Exhibit 10.3


 





 


	Healthcare Regulatory

        Agreement
        – Borrower

        Section 232
	U.S.
        Department of Housing

        and
        Urban Development

        Office
        of Residential

        Care
        Facilities
	OMB Approval
        No. 2502-0605

        (exp.
        03/31/2014)

         



 


Public reporting burden for
this collection of information is estimated to average 0.5 hours. This includes the time for collecting, reviewing, and reporting
the data. The information is being collected to obtain the supportive documentation which must be submitted to HUD for approval,
and is necessary to ensure that viable projects are developed and maintained. The Department will use this information to determine
if properties meet HUD requirements with respect to development, operation and/or asset management, as well as ensuring the continued
marketability of the properties. This agency may not collect this information, and you are not 'required to complete this form,
unless it displays a currently valid OMB control number.·


 


Warning: Any person who knowingly
presents a false, fictitious, or fraudulent statement or claim in a matter within the jurisdiction of the U.S. Department of Housing
and Urban Development is subject to criminal penalties, civil liability, and administrative sanctions.


 


	Recording
                                         requested by:

        Darrell Hotchkiss

        Burke &
        Hotchkiss, PLLC

        3 Campbell Street

        Lebanon, NH 03766

         

        After recording return to:

        David Aborn, Esq.

        U.S. Department of Housing


          and Urban Development

        Manchester Field Office

        Norris Cotton Federal Building

        275 Chestnut Street, 4th
        Floor

        Manchester NH 03101
	4046-0791

        03/26/2014
        2:55 PM Pages: 35

        REGISTER
        OF DEEDS, GRAFTON COUNTY

         

        



 


Project Name: Riverglen House
of Littleton 


 


FHA Pro ject No.:024-43104


 


Project Location: 55 Riverglen
Lane, Littleton, NH 03561


 


Lender: Housing &
Healthcare Finance, LLC


 


	Original
    Principal Amount of Note: $4,810,600.00	Date of Note: March
    27, 2014


 


Originally endorsed for insurance
under Section 232 pursuant to 223(a)(7)


 


Borrower: Profit-Motivated
x Non-Profit  ̈


Is Non-Profit Borrower permitted
to take Distributions? Yes  ̈ No  ̈


(Failure to
check the appropriate space(s) shall not affect the enforceability or application of this Agreement.)


 




    	Previous versions obsolete
	Page 1 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


This Healthcare
Regulatory Agreement - Borrower (this "Agreement") is entered into this 27th day of March, 2014, between
Riverglen House of Littleton, L.L.C., a limited liability company organized and existing under the laws of New Hampshire, whose
address is 55 Riverglen Lane, Littleton, NH, its successors, heirs, and assigns (jointly and severally) ("Borrower")
and the U.S. Department of Housing and Urban Development, acting by and through the Secretary, his or her successors, assigns
or designates ("HUD"). Borrower is sometimes also referred to as "Owner" or "Mortgagor" in
the Loan Documents and Program Obligations. If Borrower is also
Operator, references in this Agreement to Operator refer to Borrower. To the extent that Borrower contracts with any other party
to perform any functions included in this Agreement, Borrower shall maintain ultimate responsibility for performance of all required
functions included herein.


 


In consideration
of, and in exchange for an action by HUD, HUD and Borrower agree to the terms of this Agreement. The HUD action may be one of
the following: HUD's endorsement for insurance of the Note, HUD's consent to the transfer of any of the Mortgaged Property, HUD's
sale and conveyance of any of the Mortgaged Property, or HUD's consent to other actions related to Borrower, the Project, or to
the Mortgaged Property.


 


Borrower and
HUD execute this Agreement in order to comply with Program Obligations, with the requirements of the National Housing Act, as
amended, and the regulations adopted by HUD pursuant thereto. This Agreement shall continue during such period time as HUD shall
be the owner, holder, or insurer of the Note. Upon satisfaction of the Note, as evidenced by the discharge or release of the Borrower's
Security Instrument, this Agreement shall automatically terminate. However, Borrower shall be responsible for any violations of
this Agreement which occurred prior to termination.


 


Violation of
this Agreement or Program Obligations may subject Borrower and other signatories hereto to adverse actions.


 


Borrower and
HUD covenant and agree as follows:


 


I.  DEFINITIONS.


 


1.          DEFINITIONS.
Any capitalized term or word used herein but not defined shall have the meaning given to such term in the Borrower's
Security Instrument. The following terms, when used in this Agreement (including when used in the above recitals), shall have
the following meanings, whether capitalized or not and whether singular or plural, unless, in the context, an incongruity results:


 


“Affiliate” is
defined in 24 C.F.R. 200.215, or any successor regulation.


 


“Approved Use” 
means the use of the Project for the operation of the Healthcare Facility as an assisted living facility with 60 beds and
such other uses as may be approved in writing from time to time by HUD based upon a request made by Borrower, or Operator,
but excluding any uses that are discontinued with the written approval of HUD.


 




    	Previous versions obsolete
	Page 2 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


"Borrower" shall
mean the entity identified as "Borrower" in the first paragraph of this Agreement, together with any successors, heirs,
and assigns (jointly and severally). "Borrower'' shall include any person or entity taking title to the Mortgaged Property
whether or not such person or entity assumes the Note. "Borrower" is sometimes also referred to in the Loan Documents
and Program Obligations as the "Obligor," the "Owner," and/or the "Mortgagor."


 


"Borrower-Operator Agreement"
means any agreement relating to the operation of the Heathcare Facility by and between Borrower and Operator, including any
Operator Lease.


 


"Borrower's Security Instrument"
means the Healthcare Mortgage, Assignment of Leases, Rents and Revenue and Security Agreement, and shall be deemed to be the
mortgage as defined by Program Obligations.


 


"Distribution" means
any disbursal, conveyance, loan or transfer of cash, any asset of Borrower, or any other portion of the Mortgaged Property, other
than in payment of Reasonable Operating Expenses.


 


"Firm Commitment" means
the commitment for insurance of advances or commitment for insurance upon completion, dated January 8, 2014, issued to Lender
by HUD under which the debt evidenced by the Note is to be insured pursuant to a Section of the National Housing Act.


 


"Fixtures" has
the meaning set forth in the Borrower's Security Instrument.


 


"Healthcare Facility"
means that portion of the Project operated on the Land as a Nursing Home, Intermediate Care Facility, Board and Care Home,
Assisted Living Facility and/or any other healthcare facility authorized to receive insured mortgage financing pursuant to Section
232 of the National Housing Act, as amended, including any commercial space included in the facility.


 


"HUD" means the
U.S. Department of Housing and Urban Development acting by and through the Secretary in the capacity as insurer or holder of the
Loan under the authority of the National Housing Act, as amended, the Department of Housing and Urban Development Act, as amended,
or any other federal law or regulation pertaining to the Loan or the Project.


 


"Improvements" has
the meaning set forth in the Borrower's Security Instrument.


 


"Indebtedness"
means the principal of, interest on, and all other amounts due at any time under the Note or the Loan Documents, including
prepayment premiums, late charges, default interest, and advances to protect the security as provided in the Loan Documents.


 




    	Previous versions obsolete
	Page 3 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


"Land" has the
meaning set forth in the Borrower's Security Instrument .and is also legally described on Exhibit A, attached hereto and
incorporated herein.


 


"Lender" means
the entity identified as "Lender" in the first paragraph of the Borrower's Security Instrument, or any subsequent holder
of the Note, and whenever the term "Lender" is used herein, the same shall be deemed to include the "Obligee",
or the "Trustee(s)'' and the "Beneficiary" of the Borrower's Security Instrument, and shall also be deemed to be
the "Mortgagee" as defined by Program Obligations.


 


"Loan Documents" has
the meaning set forth in the Borrower's Security Instrument.


 


"Mortgaged Property"
has the meaning set forth in the Borrower's Security Instrument.


 


"Non-Profit Borrower"
means a Borrower that is treated under the Firm Commitment as an entity organized for purposes other than profit or gain for
itself or persons identified therewith, pursuant to Section 501(c)(3) or other applicable provisions of the Internal Revenue Code.
For transactions entered into pursuant to Section 223(a)(7) of the National Housing Act, a Borrower who executed with HUD's permission
a "for-profit" regulatory agreement in connection with the original loan being refinanced through this transaction shall
not be considered a "Non-Profit Borrower" for purposes of this Agreement and may designate itself as a "Profit-Motivated"
entity on page 1, provided, however, that any conditions in the Finn Commitment conflicting with the above statement shall control.


 


"Note" means the
Note executed by Borrower, described in the Borrower's Security Instrument, including all schedules, riders, allonges and addenda,
as such Note may be amended from time to time.


 


"Notice" is defined
in Section 45.


 


"Operator" means
Riverglen House of Littleton, L.L.C., a limited liability company organized and existing under the laws of New Hampshire, or any
subsequent operator approved by HUD.


 


"Operator Lease" means
a lease by Borrower to Operator providing for the operation of the Healthcare Facility.


 


"Operator's Regulatory Agreement"
means that certain Healthcare Regulatory Agreement - Operator relating to the Project and entered into by Operator for the
benefit of HUD.


 


"Personalty" has
the meaning set forth in the Borrower's Security Instrument.


 


"Principal" is
defined in 24 C.F.R. 200.215, and any successor regulation, provided that for purposes of the Loan Documents, "Principal"
shall also include the managing member and any other member that has a twenty-five percent (25%) or more interest in a limited
liability company.


 




    	Previous versions obsolete
	Page 4 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


"Program
Obligations" means (1) all applicable statutes and any regulations issued by HUD pursuant
thereto that apply to the Project, including all amendments to such statutes and regulations, as they become effective, except
that changes subject to notice and comment rulemaking shall become effective only upon completion of the rulemaking process, and
(2) all current requirements in HUD handbooks and guides, notices, and mortgagee letters that apply to the Project, and all future
updates, changes and amendments thereto, as they become effective, except that changes subject to notice and comment rulemaking
shall become effective only upon completion of the rulemaking process, and provided that such future updates, changes and amendments
shall be applicable to the Project only to the extent that they interpret, clarify and implement terms in this Agreement rather
than add or delete provisions from such document. Handbooks, guides, notices, and mortgagee letters are available on HUD's official
website: http://www.hud.gov/offices/adm/hudclips/index.cfm or a successor location to that site.


 


"Project"
has the meaning set forth in the Borrower's Security Instrument.


 


"Property
Jurisdiction" is any jurisdiction in which the Land is located.


 


"Reasonable
Operating Expenses" means expenses that arise from the operation, maintenance and routine
repair of the Project, including all payments and deposits required under this Agreement and any of the Loan Documents, and comply
with the requirements of 24 C.F.R. 232.1007, or successor regulation.


 


"Rent,"
"Profits" and "Income" shall include: all rent due pursuant to any Master
Lease or Operator Lease; any payments due pursuant to any Residential Agreement; any other lease payments, revenues, charges,
fees and assistance payments arising from the operation of the Project, including but not limited to, if and for so long as applicable,
commercial leases, workers' compensation, social security, Medicare, Medicaid, and other third-party reimbursement payments, Accounts
Receivable (as defined in the Borrower's Security Instrument) and all payments and income arising from the operation of the Healthcare
Facility and/or the provision of services to residents thereof.


 


"Reserve
for Replacement'' is defined in Section 13.


 


"Residential
Agreement" means a lease or other resident agreement between the operator of the Healthcare
Facility and a resident setting forth the terms of the resident's living arrangement and the provision of any related services.


 


"Residual
Receipts" means certain funds held by a Non-Profit Borrower which are restricted in
their use by this Agreement and Program Obligations, and otherwise described in Section 17.


 




    	Previous versions obsolete
	Page 5 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


''Surplus Cash" is
defined in Section 15.


 


"Taxes"
means all taxes, assessments, vault rentals and other charges, if any, general, special
or otherwise, including all assessments for schools, public betterments and general or local improvements, that are levied, assessed
or imposed by any public authority or quasi-public authority, and that, if not paid, could become a lien on the Land or the Improvements.


 


"Waste"
means a failure to keep the Project in decent, safe and sanitary condition and in good repair.
"Waste" also means the failure to meet certain financial obligations regarding the payment of Taxes and the relinquishment
of the possession of Rents. During any period in which HUD insures the Loan or holds a security interest on the Mortgaged Property,
Waste is committed when, without Lender's and HUD's express written consent, Borrower:


 


		(1)	physically
                                         changes, or permits changes to, the Mortgaged Property, whether negligently or intentionally,
                                         in a manner that reduces its value;



 


		(2)	fails
                                         to maintain the Mortgaged Property in decent, safe, and sanitary condition and in good
                                         repair;



 


		(3)	fails
                                         to pay, or cause to be paid, before delinquency any Taxes that because of such failure,
                                         may subject the Project to a lien having priority over the Borrower's Security Instrument;



 


		(4)	mate1ially
                                         fails to comply with covenants in the Note, the Borrower's Security Instrument, this
                                         Agreement, or any of the Loan Documents respecting physical care, maintenance, construction,
                                         abandonment, demolition, or insurance against casualty of the Mortgaged Property; or



 


		(5)	retains
                                         possession of Rents to which Lender or its assigns have the right of possession under
                                         the terms of the Loan Documents.



 


II.  CONSTRUCTION;
REPAIRS.


 


2.          CONSTRUCTION
FUNDS. Borrower shall keep construction funds of the Project, if any, separate and apart
from operating funds of the Project, including without limitation any funds necessary to operate the Healthcare Facility.


 


3.          UNPAID
OBLIGATIONS. Borrower certifies that upon final endorsement of the Note by HUD, Borrower
shall have no unpaid obligations in connection with the purchase of the Mortgaged Property, the construction of the Mortgaged
Property, or with respect to the Borrower's Security Instrument except such unpaid obligations as have the written approval of
HUD as to terms, form and amount.


 




    	Previous versions obsolete
	Page 6 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


4.          LENDER'S
CERTIFICATE. Borrower shall be bound by the tem1s of either the Lender's Certificate, a
copy of which has been provided to Borrower, and/or the Request for Endorsement of Credit Instrument &
Certificate of Lender, Borrower & General Contractor,
as applicable (a copy of which has been provided to Borrower), insofar as the applicable document establishes or reflects obligations
of Borrower, and Borrower agrees that the fees and expenses enumerated in the applicable document have been fully paid or payment
has been provided for as set forth in the applicable document and that all funds deposited with Lender shall be used for the purposes
set forth in the applicable document insofar as Borrower has rights and obligations in respect thereto.


 


5.          CONSTRUCTION
COMMENCEMENT/REPAIRS. Borrower shall not commence, and has not commenced, construction or substantial rehabilitation of the
Mortgaged Property prior to HUD endorsement of the Note except as pem1itted by Program Obligations or as otherwise permitted by
HUD, and provided that this Section 5 is not applicable if HUD has given prior written approval to an early commencement or early
start of construction, or if this Project is an Insurance Upon Completion loan or involves a loan refinancing.


 


6.          DRAWINGS
AND SPECIFICATIONS. The Project shall be constructed in accordance with the terms of the Construction Contract as approved
by HUD, if any, and with the "Drawings and Specifications," as such term is referred to in such Construction Contract.


 


7.          REQUIRED
CONSTRUCTION PERMITS. Unless otherwise required in the Construction Contract and Building Loan Agreement, Borrower has obtained
all necessary certificates, permits, licenses, qualifications, authorizations, consents and approvals from all necessary Governmental
Authorities to own, construct or substantially rehabilitate, to carry out all of the transactions required by the Loan Documents
and to comply with all applicable federal statutes and regulations of HUD in effect on the date of the Firm Commitment, except
for those, if any, which customarily would be obtained at a later date, at an appropriate stage of construction or completion
thereof, and which the Borrower shall obtain in the future. The licenses and permits that are in effect as of the date hereof
are sufficient to allow any construction (or substantial rehabilitation, as applicable) of the Improvements to proceed to completion
in the ordinary course. As the construction (or substantial rehabilitation, as applicable) of the Project progresses, unless otherwise
required by the Construction Contract, Borrower shall procure and submit all necessary building and other permits required by
Governmental Authorities. The Project shall not be available for residency by any resident, nor shall the Healthcare Facility
commence operations, except to the extent approved by prior written consent of HUD and of all other legal authorities having jurisdiction
of the Project.


 


8.          PRE-COMPLETION
ACCOUNTING REQUIREMENTS. Borrower shall submit an accounting to HUD, as required by Program Obligations, for all receipts
and disbursements during the period starting with the date of first occupancy of the Mortgaged Property after endorsement of the
Note and ending, at the option of Borrower, any date after completion of the Project, as determined in accordance with Program
Obligations. Any income of the Project in excess of disbursements for HUD-approved construction and development costs and Reasonable
Operating Expenses, as such excess is determined by HUD, shall be treated as a recovery of construction cost, except as otherwise
allowed in Program Obligations.


 




    	Previous versions obsolete
	Page 7 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


III.  FINANCIAL
MANAGEMENT.


 


9.          OUTSTANDING
OBLIGATIONS. Borrower shall have no obligations as of the date of this Agreement except
those approved by HUD in writing and, except for those approved obligations, the Land has been paid for in full (or if the Land
is subject to a leasehold interest, it must be subject to a HUD-approved lease), and is free from any liens or purchase money
obligations, except as approved by HUD. As of the date hereof, all contractual obligations relating to
the Project have been fully disclosed to HUD.


 


10.         PAYMENTS.
Borrower shall make promptly all payments, including any deposits to
required reserves, due under the Loan Documents, including without limitation the Note and the Borrower's Security
Instrument.


 


11.         PROPERTY
AND OPERATION; ENCUMBRANCES.


 


(a)          Borrower
shall deposit all receipts of Borrower relating to the Project including all Rents, Advances, and equity or capital contributions
required under the Firm Commitment or otherwise advanced for the purpose and as part of the Mortgaged Property, in the name of
Borrower, for the benefit of the Project, in a federally insured depository or depositories and in accordance with Program Obligations,
provided that, in accordance with Program Obligations, an account held in an institution approved by the Government National Mortgage
Association may have a balance that exceeds the amount to which such deposit insurance is limited. Equity or capital contributions
shall not include certain syndication proceeds, such as proceeds from Low Income Housing Tax Credit transactions used to repay
bridge loans, all as more fully set forth in Program Obligations. Such funds shall be withdrawn only in accordance with the provisions
of this Agreement and Program Obligations. Any person or entity receiving Mortgaged Property or any other proceeds of the Project
other than for eligible purposes pursuant to this Agreement shall immediately deliver such Mortgaged Property or other proceeds
to Borrower for the benefit of the Project and failing so to do shall hold and be
deemed to hold such Mortgaged Property in trust for the benefit of the Project.


 


(b)          Borrower
shall not engage in any business or activity, including the operation of any other project or other healthcare facility, or other
ancillary businesses, or incur any liability or obligation not in connection with the Project. Borrower shall not acquire an Affiliate
or contract to enter into any affiliation with any party, except as approved by HUD.


 


(c)          Borrower
shall immediately satisfy or obtain a release of any mechanic's lien, attachment, judgment lien, or any other lien that attaches
to the Mortgaged Property, except to the extent permitted by HUD.


 




    	Previous versions obsolete
	Page 8 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(d)          Penalties,
including but not limited to delinquent tax penalties, shall not be paid from the Mortgaged Property except to the extent such
payments are considered Distributions and are allowed pursuant to this Agreement.


 


(e)          Borrower
shall promptly notify HUD of the appointment of any receiver for the Project, the filing of a petition in bankruptcy or insolvency
or for reorganization, as well as the retention of any attorneys, consultants or other professionals in anticipation of such an
appointment or filing.


 


(f)          Borrower
shall cause the Project to be insured at all times in accordance with the Borrower's Security Instrument and Program Obligations,
and Borrower shall notify HUD of all payments received, or claimed, from an insurer.


 


(g)          Borrower
shall notify HUD of any action or proceeding relating to any condemnation or other taking, or conveyance in lieu thereof, of all
or any part of the Mortgaged Property, whether direct or indirect condemnation.


 


(h)          Borrower
shall notify HUD of any litigation proceeding filed against Borrower or Principals, Operator, the Healthcare Facility, or the
Project, or any litigation proceeding filed by Borrower, pursuant to Program Obligations.


 


(i)          If
the Healthcare Facility is an Assisted Living Facility, Borrower shall require that no more than one person shall occupy any residential
unit of the Healthcare Facility unless Operator receives prior written consent from all residents of such unit.


 


12.         FINANCIAL
ACCOUNTING. Borrower shall keep the books and accounts of the operation of the Mortgaged
Property in accordance with Program Obligations. Financial records of Borrower and the Project shall be complete, accurate and
current at all times. Posting must be made at least monthly to the ledger accounts, and year-end adjusting entries must be posted
promptly in accordance with sound accounting principles. All expenditures in connection with the Project must be fully documented
so as to provide reasonable assurance to all persons or entities that review such expenditures that such expenditures are permitted
under Program Obligations. Undocumented expenses shall not be considered Reasonable Operating Expenses.


 


13.         RESERVE
FOR REPLACEMENT.


 


(a)          Borrower
shall establish and maintain a Reserve for Replacement account for defraying certain costs for replacing major structural elements
and mechanical equipment of the Project or for any other purpose. The Reserve for Replacement shall be deposited with Lender or
in a safe and responsible depository designated by Lender in accordance with Program Obligations. Such funds shall at all times
remain under the control of Lender or Lender 's designee, whether in the form of a cash deposit or invested in obligations of,
or fully guaranteed as to principal by, the United States of America or in such other investments as may be allowed by HUD and
shall be held in accounts insured or guaranteed by a federal agency and in accordance with Program Obligations.


 




    	Previous versions obsolete
	Page 9 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(b)          Borrower
shall deposit at endorsement of the Note an initial amount of $129,800.00, if applicable, and Borrower shall deposit a monthly
amount of $2,417.00, concurrently with the beginning of payments towards amortization of the Note unless a different date or amount
is established by HUD. At least every ten years, starting March 18, 2023, and more frequently at HUD' s discretion, Borrower shall
submit to HUD a written analysis of its use of the Reserve for Replacement during the prior ten years and the projected use of
the Reserve for Replacement funds during the coming ten years in accordance with Program Obligations. The amount of the monthly
deposit may be increased or decreased from time to time at the written direction of HUD without a recorded amendment to this Agreement.
In connection therewith, every ten years starting March 18, 2023, the Lender shall obtain a physical and capital needs assessment
report for HUD to evaluate. The cost of such report may be paid from the Reserve for Replacements. HUD may, in its sole discretion,
require Borrower to maintain a minimum balance in the account, in an amount to be .set by HUD. In addition to the required monthly
deposits to the said reserve fund, the balance in the replacement reserve fund existing with respect to the Project under FHA
Project No. 024-43076 shall be transferred to the replacement reserve fund to be established pursuant to this Agreement under
FHA Project No. 024-43104.


 


(c)          Borrower
shall carry the balance in this account on the financial records as a restricted asset. The Reserve for Replacement shall be invested
in accordance with Program Obligations, and any interest earned on the investment shall be deposited in the Reserve for Replacement
for use by the Project in accordance with this Section 13.


 


(d)          Disbursements
from such account shall only be made after consent, in writing, of HUD, which may be given or withheld in HUD's sole discretion.
In the event of a notification of default under the terms of the Borrower's Security Instrument pursuant to which the Indebtedness
has been accelerated, a written notification by HUD to Borrower of a violation of this Agreement, or at such other times as determined
solely by HUD, HUD may direct the application of the balance in such account to the amount due on the Indebtedness as accelerated
or for such other purposes as may be determined solely by HUD.


 


(e)          Upon
Borrower's full satisfaction of all of its obligations under the Loan Documents, any monies remaining in the Reserve for Replacement
account shall be released to Borrower.


 


(f)          Borrower
may, only with the advance written approval of HUD, borrow funds from the Reserve for Replacement for Reasonable Operating Expenses
as provided in Program Obligations. Such funds shall be repaid to the Reserve for Replacement by Borrower pursuant to the terms
approved by HUD prior to the making of such loan. To the extent HUD does not specify repayment
requirements, Borrower shall repay the Reserve for Replacement in full within thirty (30) days of the approved withdrawal. If
Borrower fails to timely make any repayment installment pursuant to the terms approved by HUD, upon notice from HUD, Borrower
shall immediately repay the full amount of such loan from non-Project funds.


 




    	Previous versions obsolete
	Page 10 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


14.         RESERVED


 


15.         SURPLUS
CASH.


 


(a)          Surplus
Cash shall be calculated semi-annually, at the end of the first six months of the Borrower's annual fiscal year, and at the end
of the Borrower's annual fiscal year. Each Surplus Cash calculation shall be submitted to Lender and HUD with the filing of Borrower's
Annual Financial Reports, unless otherwise required by HUD.


 


(b)          "Surplus
Cash" means any cash remaining after:


 


		(i)	the
                                         payment of (1) all sums due or currently required to be paid by Borrower under the Loan
                                         Documents, including any required deposits into reserves; and (2) all of Borrower's obligations
                                         relating to the Project other than those required to be paid under the Loan Documents,
                                         unless funds for such payments have been set aside or deferment of payment has been approved
                                         by HUD; and



 


		(ii)	the
                                         segregation of all amounts required to be held in trust (e.g., tenant security deposits)
                                         and all amounts required to be held (segregated) in other restricted asset accounts of
                                         the Project (e.g., Reserve for Replacements) pursuant to this Agreement, the Loan Documents
                                         and Program Obligations.



 


16.         DISTRIBUTIONS.


 


(a)          Borrower
may make and take Distributions of Mortgaged Property, to the extent and as permitted by the law of the applicable jurisdiction,
pursuant to the restrictions below, including without limitation the reconciliation requirements set forth in Section 16(d); provided
however that, except as may be approved by HUD or permitted under Program Obligations, or as otherwise provided in this Agreement,
Distributions of Mortgaged Property are prohibited for Non-Profit Borrowers.


 


(b)          Distributions
shall not be made:


 


		(i)	from
                                         borrowed funds (unless the Borrower is Operator and such Distribution is permitted under
                                         the Operator's Regulatory Agreement and Program Obligations) or prior to the completion
                                         of the construction or rehabilitation of the Project;



 




    	Previous versions obsolete
	Page 11 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


		(ii)	after
                                         HUD has given written notice to Borrower of a violation or default under this Agreement
                                         and/or after Lender has given written notice to Borrower of a violation or default under
                                         any of the Loan Documents, and until the tem1s of such notices of violation or default
                                         have been satisfied to the satisfaction of HUD and/or Lender, as applicable;



 


		(iii)	when
                                         Borrower or the Project is under a forbearance agreement;



 


		(iv)	If:
                                         (A) necessary services for the operation of the Healthcare
                                         Facility are not being provided on a regular basis, which failure Borrower knows or should
                                         have known about in the exercise of due care; (B) written notices of necessary physical
                                         repairs or deficiencies involving exigent or significant health or safety risks to residents
                                         in connection with the Project (including but not limited to building code violations)
                                         by other Governmental Authorities and/or by HUD have been issued and remain unresolved
                                         to the satisfaction of the issuing Governmental Authority, (C) Borrower has been notified
                                         in writing by HUD, Lender or other Governmental Authority that necessary physical repairs
                                         and/or deficiencies exist in connection with the Project and Borrower has not corrected
                                         or cured, or caused to be corrected or cured, the identified items to HUD's satisfaction,
                                         (D) there remain any outstanding loans from the Reserve for Replacement or Residual Receipts
                                         account, or any required deposits to such accounts have not been made when due, or (E)
                                         the Reserve for Replacement account or any other required reserve does not have
                                         the minimum balance required by HUD; and/or



 


		(v)	if
                                         the Borrower is also Operator, at any time that Operator is prohibited from distributing,
                                         advancing or otherwise using funds attributable to the Healthcare Facility (e.g., failure
                                         to timely file financial reports or when Healthcare Facility Working Capital is negative).



 


(c)          Any
Distribution of any funds, which the party receiving such funds is not entitled to retain hereunder, shall be returned to Borrower's
Project-related accounts immediately.


 


(d)          Upon
each required calculation of Surplus Cash, Borrower must demonstrate positive Surplus Cash, or to the extent Surplus Cash is negative,
repay to Project-related accounts any Distributions taken during such calculation period. Such repayment must be made within thirty
(30) days of the conclusion of the reporting period, or such longer period approved by HUD.


 




    	Previous versions obsolete
	Page 12 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(e)          If
a Non-Profit Borrower has been permitted to take Distributions, as indicated on the first
page of this Agreement, and to the extent the annual audited financial statement of such Non-Profit Borrower demonstrates Surplus
Cash, such Non-Profit Borrower may make Distributions of such Surplus Cash, upon the following conditions:


 


		(i)	Distributions
                                         may only be made after the end of any annual or semi-annual fiscal period, and when the
                                         Borrower can demonstrate positive Surplus Cash pursuant to Section 15, at the end of
                                         the immediately prior annual or semi-annual fiscal period;



 


		(ii)	Operator
                                         is in good standing with the applicable licensing agency and has no open state compliance
                                         issues or special focus facility designation;



 


		(iii)	No
                                         unresolved audit findings in the annual audited financial statements exist relating to
                                         the Project;



 


		(iv)	Borrower
                                         and Operator are in compliance with the terms of this Agreement and the Operator's Regulatory
                                         Agreement, respectively, with no notice of noncompliance or violation from HUD;



 


		(v)	No
                                         defaults exist under any of the Loan Documents and all payments required by any of the
                                         Loan Documents are current, with no notice of noncompliance or violation from HUD; and



 


		(vi)	The
                                         balance of the Residual Receipts account remains equal to no less than six months of
                                         the Borrower's required debt service (including any mortgage insurance premium, escrow
                                         deposit, reserve deposits, or any other payments required by Borrower pursuant to the
                                         Loan Documents).



 


The Non-Profit Borrower making Distributions
must evidence, with appropriate documentation sufficient for audit and HUD monit01ing purposes, compliance with each condition
listed above at the time such Distribution is made, and must retain such documentation in accordance with Program Obligations,
for audit and HUD monitoring purposes.


 


17.         RESIDUAL
RECEIPTS.


 


(a)          Any
Non-Profit Borrower shall establish and maintain a Residual Receipts account. Unless and until otherwise approved in writing by
HUD, Residual Receipts and the Residual Receipts account shall be restricted as set forth in this Section 17. Within ninety (90)
days after the end of the annual or semi-annual fiscal period for which Surplus Cash is calculated, Borrower shall deposit into
the Residual Receipts account an amount equal to the excess, if any, of (i) Surplus Cash as of the end of such fiscal period over
(ii) the amount of any permitted Distributions therefrom.


 




    	Previous versions obsolete
	Page 13 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(b)          Residual
Receipts shall be deposited with Lender or in a safe and responsible depository designated by Lender in accordance with Program
Obligations. Residual Receipts shall at all times remain under the control of Lender or Lender's designee, whether in the form
of a cash deposit or invested in obligations of, or fully guaranteed as to principal by, the United States of America or in such
other investments as may be allowed by HUD and shall be held in accounts insured or guaranteed by a federal agency and in accordance
with Program Obligations.


 


(c)          Borrower
shall carry the balance in such account on the financial records as a restricted asset. Residual Receipts shall be invested in
accordance with Program Obligations, and any interest earned on the investment shall be deposited in the Residual Receipts account
for


use by the Project
in accordance with this Section 17.


 


(d)          Disbursements
from such account shall only be made after consent, in writing, of HUD, which may be given or withheld in its sole discretion,
provided that, if the Non-Profit Borrower has been permitted to take Distributions as indicated on the first page of this Agreement,
then HUD shall apply the conditions enumerated in Section 16(e) in granting or withholding such consent. In
the event of a notification of default under the terms of the Borrower's Security Instrument, pursuant to which the Indebtedness
has been accelerated, a written notification by HUD to Borrower of a violation of this Agreement or at such other times as determined
solely by HUD, HUD may direct the application of the balance in such account to the amount due on the Indebtedness as accelerated
or for such other purposes as may be determined solely by HUD.


 


(e)          Upon
Borrower's full satisfaction of all its obligations under the Loan Documents, all funds remaining in the Residual Receipts account
shall be released to the Borrower.


 


(f)          Borrower
may, only with the advance written approval of HUD, borrow funds from Residual Receipts for Reasonable Operating Expenses as provided
in Program Obligations or for such other purposes as HUD may permit. Such funds shall be repaid to the Residual Receipts account
pursuant to the terms approved by HUD prior to the making of such loan. To the extent HUD does not specify repayment requirements,
Borrower shall repay the Residual Receipts account in full within thirty (30) days of the approved withdrawal. If
Borrower fails to timely make any repayment installment pursuant to the terms approved by HUD, upon notice from HUD, Borrower
shall immediately repay the full unrepaid amount of all such loan from non-Project funds.


 


18.         ADVANCES.


 


(a)          All
advances made by Borrower (or by a member, partner, shareholder of Borrower, or other individual or entity acting on behalf of
Borrower) for Reasonable Operating Expenses or otherwise for the benefit of the Project must be deposited into the Project's operating
account, or otherwise as directed by HUD, as required by Program Obligations.


 




    	Previous versions obsolete
	Page 14 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(b)          Interest
may accrue, and be paid, on such advances pursuant to tern1s approved by HUD in advance in writing.


 


(c)          Repayments
of advances must be approved by HUD, or as otherwise provided in Program Obligations.


 


19.         PROJECT
RECORDS. Borrower shall:


 


(a)          Make
and keep books, records, and accounts, in such reasonable detail, so as to fully, accurately, and fairly reflect the activities
of Borrower.


 


(b)          Record
the Project's assets, liabilities, revenues, expenses, receipts and disbursements in separate accounts from any other assets,
liabilities, revenues, expenses, receipts and disbursements of Borrower so as to permit the production of a Statement of Financial
Position, a Statement of Profit and Loss (Statement of Activities), and a Statement of Cash Flows for Borrower in which the activities
of Borrower are separately identifiable from the activities of the Operator, unless Borrower is also Operator.


 


(c)          Devise
and maintain a system of internal accounting controls sufficient to provide reasonable assurances that:


 


		(i)	Transactions
                                         are executed, and access to assets is permitted, only in accordance with Borrower's authorization;



 


		(ii)	Transactions
                                         are accurately and timely recorded to permit the preparation of quarterly and annual
                                         financial reports in conformity with applicable Program Obligations;



 


		(iii)	Transactions
                                         are timely recorded in sufficient detail so as to permit an efficient audit of the Borrower's
                                         books and records in accordance with Generally Accepted Auditing Standards (GAAS), Generally
                                         Accepted Government Auditing Standards (GAGAS), and other applicable Program Obligations;
                                         and



 


		(iv)	Transactions
                                         are timely recorded in sufficient detail so as to maintain accountability of the Borrower's
                                         assets. The recorded accountability for assets shall be compared with the existing assets
                                         at reasonable intervals, but not less than annually, and appropriate action shall be
                                         taken with respect to any differences.



 




    	Previous versions obsolete
	Page 15 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(d)          Make
the books, records and accounts of Borrower available for inspection by HUD or its authorized representatives, after reasonable
prior notice, during normal business hours, at the Project or other mutually agreeable location or, at HUD's request, shall provide
legible copies of such documents to HUD or its authorized representatives within a reasonable time after HUD or its authorized
representative makes a request for such documents.


 


(e)          ,Include
as a requirement in any operating or management contract that the books, records, and accounts of any agent of Borrower, as they
pertain to the operations of the Project, shall be kept in accordance with the requirements of this Section 19 and be available
for examination by HUD or its authorized representatives after reasonable prior notice during customary business hours at the
Project or other mutually agreeable location or, at HUD's request, the Management Agent shall provide legible copies of such documents
to HUD or its authorized representatives within a reasonable time after HUD or its authorized representative makes the request.


 


20.         ANNUAL
FINANCIAL REPORTS.


 


(a)          For
so long as any portion or portions of this Section 20 are not expressly waived or modified in writing by HUD, within ninety (90)
days, or such longer period established in writing by HUD, following the end of each fiscal year, Borrower shall furnish HUD and
Lender with a complete annual financial report of all of Borrower's financial activities for the immediately preceding fiscal
year, or for such other period as approved by HUD in writing, prepared in accordance with Generally Accepted Accounting Principles
(GAAP). For purposes of this Section 20, where Borrower is also Operator, and without limiting the requirements for Operator's
submission of financial reports to HUD under the Operator's Regulatory Agreement, financial activities of Borrower and the Project
shall include all of the activities of both Borrower and Operator. To the extent any records or other information of the Project
is held by Operator, or any management agent or Affiliate, Borrower shall cause such entity to provide such information to Borrower,
Lender, and HUD, and every contract related to the Project with Operator, or any management agent or Affiliate, shall include
the provision that such information shall be provided on demand. All annual financial reports furnished to HUD required herein
shall be furnished in accordance with 24 C.F.R. 5.801 and other Program Obligations, and shall include a certification in content
and form prescribed by HUD and certified by Borrower.


 


(b)          In
addition, except as otherwise provided in this Section 20, annual financial reports shall be audited in accordance with Generally
Accepted Auditing Standards (GAAS) and Government Auditing Standards (GAS), and certified by a certified public accountant licensed
or certified by a regulatory authority of a state or other political subdivision of the United States, which authority makes such
certified public accountant subject to regulations, disciplinary measures, or codes of ethics prescribed by law. Such certified
public accountant must have no business relationship with Borrower other than for the provision of tax consulting and return preparation
and auditing services.


 




    	Previous versions obsolete
	Page 16 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(c)          Any
Non-Profit Borrower shall submit audited annual financial reports, as applicable, pursuant to federal notice (e.g., Office of
Management and Budget Circular A-133). However, notwithstanding any additional time provided for Non-Profit Borrowers to submit
audited annual financial reports, such Borrowers shall still be required to submit unaudited annual financial repo1is pursuant
to Section 20(a), except that, for Borrowers that elect to submit their required audited annual financial reports early (i.e.
within the time specified in Section 20(a)), the requirement to submit unaudited annual financial reports shall be waived.


 


(d)          If
Borrower fails to submit any annual financial report required by this Section 20 within ninety (90) days of the required
due date, HUD, at its sole election, and without relieving Borrower of its requirement to file such report, may thereafter examine,
or cause to be examined at Borrower's expense, the books and records of Borrower and the Project for purposes of preparing a report
of the operations of the Project for HUD’s use.


 


(e)          Auditing
costs and tax return preparation costs may be charged as Reasonable Operating Expenses only to the extent they are required of
Borrower itself by state law, the Internal Revenue Service ("IRS"), the Securities and Exchange Commission, or
HUD. Neither IRS audit costs nor costs of tax return preparation for partners, members, shareholders, Principals or Affiliates
of Borrower are considered Reasonable Operating Expenses.


 


IV.
PROJECT MANAGEMENT.


 


21.         PRESERVATION,
MANAGEMENT AND MAINTENANCE OF THE MORTGAGED PROPERTY. Borrower (a) shall not commit or permit Waste, (b) shall not abandon
the Mortgaged Property, (c) shall restore or repair promptly, or cause to be restored or repaired promptly, in a good and workmanlike
manner, any damaged part of the Project to the equivalent of its original condition, or such other condition as HUD may approve
in writing, whether or not litigation or insurance proceeds or condemnation awards are available to cover any costs of such restoration
or repair, and (d) shall keep, or cause to be kept, the Project in decent, safe, sanitary condition and good repair, including
the replacement of Personalty and Fixtures with items of equal or better function and quality. Obligations (a) through (d) of
this Section 21 are absolute and unconditional and are not limited by any conditions precedent
and are not contingent on the availability of financial assistance from HUD or on HUD' s performance of any administrative or
contractual obligations. In the event all or any of the Improvements shall be destroyed or damaged by fire, by an exercise of
the power of eminent domain, by failure of warranty, or other casualty, the money derived from any settlement, judgment, or insurance
on any portion of the Project shall be applied in accordance with the terms of Program Obligations and the Borrower's Security
Instrument or as otherwise may be directed in writing by HUD.


 


22.         FLOOD
HAZARDS. Borrower shall maintain, or cause to be maintained, flood insurance as required by Program Obligations.


 




    	Previous versions obsolete
	Page 17 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


23.         CONTRACTS
FOR GOODS AND SERVICES. Consistent with Program Obligations, Borrower shall obtain, or cause to be obtained, contracts for
goods, materials, supplies, and services ("Goods and Services") at costs, amounts,
and terms that do not exceed reasonable and necessary levels and those customarily paid in the vicinity of the Land for Goods
and Services received. The purchase price of Goods and Services shall be based on quality, durability and scope of work. Reasonable
Operating Expenses do not include amounts paid for betterments as defined in the Property Jurisdiction or the Improvements unless
determined by HUD to be prudent and appropriate. If the Borrower
is acquiring goods and services whose costs exceed five percent (5.00%) of the Healthcare Facility's gross annual revenue, Borrower
shall solicit written cost estimates. Borrower shall keep copies of all written cost estimates and contracts or other instruments
relating to the Project, all or any of which may be subject to inspection and examination by HUD at the Project or other mutually
agreeable location.


 


24.         RESPONSIVENESS
TO INQUIRIES. At the request of HUD, Borrower shall promptly furnish or cause to be furnished operating budgets and occupancy,
accounting and other reports (including credit reports) and give or cause to be given specific answers to questions relative to
income, assets, liabilities, contracts, operation, and conditions of the Project and the status of the Borrower's Security Instrument.


 


25.         PERMITS
AND APPROVALS.


 


(a)          Borrower
shall at all times cause Operator, or any lessee or management agent, as applicable, to maintain in full force and effect, all
appropriate certificates of need, bed authority, provider agreements, licenses, permits and approvals reasonably necessary to
operate the Healthcare Facility or to fund the operation of the Project for the Approved Use (collectively, the "Permits
and Approvals"). Without the prior written consent of HUD, none of the Permits and Approvals shall be conveyed, assigned,
encumbered, transferred or alienated from the Healthcare Facility or the Project (nor shall they be relinquished to any licensing
or certification authority). Borrower shall ensure that the Healthcare Facility and the Project are at all times operated in accordance
with the requirements of the Permits and Approvals.


 


(b)          The
security interest referred to in Section 27 below shall constitute, to the extent permitted by law, a first lien upon all of the
rights, titles and interests of Borrower, if any, in the Permits and Approvals. However, in the event of either a monetary or
other default under this Agreement, the Note, the Borrower's Security Instrument, or any of the other Loan Documents, the Borrower
shall cooperate in any legal and lawful manner necessary or required to permit the continued operation of the Healthcare Facility
for the Approved Use. For the intents and purposes herein, Borrower hereby irrevocably nominates and appoints Lender and .HUD,
their respective successors and assigns, each in its own capacity, as Borrower's attorney-in-fact coupled with an interest to
do all things that any such attorney-in-fact deems to be necessary or appropriate in order to facilitate the continued operation
of the Healthcare Facility and the Project for the Approved Use, including but not limited to, the power and authority to provide
any and all information and data, pay such fees as may be required, and execute and sign in the name of Borrower, its successors
or assigns, any and all documents, as may be required by any Governmental Authority exercising jurisdiction over the Project.


 




    	Previous versions obsolete
	Page 18 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(c)          Borrower
shall not alter, terminate or relinquish or suffer or permit the alteration, termination or relinquishment of any Permits and
Approvals without the prior written approval of HUD. In the event that any such alteration, termination or relinquishment is proposed,
upon learning of such proposed alteration, termination or relinquishment, Borrower shall advise HUD and Lender promptly. Borrower
shall insert the foregoing requirements into any Borrower Operator Agreement for the Project.


 


(d)          Except
as otherwise provided below or in Program Obligations, Borrower shall electronically deliver within two (2) Business Days after
Borrower's receipt thereof, to the assigned HUD personnel and Lender copies of any and all notices, reports, surveys and other
correspondence (regardless of form) received by Borrower from any Governmental Authority that includes any statement, finding
or assertion that (i) Borrower, Operator, the Project or any lessee or management agent of the Project is or may be in violation
of (or default under) any of the Permits and Approvals or any governmental requirements applicable thereto, (ii) any of the Permits
and Approvals are to be terminated, limited in any way, or not renewed, (iii) any civil money penalty relating to the Project
is being imposed with respect to the Healthcare Facility, or (iv) Borrower, Operator, the Project or any lessee or management
agent of the Project is subject to any governmental investigation or inquiry involving fraud. Borrower shall deliver to the assigned
HUD personnel and Lender, simultaneously with delivery thereof to any Governmental Authority, any and all responses given by or
on behalf of Borrower to any of the foregoing and shall provide to HUD and Lender, promptly upon request, such other information
regarding any of the foregoing as HUD or Lender may request. Unless otherwise requested by HUD, the reporting requirement of this
provision shall not encompass regulators' communications relating solely to Licensed Nursing Facility surveys where the most severe
citation level is at the "G" level or its equivalent (pursuant to CMS State Operations Manual, Chapter 7, as may hereafter
be edited or updated, or any successor guidance) unless a citation at such level is either (i) unresolved
from the two most recent consecutive prior surveys, or (ii) is a repeat violation having the same citation number. Moreover, unless
otherwise requested by HUD or Lender, the initial communication from the Operator pursuant to this paragraph shall be a notice
by email to the Lender describing the conduct cited, the scope and duration of remedy(ies) imposed, and the timelines for corrective
actions. Then, unless otherwise requested by HUD or Lender, the next communication from the Operator shall be notification that
the citations have been cleared by the issuing regulatory agency. The receipt by HUD and/or Lender of notices, reports, surveys,
correspondence and other information shall not in any way impose any obligation or liability on HUD, the Lender or their respective
agents, representatives or designees to take or refrain from taking any action, and HUD, Lender and their respective agents, representatives
and designees shall have no liability for any failure to act thereon or as a result thereof.


 




    	Previous versions obsolete
	Page 19 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


26.         OPERATOR;
COOPERATION IN CHANGE OF OPERATOR.


 


(a)          Unless
Borrower is itself the licensed operator of the Healthcare Facility, Borrower has or shall enter into and maintain the Borrower-Operator
Agreement, in such form as approved by HUD. Any Operator (including Borrower) must be approved by HUD and shall execute a Healthcare
Regulatory Agreement - Operator (Form HUD-92466A-ORCF) upon such terms as are acceptable to HUD and an Operator Security Agreement
(Form HUD-92323-0RCF) and deposit account control agreements in form and substance satisfactory to HUD and Lender. If
Borrower is or becomes Operator, Borrower shall execute a Healthcare Regulatory Agreement – Operator (Form HUD-92466A-ORCF)
upon terms acceptable to HUD and an Operator Security Agreement (Form HUD-92323-0RCF) and deposit account control agreements in
form and substance satisfactory to HUD and Lender.


 


(b)          Borrower
shall require Operator to comply with the terms of the Operator's Regulatory Agreement and shall set forth such requirements,
or cause such requirements to be set forth, in any Borrower-Operator Agreement.


 


(c)          In
the event that, consistent with the Operator's Regulatory Agreement, HUD directs Borrower to terminate any Borrower-Operator Agreement
and procure a new Operator acceptable to HUD, Borrower shall expeditiously do so consistent with the continued operation of the
Healthcare Facility for the Approved Use, and in cooperation with and subject to the requirements of the necessary regulatory
and/or funding entities. Doing so shall in no way obviate the Borrower's obligation to comply with all other terms of this Agreement
or affect any enforcement action by HUD.


 


(d)          In
the event that Borrower is itself the licensed operator of the Healthcare Facility and HUD determines that (i) any of the Permits
and Approvals have been or are at substantial and imminent risk of being terminated, suspended or otherwise restricted in such
a way that the Project could not be operated for the Approved Use, as evidenced by, without limitation, letters of warning or
imposition of penalties from applicable state and/or federal regulatory and/or funding agencies, or (ii) the financial viability
of the Healthcare Facility is at substantial and imminent risk, then, pursuant to Program Obligations and without prejudice to
any enforcement actions otherwise set forth in this Agreement, HUD may direct Borrower to retain the services of an operator acceptable
to HUD. Upon such direction from HUD, Borrower shall expeditiously do so.


 


(e)          Without
prior approval of HUD, the Operator Lease shall not, and may not be amended to contain any provisions that cause such lease to
be characterized as other than an "operating lease" pursuant to Generally Accepted Accounting Principles and FASB Standard
13 (or its successor), including without limitation provisions that convey an ownership interest in the Project to Operator, or
grant Operator a bargain purchase option during or after the lease term.


 




    	Previous versions obsolete
	Page 20 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


27.         PERSONAL
PROPERTY; SECURITY INTERESTS. Borrower
shall suitably equip, or cause to be equipped, the Project for the Approved Use. Except as otherwise approved in writing by HUD,
Borrower shall grant to Lender and HUD a first lien security interest in all personal property of Borrower related to the Project
as additional security for the obligations of Borrower under the Note, the Borrower's Security
Instrument and this Agreement. Such security interest shall be evidenced by such security agreements as Lender and/or HUD may
require and, in connection therewith, Borrower shall execute or cause to be executed and delivered such deposit account control
agreements as may be required by Lender and/or HUD. Borrower hereby authorizes each of Lender and HUD to file such UCC financing
statements, amendments, and continuation statements as either of them may deem to be necessary or appropriate in connection with
the foregoing security interests. Borrower shall not be permitted to grant any other liens on any of the Mortgaged Property without
the prior written approval of Lender and HUD.


 


28.         PROFESSIONAL
LIABILITY INSURANCE. Borrower shall maintain, or cause Operator or any lessee or management agent to maintain, professional
liability insurance that complies with the applicable requirements of HUD. Annually, Borrower shall provide, or cause Operator
or any lessee or management agent to provide, to HUD and Lender, a certification of compliance with such professional liability
insurance requirements as evidenced by an Acord or certified copy of the insurance policy.


 


29.         PROPERTY
MANAGEMENT AGREEMENTS. If, in addition to or in lieu of any
Borrower-Operator Agreement, Borrower enters into a property management agreement or other document outlining procedures for managing
the Healthcare Facility ("Management Agreement"), such agreement or document must be approved by HUD and consistent
with Program Obligations. Any management agent must be approved by HUD and must execute and deliver a Management Agent Certification
-Residential Care Facilities (form HUD-9839-0RCF, or successor form) in such form as approved by HUD. Any Management Agreement
shall contain the following provisions: (1) the Management Agreement shall terminate without penalty upon failure to comply with
the provisions of Management Certification to HUD, or for other good cause, including without limitation for violations of the
Borrower's Regulatory Agreement, Operator's Regulatory Agreement, and/or Master Tenant's Regulatory Agreement, if any, thirty
days after HUD has mailed to Borrower, or Operator, as applicable, a written notice of its desire to terminate the Management
Agreement; (2) in the event that HUD determines that any of the Permits and Approvals reasonably necessary to operate the Healthcare
Facility is at substantial and imminent risk of being terminated, suspended or otherwise restricted, if such tem1ination, suspension
or other restriction would have a materially adverse effect on the Project, the Management Agreement shall terminate immediately
without penalty upon HUD's issuance of a notice of termination to Borrower, or Operator, as applicable, and such management agent;
and (3) the Management Agreement may not be assigned without the prior written approval of HUD. Upon HUD's request for termination,
Borrower, or Operator, as applicable, shall immediately arrange to terminate any such Management Agreement and shall make arrangements
satisfactory to HUD for the continuing proper management of the Healthcare Facility and the Project. Any material amendment to
the management agreement must be acceptable to HUD, in accordance with Program Obligations.


 




    	Previous versions obsolete
	Page 21 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


30.         ACCEPTABILITY
OF MANAGEMENT OF THE MORTGAGED PROPERTY. Borrower shall provide management of the Mortgaged
Property in a manner consistent with Program Obligations and acceptable to HUD. Borrower shall take such actions as shall cause
the Project to conform to Program Obligations.


 


31.         TERMINATION
OF CONTRACTS. Except as otherwise permitted by HUD, any contract pertaining to the Project
with a vendor having an identity of interest with the Borrower and/or Operator, as determined by HUD pursuant to Program Obligations,
shall provide:(1) in the event of a default under this Agreement, or the Operator's Regulatory Agreement, the contract shall
be subject to termination without penalty and without cause upon written request by HUD, within thirty (30) days notice of such
tem1ination; and (2) in the event that HUD determines that any of the Permits and Approvals are at substantial and imminent risk
of being terminated, suspended or otherwise restricted so as to have a material adverse effect on the Project, the contract shall
be subject to termination immediately without penalty and without cause upon written request by HUD. Upon such request by HUD,
Borrower shall immediately arrange to terminate the contract, or cause Operator to terminate the contract, and Borrower shall
also make arrangements, or cause Operator to make arrangements, satisfactory to HUD for continuing acceptable services to the
Project effective as of the termination date of the contract.


 


32.         MANAGEMENT
AGENT. In the event that a management agent is or will be the holder of the Healthcare Facility
license or is or will be the payee under one or more third- party payor agreements with respect to the Healthcare Facility, such
management agent will be treated as an Operator in accordance with Program Obligations.


 


33.         COMMERCIAL
(NON-RESIDENTIAL) LEASES. No portion of the Project shall be leased for any commercial purpose
or use without receiving HUD's prior written approval as to terms, form and amount, except for commercial leases for support or
ancillary services which are subordinate to the Borrower's Security Instrument, have terms of not more than five (5) years and
otherwise comply with Program Obligations. Borrower shall deliver, or cause to be delivered, an executed copy of any commercial
lease to HUD and Lender within thirty (30) days after its effective date.


 


V.   ACTIONS
REQUIRING THE PRIOR WRITTEN APPROVAL OF HUD.


 


34.         Borrower
shall not without the prior written approval of HUD, including without limitation in accordance with Program Obligations:


 


(a)          Convey,
assign, transfer, pledge, hypothecate, encumber, or otherwise dispose of the Mortgaged Property or any interest therein, or permit
the conveyance, assignment, or transfer of any interest or control in Borrower (if the effect of such conveyance, assignment or
transfer is the creation or elimination of a Principal) unless permitted by Program Obligations. Borrower need not obtain the
prior written approval of HUD for: (i) conveyance of the Mortgaged Property at a judicial or non-judicial foreclosure sale under
the Borrower's Security Instrument; (ii) inclusion of the Mortgaged Property in a bankruptcy estate by operation of law under
the United States Bankruptcy Code; (iii) acquisition of an interest by inheritance or by court decree; or (iv) as otherwise allowed
by Program Obligations.


 




    	Previous versions obsolete
	Page 22 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(b)          Enter
into any contract, agreement or arrangement to borrow funds or finance any purchase or incur any liability, direct or contingent,
other than in accordance with the Loan Documents and Program Obligations.


 


(c)          Pay
out any funds in violation of this Agreement, the Loan Documents, or Program Obligations.


 


(d)          In
accordance with 24 C.F.R. 232.1007 or any successor regulation, except for Distributions allowed pursuant to this Agreement, pay
any compensation, including wages or salaries, in excess of fair and reasonable compensation or incur any obligation to do so,
to any officer, director, stockholder, trustee, beneficiary, partner, member, or Principal of Borrower, or to any nominee thereof,
except that, at any time at which Borrower is the operator of the Healthcare Facility, Borrower may pay fair and reasonable compensation
to employees who are officers, directors, stockholders, trustees, beneficiaries, partners, members or Principals of Borrower.


 


(e)          Enter
into or change any contract, agreement or arrangement for supervisory or managerial services or leases for the operation of the
Healthcare Facility or any portion of the Project, except as permitted under Program Obligations.


 


(f)          Convey,
assign or transfer any right to receive Rents of the Mortgaged Property.


 


(g)          Remodel,
add to, subtract from, construct, reconstruct or demolish any part of the Project, except as required by HUD under Section 2l
(c) and except that Borrower may, without approval of HUD, (i) dispose of or cause to be disposed of obsolete or deteriorated
Fixtures or Personalty if the same are replaced with like items of the same or greater quality or value (provided, that Borrower
shall have no obligation to replace any such Fixtures or Personalty that are not needed for operation of the Project) and (ii)
make minor alterations that do not adversely affect the Mortgaged Property.


 


(h)          Permit
the use of the Project, including any portion of the Healthcare Facility, for any other purpose except the Approved Use, or permit
commercial use greater than that originally approved by HUD.


 




    	Previous versions obsolete
	Page 23 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(i)          Amend
the organizational documents of Borrower in such a way that modifies the terms of the organizational documents required by HUD,
Lender, and/or Program Obligations, including, but not limited to: (i) any amendment that results in the creation or elimination
of a Principal or modifies the requirements regarding the filing of a HUD previous participation certification when required by
Program Obligations; (ii) any amendment that in any way affects the Loan Documents; (iii) any
amendment that would change the identity of the persons and/or entities authorized to bind Borrower previously approved by HUD
or pre-approve a successor general partner, manager or member to bind the partnership or company for any matters concerning the
Project which require HUD's consent or approval; (iv) a change in any general partner, manager or managing member or pre-approved
successor general partner, manager or managing member of the partnership or company or any change in a guarantor of any obligation
to HUD; and (v) any proposed changes to the mandatory HUD language included in the organizational documents. Copies of all fully
executed amendments to the organizational documents must be provided to HUD within ten (10) days of the effective date of the
amendment. If the amendments to the organizational documents are
recorded, copies of the recorded documents must be provided to HUD within ten (10) days of receipt by Borrower.


 


(j)          Except
in cases funded by proceeds from professional liability insurance, institute litigation seeking the recovery of a sum in excess
of $100,000, nor settle or compromise any action for specific performance, damages, or other equitable relief, in excess of $100,000;
and in all cases dispose of or distribute the proceeds thereof.


 


(k)          Reimburse
any party from the Mortgaged Property for payment of expenses or costs of the Project except for Reasonable Operating Expenses
and except for payments by means of Distributions.


 


(1)         Receive
any fee or payment of any kind from Operator or any management agent or employee of the Project, or other provider of Goods or
Services of the Project in exchange for the right to provide such Goods or Services.


 


(m)          Except
as provided in Section 33, enter into, or agree to the assignment of, any commercial lease for all or part of the Mortgaged Property.


 


(n)          Enter
into any amendment of any contract or lease relating to the Project, except to the extent such contract or lease does not require
HUD' s approval, including without limitation any amendment that (i) reduces the rent or other payments due to Borrower, (ii)
materially increases the obligations of Borrower or the rights of the other parties to such contract or lease, (iii) materially
decreases the rights of Borrower or the obligations of the other parties to such contract or lease, or (iv) alters any provision
of such contract or lease required by HUD to be included therein.


 


VI.   ENFORCEMENT.


 


35.         VIOLATION
OF AGREEMENT. The occurrence of any one or more of the following shall constitute a "Violation" under this
Agreement:


 


(a)          Any
failure by Borrower to comply with any of the provisions of this Agreement;


 




    	Previous versions obsolete
	Page 24 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(b)          Any
failure by Borrower to comply with any of the provisions of any other of the Loan Documents;


 


(c)          Any
fraud or material misrepresentation or material omission by Borrower, any of its officers, directors, trustees, general partners,
members, managers, employees, representatives or managing agent in connection with (1)
any financial statement, rent roll or other report or information provided to HUD during the term of this Agreement or
(2) any request for HUD's consent to any proposed action, including a request for disbursement of funds from any restricted account
for which HUD's prior written approval is required; or


 


(d)          The
commencement of a forfeiture action or proceeding, whether civil or criminal, which, in HUD's reasonable judgment, could result
in a forfeiture of the Mortgaged Property or otherwise materially impair Lender's and/or HUD's interest in the Mortgaged Property.


 


36.         NOTICE
OF VIOLATION AND EVENT OF DEFAULT.


 


(a)          At
any time during the existence of a Violation, HUD may give written notice of such Violation to Borrower (the "Violation
Notice"), addressed to the addresses stated in this Agreement, or such other addresses as may subsequently, upon appropriate
written Notice to HUD and Lender, be designated by Borrower as its legal business address. Borrower shall have thirty (30) days
to cure, or cause to ·be cured, any Violation described in the Violation Notice, provided that HUD shall extend such thirty
(30) day period by such time as HUD may reasonably determine is necessary to correct the Violation for so long as, HUD determines,
in its discretion, that: (i) Borrower is timely satisfying all payment obligations in the Loan Documents; (ii) none of the Permits
and Approvals is at substantial and imminent risk of being terminated; (iii) such violation cannot reasonably be corrected during
such thirty (30) day period, but can reasonably be corrected in a timely manner, and (iv) Borrower or Operator commences to correct
such Violation, or cause such correction to be commenced, during such thirty (30) day period and thereafter diligently and continuously
proceeds to correct, or cause correction of, such Violation. If, after delivery of such Violation
Notice and applicable cure period, the Violation is not corrected to the satisfaction of HUD, HUD may declare an Event of Default
under this Agreement without further Notice. Alternatively, if necessary in HUD's determination to protect the health and
safety of the tenants or the financial or operational viability of the Healthcare Facility, HUD may declare an Event of Default
at any time during the existence of a Violation without providing prior written notice of the Violation.


 




    	Previous versions obsolete
	Page 25 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(b)          Notwithstanding
any other provisions of this Agreement, if HUD determines at any time that any of the Permits and Approvals are at substantial
and imminent risk of being terminated, suspended or otherwise restricted if such termination, suspension, or other restriction
would have a materially adverse effect on the Project, including without limitation, HUD's determination that there is a substantial
risk that deficiencies identified by applicable state and/or federal regulatory and/or funding agencies cannot be cured in such
manner and within such time periods as would avoid the loss, suspension, or diminution of any of the Permits and Approvals that
would have a materially adverse effect on the Project, or if HUD determines at any time that, as a result of a Violation, the
value of the Mortgaged Property is at substantial and imminent risk of material adverse diminution, then HUD may immediately (without
thirty (30) days notice) declare an Event of Default of this Agreement and may immediately proceed to take actions to pursue its
remedies.


 


(c)          Upon
any declaration of an Event of Default, HUD may:


 


		(i)	If
                                         HUD holds the Note, declare the whole of the Indebtedness
                                         immediately due and payable and then proceed with the foreclosure of the Borrower's Security
                                         Instrument or otherwise dispose of HUD's interest in the Note and the Borrower's Security
                                         Instrument pursuant to Program Obligations;



 


		(ii)	If
                                         the Note is not held by HUD, notify the holder of the
                                         Note of such default and require the holder to declare a default under the Note and the
                                         Borrower's Security Instrument, and the holder after receiving such Notice and demand,
                                         shall declare the whole of the Indebtedness due and payable and thereupon proceed with
                                         foreclosure of the Borrower's Security Instrument and the exercise of other remedies
                                         available to Lender under the Loan Documents or at law or equity, or assign the Note
                                         and the Borrower's Security Instrument to HUD as provided in Program Obligations. Upon
                                         assignment of the Note and the Borrower's Security Instrument to HUD, HUD may then proceed
                                         with the foreclosure of the Borrower's Security Instrument or otherwise dispose of HUD's
                                         interest in the Note and the Borrower's Security Instrument pursuant to Program Obligations;



 


		(iii)	Collect
                                         all Rents and charges in connection with the Project or the operation of the Healthcare
                                         Facility, to the extent permitted by applicable law, and use such collections to pay
                                         obligations of Borrower under this Agreement and under the Note and the Loan Documents
                                         and the necessary expenses of preserving and operating the Project;



 


		(iv)	Take
                                         possession of the Mortgaged Property, bring any action necessary to enforce any rights
                                         of Borrower growing out of .the Mortgaged Property's operation, and maintain the Mortgaged
                                         Property in decent, safe, sanitary condition and good repair;



 




    	Previous versions obsolete
	Page 26 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


		(v)	Apply
                                         to any court, state or federal, for specific performance of this Agreement, for an injunction
                                         against any Violations of this Agreement, for the appointment of a receiver to take over
                                         and operate the Project in accordance with the terms of this Agreement, or for such other
                                         relief as may be appropriate, as the injury to HUD arising from a default under any of
                                         the terms of this Agreement would be irreparable and the amount of damage would be difficult
                                         to ascertain; and,



 


		(vi)	Collect
                                         reasonable attorney fees related to enforcing Borrower's compliance with this Agreement.



 


(d)          Any
forbearance by HUD in exercising any right or remedy under this Agreement or otherwise afforded by applicable law shall not be
a waiver of or preclude the exercise of any right or remedy.


 


37.         MEASURE
OF DAMAGES. The damage to HUD as a result of Borrower's breach of duties and obligations under this Agreement shall
be, in the case of failure to maintain, or cause to be maintained, the Project as required by this Agreement, the cost of the
repairs required to return the Project to decent, safe and sanitary condition and good repair. This contractual provision shall
not abrogate or limit any other remedy or measure of damages available to HUD under any civil, criminal or common law.


 


38.         NONRECOURSE
DEBT. The following individuals or entities identified in the Firm Commitment: Jason
E. Purdy, Individually and Riverglen House of Littleton, L.L.C. as identified in the Firm Commitment do not assume
personal liability for payments due under the Note and the Borrower's Security Instrument, or for the payments to the Reserve
for Replacement, or for matters not under their control, provided that such individuals or entities shall remain personally liable
under this Agreement only with respect to the matters hereinafter stated; namely: (a) for funds or property of the Project coming
into its hands which, by the provisions of this Agreement, it is not entitled to retain; (b) for authorizing the conveyance, assignment,
transfer, pledge, encumbrance, or other disposition of the Mortgaged Property or any interest therein in violation of this Agreement
without the prior written approval of HUD; and (c) for its own acts and deeds, or acts and deeds of others, which it has authorized
in violation of the provisions of this Section. The obligations of the individuals or entities listed in this Section shall survive
any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, any termination of this Agreement,
and any release of record of the Borrower's Security Instrument.


 


[signature on
following page]


 



    	Previous versions obsolete
	Page 27 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


	/s/
    Jason Purdy	 
	Jason Purdy, Individually	 
	 	 
	STATE OF NEW HAMPSHIRE	)
	 	) SS:
	COUNTY OF	)


 


On
this 19th day of March, 2014, before me, the undersigned notary public, personally appeared Jason E. Purdy,
proved to me through satisfactory evidence of identification, which was  ̈
photographic identification with signature issued
by a federal or state governmental agency, namely_____________, ̈
oath or affirmation of a credible witness, x
personal knowledge of the undersigned, to be the
person whose name is signed on the preceding or attached document(s), and acknowledged to me that he signed it voluntarily for
its stated purpose.


 


	 	/s/
    Darrell Hotchkiss
	 	Notary Public
	 	My Commission Expires: 5.20.2014


 


	Riverglen House of Littleton,
    L.L.C.	 
	 	DARRELL HOTCHKISS
	 	NOTARY PUBLIC - NEW HAMPSHIRE
	 	My Commission Expires
    May 20, 2014
	By: 	/s/
    Jason E. Purdy	 
	 	Jason E. Purdy, Managing
    Member	 


 


VII. MISCELLANEOUS.


 


39.         COMPLIANCE
WITH LAWS.


 


(a)          Borrower
shall comply with all applicable: laws; ordinances; regulations; requirements of any Governmental Authority; lawful covenants
and agreements (including the Borrower's Security Instrument) recorded against the Mortgaged Property; and Program Obligations;
including but not limited to those of the foregoing pertaining to: health and safety; construction of improvements on the Mortgaged
Property; fair housing; civil rights; zoning and land use; Leases; lead-based paint maintenance requirements of 24 C.F.R. Part
35 and maintenance and disposition of resident security deposits; and, with respect to all of the foregoing, all subsequent amendments,
revisions, promulgations or enactments. Borrower shall at all times maintain records sufficient to demonstrate compliance with
the provisions of this Section 39. Borrower shall take appropriate measures to prevent, and shall not engage in or knowingly permit,
any illegal activities at the Mortgaged Property including those that could endanger residents or visitors, result in damage to
the Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise impair the lien created by the Borrower's
Security Instrument or Lender's interest in the Mortgaged Property. To the best of Borrower's knowledge, Borrower represents and
warrants to HUD that no portion of the Mortgaged Property has been or shall be purchased with the proceed s of any illegal activity.


 






    	Previous versions obsolete
	Page 28 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


(b)          There
shall be full compliance with the provisions of (1) any State or local laws prohibiting discrimination in housing on the basis
of race, color, creed, or national origin; and (2) the regulations of HUD providing for non-discrimination and equal opportunity
in housing. It is understood and agreed that failure or refusal to comply with any such provisions shall be a proper basis for
HUD to take any corrective action it may deem necessary including, but not limited to, the rejection of applications for FHA mortgage
insurance and the refusal to enter into future contracts of any kind with which Borrower is identified; and further, if Borrower
is a corporation or any other type of business association or organization which may fail or refuse to comply with the aforementioned
provisions, HUD shall have a similar right of corrective action (1) with respect to any individuals who are officers, directors,
trustees, managers, partners, associates or principal stockholders of Borrower; and (2) with respect to any other type of business
association, or organization with which the officers, directors, trustee, managers, partners, associates or principal stockholders
of Borrower may be identified.


 


(c)          HUD
and Lender shall be entitled to invoke any remedies available by law or equity to redress any breach or to compel compliance by
Borrower with these requirements, including any remedies available hereunder.


 


40.         BINDING
EFFECT. This Agreement shall bind, and the benefits
shall inure to, Borrower, its heirs, legal representative, executors, administrators, successors in office or interest, and assigns,
and to HUD and HUD' s successors, so long as the Contract of Insurance continues in effect, and during such further time as HUD
shall be Lender, holder, coinsurer, or reinsurer of the Borrower's Security Instrument, or obligated to reinsure the Note or the
Borrower’s Security Instrument.


 


41.         PARAMOUNT
RIGHTS AND OBLIGATIONS. Borrower warrants that it has not, and shall not, execute any other
agreement with provisions contradictory of, or in opposition to, the provisions hereof, and that, in any event, the requirements
of this Agreement are paramount and controlling as to the rights and obligations set forth and supersede any other requirements
in conflict therewith.         ·


 


42.         SEVERABILITY.
The invalidity of any clause, part, or provision of this Agreement shall not affect the
validity of the remaining portions hereof.


 


43.         RULES
OF CONSTRUCTION. The captions and headings of the sections of this Agreement are for convenience
only and shall be disregarded in construing this Agreement. Any reference in this Agreement to an "Exhibit"
or a "Section" shall, unless otherwise explicitly provided, be
construed as referring, respectively, to an Exhibit attached to this Agreement or to a Section of this Agreement. All Exhibits
attached to or referred to in this Agreement are incorporated by reference into this Agreement. Use of the singular in this Agreement
includes the plural and use of the plural includes the singular. As used in this Agreement, the term, "including" means
"including, but not limited to."


 






    	Previous versions obsolete
	Page 29 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


44.         PRESENT
ASSIGNMENT. To the extent permitted by applicable law, Borrower irrevocably and unconditionally assigns, pledges, mortgages
and transfers to HUD its rights to Rents, charges, fees, carrying charges, Project accounts, security deposits, and other revenues
and receipts of whatsoever sort that it may receive or be entitled to receive from the operation of the Mortgaged Property, subject
to the assignment of Rents and other provisions in the Borrower's Security Instrument and, if Borrower is also Operator, subject
to the rights of any accounts receivable lender under accounts receivable financing that has been approved by HUD. Until a default
is declared under this Agreement, a revocable license is granted to Borrower to collect and retain such Rents, charges, fees,
carrying charges, Project accounts, security deposits, and other revenues and receipts, but upon an Event of Default under this
Agreement or under the Borrower's Security Instrument, such revocable license is automatically terminated.


 


45.         NOTICE.


 


(a)          All
notices, demands and other communications ("Notice") under or concerning
this Agreement shall be in writing. A courtesy copy of any Notice given by Borrower or HUD shall be sent simultaneously to Lender.
Each Notice shall be addressed to the intended recipients at their respective addresses set forth below, and shall be deemed given
on the earliest to occur of (i) the date when the Notice is received by the addressee; (ii) the first or second Business Day after
the Notice is delivered to a recognized overnight courier service, with arrangements made for payment of charges for next or second
Business Day delivery, respectively, or (iii) the third Business Day after the Notice is deposited in the United States mail with
postage prepaid, certified mail, return receipt requested. As used in this Section 45, the term "Business
Day" means any day other than a Saturday or a Sunday, a federal holiday or holiday in the state where the Project
is located or other day on which the federal government or the government of the state where the Project is located is not open
for business. When not specifically designated as a Business Day, the term "day" shall
refer to a calendar day.


 


(b)          Any
party to this Agreement and Lender 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 45. Each party agrees that it shall not refuse or reject delivery of
any Notice given in accordance with this Section 45, that it shall acknowledge, in writing, the


receipt of any Notice upon request
by the other party and that any Notice rejected or refused by it shall be deemed for purposes of this Section 45 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.


 






    	Previous versions obsolete
	Page 30 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

	BORROWER:	Riverglen House of Littleton, L.L.C.
	 	c/o Jason E. Purdy
	 	55 Riverglen Lane
	 	Littleton, NH 03561
	 	 
	HUD:	Manchester Field Office c/o David Aborn, Esq.
	 	Norris Cotton Federal Building
	 	275 Chestnut Street, 4t1 Floor
	 	Manchester, NH 03101
	 	 
	LENDER:	Housing & Healthcare Finance, LLC
	 	c/o Susana S. Araoz
	 	2 Wisconsin Circle, Suite 540
	 	Chevy Chase, MD 20815


 


IN WITNESS WHEREOF, the
parties hereto have set their hands and seals on the date first herein above written.


 


Borrower hereby certifies that the statements and
representations contained in this instrument and all supporting documentation thereto are true, accurate, and complete and
that each signatory has read and understands the terms of this instrument. This instrument has been made, presented, and
delivered for the purpose of influencing an official action of HUD in insuring the Loan, and may be relied upon by HUD as a
true statement of the facts contained therein.


 


	 	BORROWER:
	 	 
	 	RIVERGLEN HOUSE OF LITTLETON, L.L.C.,
	 	a New Hampshire limited liability company
	 	 
	 	By:	/s/ Jason E. Purdy
	 	Name:	Jason E. Purdy
	 	Title:	Managing Member


 




    	Previous versions obsolete
	Page 31 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


	STATE OF NEW HAMPSHIRE	)
	 	) ss:
	COUNTY OF GRAFTON	)


 


On this 19th day of March, 2014, before me, the undersigned notary public, personally appeared
Jason E. Purdy, Managing Member of Riverglen House of Littleton, L.L.C., proved to me through satisfactory evidence of identification,
which was  ̈ photographic Identification
with signature issued by a federal or state governmental agency, namely                   ,
 ̈ oath or affirmation
of a credible witness, x
personal knowledge of the undersigned, to be the person whose name is signed on the preceding or attached document(s), and acknowledged
to me that he signed it voluntarily for its stated purpose.


 


	 	/s/ Anne M.
    Donatelli
	 	Notary Public
	 	My Commission Expires: 2/6/18
	 	 
	 	


 




    	Previous versions obsolete
	Page 32 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 





	 	Secretary of Housing and Urban Development,  

acting by and through the Federal Housing  

Commissioner




 


	 	By:	/s/ Carol
    S.Jun
	 	 	Carol S.Jun
	 	 	Authorized Agent
	 	 	Office of Residential Care Facilities


 


ACKNOWLEDGEMENT


 


DISTRICT OF COLUMBIA


 


On this 20th day of March , 2014, before me, a notary
public in and for the jurisdiction aforesaid, personally appeared Carol S. Jun, who acknowledged that she is the Authorized
Agent of the Secretary of U.S. Department of Housing and Urban Development, acting by and through the Federal Housing Commissioner,
and a Supervisory Account Executive in the Office of Residential Care Facilities, U.S. Department of Housing and Urban Development,
and that she, being authorized to do so by virtue of such office, executed the foregoing instrument on behalf of the Federal Housing
Commissioner, acting for the Secretary of the U.S. Department of Housing and Urban Development.


 


Witness my hand and official seal.


 


		/s/ Tiffani W. Tyer
	Notary Public
	 
	/s/ Tiffani W. Tyer
	(Print Name)




 


	My Commission expires: 	10/14/2018	 


 


NOTICE: THIS AGREEMENT
MUST HAVE A LEGAL DESCRIPTION ATTACHED AND BE EXECUTED WITH ALL FORMALITIES REQUIRED FOR RECORDING A DEED TO REAL ESTATE (i.e.,
NOTARY/ACKNOWLEDGEMENT , SEAL, WITNESS OR OTHER APPROPRIATE FORMALITIES).


 




    	Previous versions obsolete
	Page 33 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


EXHIBIT A


LEGAL DESCRIPTION


55 Riverglen Lane, Littleton, NH


 


All and the same land and premises conveyed
by Quitclaim Deed from New Hampshire Key Line, Inc. to Riverglen House of Littleton, LLC dated August 15, 2001 and recorded on
August 17, 2001 in the Grafton County Registry of Deeds at Book 2571, Page 711. Being a certain parcel of land containing 1.73
acres, more or less, with buildings thereon, situate westerly of Cottage Street and lying on the southerly bank of the Ammonoosuc
River in the Town of Littleton, County of Grafton, State of New Hampshire and described on a plan entitled "ALTA/ACSM
Land Title Survey FHA #024-43076 for RIVERGLEN HOUSE OF LITTLETON, L.L.C. on the lands of RIVERGLEN HOUSE OF LITTLETON, L.L.C.
dated September 4, 2003 by Alpine Land Surveying, recorded in the Grafton County Registry of Deeds as Plan No. 11155.


 


The premises to be insured are more particularly
described as follows:


 


A certain parcel of land situate on the
west side of Cottage Street, South of the Ammonoosuc River, in the Town of Littleton, County of Grafton, State of New Hampshire,
bounded and further described as follows:


 


Beginning at a 1 1/2" x 0.6" high
iron pipe found, leaning northerly 0.6', at the southerly bank of the Ammonoosuc River, at the land of Town of Littleton, iron
pipe referenced as being South 4g 15' 29" East a distance
of 128.50 feet from a 5/8" x 0.2' high rebar found leaning northeasterly 0.1', iron pipe being the true point of beginning
of this description.


 


Thence North 2°34' 26" East
a distance of 15.00 feet, along the land of Town of Littleton, to a point at the southerly edge of the Ammonoosuc River;


 


Thence southeasterly and easterly a distance
of 502 feet, more or less, along the southerly edge of the Ammonoosuc River, referenced by a tie course South 78°54' 30"
East a distance of 487.51 feet to a point at the southerly edge of the Ammonoosuc River, at the land of Northeast Glass &
Aluminum, Inc.;


 


Thence South 11°26' 20" West a
distance of 15.00 feet, along the land of Northeast Glass & Aluminum,
Inc. to a 5/8" rebar set with plastic cap, stamped "Alpine Land Surveying Co. LLS 757, Littleton, N H 03561 ";


 


Thence South 11°26' 20" West a
distance of 95.00 feet, along the land of Northeast Glass & Aluminum,
Inc., across a paved drive, to a 5/811 rebar set with plastic cap, stamped "Alpine Land
Surveying Co LLS 757, Littleton, NH 03561, in pavement;


 




    	Previous versions obsolete
	Page 34 of 35	form HUD-92466-0RCF (Rev.  03/13)



     

    

 


Thence South 35°48' 39" West a distance
of 29.50 feet, along the land of Northeast Glass & Aluminum, Inc., to the northwest comer of the "Pride School" building
at the land of R & A Investment Group, Inc., referenced as being North 8734' 47" West a distance of 80.15 feet from a
1' x 1' high iron pipe found at the base of a re-wall;


 


Thence South 89°58' 33" West a
distance of 126.58 feet, along the land of R & A Investment
Group, Inc., to a 5/8" rebar set with plastic cap, stamped Alpine Land Surveying Co LLS 757, Littleton, NH 03561
";


 


Thence South 26°28' 33" West a
distance of 16.06 feet, along the land of R & A Investment Group,
Inc., to a 5/8" rebar set with plastic cap, stamped "Alpine Land Surveying Co, LLS 757, Littleton, NH 03561 ",
at the land of Stephen J. & Linda L. Maclver;


 


Thence South 88°40' 59" West
a distance of 180.80 feet, along the land of Stephen J. & Linda
L. Maclver, to a point at the land of Town of Littleton, point referenced
as being North 3° 04' 18" West a distance of 68.24 feet
from a 1/2" x 0.7' high rebar found at the land of State of New Hampshire - Department of Transportation.


 


Thence South 88°40' 59" West
a distance of 135.99 feet, along the land of Town of Littleton, to a 5/8" rebar set with plastic cap, stamped Alpine Land
Surveying Co LLS 757, Littleton, NH 03561"


 


Thence North 2°34' 26" East a
distance of 232.48 feet, along the land of Town of Littleton, crossing a paved drive, to the true point of beginning.


 


Containing 1.73 acres or 75380 square feet,
more or less, and shown on a plan entitled "ALTAl ACSM Land Title Survey for FHA
#024-43076 Riverglen House of Littleton, L.L.C., on the lands of Riverglen House of Littleton, L.L.C. ", by Alpine Land Surveying
Company dated September 4, 2003 and recorded in the Grafton County Registry of Deeds as Plan No. 11155.


 


Together with a right of way along a roadway
running westerly from Cottage Street to the above described premises. See deed conveyed by Stanley B. Lee to Herbert H. Downing
dated


22 August 1929 recorded in the Grafton County Registry of Deeds
at Vol. 614, Page 299.


 


Including a right of way twenty (20) feet
in width to be used in common with the Town of Littleton and the Grafton County Senior Citizens Council, Inc. as conveyed by Easement
and Right-of-Way Agreement dated June 5, 2001 and recorded in the Grafton County Registry of Deeds at Book 2602, Page 980.


 




    	Previous versions obsolete
	Page 35 of 35	form HUD-92466-0RCF (Rev.  03/13)