR FIDUCIARY
OBLIGATIONS WITH RESPECT TO GOVERNMENTAL PLANS.

 

5.19

No Fraudulent Transfer or Preference. No Borrower or Borrower Principal (a) has
made, or is making in connection with and as security for the Loan, a transfer
of an interest in the property of Borrower or Borrower Principal to or for the
benefit of Lender or otherwise as security for any of the obligations under the
Loan Documents which is or could constitute a voidable preference under federal
bankruptcy, state insolvency or similar applicable creditors’ rights laws, or
(b) has made, or is making in connection with

 

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the Loan, a transfer (including any transfer to or for the benefit of an insider
under an employment contract) of an interest of Borrower or any Borrower
Principal in property which is or could constitute a voidable preference under
federal bankruptcy, state insolvency or similar applicable creditors’ rights
laws, or (c) has incurred, or is incurring in connection with the Loan, any
obligation (including any obligation to or for the benefit of an insider under
an employment contract) which is or could constitute a fraudulent transfer under
federal bankruptcy, state insolvency, or similar applicable creditors’ rights
laws.

 

5.20

No Insolvency or Judgment.

 

  (a)

No Pending Proceedings or Judgments. No Borrower or Borrower Principal is
(i) the subject of or a party to (other than as a creditor) any completed or
pending bankruptcy, reorganization or insolvency proceeding, or (ii) the subject
of any judgment unsatisfied of record or docketed in any court located in the
United States.

 

  (b)

Insolvency. Borrower is not presently insolvent, and the Loan will not render
Borrower insolvent. As used in this Section, the term “insolvent” means that the
total of all of a Person’s liabilities (whether secured or unsecured, contingent
or fixed, or liquidated or unliquidated) is in excess of the value of all of the
assets of the Person that are available to satisfy claims of creditors.

 

5.21

Working Capital. After the Loan is made, Borrower intends to have sufficient
working capital, including cash flow from the Mortgaged Property or other
sources, not only to adequately maintain the Mortgaged Property, but also to pay
all of Borrower’s outstanding debts as they come due (other than any balloon
payment due upon the maturity of the Loan). Lender acknowledges that no members
or partners of Borrower or any Borrower Principal will be obligated to
contribute equity to Borrower for purposes of providing working capital to
maintain the Mortgaged Property or to pay Borrower’s outstanding debts except as
may otherwise be required under their organizational documents.

 

5.22

Cap Collateral. Reserved.

 

5.23

Ground Lease. Reserved.

 

5.24

Purpose of Loan. The purpose of the Loan is as indicated by the checked boxes
below:

 

  [    ]

Refinance Loan: The Loan is a refinancing of existing indebtedness and, except
to the extent specifically required by Lender, there is to be no change in the
ownership of either the Mortgaged Property or Borrower Principals. The intended
use of any cash received by Borrower from Lender, to the extent applicable, in
connection with the refinancing has been fully disclosed to Lender.

 

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  [ X ]

Acquisition Loan: All of the consideration given or received or to be given or
received in connection with the acquisition of the Mortgaged Property has been
fully disclosed to Lender. The Mortgaged Property was or will be purchased from
                     (“Property Seller”). No Borrower or Borrower Principal has
or had, directly or indirectly (through a family member or otherwise), any
interest in the Property Seller and the acquisition of the Mortgaged Property is
an arm’s-length transaction. To the best of Borrower’s knowledge after due
inquiry and investigation, the purchase price of the Mortgaged Property
represents the fair market value of the Mortgaged Property and Property Seller
is not or will not be insolvent subsequent to the sale of the Mortgaged
Property.

 

  [    ]

Supplemental Loan: The Loan is a Supplemental Loan and, except to the extent
specifically required or approved by Lender, there has been no change in the
ownership of either the Mortgaged Property or Borrower Principals since the date
of the Senior Note. The intended use of any cash received by Borrower from
Lender, to the extent applicable, in connection with the refinancing has been
fully disclosed to Lender.

 

  [ X ]

Cross-Collateralized/Cross-Defaulted Loan Pool: The Loan is part of a
cross-collateralized/cross-defaulted pool of loans described as follows:

 

    X  

being simultaneously made to Borrower and/or Borrower’s Affiliates

 

          

made previously to Borrower and/or Borrower’s Affiliates

The intended use of any cash received by Borrower from Lender, to the extent
applicable, in connection with the Loan and the other loans comprising the
cross-collateralized/cross-defaulted loan pool has been fully disclosed to
Lender.

 

5.25

Intended Use.

 

  (a)

The residential units in the Facility are allocated as follows (“Intended Use”):

 

1.

Independent Living Units 100% 145 units

2.

Assisted Living Residences 0% 0 units 0 beds

3.

Assisted Living Residences devoted

to Alzheimer’s care, dementia care and/or memory care

0% 0 units 0 beds

 

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4.

Skilled Nursing Beds 0% 0 units 0 beds

5.

Continuing Care Retirement

Community with the following percentages of use:

a.        Seniors Apartments 0% 0 units b.        Independent Living Units 0% 0
units c.        Assisted Living Residences 0% 0 units 0 beds d.        Skilled
Nursing Beds 0% 0 units 0 beds

 

  (b)

The number of units set aside as Assisted Living Residences and Independent
Living Units may be increased by no more than 10% of the present number of total
units in the Facility.

 

  (c)

Reserved.

 

5.26

Furniture, Fixtures, Equipment, and Motor Vehicles. As of the Closing Date, all
furniture, Fixtures, equipment, and motor vehicles located on or used in
connection with the Mortgaged Property, and the name of the Person that owns
and/or leases each item, if other than Borrower, is listed on Exhibit L, and
such list is true and complete.

 

5.27

Participant in Federal Programs. Neither Borrower nor any Facility Operator is a
participant in any federal program under which any Governmental Authority may
have the right to recover funds by reason of the advance of federal funds.

 

5.28

Certificate of Need. Under applicable laws and regulations as in effect on the
date of this Loan Agreement, if any existing management agreement or operating
lease is terminated or Lender acquires the Facility through foreclosure or
otherwise, none of Borrower, Lender, any subsequent operator or management
agent, or any subsequent purchaser (through foreclosure or otherwise) must
obtain a certificate of need from any Governmental Authority (other than giving
of any notice required under the applicable state law or regulation) prior to
applying for any License, so long as neither the type of service nor any unit
complement is changed.

 

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5.29

Contracts.

 

  (a)

Exhibit M lists all Contracts in effect as of the date of this Loan Agreement,
the names of the parties to such Contracts and the dates of such Contracts.

 

  (b)

With regard to each Contract listed in Exhibit M, (i) the Contract is in full
force and effect in accordance with its terms, and (ii) there is no default by
any party under the Contract.

 

  (c)

Borrower has delivered to Lender a copy of each Contract, together with all
amendments, modifications, supplements and renewals thereto in effect as of the
date of this Loan Agreement.

 

  (d)

Except as set forth on Exhibit M, each Contract listed in Exhibit M provides
that it is terminable by Borrower or any Facility Operator upon not more than 30
days’ notice without the necessity of establishing cause and without payment of
a penalty or termination fee by Borrower or any Facility Operator or their
respective successors or assigns, except only Third Party Provider Agreements.

 

5.30

Material Contracts.

 

  (a)

Exhibit N lists all Material Contracts in effect as of the date of this Loan
Agreement.

 

  (b)

With regard to each Material Contract listed in Exhibit N: (i) the Material
Contract is assignable by Borrower, or if Borrower is not a party thereto, by a
Facility Operator, without the consent of the other party thereto (or Borrower
and any Facility Operator, as applicable, has obtained express written consent
to the assignment from the other party thereto), except only Third Party
Provider Agreements; (ii) no previous assignment of Borrower’s or any Facility
Operator’s interest in the Material Contract has been made except such
assignments that have been properly terminated prior to or concurrently with the
execution and delivery of this Loan Agreement; (iii) the Material Contract is in
full force and effect in accordance with its terms; and (iv) there is no default
by any party under the Material Contract.

 

  (c)

Borrower has delivered to Lender a copy of each Material Contract, together with
all amendments, modifications, supplements and renewals thereto in effect as of
the date of this Loan Agreement.

 

  (d)

Each Material Contract listed in Exhibit N provides that it is terminable upon
not more than 30 days notice without the necessity of establishing cause and
without payment of a penalty or termination fee by Borrower or any Facility
Operator or their respective successors or assigns, except only Third Party
Provider Agreements.

 

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5.31

No Financing Statements. Except for termination statements and continuation
statements, during the 45-day period prior to the date of this Loan Agreement,
there have been no UCC financing statements filed with respect to any of the UCC
Collateral listing as debtor Borrower, any Facility Operator, or the Facility’s
common name.

 

5.32

Medicare and Medicaid. If Borrower or any Facility Operator or Property Manager
participates in any Governmental Payor Program in connection with the operation
of the Facility, all of the following are true:

 

  (a)

The Facility is in compliance in all material respects with the requirements for
participation in the Governmental Payor Program, including without limitation,
the Medicare and Medicaid Patient Protection Act of 1987.

 

  (b)

The Facility conforms in all material respects to all insurance, reimbursement
and cost reporting requirements, and has a current provider agreement under
Title XVIII and/or XIX of the Social Security Act or any other applicable laws
for reimbursement necessary for its Intended Use.

 

  (c)

There is no action pending or threatened to terminate the Facility’s
participation in the Governmental Payor Program nor is there any decision not to
renew any provider agreement related to the Facility, nor is there any action
pending or threatened to impose material intermediate or alternative sanctions
with respect to the Facility.

 

  (d)

All Governmental Payor Program and private insurance cost reports and financial
reports submitted by Borrower, any Facility Operator, or any Property Manager
for the Facility are and will be materially accurate and complete and have not
been and will not be misleading in any material respects.

 

  (e)

No cost reports for the Facility remain “open” or unsettled, except as otherwise
disclosed in writing to Lender.

 

  (f)

The Facility has not received a “Level A” (or equivalent) violation, and no
statement of charges or deficiencies has been made or penalty enforcement action
has been undertaken against the Facility, any Property Manager or Facility
Operator or the Borrower (or any officer, director or stockholder of any of the
foregoing) during the last 3 calendar years, and there have been no violations
over the past 3 calendar years which have threatened any certification of the
Facility, any Property Manager or Facility Operator or the Borrower for
participation in any Governmental Payor Program.

 

  (g)

There are no resident care agreements with residents of the Facility or with any
other Persons which deviate in any material respect from the standard forms
customarily used at a comparable first-class facility or which conflict with any
statutory or regulatory requirements.

 

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  (h)

All resident records at the Facility, including any resident trust fund
accounts, are true and correct in all material respects.

 

  (i)

Borrower and the Facility are not subject to any proceeding, suit, or
investigation by any Governmental Authority. None of the Borrower, any Property
Manager, or any Facility Operator has received any notice from any Governmental
Authority which has not been provided for on the financial statements provided
to Lender and which may result in the imposition of a fine or interim or final
sanction or which would result in a lower reimbursement rate for services
rendered to eligible residents.

 

  (j)

The execution and delivery of the Note, this Loan Agreement, the Security
Instrument, or any other Loan Document, Borrower’s performance under the Loan
Documents, the recordation of the Security Instrument, and the exercise of any
remedies by Lender, will not do any of the following:

 

  (i)

Adversely affect the right by Borrower, a Facility Operator, or the Facility to
receive Governmental Payor Program payments and reimbursements with respect to
the Facility.

 

  (ii)

Materially reduce the Governmental Payor Program payments and reimbursements
which Borrower or a Facility Operator is receiving as of the date of this Loan
Agreement.

 

  (iii)

Adversely affect any of the Licenses.

 

  (k)

If any existing management agreement or operating lease is terminated or Lender
acquires the Facility through foreclosure or otherwise, none of the Borrower,
Lender, any subsequent management agent, any subsequent operator of the
Facility, or any subsequent purchaser (through foreclosure or otherwise) will be
required to obtain a certificate of need from any Governmental Authority (other
than giving of any notice required under the applicable state law or regulation)
prior to receiving certification to receive Governmental Payor Program payments
(or any successor programs) for residents having coverage under any Governmental
Payor Program so long as neither the type of service nor any unit complement is
changed.

 

5.33

Third-Party Payor Programs and Private Commercial Insurance Managed Care and
Employee Assistance Programs. There is no threatened or pending revocation,
suspension, termination, probation, restriction, limitation or nonrenewal
affecting Borrower or Facility Operator, of any participation or provider
agreement with any Governmental Payor Program or any private commercial
insurance managed care or employee assistance program to which Borrower or
Facility Operator is subject. All

 

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Governmental Payor Program and private insurance cost reports and financial
reports submitted by Borrower or Facility Operator are and will be materially
accurate and complete and have not been and will not be misleading in any
material respects. No cost reports for the Facility remain “open” or unsettled.

 

5.34

No Transfer or Pledge of Licenses. The Licenses, including the certificate of
need, may not be, and have not been, transferred to any location other than the
Facility, have not been pledged as collateral security for any other loan or
indebtedness, and are held free from restrictions or known conflicts that would
materially impair the use or operation of the Facility for its Intended Use, and
are not provisional, probationary, or restricted in any way.

 

5.35

No Pledge of Receivables. Neither Borrower nor the Facility Operator has pledged
its receivables as collateral security for any other loan or indebtedness.

 

5.36

Patient and Resident Care Agreements. There are no patient or resident care
agreements with patients or residents or with any other persons that deviate in
any material adverse respect from the standard form customarily used at the
Facility.

 

5.37

Patient and Resident Records. All patient or resident records at the Facility,
including patient or resident trust fund accounts, are true and correct in all
material respects.

 

5.38

No Facility Deficiencies, Enforcement Actions or Violations.

 

  (a)

The Facility has not received a statement of charges or deficiencies and no
penalty enforcement actions have been undertaken against the Facility, the
Facility Operator or Borrower or against any officer, director or stockholder
thereof, by any Governmental Agency during the last three calendar years, and
there have been no violations over the past three years that have threatened the
Facility’s or the Facility Operator’s or Borrower’s certification for
participation in any Governmental Payor Program.

 

  (b)

[Reserved]

 

5.39

Seniors Housing Operator. Reserved.

 

5.40

Recycled SPE Borrower. Reserved.

 

5.41

Recycled SPE Equity Owner. Reserved.

 

5.42

through 5.50 are reserved.

 

5.51

Survival. The representations and warranties set forth in this Loan Agreement
will survive until the Indebtedness is paid in full; however, the
representations and warranties set forth in Section 5.05 will survive beyond
repayment of the entire Indebtedness, to the extent provided in
Section 10.02(i).

 

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ARTICLE VI        BORROWER

COVENANTS.

 

6.01

Compliance with Laws. Borrower will comply with all laws, ordinances, rules,
regulations and requirements of any Governmental Authority having jurisdiction
over the Mortgaged Property and all licenses and permits and all recorded
covenants and agreements relating to or affecting the Mortgaged Property,
including all laws, ordinances, regulations, requirements and covenants
pertaining to health and safety, construction of improvements on the Mortgaged
Property, Repairs, Capital Replacements, fair housing, disability accommodation,
zoning and land use, applicable building codes, special use permits and
environmental regulations, Leases and the maintenance and disposition of tenant
security deposits. Borrower will take appropriate measures to prevent, and will
not engage in or knowingly permit, any illegal activities at the Mortgaged
Property, including those that could endanger tenants or visitors, result in
damage to the Mortgaged Property, result in forfeiture of the Mortgaged
Property, or otherwise materially impair the Lien created by the Security
Instrument or Lender’s interest in the Mortgaged Property. Borrower will at all
times maintain records sufficient to demonstrate compliance with the provisions
of this Section 6.01.

 

6.02

Compliance with Organizational Documents. Borrower will at all times comply with
all laws, regulations and requirements of any Governmental Authority relating to
Borrower’s formation, continued existence and good standing in its state of
formation and, if different, in the Property Jurisdiction. Borrower will at all
times comply with its organizational documents, including its partnership
agreement (if Borrower is a partnership), its by-laws (if Borrower is a
corporation or housing cooperative corporation or association) or its operating
agreement (if Borrower is a limited liability company or tenancy-in-common). If
Borrower is a housing cooperative corporation or association, Borrower will at
all times maintain its status as a “cooperative housing corporation” as such
term is defined in Section 216(b) of the Internal Revenue Code of 1986, as
amended, or any successor statute thereto.

 

6.03

Use of Mortgaged Property.

 

  (a)

Unless required by applicable law, without the prior written consent of Lender,
Borrower will not, and will not permit any Facility Operator to, take any of the
following actions:

 

  (i)

Allow changes in the use for which all or any part of the Mortgaged Property is
being used at the time this Loan Agreement is executed.

 

  (ii)

Convert any individual dwelling units or common areas to commercial use.

 

  (iii)

Initiate a change in the zoning classification of the Mortgaged Property or
acquiesce to a change in the zoning classification of the Mortgaged Property.

 

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  (iv)

Establish any condominium or cooperative regime with respect to the Mortgaged
Property beyond any which may be in existence on the date of this Loan
Agreement.

 

  (v)

Combine all or any part of the Mortgaged Property with all or any part of a tax
parcel which is not part of the Mortgaged Property.

 

  (vi)

Subdivide or otherwise split any tax parcel constituting all or any part of the
Mortgaged Property.

 

  (vii)

Add to or change any location at which any of the Mortgaged Property is stored,
held or located unless Borrower (A) gives Notice to Lender within 30 days after
the occurrence of such addition or change, (B) executes and delivers to Lender
any modifications of or supplements to this Loan Agreement that Lender may
require, and (C) authorizes the filing of any financing statement which may be
filed in connection with this Loan Agreement, as Lender may require.

 

  (b)

Without the prior written consent of Lender, which may be granted or withheld in
Lender’s discretion, Borrower will not, and will not permit any Facility
Operator to, provide or contract for skilled nursing care, assisted living care,
Alzheimer’s care, memory care or dementia care for any of the residents other
than that level of care which both (i) is consistent with the Intended Use and
(ii) is permissible for Borrower or the Facility Operator to provide at the
Facility under (A) applicable Healthcare Laws, and (B) applicable Licenses.

 

  (c)

Notwithstanding anything contained in this Section to the contrary, if Borrower
is a housing cooperative corporation or association, Lender acknowledges and
consents to Borrower’s use of the Mortgaged Property as a housing cooperative.

 

6.04

Non-Residential Leases.

 

  (a)

Prohibited New Non-Residential Leases or Modified Non-Residential Leases.
Borrower will not enter into any New Non-Residential Lease, enter into any
Modified Non-Residential Lease or terminate any Non-Residential Lease (including
any Non-Residential Lease in existence on the date of this Loan Agreement)
without the prior written consent of Lender.

 

  (b)

Reserved.

 

  (c)

Executed Copies of Non-Residential Leases. Borrower will, without request by
Lender, deliver a fully executed copy of each Non-Residential Lease to Lender
promptly after such Non-Residential Lease is signed.

 

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  (d)

Subordination and Attornment Requirements. All Non-Residential Leases will
specifically include the following provisions:

 

  (i)

The Lease is subordinate to the Lien of the Security Instrument, with such
subordination to be self-executing.

 

  (ii)

The tenant will attorn to Lender and any purchaser at a foreclosure sale, such
attornment to be self-executing and effective upon acquisition of title to the
Mortgaged Property by any purchaser at a foreclosure sale or by Lender in any
manner.

 

  (iii)

The tenant agrees to execute such further evidences of attornment as Lender or
any purchaser at a foreclosure sale may from time to time request.

 

  (iv)

The tenant will, upon receipt of a written request from Lender following the
occurrence of and during the continuance of an Event of Default, pay all Rents
payable under the Lease to Lender.

 

  (v)

If Lender or a purchaser at a foreclosure sale so elects, the Lease will not be
terminated by foreclosure or any other transfer of the Mortgaged Property.

 

  (vi)

After a foreclosure sale of the Mortgaged Property, Lender or any other
purchaser at such foreclosure sale may, at Lender’s or such purchaser’s option,
accept or terminate such Lease without payment of any fee or penalty.

 

6.05

Prepayment of Rents. Borrower will not receive or accept Rent under any Lease
(whether a residential Lease or a Non-Residential Lease) for more than 2 months
in advance.

 

6.06

Inspection.

 

  (a)

Right of Entry. Borrower will permit Lender, its agents, representatives and
designees and any interested Governmental Authority to make or cause to be made
entries upon and inspections of the Mortgaged Property to inspect, among other
things: (i) Repairs, (ii) Capital Replacements, in process and upon completion,
and (iii) Improvements (including environmental inspections and tests performed
by professional inspection engineers) during normal business hours, or at any
other reasonable time, upon reasonable Notice to Borrower if the inspection is
to include occupied residential units (which Notice need not be in writing).
During normal business hours, or at any other reasonable time, Borrower will
also permit Lender to examine all books and records and contracts and bills
pertaining to the foregoing. Notice to Borrower will not be required in the case
of an emergency, as determined in Lender’s Discretion, or when an Event of
Default has occurred and is continuing.

 

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  (b)

Inspection of Mold. If Lender determines that Mold has or may have developed as
a result of a water intrusion event or leak, Lender, at Lender’s Discretion, may
require that a professional inspector inspect the Mortgaged Property to confirm
whether Mold has developed and, if so, thereafter as frequently as Lender
determines is necessary until any issue with Mold and its cause(s) are resolved
to Lender’s satisfaction. Such inspection will be limited to a visual and
olfactory inspection of the area that has experienced the Mold, water intrusion
event or leak. Borrower will be responsible for the cost of each such
professional inspection and any remediation deemed to be necessary as a result
of the professional inspection. After any issue with Mold is remedied to
Lender’s satisfaction, Lender will not require a professional inspection any
more frequently than once every 3 years unless Lender otherwise becomes aware of
Mold as a result of a subsequent water intrusion event or leak.

 

  (c)

Certification in Lieu of Inspection. If Lender or Loan Servicer determines not
to conduct an annual inspection of the Mortgaged Property, and in lieu thereof
Lender requests a certification, Borrower will provide to Lender a factually
correct certification, each year that the annual inspection is waived, to the
following effect:

Borrower has not received any written complaint, notice, letter or other written
communication from any tenant, Property Manager, Facility Operator or
governmental authority regarding mold, fungus, microbial contamination or
pathogenic organisms (“Mold”) or any activity, condition, event or omission that
causes or facilitates the growth of Mold on or in any part of the Mortgaged
Property or, if Borrower has received any such written complaint, notice, letter
or other written communication, that Borrower has investigated and determined
that no Mold activity, condition or event exists or alternatively has fully and
properly remediated such activity, condition, event or omission in compliance
with the Moisture Management Plan for the Mortgaged Property.

If Borrower is unwilling or unable to provide such certification, Lender may
require a professional inspection of the Mortgaged Property at Borrower’s
expense.

 

6.07

Books and Records; Financial Reporting.

 

  (a)

Delivery of Books and Records. Borrower will keep and maintain at all times at
the Mortgaged Property or the Property Manager’s or Facility Operator’s office,
and upon Lender’s request will make available at the Mortgaged Property (or, at
Borrower’s option, at the Property Manager’s or Facility Operator’s office),
complete and accurate books of account and records (including copies of

 

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supporting bills and invoices) adequate to reflect correctly the operation of
the Mortgaged Property, in accordance with GAAP consistently applied (or such
other method which is reasonably acceptable to Lender), and copies of all
written contracts, Leases, and other instruments which affect the Mortgaged
Property. The books, records, contracts, Leases and other instruments will be
subject to examination and inspection by Lender at any reasonable time.

 

  (b)

Delivery of Statement of Income and Expenses; Rent Schedule and Other
Statements. Borrower will furnish to Lender each of the following:

 

  (i)

Within 25 days after the end of each calendar quarter prior to Securitization
and within 35 days after each calendar quarter after Securitization, each of the
following:

 

  (A)

A Rent Schedule dated no earlier than the date that is 5 days prior to the end
of such quarter.

 

  (B)

A statement of income and expenses for Borrower’s operation of the Mortgaged
Property that is either of the following:

 

  (1)

For the 12 month period ending on the last day of such quarter.

 

  (2)

If at the end of such quarter Borrower or any Affiliate of Borrower has owned
the Mortgaged Property for less than 12 months, for the period commencing with
the acquisition of the Mortgaged Property by Borrower or its Affiliate, and
ending on the last day of such quarter.

 

  (C)

When requested by Lender, a balance sheet showing all assets and liabilities of
Borrower relating to the Mortgaged Property as of the end of that fiscal
quarter.

 

  (ii)

Within 90 days after the end of each fiscal year of Borrower, each of the
following:

 

  (A)

An annual statement of income and expenses for Borrower’s operation of the
Mortgaged Property for that fiscal year.

 

  (B)

A balance sheet showing all assets and liabilities of Borrower relating to the
Mortgaged Property as of the end of that fiscal year and a profit and loss
statement for Borrower.

 

  (C)

An accounting of all security deposits held pursuant to all Leases, including
the name of the institution (if any) and the names and identification numbers of
the accounts (if any) in which such

 

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security deposits are held and the name of the person to contact at such
financial institution, along with any authority or release necessary for Lender
to access information regarding such accounts.

 

  (iii)

Within 30 days after the date of filing, copies of all tax returns filed by
Borrower.

 

  (c)

Delivery of Borrower Financial Statements Upon Request. Borrower will furnish to
Lender each of the following:

 

  (i)

Upon Lender’s request, in Lender’s sole and absolute discretion prior to a
Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a
monthly Rent Schedule and a monthly statement of income and expenses for
Borrower’s operation of the Mortgaged Property, in each case within 25 days
after the end of each month.

 

  (ii)

Upon Lender’s request in Lender’s sole and absolute discretion prior to a
Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a
statement that identifies all owners of any interest in Borrower and any
Designated Entity for Transfers and the interest held by each (unless Borrower
or any Designated Entity for Transfers is a publicly-traded entity in which case
such statement of ownership will not be required), and if Borrower or a
Designated Entity for Transfers is a corporation then all officers and directors
of Borrower and the Designated Entity for Transfers, and if Borrower or a
Designated Entity for Transfers is a limited liability company then all Managers
who are not members, in each case within 10 days after such request.

 

  (iii)

Upon Lender’s request in Lender’s Discretion, such other financial information
or property management information (including information on tenants under
Leases to the extent such information is available to Borrower, copies of bank
account statements from financial institutions where funds owned or controlled
by Borrower are maintained, and an accounting of security deposits) as may be
required by Lender from time to time, in each case within 30 days after such
request.

 

  (iv)

Upon Lender’s request in Lender’s Discretion, a monthly property management
report for the Mortgaged Property, showing the number of inquiries made and
rental applications received from tenants or prospective tenants and deposits
received from tenants and any other information requested by Lender within 30
days after such request. However, Lender will not require the foregoing more
frequently than quarterly except when there has been an Event of Default and
such Event of Default is continuing, in which case Lender may require Borrower
to furnish the foregoing more frequently.

 

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  (d)

Form of Statements; Audited Financials. A natural person having authority to
bind Borrower (or the SPE Equity Owner or Guarantor, as applicable) will certify
each of the statements, schedules and reports required by Sections 6.07(b),
6.07(c) and 6.07(f) to be complete and accurate. Each of the statements,
schedules and reports required by Sections 6.07(b),
6.07(c) and 6.07(f) will be in such form and contain such detail as Lender may
reasonably require. Lender also may require that any of the statements,
schedules or reports listed in Sections 6.07(b), 6.07(c) and 6.07(f) be audited
at Borrower’s expense by independent certified public accountants acceptable to
Lender, at any time when an Event of Default has occurred and is continuing or
at any time that Lender, in its reasonable judgment, determines that audited
financial statements are required for an accurate assessment of the financial
condition of Borrower or of the Mortgaged Property.

 

  (e)

Failure to Timely Provide Financial Statements. If Borrower fails to provide in
a timely manner the statements, schedules and reports required by Sections
6.07(b), 6.07(c) and 6.07(f), Lender will give Notice to Borrower specifying the
statements, schedules and reports required by Sections 6.07(b), 6.07(c) and
6.07(f) that Borrower has failed to provide. If Borrower has not provided the
required statements, schedules and reports within 10 Business Days following
such Notice, then (i) Borrower will pay a late fee of $500 for each late
statement, schedule or report, plus an additional $500 per month that any such
statement, schedule or report continues to be late, and (ii) Lender will have
the right to have Borrower’s books and records audited, at Borrower’s expense,
by independent certified public accountants selected by Lender in order to
obtain such statements, schedules and reports, and all related costs and
expenses of Lender will become immediately due and payable and will become an
additional part of the Indebtedness as provided in Section 9.02. Notice to
Borrower of Lender’s exercise of its rights to require an audit will not be
required in the case of an emergency, as determined in Lender’s Discretion, or
when an Event of Default has occurred and is continuing.

 

  (f)

Delivery of Guarantor and SPE Equity Owner Financial Statements Upon Request.
Borrower will cause each Guarantor and, at Lender’s request in Lender’s
Discretion, any SPE Equity Owner, to provide to Lender (i) within 90 days after
the close of such party’s fiscal year, such party’s balance sheet and profit and
loss statement (or if such party is a natural person, within 90 days after the
close of each calendar year, such party’s personal financial statements) in form
reasonably satisfactory to Lender and certified by such party to be accurate and
complete, and (ii) such additional financial information (including copies of
state and federal tax returns with respect to any SPE Equity Owner but Lender
will only require copies of such tax returns with respect to each Guarantor if
an Event of Default has occurred and is continuing) as Lender may reasonably
require from time to time and in such detail as reasonably required by Lender.

 

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  (g)

Reporting Upon Event of Default. If an Event of Default has occurred and is
continuing, Borrower will deliver to Lender upon written demand all books and
records relating to the Mortgaged Property or its operation.

 

  (h)

Credit Reports. Borrower authorizes Lender to obtain a credit report on Borrower
at any time.

 

  (i)

Reserved.

 

6.08

Taxes; Operating Expenses; Ground Rents.

 

  (a)

Payment of Taxes and Ground Rent. Subject to the provisions of Sections 6.08(c)
and (d), Borrower will pay or cause to be paid (i) all Taxes when due and before
the addition of any interest, fine, penalty or cost for nonpayment, and (ii) if
Borrower’s interest in the Mortgaged Property is as a Ground Lessee, then the
monthly or other periodic installments of Ground Rent before the last date upon
which each such installment may be made without penalty or interest charges
being added.

 

  (b)

Payment of Operating Expenses. Subject to the provisions of Section 6.08(c),
Borrower will (i) pay the expenses of operating, managing, maintaining and
repairing the Mortgaged Property (including utilities, Repairs and Capital
Replacements) before the last date upon which each such payment may be made
without any penalty or interest charge being added, and (ii) pay Insurance
premiums at least 30 days prior to the expiration date of each policy of
Insurance, unless applicable law specifies some lesser period.

 

  (c)

Payment of Impositions and Reserve Funds. If Lender is collecting Imposition
Reserve Deposits pursuant to Article IV, then so long as no Event of Default
exists, Borrower will not be obligated to pay any Imposition for which
Imposition Reserve Deposits are being collected, whether Taxes, Insurance
premiums, Ground Rent (if applicable) or any other individual Impositions, but
only to the extent that sufficient Imposition Reserve Deposits are held by
Lender for the purpose of paying that specific Imposition and Borrower has
timely delivered to Lender any bills or premium notices that it has received
with respect to that specific Imposition (other than Ground Rent). Lender will
have no liability to Borrower for failing to pay any Impositions to the extent
that: (i) any Event of Default has occurred and is continuing, (ii) insufficient
Imposition Reserve Deposits are held by Lender at the time an Imposition becomes
due and payable, or (iii) Borrower has failed to provide Lender with bills and
premium notices as provided in this Section.

 

  (d)

Right to Contest. Borrower, at its own expense, may contest by appropriate legal
proceedings, conducted diligently and in good faith, the amount or validity of
any Imposition other than Insurance premiums and Ground Rent (if applicable),
if: (i) Borrower notifies Lender of the commencement or expected commencement of

 

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such proceedings, (ii) the Mortgaged Property is not in danger of being sold or
forfeited, (iii) if Borrower has not already paid the Imposition, Borrower
deposits with Lender reserves sufficient to pay the contested Imposition, if
requested by Lender, and (iv) Borrower furnishes whatever additional security is
required in the proceedings or is reasonably requested by Lender, which may
include the delivery to Lender of reserves established by Borrower to pay the
contested Imposition.

 

6.09

Preservation, Management and Maintenance of Mortgaged Property.

 

  (a)

Maintenance of Mortgaged Property; No Waste. Borrower will keep the Mortgaged
Property in good repair, including the replacement of Personalty and Fixtures
with items of equal or better function and quality. Borrower will not commit
waste or permit impairment or deterioration of the Mortgaged Property.

 

  (b)

Abandonment of Mortgaged Property. Borrower will not abandon the Mortgaged
Property.

 

  (c)

Preservation of Mortgaged Property. Borrower will restore or repair promptly, in
a good and workmanlike manner, any damaged part of the Mortgaged Property to the
equivalent of its original condition, or such other condition as Lender may
approve in writing, whether or not Insurance proceeds or Condemnation awards are
available to cover any costs of such Restoration or repair; provided, however,
that Borrower will not be obligated to perform such Restoration or repair if
(i) no Event of Default has occurred and is continuing, and (ii) Lender has
elected to apply any available Insurance proceeds and/or Condemnation awards to
the payment of Indebtedness pursuant to Section 6.10(l) or Section 6.11(d).

 

  (d)

Property Management. Borrower will provide for professional management of the
Mortgaged Property by the Property Manager at all times under a property
management agreement approved by Lender in writing. Borrower will not surrender,
terminate, cancel, modify, renew or extend its property management agreement, or
enter into any other agreement relating to the management or operation of the
Property with Property Manager or any other Person, or consent to the assignment
by the Property Manager of its interest under such property management
agreement, in each case without the consent of Lender, which consent will not be
unreasonably withheld.

 

  (i)

If at any time Lender consents to the appointment of a new Property Manager,
such new Property Manager and Borrower will, as a condition of Lender’s consent,
execute an Assignment of Management Agreement in a form acceptable to Lender.

 

  (ii)

If any such replacement Property Manager is an Affiliate of Borrower, and if a
nonconsolidation opinion was delivered on the Closing Date, Borrower will
deliver to Lender an updated nonconsolidation opinion in form and substance
satisfactory to Lender with regard to nonconsolidation.

 

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  (iii)

Reserved.

 

  (e)

Alteration of Mortgaged Property. Borrower will give Notice to Lender of and,
unless otherwise directed in writing by Lender, will appear in and defend any
action or proceeding purporting to affect the Mortgaged Property, Lender’s
security or Lender’s rights under this Loan Agreement. Borrower will not (and
will not permit any tenant or other Person to) remove, demolish or alter the
Mortgaged Property or any part of the Mortgaged Property, including any removal,
demolition or alteration occurring in connection with a rehabilitation of all or
part of the Mortgaged Property, except that each of the following is permitted:

 

  (i)

Repairs or Capital Replacements pursuant to Sections 4.03 or 4.04.

 

  (ii)

Repairs or Capital Replacements made in connection with the replacement of
tangible Personalty.

 

  (iii)

If Borrower is a cooperative housing corporation or association, Repairs or
Capital Replacements to the extent permitted with respect to individual dwelling
units under the form of a proprietary lease or occupancy agreement.

 

  (iv)

Repairs or Capital Replacements in connection with making an individual unit
ready for a new occupant or pursuant to Sections 6.09(a) and (c).

 

  (v)

Reserved.

 

  (vi)

Reserved.

 

  (vii)

Reserved.

 

  (f)

Establishment of MMP. Unless otherwise waived by Lender in writing, Borrower
will have or will establish and will adhere to the MMP. If Borrower is required
to have an MMP, Borrower will keep all MMP documentation at the Mortgaged
Property or at the Property Manager’s or the Facility Operator’s office and
available for review by Lender or the Loan Servicer during any annual assessment
or other inspection of the Mortgaged Property that is required by Lender. At a
minimum, the MMP must contain a provision for: (i) staff training,
(ii) information to be provided to tenants, (iii) documentation of the plan,
(iv) the appropriate protocol for incident response and remediation, and
(v) routine, scheduled inspections of common space and unit interiors.

 

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  (g)

No Reduction of Housing Cooperative Charges. If Borrower is a housing
cooperative corporation or association, until the Indebtedness is paid in full,
Borrower will not reduce the maintenance fees, charges or assessments payable by
shareholders or residents under proprietary leases or occupancy agreements below
a level which is sufficient to pay all expenses of Borrower, including all
operating and other expenses for the Mortgaged Property and all payments due
pursuant to the terms of the Note and any Loan Documents.

 

  (h)

through (k) are reserved.

 

6.10

Insurance. At all times during the term of this Loan Agreement, Borrower will
maintain at its sole cost and expense, for the mutual benefit of Borrower and
Lender, all of the Insurance specified in this Section 6.10, as required by
Lender and applicable law, and in such amounts and with such maximum deductibles
as Lender may require, as those requirements may change:

 

  (a)

Hazard Insurance. Borrower will keep the Improvements insured at all times
against relevant physical hazards that may cause damage to the Mortgaged
Property as Lender may require (“Hazard Insurance”). Required Hazard Insurance
coverage may include any or all of the following:

 

  (i)

All Risks of Physical Loss. Insurance against loss or damage from fire, wind,
hail, flood, and other related perils within the scope of a “Special Causes of
Loss” or “All Risk” policy, in an amount not less than the Replacement Cost of
the Mortgaged Property.

 

  (ii)

Ordinance and Law. If the Mortgaged Property constitutes a legal non-conforming
use, then “Ordinance and Law Coverage” in the amount required by Lender,
including the follow endorsements:

 

  (A)

“Loss to the Undamaged Portion of the Building.”

 

  (B)

“Demolition Cost.”

 

  (C)

“Increased Cost of Construction.”

 

  (D)

“Increased Period of Restoration.”

 

  (iii)

Flood. If any of the Improvements are located in an area identified by the
Federal Emergency Management Agency (or any successor to that agency) as a
“Special Flood Hazard Area,” flood Insurance in the amount required by Lender.

 

  (iv)

Windstorm. If windstorm and/or windstorm related perils and/or “named storm” are
excluded from the “Special Causes of Loss” policy required under
Section 6.10(a)(i), then separate coverage for such risks (“Windstorm
Coverage”), either through an endorsement or a separate policy. Windstorm
Coverage will be written in an amount not less than the Replacement Cost of the
Mortgaged Property.

 

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  (v)

Boiler and Machinery/Equipment Breakdown. If the Mortgaged Property contains a
central heating, ventilation and cooling system (“HVAC System”) where steam
boilers and/or other pressurized systems are in operation and are regulated by
the Property Jurisdiction, Insurance providing coverage in the amount required
by Lender for:

 

  (A)

Damage to the HVAC System.

 

  (B)

Other portions of the Mortgaged Property if the damage is the result of an
explosion of steam boilers, pressure vessels or similar apparatus now or in the
future installed at the Mortgaged Property.

 

  (vi)

Builder’s Risk. During any period of construction or Restoration, builder’s risk
Insurance (including fire and other perils within the scope of a policy known as
“Causes of Loss – Special Form” or “All Risk” policy) in an amount not less than
the sum of the related contractual arrangements.

 

  (vii)

Other. Insurance for other physical perils applicable to the Mortgaged Property
as may be required by Lender including earthquake, sinkhole, mine subsidence,
avalanche, mudslides, and volcanic eruption. If Lender reasonably requires any
updated reports or other documentation to determine whether additional Insurance
is necessary or prudent, Borrower will pay for the updated reports or other
documentation at its sole cost and expense.

 

  (viii)

Professional Liability. Required if the Mortgaged Property has assisted living,
Alzheimer’s care, or skilled nursing units. The policy may be written on a
“Claims Made Policy” form or an “Occurrence-based Policy” form. Minimum coverage
of $1,000,000 per occurrence and $2,000,000 in the general aggregate is
required. If the professional liability policy covers multiple locations,
aggregate limits apply per location. In addition, Borrower must maintain the
following minimum umbrella or excess professional liability coverage:

 

Total number of licensed beds covered by the policy    Minimum Umbrella/
Excess Coverage  

Less than or equal to 100

   $ 1 million   

100 to 500

   $ 5 million   

501 to 1,000

   $ 10 million   

Greater than 1,000

   $ 25 million   

 

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The minimum coverage limits in this section may be satisfied with any
combination of primary, umbrella and/or excess coverage.

 

  (ix)

Reserved.

 

  (b)

Business Income/Rental Value. Business income/rental value Insurance for all
relevant perils to be covered in the amount required by Lender, but in no case
less than the effective gross income attributable to the Mortgaged Property for
the preceding 12 months, as determined by Lender in Lender’s Discretion, and
otherwise sufficient to avoid any co-insurance provisions.

 

  (c)

Commercial General Liability Insurance. Commercial general liability Insurance
against legal liability claims for personal and bodily injury, property damage
and contractual liability in such amounts and with such maximum deductibles as
Lender may require, but not less than $1,000,000 per occurrence and $2,000,000
in the general aggregate on a per-location basis, plus excess and/or umbrella
liability coverage in such amounts as Lender may require.

 

  (d)

Terrorism Insurance. Insurance required under Section 6.10(a)(i) and (ii) and
Section 6.10(b) will provide coverage for acts of terrorism. Terrorism coverage
may be provided through one or more separate policies, which will be on terms
(including amounts) consistent with those required under Section 6.10(a)(i) and
(ii) and Section 6.10(b).

 

  (e)

Payment of Premiums. All Hazard Insurance premiums and premiums for other
Insurance required under this Section 6.10 will be paid in the manner provided
in Article IV, unless Lender has designated in writing another method of
payment.

 

  (f)

Policy Requirements. The following requirements apply with respect to all
Insurance required by this Section 6.10:

 

  (i)

All Insurance policies will be in a form approved by Lender.

 

  (ii)

All Insurance policies will be issued by Insurance companies authorized to do
business in the Property Jurisdiction and/or acting as eligible surplus insurers
in the Property Jurisdiction, and which have a general policyholder’s rating
satisfactory to Lender.

 

  (iii)

All Hazard Insurance policies will contain a standard mortgagee or mortgage
holder’s clause and a loss payable clause, in favor of, and in a form approved
by, Lender.

 

  (iv)

If any Insurance policy contains a coinsurance clause, the coinsurance clause
will be offset by an agreed amount endorsement in an amount not less than the
Replacement Cost.

 

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  (v)

All commercial general liability and excess/umbrella liability policies will
name Lender, its successors and/or assigns, as additional insured.

 

  (vi)

Professional liability policies will not include Lender, its successors and/or
assigns, as additional insured.

 

  (vii)

All Hazard Insurance policies and liability Insurance policies will provide that
the insurer will notify the Lender in writing of cancelation of policies at
least 10 days before the cancelation of the policy by the insurer for nonpayment
of the premium or nonrenewal and at least 30 days before cancelation by the
insurer for any other reason.

 

  (g)

Evidence of Insurance; Insurance Policy Renewals. Borrower will deliver to
Lender a legible copy of each Insurance policy, and Borrower will promptly
deliver to Lender a copy of all renewal and other notices received by Borrower
with respect to the policies. Borrower will ensure that the Mortgaged Property
is continuously covered by the required Insurance. At least 15 days prior to the
expiration date of each Insurance policy, Borrower will deliver to Lender
evidence acceptable to Lender in Lender’s Discretion that each policy has been
renewed. If the evidence of a renewal does not include a legible copy of the
renewal policy, Borrower will deliver a legible copy of such renewal no later
than the earlier of the following:

 

  (i)

60 days after the expiration date of the original policy.

 

  (ii)

The date of any Notice of an insured loss given to Lender under Section 6.10(i).

 

  (h)

Compliance With Insurance Requirements. Borrower will comply with all Insurance
requirements and will not permit any condition to exist on the Mortgaged
Property that would invalidate any part of any Insurance coverage required under
this Loan Agreement.

 

  (i)

Obligations Upon Casualty; Proof of Loss.

 

  (i)

If an insured loss occurs, then Borrower will give immediate written notice to
the Insurance carrier and to Lender.

 

  (ii)

Borrower authorizes and appoints Lender as attorney in fact for Borrower to make
proof of loss, to adjust and compromise any claims under policies of Hazard
Insurance, to appear in and prosecute any action arising from such Hazard
Insurance policies, to collect and receive the proceeds of Hazard Insurance, to
hold the proceeds of Hazard Insurance, and to deduct from such proceeds Lender’s
expenses incurred in the collection of such proceeds. This power of attorney is
coupled with an interest and therefore is irrevocable. However, nothing
contained in this Section 6.10 will require Lender to incur any expense or take
any action.

 

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  (j)

Lender’s Options Following a Casualty. Lender may, at Lender’s option, take one
of the following actions:

 

  (i)

Require a “repair or replacement” settlement, in which case the proceeds will be
used to reimburse Borrower for the cost of restoring and repairing the Mortgaged
Property to the equivalent of its original condition or to a condition approved
by Lender (“Restoration”). If Lender determines to require a repair or
replacement settlement and to apply Insurance proceeds to Restoration, Lender
will apply the proceeds in accordance with Lender’s then-current policies
relating to the Restoration of casualty damage on similar multifamily
properties.

 

  (ii)

Require an “actual cash value” settlement in which case the proceeds may be
applied to the payment of the Indebtedness, whether or not then due.

 

  (k)

Borrower’s Options Following a Casualty. Subject to Section 6.10(l), Borrower
may take the following actions:

 

  (i)

If a casualty results in damage to the Mortgaged Property for which the cost of
Repairs will be less than the Borrower Proof of Loss Threshold, Borrower will
have the sole right to make proof of loss, adjust and compromise the claim and
collect and receive any proceeds directly without the approval or prior consent
of Lender so long as the Insurance proceeds are used solely for the Restoration
of the Mortgaged Property.

 

  (ii)

If a casualty results in damage to the Mortgaged Property for which the cost of
Repairs will be more than the Borrower Proof of Loss Threshold, but less than
the Borrower Proof of Loss Maximum, Borrower is authorized to make proof of loss
and adjust and compromise the claim without the prior consent of Lender, and
Lender will hold the applicable Insurance proceeds to be used to reimburse
Borrower for the cost of Restoration of the Mortgaged Property and will not
apply such proceeds to the payment of the Indebtedness.

 

  (l)

Lender’s Right to Apply Insurance Proceeds to Indebtedness. Lender will have the
right to apply Insurance proceeds to the payment of the Indebtedness if Lender
determines, in Lender’s Discretion, that any of the following conditions are
met:

 

  (i)

An Event of Default (or any event, which, with the giving of Notice or the
passage of time, or both, would constitute an Event of Default) has occurred and
is continuing.

 

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  (ii)

There will not be sufficient funds from Insurance proceeds, anticipated
contributions of Borrower of its own funds or other sources acceptable to Lender
to complete the Restoration.

 

  (iii)

The rental income from the Mortgaged Property after completion of the
Restoration will not be sufficient to meet all operating costs and other
expenses, deposits to Reserve Funds and Loan repayment obligations relating to
the Mortgaged Property.

 

  (iv)

The Restoration will be completed less than (A) 6 months prior to the Maturity
Date if re-leasing will be completed prior to the Maturity Date, or (B) 12
months prior to the Maturity Date if re-leasing will not be completed prior to
the Maturity Date.

 

  (v)

The Restoration will not be completed within one year after the date of the loss
or casualty.

 

  (vi)

The casualty involved an actual or constructive loss of more than 30% of the
fair market value of the Mortgaged Property, and rendered untenantable more than
30% of the residential units of the Mortgaged Property.

 

  (vii)

After completion of the Restoration the fair market value of the Mortgaged
Property is expected to be less than the fair market value of the Mortgaged
Property immediately prior to such casualty (assuming the affected portion of
the Mortgaged Property is re-let within a reasonable period after the date of
such casualty).

 

  (viii)

Leases covering less than 35% of the residential units of the Mortgaged Property
will remain in full force and effect during and after the completion of
Restoration.

 

  (m)

Lender’s Succession to Insurance Policies. If the Mortgaged Property is sold at
a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender
will automatically succeed to all rights of Borrower in and to any Insurance
policies and unearned Insurance premiums and in and to the proceeds resulting
from any damage to the Mortgaged Property prior to such sale or acquisition.

 

  (n)

Payment of Installments After Application of Insurance Proceeds. Unless Lender
otherwise agrees in writing, any application of any Insurance proceeds to the
Indebtedness will not extend or postpone the due date of any monthly
installments referred to in the Note, Article IV of this Loan Agreement or
change the amount of such installments.

 

  (o)

Assignment of Insurance Proceeds. Borrower agrees to execute such further
evidence of assignment of any Insurance proceeds as Lender may require.

 

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  (p)

Borrower Acknowledgment of Lender’s Right to Change Insurance Requirements.
Borrower acknowledges and agrees that Lender’s Insurance requirements may change
from time to time throughout the term of the Indebtedness.

 

6.11

Condemnation.

 

  (a)

Rights Generally. Borrower will promptly notify Lender in writing of any action
or proceeding or notice relating to any proposed or actual condemnation or other
taking, or conveyance in lieu thereof, of all or any part of the Mortgaged
Property, whether direct or indirect (“Condemnation”). Borrower will appear in
and prosecute or defend any action or proceeding relating to any Condemnation
unless otherwise directed by Lender in writing. Borrower authorizes and appoints
Lender as attorney in fact for Borrower to commence, appear in and prosecute, in
Lender’s or Borrower’s name, any action or proceeding relating to any
Condemnation and to settle or compromise any claim in connection with any
Condemnation, after consultation with Borrower and consistent with commercially
reasonable standards of a prudent lender. This power of attorney is coupled with
an interest and therefore is irrevocable. However, nothing contained in this
Section 6.11(a) will require Lender to incur any expense or take any action.
Borrower transfers and assigns to Lender all right, title and interest of
Borrower in and to any award or payment with respect to (i) any Condemnation, or
any conveyance in lieu of Condemnation, and (ii) any damage to the Mortgaged
Property caused by governmental action that does not result in a Condemnation.

 

  (b)

Application of Award. Lender may hold such awards or proceeds and apply such
awards or proceeds, after the deduction of Lender’s expenses incurred in the
collection of such amounts (including Attorneys’ Fees and Costs) at Lender’s
option, to the Restoration or repair of the Mortgaged Property or to the payment
of the Indebtedness, with the balance, if any, to Borrower. Unless Lender
otherwise agrees in writing, any application of any awards or proceeds to the
Indebtedness will not extend or postpone the due date of any monthly
installments referred to in the Note or Article IV of this Loan Agreement, or
change the amount of such installments. Borrower agrees to execute such further
evidence of assignment of any Condemnation awards or proceeds as Lender may
require.

 

  (c)

Borrower’s Right to Condemnation Proceeds. Notwithstanding any provision to the
contrary in this Section 6.11, but subject to Section 6.11(e), in the event of a
partial Condemnation of the Mortgaged Property, as long as no Event of Default,
or any event which, with the giving of Notice or the passage of time, or both,
would constitute an Event of Default, has occurred and is continuing, in the
event of a partial Condemnation resulting in proceeds or awards in the amount of
less than $100,000, Borrower will have the sole right to make proof of loss,
adjust and compromise the claim and collect and receive any proceeds directly
without the approval or prior consent of Lender so long as the proceeds or
awards are used solely for the Restoration of the Mortgaged Property.

 

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  (d)

Right to Apply Condemnation Proceeds to Indebtedness. In the event of a partial
Condemnation of the Mortgaged Property resulting in proceeds or awards in the
amount of $100,000 or more and subject to Section 6.11(e), Lender will have the
right to exercise its option to apply Condemnation proceeds to the payment of
the Indebtedness only if Lender, in Lender’s Discretion, determines that at
least one of the following conditions is met:

 

  (i)

An Event of Default (or any event, which, with the giving of Notice or the
passage of time, or both, would constitute an Event of Default) has occurred and
is continuing.

 

  (ii)

There will not be sufficient funds from Condemnation proceeds, anticipated
contributions of Borrower of its own funds or other sources acceptable to Lender
to complete the Restoration.

 

  (iii)

The rental income from the Mortgaged Property after completion of the
Restoration will not be sufficient to meet all operating costs and other
expenses, deposits to Reserve Funds and Loan repayment obligations relating to
the Mortgaged Property.

 

  (iv)

The Restoration will not be completed at least one year before the Maturity Date
(or 6 months before the Maturity Date if re-leasing of the Mortgaged Property
will be completed within such 6 month period).

 

  (v)

The Restoration will not be completed within one year after the date of the
Condemnation.

 

  (vi)

The Condemnation involved an actual or constructive loss of more than 15% of the
fair market value of the Mortgaged Property, and rendered untenantable more than
25% of the residential units of the Mortgaged Property.

 

  (vii)

After Restoration the fair market value of the Mortgaged Property is expected to
be less than the fair market value of the Mortgaged Property immediately prior
to the Condemnation (assuming the affected portion of the Mortgaged Property is
re-let within a reasonable period after the date of the Condemnation).

 

  (viii)

Leases covering less than 35% of residential units of the Mortgaged Property
will remain in full force and effect during and after the completion of
Restoration.

 

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  (e)

Right to Apply Condemnation Proceeds in Connection with a Partial Release.
Notwithstanding anything to the contrary set forth in this Loan Agreement,
including this Section 6.11, for so long as the Loan or any portion of the Loan
is included in a Securitization, then each of the following will apply:

 

  (i)

If any portion of the Mortgaged Property is released from the Lien of the Loan
in connection with a Condemnation and if the ratio of (A) the unpaid principal
balance of the Loan to (B) the value of the Mortgaged Property (taking into
account only the related land and buildings and not any personal property or
going-concern value), as determined by Lender in its sole and absolute
discretion based on a commercially reasonable valuation method permitted in
connection with a Securitization, is greater than 125% immediately after such
Condemnation and before any Restoration or repair of the Mortgaged Property (but
taking into account any planned Restoration or repair of the Mortgaged Property
as if such planned Restoration or repair were completed), then Lender will apply
any net proceeds or awards from such Condemnation, in full, to the payment of
the principal of the Indebtedness whether or not then due and payable, unless
Lender has received an opinion of counsel that a different application of such
net proceeds or awards will not cause such Securitization to fail to meet
applicable federal income tax qualification requirements or subject such
Securitization to any tax.

 

  (ii)

If neither Borrower nor Lender has the right to receive any or all net proceeds
or awards as a result of the provisions of any agreement affecting the Mortgaged
Property (including any Ground Lease, condominium document, or reciprocal
easement agreement) and, therefore cannot apply such net proceeds or awards to
the payment of the principal of the Indebtedness as set forth above, then
Borrower will prepay the Indebtedness in an amount which Lender, in its sole and
absolute discretion, deems necessary to ensure that the Securitization will not
fail to meet applicable federal income tax qualification requirements or be
subject to any tax as a result of the Condemnation.

 

  (f)

Succession to Condemnation Proceeds. If the Mortgaged Property is sold at a
foreclosure sale or Lender acquires title to the Mortgaged Property, Lender will
automatically succeed to all rights of Borrower in and to any Condemnation
proceeds and awards prior to such sale or acquisition.

 

6.12

Environmental Hazards.

 

  (a)

Prohibited Activities and Conditions. Except for matters described in this
Section 6.12, Borrower will not cause or permit Prohibited Activities or
Conditions. Borrower will comply with all Hazardous Materials Laws applicable to
the Mortgaged Property. Without limiting the generality of the previous
sentence, Borrower will: (i) obtain and maintain all Environmental Permits
required by

 

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Hazardous Materials Laws and comply with all conditions of such Environmental
Permits, (ii) cooperate with any inquiry by any Governmental Authority, and
(iii) comply with any governmental or judicial order that arises from any
alleged Prohibited Activity or Condition.

 

  (b)

Employees, Tenants and Contractors. Borrower will take all commercially
reasonable actions (including the inclusion of appropriate provisions in any
Leases executed after the date of this Loan Agreement) to prevent its employees,
agents and contractors, and all tenants and other occupants from causing or
permitting any Prohibited Activities or Conditions. Borrower will not lease or
allow the sublease or use of all or any portion of the Mortgaged Property to any
tenant or subtenant for nonresidential use by any user that, in the ordinary
course of its business, would cause or permit any Prohibited Activity or
Condition.

 

  (c)

O&M Programs. As required by Lender, Borrower will also have established a
written operations and maintenance program with respect to certain Hazardous
Materials. Each such operations and maintenance program and any additional or
revised operations and maintenance programs established for the Mortgaged
Property pursuant to this Section 6.12 must be approved by Lender and will be
referred to in this Loan Agreement as an “O&M Program.” Borrower will comply in
a timely manner with, and cause all employees, agents, and contractors of
Borrower and any other Persons present on the Mortgaged Property to comply with
each O&M Program. Borrower will pay all costs of performance of Borrower’s
obligations under any O&M Program, and Lender’s out of pocket costs incurred in
connection with the monitoring and review of each O&M Program must be paid by
Borrower upon demand by Lender. Any such out-of-pocket costs of Lender that
Borrower fails to pay promptly will become an additional part of the
Indebtedness as provided in Section 9.02.

 

  (d)

Notice to Lender. Borrower will promptly give Notice to Lender upon the
occurrence of any of the following events:

 

  (i)

Borrower’s discovery of any Prohibited Activity or Condition.

 

  (ii)

Borrower’s receipt of or knowledge of any written complaint, order, notice of
violation or other communication from any tenant, Property Manager, Facility
Operator, Governmental Authority or other Person with regard to present or
future alleged Prohibited Activities or Conditions, or any other environmental,
health or safety matters affecting the Mortgaged Property.

 

  (iii)

Borrower’s breach of any of its obligations under this Section 6.12.

Any such Notice given by Borrower will not relieve Borrower of, or result in a
waiver of, any obligation under this Loan Agreement, the Note or any other Loan
Document.

 

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  (e)

Environmental Inspections, Tests and Audits. Borrower will pay promptly the
costs of any environmental inspections, tests or audits, a purpose of which is
to identify the extent or cause of or potential for a Prohibited Activity or
Condition (“Environmental Inspections”), required by Lender in connection with
any foreclosure or deed in lieu of foreclosure, or as a condition of Lender’s
consent to any Transfer under Article VII, or required by Lender following a
reasonable determination by Lender that Prohibited Activities or Conditions may
exist. Any such costs incurred by Lender (including Attorneys’ Fees and Costs
and the costs of technical consultants whether incurred in connection with any
judicial or administrative process or otherwise) that Borrower fails to pay
promptly will become an additional part of the Indebtedness as provided in
Section 9.02. As long as: (i) no Event of Default has occurred and is
continuing, (ii) Borrower has actually paid for or reimbursed Lender for all
costs of any such Environmental Inspections performed or required by Lender, and
(iii) Lender is not prohibited by law, contract or otherwise from doing so,
Lender will make available to Borrower, without representation of any kind,
copies of Environmental Inspections prepared by third parties and delivered to
Lender. Lender reserves the right, and Borrower expressly authorizes Lender, to
make available to any party, including any prospective bidder at a foreclosure
sale of the Mortgaged Property, the results of any Environmental Inspections
made by or for Lender with respect to the Mortgaged Property. Borrower consents
to Lender notifying any party (either as part of a notice of sale or otherwise)
of the results of any Environmental Inspections made by or for Lender. Borrower
acknowledges that Lender cannot control or otherwise ensure the truthfulness or
accuracy of the results of any Environmental Inspections and that the release of
such results to prospective bidders at a foreclosure sale of the Mortgaged
Property may have a material and adverse effect upon the amount that a party may
bid at such sale. Borrower agrees that Lender will have no liability whatsoever
as a result of delivering the results of any Environmental Inspections made by
or for Lender to any third party, and Borrower releases and forever discharges
Lender from any and all claims, damages or causes of action arising out of,
connected with or incidental to the results of the delivery of any Environmental
Inspections made by or for Lender.

 

  (f)

Remedial Work. If any investigation, site monitoring, containment, clean-up,
Restoration or other remedial work (“Remedial Work”) is necessary to comply with
any Hazardous Materials Law or order of any Governmental Authority that has or
acquires jurisdiction over the Mortgaged Property or the use, operation or
improvement of the Mortgaged Property, or is otherwise required by Lender as a
consequence of any Prohibited Activity or Condition or to prevent the occurrence
of a Prohibited Activity or Condition, Borrower will, by the earlier of (i) the
applicable deadline required by Hazardous Materials Law, or (ii) 30 days after
Notice from Lender demanding such action, begin performing the Remedial Work,
and thereafter diligently prosecute it to completion, and must in any event
complete the work by the time required by applicable Hazardous Materials Law. If
Borrower fails to begin on a timely basis or diligently prosecute any required
Remedial Work, Lender may, at its option, cause the Remedial Work to be

 

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completed, in which case Borrower will reimburse Lender on demand for the cost
of doing so. Any reimbursement due from Borrower to Lender will become part of
the Indebtedness as provided in Section 9.02.

 

6.13

Single Purpose Entity Requirements.

 

  (a)

Single Purpose Entity Requirements. Until the Indebtedness is paid in full, each
Borrower and any SPE Equity Owner will remain a “Single Purpose Entity,” which
means at all times since its formation and thereafter it will satisfy each of
the following conditions:

 

  (i)

It will not engage in any business or activity, other than the ownership,
operation and maintenance of the Mortgaged Property and activities incidental
thereto.

 

  (ii)

It will not acquire, own, hold, lease, operate, manage, maintain, develop or
improve any assets other than the Mortgaged Property and such Personalty as may
be necessary for the operation of the Mortgaged Property and will conduct and
operate its business as presently conducted and operated.

 

  (iii)

It will preserve its existence as an entity duly organized, validly existing and
in good standing (if applicable) under the laws of the jurisdiction of its
formation or organization and will do all things necessary to observe
organizational formalities.

 

  (iv)

It will not merge or consolidate with any other Person.

 

  (v)

It will not take any action to dissolve, wind-up, terminate or liquidate in
whole or in part; to sell, transfer or otherwise dispose of all or substantially
all of its assets; to change its legal structure; transfer or permit the direct
or indirect transfer of any partnership, membership or other equity interests,
as applicable, other than Transfers permitted under this Loan Agreement; issue
additional partnership, membership or other equity interests, as applicable, or
seek to accomplish any of the foregoing.

 

  (vi)

It will not, without the prior unanimous written consent of all of Borrower’s
partners, members, or shareholders, as applicable, and, if applicable, the prior
unanimous written consent of 100% of the members of the board of directors or of
the board of Managers of Borrower or the SPE Equity Owner, take any of the
following actions:

(A) File any insolvency, or reorganization case or proceeding, to institute
proceedings to have Borrower or any SPE Equity Owner be adjudicated bankrupt or
insolvent.

 

  (B)

Institute proceedings under any applicable insolvency law.

 

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  (C)

Seek any relief under any law relating to relief from debts or the protection of
debtors.

 

  (D)

Consent to the filing or institution of bankruptcy or insolvency proceedings
against Borrower or any SPE Equity Owner.

 

  (E)

File a petition seeking, or consent to, reorganization or relief with respect to
Borrower or any SPE Equity Owner under any applicable federal or state law
relating to bankruptcy or insolvency.

 

  (F)

Seek or consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian, or any similar official for Borrower or a substantial
part of its property or for any SPE Equity Owner or a substantial part of its
property.

 

  (G)

Make any assignment for the benefit of creditors of Borrower or any SPE Equity
Owner.

 

  (H)

Admit in writing Borrower’s or any SPE Equity Owner’s inability to pay its debts
generally as they become due.

 

  (I)

Take action in furtherance of any of the foregoing.

 

  (vii)

It will not amend or restate its organizational documents if such change would
cause the provisions set forth in those organizational documents not to comply
with the requirements set forth in this Section 6.13.

 

  (viii)

It will not own any subsidiary or make any investment in, any other Person.

 

  (ix)

It will not commingle its assets with the assets of any other Person and will
hold all of its assets in its own name.

 

  (x)

It will not incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the following:

 

  (A)

The Indebtedness (and any further indebtedness as described in Section 11.11
with regard to Supplemental Instruments).

 

  (B)

Customary unsecured trade payables incurred in the ordinary course of owning and
operating the Mortgaged Property provided the same are not evidenced by a
promissory note, do not exceed, in the aggregate, at any time a maximum amount
of 2% of the original principal amount of the Indebtedness and are paid within
60 days of the date incurred.

 

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  (C)

through (F) are reserved.

 

  (xi)

It will maintain its records, books of account, bank accounts, financial
statements, accounting records and other entity documents separate and apart
from those of any other Person and will not list its assets as assets on the
financial statement of any other Person; provided, however, that Borrower’s
assets may be included in a consolidated financial statement of its Affiliate
provided that (A) appropriate notation will be made on such consolidated
financial statements to indicate the separateness of Borrower from such
Affiliate and to indicate that Borrower’s assets and credit are not available to
satisfy the debts and other obligations of such Affiliate or any other Person,
and (B) such assets will also be listed on Borrower’s own separate balance
sheet.

 

  (xii)

Except for capital contributions or capital distributions permitted under the
terms and conditions of its organizational documents, it will only enter into
any contract or agreement with any general partner, member, shareholder,
principal or Affiliate of Borrower or any Guarantor, or any general partner,
member, principal or Affiliate thereof, upon terms and conditions that are
commercially reasonable and substantially similar to those that would be
available on an arm’s-length basis with third parties.

 

  (xiii)

It will not maintain its assets in such a manner that will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any other Person.

 

  (xiv)

It will not assume or guaranty (excluding any guaranty that has been executed
and delivered in connection with the Note) the debts or obligations of any other
Person, hold itself out to be responsible for the debts of another Person,
pledge its assets to secure the obligations of any other Person or otherwise
pledge its assets for the benefit of any other Person, or hold out its credit as
being available to satisfy the obligations of any other Person.

 

  (xv)

It will not make or permit to remain outstanding any loans or advances to any
other Person except for those investments permitted under the Loan Documents and
will not buy or hold evidence of indebtedness issued by any other Person (other
than cash or investment-grade securities).

 

  (xvi)

It will file its own tax returns separate from those of any other Person, except
to the extent that Borrower is treated as a “disregarded entity” for tax
purposes and is not required to file tax returns under applicable law, and will
pay any taxes required to be paid under applicable law.

 

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  (xvii)

It will hold itself out to the public as a legal entity separate and distinct
from any other Person and conduct its business solely in its own name, will
correct any known misunderstanding regarding its separate identity and will not
identify itself or any of its Affiliates as a division or department of any
other Person.

 

  (xviii)

It will maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations and will pay its debts and liabilities from its
own assets as the same become due.

 

  (xix)

It will allocate fairly and reasonably shared expenses with Affiliates
(including shared office space) and use separate stationery, invoices and checks
bearing its own name.

 

  (xx)

It will pay (or cause the Property Manager or any Facility Operator to pay on
behalf of Borrower from Borrower’s funds) its own liabilities (including
salaries of its own employees) from its own funds.

 

  (xxi)

It will not acquire obligations or securities of its partners, members,
shareholders, or Affiliates, as applicable.

 

  (xxii)

Except as contemplated or permitted by the property management agreement with
respect to the Property Manager or any operating lease or operating agreement
with respect to any Facility Operator, it will not permit any Affiliate or
constituent party independent access to its bank accounts.

 

  (xxiii)

It will maintain a sufficient number of employees (if any) in light of its
contemplated business operations and pay the salaries of its own employees, if
any, only from its own funds.

 

  (xxiv)

If such entity is a single member limited liability company, such entity will
satisfy each of the following conditions:

 

  (A)

Be formed and organized under Delaware law.

 

  (B)

Have either one springing member that is a corporation or two springing members
who are natural persons. If there is more than one springing member, only one
springing member will be the sole member of Borrower or SPE Equity Owner (as
applicable) at any one time, and the second springing member will become the
sole member only upon the first springing member ceasing to be a member.

 

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  (C)

Otherwise comply with all Rating Agencies’ criteria for single member limited
liability companies (including the delivery of Delaware single member limited
liability company opinions acceptable in all respects to Lender).

 

  (D)

At all times Borrower or SPE Equity Owner (as applicable) will have one and only
one member.

 

  (xxv)

If such entity is a single member limited liability company that is
board-managed, such entity will have a board of Managers separate from that of
Guarantor and any other Person and will cause its board of Managers to keep
minutes of board meetings and actions and observe all other Delaware limited
liability company required formalities.

 

  (xxvi)

If an SPE Equity Owner is required pursuant to this Loan Agreement, if Borrower
is (A) a limited liability company with more than one member, then Borrower has
and will have at least one member that is an SPE Equity Owner that has satisfied
and will satisfy the requirements of Section 6.13(b) and such member is its
managing member, or (B) a limited partnership, then all of its general partners
are SPE Equity Owners that have satisfied and will satisfy the requirements set
forth in Section 6.13(b).

 

  (xxvii)

Reserved.

 

  (xxviii)

Reserved.

 

  (b)

SPE Equity Owner Requirements. The SPE Equity Owner, if applicable, will at all
times since its formation and thereafter comply in its own right (subject to the
modifications set forth below), and will cause Borrower to comply, with each of
the requirements of a Single Purpose Entity. Upon the withdrawal or the
disassociation of an SPE Equity Owner from Borrower, Borrower will immediately
appoint a new SPE Equity Owner, whose organizational documents are substantially
similar to those of the withdrawn or disassociated SPE Equity Owner, and deliver
a new nonconsolidation opinion to Lender in form and substance satisfactory to
Lender with regard to nonconsolidation by a bankruptcy court of the assets of
each of Borrower and SPE Equity Owner with those of its Affiliates.

 

  (i)

With respect to Section 6.13(a)(i), the SPE Equity Owner will not engage in any
business or activity other than being the managing member or general partner, as
the case may be, of Borrower and owning at least 0.5% equity interest in
Borrower.

 

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  (ii)

With respect to Section 6.13(a)(ii), the SPE Equity Owner has not and will not
acquire or own any assets other than its equity interest in Borrower and
personal property related thereto.

 

  (iii)

With respect to Section 6.13(a)(viii), the SPE Equity Owner will not own any
subsidiary or make any investment in any other Person, except for Borrower.

 

  (iv)

With respect to Section 6.13(a)(x), the SPE Equity Owner has not and will not
incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation), other than (A) customary unsecured payables
incurred in the ordinary course of owning Borrower provided the same are not
evidenced by a promissory note, do not exceed, in the aggregate, at any time a
maximum amount of $10,000 and are paid within 60 days of the date incurred, and
(B) in its capacity as general partner of Borrower (if applicable).

 

  (v)

With respect to Section 6.13(a)(xiv), the SPE Equity Owner will not assume or
guaranty the debts or obligations of any other Person, hold itself out to be
responsible for the debts of another Person, pledge its assets to secure the
obligations of any other Person or otherwise pledge its assets for the benefit
of any other Person, or hold out its credit as being available to satisfy the
obligations of any other Person, except for in its capacity as general partner
of Borrower (if applicable).

 

  (c)

Effect of Transfer on Special Purpose Entity Requirements. Notwithstanding
anything to the contrary in this Loan Agreement, no Transfer will be permitted
under Article VII unless the provisions of this Section 6.13 are satisfied at
all times.

 

6.14

Repairs and Capital Replacements.

 

  (a)

Completion of Repairs. Borrower will commence any Repairs as soon as practicable
after the date of this Loan Agreement and will diligently proceed with and
complete such Repairs on or before the Completion Date. All Repairs and Capital
Replacements will be completed in a good and workmanlike manner, with suitable
materials, and in accordance with good building practices and all applicable
laws, ordinances, rules, regulations, building setback lines and restrictions
applicable to the Mortgaged Property. Borrower agrees to cause the replacement
of any material or work that is defective, unworkmanlike or that does not comply
with the requirements of this Loan Agreement, as determined by Lender.

 

  (b)

Purchases. Without the prior written consent of Lender, no materials, machinery,
equipment, fixtures or any other part of the Repairs or Capital Replacements
will be purchased or installed under conditional sale contracts or lease
agreements, or

 

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any other arrangement wherein title to such Repairs or Capital Replacements is
retained or subjected to a purchase money security interest, or the right is
reserved or accrues to anyone to remove or repossess any such Repairs or Capital
Replacements, or to consider them as personal property.

 

  (c)

Lien Protection. Borrower will promptly pay or cause to be paid, when due, all
costs, charges and expenses incurred in connection with the construction and
completion of the Repairs or Capital Replacements, and will keep the Mortgaged
Property free and clear of any and all Liens other than the Lien of the Security
Instrument and any other junior Lien to which Lender has consented.

 

  (d)

Adverse Claims. Borrower will promptly advise Lender in writing of any
litigation, Liens or claims affecting the Mortgaged Property and of all
complaints and charges made by any Governmental Authority that may delay or
adversely affect the Repairs or Capital Replacements.

 

6.15

Residential Leases Affecting the Mortgaged Property.

 

  (a)

Borrower will, promptly upon Lender’s request, deliver to Lender an executed
copy of each residential Lease then in effect. All Leases for residential
dwelling units will be on forms acceptable to Lender, will be for initial terms
of at least 6 months and not more than 2 years, and will not include options to
purchase.

 

  (b)

If Borrower is a cooperative housing corporation or association, notwithstanding
anything to the contrary contained in this Loan Agreement, so long as Borrower
remains a cooperative housing corporation or association and is not in breach of
any covenant of this Loan Agreement, Lender consents to each of the following:

 

  (i)

The execution of Leases for terms in excess of 2 years to a tenant shareholder
of Borrower, so long as such Leases, including proprietary Leases, are and will
remain subordinate to the Lien of the Security Instrument.

 

  (ii)

The surrender or termination of such Leases where the surrendered or terminated
Lease is immediately replaced or where Borrower makes its best efforts to secure
such immediate replacement by a newly-executed Lease of the same apartment to a
tenant shareholder of Borrower. However, no consent is given by Lender to any
execution, surrender, termination or assignment of a Lease under terms that
would waive or reduce the obligation of the resulting tenant shareholder under
such Lease to pay cooperative assessments in full when due or the obligation of
the former tenant shareholder to pay any unpaid portion of such assessments.

 

6.16

Litigation; Government Proceedings. Borrower will give prompt Notice to Lender
of any litigation or governmental proceedings pending or, to the best of
Borrower’s knowledge, threatened in writing against Borrower, any Borrower
Principal, the Facility

 

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Operator, or Property Manager which might have a Material Adverse Effect. As and
when requested by Lender, Borrower will provide Lender with written updates on
the status of all litigation proceedings affecting Borrower, any Borrower
Principal, the Facility Operator or Property Manager.

 

6.17

Further Assurances and Estoppel Certificates; Lender’s Expenses. Within 10 days
after a request from Lender, in Lender’s Discretion, Borrower will take each of
the following actions:

 

  (a)

Deliver to Lender a written statement, signed and acknowledged by Borrower,
certifying to Lender or any Person designated by Lender, as of the date of such
statement: (i) that the Loan Documents are unmodified and in full force and
effect (or, if there have been modifications, that the Loan Documents are in
full force and effect as modified and setting forth such modifications),
(ii) the unpaid principal balance of the Note, (iii) the date to which interest
under the Note has been paid, (iv) that Borrower is not in default in paying the
Indebtedness or in performing or observing any of the covenants or agreements
contained in this Loan Agreement or any of the other Loan Documents (or, if
Borrower is in default, describing such default in reasonable detail),
(v) whether there are any then-existing setoffs or defenses known to Borrower
against the enforcement of any right or remedy of Lender under the Loan
Documents, and (vi) any additional facts requested by Lender.

 

  (b)

Execute, acknowledge and/or deliver, at its sole cost and expense, all further
acts, deeds, conveyances, assignments, estoppel certificates, financing
statements or amendments, transfers and assurances as Lender may require from
time to time in order to better assure, grant and convey to Lender the rights
intended to be granted, now or in the future, to Lender under this Loan
Agreement and the Loan Documents or in connection with Lender’s consent rights
under Article VII.

Borrower acknowledges and agrees that, in connection with each request by
Borrower under this Loan Agreement or any Loan Document, Borrower will pay all
reasonable Attorneys’ Fees and Costs and expenses incurred by Lender and Loan
Servicer, including any fees charged by the Rating Agencies, if applicable,
regardless of whether the matter is approved, denied or withdrawn. Any amounts
payable by Borrower under this Loan Agreement will be deemed a part of the
Indebtedness, will be secured by the Security Instrument and will bear interest
at the Default Rate if not fully paid within 10 days of written demand for
payment.

 

6.18

Cap Collateral. Reserved.

 

6.19

Ground Lease. Reserved.

 

6.20

ERISA REQUIREMENTS.

 

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  (a)

Borrower will not engage in any transaction which would cause an obligation, or
action taken or to be taken under this Loan Agreement (or the exercise by Lender
of any of its rights under the Note, this Loan Agreement or any of the other
Loan Documents) to be a non-exempt prohibited transaction under ERISA or
Section 4975 of the Tax Code.

 

  (b)

Borrower will deliver to Lender such certifications or other evidence from time
to time throughout the term of this Loan Agreement, as requested by Lender in
Lender’s Discretion, confirming each of the following:

 

  (i)

Borrower is not an “employee benefit plan” as defined in Section 3(3) of ERISA,
which is subject to Title I of ERISA, a “plan” to which Section 4975 of the Tax
Code applies, or an entity whose underlying assets constitute “plan assets” of
one or more of such plans.

 

  (ii)

Borrower is not a “governmental plan” within the meaning of Section 3(32) of
ERISA.

 

  (iii)

Borrower is not subject to state statutes regulating investments or fiduciary
obligations with respect to governmental plans.

 

  (iv)

One or more of the following circumstances is true:

 

  (A)

Equity interests in Borrower are publicly offered securities within the meaning
of 29 C.F.R. Section 2510.3-101(b)(2), as amended from time to time or any
successor provision.

 

  (B)

Less than 25% of each outstanding class of equity interests in Borrower are held
by “benefit plan investors” within the meaning of Section 3(42) of ERISA, as
amended from time to time or any successor provision.

 

  (C)

Borrower qualifies as either an “operating company” or a “real estate operating
company” within the meaning of 29 C.F.R. Section 2510.3-101(c) or (e), as either
may be amended from time to time or any successor provisions, or is an
investment company registered under the Investment Company Act of 1940.

 

6.21

Operation of the Facility.

 

  (a)

Without limiting the generality of Section 6.03, Borrower will, or will cause
any Facility Operator to, operate the Facility for its Intended Use and will, or
will cause any Facility Operator to, provide, to Lender’s reasonable
satisfaction, all of the facilities, services, staff, equipment and supplies
required or normally associated with a typical high quality property devoted to
the Intended Use.

 

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  (b)

Borrower will, or will cause any Facility Operator to, operate the Facility in a
manner such that all applicable Licenses now or hereafter in effect will remain
in full force and effect. Borrower will not, and will not allow any Facility
Operator to: (i) transfer any License (or any rights thereunder) to any location
other than the Facility, (ii) pledge any License (or any rights thereunder) as
collateral security for any other loan or indebtedness, (iii) terminate any
License or permit any License not to be renewed or reissued as applicable,
(iv) rescind, withdraw, revoke, amend, supplement, modify or otherwise alter the
nature, tenor or scope of any License, or (v) permit any License to become the
subject of any Downgrade, revocation, suspension, restriction, condition or
probation (including any restriction on new admissions or residents).

 

  (c)

Borrower will, or as applicable, Borrower will cause any Facility Operator to,
maintain and implement all compliance and procedures policies as may be required
by any applicable Healthcare Laws or Governmental Authority. Upon request by
Lender, Borrower will provide Lender with copies of Borrower’s, and if
applicable, each Facility Operator’s, compliance manuals which evidence such
compliance.

 

6.22

Facility Reporting.

 

  (a)

Borrower will, or will cause any Facility Operator to, furnish to Lender, within
10 days after receipt by Borrower or any Facility Operator, any and all written
notices from any Governmental Authority that: (i) any License is being
Downgraded, revoked, terminated, suspended, restricted or conditioned or may not
be renewed or reissued or that action is pending or being considered to
Downgrade, revoke, terminate, suspend, restrict or condition (or not renew or
reissue) any such License, (ii) any violation, fine, finding, investigation or
corrective action concerning any License is pending or being considered,
rendered or adopted, or (iii) any Healthcare Law or any health or safety code or
building code violation or other deficiency at the Mortgaged Property has been
identified, but in each case only if the subject matter of such written notice
(A) could materially impact the operation or value of the Facility, or
(B) requires additional formal or informal action by Borrower or Facility
Operator that is more than development or implementation of a routine plan of
correction, including participation in hearings concerning continued licensing
or Medicare or Medicaid participation, entering into consent orders affecting
licensing affecting the Facility, or engaging in oversight management.

 

  (b)

Borrower will, or will cause any Facility Operator to, furnish to Lender, within
10 days after receipt by Borrower or any Facility Operator, a copy of any
survey, report or statement of deficiencies by any Governmental Authority, but
only if the subject matter of such survey, report or statement of deficiencies
(i) could materially impact the operation or value of the Facility, or
(ii) requires additional formal or informal action by Borrower or Facility
Operator that is more than development or implementation of a routine plan of
correction, including

 

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participation in hearings concerning continued licensing or Medicare or Medicaid
participation, entering into consent orders affecting licensing affecting the
Facility, or engaging in oversight management. Within the time period specified
by the Governmental Authority for furnishing a plan of correction, Borrower, or
if applicable, a Facility Operator, will do so and will furnish or will cause to
be furnished to Lender a copy of the plan of correction concurrently therewith.
Borrower will correct or will cause to be corrected in a timely manner (and in
all events by the date required by the Governmental Authority) any deficiency if
the failure to do so could cause any License to be Downgraded, revoked,
suspended, restricted, conditioned or not renewed or reissued.

 

  (c)

Upon Lender’s request and subject to Privacy Laws, Borrower will, or will cause
the Facility Operator to, furnish to Lender true and correct rent rolls and
copies of all Leases.

 

  (d)

Borrower will provide Lender with a copy of any License issued or renewed in the
future by a Governmental Authority within 30 days after its issuance or renewal.
To the extent that any such License is assignable, Borrower will assign it to
Lender as additional security for the Indebtedness, using a form of assignment
acceptable to Lender in its discretion. If any License is issued to a Facility
Operator, to the extent such License is assignable, Borrower will cause such
operator or management agent to assign the License to Lender as additional
security for the Indebtedness, using a form of assignment acceptable to Lender
in its discretion.

 

  (e)

Subject to Privacy Laws, Borrower will furnish, and will cause any Facility
Operator to furnish, to Lender at Borrower’s expense all evidence, which Lender
may from time to time reasonably request as to the continuing accuracy and
validity of all representations and warranties made by Borrower in the Loan
Documents and the continuing compliance with and satisfaction of all covenants
and conditions contained in the Loan Documents.

 

6.23

Covenants Regarding Material Contracts.

 

  (a)

Borrower will not, and will not permit any Facility Operator to, enter into any
Material Contract, unless that Material Contract provides that it is terminable
upon not more than 30 days notice by Borrower, or if Borrower is not a party to
the Material Contract, the Facility Operator, and their respective successors
and assigns, without the necessity of establishing cause and without payment of
a penalty or termination fee or extra charge.

 

  (b)

Borrower will (or if Borrower is not a party thereto, will cause a Facility
Operator to) fully perform all of its obligations under each Contract, and
Borrower will not (and Borrower will not permit a Facility Operator to) enter
into, terminate or amend, modify, assign or otherwise encumber its interest in
any Material Contract without the prior written approval of Lender. If Borrower
or a Facility Operator

 

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enters into any Material Contract in the future (with Lender’s consent thereto),
Borrower will (or will cause the operator to), simultaneously with entering into
the Material Contract, if requested by Lender (i) assign its rights under and
interest in the Material Contract to Lender as additional security for the
Indebtedness, and (ii) obtain and provide to Lender a consent to that assignment
by the other party(ies) to the Material Contract. Both the assignment and the
consent must be in a form acceptable to Lender in its discretion.

 

6.24

Pledge of Receivables. Borrower will not, and will not allow any Facility
Operator to, pledge any receivables arising from the operation of the Facility
(or any Leases or Contracts under which such receivables arise) as collateral
security for any other loan or indebtedness.

 

6.25

Property Manager and Operator of the Facility. Borrower will not surrender,
terminate, cancel, modify, renew or extend its property management agreement or
any operating lease; permit the change of the Property Manager or any Facility
Operator; enter into any other agreement relating to the management or operation
of the Facility with Property Manager, the Facility Operator, or any other
Person; or consent to the assignment by the Property Manager or Facility
Operator of its interest under such property management agreement, operating
lease or similar agreement, as applicable, in each case without the prior
written approval of Lender, and in each such instance the approval by Lender of
the property management agreement and/or operating lease (or similar) agreement,
as applicable. If at any time Lender consents to the appointment of a new
Property Manager or Facility Operator, such new Property Manager or Facility
Operator and Borrower (or if Borrower is not a party thereto, a Facility
Operator) will, as a condition of Lender’s consent, execute an Assignment of
Management Agreement or assignment of operating agreement, as the case may be,
in a form acceptable to Lender in its discretion. If any such replacement
Property Manager or Facility Operator is an Affiliate of Borrower, and if a
nonconsolidation opinion was delivered at the origination of the Loan, Borrower
will deliver to Lender an updated nonconsolidation opinion in form and substance
satisfactory to Lender with regard to nonconsolidation. Without limiting the
foregoing, Borrower will not, and will not permit any Facility Operator to,
enter into any New Non-Residential Lease, enter into any Modified
Non-Residential Lease or terminate any Non-Residential Lease, or enter into,
terminate, extend or amend any Contract to lease, manage or operate the Facility
without in each instance Lender providing its prior written consent thereto,
which may be conditioned upon Lender receiving an assignment thereof in a form
acceptable to Lender.

 

6.26

Residential Leases and Agreements.

 

  (a)

The form of residential Lease and/or residential care agreement or similar
resident agreement approved by Lender prior to the date of this Loan Agreement
with respect to the Facility will not be revised in any material respect (except
as may be required by applicable Healthcare Laws) without Lender’s prior written
consent thereto. All Leases and agreements with residents at the Facility will
be on forms approved by Lender.

 

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  (b)

Borrower or any Facility Operator will maintain all deposits by all residents of
the Facility in accordance with all applicable laws and regulations pertaining
thereto, and in accordance with the terms of each such resident’s Lease or
resident care agreement, and otherwise in accordance with the other provisions
of this Loan Agreement and the other Loan Documents.

 

6.27

Performance Under Leases. Borrower or a Facility Operator, as applicable, will
timely perform all of the obligations of such party under all Leases of the
Facility or any Mortgaged Property.

 

6.28

Governmental Payor Programs.

 

  (a)

No more than 5% of the total number of beds at the Facility may be allocated to
residents who participate in a Governmental Payor Program.

 

  (b)

If Borrower violates the covenant in Section 6.28(a), then Borrower must
immediately fund a transition reserve with cash in an amount equal to the
aggregate of 6 months of principal and interest payments due under the terms of
the Note for the next 6 months. If the Note provides for interest to accrue at a
floating or variable interest rate (other than during the “Extension Period,” as
defined in the Note, if applicable), then Lender will estimate the amount of the
interest due during such 6-month period. Borrower must also enter into a
transition reserve agreement acceptable to Lender in form and content.

 

  (c)

Borrower will furnish to Lender, within 10 days after receipt by Borrower, any
Facility Operator or any Property Manager, any and all notices from any
Governmental Authority which state that the Governmental Payor Program
certification of the Facility is being downgraded to a substandard category,
revoked, or suspended, or that action is pending or being considered to
downgrade any such certification.

 

  (d)

Borrower will furnish to Lender, within 10 days after receipt by Borrower, any
Facility Operator or any Property Manager, a copy of any survey, report or
statement of deficiencies by any Governmental Authority administering
Governmental Payor Program funds or programs. Within the time period specified
by any such Governmental Authority for furnishing a plan of correction, Borrower
will furnish to Lender a copy of the plan of correction. By the date required
for cure by the Governmental Authority, Borrower will correct or will cause to
be corrected any deficiency the curing of which is a condition of continued
eligibility for Governmental Payor Program payment or reimbursement, including
full participation in the Governmental Payor Program for existing residents and
for new residents to be admitted with Governmental Payor Program coverage.

 

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  (e)

Other than in the normal course of business, Borrower will not, and will not
permit any Facility Operator or any Property Manager to, change the terms of any
of the Governmental Payor Program or its normal billing payment and
reimbursement policies and procedures with respect to such Governmental Payor
Program (including the amount and timing of finance charges, fees and
write-offs).

 

  (f)

Within 10 days of the required filing of cost reports of the Facility with the
Governmental Payor Program agency or the date of actual filing of such cost
report of the Facility with such agency, whichever is earlier, Borrower will
provide Lender with a complete and accurate copy of the annual Governmental
Payor Program cost report of the Facility, which will be prepared by an
independent certified public accountant or by an experienced cost report
preparer acceptable to Lender, and will promptly furnish Lender any amendments
filed with respect to such reports and all responses, audit reports or inquiries
with respect to such reports.

 

  (g)

Borrower will permit and will cause any Property Manager or any Facility
Operator to permit representatives appointed by Lender, including independent
accountants, agents, attorneys, appraisers and any other persons, to visit and
inspect any of the Facility during its normal business hours and at any other
reasonable times, and to take photographs of the Facility, and to write down and
record any information such representatives obtain, and will permit Lender or
its representatives to investigate and verify the accuracy of the information
furnished to Lender under or in connection with this Loan Agreement or any of
the other Loan Documents and to discuss all such matters with its officers,
employees and representatives.

 

  (h)

Borrower will furnish and will cause any management agent for the Facility or
any Facility Operator to furnish to Lender, at Borrower’s expense, all evidence
which Lender may from time to time reasonably request as to the accuracy and
validity of or compliance with all representations and warranties made by
Borrower in the Loan Documents and satisfaction of all conditions contained in
the Loan Documents.

 

  (i)

Any inspection or audit of the Facility or the books and records of Borrower,
any Property Manager or any Facility Operator, or the procuring of documents and
financial and other information, by or on behalf of Lender, will be for Lender’s
protection only, and will not constitute any assumption of responsibility or
liability by Lender to Borrower, any Property Manager or any Facility Operator
or anyone else with regard to the condition, construction, maintenance or
operation of the Facility. Lender’s approval of any certification given to
Lender will not relieve Borrower, Property Manager, or a Facility Operator of
any of their respective obligations.

 

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  (j)

Within 120 days after the end of each fiscal quarter of Borrower, Borrower will
deliver or cause Property Manager or the Facility Operator to deliver to Lender
information in sufficient detail, as determined by Lender, to show by patient
mix (i.e., private and Governmental Payor Program, if applicable) the average
monthly census of the Facility, occupancy rates and the amount of income
attributed to reimbursements or payments from a Governmental Payor Program.

 

  (k)

After an Event of Default, Lender is authorized to give notice to all third
party payors at Lender’s option, instructing them to pay all third party
payments, including Medicare, Medicaid or TRICARE, which would be otherwise paid
to Borrower or to a Facility Operator to Lender, to the extent permitted by law.

 

  (l)

Borrower will not and will not permit any breach or violation by any Person of
any Healthcare Laws pertaining to the Facility or the operation of the Facility,
including any Healthcare Laws pertaining to billing for goods or services by
Borrower or any Facility Operator. Borrower will not and will not permit any
circumstance to occur which would (i) cause Borrower, a Facility Operator or the
Facility to be disqualified for participation in any Governmental Payor Program
or (ii) cause the non-renewal or termination of Borrower, a Facility Operator or
the Facility’s participation in any such program, as applicable.

 

6.29

Additional Covenants Regarding Operator. Reserved.

 

6.30

through 6.41 are reserved.

 

ARTICLE VII TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.

Upon the occurrence of a Transfer prohibited by or requiring Lender’s approval
(if applicable) under this Article VII, Lender may, in Lender’s Discretion, by
Notice to Borrower and the proposed transferee(s), modify or render void, any or
all of the negotiated modifications to the Loan Documents (and/or deferral of
deposits to Reserve Funds) as a condition to Lender’s consent to the proposed
Transfer.

 

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7.01

Permitted Transfers. The occurrence of any of the following Transfers will not
constitute an Event of Default under this Loan Agreement, notwithstanding any
provision of Section 7.02 to the contrary:

 

  (a)

A Transfer to which Lender has consented.

 

  (b)

A Transfer that is not a prohibited Transfer pursuant to Section 7.02.

 

  (c)

A Transfer that is conditionally permitted pursuant to Section 7.03 upon the
satisfaction of all applicable conditions.

 

  (d)

The grant of a leasehold interest in an individual dwelling unit for a term of 2
years or less (or longer if approved by Lender in writing) not containing an
option to purchase.

 

  (e)

Entering into any New Non-Residential Lease, or modifying or terminating any
Non-Residential Lease, in each case in compliance with Section 6.04.

 

  (f)

A Condemnation with respect to which the Borrower satisfies the requirements of
Section 6.11.

 

  (g)

A Transfer of obsolete or worn out Personalty or Fixtures that are
contemporaneously replaced by items of equal or better function and quality,
which are free of Liens, encumbrances and security interests other than those
created by the Loan Documents or consented to by Lender.

 

  (h)

The creation of a mechanic’s, materialmen’s, or judgment Lien against the
Mortgaged Property, which is released of record, bonded, or otherwise remedied
to Lender’s satisfaction within 60 days of the date of creation; provided,
however, if Borrower is diligently prosecuting such release or other remedy and
advises Lender that such release or remedy cannot be consummated within such
60-day period, Borrower will have an additional period of time (not exceeding
120 days from the date of creation or such earlier time as may be required by
applicable law in which the lienor must act to enforce the Lien) within which to
obtain such release of record or consummate such other remedy.

 

  (i)

If Borrower is a housing cooperative corporation or association, the Transfer of
the shares in the housing cooperative or the assignment of the occupancy
agreements or Leases relating thereto to tenant shareholders of the housing
cooperative or association.

 

  (j)

A Supplemental Instrument that complies with Section 11.11 (if applicable) or
Defeasance that complies with Section 11.12 (if applicable).

 

  (k)

Reserved.

 

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7.02

Prohibited Transfers. The occurrence of any of the following Transfers will
constitute an Event of Default under this Loan Agreement:

 

  (a)

A Transfer of all or any part of the Mortgaged Property or any interest in the
Mortgaged Property, including the grant, creation or existence of any Lien on
the Mortgaged Property, whether voluntary, involuntary or by operation of law,
and whether or not such Lien has priority over the Lien of the Security
Instrument, other than the Lien of the Security Instrument or, if this Loan
Agreement is entered into in connection with a Supplemental Loan, the Lien of
the Senior Instrument, or any other Lien to which Lender has consented.

 

  (b)

A Transfer or series of Transfers of any legal or equitable interest of any
Guarantor which owns a direct or indirect interest in Borrower that result(s) in
such Guarantor no longer owning any direct or indirect interest in Borrower.

 

  (c)

A Transfer or series of Transfers of any legal or equitable interest since the
Closing Date that result(s) in a change of more than 50% of the ownership
interests (or beneficial interests, if the applicable entity is a trust) in
Borrower or any Designated Entity for Transfers.

 

  (d)

A Transfer of any general partnership interest in a partnership, or any manager
interest (whether a member manager or nonmember manager) in a limited liability
company, or a change in the trustee of a trust other than as permitted in
Section 7.04, if such partnership, limited liability company, or trust, as
applicable, is Borrower or a Designated Entity for Transfers.

 

  (e)

If Borrower or any Designated Entity for Transfers is a corporation whose
outstanding voting stock is held by 100 or more shareholders, one or more
Transfers by a single transferor within a 12-month period affecting an aggregate
of 10% or more of that stock.

 

  (f)

The grant, creation or existence of any Lien, whether voluntary, involuntary or
by operation of law, and whether or not such Lien has priority over the Lien of
the Security Instrument, on any ownership interest in Borrower or any Designated
Entity for Transfers, if the foreclosure of such Lien would result in a Transfer
prohibited under Sections 7.02(b), (c), (d), or (e).

 

  (g)

If Borrower is a trust (i) the termination or revocation of the trust, or
(ii) the removal, appointment or substitution of a trustee of the trust.

 

  (h)

Reserved.

 

  (i)

Reserved.

 

  (j)

Reserved.

 

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7.03

Conditionally Permitted Transfers. The occurrence of any of the following
Transfers will not constitute a prohibited Transfer under Section 7.02, provided
that Borrower has complied with all applicable specified conditions in this
Section.

 

  (a)

Transfer by Devise, Descent or Operation of Law. Upon the death of a natural
person, a Transfer which occurs by devise, descent, or by operation of law to
one or more Immediate Family Members of such natural person or to a trust or
family conservatorship established for the benefit of such Immediate Family
Members (each a “Beneficiary”), provided that each of the following conditions
is satisfied:

 

  (i)

The Property Manager or Facility Operator, as applicable, continues to be
responsible for the management of the Mortgaged Property, and such Transfer will
not result in a change in the day-to-day operations of the Mortgaged Property.

 

  (ii)

Lender receives confirmation acceptable to Lender, in Lender’s Discretion, that
Borrower continues to satisfy the requirements of Section 6.13.

 

  (iii)

Each Guarantor executes such documents and agreements as Lender requires in
Lender’s Discretion to evidence and effect the ratification of each Guaranty, or
in the event of the death of any Guarantor, Borrower causes one of the following
to occur:

 

  (A)

One or more Persons acceptable to Lender, in Lender’s Discretion, execute(s) and
deliver(s) to Lender a guaranty in a form acceptable to Lender and in
substantially the same form as the Guaranty executed on the Closing Date,
without any cost or expense to Lender.

 

  (B)

The estate of the deceased Guarantor immediately ratifies the Guaranty in
writing, and within 6 months after the date of the death of the deceased
Guarantor one or more Persons, acceptable to Lender in Lender’s Discretion,
execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender
and in substantially the same form as the Guaranty executed on the Closing Date,
without any cost or expense to Lender.

 

  (iv)

Borrower gives Lender Notice of such Transfer together with copies of all
documents effecting such Transfer not more than 30 calendar days after the date
of such Transfer, and contemporaneously with the Notice, takes each of the
following additional actions:

 

  (A)

Borrower reaffirms the representations and warranties under Article V.

 

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  (B)

Borrower satisfies Lender, in Lender’s Discretion, that the Beneficiary’s
organization, credit and experience in the management of similar properties are
appropriate to the overall structure and documentation of the existing
financing.

 

  (v)

Borrower or Beneficiary causes to be delivered to Lender such legal opinions as
Lender deems necessary, in Lender’s Discretion, including a nonconsolidation
opinion (if a nonconsolidation opinion was delivered on the Closing Date and if
required by Lender), an opinion that the ratification of the Loan Documents and
Guaranty (if applicable) have been duly authorized, executed, and delivered and
that the ratification documents and Guaranty (if applicable) are enforceable as
the obligations of Borrower, Beneficiary or Guarantor, as applicable.

 

  (vi)

Borrower (A) pays the Transfer Processing Fee to Lender, and (B) pays or
reimburses Lender, upon demand, for all costs and expenses including all
Attorneys’ Fees and Costs, incurred by Lender in connection with such Transfer;
provided, however, that Lender will not be entitled to collect a Transfer Fee.

 

  (b)

Easement, Restrictive Covenant or Other Encumbrance. The grant of an easement,
restrictive covenant or other encumbrance, provided that each of the following
conditions is satisfied:

 

  (i)

Borrower provides Lender with at least 30 days prior Notice of the proposed
grant.

 

  (ii)

Prior to the grant, Lender determines, in Lender’s Discretion, that the
easement, restrictive covenant or other encumbrance will not materially affect
the operation or value of the Mortgaged Property or Lender’s interest in the
Mortgaged Property.

 

  (iii)

Borrower pays or reimburses Lender, upon demand, for all costs and expenses,
including all Attorneys’ Fees and Costs, incurred by Lender in connection with
reviewing Borrower’s request for Lender’s review of such grant of easement,
restrictive covenant or other encumbrance; provided, however, that Lender will
not be entitled to collect a Transfer Fee.

 

  (iv)

If the Note is held by a REMIC trust, Lender may require an opinion of counsel
which meets each of the following requirements:

 

  (A)

The counsel providing the opinion is acceptable to Lender.

 

  (B)

The opinion is addressed to Lender.

 

  (C)

The opinion is paid for by Borrower.

 

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  (D)

The opinion is in form and substance satisfactory to Lender in its sole and
absolute discretion.

 

  (E)

The opinion confirms each of the following:

 

  (1)

The grant of such easement has been effected in accordance with the requirements
of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be
modified, amended or replaced from time to time).

 

  (2)

The qualification and status of the REMIC trust as a REMIC will not be adversely
affected or impaired as a result of such grant.

 

  (3)

The REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a
result of such grant.

 

  (c)

Publicly-Held Fund or Publicly-Held Real Estate Investment Trust. If a
Designated Entity for Transfers is a publicly-held fund or a publicly-held real
estate investment trust, either of the following:

 

  (i)

The public issuance of common stock, convertible debt, equity or other similar
securities (“Public Fund/REIT Securities”) and the subsequent Transfer of such
Public Fund/REIT Securities.

 

  (ii)

The acquisition by a single Public Fund/REIT Securities holder of an ownership
percentage of 10% or more in the Designated Entity for Transfers, if Borrower
provides notice of that acquisition to Lender within 30 days following the
acquisition.

 

  (d)

Transaction Specific Transfers.

 

  (i)

through (viii) are reserved.

 

  (e)

through (i) are reserved.

 

7.04

Preapproved Intrafamily Transfers. Not applicable.

 

7.05

Lender’s Consent to Prohibited Transfers.

 

  (a)

Conditions for Lender’s Consent. With respect to a Transfer that would otherwise
constitute an Event of Default under this Article VII, Lender will consent,
without any adjustment to the rate at which the Indebtedness bears interest or
to any other economic terms of the Indebtedness set forth in the Note, provided
that, prior to such Transfer, each of the following requirements is satisfied:

 

  (i)

Borrower has submitted to Lender all information required by Lender to make the
determination required by this Section along with the Transfer Processing Fee.

 

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  (ii)

No Event of Default has occurred and is continuing and no event or condition has
occurred and is continuing that, with the giving of Notice or the passage of
time, or both, would become an Event of Default unless such Transfer would cure
the Event of Default.

 

  (iii)

Lender in Lender’s Discretion has determined that the transferee meets Lender’s
eligibility, credit, management and other standards (including any standards
with respect to previous relationships between Lender and the transferee).

 

  (iv)

Lender in Lender’s Discretion has determined that the transferee’s organization,
credit and experience in the ownership and management of similar senior housing
facilities is adequate and appropriate to the overall structure and
documentation of the Loan.

 

  (v)

Lender in Lender’s Discretion has determined that the Mortgaged Property will be
managed by a Property Manager meeting the requirements of Section 6.09(d), and,
if applicable, an Operator whose organization, credit and experience in the
operation of similar senior housing facilities is adequate and appropriate to
the overall structure and documentation of the Loan. Any new or replacement
Operator approved by Lender must either (A) assume the Loan Documents executed
by the prior Operator, if applicable, or (B) execute Lender’s then-standard
documents governing operators of senior housing facilities and transferee will
execute any modifications to the Loan Documents required by Lender to document
Operator’s role in the operation of the Facility and appropriately secure the
Loan.

 

  (vi)

Lender in Lender’s Discretion has determined that the Mortgaged Property, at the
time of the proposed Transfer, meets all of Lender’s standards as to its
physical condition, occupancy, net operating income and the accumulation of
reserves.

 

  (vii)

Lender in Lender’s Discretion has determined that the transferee and any SPE
Equity Owner of such transferee meet the requirements of Section 6.13.

 

  (viii)

If a Supplemental Instrument is outstanding, Borrower has obtained the consent
of the Supplemental Lender, if different from Lender.

 

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  (ix)

In the case of a Transfer of all or any part of the Mortgaged Property, each of
the following conditions is satisfied:

 

  (A)

The transferee executes Lender’s then-standard assumption agreement that, among
other things, requires the transferee to perform all obligations of Borrower set
forth in the Note, the Security Instrument, this Loan Agreement and any other
Loan Document, and may require that the transferee comply with any provisions of
this Loan Agreement or any other Loan Document which previously may have been
waived or modified by Lender.

 

  (B)

If Lender requires, the transferee causes one or more Persons acceptable to
Lender, in Lender’s Discretion, to execute and deliver to Lender a Guaranty in a
form acceptable to Lender.

 

  (C)

The transferee executes such additional documentation (including filing
financing statements, as applicable) as Lender may require.

 

  (x)

In the case of a Transfer of any interest in Borrower or a Designated Entity for
Transfers, if a Guarantor requests that Lender release the Guarantor from its
obligations under a Guaranty executed and delivered in connection with the Note,
this Loan Agreement or any of the other Loan Documents, then Borrower causes one
or more Persons acceptable to Lender, in Lender’s Discretion, to execute and
deliver to Lender a Guaranty in a form acceptable to Lender.

 

  (xi)

Lender has received such legal opinions as Lender deems necessary, including a
nonconsolidation opinion (if a nonconsolidation opinion was delivered on the
Closing Date and if required by Lender), an opinion that the assignment and
assumption of the Loan Documents has been duly authorized, executed, and
delivered and that the assignment documents and the Loan Documents are
enforceable as the obligations of Borrower, transferee and Guarantor, as
applicable.

 

  (xii)

Lender collects all costs, including the cost of all title searches, title
insurance and recording costs, and all Attorneys’ Fees and Costs incurred in
reviewing the Transfer request and any fees charged by the Rating Agencies, if
applicable.

 

  (xiii)

At the time of the Transfer, Borrower pays the Transfer Fee to Lender.

 

  (xiv)

The Transfer will not occur during any Extension Period, if applicable.

 

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  (b)

Continuing Liability of Borrower. If Borrower requests a release of its
liability under the Loan Documents in connection with a Transfer of all of
Borrower’s interest in the Mortgaged Property, and Lender approves the Transfer
pursuant to Section 7.05(a), then one of the following will apply:

 

  (i)

If Borrower delivers to Lender a current Site Assessment which (A) is dated
within 90 days prior to the date of the proposed Transfer, and (B) evidences no
presence of Hazardous Materials on the Mortgaged Property and no other
Prohibited Activities or Conditions with respect to the Mortgaged Property
(“Clean Site Assessment”), then Lender will release Borrower from all of
Borrower’s obligations under the Loan Documents except for any liability under
Section 6.12 or Section 10.02(b) with respect to any loss, liability, damage,
claim, cost or expense which directly or indirectly arises from or relates to
any Prohibited Activities or Conditions existing prior to the date of the
Transfer.

 

  (ii)

If Borrower does not deliver a Clean Site Assessment as described in
Section 7.05(b)(i), then Lender will release Borrower from all of Borrower’s
obligations under the Loan Documents except for liability under Section 6.12 or
Section 10.02(b).

 

  (c)

Continuing Liability of Guarantor. If Guarantor requests a release of its
liability under the Guaranty in connection with a Transfer which is permitted,
preapproved, or approved by Lender pursuant to this Article VII, and Borrower
has provided a replacement Guarantor acceptable to Lender under the terms of
Section 7.05(a)(ix)(B), then one of the following will apply:

 

  (i)

If Borrower delivers to Lender a Clean Site Assessment, then Lender will release
Guarantor from all of Guarantor’s obligations except Guarantor’s obligation to
guaranty Borrower’s liability under Section 6.12 or Section 10.02(b) with
respect to any loss, liability, damage, claim, cost or expense which directly or
indirectly arises from or relates to any Prohibited Activities or Conditions
existing prior to the date of the Transfer.

 

  (ii)

If Borrower does not deliver a Clean Site Assessment as described in
Section 7.05(b)(i), then Lender will release Guarantor from all of Guarantor’s
obligations except for Guarantor’s obligation to guaranty Borrower’s liability
under Section 6.12 or Section 10.02(b).

 

7.06

SPE Equity Owner Requirement Following Transfer. Following any Transfer pursuant
to this Article VII, Borrower must satisfy the applicable conditions regarding
an SPE Equity Owner set forth in Section 6.13(a)(xxvi) of this Loan Agreement.

 

7.07

Additional Transfer Requirements - External Cap Agreement.

 

  (a)

Continuation of Cap Agreement. If a Transfer of all or part of the Mortgaged
Property permitted by this Loan Agreement occurs, Borrower will ensure that any
third-party Cap Agreement is transferred to the applicable transferee or, if the
Cap Agreement is not transferable, Borrower will replace the third-party Cap
Agreement in accordance with Lender’s then-current requirements.

 

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  (b)

Establishment or Modification of Rate Cap Agreement Reserve Fund.

 

  (i)

If the third-party Cap Agreement which will be in place immediately following
the Transfer is scheduled to expire prior to the Maturity Date, Lender may
require Borrower to establish a Rate Cap Agreement Reserve Fund.

 

  (ii)

If Borrower has previously established a Rate Cap Agreement Reserve Fund, then
Lender will determine whether the balance of any existing Rate Cap Agreement
Reserve Fund is sufficient under then-current market conditions to purchase a
Replacement Cap Agreement, and may then take any of the following actions:

 

  (A)

Lender may require Borrower to make an additional deposit into the Rate Cap
Agreement Reserve Fund.

 

  (B)

If funding of the Rate Cap Agreement Reserve Fund has been deferred, Lender may
require Borrower to begin making monthly deposits into the Rate Cap Agreement
Reserve Fund.

 

  (C)

Lender may require Borrower to increase the amount of monthly deposits to the
Rate Cap Agreement Reserve Fund.

 

7.08

Reserved.

 

7.09

Reserved.

 

ARTICLE VIII        

SUBROGATION.

If, and to the extent that, the proceeds of the Loan, or subsequent advances
under Section 9.02, are used to pay, satisfy or discharge a Prior Lien, such
Loan proceeds or advances will be deemed to have been advanced by Lender at
Borrower’s request, and Lender will automatically, and without further action on
its part, be subrogated to the rights, including Lien priority, of the owner or
holder of the obligation secured by the Prior Lien, whether or not the Prior
Lien is released.

 

ARTICLE IX        

EVENTS OF DEFAULT AND REMEDIES.

 

9.01

Events of Default. The occurrence of any one or more of the following will
constitute an Event of Default under this Loan Agreement:

 

  (a)

Borrower fails to pay or deposit when due any amount required by the Note, this
Loan Agreement or any other Loan Document.

 

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  (b)

Borrower fails to maintain the Insurance coverage required by Section 6.10.

 

  (c)

Borrower or any SPE Equity Owner fails to comply with the provisions of
Section 6.13 or if any of the assumptions contained in any nonconsolidation
opinions delivered to Lender at any time is or becomes untrue in any material
respect.

 

  (d)

Borrower or any SPE Equity Owner, any of its officers, directors, trustees,
general partners or managers or any Guarantor commits fraud or a material
misrepresentation or material omission in connection with: (i) the application
for or creation of the Indebtedness, (ii) any financial statement, Rent
Schedule, or other report or information provided to Lender during the term of
the Indebtedness, or (iii) any request for Lender’s consent to any proposed
action, including a request for disbursement of funds under this Loan Agreement.

 

  (e)

Borrower fails to comply with the Condemnation provisions of Section 6.11.

 

  (f)

A Transfer occurs that violates the provisions of Article VII, whether or not
any actual impairment of Lender’s security results from such Transfer.

 

  (g)

A forfeiture action or proceeding, whether civil or criminal, is commenced which
could result in a forfeiture of the Mortgaged Property or otherwise materially
impair the Lien created by the Security Instrument or Lender’s interest in the
Mortgaged Property.

 

  (h)

Borrower fails to perform any of its obligations under this Loan Agreement
(other than those specified in Sections 9.01(a) through (g)), as and when
required, which failure continues for a period of 30 days after Notice of such
failure by Lender to Borrower. However, if Borrower’s failure to perform its
obligations as described in this Section 9.01(h) is of the nature that it cannot
be cured within the 30 day cure period after such Notice from Lender but
reasonably could be cured within 90 days, then Borrower will have additional
time as determined by Lender in Lender’s Discretion, not to exceed an additional
60 days, in which to cure such default, provided that Borrower has diligently
commenced to cure such default during the initial 30 day cure period and
diligently pursues the cure of such default. However, no such Notice or cure
periods will apply in the case of any such failure which could, in Lender’s
judgment, absent immediate exercise by Lender of a right or remedy under this
Loan Agreement, result in harm to Lender, danger to tenants or third parties, or
impairment of the Note, the Security Instrument or this Loan Agreement or any
other security given under any other Loan Document.

 

  (i)

Borrower fails to perform any of its obligations as and when required under any
Loan Document other than this Loan Agreement which failure continues beyond the
applicable cure period, if any, specified in that Loan Document.

 

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  (j)

The holder of any other debt instrument secured by a mortgage, deed of trust or
deed to secure debt on the Mortgaged Property exercises any right to declare all
amounts due under that debt instrument immediately due and payable.

 

  (k)

Any of the following occurs:

 

  (i)

Borrower or any SPE Equity Owner commences any case, Proceeding or other action
under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, conservatorship or relief of
debtors (A) seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debt, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets.

 

  (ii)

Any party other than Lender commences any case, Proceeding, or other action of a
nature referred to in
Section 9.01(k)(i) against Borrower or any SPE Equity Owner which (A) results in
the entry of an order for relief or any such adjudication or appointment, or
(B) has not been dismissed, discharged or bonded for a period of 90 days.

 

  (iii)

Any case, Proceeding or other action is commenced against Borrower or any SPE
Equity Owner seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets which
results in the entry of any order by a court of competent jurisdiction for any
such relief which is not vacated, discharged, or stayed or bonded pending appeal
within 90 days from the entry thereof.

 

  (iv)

Borrower or any SPE Equity Owner takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in Section 9.01(k)(i), (ii) or (iii).

 

  (l)

Borrower or any SPE Equity Owner has made any representation or warranty in
Article V or any other Section of this Loan Agreement that is false or
misleading in any material respect.

 

  (m)

If the Loan is secured by an interest under a Ground Lease, Borrower fails to
comply with the provisions of Section 6.19.

 

  (n)

If the Loan is a Supplemental Loan, any Event of Default occurs under (i) the
Senior Note, the Senior Instrument or any other Senior Loan Document, or
(ii) any loan document related to another loan in connection with the Mortgaged
Property, regardless of whether Borrower has obtained Supplemental Lender’s
approval of the placement of such Lien

 

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on the Mortgaged Property. In addition, if the Loan is a Supplemental Loan, as
Borrower under both the Supplemental Instrument and the Senior Instrument,
Borrower acknowledges and agrees that if there is an Event of Default under the
Supplemental Note, the Supplemental Instrument or any other Supplemental Loan
Document, such Event of Default will be an Event of Default under the terms of
the Senior Instrument and will entitle Senior Lender to invoke any and all
remedies permitted to Senior Lender by applicable law, the Senior Note, the
Senior Instrument or any of the other Senior Loan Documents.

 

  (o)

If the Mortgaged Property is subject to any covenants, conditions and/or
restrictions, land use restriction agreements or similar agreements, Borrower
fails to perform any of its obligations under any such agreement as and when
required, and such failure continues beyond any applicable cure period.

 

  (p)

A Guarantor files for bankruptcy protection under the Bankruptcy Code or a
Guarantor voluntarily becomes subject to any reorganization, receivership,
insolvency proceeding or other similar proceeding pursuant to any other federal
or state law affecting debtor and creditor rights, or any creditor (other than
Lender) of a Guarantor commences any involuntary case against a Guarantor
pursuant to the Bankruptcy Code or other federal or state law affecting debtor
and creditor rights, unless each of the following conditions is satisfied:

 

  (i)

Borrower or Guarantor provides Notice of such action to Lender within 30 days
after the filing of such action.

 

  (ii)

Either (A) the case is dismissed or discharged within 90 days after filing, or
(B) within 90 days following the date of such filing or commencement, the
affected Guarantor is replaced with one or more other Persons acceptable to
Lender, in Lender’s Discretion, each of whom executes and delivers to Lender a
replacement Guaranty in form and content acceptable to Lender, together with
such legal opinions as Lender deems necessary; provided, however, that if Lender
determines, in Lender’s Discretion, that any proposed replacement Guarantor is
not acceptable, then the action will constitute a prohibited Transfer governed
by Section 7.02.

 

  (iii)

If Borrower must provide a replacement Guarantor pursuant to
Section 9.01(p)(ii), then Borrower pays the Transfer Processing Fee to Lender.

 

  (q)

With respect to a Guarantor, either of the following occurs:

 

  (i)

The death of any Guarantor who is a natural person, unless within 30 days
following the Guarantor’s death, Borrower causes one of the following to occur:

 

  (A)

One or more Persons acceptable to Lender, in Lender’s Discretion, execute(s) and
deliver(s) to Lender a guaranty in a form acceptable to Lender and in
substantially the same form as the Guaranty executed on the Closing Date,
without any cost or expense to Lender.

 

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  (B)

The estate of the deceased Guarantor immediately ratifies the Guaranty in
writing, and within 6 months after the date of the death of the deceased
Guarantor one or more Persons, acceptable to Lender in Lender’s Discretion,
execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender
and in substantially the same form as the Guaranty executed on the Closing Date,
without any cost or expense to Lender.

 

  (ii)

The dissolution of any Guarantor who is an entity, unless within 30 days
following the dissolution of the Guarantor, Borrower causes one or more Persons
acceptable to Lender, in Lender’s Discretion, to execute and deliver to Lender a
guaranty in a form acceptable to Lender and in substantially the same form as
the Guaranty executed on the Closing Date, without any cost or expense to
Lender.

 

  (r)

If a Cap Agreement is required, Borrower fails to provide Lender with a
Replacement Cap Agreement prior to the expiration of the then-existing Cap
Agreement.

 

  (s)

Borrower or any Facility Operator fails, within the time deadlines set by any
Governmental Authority, to correct any deficiency, which failure could result in
an action by such Governmental Authority with respect to the Facility that could
have a Material Adverse Effect.

 

  (t)

A default under any of the Material Contracts by Borrower or by any Facility
Operator, which continues beyond the expiration of any applicable cure period.

 

  (u)

The Facility is no longer classified as housing for older persons pursuant to
the Fair Housing Amendments Act of 1988.

 

  (v)

Borrower, a Facility Operator, or the Facility is assessed fines or penalties in
excess of $50,000.00 in the aggregate in any year by any state or any Medicare,
Medicaid, TRICARE, health, reimbursement, or licensing agency having
jurisdiction over Borrower, a Facility Operator, or the Facility.

 

  (w)

through (oo) are reserved.

 

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9.02

Protection of Lender’s Security; Security Instrument Secures Future Advances.

(a) If Borrower fails to perform any of its obligations under this Loan
Agreement or any other Loan Document, or if any action or proceeding is
commenced which purports to affect the Mortgaged Property, Lender’s security or
Lender’s rights under this Loan Agreement, including eminent domain, insolvency,
code enforcement, civil or criminal forfeiture, enforcement of Hazardous
Materials Laws, fraudulent conveyance or reorganizations or proceedings
involving a bankrupt or decedent, then Lender, in Lender’s Discretion, may make
such appearances, file such documents, disburse such sums and take such actions
as Lender reasonably deems necessary to perform such obligations of Borrower and
to protect Lender’s interest, including: (i) payment of Attorneys’ Fees and
Costs, (ii) payment of fees and out-of-pocket expenses of accountants,
inspectors and consultants, (iii) entry upon the Mortgaged Property to make
Repairs or secure the Mortgaged Property, (iv) procurement of the Insurance
required by Section 6.10, (v) payment of amounts which Borrower has failed to
pay under Section 6.08, (vi) performance of Borrower’s obligations under
Section 6.09, and (vii) advances made by Lender to pay, satisfy or discharge any
obligation of Borrower for the payment of money that is secured by a Prior Lien.

 

  (b)

Any amounts disbursed by Lender under this Section 9.02, or under any other
provision of this Loan Agreement that treats such disbursement as being made
under this Section 9.02, will be secured by the Security Instrument, will be
added to, and become part of, the principal component of the Indebtedness, will
be immediately due and payable and will bear interest from the date of
disbursement until paid at the Default Rate.

 

  (c)

Nothing in this Section 9.02 will require Lender to incur any expense or take
any action.

 

9.03

Remedies.

 

  (a)

Upon an Event of Default, Lender may exercise any or all of its rights and
remedies provided under the Loan Documents and Borrower will pay all costs
associated therewith, including Attorneys’ Fees and Costs.

 

  (b)

Each right and remedy provided in this Loan Agreement is distinct from all other
rights or remedies under this Loan Agreement or any other Loan Document or
afforded by applicable law or equity, and each will be cumulative and may be
exercised concurrently, independently or successively, in any order. Lender’s
exercise of any particular right or remedy will not in any way prevent Lender
from exercising any other right or remedy available to Lender. Lender may
exercise any such remedies from time to time and as often as Lender chooses.

 

  (c)

Lender will have all remedies available to Lender under Revised Article 9 of the
Uniform Commercial Code of the Property Jurisdiction, the Loan Documents and
under applicable law.

 

  (d)

Lender may also retain (i) all money in the Reserve Funds, including interest,
and (ii) any Cap Payment, and in Lender’s sole and absolute discretion, may
apply such amounts, without restriction and without any specific order of
priority, to the payment of any and all Indebtedness.

 

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  (e)

If a claim or adjudication is made that Lender has acted unreasonably or
unreasonably delayed acting in any case where, by law or under this Loan
Agreement or the other Loan Documents, Lender has an obligation to act
reasonably or promptly, then Lender will not be liable for any monetary damages,
and Borrower’s sole remedy will be limited to commencing an action seeking
injunctive relief or declaratory judgment. Any action or proceeding to determine
whether Lender has acted reasonably will be determined by an action seeking
declaratory judgment.

 

9.04

Forbearance.

 

  (a)

Lender may (but will not be obligated to) agree with Borrower, from time to
time, and without giving Notice to, or obtaining the consent of, or having any
effect upon the obligations of, any Guarantor or other third party obligor, to
take any of the following actions:

 

  (i)

Extend the time for payment of all or any part of the Indebtedness.

 

  (ii)

Reduce the payments due under this Loan Agreement, the Note or any other Loan
Document.

 

  (iii)

Release anyone liable for the payment of any amounts under this Loan Agreement,
the Note or any other Loan Document.

 

  (iv)

Accept a renewal of the Note.

 

  (v)

Modify the terms and time of payment of the Indebtedness.

 

  (vi)

Join in any extension or subordination agreement.

 

  (vii)

Release any portion of the Mortgaged Property.

 

  (viii)

Take or release other or additional security.

 

  (ix)

Modify the rate of interest or period of amortization of the Note or change the
amount of the monthly installments payable under the Note.

 

  (x)

Otherwise modify this Loan Agreement, the Note or any other Loan Document.

 

  (b)

Any forbearance by Lender in exercising any right or remedy under the Note, this
Loan Agreement or any other Loan Document or otherwise afforded by applicable
law, will not be a waiver of or preclude the exercise of any other right

 

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or remedy, or the subsequent exercise of any right or remedy. The acceptance by
Lender of payment of all or any part of the Indebtedness after the due date of
such payment, or in an amount which is less than the required payment, will not
be a waiver of Lender’s right to require prompt payment when due of all other
payments on account of the Indebtedness or to exercise any remedies for any
failure to make prompt payment. Enforcement by Lender of any security for the
Indebtedness will not constitute an election by Lender of remedies so as to
preclude the exercise of any other right available to Lender. Lender’s receipt
of any awards or proceeds under Sections 6.10 and 6.11 will not operate to cure
or waive any Event of Default.

 

9.05

Waiver of Marshalling. Notwithstanding the existence of any other security
interests in the Mortgaged Property held by Lender or by any other party, Lender
will have the right to determine the order in which any or all of the Mortgaged
Property will be subjected to the remedies provided in this Loan Agreement or
any other Loan Document or applicable law. Lender will have the right to
determine the order in which any or all portions of the Indebtedness are
satisfied from the proceeds realized upon the exercise of such remedies.
Borrower and any party who now or in the future acquires a security interest in
the Mortgaged Property and who has actual or constructive notice of the Security
Instrument waives any and all right to require the marshalling of assets or to
require that any of the Mortgaged Property be sold in the inverse order of
alienation or that any of the Mortgaged Property be sold in parcels or as an
entirety in connection with the exercise of any of the remedies permitted by
applicable law or provided in this Loan Agreement.

 

ARTICLE IX        

RELEASE; INDEMNITY.

 

10.01

Release. Borrower covenants and agrees that, in performing any of its duties
under this Loan Agreement, none of Lender, Loan Servicer or any of their
respective agents or employees will be liable for any losses, claims, damages,
liabilities and expenses that may be incurred by any of them as a result of such
performance, except that no party will be released from liability for any
losses, claims, damages, liabilities or expenses arising out of the willful
misconduct or gross negligence of such party.

 

10.02

     Indemnity.

 

  (a)

General Indemnity. Borrower agrees to indemnify, hold harmless and defend
Lender, including any custodian, trustee and other fiduciaries who hold or have
held a full or partial interest in the Loan for the benefit of third parties,
any prior owner or holder of the Note, the Loan Servicer, any prior Loan
Servicer, the officers, directors, shareholders, partners, employees and
trustees of each of the foregoing, and the heirs, legal representatives,
successors and assigns of each of the foregoing (collectively, “Indemnitees”)
against any and all losses, claims, damages, liabilities and expenses including
Attorneys’ Fees and Costs, which may be imposed or incurred by any of them
directly or indirectly arising out of, or in any way relating to, or as a result
of: (i) any failure of the Mortgaged Property to comply with the laws,
regulations, ordinance, code or decree of any

 

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Governmental Authority, including those pertaining to the Americans with
Disabilities Act, zoning, occupancy and subdivision of real property, (ii) any
obligation of Borrower under any Lease, and (iii) any accident, injury or death
to any natural person on the Mortgaged Property or any damage to personal
property located on the Mortgaged Property, except that no such party will be
indemnified from liability for any losses, claims, damages, liabilities or
expenses arising out of the willful misconduct or gross negligence of such
party.

 

  (b)

Environmental Indemnity. Borrower agrees to indemnify, hold harmless and defend
Indemnitees from and against all proceedings, claims, damages, penalties and
costs (whether initiated or sought by Governmental Authorities or private
parties), including Attorneys’ Fees and Costs and remediation costs, whether
incurred in connection with any judicial or administrative process or otherwise,
arising directly or indirectly from any of the following:

 

  (i)

Any breach of any representation or warranty of Borrower in Section 5.05.

 

  (ii)

Any failure by Borrower to perform any of its obligations under Section 6.12.

 

  (iii)

The existence or alleged existence of any Prohibited Activity or Condition.

 

  (iv)

The presence or alleged presence of Hazardous Materials on or under the
Mortgaged Property or in any of the Improvements.

 

  (v)

The actual or alleged violation of any Hazardous Materials Law.

 

  (c)

Indemnification Regarding ERISA Covenants. BORROWER WILL INDEMNIFY LENDER AND
DEFEND AND HOLD LENDER HARMLESS FROM AND AGAINST ALL CIVIL PENALTIES, EXCISE
TAXES, OR OTHER LOSS, COST, DAMAGE AND EXPENSE (INCLUDING REASONABLE ATTORNEYS’
FEES AND COSTS INCURRED IN THE INVESTIGATION, DEFENSE AND SETTLEMENT OF CLAIMS
AND LOSSES INCURRED IN CORRECTING ANY PROHIBITED TRANSACTION OR IN THE SALE OF A
PROHIBITED LOAN, AND IN OBTAINING ANY INDIVIDUAL PROHIBITED TRANSACTION
EXEMPTION UNDER ERISA THAT MAY BE REQUIRED, IN LENDER’S SOLE AND ABSOLUTE
DISCRETION) THAT LENDER MAY INCUR, DIRECTLY OR INDIRECTLY, AS A RESULT OF
DEFAULT UNDER SECTION 6.20. THIS INDEMNITY WILL SURVIVE ANY TERMINATION,
SATISFACTION OR FORECLOSURE OF THE SECURITY INSTRUMENT.

 

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  (d)

Securitization Indemnification.

 

  (i)

Borrower agrees to indemnify, hold harmless and defend the Indemnified Parties
from and against any and all proceedings, losses, claims, damages, liabilities,
penalties, costs and expenses (whether initiated or sought by Governmental
Authorities or private parties), including Attorneys’ Fees and Costs, which may
be incurred by any Indemnified Party (either directly or indirectly), which
arise out of, are in any way related to, or are as a result of a claim that the
Borrower Information contains an untrue statement of any material fact or the
Borrower Information omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading (collectively, the “Securitization Indemnification”).

 

  (ii)

Borrower will not be liable under the Securitization Indemnification if the
claim is based on Borrower Information which Lender has materially misstated or
materially misrepresented in the Disclosure Document.

 

  (iii)

For purposes of this Section 10.02(d):

 

  (A)

“Borrower Information” includes any information provided at any time to Lender
or Loan Servicer by Borrower, any SPE Equity Owner, any Facility Operator, any
Guarantor, any Property Manager or any Affiliates of the foregoing with respect
to any of the following:

 

  (1)

Any Person listed in Section 10.02(d)(iii)(A).

 

  (2)

The Loan.

 

  (3)

The Mortgaged Property.

Borrower Information includes: (i) representations and warranties made in the
Loan Documents, (ii) financial statements of Borrower, any SPE Equity Owner, any
Designated Entity for Transfers or any Guarantor, and (iii) operating statements
and rent rolls with respect to the Mortgaged Property. Borrower Information does
not include any information provided directly to Lender or Loan Servicer by a
third party such as an appraiser or an environmental consultant.

 

  (B)

The term “Lender” includes its officers and directors.

 

  (C)

An “Issuer Person” includes all of the following:

 

  (1)

Any Person that has filed the registration statement, if any, relating to the
Securitization, and any Affiliate of such Person.

 

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  (2)

Any Person acting as issuer, depositor, sponsor and/or in a similar capacity
with respect to the Securitization, and any Affiliate of such Person.

 

  (D)

The “Issuer Group” includes all of the following:

 

  (1)

Each director and officer of any Issuer Person.

 

  (2)

Each entity that Controls any Issuer Person within the meaning of Section 15 of
the Securities Act or Section 20 of the Securities Exchange Act.

 

  (E)

The “Underwriter Group” includes all of the following:

 

  (1)

Each entity which is acting as an underwriter, manager, placement agent, initial
purchaser or in a similar capacity with respect to the Securitization.

 

  (2)

Each of its directors and officers.

 

  (3)

Each entity that Controls any such entity within the meaning of Section 15 of
the Securities Act or Section 20 of the Securities Exchange Act and is acting as
an underwriter, manager, placement agent, initial purchaser or in a similar
capacity with respect to the Securitization.

 

  (4)

The directors and officers of such entity described in
Section 10.02(d)(iii)(E)(1).

 

  (F)

“Indemnified Party” or “Indemnified Parties” means one or more of Lender, Issuer
Person, Issuer Group, and Underwriter Group.

 

  (e)

Selection and Direction of Counsel. Counsel selected by Borrower to defend
Indemnitees will be subject to the approval of those Indemnitees. In any
circumstances in which the indemnity under this Article X applies, Lender may
employ its own legal counsel and consultants to prosecute, defend or negotiate
any claim or legal or administrative proceeding and Lender, with the prior
written consent of Borrower (which will not be unreasonably withheld, delayed or
conditioned) may settle or compromise any action or legal or administrative
proceeding. However, unless an Event of Default has occurred and is continuing,
or the interests of Borrower and Lender are in conflict, as determined by Lender
in Lender’s Discretion, Lender will permit Borrower to undertake the actions
referenced in this Article X so long as Lender approves such action, which
approval will not be unreasonably withheld or delayed. Borrower will reimburse
Lender upon demand for all costs and expenses incurred by Lender, including all
costs of settlements entered into in good faith, consultants’ fees and
Attorneys’ Fees and Costs.

 

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  (f)

Settlement or Compromise of Claims. Borrower will not, without the prior written
consent of those Indemnitees who are named as parties to a claim or legal or
administrative proceeding (“Claim”), settle or compromise the Claim if the
settlement (i) results in the entry of any judgment that does not include as an
unconditional term the delivery by the claimant or plaintiff to Lender of a
written release of those Indemnitees, satisfactory in form and substance to
Lender, or (ii) may materially and adversely affect Lender, as determined by
Lender in Lender’s Discretion.

 

  (g)

Effect of Changes to Loan on Indemnification Obligations. Borrower’s obligation
to indemnify the Indemnitees will not be limited or impaired by any of the
following, or by any failure of Borrower or any Guarantor to receive notice of
or consideration for any of the following:

 

  (i)

Any amendment or modification of any Loan Document.

 

  (ii)

Any extensions of time for performance required by any Loan Document.

 

  (iii)

Any provision in any of the Loan Documents limiting Lender’s recourse to
property securing the Indebtedness, or limiting the personal liability of
Borrower or any other party for payment of all or any part of the Indebtedness.

 

  (iv)

The accuracy or inaccuracy of any representations and warranties made by
Borrower under this Loan Agreement or any other Loan Document.

 

  (v)

The release of Borrower or any other Person, by Lender or by operation of law,
from performance of any obligation under any Loan Document.

 

  (vi)

The release or substitution in whole or in part of any security for the
Indebtedness.

 

  (vii)

Lender’s failure to properly perfect any Lien or security interest given as
security for the Indebtedness.

 

  (h)

Payments by Borrower. Borrower will, at its own cost and expense, do all of the
following:

 

  (i)

Pay or satisfy any judgment or decree that may be entered against any Indemnitee
or Indemnitees in any legal or administrative proceeding incident to any matters
against which Indemnitees are entitled to be indemnified under this Article X.

 

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  (ii)

Reimburse Indemnitees for any expenses paid or incurred in connection with any
matters against which Indemnitees are entitled to be indemnified under this
Article X.

 

  (iii)

Reimburse Indemnitees for any and all expenses, including Attorneys’ Fees and
Costs, paid or incurred in connection with the enforcement by Indemnitees of
their rights under this Article X, or in monitoring and participating in any
legal or administrative proceeding.

 

  (i)

Other Obligations. The provisions of this Article X will be in addition to any
and all other obligations and liabilities that Borrower may have under
applicable law or under other Loan Documents, and each Indemnitee will be
entitled to indemnification under this Article X without regard to whether
Lender or that Indemnitee has exercised any rights against the Mortgaged
Property or any other security, pursued any rights against any Guarantor, or
pursued any other rights available under the Loan Documents or applicable law.
If Borrower consists of more than one Person, the obligation of those Persons to
indemnify the Indemnitees under this Article X will be joint and several. The
obligation of Borrower to indemnify the Indemnitees under this Article X will
survive any repayment or discharge of the Indebtedness, any foreclosure
proceeding, any foreclosure sale, any delivery of any deed in lieu of
foreclosure, and any release of record of the Lien of the Security Instrument.
Notwithstanding the foregoing, if Lender has never been a
mortgagee-in-possession of, or held title to, the Mortgaged Property, Borrower
will have no obligation to indemnify the Indemnitees under this Article X after
the date of the release of record of the Lien of the Security Instrument by
payment in full at the Maturity Date or by voluntary prepayment in full.

 

  (j)

Reserved.

 

10.03    

Reserved.

 

ARTICLE XI        

MISCELLANEOUS PROVISIONS.

 

11.01

Waiver of Statute of Limitations, Offsets and Counterclaims. Borrower waives the
right to assert any statute of limitations as a bar to the enforcement of this
Loan Agreement or the Lien of the Security Instrument or to any action brought
to enforce any Loan Document. Borrower waives the right to assert a
counterclaim, other than a compulsory counterclaim, in any action or proceeding
brought against it by Lender or otherwise to offset any obligations to make the
payments required by the Loan Documents. No failure by Lender to perform any of
its obligations under the Loan Documents will be a valid defense to, or result
in any offset against, any payments that Borrower is obligated to make under any
of the Loan Documents.

 

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11.02 Governing Law; Consent to Jurisdiction and Venue.

 

  (a)

This Loan Agreement, and any Loan Document which does not itself expressly
identify the law which is to apply to it, will be governed by the laws of the
Property Jurisdiction.

 

  (b)

Borrower agrees that any controversy arising under or in relation to the Note,
the Security Instrument, this Loan Agreement or any other Loan Document may be
litigated in the Property Jurisdiction. The state and federal courts and
authorities with jurisdiction in the Property Jurisdiction will have
jurisdiction over all controversies that may arise under or in relation to the
Note, any security for the Indebtedness or any other Loan Document. Borrower
irrevocably consents to service, jurisdiction and venue of such courts for any
such litigation and waives any other venue to which it might be entitled by
virtue of domicile, habitual residence or otherwise. However, nothing in this
Section 11.02 is intended to limit Lender’s right to bring any suit, action or
proceeding relating to matters under this Loan Agreement in any court of any
other jurisdiction.

 

11.03 Notice.

 

  (a)

All Notices under or concerning this Loan Agreement will be in writing. Each
Notice will be deemed given on the earliest to occur of: (i) the date when the
Notice is received by the addressee, (ii) the first Business Day after the
Notice is delivered to a recognized overnight courier service, with arrangements
made for payment of charges for next Business Day delivery, or (iii) the third
Business Day after the Notice is deposited in the United States mail with
postage prepaid, certified mail, return receipt requested. Addresses for Notice
are as follows:

 

If to Lender:

Walker & Dunlop, LLC

7501 Wisconsin Avenue, Suite 1200E

Bethesda, Maryland 20814

If to Borrower:

c/o Fortress Investment Group LLC

2901 North Dallas Parkway, Suite 380

Plano, Texas 75093

Attention Brian Landrum and Trent Johnson

 

  (b)

Any party to this Loan Agreement may change the address to which Notices
intended for it are to be directed by means of Notice given to the other party
in accordance with this Section 11.03. Each party agrees that it will not refuse
or reject delivery of any Notice given in accordance with this Section 11.03,
that it will acknowledge, in writing, the receipt of any Notice upon request by
the other party and that any Notice rejected or refused by it will be deemed for
purposes of this Section 11.03 to have been received by the rejecting party on
the date so refused or rejected, as conclusively established by the records of
the U.S. Postal Service or the courier service.

 

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  (c)

Any Notice under the Note and any other Loan Document that does not specify how
Notices are to be given will be given in accordance with this Section 11.03.

 

  (d)

Reserved.

 

11.04

Successors and Assigns Bound. This Loan Agreement will bind the respective
successors and assigns of Borrower and Lender, and the rights granted by this
Loan Agreement will inure to Lender’s successors and assigns.

 

11.05

Joint and Several (and Solidary) Liability. If more than one Person signs this
Loan Agreement as Borrower, the obligations of such Persons will be joint and
several. For a Mortgaged Property located in Louisiana, if more than one Person
signs this Loan Agreement as Borrower, the obligations of such Persons with be
joint and several and solidary, and wherever the phrase “joint and several”
appears in this Loan Agreement, the phrase is amended to read “joint, several,
and solidary.”

 

11.06

Relationship of Parties; No Third Party Beneficiary.

 

  (a)

The relationship between Lender and Borrower will be solely that of creditor and
debtor, respectively, and nothing contained in this Loan Agreement will create
any other relationship between Lender and Borrower. Nothing contained in this
Loan Agreement will constitute Lender as a joint venturer, partner or agent of
Borrower, or render Lender liable for any debts, obligations, acts, omissions,
representations or contracts of Borrower.

 

  (b)

No creditor of any party to this Loan Agreement and no other Person will be a
third party beneficiary of this Loan Agreement or any other Loan Document.
Without limiting the generality of the preceding sentence: (i) any arrangement
(“Servicing Arrangement”) between Lender and any Loan Servicer for loss sharing
or interim advancement of funds will constitute a contractual obligation of such
Loan Servicer that is independent of the obligation of Borrower for the payment
of the Indebtedness, (ii) Borrower will not be a third party beneficiary of any
Servicing Arrangement, and (iii) no payment by the Loan Servicer under any
Servicing Arrangement will reduce the amount of the Indebtedness.

 

11.07

Severability; Amendments.

 

  (a)

The invalidity or unenforceability of any provision of this Loan Agreement will
not affect the validity or enforceability of any other provision, and all other
provisions will remain in full force and effect. This Loan Agreement contains
the entire agreement among the parties as to the rights granted and the
obligations assumed in this Loan Agreement.

 

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  (b)

This Loan Agreement may not be amended or modified except by a writing signed by
the party against whom enforcement is sought.

 

11.08

Disclosure of Information. Borrower acknowledges that Lender may provide to
third parties with an existing or prospective interest in the servicing,
enforcement, evaluation, performance, ownership, purchase, participation or
Securitization (if applicable) of the Loan, including any of the Rating
Agencies, any entity maintaining databases on the underwriting and performance
of commercial mortgage loans, as well as governmental regulatory agencies having
regulatory authority over Lender, any and all information which Lender now has
or may hereafter acquire relating to the Loan, the Mortgaged Property, Borrower,
any SPE Equity Owner or any Guarantor, as Lender determines necessary or
desirable and that such information may be included in disclosure documents in
connection with a Securitization (if applicable) or syndication of participation
interests, including a prospectus, prospectus supplement, offering memorandum,
private placement memorandum or similar document (each, a “Disclosure Document”)
and also may be included in any filing with the Securities and Exchange
Commission pursuant to the Securities Act or the Securities Exchange Act. To the
fullest extent permitted under applicable law, Borrower irrevocably waives all
rights, if any, to prohibit such disclosure, including any right of privacy.

 

11.09

Determinations by Lender. Unless otherwise provided in this Loan Agreement, in
any instance where the consent or approval of Lender may be given or is
required, or where any determination, judgment or decision is to be rendered by
Lender under this Loan Agreement, the granting, withholding or denial of such
consent or approval and the rendering of such determination, judgment or
decision will be made or exercised by Lender (or its designated representative)
at its sole and exclusive option and in its sole and absolute discretion.

 

11.10

Sale of Note; Change in Servicer; Loan Servicing. The Note or a partial interest
in the Note (together with this Loan Agreement and the other Loan Documents) may
be sold one or more times without prior Notice to Borrower. A sale may result in
a change of the Loan Servicer. There also may be one or more changes of the Loan
Servicer unrelated to a sale of the Note. If there is a change of the Loan
Servicer, Borrower will be given Notice of the change. All actions regarding the
servicing of the Loan evidenced by the Note, including the collection of
payments, the giving and receipt of Notice, inspections of the Mortgaged
Property, inspections of books and records, and the granting of consents and
approvals, may be taken by the Loan Servicer unless Borrower receives Notice to
the contrary. If Borrower receives conflicting Notices regarding the identity of
the Loan Servicer or any other subject, any such Notice from Lender will govern.

 

11.11

Supplemental Financing.

 

  (a)

This Section will apply only if at the time of any application referred to in
Section 11.11(b), Freddie Mac has in effect a product described in its
Multifamily Seller/Servicer Guide under which it purchases supplemental
mortgages on multifamily properties that meet specified criteria (“Supplemental
Mortgage Product”). For purposes of this Section 11.11 only, the term “Freddie
Mac” will include any affiliate or subsidiary of Freddie Mac.

 

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  (b)

After the first anniversary of the date of the Senior Indebtedness, Freddie Mac
will consider an application from an originating lender that is generally
approved by Freddie Mac to sell mortgages to Freddie Mac under the Supplemental
Mortgage Product (“Approved Seller/Servicer”) for the purchase by Freddie Mac of
a proposed indebtedness of Borrower to the Approved Seller/Servicer to be
secured by one or more Supplemental Instruments on the Mortgaged Property.
Freddie Mac will purchase each Supplemental Loan secured by the Mortgaged
Property if each of the following conditions is satisfied:

 

  (i)

At the time of the proposed Supplemental Loan, no Event of Default may have
occurred and be continuing and no event or condition may have occurred and be
continuing that, with the giving of Notice or the passage of time, or both,
would become an Event of Default.

 

  (ii)

Borrower and the Mortgaged Property must be acceptable to Freddie Mac under its
Supplemental Mortgage Product.

 

  (iii)

New loan documents must be entered into to reflect each Supplemental Loan, such
documents to be acceptable to Freddie Mac in its discretion.

 

  (iv)

No Supplemental Loan may cause the combined debt service coverage ratio of the
Mortgaged Property after the making of that Supplemental Loan to be less than
the Minimum DSCR. As used in this Section, the term “combined debt service
coverage ratio” means, with respect to the Mortgaged Property, the ratio of:

 

  (A)

the annual net operating income from the operations of the Mortgaged Property at
the time of the proposed Supplemental Loan,

to

 

  (B)

the aggregate of the annual principal and interest payable on all of the
following:

 

  (I)

the Indebtedness under this Loan Agreement (using a 30 year amortization
schedule),

 

  (II)

any “Indebtedness” as defined in any security instruments recorded against the
Mortgaged Property (using a 30 year amortization schedule for any Supplemental
Loans), and

 

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  (III)

the proposed “Indebtedness” for any Supplemental Loan (using a 30 year
amortization schedule).

As used in this Section, “annual principal and interest” with respect to a
floating rate loan will be calculated by Freddie Mac using an interest rate
equal to one of the following:

 

  (X)

If the loan has an internal interest rate cap, the Capped Interest Rate.

 

  (Y)

If the loan has an external interest rate cap, the external interest rate cap.

 

  (Z)

If the loan has no interest rate cap, the greater of (I) 7%, or (II) the
then-current LIBOR Index Rate plus the Margin plus 300 basis points.

The annual net operating income of the Mortgaged Property will be as determined
by Freddie Mac in its discretion considering factors such as income in place at
the time of the proposed Supplemental Loan and income during the preceding 12
months, and actual, historical and anticipated operating expenses. Freddie Mac
will determine the combined debt service coverage ratio of the Mortgaged
Property based on its underwriting. Borrower will provide Freddie Mac such
financial statements and other information Freddie Mac may require to make these
determinations.

 

  (v)

No Supplemental Loan may cause the combined loan to value ratio of the Mortgaged
Property after the making of that Supplemental Loan to exceed the Maximum
Combined LTV, as determined by Freddie Mac. As used in this Section, “combined
loan to value ratio” means, with respect to the Mortgaged Property, the ratio,
expressed as a percentage, of:

 

  (A)

the aggregate outstanding principal balances of all of the following:

 

  (I)

the Indebtedness under this Loan Agreement,

 

  (II)

any “Indebtedness” as defined in any security instruments recorded against the
Mortgaged Property, and

 

  (III)

the proposed “Indebtedness” for any Supplemental Loan,

to

 

  (B)

the value of the Mortgaged Property.

 

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Freddie Mac will determine the combined loan to value ratio of the Mortgaged
Property based on its underwriting. Borrower will provide Freddie Mac such
financial statements and other information Freddie Mac may require to make these
determinations. In addition, Freddie Mac, at Borrower’s expense, may obtain MAI
appraisals of the Mortgaged Property in order to assist Freddie Mac in making
the determinations under this Section. If Freddie Mac requires an appraisal,
then the value of the Mortgaged Property that will be used to determine whether
the Maximum Combined LTV has been met will be the lesser of the appraised value
set forth in such appraisal or the value of the Mortgaged Property as determined
by Freddie Mac.

 

  (vi)

Borrower’s organizational documents are amended to permit Borrower to incur
additional debt in the form of Supplemental Loans (Lender will consent to such
amendment(s)).

 

  (vii)

One or more Persons acceptable to Freddie Mac executes and delivers to the
Approved Seller/Servicer a Guaranty in a form acceptable to Freddie Mac with
respect to the exceptions to non-recourse liability described in Freddie Mac’s
form promissory note, unless Freddie Mac has elected to waive its requirement
for a Guaranty.

 

  (viii)

The loan term of each Supplemental Loan will be coterminous with the Senior
Indebtedness or longer than the Senior Indebtedness, in Freddie Mac’s
discretion.

 

  (ix)

The Prepayment Premium Period of each Supplemental Loan will be coterminous with
the Prepayment Premium Period or the combined Lockout Period and Defeasance
Period, as applicable, of the Senior Indebtedness.

 

  (x)

The interest rate of each Supplemental Loan will be determined by Freddie Mac in
its discretion.

 

  (xi)

Lender enters into an intercreditor agreement (“Intercreditor Agreement”)
acceptable to Freddie Mac and to Lender for each Supplemental Loan.

 

  (xii)

Borrower’s payment of fees and other expenses charged by Lender, Freddie Mac,
the Approved Seller/Servicer, and the Rating Agencies (including reasonable
Attorneys’ Fees and Costs) in connection with reviewing and originating each
Supplemental Loan.

 

  (xiii)

Commencing on the date that a Supplemental Loan is originated and continuing for
so long as any Supplemental Loan is outstanding, Senior Lender may begin
collection of Imposition Deposits for any of the following Impositions marked
‘Deferred’ in Section 4.02(a):

 

  (A)

Hazard Insurance premiums or premiums for other Insurance required by Lender
under Section 6.10.

 

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  (B)

Taxes and payments in lieu of taxes

 

  (C)

Ground Rents

Such deposits will be credited to the payment of any such required Imposition
deposits under any Supplemental Loan.

 

  (xiv)

If any covenants, conditions and restrictions affecting the Mortgaged Property
provide for a lien for any assessments or other unpaid amounts, Borrower will
provide satisfactory evidence that such lien will be subordinate to the lien of
the Supplemental Instrument.

 

  (xv)

All other requirements of the Supplemental Mortgage Product must be met, unless
Freddie Mac has elected to waive one or more of its requirements.

 

  (xvi)

Reserved.

 

  (xvii)

Reserved.

 

  (c)

No later than 5 Business Days after Lender’s receipt of a written request from
Borrower, Lender will provide the following information to an Approved
Seller/Servicer:

 

  (i)

The then-current outstanding principal balance of the Senior Indebtedness.

 

  (ii)

Payment history of the Senior Indebtedness.

 

  (iii)

Whether any Reserve Funds are being collected on the Senior Indebtedness and the
amount of each such Reserve Fund deposit as of the date of the request.

 

  (iv)

Whether any Repairs, Capital Replacements or improvements or rental achievement
or burn-off guaranty requirements are existing or outstanding under the terms of
the Senior Indebtedness.

 

  (v)

A copy of the most recent inspection report for the Mortgaged Property.

 

  (vi)

Whether any modifications or amendments have been made to the Loan Documents for
the Senior Indebtedness since origination of the Senior Indebtedness and, if
applicable, a copy of such modifications and amendments.

 

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  (vii)

Whether to Lender’s knowledge any Event of Default exists under the Senior
Indebtedness.

Lender will only be obligated to provide this information in connection with
Borrower’s request for a Supplemental Loan from an Approved Seller/Servicer.
Notwithstanding anything in this Section to the contrary, if Freddie Mac is the
owner of the Note, this Section 11.11(c) is not applicable.

 

  (d)

Lender will have no obligation to consent to any mortgage or Lien on the
Mortgaged Property that secures any indebtedness other than the Indebtedness,
except as set forth in this Loan Agreement.

 

  (e)

If a Supplemental Loan is made to Borrower, Borrower agrees that the terms of
the Intercreditor Agreement will govern with respect to any distributions of
excess proceeds by Lender to the Supplemental Lender, and Borrower agrees that
Lender may distribute any excess proceeds received by Lender pursuant to the
Loan Documents to Supplemental Lender pursuant to the Intercreditor Agreement.

 

11.12

Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the
Cut-off Date and if the Note provides for Defeasance). This Section 11.12 will
apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date,
and if the Note provides for Defeasance. If both of these conditions are met,
then, subject to Section 11.12(a) and (c), Borrower will have the right to
defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged
Property from the Lien of the Security Instrument upon the satisfaction of each
of the following conditions:

 

  (a)

Borrower will not have the right to obtain Defeasance at any of the following
times:

 

  (i)

If the Loan is not assigned to a REMIC trust.

 

  (ii)

During the Lockout Period.

 

  (iii)

After the expiration of the Defeasance Period.

 

  (iv)

After Lender has accelerated the maturity of the unpaid principal balance of,
accrued interest on, and other amounts payable under, the Note pursuant to
Section 11 of the Note.

 

  (b)

Borrower will give Lender Notice (“Defeasance Notice”) specifying a Business Day
(“Defeasance Closing Date”) on which Borrower desires to close the Defeasance.
The Defeasance Closing Date specified by Borrower may not be more than 60
calendar days, nor less than 30 calendar days, after the date on

 

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which Lender receives the Defeasance Notice. Lender will acknowledge receipt of
the Defeasance Notice and will notify Borrower of the identity of the
accommodation borrower (“Successor Borrower”).

 

  (c)

The Defeasance Notice must be accompanied by a $10,000 non-refundable fee
(“Defeasance Fee”). If Lender does not receive the Defeasance Fee, then
Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice will
terminate.

 

  (d)    (i)

If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its
other obligations under this Section, Lender will have the right to retain the
Defeasance Fee as liquidated damages for Borrower’s default and, except as
provided in Section 11.12(d)(ii), Borrower will be released from all further
obligations under this Section 11.12. Borrower acknowledges that Lender will
incur financing costs in arranging and preparing for the release of the
Mortgaged Property from the Lien of the Security Instrument in reliance on the
executed Defeasance Notice. Borrower agrees that the Defeasance Fee represents a
fair and reasonable estimate, taking into account all circumstances existing on
the date of this Loan Agreement, of the damages Lender will incur by reason of
Borrower’s default.

 

  (ii)

If the Defeasance is not consummated on the Defeasance Closing Date for any
reason, Borrower agrees to reimburse Lender for all third party costs and
expenses (other than financing costs covered by Section 11.12(d)(i)) incurred by
Lender in reliance on the executed Defeasance Notice, within 5 Business Days
after Borrower receives a written demand for payment, accompanied by a
statement, in reasonable detail, of Lender’s third party costs and expenses.

 

  (iii)

All payments required to be made by Borrower to Lender pursuant to this
Section 11.12 will be made by wire transfer of immediately available funds to
the account(s) designated by Lender in its acknowledgement of the Defeasance
Notice.

 

  (e)

No Event of Default has occurred and is continuing.

 

  (f)

Borrower will deliver each of the following documents to Lender, in form and
substance satisfactory to Lender, on or prior to the Defeasance Closing Date,
unless Lender has issued a written waiver of its right to receive any such
document:

 

  (i)

One or more opinions of counsel for Borrower confirming each of the following:

 

  (A)

Lender has a valid and perfected first Lien and first priority security interest
in the Defeasance Collateral and the proceeds of the Defeasance Collateral.

 

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  (B)

The Pledge Agreement is duly authorized, executed, delivered and enforceable
against Borrower in accordance with its terms.

 

  (C)

If, as of the Defeasance Closing Date, the Note is held by a REMIC trust, then
each of the following is correct:

 

  (1)

The Defeasance has been effected in accordance with the requirements of Treasury
Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended
or replaced from time to time).

 

  (2)

The qualification and status of the REMIC trust as a REMIC will not be adversely
affected or impaired as a result of the Defeasance.

 

  (3)

The REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a
result of the Defeasance.

 

  (D)

The Defeasance will not result in a “sale or exchange” of the Note within the
meaning of Section 1001(c) of the Tax Code and the temporary and final
regulations promulgated thereunder.

 

  (ii)

A written certificate from an independent certified public accounting firm
(reasonably acceptable to Lender), confirming that the Defeasance Collateral
will generate cash sufficient to make all Scheduled Debt Payments as they fall
due under the Note, including full payment due on the Note on the Maturity Date.

 

  (iii)

Lender’s form of a pledge and security agreement (“Pledge Agreement”) and
financing statements which pledge and create a first priority security interest
in the Defeasance Collateral in favor of Lender.

 

  (iv)

Lender’s form of a transfer and assumption agreement (“Transfer and Assumption
Agreement”), pursuant to which Borrower and any Guarantor (in each case, subject
to satisfaction of all requirements under this Loan Agreement) will be relieved
from liability in connection with the Loan to the extent described in Sections
7.05(b)(i) and
7.05(c)(i), respectively, and Successor Borrower will assume all remaining
obligations.

 

  (v)

Forms of all documents necessary to release the Mortgaged Property from the
Liens created by the Security Instrument and related UCC financing statements
(collectively, “Release Instruments”), each in appropriate form required by the
Property Jurisdiction.

 

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  (vi)

Any other opinions, certificates, documents or instruments that Lender may
reasonably request.

 

  (g)

Borrower will deliver to Lender, on or prior to the Defeasance Closing Date,
each of the following:

 

  (i)

The Defeasance Collateral, which meets all of the following requirements:

 

  (A)

It is owned by Borrower, free and clear of all Liens and claims of
third-parties.

 

  (B)

It is in an amount sufficient to provide for (1) redemption payments to occur
prior, but as close as possible, to all successive Installment Due Dates
occurring under the Note after the Defeasance Closing Date, and (2) delivery of
redemption proceeds at least equal to the amount of principal and interest due
on the Note on each Installment Due Date including full payment due on the Note
on the Maturity Date (“Scheduled Debt Payments”).

 

  (C)

All redemption payments received from the Defeasance Collateral will be paid
directly to Lender to be applied on account of the Scheduled Debt Payments
occurring after the Defeasance Closing Date.

 

  (D)

The pledge of the Defeasance Collateral will be effected through the book-entry
facilities of a qualified securities intermediary designated by Lender in
conformity with all applicable laws.

 

  (ii)

All accrued and unpaid interest and all other sums due under the Note, this Loan
Agreement and under the other Loan Documents, including all amounts due under
Section 11.12(i), up to the Defeasance Closing Date.

 

  (h)

Reserved.

 

  (i)

Borrower will pay all reasonable costs and expenses incurred by Lender in
connection with the Defeasance in full on or prior to the Defeasance Closing
Date, which payment is required prior to Lender’s issuance of the Release
Instruments and whether or not Defeasance is completed. Such expenses include
all fees, costs and expenses incurred by Lender and its agents in connection
with the Defeasance (including Attorneys’ Fees and Costs for the review and
preparation of the Pledge Agreement and of the other materials described in this
Loan Agreement and any related documentation, and any servicing fees, Rating
Agencies’ fees or other costs related to the Defeasance).

 

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Lender reserves the right to require that Borrower post a deposit to cover costs
which Lender reasonably anticipates that Lender will incur in connection with
the Defeasance.

 

  (j)

No Transfer Fee will be payable to Lender upon a Defeasance made in accordance
with this Section 11.12.

 

  (k)

Reserved.

 

11.13

Lender’s Rights to Sell or Securitize. Borrower acknowledges that Lender, and
each successor to Lender’s interest, may (without prior Notice to Borrower or
Borrower’s prior consent), sell or grant participations in the Loan (or any part
of the Loan), sell or subcontract the servicing rights related to the Loan,
securitize the Loan or place the Loan in a trust. Borrower, at its expense,
agrees to cooperate with all reasonable requests of Lender in connection with
any of the foregoing including taking the following actions:

 

  (a)

Executing any financing statements or other documents deemed necessary by Lender
or its transferee to create, perfect or preserve the rights and interest to be
acquired by such transferee.

 

  (b)

Delivering revised organizational documents, counsel opinions, and executed
amendments to the Loan Documents satisfactory to the Rating Agencies.

 

  (c)

Providing updated financial information with appropriate verification through
auditors’ letters, if required by Lender.

 

  (d)

Providing updated information on all litigation proceedings affecting Borrower,
any Borrower Principal, any Facility Operator or Property Manager as required in
Section 6.16.

 

  (e)

Reviewing information contained in any Disclosure Document, including with
respect to the Loan, Borrower, Guarantor, any Property Manager, and any Facility
Operator, and providing a mortgagor estoppel certificate, written confirmation
of Borrower’s indemnification obligations under this Loan Agreement, certificate
and such other information about Borrower, any SPE Equity Owner, any Guarantor,
any Property Manager, any Facility Operator, or the Mortgaged Property as Lender
may require for Lender’s offering materials.

 

11.14

Cooperation with Rating Agencies and Investors. Borrower covenants and agrees
that if Lender decides to include the Loan as an asset of a Secondary Market
Transaction, Borrower will do all of the following:

 

  (a)

At Lender’s request, meet with representatives of the Rating Agencies and/or
investors to discuss the business and operations of the Mortgaged Property.

 

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  (b)

Permit Lender or its representatives to provide related information to the
Rating Agencies and/or investors.

 

  (c)

Cooperate with the reasonable requests of the Rating Agencies and/or investors
in connection with all of the foregoing.

 

11.15

Letter of Credit Requirements.

 

  (a)

Any Letter of Credit required under this Loan Agreement must satisfy the
following conditions:

 

  (i)

It must be a clean, irrevocable, unconditional standby letter of credit.

 

  (ii)

It must name Lender as the sole beneficiary and permit Lender to assign the
Letter of Credit without further consent from Issuer.

 

  (iii)

It must have an initial term of not less than 12 months.

 

  (iv)

It must be in the form required by Lender.

 

  (v)

It must provide that it may be drawn on by Lender or Loan Servicer, in whole or
in part, by presentation to Issuer of a sight draft without any other
restrictions on the right to draw.

 

  (vi)

It must be issued by an Issuer meeting Lender’s requirements, which Issuer
(i) must be an Eligible Institution, and (ii) may not, unless Lender agrees in
writing, be an affiliate of Borrower or Lender.

 

  (vii)

It must be obtained on behalf of Borrower by a Person other than Borrower’s
general partners or managing members if Borrower is a general or limited
partnership or limited liability company. Neither Borrower nor the general
partners or managing members, if applicable, may have any liability or other
obligations under any reimbursement agreement with respect to the Letter of
Credit.

 

  (viii)

It may not be secured by a lien on all or any part of the Mortgaged Property or
related Personalty.

 

  (ix)

When delivered to Lender, it must be accompanied by an opinion acceptable to
Lender in Lender’s Discretion issued by counsel to the Issuer of the Letter of
Credit that includes opinions as to Issuer’s power and authority to issue the
Letter of Credit and the enforceability of the Letter of Credit against Issuer.

 

  (b)

If at any time the Issuer of a Letter of Credit held by Lender ceases to be an
Eligible Institution, Lender will have the right to immediately draw down the
Letter of Credit in full and hold the Proceeds in an escrow account in
accordance with the terms of this Loan Agreement.

 

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  (c)

Each Letter of Credit held by Lender pursuant to this Loan Agreement provides
additional collateral for the Indebtedness in addition to the lien of the
Security Instrument.

 

11.16

Reserved.

 

11.17

Splitting the Note.

 

  (a)

Lender has the right from time to time to sever the Note into two or more
separate promissory notes in such denominations as Lender determines in its sole
discretion, which promissory notes may be included in separate sales or
Securitizations undertaken by Lender. In conjunction with any such action,
Lender may redefine the interest rate and amortization schedule; provided
however, each of the following will be true:

 

  (i)

If Lender redefines the interest rate, the weighted average of the margins
contained in the severed promissory notes taken in the aggregate will equal the
Margin (as defined in the Note).

 

  (ii)

If Lender redefines the amortization schedule, the amortization of the severed
promissory notes taken in the aggregate will require no more amortization to be
paid under the Loan than as required under the Note at the time such action was
taken by Lender and such redefined amortization will not result in a change in
the amount of the monthly payment due under the Note.

 

  (b)

Borrower will only be required to make one payment under such separate
promissory notes. Subject to the foregoing, each severed promissory note, and
the Loan evidenced by each severed promissory note, will be upon all of the
terms and provisions contained in this Loan Agreement and the Loan Documents
which continue in full force and effect, except that Lender may allocate
specific collateral given for the Loan as security for performance of specific
promissory notes, in each case with or without cross default provisions.

 

  (c)

Borrower agrees to cooperate with all reasonable requests of Lender to
accomplish the foregoing, including execution and prompt delivery to Lender of a
severance agreement and such other documents as Lender requires in Lender’s
Discretion, and Lender will reimburse Borrower for all costs reasonably incurred
by Borrower in connection with actions taken by Borrower pursuant to Lender’s
request under the terms of this Section 11.17.

 

  (d)

Borrower hereby appoints Lender its attorney-in-fact with full power of
substitution (which appointment will be deemed to be coupled with an interest

 

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and irrevocable until the Loan is paid in full and the Security Instrument is
discharged of record, with Borrower hereby ratifying all that its said attorney
may do by virtue of such power) to make and execute all documents necessary or
desirable to effect the severance set forth in Section 11.17(a); provided,
however, Lender will not make or execute any such documents under such power
until 10 Business Days after Lender has given Borrower Notice of Lender’s intent
to exercise its rights under such power.

 

  (e)

Borrower’s failure to deliver any of the documents requested by Lender under
this Section for a period of 10 Business Days after Notice of such request by
Lender will, at Lender’s option, constitute an Event of Default under this Loan
Agreement.

 

11.18

Reserved.

 

11.19

State Specific Provisions. Reserved.

 

11.20

Time is of the Essence. Time is of the essence with respect to each covenant of
this Loan Agreement.

 

ARTICLE XII DEFINITIONS.

The following terms, when used in this Loan Agreement (including when used in
the recitals), will have the following meanings:

“Activities of Daily Living” means personal care services that provide the frail
elderly with assistance in eating, dressing, bathing, incontinence care and
assistance in moving from one place to another (such as from a bed to a
wheelchair).

“Affiliate” of any Person means:

 

(i)

Any other individual or entity that is, directly or indirectly, one of the
following:

 

  (A)

In Control of the applicable Person.

 

  (B)

Under the Control of the applicable Person.

 

  (C)

Under common Control with the applicable Person.

 

(ii)

Any individual that is a director or officer of the applicable Person.

 

(iii)

Any individual that is a director or officer of any entity described in clause
(i) of this definition.

“Approved Seller/Servicer” is defined in Section 11.11(b).

 

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“Assignment of Management Agreement” means the Assignment of Management
Agreement and Subordination of Management Fees dated the same date as this Loan
Agreement among Borrower, Lender and Property Manager, including all schedules,
riders, allonges and addenda, as such Assignment of Management Agreement may be
amended from time to time, and any future Assignment of Management Agreement and
Subordination of Management Fees executed in accordance with Section 6.09(d).

“Assisted Living Residences” means residences that are designed to accommodate
and provide 24-hour protective oversight and assistance for natural persons with
functional limitations, including meals in a central location and assistance
with Activities of Daily Living and Alzheimer’s care.

“Attorneys’ Fees and Costs” means: (i) fees and out of pocket costs of Lender’s
and Loan Servicer’s attorneys, as applicable, including costs of Lender’s and
Loan Servicer’s in-house counsel, support staff costs, costs of preparing for
litigation, computerized research, telephone and facsimile transmission
expenses, mileage, deposition costs, postage, duplicating, process service,
videotaping and similar costs and expenses; (ii) costs and fees of expert
witnesses, including appraisers; (iii) investigatory fees; and (iv) costs for
any opinion required by Lender pursuant to the terms of the Loan Documents.

“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. Section 101
et seq., as amended from time to time.

“Borrower” means all Persons identified as “Borrower” in the first paragraph of
this Loan Agreement, together with their successors and assigns.

“Borrower Information” is defined in Section 10.02(d).

“Borrower Principal” means any of the following:

 

  (i)

Any general partner of Borrower (if Borrower is a partnership).

 

  (ii)

Any manager or managing member of Borrower (if Borrower is a limited liability
company).

 

  (iii)

Any Person (limited partner, member or shareholder) with a collective direct or
indirect equity interest in Borrower equal to or greater than 25%.

 

  (iv)

Any Guarantor of all or any portion of the Loan or of any obligations of
Borrower under the Loan Documents.

“Borrower Proof of Loss Threshold” means $500,000.

“Borrower Proof of Loss Maximum” means $2,500,000.

 

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“Business Day” means any day other than a Saturday, a Sunday, or any other day
on which Lender or the national banking associations are not open for business.

“Cap Agreement” means any interest rate cap agreement, interest rate swap
agreement or other interest rate-hedging contract or agreement obtained by
Borrower from a Cap Provider as a requirement of any Loan Document or as a
condition of Lender’s making the Loan.

“Cap Collateral” means all of the following:

 

  (i)

The Cap Agreement.

 

  (ii)

The Cap Payments.

 

  (iii)

All rights of Borrower under any Cap Agreement and all rights of Borrower to all
Cap Payments, including contract rights and general intangibles, whether
existing now or arising after the date of this Loan Agreement.

 

  (iv)

All rights, liens and security interests or guaranties granted by a Cap Provider
or any other Person to secure or guaranty payment of any Cap Payments whether
existing now or granted after the date of this Loan Agreement.

 

  (v)

All documents, writings, books, files, records and other documents arising from
or relating to any of the foregoing, whether existing now or created after the
date of this Loan Agreement.

 

  (vi)

All cash and non-cash proceeds and products of (ii) through (v) of this
definition.

“Cap Payment(s)” means any and all monies payable pursuant to any Cap Agreement
by a Cap Provider.

“Cap Provider” means the interest rate cap provider or other counterparty to a
Cap Agreement or any guarantor of the obligations of any such cap provider or
counterparty.

“Capital Replacement” means the replacement of those items listed on Exhibit F.

“Capped Interest Rate” is defined in the Note, if applicable.

“Claim” is defined in Section 10.02(f).

“Clean Site Assessment” is defined in Section 7.05(b)(i).

“Closing Date” means the date on which Lender disburses the proceeds of the Loan
to or for the account of Borrower.

 

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“Commitment Letter” means the fully executed commitment letter or early rate
lock application between Lender and Borrower issued in connection with the Loan,
as such document may have been modified, amended or extended.

“Completion Date” means, with respect to any Repair, the date specified for that
Repair in the Repair Schedule of Work, as such date may be extended.

“Condemnation” is defined in Section 6.11(a).

“Continuing Care Retirement Community” or “CCRC” means a property designed to
provide a continuum of care within a single community. The living accommodations
and care provided within a CCRC are a combination of the accommodations and
services provided by Seniors Apartments, Independent Living Units, Assisted
Living Residences and Skilled Nursing Beds.

“Contract” means any present or future contract for the provision of goods or
services (or with respect to payment therefore), together with all
modifications, extensions and renewals, in connection with the operation or
management of the Facility (other than Leases), including (i) those with
Borrower or a Facility Operator, and (ii) Third Party Provider Agreements,
together with all modifications, extensions or renewals.

“Control” means to possess, directly or indirectly, the power to direct or cause
the direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, including the power to
elect a majority of the directors or trustees of a corporation or trust, as the
case may be.

“Cut-off Date” is defined in the Note, if applicable.

“Default Rate” is defined in the Note.

“Defeasance” is defined in Section 11.12.

“Defeasance Closing Date” is defined in Section 11.12(b).

“Defeasance Collateral” means: (i) a Freddie Mac Debt Security, (ii) a Fannie
Mae Debt Security, (iii) U.S. Treasury Obligations, or (iv) FHLB Obligations.

“Defeasance Fee” is defined in Section 11.12(c).

“Defeasance Notice” is defined in Section 11.12(b).

“Defeasance Period” is defined in the Note, if applicable.

“Designated Entity for Transfers” means each entity so identified in Exhibit I,
and that entity’s successors and permitted assigns.

“Disclosure Document” is defined in Section 11.08.

 

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“Downgrade” as it applies to a License, means a License is modified so as to
permit a less acute level of care (including elimination of skilled nursing or
assisted living care or services included in the License) by the Governmental
Authority responsible for issuing such License.

“Eligible Account” means an identifiable account which is separate from all
other funds held by the holding institution that is either (i) an account or
accounts maintained with the corporate trust department of a federal or
state-chartered depository institution or trust company which complies with the
definition of Eligible Institution, or (ii) a segregated trust account or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or trust
company is subject to regulations substantially similar to 12 C.F.R. §9.10(b),
having in either case a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal and state authority. An
Eligible Account will not be evidenced by a certificate of deposit, passbook or
other instrument.

“Eligible Institution” means a federal or state chartered depository institution
or trust company insured by the Federal Deposit Insurance Corporation, the short
term unsecured debt obligations or commercial paper of which are rated at least
A-1 by Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., P-1 by Moody’s Investors Service, Inc. and F-3 by Fitch, Inc.
in the case of accounts in which funds are held for 30 days or less or, in the
case of letters of credit or accounts in which funds are held for more than 30
days, the long term unsecured debt obligations of which are rated at least “A”
by Fitch, Inc. and Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., and “A2” by Moody’s Investors Service, Inc. If at
any time an Eligible Institution does not meet the required rating, the Loan
Servicer must move the Eligible Account within 30 days of such event to an
appropriately rated Eligible Institution.

“Environmental Inspections” is defined in Section 6.12(e).

“Environmental Permit” means any permit, license, or other authorization issued
under any Hazardous Materials Law with respect to any activities or businesses
conducted on or in relation to the Mortgaged Property.

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

“Event of Default” means the occurrence of any event listed in Section 9.01.

“Extension Period” is defined in the Note, if applicable.

“Facility” means the senior housing facility located on the Land, and including
the Land and Improvements located on the Land.

“Facility Operator” means any tenant (an “Operating Tenant”) under a lease with
Borrower (as landlord) of all or substantially all of the Facility, as well as
any manager or Facility Operator pursuant to a Contract with Borrower or with an
Operating Tenant.

 

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“Fannie Mae Debt Security” means any non-callable bond, debenture, note, or
other similar debt obligation issued by the Federal National Mortgage
Association.

“FHLB Obligations” mean direct, non-callable and non-redeemable securities
issued, or fully insured as to payment, by the Federal Home Loan Bank.

“Fixtures” means all property owned by Borrower which is attached to the Land or
the Improvements so as to constitute a fixture under applicable law, including:
machinery, equipment, engines, boilers, incinerators and installed building
materials; systems and equipment for the purpose of supplying or distributing
heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring
and conduits used in connection with radio, television, security, fire
prevention or fire detection or otherwise used to carry electronic signals;
telephone systems and equipment; elevators and related machinery and equipment;
fire detection, prevention and extinguishing systems and apparatus; security and
access control systems and apparatus; plumbing systems; water heaters, ranges,
stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers,
dryers and other appliances; light fixtures, awnings, storm windows and storm
doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors;
cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants;
swimming pools; and exercise equipment.

“Freddie Mac” means the Federal Home Loan Mortgage Corporation.

“Freddie Mac Debt Security” means any non-callable bond, debenture, note, or
other similar debt obligation issued by Freddie Mac.

“Freddie Mac Web Site” means the web site of Freddie Mac, located at
www.freddiemac.com.

“GAAP” means generally accepted accounting principles.

“Governmental Authority” means any board, commission, department, agency or body
of any municipal, county, state or federal governmental unit, or any subdivision
of any of them, that has or acquires jurisdiction over the Mortgaged Property,
or the use, operation or improvement of the Mortgaged Property, or over Borrower
including all applicable licensing or accreditation bodies or agencies (whether
federal, state, county, district, municipal, city or otherwise, whether now or
hereafter in existence, including applicable non-governmental organizations,
such as the Joint Commission on the Accreditation of Healthcare Organizations)
that have or acquire jurisdiction over Borrower, a Facility Operator (as
pertains to the Facility), the Facility or the use, operation, improvement,
accreditation, licensing or permitting of the Facility or the operations of the
Facility.

“Governmental Payor Program” means any Medicare, Medicaid, TRICARE programs or
similar federal, state, local or any other third party payors’ programs or other
similar provider payment programs, or any so-called “waiver program” associated
therewith.

 

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“Guarantor” means the Person(s) required by Lender to guaranty all or a portion
of Borrower’s obligations under the Loan Documents, as set forth in the
Guaranty: The required Guarantors as of the date of this Loan Agreement are set
forth in Exhibit I.

“Guaranty” means the Guaranty executed by Guarantor and/or any replacement or
supplemental guaranty executed pursuant to the terms of this Loan Agreement.

“Hazard Insurance” is defined in Section 6.10(a).

“Hazardous Materials” means petroleum and petroleum products and compounds
containing them, including gasoline, diesel fuel and oil; explosives; flammable
materials; radioactive materials; polychlorinated biphenyls (PCBs) and compounds
containing them; lead and lead-based paint; asbestos or asbestos containing
materials in any form that is or could become friable; underground or
above-ground storage tanks, whether empty or containing any substance; any
substance the presence of which on the Mortgaged Property is prohibited by any
Governmental Authority; any medical products or devices, including, those
materials defined as “medical waste” or “biological waste” under relevant
statutes, ordinances or regulations pertaining to Hazardous Materials Law; any
substance that requires special handling and any other material or substance now
or in the future that (i) is defined as a “hazardous substance,” “hazardous
material,” “hazardous waste,” “toxic substance,” “toxic pollutant,”
“contaminant,” or “pollutant” by or within the meaning of any Hazardous
Materials Law, or (ii) is regulated in any way by or within the meaning of any
Hazardous Materials Law.

“Hazardous Materials Law” and “Hazardous Materials Laws” means any and all
federal, state and local laws, ordinances, regulations and standards, rules,
policies and other governmental requirements, administrative rulings and court
judgments and decrees in effect now or in the future, including all amendments,
that relate to Hazardous Materials or the protection of human health or the
environment and apply to Borrower or to the Mortgaged Property. Hazardous
Materials Laws include the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601, et seq., the Resource Conservation
and Recovery Act of 1976, 42 U.S.C. Section 6901, et seq., the Toxic Substance
Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water Act, 33 U.S.C.
Section 1251, et seq., and the Hazardous Materials Transportation Act, 49 U.S.C.
Section 5101 et seq., and their state analogs.

“Healthcare Laws” means all federal, state, municipal or other Governmental
Authority laws, codes and statutes and all regulations and rules promulgated
thereunder and all Governmental Authority interpretations thereof, applicable or
pertaining to the ownership, leasing, operation or management of medical or
senior housing facilities (including Independent Living Units, adult care
facilities, Assisted Living Residences, skilled nursing care, rehabilitation
services, CCRC’s, and dementia and/or memory care facilities), including those
pertaining to Licenses necessary to operate or manage any such facility, those
pertaining to billing any Governmental Payor Program, those pertaining to
patient care and Privacy Laws, quality and safety standards, accepted
professional standards, and principles that apply to professionals providing
services to the Facility, accreditation standards, and requirements of the
applicable state department of health and all other Governmental Authorities
including, those requirements relating to the Facility’s physical structure and
environment, licensing, quality and adequacy of medical care, distribution of
pharmaceuticals, rate setting, equipment, personnel, operating policies,
additions to facilities and services and fee splitting.

 

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“HIPAA” means the Health Insurance Portability and Accountability Act of 1996,
as amended from time to time, together with all rules and regulations
promulgated thereunder from time to time.

“HVAC System” is defined in Section 6.10(a)(v).

“Immediate Family Members” means a Person’s spouse, parent, child (including
stepchild), grandchild (including step-grandchild) or sibling.

“Imposition Reserve Deposits” is defined in Section 4.02(a).

“Impositions” is defined in Section 4.02(a).

“Improvements” means the buildings, structures and improvements now constructed
or at any time in the future constructed or placed upon the Land, including any
future alterations, replacements and additions.

“Indebtedness” means the principal of, interest at the fixed or variable rate
set forth in the Note on, and all other amounts due at any time under, the Note,
this Loan Agreement or any other Loan Document, including prepayment premiums,
late charges, default interest, and advances as provided in Section 9.02 to
protect the security of the Security Instrument.

“Indemnified Party/ies” is defined in Section 10.02(d).

“Indemnitees” is defined in Section 10.02(a).

“Independent Living Units” means residential units that are accompanied by
optional services designed to aid the residents’ independence, including
building security, optional meals, housekeeping, laundry, and at least some
incidental services and activities not related to personal care, such as valet
shopping, financial planning, unscheduled transportation, beautician services,
recreational and social activities and 24-hour staff presence.

“Installment Due Date” is defined in the Note.

“Insurance” means Hazard Insurance, liability insurance and all other insurance
that Lender requires Borrower to maintain pursuant to this Loan Agreement.

“Intended Use” is defined in Section 5.25.

“Intercreditor Agreement” is defined in Section 11.11(b).

“Issuer” means the issuer of any Letter of Credit.

 

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“Issuer Group” is defined in Section 10.02(d).

“Issuer Person” is defined in Section 10.02(d).

“Land” means the land described in Exhibit A.

“Leases” means all present and future leases, master leases, operating leases,
subleases, occupancy agreements pertaining to occupants of the Facility,
including both residential and commercial agreements and patient admission or
resident care agreements, licenses, concessions or grants or other possessory
interests now or hereafter in force, whether oral or written, covering or
affecting the Mortgaged Property, or any portion of the Mortgaged Property
(including proprietary leases or occupancy agreements if Borrower is a
cooperative housing corporation), and all modifications, extensions or renewals.

“Lender” means the entity identified as “Lender” in the first paragraph of this
Loan Agreement, or any subsequent holder of the Note.

“Lender’s Discretion” means Lender’s reasonable discretion unless otherwise set
forth in this Loan Agreement.

“Letter of Credit” means any letter of credit required under the terms of this
Loan Agreement or any other Loan Document.

“LIBOR Index Rate” is defined in the Note, if applicable.

“License” means any license, permit, regulatory agreement, certificate,
approval, certificate of need or similar certificate, authorization,
accreditation, approved provider status in any approved provider payment
program, or approval issued by an applicable state department of health (or any
subdivision thereof) or state licensing agency, as applicable, in each instance
whether issued by a Governmental Authority or otherwise, used in connection
with, or necessary or desirable to use, occupy or operate the Facility for its
Intended Use, including the provision of all goods and services to be provided
by Borrower or the Facility Operator to the residents of the Facility.

“Lien” means any mortgage, deed of trust, deed to secure debt, security interest
or other lien or encumbrance on the Mortgaged Property.

“Loan” is defined on Page 1 of this Loan Agreement.

“Loan Agreement” means this Multifamily Loan and Security Agreement.

“Loan Application” is defined in Section 5.16(a).

“Loan Documents” means the Note, the Security Instrument, this Loan Agreement,
all guaranties, all indemnity agreements, all collateral agreements, UCC
filings, O&M Programs, the MMP and any other documents now or in the future
executed by Borrower, any Guarantor or any other Person in connection with the
Loan evidenced by the Note, as such documents may be amended from time to time.

 

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“Loan Servicer” means the entity that from time to time is designated by Lender
to collect payments and deposits and receive Notices under the Note, the
Security Instrument, this Loan Agreement and any other Loan Document, and
otherwise to service the Loan evidenced by the Note for the benefit of Lender.

“Lockout Period,” if applicable, is defined in the Note.

“Manager” or “Managers” means a Person who is named or designated as a manager
or managing member or otherwise acts in the capacity of a manager or managing
member of a limited liability company in a limited liability company agreement
or similar instrument under which the limited liability company is formed or
operated.

“Margin” is defined in the Note, if applicable.

“Material Adverse Effect” means a significant detrimental effect on: (i) the
Mortgaged Property (including the Facility), (ii) the business, prospects,
profits, operations or condition (financial or otherwise) of Borrower or any
Facility Operator, (iii) the enforceability, validity, perfection or priority of
the Lien of any Loan Document, (iv) the ability of Borrower or any Facility
Operator to perform any obligations under any Loan Document or (v) Borrower’s or
any Facility Operator’s interest in the Facility including a Downgrade,
termination, revocation or suspension of, or refusal to renew or reissue, any
applicable License, or a ban on new resident admissions.

“Material Contract” means Contracts:

 

  (i)

For preparing or serving food (but do not include food supply Contracts),
regardless of annual consideration or term.

 

  (ii)

For medical services or healthcare provider agreements, regardless of annual
consideration or term.

 

  (iii)

The average annual consideration of which, directly or indirectly, is at least
$20,000.

 

  (iv)

Having a term of more than one year unless subject to termination by Borrower or
if Borrower is not a party to the Contract, the Facility Operator, and their
respective successors and assigns, upon not more than 30 days notice, without
cause and without payment of any termination fee, penalty or extra charge.

 

  (v)

Determined by Lender to be material to the operation of the Facility.

“Maturity Date” means the Scheduled Maturity Date, as defined in the Note.

 

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“Maximum Combined LTV” means 65%.

“Minimum DSCR” means, with respect to a Supplemental Loan,

 

  (i)

if the Senior Indebtedness bears interest at a fixed rate, then

 

  (A)

1.30:1 for Mortgaged Properties classified by Lender as Independent Living, and

 

  (B)

1.40:1 for Mortgaged Properties classified by Lender as Assisted Living,

or

 

  (ii)

if the Senior Indebtedness bears interest at a floating rate, then

 

  (A)

1.15:1 for Mortgaged Properties classified by Lender as Independent Living and

 

  (B)

1.20:1 for Mortgaged Properties classified by Lender as Assisted Living.

“MMP” means a moisture management plan to control water intrusion and prevent
the development of Mold or moisture at the Mortgaged Property throughout the
term of this Loan Agreement.

“Modified Non-Residential Lease” means an extension or modification of any
Non-Residential Lease, which Non-Residential Lease was in existence as of the
date of this Loan Agreement.

“Mold” means mold, fungus, microbial contamination or pathogenic organisms.

“Mortgaged Property” means all of Borrower’s present and future right, title and
interest in and to all of the following:

 

  (i)

The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease,
the Ground Lease and the Leasehold Estate.

 

  (ii)

The Improvements (including the Facility).

 

  (iii)

The Fixtures.

 

  (iv)

The Personalty.

 

  (v)

All current and future rights, including air rights, development rights, zoning
rights and other similar rights or interests, easements, tenements, rights of
way, strips and gores of land, streets, alleys, roads, sewer rights, waters,
watercourses and appurtenances related to or benefiting the Land or the
Improvements, or both, and all rights-of-way, streets, alleys and roads which
may have been or may in the future be vacated.

 

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  (vi)

All proceeds paid or to be paid by any insurer of the Land, the Improvements,
the Fixtures, the Personalty or any other part of the Mortgaged Property,
whether or not Borrower obtained the Insurance pursuant to Lender’s requirement.

 

  (vii)

All awards, payments and other compensation made or to be made by any municipal,
state or federal authority with respect to the Land or the Leasehold Estate, as
applicable, the Improvements, the Fixtures, the Personalty or any other part of
the Mortgaged Property, including any awards or settlements resulting from
Condemnation proceedings or the total or partial taking of the Land, the
Improvements, the Fixtures, the Personalty or any other part of the Mortgaged
Property under the power of eminent domain or otherwise and including any
conveyance in lieu thereof.

 

  (viii)

All contracts, options and other agreements for the sale of the Land, or the
Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty
or any other part of the Mortgaged Property entered into by Borrower now or in
the future, including cash or securities deposited to secure performance by
parties of their obligations.

 

  (ix)

All proceeds from the conversion, voluntary or involuntary, of any of the items
described in items (i) through (viii) of this definition, into cash or
liquidated claims, and the right to collect such proceeds.

 

  (x)

All Rents and Leases.

 

  (xi)

All earnings, royalties, accounts receivable, issues and profits from the Land,
the Improvements or any other part of the Mortgaged Property, and all
undisbursed proceeds of the Loan.

 

  (xii)

All Imposition Reserve Deposits.

 

  (xiii)

All refunds or rebates of Impositions by any Governmental Authority or insurance
company (other than refunds applicable to periods before the real property tax
year in which this Loan Agreement is dated).

 

  (xiv)

All tenant security deposits which have not been forfeited by any tenant under
any Lease and any bond or other security in lieu of such deposits.

 

  (xv)

All names under or by which any of the Mortgaged Property may be operated or
known, and all trademarks, trade names and goodwill relating to any of the
Mortgaged Property.

 

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  (xvi)

If required by the terms of Section 4.05 or elsewhere in this Loan Agreement,
all rights under any Letter of Credit and the Proceeds, as such Proceeds may
increase or decrease from time to time.

 

  (xvii)

If the Note provides for interest to accrue at a floating or variable rate and
there is a Cap Agreement, the Cap Collateral.

 

  (xviii)

All payments received and all rights to receive payments from any source, which
payments (or rights thereto) arise from operation of or at the Facility,
including entrance fees, application fees, processing fees, community fees and
any other amounts or fees deposited or to be deposited by any resident or
tenant, payments received and the right to receive payments of second party
charges added to base rental income, base and additional meal sales, payments
received and rights to receive payments from commercial operations located at or
on the Facility or provided as a service to the occupants of the Facility,
rental from guest suites, seasonal lease charges, rental payments under
furniture leases, income from laundry service, and income and fees from any and
all other services provided to residents of the Facility.

 

  (xix)

All rights to payments from Governmental Payor Programs and rights to payment
from private insurers, arising from the operation of the Facility.

 

  (xx)

All Licenses.

 

  (xxi)

All Contracts, including operating contracts, franchises, licensing agreements,
healthcare services contracts, food service contracts and other contracts for
services related to the operation of the Facility.

 

  (xxii)

All utility deposits.

 

  (xxiii)

Reserved.

 

  (xxiv)

Reserved.

 

  (xxv)

Reserved.

“New Non-Residential Lease” is any Non-Residential Lease not in existence as of
the date of this Loan Agreement.

“Non-Residential Lease” is a Lease of a portion of the Mortgaged Property to be
used for non-residential purposes.

“Note” means the Multifamily Note (including any Amended and Restated Note,
Consolidated, Amended and Restated Note, or Extended and Restated Note) executed
by Borrower in favor of Lender and dated as of the date of this Loan Agreement,
including all schedules, riders, allonges and addenda, as such Multifamily Note
may be amended, modified and/or restated from time to time.

 

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“Notice” or “Notices” means all notices, demands and other communication
required under the Loan Documents, provided in accordance with the requirements
of Section 11.03.

“O&M Program” is defined in Section 6.12(c) and consists of the following: O&M
Program for asbestos and PCBs which complies with the requirements of the
environmental report prepared by RPS GaiaTech dated March 1, 2015.

“Person” means any natural person, sole proprietorship, corporation, general
partnership, limited partnership, limited liability company, limited liability
partnership, limited liability limited partnership, joint venture, association,
joint stock company, bank, trust, estate, unincorporated organization, any
federal, state, county or municipal government (or any agency or political
subdivision thereof), endowment fund or any other form of entity.

“Personalty” means all of the following:

 

  (i)

Accounts (including deposit accounts) of Borrower related to the Mortgaged
Property.

 

  (ii)

Equipment and inventory owned by Borrower, which are used now or in the future
in connection with the ownership, management or operation of the Land or
Improvements or are located on the Land or Improvements, including furniture,
furnishings, dishes, silverware, glassware, kitchen equipment, machinery,
building materials, goods, supplies, tools, books, records (whether in written
or electronic form) and computer equipment (hardware and software).

 

  (iii)

Other tangible personal property owned by Borrower which is used now or in the
future in connection with the ownership, management or operation of the Land or
Improvements or is located on the Land or in the Improvements, including ranges,
stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers,
dryers and other appliances (other than Fixtures).

 

  (iv)

Any operating agreements relating to the Land or the Improvements.

 

  (v)

Any surveys, plans and specifications and contracts for architectural,
engineering and construction services relating to the Land or the Improvements.

 

  (vi)

All other intangible property, general intangibles and rights relating to the
operation of, or used in connection with, the Land or the Improvements,

 

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including all governmental permits relating to any activities on the Land and
including subsidy or similar payments received from any sources, including a
Governmental Authority.

 

  (vii)

Any rights of Borrower in or under any Letter of Credit.

“Pledge Agreement” is defined in Section 11.12(f)(iii).

“Prepayment Premium Period” is defined in the Note.

“Prior Lien” means a pre-existing mortgage, deed of trust or other Lien
encumbering the Mortgaged Property.

“Privacy Laws” means all federal, state, municipal or other Governmental
Authority laws, codes and statutes and all regulations and rules promulgated
thereunder and all Governmental Authority interpretations thereof, applicable or
pertaining to resident, tenant and patient privacy. Privacy Laws include HIPAA.

“Proceeding” means, whether voluntary or involuntary, any case, proceeding or
other action against Borrower or any SPE Equity Owner under any existing or
future law of any jurisdiction relating to bankruptcy, insolvency,
reorganization or relief of debtors.

“Proceeds” means the cash obtained by a draw on a Letter of Credit.

“Prohibited Activity or Condition” means each of the following:

 

  (i)

The presence, use, generation, release, treatment, processing, storage
(including storage in above-ground and underground storage tanks), handling or
disposal of any Hazardous Materials on or under the Mortgaged Property.

 

  (ii)

The transportation of any Hazardous Materials to, from or across the Mortgaged
Property.

 

  (iii)

Any occurrence or condition on the Mortgaged Property, which occurrence or
condition is or may be in violation of Hazardous Materials Laws.

 

  (iv)

Any violation of or noncompliance with the terms of any Environmental Permit
with respect to the Mortgaged Property.

 

  (v)

Any violation or noncompliance with the terms of any O&M Program.

However, the term “Prohibited Activity or Condition” expressly excludes lawful
conditions permitted by an O&M Program or the safe and lawful use and storage of
quantities of: (i) medical products or devices or medical waste,
(ii) pre-packaged supplies, cleaning materials and petroleum products
customarily used in the operation and maintenance of comparable multifamily
properties, (iii) cleaning materials, personal grooming items and other items
sold in

 

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pre-packaged containers for consumer use and used by tenants and occupants of
residential dwelling units in the Mortgaged Property, and (iv) petroleum
products used in the operation and maintenance of motor vehicles from time to
time located on the Mortgaged Property’s parking areas, so long as all of the
foregoing are used, stored, handled, transported and disposed of in compliance
with Hazardous Materials Laws.

“Property Jurisdiction” means the jurisdiction in which the Land is located.

“Property Manager” means Holiday AL Management Sub LLC, or another residential
rental property manager which is approved by Lender in writing.

“Property Seller” is defined in Section 5.24.

“Public Fund/REIT Securities” is defined in Section 7.03(c).

“Rate Cap Agreement Reserve Fund” means the account established pursuant to
Section 4.07, if applicable, to pay for the cost of a Replacement Cap Agreement.

“Rating Agencies” means Fitch, Inc., Moody’s Investors Service, Inc., or
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., or any successor entity of the foregoing, or any other nationally
recognized statistical rating organization.

“Release Instruments” is defined in Section 11.12(f).

“Remedial Work” is defined in Section 6.12(f).

“Rent(s)” means all rents (whether from residential or non-residential space),
revenues and other income of the Land or the Improvements, parking fees, laundry
and vending machine income and fees and charges for food, health care and other
services provided at the Mortgaged Property, whether now due, past due or to
become due, and deposits forfeited by tenants, and, if Borrower is a cooperative
housing corporation or association, maintenance fees, charges or assessments
payable by shareholders or residents under proprietary leases or occupancy
agreements, whether now due, past due or to become due.

“Rent Schedule” means a written schedule for the Mortgaged Property showing the
name of each tenant, and for each tenant, the space occupied, the lease
expiration date, the rent payable for the current month, the date through which
rent has been paid, and any related information requested by Lender.

“Repairs” means the repairs to be made to the Mortgaged Property, as described
on the Repair Schedule of Work or as otherwise required by Lender in accordance
with this Loan Agreement.

“Replacement Cap Agreement” means any replacement Cap Agreement provided to
Lender pursuant to Section 4.07(c). The Replacement Cap Agreement must satisfy
each of the following requirements:

 

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  (i)

It must have an effective date not later than the day following the last day of
the term of the Cap Agreement that preceded it, and may not expire before the
earlier of (A) the 1st anniversary of the effective date of such Replacement Cap
Agreement or (B) the Maturity Date.

 

  (ii)

It must obligate the Cap Provider, which Cap Provider must be acceptable to
Lender, to make monthly payments to Lender equal to the excess of (A) the actual
interest on a notional principal amount of the Indebtedness over (B) interest on
that notional amount at the same fixed cap rate as that in the original Cap
Agreement.

“Replacement Cost” means the estimated replacement cost of the Improvements,
Fixtures, and Personalty (or, when used in reference to a property that is not
the Mortgaged Property, all improvements, fixtures, and personalty located on
such property), excluding any deduction for depreciation, all as determined
annually by Borrower using customary methodology and sources of information
acceptable to Lender in Lender’s Discretion. Replacement Cost will not include
the cost to reconstruct foundations or site improvements, such as driveways,
parking lots, sidewalks, and landscaping.

“Reserve Fund” means each account established for Imposition Reserve Deposits,
the Replacement Reserve Fund, the Repair Reserve Fund (if any), the Rate Cap
Agreement Reserve Fund (if any), the Rental Achievement Reserve Fund (if any),
and any other account established pursuant to Article IV of this Loan Agreement.

“Restoration” is defined in Section 6.10(j)(i).

“Scheduled Debt Payments” is defined in Section 11.12(g)(i)(B).

“Secondary Market Transaction” means: (i) any sale or assignment of this Loan
Agreement, the Note and the other Loan Documents to one or more investors as a
whole loan, (ii) a participation of the Loan to one or more investors, (iii) any
deposit of this Loan Agreement, the Note and the other Loan Documents with a
trust or other entity which may sell certificates or other instruments to
investors evidencing an ownership interest in the assets of such trust or other
entity, or (iv) any other sale, assignment or transfer of the Loan or any
interest in the Loan to one or more investors.

“Securitization” means when the Note or any portion of the Note is assigned to a
REMIC trust.

“Securitization Indemnification” is defined in Section 10.02(d).

“Security Instrument” means the mortgage, deed of trust, deed to secure debt or
other similar security instrument encumbering the Mortgaged Property and
securing Borrower’s performance of its Loan obligations, including Borrower’s
obligations under the Note and this Loan Agreement (including any Amended and
Restated Security Instrument, Consolidation, Modification and Extension
Agreement, Extension and Modification Agreement or similar agreement or
instrument amending and restating existing security instruments).

 

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“Senior Indebtedness” means, for a Supplemental Loan, if any, the Indebtedness
evidenced by each Senior Note and secured by each Senior Instrument for the
benefit of each Senior Lender.

“Senior Instrument” – Not applicable.

“Senior Lender” means each holder of a Senior Note.

“Senior Loan Documents” means, for a Supplemental Loan, if any, all documents
relating to each loan evidenced by a Senior Note.

“Senior Note” means, for a Supplemental Loan, if any, each Multifamily Note
secured by a Senior Instrument.

“Seniors Apartments” means age-restricted apartments for senior residents who
are able to function independently. These residences are typically restricted to
residents 55 and older (or 62 and older). Seniors Apartments do not provide
healthcare services, medication assistance, meal services or other third-party
contract services.

“Servicing Arrangement” is defined in Section 11.06(b).

“Single Purpose Entity” is defined in Section 6.13(a).

“Site Assessment” means an environmental assessment report for the Mortgaged
Property prepared at Borrower’s expense by a qualified environmental consultant
engaged by Borrower, or by Lender on behalf of Borrower, and approved by Lender,
and in a manner reasonably satisfactory to Lender, based upon an investigation
relating to and making appropriate inquiries to evaluate the risks associated
with Mold and any existence of Hazardous Materials on or about the Mortgaged
Property, and the past or present discharge, disposal, release or escape of any
such substances, all consistent with ASTM Standard E1527-05 (or any successor
standard published by ASTM) and good customary and commercial practice.

“Skilled Nursing Beds” means a portion of a property that provides licensed
skilled nursing care and related services for patients who require medical,
nursing or rehabilitative services, including Alzheimer’s care.

“SPE Equity Owner” is not applicable. Borrower will not be required to maintain
an SPE Equity Owner in its organizational structure during the term of the Loan
and all references to SPE Equity Owner in this Loan Agreement and in the Note
will be of no force or effect.

“Successor Borrower” is defined in Section 11.12(b).

“Supplemental Indebtedness” the Indebtedness evidenced by the Supplemental Note
and secured by the Supplemental Instrument for the benefit of Supplemental
Lender, if any.

“Supplemental Instrument” means, for a Supplemental Loan, if any, the Security
Instrument executed to secure the Supplemental Note.

 

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“Supplemental Lender” means, for a Supplemental Loan, if any, the lender named
in the Supplemental Instrument and its successors and/or assigns.

“Supplemental Loan” means a loan that is subordinate to the Senior Indebtedness.

“Supplemental Loan Documents” means, for a Supplemental Loan, if any, all
documents relating to the loan evidenced by the Supplemental Note.

“Supplemental Mortgage Product” is defined in Section 11.11(a).

“Supplemental Note” means, for a Supplemental Loan, if any, the Multifamily Note
secured by the Supplemental Instrument.

“Tax Code” means the Internal Revenue Code of the United States, 26 U.S.C.
Section 1 et seq., as amended from time to time.

“Taxes” means all taxes, assessments, vault rentals and other charges, if any,
whether general, special or otherwise, including all assessments for schools,
public betterments and general or local improvements, which are levied, assessed
or imposed by any public authority or quasi-public authority, and which, if not
paid, will become a Lien on the Land or the Improvements.

“Third Party Provider Agreements” means any contract pursuant to which payments
arising from operation of or at the Facility are to be made by or pursuant to
Governmental Payor Programs or private insurers.

“Total Insurable Value” means the sum of the Replacement Cost, business
income/rental value Insurance and the value of any business personal property.

“Transfer” means any of the following:

 

  (i)

A sale, assignment, transfer or other disposition or divestment of any interest
in Borrower, a Designated Entity for Transfers, or the Mortgaged Property
(whether voluntary, involuntary or by operation of law).

 

  (ii)

The granting, creating or attachment of a Lien, encumbrance or security interest
(whether voluntary, involuntary or by operation of law).

 

  (iii)

The issuance or other creation of an ownership interest in a legal entity,
including a partnership interest, interest in a limited liability company or
corporate stock.

 

  (iv)

The withdrawal, retirement, removal or involuntary resignation of a partner in a
partnership or a member or Manager in a limited liability company.

 

  (v)

The merger, dissolution, liquidation, or consolidation of a legal entity or the
reconstitution of one type of legal entity into another type of legal entity.

 

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  (vi)

A change of the Guarantor.

For purposes of defining the term “Transfer,” the term “partnership” means a
general partnership, a limited partnership, a joint venture, a limited liability
partnership, or a limited liability limited partnership, and the term “partner”
means a general partner, a limited partner, or a joint venturer.

“Transfer” does not include any of the following:

 

  (i)

A conveyance of the Mortgaged Property at a judicial or non-judicial foreclosure
sale under the Security Instrument.

 

  (ii)

The Mortgaged Property becoming part of a bankruptcy estate by operation of law
under the Bankruptcy Code.

 

  (iii)

The filing or recording of a Lien against the Mortgaged Property for local taxes
and/or assessments not then due and payable.

“Transfer and Assumption Agreement” is defined in Section 11.12(f)(iv).

“Transfer Fee” means a fee paid when the Transfer is completed. Unless otherwise
specified, the Transfer Fee will be equal to the lesser of the following:

 

  (i)

1% of the outstanding principal balance of the Indebtedness as of the date of
the Transfer.

 

  (ii)

$250,000.

“Transfer Processing Fee” means a nonrefundable fee of $15,000 for Lender’s
review of a proposed or completed Transfer.

“U.S. Treasury Obligations” means direct, non-callable and non-redeemable
securities issued, or fully insured as to payment, by the United States of
America.

“UCC Collateral” is defined in Section 3.03.

“Underwriter Group” is defined in Section 10.02(d).

“Uniform Commercial Code” means the Uniform Commercial Code as promulgated in
the applicable jurisdiction.

“Windstorm Coverage” is defined in Section 6.10(a)(iv).

 

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ARTICLE XIII         INCORPORATION OF ATTACHED RIDERS.

The Riders listed on Page ii are attached to and incorporated into this Loan
Agreement.

 

ARTICLE XIV         INCORPORATION OF ATTACHED EXHIBITS.

The following Exhibits, if marked with an “X” in the space provided, are
attached to this Loan Agreement:

 

x Exhibit A Description of the Land (required) x Exhibit B Modifications to
Multifamily Loan and Security Agreement x Exhibit C Repair Schedule of Work x
Exhibit D Repair Disbursement Request (required) ¨ Exhibit E Work Commenced at
Mortgaged Property x Exhibit F Capital Replacements (required) ¨ Exhibit G
Description of Ground Lease x Exhibit H Organizational Chart of Borrower as of
the Closing Date (required) x Exhibit I Designated Entities for Transfers and
Guarantor(s) (required) ¨ Exhibit J Description of Release Parcel x Exhibit K
Licenses (required)

 

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x

Exhibit L Furniture, Fixtures, Equipment, and Motor Vehicles (required)

x

Exhibit M Contracts (required)

x

Exhibit N Material Contracts (required)

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURES ON FOLLOWING PAGES

 

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BORROWER: NIC 11 Ashford Court Owner LLC, a Delaware limited liability company
By:

/s/ Justine Cheng

(Seal) Name: Justine Cheng Title: Authorized Person

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

LENDER: WALKER & DUNLOP, LLC, a Delaware limited liability company By:

/s/ Nancy McGrade

(Seal) Name: Nancy McGrade Title: Senior Closing Officer

 

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

REPLACEMENT RESERVE FUND – IMMEDIATE DEPOSITS

(Revised 7-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 4.04 is deleted and replaced with the following:

 

  4.04

Replacement Reserve Fund.

 

  (a)

Deposits to Replacement Reserve Fund. On the Closing Date, the parties will
establish the Replacement Reserve Fund and Borrower will pay the Initial Deposit
to Lender for deposit into the Replacement Reserve Fund. Commencing on the date
the first installment of principal and/or interest is due under the Note and
continuing on the same day of each successive month until the Loan is paid in
full, Borrower will pay the Monthly Deposit to Lender for deposit into the
Replacement Reserve Fund, together with its regular monthly payments of
principal and/or interest as required by the Note. A transfer of funds into the
Replacement Reserve Fund from the Repair Reserve Fund, pursuant to the terms of
Section 4.03(e), if applicable, will not alter or reduce the amount of any
deposits to the Replacement Reserve Fund.

 

  (b)

Costs Charged by Lender.

 

  (i)

If Lender, in Lender’s Discretion, retains a professional inspection engineer or
other qualified third party to inspect any Capital Replacements pursuant to the
terms of Section 6.06, Lender may charge Borrower an amount sufficient to pay
all reasonable costs and expenses charged by such third party inspector.

 

  (ii)

If there are sufficient funds in Replacement Reserve Fund, Lender will be
entitled, but not obligated, to deduct from the Replacement Reserve Fund the
costs and expenses set forth in Section 4.04(b)(i). Lender will be entitled to
charge Borrower for such costs and expenses and Borrower will pay the amount of
such item(s) to Lender immediately within five (5) Business Days after Notice
from Lender to Borrower of such charge(s).

 

  (iii)

If there are insufficient funds in the Replacement Reserve Fund, then Lender
will be entitled to charge Borrower for the costs and expenses specified in
Section 4.04(b)(i), and Borrower will pay the amount of such item(s) to Lender
immediately within five (5) Business Days after Notice from Lender to Borrower
of such charge(s).

 

Rider to Multifamily Loan and Security Agreement

Replacement Reserve Fund – Immediate Deposits

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  (c)

Adjustments to Replacement Reserve Fund. If the initial term of the Loan is
greater than 120 months, then the following provisions will apply:

 

  (i)

Lender reserves the right to adjust the amount of the Monthly Deposit based on
Lender’s assessment of the physical condition of the Mortgaged Property,
however, Lender will not make such an adjustment prior to the date that is 120
months after the first installment due date, nor more frequently than every 10
years thereafter during the term of the Loan.

 

  (ii)

Borrower will pay the cost of any assessment required by Lender pursuant to
Section 4.04(c)(i) to Lender immediately after Notice from Lender to Borrower of
such charge.

 

  (iii)

Upon Notice from Lender or Loan Servicer, Borrower will begin paying the Revised
Monthly Deposit on the first monthly payment date that is at least 30 days after
the date of Lender’s or Loan Servicer’s Notice. If Lender or Loan Servicer does
not provide Borrower with Notice of a Revised Monthly Deposit, Borrower will
continue to pay the Monthly Deposit or the Revised Monthly Deposit then in
effect.

 

  (d)

Insufficient Amount in Replacement Reserve Fund. If Borrower requests
disbursement from the Replacement Reserve Fund for a Capital Replacement in
accordance with this Loan Agreement in an amount which exceeds the amount on
deposit in the Replacement Reserve Fund, Lender will disburse to Borrower only
the amount on deposit in the Replacement Reserve Fund. Borrower will pay all
additional amounts required in connection with any such Capital Replacement from
Borrower’s own funds.

 

  (e)

Reserved.

 

  (f)

Reserved.

 

  (g)

Disbursements from Replacement Reserve Fund.

 

  (i)

Requests for Disbursement. Lender will disburse funds from the Replacement
Reserve Fund as follows:

 

  (A)

Borrower’s Request. If Borrower determines, at any time or from time to time,
that a Capital Replacement is necessary or desirable, Borrower will perform such
Capital Replacement and request from Lender, in writing, reimbursement for such
Capital Replacement. Borrower’s

 

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Replacement Reserve Fund – Immediate Deposits

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request for reimbursement will include (1) a detailed description of the Capital
Replacement performed, together with evidence, satisfactory to Lender, that the
cost of such Capital Replacement has been paid, and (2) if required by Lender,
lien waivers from each contractor and material supplier supplying labor or
materials for such Capital Replacement.

 

  (B)

Lender’s Request. If Lender reasonably determines at any time or from time to
time, that a Capital Replacement is necessary for the proper maintenance of the
Mortgaged Property, it will so notify Borrower, in writing, requesting that
Borrower obtain and submit to Lender bids for all labor and materials required
in connection with such Capital Replacement. Borrower will submit such bids and
a time schedule for completing each Capital Replacement to Lender within 30 days
after Borrower’s receipt of Lender’s Notice. Borrower will perform such Capital
Replacement and request from Lender, in writing, reimbursement for such Capital
Replacement. Borrower’s request for reimbursement will include (1) a detailed
description of the Capital Replacement performed, together with evidence,
satisfactory to Lender, that the cost of such Capital Replacement has been paid,
and (2) if required by Lender, lien waivers from each contractor and material
supplier supplying labor or materials for such Capital Replacement.

 

  (ii)

Conditions Precedent. Disbursement from the Replacement Reserve Fund will be
made no more frequently than once every Replacement Reserve Disbursement Period
and, except for the final disbursement, no disbursement will be made in an
amount less than the Minimum Replacement Disbursement Request Amount.
Disbursements will be made only if the following conditions precedent have been
satisfied, as determined by Lender in Lender’s Discretion:

 

  (A)

Each Capital Replacement has been performed and/or installed on the Mortgaged
Property in a good and workmanlike manner with suitable materials (or in the
case of a partial disbursement, performed and/or installed on the Mortgaged
Property to an acceptable stage), in accordance with good customary building
practices and all applicable laws, ordinances, rules and regulations, building
setback lines and restrictions applicable to the Mortgaged Property, and has
been paid for by Borrower as evidenced by copies of all applicable paid invoices
or bills submitted to Lender by Borrower at the time Borrower requests
disbursement from the Replacement Reserve Fund.

 

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  (B)

There is no condition, event or act that would constitute a default (with or
without Notice and/or lapse of time).

 

  (C)

No Lien or claim based on furnishing labor or materials has been recorded, filed
or asserted against the Mortgaged Property, unless Borrower has properly
provided a bond or other security against loss in accordance with applicable
law.

 

  (D)

All licenses, permits and approvals of any Governmental Authority required for
the Capital Replacement as completed to the applicable stage have been obtained
and submitted to Lender upon Lender’s request.

 

  (h)

Right to Complete Capital Replacements. If Borrower abandons or fails to proceed
diligently with any Capital Replacement in a timely fashion or an Event of
Default occurs and continues under this Loan Agreement, in each case for 30 days
after Notice of such failure condition or event by Lender to Borrower, Lender
will have the right (but not the obligation) to enter upon the Mortgaged
Property and take over and cause the completion of such Capital Replacement.
However, no such Notice or cure period will apply in the case of such failure
which could, in Lender’s sole and absolute discretion, absent immediate exercise
by Lender of a right or remedy under this Loan Agreement, result in harm to
Lender, tenants or third parties or impairment of the security given under this
Loan Agreement, the Security Instrument or any other Loan Document. Any
contracts entered into or indebtedness incurred upon the exercise of such right
may be in the name of Borrower, and Lender is irrevocably appointed the attorney
in fact for Borrower, such appointment being coupled with an interest, to enter
into such contracts, incur such obligations, enforce any contracts or agreements
made by or on behalf of Borrower (including the prosecution and defense of all
actions and proceedings in connection with the Capital Replacement and the
payment, settlement or compromise of all bills and claims for materials and work
performed in connection with the Capital Replacement) and do any and all things
necessary or proper to complete any Capital Replacement, including signing
Borrower’s name to any contracts and documents as may be deemed necessary by
Lender. In no event will Lender be required to expend its own funds to complete
any Capital Replacement, but Lender may, in Lender’s Discretion, advance such
funds. Any funds advanced will be added to the Indebtedness, secured by the
Security Instrument and payable to Lender by Borrower in accordance with the
provisions of the Note, this Loan Agreement, the Security Instrument and any
other Loan Document pertaining to the protection of Lender’s security and
advances made by Lender.

 

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  (i)

Completion of Capital Replacements. Lender’s disbursement of monies from the
Replacement Reserve Fund or other acknowledgment of completion of any Capital
Replacement in a manner satisfactory to Lender in Lender’s Discretion will not
be deemed a certification by Lender that the Capital Replacement has been
completed in accordance with applicable building, zoning or other codes,
ordinances, statutes, laws, regulations or requirements of any Governmental
Authority. Borrower will at all times have the sole responsibility for ensuring
that all Capital Replacements are completed in accordance with all such
requirements of any Governmental Authority.

 

  (j)

Reserved.

 

  (k)

Reserved.

 

B.

The following definitions are added to Article XII:

“Initial Deposit” means $0.

“Minimum Replacement Disbursement Request Amount” means $5,000

“Monthly Deposit” means $7,655.

“Replacement Reserve Deposit” means the Initial Deposit, the Monthly Deposit
and/or the Revised Monthly Deposit, as appropriate.

“Replacement Reserve Disbursement Period” means the interval between
disbursements from the Replacement Reserve Fund, which interval will be no
shorter than once a quarter.

“Replacement Reserve Fund” means the account established pursuant to this Loan
Agreement to defray the costs of Capital Replacements.

“Revised Monthly Deposit” means the adjusted amount per month that Lender
determines Borrower must deposit in the Replacement Reserve Fund following any
adjustment determination by Lender pursuant to Section 4.04(c).

 

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

REPAIR RESERVE FUND

(Revised 7-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 4.03 is deleted and replaced with the following:

 

  4.03

Repair Reserve Fund.

 

  (a)

Deposits to Repair Reserve Fund. Lender and Borrower acknowledge that Borrower
has established the Repair Reserve Fund by depositing the Repair Reserve Deposit
with Lender on the date of this Loan Agreement, and that Borrower must complete
the Repairs required pursuant to Section 6.14.

 

  (b)

Costs Charged by Lender.

 

  (i)

If Lender, in Lender’s Discretion, retains a professional inspection engineer or
other qualified third party to inspect any Repairs pursuant to the terms of
Section 6.06, Lender may charge Borrower an amount sufficient to pay all
reasonable costs and expenses charged by such third party inspector.

 

  (ii)

Lender will be entitled, but not obligated, to deduct from the Repair Reserve
Fund the costs and expenses set forth in Section 4.03(b)(i). Lender will be
entitled to charge Borrower for such costs and expenses and Borrower will pay
the amount of such item(s) to Lender immediately within five (5) Business Days
after Notice from Lender to Borrower of such charge(s).

 

  (iii)

If there are insufficient funds to pay for the costs and expenses set forth in
Section 4.03(b)(i), then Lender will be entitled to charge Borrower for the
costs and expenses specified in Section 4.03(b)(i), and Borrower will pay the
amount of such item(s) to Lender immediately within five (5) Business Days after
Notice from Lender to Borrower of such charge(s).

 

  (c)

Insufficient Amount in Repair Reserve Fund. If Lender determines, in Lender’s
Discretion that the money in the Repair Reserve Fund is insufficient to pay for
the Repairs, Lender will provide Borrower with Notice of such insufficiency, and
as soon as possible (but in no event later than 20 days after such Notice)
Borrower will pay to Lender an amount, in cash, equal to such deficiency, which
Lender will deposit in the Repair Reserve Fund.

 

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  (d)

Disbursements of Repair Reserve Fund.

 

  (i)

Disbursement. From time to time, as construction and completion of the Repairs
progresses, upon Borrower’s submission of a Repair Disbursement Request in the
form attached to this Loan Agreement as Exhibit D, and provided that no Event of
Default has occurred and no condition exists which but for the passage of time
or giving of Notice, or both, would constitute an Event of Default, Lender will
make disbursements from the Repair Reserve Fund for payment or reimbursement of
the actual costs of the Repairs. In connection with each disbursement, Borrower
will take each of the following actions:

 

  (A)

Sign Borrower’s Repair Disbursement Request.

 

  (B)

Include with each Repair Disbursement Request a report setting out the progress
of the Repairs and any other reports or information relating to the construction
of the Repairs that may be reasonably requested by Lender.

 

  (C)

Include with each Repair Disbursement Request copies of any applicable invoices
and/or bills and appropriate lien waivers for the prior period for which
disbursement was made, executed by all contractors and suppliers supplying labor
or materials for the Repairs.

 

  (D)

Include with each Repair Disbursement Request, a report prepared by the
professional engineer employed by Lender as to the status of the Repairs, unless
Lender has waived this requirement in writing.

 

  (E)

Include with each Repair Disbursement Request, Borrower’s written representation
and warranty that the Repairs as completed to the applicable stage do not
violate any laws, ordinances, rules or regulations, or building setback lines or
restrictions, applicable to the Mortgaged Property.

Except for the final Repair Disbursement Request, no Repair Disbursement Request
may be for an amount less than the Minimum Repair Disbursement Request Amount.

 

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  (ii)

Conditions Precedent. Lender will not be obligated to make any disbursement from
the Repair Reserve Fund to or for the benefit of Borrower unless at the time of
such Repair Disbursement Request all of the following conditions exist:

 

  (A)

There exists no condition, event or act that would constitute a default (with or
without Notice and/or lapse of time) under this Loan Agreement or any other Loan
Document.

 

  (B)

Borrower is in full compliance with the provisions of this Loan Agreement, the
other Loan Documents and any request or demand by Lender permitted by this Loan
Agreement.

 

  (C)

No lien or claim based on furnishing labor or materials has been recorded, filed
or asserted against the Mortgaged Property, unless Borrower has properly
provided bond or other security against loss in accordance with applicable law.

 

  (D)

All licenses, permits, and approvals of any Governmental Authority required for
the Repairs as completed to the applicable stage have been obtained and
submitted to Lender upon Lender’s request.

 

  (iii)

Reporting Requirements; Completion. Prior to the applicable Completion Date,
Borrower will deliver to Lender, in addition to the information required by
Section 4.03(d)(i) above, all of the following:

 

  (A)

Contractor’s Certificate. If required by Lender, a certificate signed by each
major contractor and supplier of materials, as reasonably determined by Lender,
engaged to provide labor or materials for the Repairs to the effect that such
contractor or supplier has been paid in full for all work completed and that the
portion of the Repairs provided by such contractor or supplier has been fully
completed in accordance with the plans and specifications (if any) provided to
it by Borrower and that such portion of the Repairs is in compliance with all
applicable building codes and other rules and regulations promulgated by any
applicable regulatory authority or Governmental Authority.

 

  (B)

Borrower’s Certificate. A certificate signed by Borrower to the effect that the
Repairs have been fully paid for and that all money disbursed pursuant to this
Loan Agreement has

 

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been used for the Repairs and no claim exists against Borrower or against the
Mortgaged Property out of which a lien based on furnishing labor or material
exists or might ripen. Borrower may except from the certificate described in the
preceding sentence any claim(s) that Borrower intends to contest, provided that
any such claim is described in Borrower’s certificate and Borrower certifies to
Lender that the money in the Repair Reserve Fund is sufficient to make payment
of the full amount which might in any event be payable in order to satisfy such
claim(s). If required by Lender, Borrower also must certify to Lender that such
portion of the Repairs is in compliance with all applicable building codes and
zoning ordinances.

 

  (C)

Engineer’s Certificate. If required by Lender, a certificate signed by the
professional engineer employed by Lender to the effect that the Repairs have
been completed in a good and workmanlike manner in compliance with the Repair
Schedule of Work and all applicable building codes, zoning ordinances and other
rules and regulations promulgated by applicable regulatory or Governmental
Authorities.

 

  (D)

Other Certificates. Any other certificates of approval, acceptance or compliance
required by Lender from any Governmental Authority having jurisdiction over the
Mortgaged Property and the Repairs.

 

  (iv)

Inspection. Prior to and as a condition of the final disbursement of funds from
the Repair Reserve Fund, Lender will inspect or will cause the Repairs and
Improvements to be inspected in accordance with the terms of Section 6.06(a), to
determine whether all interior and exterior Repairs have been completed in a
manner acceptable to Lender accordance with this Section 4.03.

 

  (v)

Indirect and Excess Disbursements from Repair Reserve Fund. Lender, in its sole
and absolute discretion, is authorized to hold, use and disburse funds from the
Repair Reserve Fund to pay any and all costs, charges and expenses whatsoever
and howsoever incurred or required in connection with the construction and
completion of the Repairs, or, if an Event of Default has occurred and is
continuing, in the payment or performance of any obligation of Borrower to
Lender. If Lender, for purposes specified in this Section 4.03, elects to pay
any portion of the money in the Repair Reserve Fund to parties other than
Borrower, then Lender may do so, at any time and from time to time, and the
amount of advances to which Borrower will be entitled under this Loan Agreement
will be correspondingly reduced.

 

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  (vi)

Repair Schedule of Work. All disbursements from the Repair Reserve Fund will be
limited to the costs of those items set forth on the Repair Schedule of Work.
Without the prior written consent of Lender, Borrower will not make any payments
from the Repair Reserve Fund other than for the costs of those items set forth
on the Repair Schedule of Work or alter the Repair Schedule of Work.

 

  (e)

Termination of Repair Reserve Fund. The provisions of this Section 4.03 will
cease to be effective upon the completion of the Repairs in accordance with this
Loan Agreement to Lender’s satisfaction the terms of this Section 4.03, and the
full disbursement by Lender of the Repair Reserve Fund. If there are funds
remaining in the Repair Reserve Fund after the Repairs have been completed in
accordance with this Loan Agreement, and provided no Event of Default has
occurred and is continuing under this Loan Agreement or under any of the other
Loan Documents, and no condition exists which but for the passage of time or
giving of Notice, or both, would constitute an Event of Default, such funds
remaining in the Repair Reserve Fund will be refunded by Lender to Borrower.

 

  (f)

Right to Complete Repairs. If Borrower abandons or fails to proceed diligently
with the Repairs or otherwise, or there exists an Event of Default under this
Loan Agreement, Lender will have the right (but not the obligation) to enter
upon the Mortgaged Property and take over and cause the completion of the
Repairs. Any contracts entered into or indebtedness incurred upon the exercise
of such right may be in the name of Borrower, and Lender is irrevocably
appointed the attorney in fact of Borrower, such appointment being coupled with
an interest, to enter into such contracts, incur such obligations, enforce any
contracts or agreements made by or on behalf of Borrower (including the
prosecution and defense of all actions and proceedings in connection with the
Repairs and the payment, settlement, or compromise of all claims for materials
and work performed in connection with the Repairs) and do any and all things
necessary or proper to complete the Repairs including signing Borrower’s name to
any contracts and documents as may be deemed necessary by Lender. In no event
will Lender be required to expend its own funds to complete the Repairs, but
Lender may, in Lender’s sole and absolute discretion, advance such funds. Any
funds advanced will be added to the Indebtedness, secured by the Security
Instrument and payable to Lender by Borrower in accordance with the provisions
of the Loan Documents pertaining to the protection of Lender’s security and
advances made by Lender. Borrower waives any and all claims it may have against
Lender for materials used, work performed or resultant damage to the Mortgaged
Property, except as the result of the gross negligence or willful misconduct of
Lender.

 

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  (g)

Completion of Repairs. Lender’s disbursement of monies in the Repair Reserve
Fund or other acknowledgment of completion of any Repair in a manner
satisfactory to Lender will not be deemed a certification by Lender that the
Repair has been completed in accordance with applicable building, zoning or
other codes, ordinances, statutes, laws, regulations or requirements of any
Governmental Authority. Borrower will at all times have the sole responsibility
for insuring that all Repairs are completed in accordance with all such
governmental requirements.

 

B.

The following definitions are added to Article XII:

“Minimum Repair Disbursement Request Amount” means $5,000.

“Repair Disbursement Request” means Borrower’s written requests to Lender in the
form attached as Exhibit D for the disbursement of money from the Repair Reserve
Fund pursuant to Article IV.

“Repair Reserve Deposit” means $100,938.

“Repair Reserve Disbursement Period” means the interval between disbursements
from the Repair Reserve Fund, which interval will be no shorter than once every
30 days during the term of this Loan Agreement.

“Repair Reserve Fund” means the account which may be established by this Loan
Agreement into which the Repair Reserve Deposit is deposited.

“Repair Schedule of Work” means the Repair Schedule of Work attached as Exhibit
C.

 

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

PROPERTY IMPROVEMENT ALTERATIONS

(Revised 12-19-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 6.09(e) is deleted and replaced with the following:

 

  (e)

Alteration of Mortgaged Property. Borrower will give Notice to Lender of and,
unless otherwise directed in writing by Lender, will appear in and defend any
action or proceeding purporting to affect the Mortgaged Property, Lender’s
security or Lender’s rights under this Loan Agreement. Borrower will not (and
will not permit any tenant or other Person to) remove, demolish or alter the
Mortgaged Property or any part of the Mortgaged Property, including any removal,
demolition or alteration occurring in connection with a rehabilitation of all or
part of the Mortgaged Property, except that each of the following is permitted:

 

  (i)

Repairs or Capital Replacements pursuant to Sections 4.03 or 4.04.

 

  (ii)

Repairs or Capital Replacements made in connection with the replacement of
tangible Personalty.

 

  (iii)

If Borrower is a cooperative housing corporation or association, Repairs or
Capital Replacements to the extent permitted with respect to individual dwelling
units under the form of a proprietary lease or occupancy agreement.

 

  (iv)

Repairs or Capital Replacements repairs or capital improvements in connection
with making an individual unit ready for a new occupant or pursuant to Sections
6.09(a) and (c).

 

  (v)

Property Improvement Alterations, provided that each of the following conditions
is satisfied:

 

  (A)

At least 30 days prior to the commencement of any Property Improvement
Alterations, Borrower must submit to Lender a Property Improvement Notice. The
Property Improvement Notice must include all of the following information:

 

  (1)

The expected start date and completion date of the Property Improvement
Alterations.

 

  (2)

A description of the anticipated Property Improvement Alterations to be made.

 

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  (3)

The projected budget of the Property Improvement Alterations and the source of
funding.

In the event any changes to Property Improvement Alterations as described in the
Property Improvement Alterations Notice are made that extend beyond the overall
scope and intent of the Property Improvement Alterations set forth in the
Property Alterations Notice (e.g., renovations changed to renovate common areas
but Property Improvement Alterations Notice only described renovations to the
residential dwelling unit bathrooms), Borrower must submit a new Property
Alterations Notice to Lender in accordance with this subsection 6.09(e)(v)(A).

 

  (B)

The Property Improvement Alterations may not be commenced within 12 months prior
to the Maturity Date without prior written consent of the Lender and must be
completed at least 6 months prior to the Maturity Date.

 

  (C)

Neither the performance nor completion of the Property Improvement Alterations
may result in any of the following:

 

  (1)

An adverse effect on any Major Building Systems, except as permitted by
Section 5.25(b).

 

  (2)

A change in residential dwelling unit configurations on a permanent basis with
respect to more than 10% of the residential dwelling units located at the
Mortgaged Property.

 

  (3)

An aggregate increase of more than 10% or decrease of more than 3% in the total
number of residential dwelling units.

 

  (4)

The demolition of any existing Improvements.

 

  (5)

A permanent obstruction of tenants’ access to units or a temporary obstruction
of tenants’ access to units without a reasonable alternative access provided
during the period of renovation which causes the obstruction.

 

  (D)

The cost of the Property Improvement Alterations made to residential dwelling
units during the term of the Mortgage must not exceed the Property Improvement
Total Amount.

 

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  (E)

The Leases used to calculate Minimum Occupancy for use in Section 6.09(e)(v)(I)
must meet all of the following conditions:

 

  (1)

The Leases are with tenants that are not Affiliates of Borrower or Guarantor
(except as otherwise expressly agreed by Lender in writing).

 

  (2)

The Leases are on arms’ length terms and conditions.

 

  (3)

The Leases otherwise satisfy the requirements of the Loan Documents.

 

  (F)

The Property Improvement Alterations must be completed in accordance with
Section 6.14 and any reference to Repairs in Sections 6.06 and 6.14 will be
deemed to include Property Improvement Alterations.

 

  (G)

Upon completion of the applicable Property Improvement Alterations, Borrower
must provide all of the following to the Lender:

 

  (1)

Borrower’s Certificate of Property Improvement Alterations Completion, in the
form attached as Schedule 1 to this Rider (“Certificate of Completion”).

 

  (2)

Any other certificates or approval, acceptance or compliance required by Lender,
including certificates of occupancy, from any Governmental Authority having
jurisdiction over the Mortgaged Property and the Property Improvement
Alterations and professional engineers certifications.

 

  (H)

Borrower must deliver to Lender within 10 days Business Days of Lender’s request
a written status update on the Property Improvement Alterations.

 

  (I)

While Property Improvement Alterations that result in individual residential
dwelling units not being available for leasing are ongoing, if a Rent Schedule
shows that the occupancy of the Mortgaged Property has decreased to less than
the Minimum Occupancy, Borrower must take each of the following actions:

 

  (1)

Complete all pending Property Improvement Alterations to such individual
residential dwelling units in a timely manner until the Mortgaged Property
satisfies the Minimum Occupancy requirement.

 

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  (2)

Suspend any additional Property Improvement Alterations which would cause
residential dwelling units to be unavailable for leasing until the Mortgaged
Property satisfies the Minimum Occupancy requirement.

 

  (J)

In the event Property Improvement Alterations have commenced on the Mortgaged
Property, Borrower will deliver to Lender, upon Lender’s request, the
Certificate of Completion together with such additional information as Lender
may request within a timely manner.

 

B.

The following definitions are added to Article XII:

“Major Building System” means one that is integral to the Improvements,
providing basic services to the tenants and other occupants of the Improvements
including

 

  •  

Electrical (electrical lines or power upgrades, excluding fixture replacement)

 

  •  

HVAC (central and unit systems, excluding replacement of in kind unit systems)

 

  •  

Plumbing (supply and waste lines, excluding fixture replacement)

 

  •  

Structural (foundation, framing, and all building support elements)

“Minimum Occupancy” means 85% of units at the Mortgaged Property with leases
that comply with Section 5.11 and Section 6.09(e)(v)(E).

“Property Improvement Alterations” means alterations and additions to the
Improvements existing at or upon the Mortgaged Property as of the date of this
Loan Agreement, which are being made to renovate or upgrade the Mortgaged
Property and are not otherwise permitted under this Section 6.09(e). Repairs,
Capital Replacements, Restoration or other work required to be performed at the
Mortgaged Property pursuant to Sections 6.10 or 6.11 will not constitute
Property Improvement Alterations.

“Property Improvement Notice” means a Notice to Lender that Borrower intends to
begin the Property Improvement Alterations identified in the Property
Improvement Notice.

“Property Improvement Total Amount” means the aggregate of $1,872,000 during the
term of the Mortgage.

 

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SCHEDULE 1

Freddie Mac Loan Number: 708638015

Property Name: Ashford Court

BORROWER’S CERTIFICATE OF

PROPERTY IMPROVEMENT ALTERATIONS COMPLETION

(Revised 6-10-2014)

THIS BORROWER’S CERTIFICATE OF PROPERTY IMPROVEMENT ALTERATIONS COMPLETION
(“Certificate”) is made as of                 , 20    , by                     ,
a                     (“Borrower”) for the benefit of                     , a
                    , and it successors and assigns (collectively, “Lender”).

In connection with Section 6.09(e)(v)(G) of the Loan Agreement, Borrower
certifies to Lender as follows:

[INSERT THE APPLICABLE SECTION (a) AND DELETE THE OTHER:

USE THE FOLLOWING IF ALL PROPERTY IMPROVEMENT ALTERATIONS THAT WERE COMMENCED
HAVE BEEN COMPLETED]

 

  (a)

All Property Improvement Alterations described in the Property Improvement
Notice that were commenced have been completed. The completed Property
Improvement Alterations and their completion dates are as follows:

 

Description of Property Improvement

Alteration Commenced

  

Completion Date

     

OR

[USE THE FOLLOWING IF MINIMUM OCCUPANCY HAS DECREASED BELOW THE MINIMUM
OCCUPANCY REQUIREMENT AND NOT ALL THE PROPERTY IMPROVEMENT ALTERATIONS THAT WERE
COMMENCED HAD BEEN COMPLETED AT SUCH TIME]

 

(a)

All Property Improvement Alterations described in the Property Improvement
Notice that resulted in individual residential dwelling units not being
available for leasing that were commenced have been or will be completed in a
timely manner. Such Property Improvement Alterations that were commenced and
their completion dates and/or, if applicable, anticipated completion dates, are
as follows:

 

Description of Property Improvement
Alteration Commenced

  

Completion

Date

  

Anticipated Completion

Date

  

Comments

                 

 

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FOR ALL LOANS:

 

  (b)

The completed Property Improvement Alterations were completed in a good and
workmanlike manner and in compliance with all laws (including, without
limitation, any and all life safety laws, environmental laws, building codes,
zoning ordinances and laws for the handicapped and/or disabled)

 

  (c)

Should Borrower intend to contest any claim or claims for labor, materials or
other costs, Borrower agrees to give Lender notice within 30 days of the
existence of such claim or claims and certifies to Lender that payment of the
full amount which might in any event be payable in order to satisfy such claim
or claims will be made.

[INSERT THE FOLLOWING IF MINIMUM OCCUPANCY HAS DECREASED BELOW THE MINIMUM
OCCUPANCY REQUIREMENT]

 

  (d)

Any additional Property Improvement Alterations not yet commenced which would
cause residential dwelling units to be unavailable for leasing have been
suspended.

[BORROWER SIGNATURE]

 

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

LIMITED PARTNER OR NON-MANAGING MEMBER TRANSFER

(Revised 7-2-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 7.03(d)(vi) is deleted and replaced with the following:

 

  (vi)

Limited Partner or Non-Managing Member Transfer. A Transfer that results in the
cumulative Transfer of more than 50% and up to 100% of the non-managing
membership interests in or the limited partnership interests in Borrower or any
Designated Entity for Transfer (“Investor Interests”) (but excluding Public
Fund/REIT Securities) to third party transferees (“Investor Interest Transfer”),
provided that each of the following conditions is satisfied:

 

  (A)

Borrower provides Lender with at least 30 days prior Notice of the proposed
Investor Interest Transfer.

 

  (B)

At the time of the proposed Investor Interest Transfer, no No Event of Default
has occurred and is continuing and no event or condition has occurred and is
continuing that, with the giving of Notice or the passage of time, or both,
would become an Event of Default.

 

  (C)

Following the Investor Interest Transfer, Control and management of the
day-to-day operations of Borrower continue to be held by the Person exercising
such Control and management immediately prior to the Investor Interest Transfer
and there is no change in the Guarantor, if applicable.

 

  (D)

The Investor Interest Transfer does not result in a Transfer of the type
described in Section 7.02(b).

 

  (E)

At any time that one Person acquires 25% or more of the aggregate of direct or
indirect Investor Interests as a result of the Investor Interest Transfer,
Borrower must meet the following additional requirements:

 

  (1)

Borrower pays to Lender the Transfer Processing Fee at the time the Borrower
provides Lender with the Notice set forth subsection (A) above.

 

  (2)

Borrower pays or reimburses Lender, upon demand, for all out-of-pocket costs and
expenses, including all Attorneys’ Fees and Costs, incurred by Lender in
connection with the Investor Interest Transfer.

 

 

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  (3)

Lender receives confirmation acceptable a certificate from Borrower confirming
to Lender that (X) the requirements of Section 6.13 continue to be satisfied,
and (Y) the term of existence of the holder of 25% or more of the Investor
Interests after the Investor Interest Transfer (exclusive of any unexercised
extension options or rights) does not expire prior to the Maturity Date.

 

  (4)

Lender receives organizational charts reflecting the structure of Borrower prior
to and after the Investor Interest Transfer and copies of the then-current
organizational documents of Borrower and the entity in which Investor Interests
were transferred, if different from Borrower, including any amendments.

 

  (5)

Each transferee with an interest of 25% or more delivers to Lender a
certification that each of the following is true:

 

  (X)

He/she/it has not been convicted of fraud or a crime involving moral turpitude
(or if an entity, then no principal of such entity has been convicted of fraud
or a crime involving moral turpitude).

 

  (Y)

He/she/it has not been involved in a bankruptcy or reorganization within the ten
years preceding the date of the Investor Interest Transfer.

 

  (6)

Borrower delivers to Lender searches confirming that no transferee with an
interest of 25% or more is on the list of Specially Designated Nationals or
other blocked persons published by the U.S. Office of Foreign Assets Control, or
on the list of persons or entities prohibited from doing business with the
Department of Housing and Urban Development.

 

  (7)

If a nonconsolidation opinion was delivered on the Closing Date and if, after
giving effect to the Investor Interest Transfer and all prior Transfers, 50% or
more in the aggregate of direct or indirect interests in Borrower are owned by
any Person and its Affiliates that owned less than a 50% direct or indirect
interest in Borrower as of the Closing Date, Borrower delivers to Lender an
opinion of counsel for Borrower, in form and substance satisfactory to Lender,
with regard to nonconsolidation.

 

B.

The following definitions are added to Article XII:

“Investor Interest Transfer” is defined in Section 7.03(d)(vi).

“Investor Interests” is defined in Section 7.03(d)(vi).

 

 

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

COOPERATION WITH RATING AGENCIES AND INVESTORS

(Revised 1-27-2015)

 

A.

Section 11.14 is deleted and replaced with the following:

 

  11.14 

Cooperation with Rating Agencies and Investors. At the request of Lender and, to
the extent not already required to be provided by Borrower under this Loan
Agreement, Borrower must use reasonable efforts to satisfy the market standards
to which Lender customarily adheres or which may be reasonably required in the
marketplace or by the Rating Agencies in connection with any Securities secured
by or evidencing ownership interests in the Note and this Loan Agreement,
including all of the following:

 

  (a)

Borrower will provide financial and other information with respect to the
Mortgaged Property, the Borrower and the Property Manager.

 

  (b)

Borrower will perform or permit or cause to be performed or permitted such site
inspections and other due diligence investigations of the Mortgaged Property, as
may be requested by Lender in Lender’s Discretion or may reasonably be requested
by the Rating Agencies or as may be necessary or appropriate in connection with
the Secondary Market Transaction. Lender will reimburse Borrower for any third
party costs which Borrower reasonably incurs in connection with any such due
diligence investigation.

 

  (c)

Borrower will make such representations and warranties as of the closing date of
the Secondary Market Transaction with respect to the Mortgaged Property,
Borrower and the Loan Documents as are customarily provided in securitization
transactions and as may be requested by Lender in Lender’s Discretion or may
reasonably be requested by the Rating Agencies and consistent with the facts
covered by such representations and warranties as they exist on the date of this
Loan Agreement, including the representations and warranties made in the Loan
Documents, together, if customary, with appropriate verification of and/or
consents to the Provided Information through letters of auditors or opinions of
counsel of independent attorneys acceptable to Lender and to the Rating
Agencies. Lender will reimburse Borrower for any third party costs which
Borrower reasonably incurs in connection with obtaining such auditors’ letters
or opinions of counsel.

 

  (d)

Borrower will cause its counsel to render opinions, which may be relied

 

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upon by Lender, the Rating Agencies and their respective counsel, agents and
representatives, as to nonconsolidation or any other opinion customary in
securitization transactions with respect to the Mortgaged Property and Borrower
and its Affiliates, which counsel and opinions must be satisfactory to Lender in
Lender’s Discretion and be reasonably satisfactory to the Rating Agencies.
Lender will reimburse Borrower for any third party costs which Borrower
reasonably incurs in connection with obtaining such opinions of Borrower’s
counsel.

 

  (e)

Borrower will execute such amendments to the Loan Documents and organizational
documents, establish and fund the Replacement Reserve Fund, if any, and complete
any Repairs, if any, as may be requested by Lender or by the Rating Agencies or
otherwise to effect the Secondary Market Transaction; provided, however, that
the Borrower will not be required to modify or amend any Loan Document if such
modification or amendment would (i) change the interest rate, the stated
maturity or the amortization of principal set forth in the Note, or (ii) modify
or amend any other material economic term of the Loan.

 

B.

The following definitions are added to Article XII:

“Provided Information” means the information provided by Borrower as required by
Section 11.14 (a), (b) and (c).

“Securities” means single or multi-class securities.

 

 

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

RATE CAP AGREEMENT AND RATE CAP AGREEMENT RESERVE FUND

(Revised 7-17-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 3.04 is deleted and replaced with the following:

 

  3.04

Cap Agreement and Cap Collateral Assignment.

 

  (a)

Cap Agreement. To protect against fluctuations in interest rates, Borrower must
obtain and maintain a Cap Agreement at all times so long as the Loan is
outstanding. The initial Cap Agreement must be successfully bid purchased no
later than the Closing Date and be effective for an initial term ending not
earlier than the third anniversary of the Closing Date. The initial Cap
Agreement must be in a Notional Amount equal to of not less than the principal
amount of the Loan on the Closing Date and have a Strike Rate that does not
exceed the Original Strike Rate. The Cap Agreement, including any Replacement
Cap Agreement, must obligate the Cap Provider to make monthly payments directly
to Lender or to Loan Servicer on behalf of Lender in an amount equal to the
excess of (i) the interest on the Notional Amount at the Index Rate over
(ii) interest on the Notional Amount at the Strike Rate.

 

  (b)

Replacement Cap Agreement. At least 60 days prior to the date on which an
existing Cap Agreement terminates, Borrower must give Notice to and provide
evidence satisfactory to Lender that Borrower will deliver a Replacement Cap
Agreement. Borrower must ensure that the Replacement Cap Agreement is in full
force and effect not later than the day immediately following the expiration of
the then-existing Cap Agreement. Any Replacement Cap Agreement must (i) have a
term not terminate no earlier than one year from the earlier of (A) two years
after its effective date, or (B) the Maturity Date, (ii) have a Strike Rate that
does not exceed the Original Strike Rate, and (iii) be in a Notional Amount
equal to not less than the outstanding Indebtedness on the effective date of the
Replacement Cap Agreement.

 

  (c)

Attorneys’ Fees and Costs. Borrower must pay or reimburse Lender, upon demand,
for all costs and expenses in connection with any Replacement Cap Agreement,
including (i) all Attorneys’ Fees and Costs, incurred by Lender, and (ii) the
cost of the cap broker, if any.

 

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  (d)

Cap Collateral. To secure Borrower’s payment obligations under the Loan,
Borrower grants to Lender a security interest in the Cap Collateral, including
any Replacement Cap Agreement.

 

  (e)

Master Rate Cap. Borrower and Lender acknowledge and agree that Borrower’s
obligations pursuant to this Agreement to obtain, maintain and collaterally
assign to Lender a Cap Agreement may be satisfied by the purchase of a single
rate cap (a “Master Rate Cap”) by an entity related to Borrower which directly
or indirectly holds a controlling interest in the Borrower (“Cap Purchaser”),
provided that such Master Rate Cap: (i) has a notional amount not less than the
sum of the outstanding principal amount of the Indebtedness and the Other
Sponsor Indebtedness as of the effective date of the Master Rate Cap, (ii) other
that n the Notional Amount, the Master Rate Cap satisfies all of the
requirements of a rate cap set forth herein, and (iii) is collaterally assigned
to Lender pursuant to a Hedge Assignment and Security Agreement by and between
the Cap Purchaser, Lender, Borrower and Other Sponsor Borrowers. Borrower
acknowledges that upon termination of the Master Rate Cap without a replacement
Master Rate Cap in place, or if the Master Rate Cap fails at any time to satisfy
the requirement of this Agreement, the Borrower’s failure to obtain and deliver
a Cap Agreement to Lender shall be an Event of Default hereunder. The delivery
of a Master Rate Cap does not negate Borrower’s obligations to make deposits to
the Rate Cap Agreement Reserve Fund. Provided further, that if at any time
Lender is not the same entity as the ‘Lender’ as defined in the Hedge Assignment
and Security Agreement, this paragraph (e) shall be of no force or effect and
Borrower may not rely on the Master Rate Cap to satisfy its obligations
hereunder and at such time, Borrower must purchase and deliver a Cap Agreement
as provided herein.

 

B.

Section 4.07 is deleted and replaced with the following:

 

  4.07

Rate Cap Agreement Reserve Fund.

 

  (a)

Deposits to Rate Cap Agreement Reserve Fund. If the initial Cap Agreement
terminates prior to the Maturity Date, Lender will establish the Rate Cap
Agreement Reserve Fund on the Closing Date. Commencing on the date the first
installment of principal and/or interest is due under the Note and continuing on
the same day for each successive month until the purchase of the last
Replacement Cap Agreement, Borrower must pay to Lender an amount equal to the
Rate Cap Reserve Deposit.

 

  (b)

Adjustments to Rate Cap Reserve Deposit. Lender will recompute the amount of the
Rate Cap Reserve Deposit every__months semi-annually based on the outstanding
Indebtedness at the time Lender recomputes the amount of the Rate Cap Reserve
Deposit. Lender will provide Notice to Borrower of any revised Rate Cap Reserve
Deposit.

 

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  (c)

Disbursements from Rate Cap Agreement Reserve Fund. Lender will apply the funds
in the Rate Cap Agreement Reserve Fund to the cost of the Replacement Cap
Agreement, unless an Event of Default has occurred and is continuing, in which
case Lender at its option may apply such funds to the Indebtedness in any amount
and in any order as Lender determines in Lender’s discretion. To the extent
there are funds in the Rate Cap Agreement Reserve Fund in excess of the cost of
the Replacement Cap Agreement, such funds may be applied to pay Attorneys’ Fees
and Costs related to the Replacement Cap Agreement and to pay the cap broker.

 

  (d)

Termination of Rate Cap Agreement Reserve Fund. Upon purchase by or on behalf of
Borrower of a Replacement Cap Agreement with an expiration date on or after the
Maturity Date, Borrower will no longer be required to make Rate Cap Reserve
Deposits. Any funds remaining in the Rate Cap Agreement Reserve Fund will be
returned to Borrower upon the earlier to occur of (i) purchase of a Cap
Agreement with a termination date not earlier that the Maturity Date, or
(ii) payment in full of the Indebtedness and the Other Sponsor Indebtedness.

 

C.

Section 5.22 is deleted and replaced with the following:

 

  5.22

Cap Collateral.

 

  (a)

Obligation to Make Cap Payments. Borrower or Cap Purchaser, as applicable, has
instructed each Cap Provider and any guarantor of a Cap Provider’s obligations
to make Cap Payments directly to Lender or to Loan Servicer on behalf of Lender.

 

  (b)

Dodd-Frank Act. Borrower or Cap Purchaser, as applicable, has complied with the
applicable requirements of the Dodd-Frank Act in purchasing the initial Cap
Agreement.

 

D.

Section 6.18 is deleted and replaced with the following:

 

  6.18

Cap Collateral.

 

  (a)

Obligation to Make Payments. Borrower will instruct each Cap Provider and any
guarantor of a Cap Provider’s obligations to make Cap Payments directly to
Lender or to Loan Servicer on behalf of Lender.

 

  (b)

Dodd-Frank Act. Borrower will comply, or will cause Cap Purchaser if applicable
to comply, with the applicable requirements of the Dodd-Frank Act in purchasing
any Replacement Cap Agreement.

 

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  E.

The following definitions in Article XII are revised as follows:

“Cap Agreement” means any interest rate cap agreement, or other interest
rate-hedging contract or agreement obtained by Borrower or on behalf of Borrower
by Cap Purchaser from a Cap Provider as a requirement of any Loan Document or as
a condition of Lender’s making the Loan.

“Cap Collateral” means all of the following:

 

  (i)

The Cap Agreement.

 

  (ii)

The Cap Payments.

 

  (iii)

All rights of Borrower or Cap Purchaser, as applicable, under any Cap Agreement
and all rights of Borrower or Cap Purchaser, as applicable, to all Cap Payments,
including contract rights and general intangibles, whether existing now or
arising after the date of this Loan Agreement.

 

  (iv)

All rights, liens and security interests or guaranties granted by a Cap Provider
or any other Person to secure or guaranty payment of any Cap Payments whether
existing now or granted after the date of this Loan Agreement.

 

  (v)

All documents, writings, books, files, records and other documents arising from
or relating to any of the foregoing, whether existing now or created after the
date of this Loan Agreement.

 

  (vi)

All cash and non-cash proceeds and products of (ii) through (v) of this
definition.

 

F.

The following definitions are added to Article XII:

“Cap Provider” means the third-party financial institution approved by Lender
that is the counterparty under the Cap Agreement or any Replacement Cap
Agreement.

“Cap Purchaser” has the meaning set forth in Section 3.04(e).

“Dodd Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection
Act.

“Index Rate” means the published variable rate index designated in the Cap
Agreement as the “Floating Rate Option,” which Index Rate must be the British
Bankers Association one-month LIBOR as administered by ICE Benchmark
Administration Limited.

 

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“Notional Amount” means the dollar amount designated in the Cap Agreement as the
“Notional Amount” which must be (i) with respect to the initial Cap Agreement,
an amount equal to not less than the principal amount of the Loan on the Closing
Date, and (ii) with respect to any Replacement Cap Agreement, an amount equal to
not less than the outstanding Indebtedness on the commencement date of the
Replacement Cap Agreement.

“Original Strike Rate” means 3.68%.

“Rate Cap Reserve Deposit” means a monthly amount payable by Borrower sufficient
to accumulate funds in an amount equal to 125 200% of the amount estimated by
Lender to be sufficient to purchase, immediately prior to termination of the
then-existing Cap Agreement, a Replacement Cap Agreement (i) expiring on the
earlier of (a) two years following its effective date, or (b) the Maturity Date,
(ii) having a Notional Amount equal to the outstanding Indebtedness on the
commencement date of the Replacement Cap Agreement, and (iii) having a Strike
Rate not greater than the Original Strike Rate.

“Replacement Cap Agreement” means any Cap Agreement satisfying the provisions of
this Loan Agreement, using documentation approved by Lender, and purchased by
Borrower to replace the initial Cap Agreement or any subsequent Cap Agreement.

“Strike Rate” means a fixed rate of interest under the Cap Agreement that does
not exceed the Original Strike Rate.

 

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

ENTITY GUARANTOR

(Revised 3-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 9.01(dd) is deleted and replaced with the following:

 

  (dd)

Guarantor fails to comply with the provisions of the Section of the Guaranty
entitled “Material Adverse Change” or “Minimum Net Worth/Liquidity
Requirements”, as applicable.

 

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Entity Guarantor

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

RECYCLED BORROWER

(Revised 7-17-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 5.40 is replaced with the following:

 

  5.40

Recycled Borrower.

 

  (a)

Underwriting Representations. Borrower represents that as of the date of this
Loan Agreement, each of the following is true:

 

  (i)

Borrower is and always has been duly formed, validly existing, and in good
standing in the state of its formation and in all other jurisdictions where it
is qualified to do business.

 

  (ii)

Borrower is not now, nor has ever been, party to any lawsuit, arbitration,
summons, or legal proceeding that is still pending or that resulted in a
judgment against it that has not been paid in full, and there are no liens of
any nature against Borrower except for tax liens not yet due.

 

  (iii)

Borrower is in compliance with all laws, regulations, and orders applicable to
it and, except as otherwise disclosed in this Loan Agreement, has received all
permits necessary for it to operate Licenses.

 

  (iv)

Borrower is not involved in any dispute with any taxing authority.

 

  (v)

Borrower has paid all taxes which it owes.

 

  (vi)

Borrower has never owned any real property other than the Mortgaged Property and
personal property necessary or incidental to its ownership or operation of the
Mortgaged Property and has never engaged in any business other than the
ownership and operation of the Mortgaged Property.

 

  (vii)

[Borrower has provided Lender with complete financial statements that reflect a
fair and accurate view of the entity’s financial condition.] [Reserved.]

 

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  (viii)

Borrower has obtained a current Phase I environmental Site Assessment for the
Mortgaged Property and that Site Assessment has not identified any recognized
environmental conditions that require further investigation or remediation.

 

  (ix)

Borrower has no material contingent or actual obligations not related to the
Mortgaged Property except pursuant to the Cross-Collateralization Agreement.

 

  (x)

Each amendment and restatement of Borrower’s organizational documents has been
accomplished in accordance with, and was permitted by, the relevant provisions
of said documents prior to its amendment or restatement from time to time.

 

  (b)

Separateness Representations. Borrower represents, as of the date hereof, that
from the date of its formation, each of the following is true:

 

  (i)

Borrower has not entered into any contract or agreement with any Related Party
Affiliate, except upon terms and conditions that are commercially reasonable and
substantially similar to those available in an arm’s-length transaction with an
unrelated party.

 

  (ii)

Borrower has paid all of its debts and liabilities from its assets.

 

  (iii)

Borrower has done or caused to be done all things necessary to observe all
organizational formalities applicable to it and to preserve its existence.

 

  (iv)

Borrower has maintained all of its books, records, financial statements and bank
accounts separate from those of any other Person.

 

  (v)

Borrower has not had its assets listed as assets on the financial statement of
any other Person or entity; provided, however, that Borrower’s assets may have
been included in a consolidated financial statement of its Affiliate if each of
the following conditions is met:

 

  (A)

Appropriate notation was made on such consolidated financial statements to
indicate the separateness of Borrower from such Affiliate and to indicate that
Borrower’s assets and credit were not available to satisfy the debts and other
obligations of such Affiliate or any other Person.

 

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  (B)

Such assets were also listed on Borrower’s own separate balance sheet.

 

  (vi)

Borrower has filed its own tax returns (except to the extent that it has been a
tax-disregarded entity not required to file tax returns under applicable law)
and, if it is a corporation, has not filed a consolidated federal income tax
return with any other Person.

 

  (vii)

Borrower has been, and at all times has held itself out to the public as, a
legal entity separate and distinct from any other Person (including any
Affiliate or other Related Party Affiliate).

 

  (viii)

Borrower has corrected any known misunderstanding regarding its status as a
separate entity.

 

  (ix)

Borrower has conducted all of its business and held all of its assets in its own
name.

 

  (x)

Borrower has not identified itself or any of its affiliates as a division or
part of the other.

 

  (xi)

Borrower has maintained and utilized separate stationery, invoices and checks
bearing its own name.

 

  (xii)

Borrower has not commingled its assets with those of any other Person and has
held all of its assets in its own name.

 

  (xiii)

Borrower has not guaranteed or become obligated for the debts of any other
Person.

 

  (xiv)

Borrower has not held itself out as being responsible for the debts or
obligations of any other Person, except pursuant to the Cross-Collateralization
Agreement.

 

  (xv)

Borrower has allocated fairly and reasonably any overhead expenses that have
been shared with an Affiliate, including paying for office space and services
performed by any employee of an Affiliate or Related Party Affiliate.

 

  (xvi)

Borrower has not pledged its assets to secure the obligations of any other
Person and no such pledge remains outstanding except in connection with the
Loan.

 

  (xvii)

Borrower has maintained adequate capital in light of its contemplated business
operations; provided, however, the aforementioned shall not be deemed to require
any direct or indirect member of Borrower to contribute additional capital to
Borrower.

 

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  (xviii)

Borrower has maintained a sufficient number of employees in light of its
contemplated business operations and has paid the salaries of its own employees
from its own funds.

 

  (xix)

Borrower has not owned any subsidiary or any equity interest in any other
entity.

 

  (xx)

Borrower has not incurred any indebtedness that is still outstanding other than
Indebtedness that is permitted under the Loan Documents.

 

  (xxi)

Borrower has not had any of its obligations guaranteed by an Affiliate or other
Related Party Affiliate, except for guarantees that have been either released or
discharged (or that will be discharged as a result of the closing of the Loan)
or guarantees that are expressly contemplated by the Loan Documents.

 

  (xxii)

None of the tenants holding leasehold interests with respect to the Mortgaged
Property are an Affiliate of Borrower or other Related Party Affiliate, except
for the Facility Operator pursuant to the Operating Lease.

 

B.

The following definition is added to Article XII:

“Related Party Affiliate” means any of the Borrower’s Affiliates, constituents,
or owners, or any guarantors of any of the Borrower’s obligations or any
Affiliate of any of the foregoing.

 

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

– SENIORS HOUSING

ALZHEIMER’S CARE, DEMENTIA CARE AND/OR MEMORY CARE

(Revised 3-20-2015)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 5.25(d) is deleted and replaced with the following:

 

  (d)

The Subject to the terms of Section 5.25(b), the bed count identified in the
Intended Uses as “Assisted Living Residences devoted to Alzheimer’s care,
dementia care and/or memory care”, may vary up to the limits allowed in the
current licensing for the Mortgaged Property, provided that no more than 40% of
the beds at the Mortgaged Property (including any beds added by the construction
of any additional units) may be dedicated to the care of residents with
Alzheimer’s disease or other dementia.

 

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

ADDITIONAL PROVISIONS – SALE OR SECURITIZATION OF LOAN

(Revised 2-28-2015)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 11.13 is deleted and replaced with the following:

 

  11.13

Lender’s Rights to Sell or Securitize. Borrower acknowledges that Lender, and
each successor to Lender’s interest, may (without prior Notice to Borrower or
Borrower’s prior consent), sell or grant participations in the Loan (or any part
of the Loan), sell or subcontract the servicing rights related to the Loan,
securitize the Loan or place the loan in a trust. Borrower agrees to cooperate
with all reasonable requests of Lender in connection with any of the foregoing
including taking the following actions and causing Guarantor to take the actions
specified in Sections 11.13(c) through (e):

 

  (a)

Executing any financing statements or other documents deemed necessary by Lender
or its transferee to create, perfect or preserve the rights and interest to be
acquired by such transferee.

 

  (b)

Delivering revised organizational documents and executed amendments to the Loan
Documents satisfactory required by to the Rating Agencies.

 

  (c)

Providing updated Borrower and Guarantor financial information with appropriate
verification through auditors’ letters for Borrower’s financial information, if
required. (If Lender requires that Borrower’s updated financial information be
accompanied by appropriate verification through auditors’ letters, then Lender
will reimburse Borrower for the costs which Borrower reasonably incurs in
connection with obtaining such auditors’ letters.).

 

  (d)

Providing updated information on all litigation proceedings affecting Borrower
or any Borrower Principal, any Facility Operator, or Property Manager, as to the
extent required in Section 6.16.

 

  (e)

Reviewing all information that Lender may require for Lender’s Disclosure
Documents, regarding any of the following:

 

  (i)

Borrower.

 

  (ii)

SPE Equity Owner.

 

  (iii)

Guarantor.

 

  (iv)

Affiliates of Borrower, SPE Equity Owner, or Guarantor.

 

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  (v)

Property Manager.

 

  (vi)

Facility Operator.

 

  (vii)

Mortgaged Property.

 

  (f)

Providing a mortgagor estoppel regarding any information provided by Borrower,
Borrower Principals, or Facility Operator in connection with the Loan, including
the information specified in this Section.

 

  (g)

Entering into an indemnification agreement with Lender and any underwriters of
any Securitization that includes the Loan confirming Borrower’s indemnification
obligations under this Loan Agreement and with respect to any additional
information provided to Lender pursuant to this Section.

 

Rider To Multifamily Loan and Security Agreement

Additional Provisions – Sale or Securitization of Loan

Page 2

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

MEDICARE, MEDICAID AND

GOVERNMENTAL PAYOR PROGRAMS – SENIORS HOUSING

(Revised 3-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 6.28(a) is deleted and replaced with the following:

 

  (a)

No more than 25% of the total number of beds at the Facility may be allocated to
residents who participate in a Governmental Payor Program.

 

Rider To Multifamily Loan and Security Agreement

Medicare, Medicaid and Governmental Payor Programs – Seniors Housing

Page 1

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

MONTH TO MONTH LEASES

(Revised 3-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 5.11 is deleted and replaced with the following:

5.11 Term of Leases. Unless otherwise approved in writing by Lender, all Leases
for residential dwelling units with respect to the Mortgaged Property are on
forms acceptable to Lender, are for initial terms of at least 6 months and not
more than 2 years, and do not include options to purchase; provided, however,
that up to 100% of all Leases may be for an initial term of less than 6 months,
but not less than 1 month.

 

B.

Section 6.15(a) is deleted and replaced with the following:

 

  (a)

Borrower will, promptly upon Lender’s request, deliver to Lender an executed
copy of each residential Lease then in effect. All Leases for residential
dwelling units will be on forms acceptable to approved by Lender, will be for
initial terms of at least 6 months and not more than 2 years, and will not
include options to purchase; provided, however, that up to 100% of all Leases
may be for an initial term of less than 6 months, but not less than 1 month.

 

Rider To Multifamily Loan and Security Agreement

Month to Month Leases

Page 1

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

NO DEFEASANCE

(Revised 2-17-2015)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 7.01(j) is deleted and replaced with the following:

 

  (j)

A Supplemental Instrument that complies with Section 11.11.

 

B.

Section 11.12 is deleted.

 

C.

The following definitions are deleted from Article XII:

“Cut-off Date”

“Defeasance”

“Defeasance Closing Date”

“Defeasance Collateral”

“Defeasance Fee”

“Defeasance Notice”

“Defeasance Period”

“Lockout Period”

“Pledge Agreement”

“Release Instruments”

“Scheduled Debt Payments”

“Successor Borrower”

“Transfer and Assumption Agreement”

 

Rider To Multifamily Loan and Security Agreement

No Defeasance

Page 1

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

CROSS-COLLATERALIZED TRANSACTION

(Revised 2-17-2015)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Sections 6.11(e)(i) and (ii) are deleted and replaced with the following:

 

  (i)

If any portion of the Mortgaged Property and/or any Related Mortgaged Property
is released from the Lien of the Loan in connection with a Condemnation and if
the ratio of (A) the unpaid principal balance of the Loan and any Related Loans
(as defined in the Cross-Collateralization Agreement) to (B) the value of the
Mortgaged Property and the Related Mortgaged Properties (taking into account
only the related land and buildings and not any personal property or
going-concern value), as determined by Lender in its sole and absolute
discretion based on a commercially reasonable valuation method permitted in
connection with a Securitization, is greater than 125% immediately after such
Condemnation and before any Restoration or repair of the Mortgaged Property (but
taking into account any planned Restoration or repair of the Mortgaged Property
as if such planned Restoration or repair were completed), then Lender will apply
any net proceeds or awards from such Condemnation, in full, to the payment of
the principal of the Indebtedness and/or any other portion of the Total
Indebtedness as determined by Lender and in accordance with applicable REMIC law
whether or not then due and payable, unless Lender has received an opinion of
counsel that a different application of such net proceeds or awards will not
cause such Securitization to fail to meet applicable federal income tax
qualification requirements or subject such Securitization to any tax.

 

  (ii)

If neither Borrower nor Lender has the right to receive any or all net proceeds
or awards as a result of the provisions of any agreement affecting the Mortgaged
Property (including any Ground Lease (if applicable), condominium document, or
reciprocal easement agreement) and therefore cannot apply such net proceeds or
awards to the payment of the principal of the Indebtedness as set forth above,
then Borrower will prepay the Indebtedness and/or any other portion of the Total
Indebtedness (as determined by Lender and in accordance with applicable REMIC
law) in an amount which Lender, in its sole and absolute discretion, deems
necessary to ensure that the Securitization will not fail to meet applicable
federal income tax qualification requirements or be subject to any tax as a
result of the Condemnation.

 

B.

Section 6.13(a)(x)(D) is deleted and replaced with the following:

 

  (D)

The Related Indebtedness under the Cross-Collateralization Agreement.

 

Rider To Multifamily Loan and Security Agreement

Cross-Collateralized Transaction

Page 1

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C.

Section 6.13(a)(xiv) is deleted and replaced with the following:

 

  (xiv)

Except as required by the Cross-Collateralization Agreement and the other Loan
Documents, it will not assume or guaranty (excluding any guaranty that has been
executed and delivered in connection with the Note) the debts or obligations of
any other Person, hold itself out to be responsible for the debts of another
Person, pledge its assets to secure the obligations of any other Person or
otherwise pledge its assets for the benefit of any other Person, or hold out its
credit as being available to satisfy the obligations of any other Person.

 

D.

Section 9.01(cc) is deleted and replaced with the following:

 

  (cc)

The occurrence of an “Event of Default” as defined in the
Cross-Collateralization Agreement.

 

E.

Reserved.

 

F.

The following definitions are added to Article XII:

“Cross-Collateralization Agreement” means the Master Cross-Collateralization
Agreement dated as of the date of this Agreement by and among Borrower, Lender,
and the Related Borrowers, as amended from time to time.

“Related Borrowers” is defined in the Cross-Collateralization Agreement.

“Related Indebtedness” is defined in the Cross-Collateralization Agreement.

“Related Loan Agreements” is defined in the Cross-Collateralization Agreement.

“Related Loan Documents” is defined in the Cross-Collateralization Agreement.

“Related Loans” is defined in the Cross-Collateralization Agreement.

“Related Mortgaged Properties” is defined in the Cross-Collateralization
Agreement.

“Related Security Instruments” is defined in the Cross-Collateralization
Agreement.

“Total Indebtedness” is defined in the Cross-Collateralization Agreement.

 

Rider To Multifamily Loan and Security Agreement

Cross-Collateralized Transaction

Page 2

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

TRADE NAMES

(Revised 3-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

 

A.

Section 6.30 is deleted and replaced with the following:

 

  6.30

Lender’s Right To Use Trade Name. Notwithstanding anything contained in this
Loan Agreement, Borrower agrees that Lender will have an irrevocable license,
coupled with an interest and for which consideration has been paid and received,
to use the name “Ashford Court” and/or associated trademark rights and trade
names relating to any of the Mortgaged Property for a period not to exceed 120
days after the date Lender acquires the Mortgaged Property by foreclosure or
deed-in-lieu of foreclosure.

 

B.

Section (xv) of the definition of “Mortgaged Property” in Article XII is
modified to read as follows:

 

  (xv)

All names under or by which any of the Mortgaged Property may be operated or
known, and all trademarks, trade names and goodwill relating to any of the
Mortgaged Property; provided however, that the name “Ashford Court” and/or
associated trademark rights are not assigned to Lender, subject to Section 6.30
of this Loan Agreement.

 

Rider To Multifamily Loan and Security Agreement

Trade Names

Page 1

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EXHIBIT A

DESCRIPTION OF THE LAND

Land situated in the City of Westland, County of Wayne, Michigan, described as:

(North parcel)

Part of the Northeast 1/4 of Section 6, Town 2 South, Range 9 East, City of
Westland, Wayne County, Michigan, is described as beginning at a point on the
South line of 120 foot wide Joy Road, said point located North 88°28’00” West
along the North line of said Section 6, a distance of 260.04 feet and South
00°32’00” East 60.04 feet (rec. as 60.00 feet) from the Northeast corner of said
Section 6; thence continuing South 00°32’00” East 173.04 feet; thence South
88°28’00” East 200.00 feet to the West line of 120 foot wide Newburgh Road;
thence South 00°32’00” East along said West line 198.00 feet; thence North
88°22’49” West 268.19 feet; thence South 00°32’00” East 242.10 feet (Rec. as
241.96 feet); thence North 88°22’00” West 562.40 feet; thence North 00°32’00”
West 371.75 feet; thence South 88°28’00” East 110.00 feet; thence North
00°32’00” West 240.00 feet to said South line of Joy Road; thence South
88°28’00” East along said South line 520.54 feet to the point of beginning.

and

(South parcel)

Part of the Northeast 1/4 of Section 6, Town 2 South, Range 9 East, City of
Westland, Wayne County, Michigan, being more particularly described as follows:

Commencing at the Northeast Corner of Section 6; thence South 00°32’00 East
673.34 feet (Rec. as South 00°18’59” East, 673.04 feet) along the East line of
Section 6; thence North 88°22’00” West, 328.24 feet (Rec. North 88°23’04” West,
325.68 feet) to the point of beginning of the following described parcel, thence
South 00°32’00” East (Rec. as South 00° 33’13” East) 29.54 feet; thence North
87°56’32” West, 526.58 feet (Rec. as North 87°57’37” West, 562.67 feet); thence
North 00°32’00” West (Rec. as North 00°31’14” West) 25.37 feet; thence South
88°22’00” East, 562.40 feet (Rec. as South 88°23’04” East, 562.48 feet) to the
Point of Beginning.

Tax ID: 021-99-0001-711

 

Multifamily Loan and Security Agreement – Seniors Housing

Page A-1

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EXHIBIT B

MODIFICATIONS TO THE MULTIFAMILY LOAN AND SECURITY AGREEMENT

The following changes are made to the text of the Loan Agreement that precedes
this Exhibit:

 

A.

Sponsor Specific Modifications

1. Section 2.06(a) is revised to read in its entirety as follows:

 

  (a)

So long as there is no Event of Default exists, Lender or Loan Servicer will
remit to Borrower each Cap Payment received by Lender or Loan Servicer with
respect to any month for which Borrower has paid in full the monthly installment
of principal and interest or interest only, as applicable, due under the Note.
Alternatively, at Lender’s option, so long as there is no Event of Default
exists, Lender may apply a Cap Payment received by Lender or Loan Servicer with
respect to any month to the applicable monthly payment of accrued interest due
under the Note if Borrower has paid in full the remaining portion of such
monthly payment of principal and interest or interest only, as applicable.

2. Section 3.06(c) is revised to read in its entirety as follows:

 

  (c)

Attorney-in-Fact. To the extent permitted by applicable law, Borrower
irrevocably constitutes and appoints Lender as Borrower’s attorney-in-fact to
demand, receive and enforce Borrower’s rights with respect to the Licenses and
to do any and all acts in Borrower’s name or in the name of Lender with the same
force and effect as Borrower could do if this Loan Agreement had not been made.
This appointment will be deemed to be coupled with an interest and irrevocable.

3. Section 4.02(e) is revised to read in its entirety as follows:

 

  (e)

Deferral of Collection of Any Imposition Reserve Deposits; Delivery of Receipts.
If Lender does not collect an Imposition Reserve Deposit with respect to an
Imposition either marked “Deferred” in Section 4.02(a) or pursuant to a separate
written deferral by Lender, then on or before the earlier of the date each such
Imposition is due, or the date this Loan Agreement requires each such Imposition
to be paid last day upon which such payment may be made without any penalty [or
fine] being added, Borrower will provide Lender with proof of payment of each
such Imposition. Upon Notice to Borrower, Lender may revoke its deferral and
require Borrower to deposit with Lender any or all of the Imposition Reserve
Deposits listed in Section 4.02(a), regardless of whether any such item is
marked “Deferred” (i) if Borrower does not timely pay any of the Impositions,
(ii) if Borrower fails to provide timely proof to Lender of such payment,
(iii) at any time during the existence of an Event of Default or (iv) upon
placement of a Supplemental Loan in accordance with Section 11.11.

 

Multifamily Loan and Security Agreement – Seniors Housing

Page B-1

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4. Section 5.02 is revised to read in its entirety as follows:

 

  5.02

Condition of Mortgaged Property. Except as Borrower may have disclosed to Lender
in writing in connection with the issuance of the Commitment Letter, the
Mortgaged Property has not been materially damaged by fire, water, wind or other
cause of loss, or any previous except to the extent such damage to the Mortgaged
Property has been fully restored.

5. Section 5.03 is revised to read in its entirety as follows:

 

  5.03

No Condemnation. No part of the Mortgaged Property has been taken in
Condemnation or other like proceeding, and, to To the best of Borrower’s
knowledge after due inquiry and investigation, no such Condemnation proceeding
is pending or threatened for the partial or total Condemnation or other taking
of the Mortgaged Property.

6. Section 5.04(b) is revised to read in its entirety as follows:

 

  (b)

Without limiting the generality of subsection (a) above, except as previously
disclosed to Lender to Lender in writing, none of Borrower (and, if Borrower is
a limited partnership, any of its general partners or if Borrower is a limited
liability company, any member of Borrower), any Facility Operator, or the
Facility or, to Borrower’s knowledge, Property Manager, are subject to any
proceeding, suit or investigation by any Governmental Authority and neither
Borrower nor any Facility Operator has received any notice from any Governmental
Authority which may, directly or indirectly, or with the passage of time, result
in the imposition of a fine, or interim or final sanction, or would do any of
the following:

 

  (i)

Have a Material Adverse Effect.

 

  (ii)

Result in the appointment of a receiver or trustee with respect to Borrower or
the Mortgaged Property.

 

  (iii)

Affect Borrower’s or any Facility Operator’s ability to accept and retain
residents.

 

  (iv)

Result in the Downgrade, revocation, transfer, surrender or suspension, or
non-renewal or reissuance or other impairment of any License.

 

  (v)

Affect Borrower’s or operator’s continued participation in any Governmental
Payor Program, or any successor programs thereto, at current rate
certifications.

 

Multifamily Loan and Security Agreement – Seniors Housing

Page B-2

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7. Section 5.05(e) is revised to read in its entirety as follows:

 

  (e)

To the best of Borrower’s knowledge after due inquiry and investigation, except
for matters that have been fully resolved, no event has occurred with respect to
the Mortgaged Property that constitutes, or with the passage of time or the
giving of notice, or both, would constitute, noncompliance with the terms of any
Environmental Permit.

8. Section 5.05(g) is revised to read in its entirety as follows:

 

  (g)

Except for matters that have been fully resolved, Borrower has received no
actual or constructive notice of any written complaint, order, notice of
violation or other communication from any Governmental Authority with regard to
air emissions, water discharges, noise emissions or Hazardous Materials, or any
other environmental, health or safety matters affecting the Mortgaged Property
or any property that is adjacent to the Mortgaged Property.

9. The last paragraph of Section 5.06 is revised to read in its entirety as
follows:

Borrower represents and warrants as of the date hereof that all parties
furnishing labor and materials for which a Lien or claim of Lien may be filed
against the Mortgaged Property have been paid in full for all amounts due and,
except for such Liens or claims insured against by the policy of title insurance
to be issued in connection with the Loan, there are no mechanics’, laborers’ or
materialmen’s Liens or claims outstanding for work, labor or materials affecting
the Mortgaged Property, whether prior to, equal with or subordinate to the Lien
of the Security Instrument.

10. The lead-in paragraph of Section 5.07 is revised to read in its entirety as
follows:

 

  5.07

Compliance with Applicable Laws and Regulations. Except as disclosed to Lender:

11. The lead-in paragraph of Section 5.07(a) is revised to read in its entirety
as follows:

 

  (a)

To the best of Borrower’s knowledge after due inquiry and investigation, each of
the following is true:

12. The lead-in paragraph of Section 5.07(b) is revised to read in its entirety
as follows:

 

  (b)

Without limiting the generality of subsection (a) above, to the best of
Borrower’s knowledge, Borrower, any Facility Operator, and the Facility (and its
operation) and all residential care agreements and residential Leases in effect
as of the date hereof are in compliance with the applicable provisions of all
laws, regulations, ordinances, orders or standards of any Governmental Authority
having jurisdiction over the operation of the Facility (including any
Governmental Payor Program requirements and disclosure of ownership and related
information requirements), including:

13. Section 5.07(c) is revised to read in its entirety as follows:

 

  (c)

Borrower has received no written notice of, and is not aware of, any violation
of applicable antitrust laws or securities laws relating to the Facility,
Borrower, or any Facility Operator or any Property Manager.

 

Multifamily Loan and Security Agreement – Seniors Housing

Page B-3

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14. Section 5.08 is revised to read in its entirety as follows:

 

  5.08

Access; Utilities; Tax Parcels. The Except as otherwise disclosed in the title
policy issued to and accepted by Lender on the Closing Date, the Mortgaged
Property: (a) has ingress and egress via a publicly dedicated right of way or
via an irrevocable easement permitting ingress and egress, (b) is served by
public utilities and services generally available in the surrounding community
or otherwise appropriate for the use in which the Mortgaged Property is
currently being utilized, and (c) constitutes one or more separate tax parcels.

15. Section 5.09 is revised to read in its entirety as follows:

 

  5.09

Licenses and Permits.

 

  (a)

Borrower, Facility Operator, and/or, to Borrower’s knowledge after due inquiry
and investigation, any Property Manager and any commercial tenant of the
Mortgaged Property is in possession of all material licenses, permits and
authorizations required for use of the Mortgaged Property, which and such
licenses, permits and authorizations are valid and in full force and effect as
of the date of this Loan Agreement.

 

  (b)

Without limiting the generality of subsection (a) above, Borrower has obtained
or has caused any Facility Operator or Property Manager to obtain all Licenses
necessary to use, occupy or operate the Facility for its Intended Use (such
Licenses being in its own name or in the name of a Facility Operator, if any or
Property Manager, as applicable, and in any event in the names of the Persons
required by the applicable Governmental Authorities), and all such Licenses are
in full force and effect. Borrower has provided Lender with complete and
accurate copies of all material Licenses. The Intended Use of the Facility is in
conformity compliance with all certificates of occupancy and Licenses and any
other restrictions or covenants affecting the Facility. The Facility has all
equipment, staff and supplies necessary to use and operate the Facility for its
Intended Use.

 

  (c)

Borrower or any Facility Operator or, to Borrower’s knowledge after due inquiry
and investigation, Property Manager, has timely filed or has caused to be timely
filed all reports and other information that the Licenses require to be filed.

 

  (d)

Each License, and the name of the Person in whose name each License is issued,
is identified on Exhibit K, and a true and complete copy of each License is
attached as Exhibit K.

 

Multifamily Loan and Security Agreement – Seniors Housing

Page B-4

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  (e)

As of the Closing date, the Licenses attached as Exhibit K are current and
Borrower has not been subject to or received written notice of any pending
inquiry, audit, investigation demand or violation that have not been brought to
Lender’s attention in writing.

 

  (f)

Except as previously disclosed to Lender in writing, Borrower is not aware of
any deficiencies, actions or inactions that, in the aggregate, could result in a
suspension, Downgrade, revocation, termination, restriction, or conditioning of
any License.

 

  (g)

There has been no previous assignment or encumbrance of the material Licenses
except assignments of encumbrances terminate prior to Borrower entering into
this Loan Agreement or collateral assignments or encumbrances terminated by any
Facility Operator prior to Borrower entering into this Loan Agreement.

 

  (h)

Except as set forth on Exhibit K, other than the Licenses attached as Exhibit K,
as of the Closing Date, no other Licenses are required to operate the Facility
as it is currently being operated and for its Intended Use.

 

  (i)

Neither the execution and delivery of the Note, this Loan Agreement, the
Security Instrument nor any other Loan Document, Borrower’s performance under
the Loan Documents, nor the recordation of the Security Instrument, nor the
exercise of any remedies by Lender pursuant to the Loan Documents, at law or in
equity, will adversely affect the Licenses.

16. Section 5.10 is revised to read in its entirety as follows:

 

  5.10

No Other Interests. To the best of Borrower’s knowledge after due inquiry and
investigation, no Person has (a) any possessory interest in the Mortgaged
Property or right to occupy the Mortgaged Property except under and pursuant to
(i) any operating Lease with Facility Operator, (ii) the provisions of existing
Leases by and between tenants and Borrower (a form of residential lease having
been previously provided to Lender together with or any Facility Operator (on
the standard forms customarily used at the Facility) and (iii) any tenant
pursuant to any existing Non-Residential Lease (the material terms of any and
all Non-Residential Leases at the Mortgaged Property having been previously
provided to Lender), or (b) an option to purchase the Mortgaged Property or an
interest in the Mortgaged Property, except as has been disclosed to and approved
in writing by Lender.

17. Section 5.11 is revised to read in its entirety as follows:

 

  5.11

Term of Leases. All Leases for residential dwelling units with respect to the
Mortgaged Property are on forms acceptable disclosed to Lender, are for initial
terms of at least 6 months and not more than 2 years (unless otherwise approved
in writing by Lender), and do not include options to purchase.

 

Multifamily Loan and Security Agreement – Seniors Housing

Page B-5

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18. Section 5.14 is revised to read in its entirety as follows:

 

  5.14

Taxes Paid. Borrower has filed all federal, state, county and municipal tax
returns required to have been filed by Borrower, and has paid all Taxes which
have become due pursuant to such returns or to any notice of assessment received
by Borrower, and Borrower has no knowledge of any basis for additional
assessment with respect to such taxes. To the best of Borrower’s knowledge after
due inquiry and investigation, except as disclosed in the title policy issued to
and accepted by Lender on the Closing Date, there are not presently pending any
special assessments against the Mortgaged Property or any part of the Mortgaged
Property.

19. Section 5.16(a) is revised to read in its entirety as follows:

 

  (a)

All To the best of Borrower’s knowledge after due inquiry and investigation, all
information in the application for the Loan submitted to Lender, including all
financial statements for the Mortgaged Property, Borrower, and any Borrower
Principal, and all Rent Schedules, reports, certificates, and any other
documents submitted in connection with the application (collectively, “Loan
Application”) is complete and accurate correct in all material respects as of
the date such information application was submitted to Lender. (provided
(i) Borrower represents to Lender as of the date hereof only that any
information provided in any report, Rent Schedule or other document delivered by
Borrower in connection with the application is complete and correct in all
material respects as of the date indicated in such report, Rent Schedule or
other document, as applicable, and (ii) any projections and pro forma financial
information are excepted from the representations set forth in this
Section 5.16(a), Lender acknowledging that such projections and financial
information are based upon good faith estimates and assumptions believed by
management of Borrower, any Borrower Principal and/or the Guarantor to be
reasonable at the time made and it being recognized by the Lender that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such projections
and financial information may differ from the projected results set forth
therein by a material amount.

20. Section 5.17 is revised to read in its entirety as follows:

 

  5.17

Financial Statements. The financial statements of Borrower and each Borrower
Principal furnished to Lender as part of the Loan Application reflect in each
case a positive net worth based on fair market values as of the date of the
applicable financial statement.

 

Multifamily Loan and Security Agreement – Seniors Housing

Page B-6

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21. Section 5.18 is revised to read in its entirety as follows:

 

  5.18

ERISA – Borrower Status. Borrower represents as follows:

 

  (a)

Borrower is not an a registered “investment company,” or a company under the
Control of an a registered “investment company,” as such terms are defined in
the Investment Company Act of 1940, as amended.

22. Section 5.21 is revised to read in its entirety as follows:

 

  5.21

Working Capital. After the Loan is made, subject to the requirements of
Section 6.13(a)(xx), Borrower and/or Facility Operator intends to have
sufficient working capital, including cash flow from the Mortgaged Property or
other sources, not only to adequately maintain the Mortgaged Property, but also
to pay all of Borrower’s and Facility Operator’s outstanding debts as they come
due (other than any balloon payment due upon the maturity of the Loan). Lender
acknowledges that no members or partners of Borrower or any Borrower Principal
or Facility Operator will be obligated to contribute equity or make funds
available to Borrower or Facility Operator for purposes of providing working
capital to maintain the Mortgaged Property or to pay Borrower’s outstanding
debts except as may otherwise be required under their organizational documents.

23. Section 5.24 is revised to read in its entirety as follows:

 

  5.24

Purpose of Loan. The purpose of the Loan is as indicated by the checked boxes
below:

 

  [    ]

Refinance Loan: The Loan is a refinancing of existing indebtedness and, except
to the extent specifically required by Lender, there is to be no change in the
ownership of either the Mortgaged Property or Borrower Principals. The intended
use of any cash received by Borrower from Lender, to the extent applicable, in
connection with the refinancing has been fully disclosed to Lender.

 

  [    ]

Acquisition Loan: All of the consideration given or received or to be given or
received in connection with the acquisition of the Mortgaged Property has been
fully disclosed to Lender. The Mortgaged Property was or will be purchased from
                                (“Property Seller”). No Borrower or Borrower
Principal has or had, directly or indirectly (through a family member or
otherwise), any interest in the Property Seller and the acquisition of the
Mortgaged Property is an arm’s-length transaction. To the best of Borrower’s
knowledge after due inquiry and investigation, the purchase price of the
Mortgaged Property represents the fair market value of the Mortgaged Property
and Property Seller is not or will not be insolvent subsequent to the sale of
the Mortgaged Property.

 

  [    ]

Supplemental Loan: The Loan is a Supplemental Loan and, except to the extent
specifically required or approved by Lender, there has been no change in the
ownership of either the Mortgaged Property or Borrower

 

Multifamily Loan and Security Agreement – Seniors Housing

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Principals since the date of the Senior Note. The intended use of any cash
received by Borrower from Lender, to the extent applicable, in connection with
the refinancing has been fully disclosed to Lender.

 

  [    ]

Cross-Collateralized/Cross-Defaulted Loan Pool: The Loan is part of a
cross-collateralized/cross-defaulted pool of loans described as follows:

              being simultaneously made to Borrower and/or Borrower’s Affiliates

              made previously to Borrower and/or Borrower’s Affiliates

The intended use of any cash received by Borrower from Lender, to the extent
applicable, in connection with the Loan and the other loans comprising the
cross-collateralized/cross-defaulted loan pool has been fully disclosed to
Lender.

24. The lead-in to Section 5.25(a) is revised to read in its entirety as
follows:

 

  (a)

The Subject to the modifications permitted by subsection (b) below, the
residential units in the Facility are allocated as follows (“Intended Use”):

25. Section 5.25(b) is revised to read in its entirety as follows:

 

  (b)

The number of units set aside as at the Facility as of the date hereof shall not
be increased by more than 10%, and shall not be decreased by more than 3%,
during the term of the Loan; the number of beds at the Facility as of the date
hereof shall not be increased by more than 15%, and shall not be decreased by
more than 10%, during the term of the Loan; the number of units set aside as
Assisted Living Residences and may not be transitioned to Independent Living
Units may be increased by no if such number of units so transitioned is more
than 10% of the present aggregate number of units in Assisted Living Residences
at the Facility as of the date hereof. The units in the Facility may be
transitioned to a higher acuity so long as the combined total number of
(i) Independent Living Units transitioned to Assisted Living Residences or
Assisted Living Residences devoted to memory care (collectively, “AL Units”)
and, (ii) Assisted Living Residences transitioned to Assisted Living Residences
devoted to memory care, does not represent a change of more than 25% of the
total units in the Facility, based on the Intended Use acuity mix as of the date
of this Loan Agreement. The units in the Facility may be transitioned to a lower
acuity so long as the combined total number of (i) Assisted Living Residences
devoted to memory care transitioned to Assisted Living Residences or Independent
Living Units and, (ii) Assisted Living Residences to Independent Living Units,
does not represent a change of more than 10% of the total units in the Facility,
based on the Intended Use acuity mix as of the date of this Loan Agreement.

 

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26. Section 5.27 is revised to read in its entirety as follows:

 

  5.17

Participant in Federal Programs. Neither Borrower nor any Facility Operator or
any Property Manager is a participant in any federal program under which any
Governmental Authority may have the right to recover funds by reason of the
advance of federal funds.

27. Section 5.28 is deleted and replaced as follows:

 

  5.28

[Intentionally Deleted]

28. Section 5.29 is revised to read in its entirety as follows:

 

  5.29

Contracts.

 

  (a)

Exhibit M lists all Contracts in effect as of the date of this Loan Agreement
involving aggregate payments in excess of $50,000 per year, the names of the
parties to such Contracts and the dates of such Contracts.

 

  (b)

With regard to each Contract listed in Exhibit M, to the best of Borrower’s
knowledge after due inquiry and investigation, (i) the Contract is in full force
and effect in accordance with its terms, and (ii) there is no default by any
party under the Contract.

 

  (c)

Borrower has delivered to Lender a copy of each Contract in excess of $50,000
per year, together with all amendments, modifications, supplements and renewals
thereto in effect as of the date of this Loan Agreement.

 

  (d)

Except as set forth on Exhibit M, each Contract listed in Exhibit M provides
that it is terminable by Borrower or any Facility Operator or any Property
Manager upon not more than 30 days’ notice without the necessity of establishing
cause and without payment of a penalty or termination fee by Borrower or any
Facility Operator or their respective successors or assigns, except only Third
Party Provider Agreements and National Contracts.

29. Section 5.30 is revised to read in its entirety as follows:

 

  5.30

Material Contracts.

 

  (a)

Exhibit N lists all Material Contracts in effect as of the date of this Loan
Agreement.

 

  (b)

With regard to each Material Contract listed in Exhibit N:, except as set forth
on Exhibit N, (i) the Material Contract is assignable by Borrower, or if
Borrower is not a party thereto, or by a Facility Operator, without the consent
of the other party thereto (or Borrower and or any Facility Operator, as
applicable, has obtained express written consent to the

 

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assignment from the other party thereto), except only Third Party Provider
Agreements and National Contracts; (ii) no previous assignment of Borrower’s or
any Facility Operator’s interest in the Material Contract has been made except
such assignments that have been properly terminated prior to or concurrently
with the execution and delivery of this Loan Agreement; (iii) the Material
Contract is in full force and effect in accordance with its terms; and (iv) to
the best of Borrower’s knowledge after due inquiry and investigation, there is
no default by any party under the Material Contract.

 

  (c)

Borrower has delivered to Lender a copy of each Material Contract, together with
all amendments, modifications, supplements and renewals thereto in effect as of
the date of this Loan Agreement.

 

  (d)

Each Material Contract listed in Except as set forth on Exhibit N, each Material
Contract provides that it is terminable upon not more than 30 days’ notice
without the necessity of establishing cause and without payment of a penalty or
termination fee by Borrower or any Facility Operator or their respective
successors or assigns, except only Third Party Provider Agreements.

30. Section 5.32

 

  5.32

Medicare and Medicaid. If Borrower or any Facility Operator or Property Manager
participates in any Governmental Payor Program in connection with the operation
of the Facility, all of the following are true:

 

  (a)

The Facility is in compliance in all material respects with the requirements for
participation in the Governmental Payor Program, including without limitation,
the Medicare and Medicaid Patient Protection Act of 1987.

 

  (b)

The Facility conforms in all material respects to all insurance, reimbursement
and cost reporting requirements, and has a current provider agreement under
Title XVIII and/or XIX of the Social Security Act or any other applicable laws
for reimbursement necessary for its Intended Use.

 

  (c)

There Except as disclosed to Lender, there is no action pending or, to the best
of Borrower’s knowledge after due inquiry and investigation, threatened to
terminate the Facility’s participation in the Governmental Payor Program nor is
there has Borrower or any Facility Operator received written notice of any
decision not to renew any provider agreement related to the Facility, nor is
there any action pending or threatened to impose material intermediate or
alternative sanctions with respect to the Facility.

 

  (d)

All Governmental Payor Program and private insurance cost reports and financial
reports submitted by Borrower, any Facility Operator, or any

 

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Property Manager for the Facility are and will be materially accurate and
complete and have not been and will not be are not misleading in any material
respects respect.

 

  (e)

No cost reports for the Facility remain “open” or unsettled, except as otherwise
disclosed in writing to Lender.

 

  (f)

TheExcept as disclosed in writing to Lender, (i) the Facility has not received a
“Level A” (or equivalent) violation, and(ii) no statement of charges or
deficiencies has been made or penalty enforcement action has been undertaken
against the Facility, any Property Manager or Facility Operator or the Borrower
(or any officer, director or stockholder of any of the foregoing) during the
last 3 calendar years, and (iii) there have been no violations over the past 3
calendar years which have threatened any certification of the Facility, any
Property Manager or Facility Operator or the Borrower for participation in any
Governmental Payor Program.

 

  (g)

There are no resident care agreements with residents of the Facility or with any
other Persons which deviate in any material respect from the standard forms
disclosed to Lender and customarily used at a comparable first-class facility
the Facility or which conflict with any statutory or regulatory requirements.

 

  (h)

All resident records at the Facility, including any resident trust fund
accounts, are true and correct in all material respects.

 

  (i)

Except as disclosed to Lender, (i) Borrower and the Facility are not subject to
any proceeding, suit, or investigation by any Governmental Authority. None and
(ii) none of the Borrower, any Property Manager, or any Facility Operator has
received any notice from any Governmental Authority which has not been provided
for on the financial statements provided to Lender and which may result in the
imposition of a fine or interim or final sanction or which would result in a
lower reimbursement rate for services rendered to eligible residents.

 

  (j)

The execution and delivery of the Note, this Loan Agreement, the Security
Instrument, or any other Loan Document, Borrower’s performance under the Loan
Documents, and the recordation of the Security Instrument, and the exercise of
any remedies by Lender, will not do any of the following:

 

  (i)

Adversely affect the right by Borrower, a Facility Operator, or the Facility to
receive Governmental Payor Program payments and reimbursements with respect to
the Facility.

 

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  (ii)

Materially reduce the Governmental Payor Program payments and reimbursements
which Borrower or a Facility Operator is receiving as of the date of this Loan
Agreement.

 

  (iii)

Adversely affect any of the Licenses.

 

  (k)

If any existing management agreement or operating lease is terminated or Lender
acquires the Facility through foreclosure or otherwise, none of the Borrower,
Lender, any subsequent management agent, any subsequent operator of the
Facility, or any subsequent purchaser (through foreclosure or otherwise) will be
required to obtain a certificate of need from any Governmental Authority (other
than giving of any notice required under the applicable state law or regulation)
prior to receiving certification to receive Governmental Payor Program payments
(or any successor programs) for residents having coverage under any Governmental
Payor Program so long as neither the type of service nor any unit complement is
changed.

31. Section 5.33 is revised to read in its entirety as follows:

 

  5.33

Third-Party Payor Programs and Private Commercial Insurance Managed Care and
Employee Assistance Programs. There Except as disclosed to Lender, to the best
of Borrower’s knowledge after due inquiry and investigation, there is no
threatened or pending revocation, suspension, termination, probation,
restriction, limitation or nonrenewal affecting Borrower or Facility Operator or
Property Manager, of any participation or provider agreement with any
Governmental Payor Program or any private commercial insurance managed care or
employee assistance program to which Borrower or Facility Operator or Property
Manager is subject. All Governmental Payor Program and private insurance cost
reports and financial reports submitted by Borrower or Facility Operator or
Property Manager are and will be materially accurate and complete and have not
been and will not be misleading in any in all material respects. No cost reports
for the Facility remain “open” or unsettled, except as otherwise disclosed in
writing to Lender.

32. Section 5.34 is revised to read in its entirety as follows:

 

  5.34

No Transfer or Pledge of Licenses. The Licenses, including the certificate of
need, may not be, and have not been, transferred to any location other than the
Facility, have not been pledged as collateral security for any other loan or
indebtedness, and are held free from restrictions or known conflicts that would
materially impair the use or operation of the Facility for its Intended Use, and
are not provisional, probationary, or restricted in any way.

 

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33. Section 5.36 is revised to read in its entirety as follows:

 

  5.36

Patient and Resident Care Agreements. [FOR acquisition loans only add- “To the
best of Borrower’s knowledge after due inquiry and investigation,”] There are no
patient or resident care agreements with patients or residents or with any other
persons that deviate in any material adverse respect from the standard forms
disclosed to Lender and customarily used at the Facility.

34. Section 5.38(a) is revised to read in its entirety as follows:

 

  (a)

TheExcept as disclosed to Lender or except for issues which are fully corrected
or for which a plan of correction is in place or has been approved by the
applicable Governmental Agency, (i) the Facility has not received a statement of
charges or deficiencies and no penalty enforcement actions have been undertaken
against the Facility, the Facility Operator or Borrower or against any officer,
director or stockholder thereof, by any Governmental Agency during the last
three calendar years, and (ii) there have been no violations over the past three
years that have threatened the Facility’s or the Facility Operator’s or
Borrower’s certification for participation in any Governmental Payor Program.

35. Section 6.01 is revised to read in its entirety as follows:

 

  6.01

Compliance with Laws. Borrower will comply with all laws, ordinances, rules,
regulations and requirements of any Governmental Authority having jurisdiction
over the Mortgaged Property and all licenses and permits and all recorded
covenants and agreements relating to or affecting the Mortgaged Property,
including all laws, ordinances, regulations, requirements and covenants
pertaining to health and safety, construction of improvements on the Mortgaged
Property, Repairs, Capital Replacements, fair housing, disability accommodation,
zoning and land use, applicable building codes, special use permits and
environmental regulations, Leases and the maintenance and disposition of tenant
security deposits. Borrower will take appropriate measures to prevent, and will
not engage in or knowingly permit, any illegal activities at the Mortgaged
Property, including those that could endanger tenants or visitors, result in
damage to the Mortgaged Property, result in forfeiture of the Mortgaged
Property, or otherwise materially impair the Lien created by the Security
Instrument or Lender’s interest in the Mortgaged Property. Borrower will at all
times maintain customary business records sufficient to demonstrate related to
such compliance with the provisions of this Section 6.01.

36. Section 6.02 is revised to read in its entirety as follows:

 

  6.02

Compliance with Organizational Documents. Borrower will at all times comply, in
all material respects, with all laws, regulations and requirements of any
Governmental Authority relating to Borrower’s formation, continued existence and
good standing in its state of formation and, if different, in the Property
Jurisdiction. Borrower will at all times comply, in all material respects, with
its organizational documents, including its partnership agreement (if Borrower
is a partnership), its by-laws (if Borrower is a corporation or housing

 

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cooperative corporation or association) or its operating agreement (if Borrower
is a limited liability company or tenancy-in-common). If Borrower is a housing
cooperative corporation or association, Borrower will at all times maintain its
status as a “cooperative housing corporation” as such term is defined in
Section 216(b) of the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.

37. Section 6.03(a)(i) is revised to read in its entirety as follows:

 

  (i)

Except as otherwise permitted by this Loan Agreement, allow changes in the use
for which all or any part of the Mortgaged Property is being used at the time
this Loan Agreement is executed.

38. Section 6.04(a) is revised to read in its entirety as follows:

 

  (a)

Prohibited New Non-Residential Leases or Modified Non-Residential Leases.
Borrower will not enter into any New Non-Residential Lease, enter into any
Modified Non-Residential Lease or terminate any Non-Residential Lease (including
any Non-Residential Lease in existence on the date of this Loan Agreement)
without the prior written consent of Lender.; provided that Lender’s prior
consent shall not be required for the execution, modification or termination of
any Non–Residential Lease if such Non-Residential Lease is (i) of any
non-residential space that was non-residential space on the date hereof and for
a use relating or ancillary to, or otherwise consistent with, the Intended Use,
(ii) for space of less than 2,500 square feet or the annual consideration of
which is not greater than $50,000 (upon execution and following any such
modification, as applicable), (iii) with a tenant that is not an Affiliate of
Borrower and (iv) on market terms.

39. Section 6.04(c) is revised to read in its entirety as follows:

 

  (c)

Executed Copies of Non-Residential Leases. Borrower will, without request by
Lender, deliver a fully executed copy of each Non-Residential Lease to Lender,
promptly after such Non-Residential Lease is signed, a fully executed copy of
any Non-Residential Lease for which Lender’s consent is required.

40. The lead-in paragraph to Section 6.04(d) is revised to read in its entirety
as follows:

 

  (d)

Subordination and Attornment Requirements. All Non-Residential Leases executed
after the date hereof will specifically include the following provisions:

41. Section 6.06(a) is revised to read in its entirety as follows:

 

  (a)

Right of Entry. Borrower will permit Lender, its agents, representatives and
designees and any interested Governmental Authority to make or cause to be made
entries upon and inspections of the Mortgaged Property to inspect, among other
things: (i) Repairs, (ii) Capital Replacements, in process and upon completion,
and (iii) Improvements (including environmental inspections and

 

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tests performed by professional inspection engineers) during normal business
hours, or at any other reasonable time, upon reasonable Notice to Borrower if
the inspection is to include occupied residential units (which Notice need not
be in writing). During normal business hours, or at any other reasonable time,
Borrower will also permit Lender to examine all books and records and contracts
and bills pertaining to the foregoing. Notice to Borrower will not be required
in the case of an emergency, as determined in Lender’s Discretion, or when an
Event of Default has occurred and is continuing. Except as otherwise set forth
in this Agreement, Lender shall be responsible for the cost of any inspection
unless such inspection is conducted during the existence of an Event of Default.

42. Section 6.07(a) is revised to read in its entirety as follows:

 

  (a)

Delivery of Books and Records. Borrower will keep and maintain at all times at
the Mortgaged Property or the Property Manager’s or Facility Operator’s office,
and upon Lender’s reasonable request will make available at the Mortgaged
Property (or, at Borrower’s option, at the Property Manager’s or Facility
Operator’s office), complete and accurate books of account and records
(including copies of supporting bills and invoices) adequate to reflect
correctly the operation of the Mortgaged Property, in accordance with GAAP
consistently applied (or such other method which is reasonably acceptable to
Lender), and copies of all written contracts, Leases, and other instruments
which affect the Mortgaged Property. The books, records, contracts, Leases and
other instruments will be subject to examination and inspection by Lender at any
reasonable time, provided Lender shall be responsible for the cost of Lender’s,
not to include third party examiners, examination or inspection, excepting
(i) one examination or inspection during any 12 month period, which shall be
paid by Borrower, or (2) any such examination or inspection is conducted during
the existence of an Event of Default, which shall be paid by Borrower.

43. The lead-in paragraph of Section 6.07(b) is revised to read in its entirety
as follows:

 

  (b)

Delivery of Statement of Income and Expenses; Rent Schedule and Other
Statements. Borrower will furnish (or will cause to be furnished) to Lender each
of the following:

44. The lead-in paragraph of Section 6.07(b)(i)(B) is revised to read in its
entirety as follows:

 

  (B)

A statement of income and expenses for Borrower’s the operation of the Mortgaged
Property that is either of the following:

45. A new Section 6.07(b)(iv) is added as follows:

 

  (iv)

Within 120 days after the end of each fiscal quarter of Borrower, Borrower will
deliver or cause Property Manager or the Facility Operator to deliver to Lender
information in sufficient detail, as reasonably determined by Lender, to show by
patient mix (i.e., private and Governmental Payor Program, if applicable) the
average monthly census of the Facility, occupancy rates and the amount of income
attributed to reimbursements or payments from a Governmental Payor Program.

 

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46. Section 6.07(c) is revised to read in its entirety as follows:

 

  (c)

Delivery of Borrower Financial Statements Upon Request. Borrower will furnish to
Lender each of the following:

 

  (i)

Upon Lender’s request, in Lender’s sole and absolute discretion prior to a
Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a
monthly Rent Schedule and a monthly statement of income and expenses for
Borrower’s operation of the Mortgaged Property, in each case within 25 days
after the end of each month prior to a Securitization and within 35 days after
the end of each month following a Securitization.

 

  (ii)

Upon Lender’s request in Lender’s sole and absolute discretion prior to a
Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a
statement that identifies all direct owners of any interest in Borrower and any
Designated Entity for Transfers and the interest held by each (unless Borrower
or any Designated Entity for Transfers is a publicly-traded entity in which case
such statement of ownership will not be required), and if Borrower or a
Designated Entity for Transfers is a corporation then all officers and directors
of Borrower and the Designated Entity for Transfers, and if Borrower or a
Designated Entity for Transfers is a limited liability company then all Managers
who are not members, in each case within 10 days Business Days after such
request.

 

  (iii)

Upon Lender’s request in Lender’s Discretion, such other financial information
or property management information (including information on tenants under
Leases to the extent such information is available to Borrower, copies of bank
account statements from financial institutions where funds owned or controlled
by Borrower are maintained, and an accounting of security deposits) as may be
required by Lender from time to time, in each case within 30 days after such
request.

 

  (iv)

Upon Lender’s request in Lender’s Discretion, a monthly property management
report for the Mortgaged Property, showing the number of inquiries made and
rental applications received from tenants or prospective tenants and deposits
received from tenants and any other information reasonably requested by Lender
within 30 days after such request. However, Lender will not require the
foregoing more frequently than quarterly except when there has been an Event of
Default and such Event of Default is continuing, in which case Lender may
require Borrower to furnish the foregoing more frequently.

 

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47. Section 6.07(d) is revised to read in its entirety as follows:

(d) Form of Statements; Audited Financials. A natural person having authority to
bind Borrower (or the SPE Equity Owner or Guarantor, as applicable) will certify
each of the statements, schedules and reports required by Sections 6.07(b),
6.07(c) and 6.07(f) to be complete and accurate. Each of the statements,
schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) will be
in such form and contain such detail as Lender may reasonably require. Lender
also may require that any of the statements, schedules or reports listed in
Sections 6.07(b), 6.07(c) and 6.07(f) be audited at Borrower’s expense by
independent certified public accountants acceptable to Lender, at any time when
an Event of Default has occurred and is continuing or at any time that Lender,
in its reasonable judgment, determines that audited financial statements are
required for an accurate assessment of the financial condition of Borrower or of
the Mortgaged Property, not to exceed once per year.

48. Section 6.07(e) is revised to read in its entirety as follows:

(e) Failure to Timely Provide Financial Statements. If Borrower fails to provide
in a timely manner the statements, schedules and reports required by Sections
6.07(b), 6.07(c) and 6.07(f), Lender will give Notice to Borrower specifying the
statements, schedules and reports required by Sections 6.07(b), 6.07(c) and
6.07(f) that Borrower has failed to provide. If Borrower has not provided the
required statements, schedules and reports within 10 Business Days following
such Notice, then (i) Borrower will pay a late fee of $500 for each late
statement, schedule or report, plus an additional $500 per month that any such
statement, schedule or report continues to be late, and (ii) if such failure
continues for a period that is 30 days after receipt by Borrower from Lender of
written notice of said failure, Lender will have the right to have Borrower’s
books and records audited, at Borrower’s expense, by independent certified
public accountants selected by Lender in order to obtain such statements,
schedules and reports, and all related costs and expenses of Lender will become
immediately due, and payable within 5 Business Days of Lender’s demand and will
become an additional part of the Indebtedness as provided in Section 9.02.
Notice to Borrower of Lender’s exercise of its rights to require an audit will
not be required in the case of an emergency, as determined in Lender’s
Discretion, or when an Event of Default has occurred and is continuing.

49. Section 6.07(f) is revised to read in its entirety as follows:

 

  (i)

(f) Delivery of Guarantor and SPE Equity Owner Financial Statements Upon
Request. Borrower will cause each Guarantor and, at Lender’s request in Lender’s
Discretion, any SPE Equity Owner, to provide to Lender (i) within 90 days after
the close of such party’s fiscal year, such party’s balance sheet and profit and
loss statement (or if such party is a natural person, within 90 days after the
close of each calendar year, such party’s personal financial statements) in form
reasonably satisfactory to Lender and certified by such party to be accurate and
complete, and (ii) such additional financial information (including copies of
state and federal tax returns with respect to any SPE Equity Owner but Lender
will only require copies of such tax returns with respect to each Guarantor if
an Event of Default has occurred and is continuing) publicly available financial
information as Lender may reasonably require from time to time and in such
detail as reasonably required by Lender.

 

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50. Section 6.08 is revised to read in its entirety as follows:

 

  6.08

Taxes; Operating Expenses; Ground Rents.

 

  (a)

Payment of Taxes and Ground Rent. Subject to the provisions of Sections 6.08(c)
and (d), Borrower will pay or cause to be paid (i) all Taxes when due and before
the addition of any interest, fine, penalty or cost for nonpayment, and (ii) if
Borrower’s interest in the Mortgaged Property is as a Ground Lessee, then the
monthly or other periodic installments of Ground Rent before the last date upon
which each such installment may be made without penalty or interest charges
being added.

 

  (b)

Payment of Operating Expenses. Subject to the provisions of Section 6.08(c),
Borrower will (i) pay or cause to be paid the expenses of operating, managing,
maintaining and repairing the Mortgaged Property (including utilities, Repairs
and Capital Replacements) before the last date upon which each such payment may
be made without any penalty or interest charge being added, and (ii) pay
Insurance premiums at least 30 days prior to the expiration date of each policy
of Insurance (provided such premiums shall not be required to be paid more than
5 days prior to the expiration date of each policy of Insurance containing a
mortgagee clause and lender loss payable endorsement in accordance with the
requirements of Section 6.10(f)(viii))., unless applicable law specifies some
lesser period.

 

  (c)

Payment of Impositions and Reserve Funds. If Lender is collecting Imposition
Reserve Deposits pursuant to Article IV, then so long as no Event of Default
exists, Borrower will not be obligated to pay any Imposition for which
Imposition Reserve Deposits are being collected (or any penalties or late
payments relating thereto), whether Taxes, Insurance premiums, Ground Rent (if
applicable) or any other individual Impositions, but only to the extent that
sufficient Imposition Reserve Deposits are held by Lender for the purpose of
paying that specific Imposition and Borrower has timely delivered to Lender any
bills or premium notices that it has received with respect to that specific
Imposition (other than Ground Rent). Lender will have no liability to Borrower
for failing to pay any Impositions to the extent that: (i) any Event of Default
has occurred and is continuing, (ii) insufficient Imposition Reserve Deposits
are held by Lender at the time an Imposition becomes due and payable, or
(iii) Borrower has failed to provide Lender with bills and premium notices as
provided in this Section.

 

  (d)

Right to Contest. Borrower, at its own expense, may contest by appropriate legal
proceedings, conducted diligently and in good faith, the

 

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amount or validity of any Imposition other than Insurance premiums and Ground
Rent (if applicable), if: (i) Borrower notifies Lender of the commencement or
expected commencement of such proceedings, (ii) the Mortgaged Property is not in
danger of being sold or forfeited, (iii) if Borrower has not already paid the
Imposition, Borrower deposits with Lender reserves sufficient to pay the
contested Imposition, if requested by Lender, and (iv) Borrower furnishes
whatever additional security is required in the proceedings or is reasonably
requested by Lender, which may include the delivery to Lender of reserves
established by Borrower to pay the contested Imposition.

51. Section 6.09(a) is revised to read in its entirety as follows:

 

  (a)

Maintenance of Mortgaged Property; No Waste. Borrower will keep the Mortgaged
Property in good repair, (including the replacement of Personalty and Fixtures
with items of equal or better function and quality), ordinary wear and tear and
casualty excepted. Borrower will not commit waste or permit impairment or
deterioration of the Mortgaged Property.

52. Section 6.09(c) is revised to read in its entirety as follows:

 

  (c)

Preservation of Mortgaged Property. Borrower will restore or repair promptly, in
a good and workmanlike manner, any damaged part of the Mortgaged Property to the
equivalent of its original condition or better, or such other condition as
Lender may approve in writing, whether or not Insurance proceeds or Condemnation
awards are available to cover any costs of such Restoration or repair; provided,
however, that Borrower will not be obligated to perform such Restoration or
repair if (i) no Event of Default has occurred and is continuing, and
(ii) Lender has elected to apply any available Insurance proceeds and/or
Condemnation awards to the payment of Indebtedness pursuant to Section 6.10(l)
or Section 6.11(d).

53. Section 6.09(d) is revised to read in its entirety as follows:

 

  (d)

Property Management. Borrower or Facility Operator will provide for professional
management of the Mortgaged Property by the Property Manager at all times under
a property management agreement approved by Lender in writing or in a form
substantially similar to the forms of property management agreement existing on
the Closing Date which such property management agreements have been approved by
Lender as of the date hereof (each, an “Approved Property Management
Agreement”). Borrower will not surrender, terminate, cancel, modify, renew or
extend (except in each case by its terms) its property management agreement, or
enter into any other agreement relating to the management or operation of the
Property with Property Manager or any other Person (other than an Approved
Property Management Agreement), or consent to the assignment by the Property
Manager of its interest under such property management agreement, in each case
without the consent of Lender, which

 

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consent will not be unreasonably withheld.in Lender’s Discretion, provided, that
Lender’s consent shall not be required with respect to (i) an assignment of the
property management agreement to or (ii) the entering into of a new Approved
Property Management Agreement (and the termination, surrender and cancellation
of the existing property management agreement in connection therewith) with
(y) any manager that is managing any other a Related Mortgaged Property or
(z) an Affiliate of the Property Manager. Notwithstanding anything to the
contrary in this Loan Agreement or any Loan Document, Borrower shall be entitled
to make immaterial modifications to and renewals of the property management
agreement without Lender’s consent.

 

  (i)

If at any time Lender consents to the appointment of a new Property Manager is
appointed, or the property management agreement is assigned, in accordance with
the terms of this Section 6.09(d), such new Property Manager and Borrower (or
Facility Operator) will, as a condition of Lender’s consent, execute an
Assignment of Management Agreement in a form acceptable to Lender substantially
similar to the form of Assignment of Management Agreement delivered on the
Closing Date.

 

  (ii)

If any such replacement Property Manager is an Affiliate of Borrower, and if a
nonconsolidation opinion was delivered on the Closing Date, Borrower will
deliver to Lender an updated nonconsolidation opinion in form and substance
substantially similar to the form delivered on the Closing Date.

 

  (iii)

Reserved.

54. A new Section 6.10(f)(viii) is added as follows:

 

  (viii)

All policies of Insurance will contain a standard mortgagee clause and lender’s
loss payable provision, including a provision that the policy remains in full
force and effect as to the interests of the Lender for a period of 10 days after
its expiration, provided the policy has not been renewed or replaced.

55. Section 6.10(g) is revised to read in its entirety as follows:

 

  (g)

Evidence of Insurance; Insurance Policy Renewals. Borrower will deliver to
Lender a legible copy of each Insurance policy, and Borrower will promptly
deliver to Lender a copy of all renewal and other notices received by Borrower
with respect to the policies. Borrower will ensure that the Mortgaged Property
is continuously covered by the required Insurance. At least 15 days prior Prior
to the expiration date of each Insurance policy, Borrower will deliver to Lender
evidence acceptable to Lender in Lender’s Discretion that each policy has been
renewed. If the evidence of a renewal does not include a legible copy of the
renewal policy, Borrower will deliver a legible copy of such renewal no later
than the earlier of the following:

 

  (i)

60 days after the expiration date of the original policy.

 

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  (ii)

The date of any Notice of an insured loss given to Lender under Section 6.10(i).

56. Section 6.10(i) is revised to read in its entirety as follows:

 

  (i)

Obligations Upon Casualty; Proof of Loss.

 

  (i)

If an insured loss occurs, then Borrower will give immediate prompt written
notice to the Insurance carrier and to Lender.

57. Section 6.10(k)(i) is revised to read in its entirety as follows:

 

  (i)

If a casualty results in damage to the Mortgaged Property for which the cost of
Repairs will be equal to or less than the Borrower Proof of Loss Threshold,
Borrower will have the sole right to make proof of loss, adjust and compromise
the claim and collect and receive any proceeds directly without the approval or
prior consent of Lender so long as the Insurance proceeds are used solely for
the Restoration of the Mortgaged Property.

58. Section 6.10(l)(iii) is revised to read in its entirety as follows:

 

  (iii)

The rental income from the Mortgaged Property 6 months after completion of the
Restoration will not be sufficient to meet all operating costs and other
expenses, deposits to Reserve Funds and Loan repayment obligations relating to
the Mortgaged Property.

59. A new Section 6.01(q) is added as follows:

 

  (q)

Insurance Generally. Notwithstanding anything to the contrary contained in this
Section 6.10, if Insurance required hereunder is not available at commercially
reasonable rates and if the related coverages are not at the time commonly
insured against for properties similar to the Mortgaged Property and located in
or around the region in which the Mortgaged Property is located, then Lender may
opt to temporarily suspend, cap or otherwise limit the requirement to have such
Insurance for a period not to exceed one year, unless such suspension or cap
will be renewed by Lender for such additional one year increments.

60. Section 6.11(b) is revised to read in its entirety as follows:

 

  (b)

Application of Award. Lender may hold such awards or proceeds and apply such
awards or proceeds, after the deduction of Lender’s out of pocket expenses
incurred in the collection of such amounts (including Attorneys’ Fees and Costs)
at Lender’s option, to the Restoration or repair of the Mortgaged Property or to
the payment of the Indebtedness, with the balance, if any, to Borrower. Unless
Lender otherwise agrees in writing, any application of any awards or proceeds to

 

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the Indebtedness will not extend or postpone the due date of any monthly
installments referred to in the Note or Article IV of this Loan Agreement, or
change the amount of such installments. Borrower agrees to execute such further
evidence of assignment of any Condemnation awards or proceeds as Lender may
require.

61. Section 6.11(c) is revised to read in its entirety as follows:

 

  (c)

Borrower’s Right to Condemnation Proceeds. Notwithstanding any provision to the
contrary in this Section 6.11, but subject to Section 6.11(e), in the event of a
partial Condemnation of the Mortgaged Property, as long as no Event of Default,
or any event which, with the giving of Notice or the passage of time, or both,
would constitute an Event of Default, has occurred and is continuing, in the
event of a partial Condemnation resulting in proceeds or awards in the amount of
less than $100,000500,000, Borrower will have the sole right to make proof of
loss, adjust and compromise the claim and collect and receive any proceeds
directly without the approval or prior consent of Lender so long as the proceeds
or awards are used solely for the Restoration of the Mortgaged Property.

62. The lead-in paragraph of Section 6.11(d) is revised to read in its entirety
as follows:

 

  (d)

Right to Apply Condemnation Proceeds to Indebtedness. In the event of a partial
Condemnation of the Mortgaged Property resulting in proceeds or awards in the
amount of $100,000500,000 or more and subject to Section 6.11(e), Lender will
have the right to exercise its option to apply Condemnation proceeds to the
payment of the Indebtedness only if Lender, in Lender’s Discretion, determines
that at least one of the following conditions is met:

63. Section 6.11(d)(iii) is revised to read in its entirety as follows:

 

  (iii)

The rental income from the Mortgaged Property 6 months after completion of the
Restoration will not be sufficient to meet all operating costs and other
expenses, deposits to Reserve Funds and Loan repayment obligations relating to
the Mortgaged Property.

64. Section 6.11(e)(ii) is revised to read in its entirety as follows:

 

  (ii)

If neither Borrower nor Lender has the right to receive any or all net proceeds
or awards as a result of the provisions of any agreement affecting the Mortgaged
Property (including any Ground Lease, condominium document, or reciprocal
easement agreement) and, therefore cannot apply such net proceeds or awards to
the payment of the principal of the Indebtedness as set forth above, or if
Borrower or Lender has the right to receive proceeds or awards and Borrower uses
such proceeds or award in violation of this Loan Agreement, then Borrower will
prepay the Indebtedness in an amount which Lender, in its sole and absolute
discretion, deems necessary to ensure that the Securitization will not fail to
meet applicable federal income tax qualification requirements or be subject to
any tax as a result of the Condemnation.

 

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65. Section 6.12(d)(iii) is hereby renumbered as Section 6.12(d)(iv).

66. A new Section 6.12(d)(iii) is added as follows:

 

  (iii)

Borrower’s knowledge of any Mold which poses, or has been alleged to pose, a
material threat to human health at any Mortgage Facility and which Borrower has
not remediated within 30 days of such knowledge.

67. Section 6.13(a)(ii) is not revised from the form provision and continues to
read as follows:

 

  (ii)

It will not acquire, own, hold, lease, operate, manage, maintain, develop or
improve any assets other than the Mortgaged Property and such Personalty as may
be necessary for the operation of the Mortgaged Property and will conduct and
operate its business as presently conducted and operated.

68. Section 6.13(a)(v) is revised to read in its entirety as follows:

 

  (v)

It will not take any action to dissolve, wind up, terminate or liquidate in
whole or in part; to sell, transfer or otherwise dispose of all or substantially
all of its assets; to change its legal structure; transfer or permit the direct
or indirect transfer of any partnership, membership or other equity interests,
as applicable, other than Transfers permitted under this Loan Agreement; issue
additional partnership, membership or other equity interests, as applicable, or
seek to accomplish any of the foregoing.

69. Section 6.13(a)(vi)(H) is revised to read in its entirety as follows:

 

  (H)

Admit in writing to any Person other than Lender and Loan Servicer Borrower’s or
any SPE Equity Owner’s inability to pay its debts generally as they become due.

70. Section 6.13(a)(viii) is revised to read in its entirety as follows:

 

  (viii)

It will not own any subsidiary or make any investment in, any other Person,
other than any advance of funds to the Facility Operator pursuant to the terms
of the Operating Lease.

71. Reserved.

72. Section 6.13(a)(x)(B) is revised to read in its entirety as follows:

 

  (B)

Customary unsecured trade payables incurred in the ordinary course of owning and
operating the Mortgaged Property provided the same are not evidenced by a
promissory note, do not exceed, in the aggregate, at any time a maximum amount
of 2the greater of 3% of the original principal amount of the Indebtedness and
$300,000, and are paid within 60 days of the date incurred or when due, if
later.

 

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73. Section 6.13(a)(xi) is revised to read in its entirety as follows:

 

  (xi)

It will maintain its records, books of account, bank accounts, financial
statements, accounting records and other entity documents separate and apart
from those of any other Person and will not list its assets as assets on the
financial statement of any other Person; provided, however, that Borrower’s
assets may be included in a consolidated financial statement of its Affiliate
provided that (A) appropriate notation will be made on such consolidated
financial statements to indicate the separateness of Borrower from such
Affiliate and to indicate that Borrower’s assets and credit are not available to
satisfy the debts and other obligations of such Affiliate or any other Person
except as provided by the Cross-Collateralization Agreement, and (B) such assets
will also be listed on Borrower’s own separate balance sheet.

74. Section 6.13(a)(xiv) is revised to read in its entirety a follows:

It will not assume or guaranty (excluding any guaranty that has been executed
and delivered in connection with the Note and except as provided by the
Cross-Collateralization Agreement) the debts or obligations of any other Person,
hold itself out to be responsible for the debts of another person, pledge its
assets to secure the obligation of any other person or otherwise pledge its
assets for the benefit of any other person, or hold out its credit as being
available to satisfy the obligations of any other Person.

75. Section 6.13(a)(xv) is revised to read in its entirety as follows:

 

  (xv)

It will not make or permit to remain outstanding any loans or advances to any
other Person except for those investments permitted under the Loan Documents or
any advance of funds to the Facility Operator pursuant to the terms of the
Operating Lease, and will not buy or hold evidence of indebtedness issued by any
other Person (other than cash or investment-grade securities).

76. Section 6.13(a)(xviii) is revised to read in its entirety as follows:

 

  (xviii)

It will maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations and will pay its debts and liabilities from its
own assets as the same become due; provided however, the aforementioned shall
not be deemed to require any direct or indirect investor of the Borrower to
contribute additional capital to the Borrower.

77. Section 6.13(a)(xix) is revised to read in its entirety as follows:

 

  (xix) 

It will allocate fairly and reasonably shared expenses with Affiliates
(including shared office space) and use separate stationery, invoices and checks
bearing its own name (or may allow the use of the stationary, invoices and
checks of the Property Manager in connection with the operation of the
Facility).

 

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78. Section 6.13(a)(xx) is revised to read in its entirety as follows:

 

  (xx)

It will pay (or cause the Property Manager or any Facility Operator to pay on
behalf of Borrower from Borrower’s funds) its own liabilities (including
salaries of its own employees, if any) from its own funds; provided however, the
aforementioned shall not be deemed to require any direct or indirect investor of
the Borrower to contribute additional capital to the Borrower.

79. Section 6.14(a) is revised to read in its entirety as follows:

 

  (a)

Completion of Repairs. Borrower will commence any Repairs as soon as practicable
after the date of this Loan Agreement and will diligently proceed with and
complete such Repairs on or before the Completion Date. All Repairs and Capital
Replacements will be completed in a good and workmanlike manner, with suitable
materials, and in accordance with good customary building practices and all
applicable laws, ordinances, rules, regulations, building setback lines and
restrictions applicable to the Mortgaged Property. Borrower agrees to cause the
replacement of any material or work that is defective, unworkmanlike or that
does not comply with the requirements of this Loan Agreement, as determined by
Lender.

80. Section 6.14(b) is revised to read in its entirety as follows:

 

  (b)

Purchases. Without the prior written consent of Lender, no materials, machinery,
equipment, fixtures or any other part of the Repairs or Capital Replacements
will be purchased or installed under conditional sale contracts or lease
agreements, or any other arrangement wherein title to such Repairs or Capital
Replacements is retained or subjected to a purchase money security interest, or
the right is reserved or accrues to anyone to remove or repossess any such
Repairs or Capital Replacements, or to consider them as personal property.
Notwithstanding anything to the contrary contained in this Loan Agreement,
leases or financing agreements entered into by Borrower or Facility Operator in
the ordinary course of business with third party vendors/lessors for personal
property and equipment located at, and used in connection with the operation of,
the Facility shall be permitted without the prior consent of Lender (and such
assets shall not be Collateral or Mortgaged Property), provided that the
counterparty to such arrangement is not an Affiliate of Borrower and such
arrangement is on market terms and the total of all leases or financing
agreements is subject to Section 6.13(a)(x)(B).

81. Section 6.15(a) is revised to read in its entirety as follows:

 

  (a)

Borrower will, promptly upon Lender’s request, deliver to Lender an executed
copy of each residential Lease then in effect. All Leases for residential
dwelling units entered into after the date hereof will be on forms acceptable to
approved by Lender, will be for initial terms of at least 6 months and not more
than 2 years, and will not include options to purchase.

 

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82. Section 6.16 is revised to read in its entirety as follows:

 

  6.16

Litigation; Government Proceedings. Borrower will give prompt Notice to Lender
of any litigation or governmental proceedings pending or, to the best of
Borrower’s knowledge, threatened in writing against Borrower, any Borrower
Principal, the Facility Operator, or Property Manager which might would or could
reasonably be expected to have a Material Adverse Effect. As and when requested
by Lender, Borrower will provide Lender with written updates on the status of
all litigation proceedings affecting Borrower, any Borrower Principal, the
Facility Operator or Property Manager.

83. The lead-in paragraph of 6.17 is revised to read in its entirety as follows:

 

  6.17

Further Assurances and Estoppel Certificates; Lender’s Expenses. Within 10 days
after a request from Lender prior to Securitization, and within 20 days after a
request from Lender after a Securitization, in Lender’s Discretion, Borrower
will take each of the following actions:

84. Section 6.17(a) is revised to read in its entirety as follows:

 

  (a)

Deliver to Lender a written statement, signed and acknowledged by Borrower,
certifying to Lender or any Person designated by Lender, as of the date of such
statement: (i) that the Loan Documents are unmodified and in full force and
effect (or, if there have been modifications, that the Loan Documents are in
full force and effect as modified and setting forth such modifications),
(ii) the unpaid principal balance of the Note, (iii) the date to which interest
under the Note has been paid, (iv) that Borrower is not in default in paying the
Indebtedness or in performing or observing any of the covenants or agreements
contained in this Loan Agreement or any of the other Loan Documents (or, if
Borrower is in default no Event of Default exists (or, if an Event of Default
exists, describing such default the same in reasonable detail), (v) whether
there are any then-existing setoffs or defenses known to Borrower against the
enforcement of any right or remedy of Lender under the Loan Documents, and
(vi) any additional facts requested by Lender.

85. The lead-in paragraph of Section 6.20(b) is revised to read in its entirety
as follows:

 

  (b)

Borrower will deliver to Lender such certifications or other evidence
certifications, or other evidence reasonably requested by Lender, from time to
time throughout the term of this Loan Agreement, as requested by Lender in
Lender’s Discretion, confirming each of the following:

86. Section 6.20(b)(iv)(C) is revised to read in its entirety as follows:

 

  (C)

Borrower qualifies as either an “operating company,” a “venture capital
operating company,” or a “real estate operating company” within the meaning of
29 C.F.R. Section 2510.3-101(c), (d) or (e), as either may be amended from time
to time or any successor provisions, or is an investment company registered
under the Investment Company Act of 1940.

 

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87. Section 6.21(a) is revised to read in its entirety as follows:

 

  (a)

Without limiting the generality of Section 6.03, Borrower will, or will cause
any Facility Operator to, operate the Facility for its Intended Use and will, or
will cause any Facility Operator to, provide, to Lender’s reasonable
satisfaction, maintain all of the facilities, services, staff, equipment and
supplies required or normally associated with a typical high quality property
devoted to the to operate the Facility for its Intended Use.

88. Section 6.21(b) is revised to read in its entirety as follows:

 

  (b)

Borrower will, or will cause any Facility Operator to, operate the Facility in a
manner such that all applicable Licenses now or hereafter in effect will remain
in full force and effect. Borrower will not, and will not allow any Facility
Operator or Property Manager to: (i) transfer any License (or any rights
thereunder) to any location other than the Facility, (ii) pledge any License (or
any rights thereunder) as collateral security for any other loan or
indebtedness, (iii) terminate any License or permit fail to renew any License
not to be renewed or reissued or fail to apply for the reissuance of any
License, as applicable, (iv) rescind, withdraw, revoke, amend, supplement,
modify or otherwise alter the nature, tenor or scope of any License, or
(v) permit any License to become the subject of any Downgrade, revocation,
suspension, restriction, condition or probation (including any restriction on
new admissions or residents).

89. Section 6.22 is revised to read in its entirety as follows:

 

  6.22

Facility Reporting.

 

  (a)

Borrower will, or will cause any Facility Operator to, furnish to Lender, within
10 days Business Days after receipt by Borrower or any Facility Operator, any
and all written notices from any Governmental Authority that: (i) any License is
being Downgraded, revoked, terminated, suspended, restricted or conditioned or
may not be renewed or reissued or that action is pending or being considered to
Downgrade, revoke, terminate, suspend, restrict or condition (or not renew or
reissue) any such License, (ii) any violation, fine, finding, investigation or
corrective action concerning any License is pending or being considered,
rendered or adopted, or (iii) any Healthcare Law or any health or safety code or
building code violation or other deficiency at the Mortgaged Property has been
identified, but in each case only if the subject matter of such written notice
(A) materially impact the operation or value of the Facility, or (B) requires
additional formal or informal action by Borrower or Facility Operator that is
more than development or implementation of a routine plan of correction,
including participation in hearings concerning continued

 

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licensing or Medicare or Medicaid participation, entering into consent orders
affecting licensing affecting the Facility, or engaging in oversight management.

 

  (b)

Borrower will, or will cause any Facility Operator to, furnish to Lender, within
10 days Business Days after receipt by Borrower or any Facility Operator, a copy
of any survey, report or statement of deficiencies by any Governmental
Authority, but only if the subject matter of such survey, report or statement of
deficiencies (i) could materially impact the operation or value of the Facility,
or (ii) requires additional formal or informal action by Borrower or Facility
Operator that is more than development or implementation of a routine plan of
correction, including participation in hearings concerning continued licensing
or Medicare or Medicaid participation, entering into consent orders affecting
licensing affecting the Facility, or engaging in oversight management. Within
the time period specified by the Governmental Authority for furnishing a plan of
correction, Borrower, or if applicable, a Facility Operator, will do so and will
furnish or will cause to be furnished to Lender a copy of the plan of correction
concurrently therewith. Borrower will correct or will cause to be corrected in a
timely manner (and in all events by the date required by the Governmental
Authority) any deficiency if the failure to do so could cause any License to be
Downgraded, revoked, suspended, restricted, conditioned or not renewed or
reissued.

 

  (c)

Upon Lender’s request and subject to Privacy Laws, Borrower will, or will cause
the Facility Operator to, furnish to Lender true and correct rent rolls and
copies of all Leases.

 

  (d)

Borrower will provide Lender with a copy of any material License issued or
renewed in the future by a Governmental Authority within 30 days after its
issuance or renewal. To the extent that any such License is assignable, Borrower
will assign it to Lender as additional security for the Indebtedness, using a
customary form of assignment acceptable to Lender in its discretion. If any
License is issued to a Facility Operator, to the extent such License is
assignable, Borrower will cause such operator or management agent Facility
Operator to assign the License to Lender as additional security for the
Indebtedness, using a customary form of assignment acceptable to Lender in its
discretion.

 

  (e)

Subject to all laws and regulations, including Privacy Laws, Borrower will
furnish, and will cause any Facility Operator to furnish, to Lender at
Borrower’s expense all evidence, which Lender may from time to time reasonably
request as to the continuing accuracy and validity of all representations and
warranties made by Borrower in the Loan Documents and the continuing compliance
with and satisfaction of all covenants and conditions contained in the Loan
Documents.

 

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90. Section 6.23 is revised to read in its entirety as follows:

 

  6.23

Covenants Regarding Material Contracts.

 

  (a)

Borrower will not, and will not permit any Facility Operator to, enter into any
Material Contract, unless that approved by Lender or unless such Material
Contract provides that it is terminable upon not more than 30 days’ notice by
Borrower, or if Borrower is not a party to the Material Contract, the Facility
Operator, and their respective successors and assigns, without the necessity of
establishing cause and without payment of a penalty or termination fee or extra
charge.

 

  (b)

Borrower will (or if Borrower is not a party thereto, will cause a Facility
Operator to) fully perform all of its obligations under each Material Contract,
and Borrower will not (and Borrower will not permit a Facility Operator to)
enter into, terminate or amend, modify, assign or otherwise encumber its
interest in any Material Contract without the prior written approval of Lender.
If Borrower or a Facility Operator enters into any Material Contract in the
future (with Lender’s consent thereto), Borrower will (or will cause the
operator to), simultaneously with entering into the Material Contract, if
requested by Lender (i) assign its rights under and interest in the Material
Contract to Lender as additional security for the Indebtedness, and (ii) obtain
and provide to Lender a consent to that assignment by the other party(ies) to
the Material Contract. Both the assignment and the consent must be in a
customary form acceptable to Lender in its discretion.

91. Section 6.25 is revised to read in its entirety as follows:

 

  6.25

Property Manager and Operator of the Facility. Except as provided by
Section 6.09(d), Borrower will not surrender, terminate, cancel, modify, renew
or extend its property management agreement or any operating lease (except for
any renewal or extension pursuant to its terms, and except for immaterial
modifications); permit the change of the Property Manager or any Facility
Operator; enter into any other agreement relating to the management or operation
of the Facility with Property Manager, the Facility Operator, or any other
Person (other than the management agreement or operating agreement with Property
Manager or Facility Operator); or consent to the assignment by the Property
Manager or Facility Operator of its interest under such property management
agreement, operating lease or similar agreement, as applicable, in each case
without the prior written approval of Lender, and in each such instance the
approval by Lender of the property management agreement (other than an Approved
Property Management Agreement) and/or operating lease (or similar) agreement, as
applicable. If at any time Lender consents to the appointment of a new Property
Manager or Facility Operator, such new Property Manager or Facility Operator and
Borrower (or if Borrower is not a party thereto, a Facility Operator) will, as a
condition of Lender’s consent, execute an Assignment of

 

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Management Agreement or assignment of operating agreement, as the case may be,
in a customary form acceptable to Lender in its discretion. If any such
replacement Property Manager or Facility Operator is an Affiliate of Borrower,
and if a nonconsolidation opinion was delivered at the origination of the Loan,
Borrower will deliver to Lender an updated nonconsolidation opinion in form and
substance satisfactory to Lender with regard to nonconsolidation. Without
limiting the foregoing, except as permitted by Section 6.04(a), Borrower will
not, and will not permit any Facility Operator to, enter into any New
Non-Residential Lease, enter into any Modified Non-Residential Lease or
terminate any Non-Residential Lease, or enter into, terminate, extend or
materially amend any Contract to lease, manage or operate the Facility without
in each instance Lender providing its prior written consent thereto, which may
be conditioned upon Lender receiving an assignment thereof in a form acceptable
to Lender.

92. Section 6.27 is revised to read in its entirety as follows:

 

  6.27

Performance Under Leases. Borrower or a Facility Operator, as applicable, will
timely perform, in all material respects, all of the obligations of such party
under all Leases of the Facility or any Mortgaged Property.

93. Section 6.28 is revised to read in its entirety as follows:

 

  6.28

Governmental Payor Programs.

 

  (a)

No more than 5 If, as of the date hereof, 20% or more of the total number of
beds at the Facility shall be are allocated to residents who participate in a
Governmental Payor Program, no more than an additional 5% of the total number of
beds may be allocated to residents who participate in a Governmental Payor
Program during the term of the Loan. If, as of the date hereof, less than 20% of
the total number of beds at the Facility are allocated to residents who
participate in a Governmental Payor Program, no more than 25% of the total
number of beds may be allocated to residents who participate in a Governmental
Payor Program during the term of the Loan.

 

  (b)

If Borrower violates the covenant in Section 6.28(a), then Borrower must
immediately fundshall not be in default hereunder so long as Borrower promptly
notifies Lender of such violation and, after written demand by Lender, funds a
transition reserve with cash in an amount equal to the aggregate of 6 months of
principal and interest payments due under the terms of the Note for the next 6
months. If the Note provides for interest to accrue at a floating or variable
interest rate (other than during the “Extension Period,” as defined in the Note,
if applicable), then Lender will estimate the amount of the interest due during
such 6-month period. Borrower must also enter into a transition reserve
agreement acceptable to Lender in form and content.

 

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  (c)

Borrower will furnish to Lender, within 10 daysBusiness Days after receipt by
Borrower, any Facility Operator or any Property Manager, any and all written
notices from any Governmental Authority which state that the Governmental Payor
Program certification of the Facility is being downgraded to a substandard
category, revoked, or suspended, or that action is pending or being considered
to downgrade any such certification.

 

  (d)

Borrower will furnish to Lender, within 10 days Business Days after receipt by
Borrower, any Facility Operator or any Property Manager, a copy of any survey,
report or statement of deficiencies by any Governmental Authority administering
Governmental Payor Program funds or programs. Within the time period specified
by any such Governmental Authority for furnishing a plan of correction, Borrower
will furnish to Lender a copy of the plan of correction. By the date required
for cure by the Governmental Authority, Borrower will correct or will cause to
be corrected any deficiency the curing of which is a condition of continued
eligibility for Governmental Payor Program payment or reimbursement, including
full participation in the Governmental Payor Program for existing residents and
for new residents to be admitted with Governmental Payor Program coverage.

 

  (e)

Other than in the normal course of business, Borrower will not, and will not
permit any Facility Operator or any Property Manager to, change the terms of any
of the Governmental Payor Program or its normal billing payment and
reimbursement policies and procedures with respect to such Governmental Payor
Program (including the amount and timing of finance charges, fees and
write-offs).

 

  (f)

Within 10 days Business Days of the required filing of cost reports of the
Facility with the Governmental Payor Program agency or the date of actual filing
of such cost report of the Facility with such agency, whichever is earlier,
Borrower will provide Lender with a complete and accurate copy of the annual
Governmental Payor Program cost report of the Facility, which will be prepared
by an independent certified public accountant or by an experienced cost report
preparer acceptable to Lender, and will promptly furnish Lender any amendments
filed with respect to such reports and all responses, audit reports or inquiries
with respect to such reports.

 

  (g)

Subject to prior written notice from Lender and subject to all Privacy Laws,
Borrower will permit and will cause any Property Manager or any Facility
Operator to permit representatives appointed by Lender, including independent
accountants, agents, attorneys, appraisers and any other persons, to visit and
inspect any of the Facility during its normal business hours and at any other
reasonable times, and to take photographs of the Facility, and to write down and
record any information such

 

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representatives obtain, and will permit Lender or its representatives to
investigate and verify the accuracy of the information furnished to Lender under
or in connection with this Loan Agreement or any of the other Loan Documents and
to discuss all such matters with its officers, employees and representatives,
provided Lender shall be responsible for the cost of Lender’s examination or
inspection excepting (i) one examination or inspection during any 12 month
period or (ii) any such examination or inspection conducted during the existence
of an Event of Default.

 

  (h)

Subject to all applicable laws and regulations, including Privacy Laws, Borrower
will furnish and will cause any management agent for the Facility or any
Facility Operator to furnish to Lender, at Borrower’s expense, evidence which
Lender may from time to time reasonably request as to the accuracy and validity
of or compliance with all representations and warranties covenants made by
Borrower in the Loan Documents and satisfaction of all conditions contained in
the Loan Documents.

 

  (i)

Any inspection or audit of the Facility or the books and records of Borrower,
any Property Manager (relating to the Facility) or any Facility Operator, or the
procuring of documents and financial and other information, by or on behalf of
Lender, will be for Lender’s protection only, and will not constitute any
assumption of responsibility or liability by Lender to Borrower, any Property
Manager or any Facility Operator or anyone else with regard to the condition,
construction, maintenance or operation of the Facility. Lender’s approval of any
certification given to Lender will not relieve Borrower, Property Manager, or a
Facility Operator of any of their respective obligations.

 

  (j)

Within 120 days after the end of each fiscal quarter of Borrower, Borrower will
deliver or cause Property Manager or the Facility Operator to deliver to Lender
information in sufficient detail, as determined by Lender, to show by patient
mix (i.e., private and Governmental Payor Program, if applicable) the average
monthly census of the Facility, occupancy rates and the amount of income
attributed to reimbursements or payments from a Governmental Payor Program.

 

  (k)

After During the existence of an Event of Default, Lender is authorized to give
notice to all third party payors at Lender’s option, instructing them to pay all
third party payments, including Medicare, Medicaid or TRICARE, which would be
otherwise paid to Borrower or to a Facility Operator to Lender, to the extent
permitted by law.

 

  (l)

Borrower will not and will not permit any breach or violation by any Person of
any Healthcare Laws pertaining to the Facility or the operation of the Facility,
including any Healthcare Laws pertaining to billing for

 

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goods or services by Borrower or any Facility Operator. Borrower will not and
will not permit any circumstance to occur which would (i) cause Borrower, a
Facility Operator or the Facility to be disqualified for participation in any
Governmental Payor Program or (ii) cause the non-renewal or termination of
Borrower, a Facility Operator or the Facility’s participation in any such
program, as applicable.

94. Section 7.01(d) is revised to read in its entirety as follows:

 

  (d)

The execution of an operating lease with Operating Tenant and the grant of a
leasehold interest in an individual dwelling unit for a term of 2 years or less
(or longer if approved by Lender in writing) not containing an option to
purchase.

95. Section 7.01(g) is revised to read in its entirety as follows:

 

  (g)

ASubject to Section 6.14(b), a Transfer of obsolete or worn out Personalty or
Fixtures that are contemporaneously replaced by items of equal or better
function and quality, which are free of Liens, encumbrances and security
interests other than those created by the Loan Documents or consented to by
Lender.

96. Section 7.01(h) is revised to read in its entirety as follows:

 

  (h)

The creation of a mechanic’s, materialmen’s, or judgment Lien against the
Mortgaged Property or any other Lien that is not affirmatively granted by
Borrower, which is released of record, bonded, or otherwise remedied to Lender’s
satisfaction within 60 days of the date of creation; provided, however, if
Borrower is diligently prosecuting such release or other remedy and advises
Lender that such release or remedy cannot be consummated within such 60-day
period, Borrower will have an additional period of time (not exceeding 120 days
from the date of creation or such earlier time as may be required by applicable
law in which the lienor must act to enforce the Lien) within which to obtain
such release of record or consummate such other remedy.

97. Section 7.01(k) is revised to read in its entirety as follows:

 

  (k)

ReservedAny Transfer pursuant to a lease or financing arrangement of personal
property or equipment permitted by the terms of this Loan Agreement.

98. Section 7.02(c) is revised to read in its entirety as follows:

 

  (c)

A Transfer or series of Transfers of any legal or equitable interest since the
Closing Date that result(s) in a change of more than 50% of the ownership
interests (or beneficial interests, if the applicable entity is a trust) in
Borrower or any Designated Entity for Transfers, but excluding the Transfer of
shares of a publicly held corporation or entity, subject to the requirements of
Section 7.02(e).

 

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99. Section 7.02(e) is revised to read in its entirety as follows:

 

  (e)

If Borrower or any Designated Entity for Transfers is a corporation or entity
whose outstanding voting stock or interest is publicly held or held by 100 or
more shareholders, one or more Transfers by a single transferor within a
12-month period affecting an aggregate of 10% or more of that stock.

100. Section 7.03(c) is revised to read in its entirety as follows:

 

  (c)

Publicly-Held Entity, Corporation, Fund or Publicly-Held Real Estate Investment
Trust. If a Designated Entity for Transfers is a publicly-held entity,
corporation, fund or a publicly-held real estate investment trust, either of the
following:

 

  (i)

The public issuance of common stock, preferred stock, convertible debt, equity
or other similar securities (“Public Fund/REIT Securities”) and the subsequent
Transfer of such Public Fund/REIT Securities.

 

  (ii)

The acquisition by a single Public Fund/REIT Securities holder of an ownership
percentage of 10% or more in the Designated Entity for Transfers, if Borrower
provides notice of that acquisition to Lender within 30 days following the
acquisition.

101. Section 7.05(a)(v) is revised to read in its entirety as follows:

 

  (v)

Lender in Lender’s Discretion has determined that the Mortgaged Property will be
managed by a Property Manager meeting the requirements of Section 6.09(d), and,
if applicable, ana Facility Operator whose organization, credit and experience
in the operation of similar senior housing facilities is adequate and
appropriate to the overall structure and documentation of the Loan. Any new or
replacement Facility Operator approved by Lender must either (A) assume the Loan
Documents executed by the prior Facility Operator, if applicable, or (B) execute
Lender’s then-standard documents governing operators of senior housing
facilities and transferee will execute any modifications to the Loan Documents
required by Lender to document Facility Operator’s role in the operation of the
Facility and appropriately secure the Loan.

102. Section 7.05(b)(i) is revised to read in its entirety as follows:

 

  (i)

If Borrower delivers to Lender a current Site Assessment which (A) is dated
within 90 days prior to the date of the proposed Transfer, and (B) evidences no
presence of Hazardous Materials on the Mortgaged Property and no other
Prohibited Activities or Conditions with respect to the Mortgaged Property
(“Clean Site Assessment”), then Lender will release Borrower from all of
Borrower’s obligations under the Loan Documents except for any liability under
Section 6.12 or Section 10.02(b) with respect to any loss, liability, damage,
claim, cost or expense which directly or indirectly arises from or relates to
any Prohibited Activities or Conditions existing prior to the date of the
Transfer.

 

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103. Section 9.01(e) is revised to read in its entirety as follows:

 

  (e)

Borrower fails to apply Condemnation proceeds or awards received by Borrower in
accordance with the comply with the Condemnation provisions of Section 6.11.

104. Section 9.01(h) is revised to read in its entirety as follows:

 

  (h)

Borrower fails to perform any of its obligations under this Loan Agreement
(other than those specified in Sections 9.01(a) through (g)), as and when
required, which failure continues for a period of 30 days after Notice of such
failure by Lender to Borrower. However, if Borrower’s failure to perform its
obligations as described in this Section 9.01(h) is of the nature that it cannot
be cured within the 30 day cure period after such Notice from Lender but
reasonably could be cured within 90120 days, then, if Borrower commences such
cure within the 30 day cure period, and diligently pursues such cure thereafter,
Borrower will have an additional time as determined by Lender in Lender’s
Discretion, not to exceed an additional 6090 days, in which to cure such
default, provided that Borrower has diligently commenced to cure such default
during the initial 30 day cure period and diligently pursues the cure of such
default. However, no such Notice or cure periods will apply in the case of any
such failure which could, in Lender’s judgment Discretion, absent immediate
exercise by Lender of a right or remedy under this Loan Agreement, result in
harm to Lender, danger to tenants or third parties, or impairment of the Note,
the Security Instrument or this Loan Agreement or any other security given under
any other Loan Document.

105. Section 9.01(i) is revised to read in its entirety as follows:

 

  (i)

Borrower fails to perform any of its obligations as and when required under any
Loan Document other than this Loan Agreement which failure continues beyond the
applicable cure period, if any, specified in that Loan Document. (and if no
notice and/or cure period is specified therein and such Loan Document does not
specify that such failure is an immediate Event of Default, such failure shall
not constitute an Event of Default unless and until such failure continues
beyond the notice and cure periods contemplated by Section 9.01(h) above).

106. Section 9.01(l) is revised to read in its entirety as follows:

 

  (l)

Borrower or any SPE Equity Owner has made any representation or warranty in
Article V or any other Section of this Loan Agreement that is false or
misleading in any material respect when made.

107. Section 9.01(p)(ii) is revised to read in its entirety as follows:

 

  (ii)

Either (A) the case is dismissed or discharged within 90 days after filing, or
(B) within 90 days following the date of such filing or commencement, the
affected Guarantor is replaced with one or more other Persons acceptable to
Lender, in Lender’s Discretion, each of whom executes and delivers to Lender a
replacement Guaranty in substantially the form of the Guaranty executed on the
Closing Date or otherwise in form and content acceptable to Lender, together
with such customary legal opinions as Lender deems necessary; provided, however,
that if

 

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Lender determines, in Lender’s Discretion, that any proposed replacement
Guarantor is not acceptable, then the action will constitute a prohibited
Transfer governed by Section 7.02.

108. Section 9.01(q)(ii) is revised to read in its entirety as follows:

 

  (ii)

The dissolution of any Guarantor who is an entity, unless within 30 days
following the dissolution of the Guarantor, Borrower causes one or more Persons
acceptable to Lender, in Lender’s Discretion, to execute and deliver to Lender a
guaranty in a form acceptable to Lender and in substantially the same form asof
the Guaranty executed on the Closing Date or otherwise in form and content
acceptable to Lender, without any cost or expense to Lender.

109. Section 9.01(t) is revised to read in its entirety as follows:

 

  (t)

A default under any of the Material Contracts by Borrower or by any Facility
Operator, which continues beyond the expiration of any applicable cure period
which could, in Lender’s Discretion, result in impairment of the Note, the
Security Instrument or this Loan Agreement or any other security given under any
other Loan Document.

110. Section 9.02(a) is revised to read in its entirety as follows:

 

  (a)

If Borrower fails to perform any of its obligations under this Loan Agreement or
any other Loan Document beyond any notice and cure period provided herein or
therein, or if any action or proceeding is commenced which purports to affect
the Mortgaged Property, Lender’s security or Lender’s rights under this Loan
Agreement, including eminent domain, insolvency, code enforcement, civil or
criminal forfeiture, enforcement of Hazardous Materials Laws, fraudulent
conveyance or reorganizations or proceedings involving a bankrupt or decedent,
then Lender, in Lender’s Discretion, may make such appearances, file such
documents, disburse such sums and take such actions as Lender reasonably deems
necessary to perform such obligations of Borrower and to protect Lender’s
interest, including: (i) payment of Attorneys’ Fees and Costs, (ii) payment of
fees and out-of-pocket expenses of accountants, inspectors and consultants,
(iii) entry upon the Mortgaged Property to make Repairs or secure the Mortgaged
Property, (iv) procurement of the Insurance required by Section 6.10,
(v) payment of amounts which Borrower has failed to pay under Section 6.08,
(vi) performance of Borrower’s obligations under Section 6.09, and
(vii) advances made by Lender to pay, satisfy or discharge any obligation of
Borrower for the payment of money that is secured by a Prior Lien.

111. Section 9.03(a) is revised to read in its entirety as follows:

 

  (a)

Upon the occurrence and during the continuance of an Event of Default, Lender
may exercise any or all of its rights and remedies provided under the Loan
Documents and Borrower will pay all costs associated therewith, including
Attorneys’ Fees and Costs.

 

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112. Section 9.03(c) is revised to read in its entirety as follows:

 

  (c)

Upon the occurrence and during the continuance of an Event of Default, Lender
will have all remedies available to Lender under Revised Article 9 of the
Uniform Commercial Code of the Property Jurisdiction, the Loan Documents and
under applicable law.

113. Section 9.03(d) is revised to read in its entirety as follows:

 

  (d)

Upon the occurrence and during the continuance of an Event of Default, Lender
may also retain (i) all money in the Reserve Funds, including interest, and
(ii) any Cap Payment, and in Lender’s sole and absolute discretion, may apply
such amounts, without restriction and without any specific order of priority, to
the payment of any and all Indebtedness.

114. A new paragraph is added to the end of Section 10.02(b) as follows:

Notwithstanding the foregoing, or anything to the contrary contained in
Section 5.05 and/or Section 6.12, Borrower shall not be obligated hereunder or
liable for indemnification with respect to the introduction and initial release
of Hazardous Materials on or from the Mortgaged Property from and after the date
(the “Transfer Date”) that the Lender (or any successor to Lender) acquires
title to and has assumed possession and control of the Mortgaged Property
through power of sale, foreclosure or deed in lieu of foreclosure; provided,
however, that Borrower will bear the burden of proof that the introduction and
initial release of such Hazardous Material (i) occurred subsequent to the
Transfer Date, (ii) did not occur as a result of any action, or failure to act,
on the part of Borrower or any Affiliate of Borrower, in, on, under or near the
Mortgaged Property, and (iii) did not occur as a result of any Prohibited
Activity of Condition which occurred prior to the Transfer Date.

115. Section 10.02(d)(ii) is revised to read in its entirety as follows:

 

  (ii)

Borrower will not be liable under the Securitization Indemnification if the
claim is based on Borrower Information which has not been approved by Borrower
or which Lender has materially misstated, omitted or materially misrepresented
in the Disclosure Document.

116. Section 10.02(e) is revised to read in its entirety as follows:

 

  (e)

Selection and Direction of Counsel. Counsel selected by Borrower to defend
Indemnitees will be subject to the approval of those Indemnitees. In any
circumstances in which the indemnity under this Article X applies, Lender may
employ its own legal counsel and consultants to prosecute, defend or negotiate
any claim or legal or administrative proceeding and Lender, with the prior
written consent of Borrower (which will not be unreasonably withheld, delayed or
conditioned) may settle or compromise any action or legal or administrative
proceeding. However, unless an Event of Default has occurred and is continuing,
or the interests of Borrower and Lender are in conflict, as determined by Lender

 

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in Lender’s Discretion, Lender will permit Borrower to undertake the actions
referenced in this Article X so long as Lender approves such action, which
approval will not be unreasonably withheld or delayed. Borrower will reimburse
Lender upon demand for all out of pocket costs and expenses incurred by Lender,
including all costs of settlements entered into in good faith, consultants’ fees
and Attorneys’ Fees and Costs.

117. Section 10.02(h)(iii) is revised to read in its entirety as follows:

 

  (iii)

Reimburse Indemnitees for any and all expenses, including Attorneys’ Fees and
Costs, paid or incurred in connection with the enforcement by Indemnitees of
their rights under this Article X (but only with respect to any matters against
which Indemnitees are entitled to be indemnified under this Article X), or in
monitoring and participating in any legal or administrative proceeding in
connection with any matters against which Indemnitees are entitled to be
indemnified under this Article X.

118. Section 11.01 is revised to read in its entirety as follows:

 

  11.01

Waiver of Statute of Limitations, Offsets and Counterclaims. To the extent
permitted by applicable law, Borrower waives the right to assert any statute of
limitations as a bar to the enforcement of this Loan Agreement or the Lien of
the Security Instrument or to any action brought to enforce any Loan Document.
Borrower waives the right to assert a counterclaim, other than a compulsory
counterclaim, in any action or proceeding brought against it by Lender or
otherwise to offset any obligations to make the payments required by the Loan
Documents. No failure by Lender to perform any of its obligations under the Loan
Documents will be a valid defense to, or result in any offset against, any
payments that Borrower is obligated to make under any of the Loan Documents.

119. Section 11.02(b) is revised to read in its entirety as follows:

 

  (b)

Borrower agrees that any controversy arising under or in relation to the Note,
the Security Instrument, this Loan Agreement or any other Loan Document may be
litigated in the Property Jurisdiction. The state and federal courts and
authorities with jurisdiction in the Property Jurisdiction will have
jurisdiction over all controversies that may arise under or in relation to the
Note, any security for the Indebtedness or any other Loan Document. Each of
Lender and Borrower irrevocably consents to service, jurisdiction and venue of
such courts for any such litigation and waives any other venue to which it might
be entitled by virtue of domicile, habitual residence or otherwise. However,
nothing in this Section 11.02 is intended to limit Lender’s or Borrower’s right
to bring any suit, action or proceeding relating to matters under this Loan
Agreement in any court of any other jurisdiction.

 

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120. Section 11.13(b) is revised to read in its entirety as follows:

 

  (b)

Delivering revised organizational documents, counsel opinions, and executed
amendments to the Loan Documents satisfactory to the Rating Agencies (provided
no such amendment shall revise any economic terms of the Loan).

121. Section 11.17(c) is revised to read in its entirety as follows:

 

  (c)

Borrower agrees to cooperate with all reasonable requests of Lender to
accomplish the foregoing, including execution and prompt delivery to Lender of a
severance agreement and such other documents (each in customary form for similar
transactions with institutional lenders) as Lender requires in Lender’s
Discretion, and Lender will reimburse Borrower for all costs reasonably incurred
by Borrower in connection with actions taken by Borrower pursuant to Lender’s
request under the terms of this Section 11.17.

122. Article XII definitions are added or revised as follows:

“Attorneys’ Fees and Costs” means: (i) fees and out of pocket costs of Lender’s
and Loan Servicer’s outside attorneys, as applicable, including costs of
Lender’s and Loan Servicer’s in-house counsel, support staff costs, costs of
preparing for litigation, computerized research, telephone and facsimile
transmission expenses, mileage, deposition costs, postage, duplicating, process
service, videotaping and similar costs and expenses; (ii) costs and fees of
expert witnesses, including appraisers; (iii) investigatory fees; and (iv) costs
for any opinion required by Lender pursuant to the terms of the Loan Documents.

“Borrower Principal” means any of the following:

 

  (i)

Any general partner of Borrower (if Borrower is a partnership).

 

  (ii)

Any manager or managing member of Borrower (if Borrower is a limited liability
company).

 

  (iii)

Any Person (limited partner, member or shareholder) with a collective direct or
indirect equity interest in Borrower equal to or greater than 25% (excluding any
Person holding shares in a publicly held company or entity).

 

  (iv)

Any Guarantor of all or any portion of the Loan or of any obligations of
Borrower under the Loan Documents.

“Environmental Permit” means any permit, license, or other authorization
issuedrequired under any Hazardous Materials Law with respect to anyfor the
activities or businesses conducted on or in relation to the Mortgaged Property.

“Facility Operator” means any tenant (an “Operating Tenant”) under a lease with
Borrower (as landlord) of all or substantially all of the Facility, as well as
any manager or Facility Operator pursuant to a Contract with Borrower or with an
Operating Tenant. The Facility Operator as of the Closing Date is
                    .

 

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“Hazardous Materials Law” and “Hazardous Materials Laws” means any and all
federal, state and local laws, ordinances, regulations and standards, rules,
policies and other governmental requirements, administrative rulings and court
judgments and decrees in effect now or in the future, including all amendments,
that relate to Hazardous Materials or the protection of human health (as related
to exposure to Hazardous Materials) or the environment and apply to Borrower or
to the Mortgaged Property. Hazardous Materials Laws include the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601,
et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601,
et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and the Hazardous
Materials Transportation Act, 49 U.S.C. Section 5101 et seq., and their state
analogs.

“License” means any license, permit, regulatory agreement, certificate,
approval, certificate of need or similar certificate, authorization,
accreditation, approved provider status in any approved provider payment
program, or approval issued by an applicable state department of health (or any
subdivision thereof) or state licensing agency, as applicable, in each instance
whether issued by a Governmental Authority or otherwise, used in connection
with, or necessary or desirable to use, occupy or operate required by applicable
law for the use or operation of the Facility for its Intended Use, including the
provision of all goods and services to be provided by Borrower or the Facility
Operator to the residents of the Facility.

“Material Contract” means Contracts, but specifically excluding National
Contracts:

 

  (i)

For preparing or serving food (but do not include food supply Contracts),
regardless ofthe annual consideration or termof which, directly or indirectly,
is at least $50,000 per year.

 

  (ii)

For medical services or healthcare provider agreements, regardless ofthe annual
consideration or termof which, directly or indirectly, is at least $50,000 per
year.

 

  (iii)

The average annual consideration of which, directly or indirectly, is at least
$20,000100,000.

 

  (iv)

Having a term of more than one year and the annual consideration of which,
directly or indirectly, is at least $50,000 per year, unless subject to
termination by Borrower or if Borrower is not a party to the Contract, the
Facility Operator, and their respective successors and assigns, upon not more
than 30 days’ notice, without cause and without payment of any termination fee,
penalty or extra charge.

 

 

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  (v)

Determined by Lender to be material to the operation of the Facility necessary
to obtain or maintain a License required for the use and operation of the
Facility for its Intended Use.

“Mortgaged Property” means all of Borrower’s present and future right, title and
interest in and to all of the following:

 

  (xix)

Allto the extent assignable, all rights to payments from Governmental Payor
Programs and rights to payment from private insurers, arising from the operation
of the Facility.

 

  (xx)

Allto the extent assignable, all Licenses.

“National Contract” means any Contract to which any Property Manager is a party
that provides for the provision of goods or services to the Facility and to
other facilities owned or leased by any Person that is not the Borrower or any
Facility Operator.

“Prohibited Activity or Condition” means each of the following:

 

  (i)

The presence, use, generation, release, treatment, processing, storage
(including storage in above-ground and underground storage tanks), handling or
disposal of any Hazardous Materials on or under the Mortgaged Property.

 

  (ii)

The transportation of any Hazardous Materials to, from or across the Mortgaged
Property.

 

  (iii)

Any occurrence or condition on the Mortgaged Property, which occurrence or
condition is or may be in violation of Hazardous Materials Laws.

 

  (iv)

Any violation of or noncompliance with the terms of any Environmental Permit
with respect to the Mortgaged Property.

 

  (v)

Any violation or noncompliance with the terms of any O&M Program.

However, the term “Prohibited Activity or Condition” expressly excludes lawful
conditions permitted by an O&M Program or the safe and lawful use and storage of
quantities of: (i) medical products or devices or medical waste,
(ii) pre-packaged supplies, cleaning materials and petroleum products
customarily used in the operation and maintenance of comparable multifamily
properties, (iii) cleaning materials, personal grooming items and other items
sold in pre-packaged containers for consumer use and used by tenants and
occupants of residential dwelling units in the Mortgaged Property, and
(iv) petroleum products used in the operation and maintenance of the Facility
including, without limitation, the operation of motor vehicles from time to time
located on the Mortgaged Property’s parking areasand generators, so long as all
of the foregoing are used, stored, handled, transported and disposed of in
compliance with Hazardous Materials Laws.

 

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“Property Manager” means                                          a
                                        , or another residential property
manager which is managing the Facility in accordance with Section 6.09(d) or
approved by Lender in writing.

“Site Assessment” means an environmental assessment report for the Mortgaged
Property prepared at Borrower’s expense by a qualified environmental consultant
engaged by Borrower, or by Lender on behalf of Borrower, and approved by Lender,
and in a manner reasonably satisfactory to Lender, based upon an investigation
relating to and making appropriate inquiries to evaluate the risks associated
with Mold and any existence of Hazardous Materials on or about the Mortgaged
Property, and the past or present discharge, disposal, release or escape of any
such substances, all consistent with the most current version of the ASTM
Standard E1527-05 (or any successor standard published by ASTM) and good
customary and commercial practice.

 

B.

Transaction Specific Modifications

 

1.

Section 6.10(d) is deleted and replaced with the following provision:

(d) Terrorism Insurance. Insurance required under Section 6.10(a)(i) and
(ii) and Section 6.10(b) will provide coverage for acts of terrorism. Terrorism
coverage may be provided through one or more separate policies, which will be on
terms (including amounts) consistent with those required under
Section 6.10(a)(i) and (ii) and Section 6.10(b). If Insurance against acts of
terrorism is not available at commercially reasonable rates and if the related
hazards are not at the time commonly insured against for properties similar to
the Mortgaged Property and located in or around the region in which the
Mortgaged Property is located, then Lender may opt to temporarily suspend, cap
or otherwise limit the requirement to have such terrorism insurance for a period
not to exceed one year, unless such suspension or cap will be renewed by Lender
for additional one year increments.

 

2.

The following is added to Section 7.03(c) of the Loan Agreement:

 

  (iii)

The merger or consolidation of a publicly held fund or public Real Estate
Investment Trust (“Public Fund/REIT”) with any Person, the sale or other
Transfer of all of the Public Fund/REIT’s assets to another Person or the
Transfer of interests in the Public Fund/REIT by operation of law to another
Person if both of the following conditions are met.

 

  (A)

If the Public Fund/REIT is the Guarantor, the Borrower must remain Controlled
directly or indirectly by the Guarantor (or any successor to Guarantor).

 

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  (B)

The Guarantor (or any successor entity) continues to meet the Minimum Net Worth
Requirements as set forth in the Guaranty and assumes in writing all of the
Guarantor’s obligations.

 

3.

The following is added as an additional Event of Default under Section 9.01 of
each Loan Agreement:

(pp) The occurrence of an “Event of Default” under the Other Sponsor Loan
Documents.

 

4.

Section 11.17 is deleted and replaced with “Reserved”.

 

5.

The following new provision is added to Article XI of the Loan Agreement:

11.21 Adjustment of Cross-Default.

In the event of an Event of Default under Section 9.01(pp), Lender may elect, in
Lender’s sole option and discretion, not to enforce the cross-default provision
under Section 9.01(pp) with respect to one or more or all of the Other Sponsor
Loans, at any time, or from time to time. Any election by Lender not to enforce
the cross default provisions will not constitute a waiver of Lender’s right to
enforce those provisions in the future with respect to such default or any other
future default, and will not constitute a waiver of any of Lender’s other rights
under the Loan Documents.

 

6.

The definition of “Minimum DSCR” in Article XII is deleted and replaced with the
following:

“Minimum DSCR” means, with respect to a Supplemental Loan,

 

  (i)

if the Senior Indebtedness bears interest at a fixed rate, then

 

  (A)

1.30:1 for Mortgaged Properties classified by Lender as Independent Living, and

 

  (B)

1.40:1 for Mortgaged Properties classified by Lender as Assisted Living,

or

 

  (ii)

if the Senior Indebtedness bears interest at a floating rate, then

 

  (A)

1.10:1 for Mortgaged Properties classified by Lender as Independent Living and

 

  (B)

1.15:1 for Mortgaged Properties classified by Lender as Assisted Living.

 

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7.

The following new definitions are added to Article XII of the Loan Agreement:

“Other Sponsor Indebtedness” means, in the aggregate, the “Indebtedness” as
defined in the Other Sponsor Loan Documents for each of the Other Sponsor Loans.

“Other Sponsor Loan Documents” means the documents evidencing, securing and
otherwise governing each of the Other Sponsor Loans. 

“Other Sponsor Loans” means the loans described on Exhibit O attached hereto,
other than the Loan.

“Other Sponsor Borrowers” means the “Borrowers” under the Other Sponsor Loans,
as further identified on Exhibit O.

 

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EXHIBIT C

REPAIR SCHEDULE OF WORK

 

Description of Repair

  

Completion Date

ADA compliance items

   180 days

Seal and stripe; Mill, overlay approximately 25%

   180 days

Tuckpoint and repair mortar gaps

   180 days

 

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EXHIBIT D

REPAIR DISBURSEMENT REQUEST

The undersigned requests from                                        
                     (“Lender”) the disbursement of funds in the amount of
$                                                  (“Disbursement Request”) from
the Repair Reserve Fund established pursuant to the Multifamily Loan and
Security Agreement dated                                                      ,
20     by and between Lender and the undersigned ( “Loan Agreement”) to pay for
repairs to the multifamily apartment project known
as                                                          and located in
                                                             .

The undersigned represents and warrants to Lender that the following information
and certifications provided in connection with this Disbursement Request are
true and correct as of the date hereof:

 

1.

Purpose for which disbursement is requested:

 

 

2.

To whom the disbursement will be made (may be the undersigned in the case of
reimbursement for advances and payments made or cost incurred for work done by
the undersigned):                     

 

3.

Estimated costs of completing the uncompleted Repairs as of the date of this
Disbursement Request:                     

 

4.

The undersigned certifies that each of the following is true:

 

  (a)

The disbursement requested pursuant to this Disbursement Request will be used
solely to pay a cost or costs allowable under the Loan Agreement.

 

  (b)

None of the items for which disbursement is requested pursuant to this
Disbursement Request has formed the basis for any disbursement previously made
from the Repair Reserve Fund.

 

  (c)

All labor and materials for which disbursements have been requested have been
incorporated into the Improvements or suitably stored upon the Mortgaged
Property in accordance with reasonable and standard building practices, the Loan
Agreement and all applicable laws, ordinances, rules and regulations of any
governmental authority having jurisdiction over the Mortgaged Property.

 

  (d)

The materials, supplies and equipment furnished or installed for the Repairs are
not subject to any Lien or security interest or that the funds to be disbursed
pursuant to this Disbursement Request are to be used to satisfy any such Lien or
security interest.

 

Multifamily Loan and Security Agreement – Seniors Housing

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5.

All capitalized terms used in this Disbursement Request without definition will
have the meanings ascribed to them in the Loan Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Disbursement Request as of
the day and date first above written.

 

       

BORROWER:

Date:

                                         

                                         

                                         

 

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EXHIBIT E

WORK COMMENCED AT MORTGAGED PROPERTY

NONE

 

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EXHIBIT F

CAPITAL REPLACEMENTS

 

•  

Carpet/vinyl flooring

 

•  

Window treatments

 

•  

Roofs

 

•  

Furnaces/boilers

 

•  

Air conditioners

 

•  

Ovens/ranges

 

•  

Refrigerators

 

•  

Dishwashers

 

•  

Water heaters

 

•  

Garbage disposals

 

•  

Other items that Lender may approve subject to any conditions that Lender may
require, all in Lender’s sole and absolute discretion.

 

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EXHIBIT G

DESCRIPTION OF GROUND LEASE

N/A

 

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EXHIBIT H

ORGANIZATIONAL CHART OF BORROWER AS OF THE CLOSING DATE

 

 

LOGO [g925270g82l29.jpg]

 

Multifamily Loan and Security Agreement – Seniors Housing

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EXHIBIT I

DESIGNATED ENTITIES FOR TRANSFERS AND GUARANTOR(S)

Designated Entities for Transfers

NIC 11 Michigan Owner LLC

Propco 11 LLC

Guarantor(s)

New Senior Investment Group Inc., a Delaware corporation

 

Multifamily Loan and Security Agreement – Seniors Housing

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EXHIBIT K

LICENSES

 

LICENSE

   HOLDER

None

   N/A

 

Multifamily Loan and Security Agreement – Seniors Housing

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EXHIBIT L

FURNITURE, FIXTURES, EQUIPMENT, AND MOTOR VEHICLES

See attached Schedule B

 

Multifamily Loan and Security Agreement – Seniors Housing

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EXHIBIT M

CONTRACTS

NOT APPLICABLE

 

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EXHIBIT N

MATERIAL CONTRACTS

NOT APPLICABLE

 

Multifamily Loan and Security Agreement – Seniors Housing

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EXHIBIT O

OTHER SPONSOR LOANS

NOT APPLICABLE

 

Multifamily Loan and Security Agreement – Seniors Housing

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