<PAGE>

                                                                    EXHIBIT 4.13



                            CASH MANAGEMENT AGREEMENT


                         Dated: as of December 12, 2001


                                      among

                             VENTAS FINANCE I, LLC,

                                  as Borrower,

                      MERRILL LYNCH MORTGAGE LENDING, INC.,
                                   as Lender,

                                       and

                           FIRST UNION NATIONAL BANK,
                                    as Agent

<PAGE>

                            CASH MANAGEMENT AGREEMENT


               CASH MANAGEMENT AGREEMENT (this "Agreement"), dated as of
                                                ---------
December 12, 2001, among VENTAS FINANCE I, LLC, a Delaware limited liability
company ("Borrower"), FIRST UNION NATIONAL BANK, a national banking association
          --------
("Agent"), and MERRILL LYNCH MORTGAGE LENDING, INC., a Delaware corporation
  -----
("Lender").
  ------

                              W I T N E S S E T H:

               WHEREAS, pursuant to a certain Loan and Security Agreement, dated
as of the date hereof (together with all extensions, renewals, modifications,
substitutions and amendments thereof, the "Loan Agreement"), between Borrower
                                           --------------
and Lender, Lender has made a loan to Borrower in the principal amount of
$225,000,000 (the "Loan"), which Loan is evidenced by a Promissory Note, dated
                   ----
as of the date hereof (together with all extensions, renewals, modifications,
substitutions and amendments thereof, the "Note"), made by Borrower, as maker,
                                           ----
to Lender, as payee, and secured by, among other things, (i) those certain
Mortgages/Deeds of Trust/Deeds to Secure Debt, Assignments of Leases and Rents,
Security Agreements and Fixture Filings, each dated as of the date hereof
(together with all extensions, renewals, modifications, substitutions and
amendments thereof, collectively, the "Mortgages"), each made by Borrower, as
                                       ---------
mortgagor, to Lender, as mortgagee, covering the respective properties as more
particularly described therein (collectively, the "Properties"), (ii) those
                                                   ----------
certain Assignments of Leases and Rents, dated as of the date hereof (together
with all extensions, renewals, modifications, substitutions and amendments
thereof, collectively, the "Assignments of Leases"), each made by Borrower, as
                            ---------------------
assignor, to Lender, as assignee, and (iii) the other Loan Documents (as
hereinafter defined);

               WHEREAS, pursuant to the Mortgages and the Assignments of Leases,
Borrower has granted to Lender a security interest in all of Borrower's right,
title and interest in, to and under the Rents (as defined in the Mortgages) and
other revenues derived from and otherwise attributable or allocable to the
Properties, and has assigned and conveyed to Lender all of Borrower's right,
title and interest in, to and under the Rents due and to become due to Borrower
or to which Borrower is now or may hereafter become entitled, arising out of the
Properties or any part or parts thereof;

               WHEREAS, in order to fulfill all of the obligations of Borrower
under the Loan Agreement, Borrower has agreed that all Rents and other revenues
from the Properties will be deposited directly into a central account
established by Borrower with Agent.

               NOW, THEREFORE, in consideration of the covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

               I.    DEFINITIONS

               Capitalized terms not otherwise defined herein shall have the
meaning set forth in the Loan Agreement. As used herein, the following terms
shall have the following definitions:

                                       2

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               "Accounts" shall mean, collectively, the Central Account, the
                --------
Sub-Accounts thereof and the Loss Proceeds Account.

               "Agent" shall mean First Union National Bank, as agent under this
                -----
Agreement, together with its successors and assigns.

               "Agreement" shall mean this Cash Management Agreement dated as of
                ---------
the date hereof, among Borrower, Agent and Lender, as amended, supplemented or
otherwise modified from time to time.

               "Borrower" shall mean Ventas Finance I, LLC, a Delaware limited
                --------
liability company, together with its successors and assigns.

               "Cash Flow Sweep Sub-Account" as defined in Section 2.1(b).
                ---------------------------

               "Central Account" as defined in Section 2.1(a).
                ---------------

               "Collateral" as defined in Section 5.1.
                ----------

               "Debt Service Payment Sub-Account" as defined in Section 2.1(b).
                --------------------------------

               "Debt Service Reserve Sub-Account" as defined in Section 2.1(b).
                --------------------------------

               "Deferred Maintenance Reserve Sub-Account" as defined in Section
                ----------------------------------------
2.1(b).

               "Eligible Account" shall mean a separate and identifiable account
                ----------------
from all other funds held by the holding institution, which account is either
(i) an account maintained with an Eligible Bank or (ii) a segregated trust
account maintained by a corporate trust department or a federal depository
institution or a state chartered depository institution subject to regulations
regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulation ss.9.10(b), which has corporate trust powers and is acting in its
fiduciary capacity.

               "Eligible Bank" shall mean a bank that (i) satisfies the Rating
                -------------
Criteria and (ii) insures the deposits thereunder through the Federal Deposit
Insurance Corporation.

               "Excess Cash Flow" shall mean any funds remaining in the Central
                ----------------
Account in any calendar month after allocation of the amounts required to be
allocated under Sections 3.3(a)(i) through (iv).

               "Hazardous Materials Remediation Reserve Sub-Account" as defined
                ---------------------------------------------------
in Section 2.1(b).

               "Impositions and Insurance Reserve Sub-Account" as defined in
                ---------------------------------------------
Section 2.1(b).

               "Kindred" shall mean, collectively, Kindred Healthcare, Inc., a
                -------
Delaware corporation, and Kindred Healthcare Operating, Inc., a Delaware
corporation.

               "Lender" shall mean Merrill Lynch Mortgage Lending, Inc., a
                ------
Delaware corporation, together with its successors and assigns.

                                       3

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               "Lessee" shall mean Kindred, in its capacity as lessee under the
                ------
Master Lease, or its successors or permitted assigns thereunder.

               "Lessee Portion" as defined in Section 2.2(e).
                --------------

               "Lessee Reserve Accounts" shall mean the Impositions and
                -----------------------
Insurance Reserve Sub-Account, the Replacement Reserve Sub-Account and the
Deferred Maintenance Reserve Sub-Account.

               "Loss Proceeds Account" as defined in Section 2.1(c).
                ---------------------

               "Master Lease" shall mean that certain Master Lease Agreement
                ------------
dated as of the date hereof, between Borrower (successor-in-interest to Ventas
Realty, Limited Partnership), as landlord, and Kindred, as tenant, as the same
may be amended, modified or restated.

               "Monthly Debt Service Payment Amount" as defined in the Loan
                -----------------------------------
Agreement.

               "Monthly Impositions and Insurance Amount" shall mean the
                ----------------------------------------
aggregate monthly deposit equal to one-twelfth (1/12) of the annual amount of
Impositions and Insurance Premiums required pursuant to Section 6.3 of the Loan
Agreement; which monthly amount shall be reduced by an amount equal to
one-twelfth (1/12) of the amount of any Letter(s) of Credit then being held by
Lender in lieu of funds required to be deposited in respect of Impositions or
Insurance Premiums pursuant to such Section 6.3.

               "Monthly Replacement Reserve Amount" shall mean the monthly
                ----------------------------------
deposit to the Replacement Reserve, if any, required pursuant to Section 6.5 of
the Loan Agreement.

               "Monthly Payment Date" shall mean the ninth (9th) day of each
                --------------------
calendar month occurring during the term of the Loan (or if such ninth (9th) day
is not a Business Day, the Business Day immediately prior to such ninth (9th)
day).

               "Permitted Investments" shall mean any one or more of the
                ---------------------
following obligations or securities acquired at a purchase price of not greater
than par (unless Borrower deposits into the applicable Sub-Account cash in the
amount by which the purchase price exceeds par), including those issued by any
Servicer, the trustee under any Securitization or any of their respective
Affiliates, payable on demand or having a maturity date not later than the
Business Day immediately prior to the date on which the invested sums are
required for payment of an obligation for which the related Sub-Account was
created and meeting one of the appropriate standards set forth below:

                    (i)   obligations of, or obligations fully guaranteed as to
     payment of principal and interest by, the United States or any agency or
     instrumentality thereof, provided such obligations are backed by the full
     faith and credit of the United States of America including, without
     limitation, obligations of: the U.S. Treasury (all direct or fully
     guaranteed obligations), the Farmers Home Administration (certificates of
     beneficial ownership), the General Services Administration (participation
     certificates), the U.S. Maritime Administration (guaranteed Title XI
     financing), the Small Business Administration (guaranteed participation
     certificates and guaranteed pool certificates),

                                       4

<PAGE>

     the U.S. Department of Housing and Urban Development (local authority
     bonds) and the Washington Metropolitan Area Transit Authority (guaranteed
     transit bonds); provided, however, that the investments described in this
     clause (i) must (A) have a predetermined fixed dollar amount of principal
     due at maturity that cannot vary or change, (B) if rated by S&P, not have
     an "r" highlighter affixed to their rating, (C) if such investments have a
     variable rate of interest, have an interest rate tied to a single interest
     rate index plus a fixed spread (if any) and must move proportionately with
     that index, and (D) not be subject to liquidation prior to their maturity;

                    (ii)   Federal Housing Administration debentures;

                    (iii)  obligations of the following United States government
     sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations),
     the Farm Credit System (consolidated systemwide bonds and notes), the
     Federal Home Loan Banks (consolidated debt obligations), the Federal
     National Mortgage Association (debt obligations), the Student Loan
     Marketing Association (debt obligations), the Financing Corp. (debt
     obligations), and the Resolution Funding Corp. (debt obligations);
     provided, however, that the investments described in this clause (iii) must
     (A) have a predetermined fixed dollar amount of principal due at maturity
     that cannot vary or change, (B) if rated by S&P, not have an "r"
     highlighter affixed to their rating, (C) if such investments have a
     variable rate of interest, have an interest rate tied to a single interest
     rate index plus a fixed spread (if any) and must move proportionately with
     that index, and (D) not be subject to liquidation prior to their maturity;

                    (iv)   federal funds, unsecured certificates of deposit,
     time deposits, bankers' acceptances and repurchase agreements with
     maturities of not more than 365 days of any bank, the short term
     obligations of which at all times are rated in the highest short term
     rating category by each Rating Agency (or, if not rated by all Rating
     Agencies, rated by at least one Rating Agency in the highest short term
     rating category and otherwise acceptable to each other Rating Agency, as
     confirmed in writing that such investment would not, in and of itself,
     result in a downgrade, qualification or withdrawal of the initial or, if
     higher, then current ratings assigned to any class of certificates or other
     securities issued in connection with any Securitization backed in whole or
     in part by the Loan (collectively the "Certificates")); provided, however,
                                            ------------
     that the investments described in this clause (iv) must (A) have a
     predetermined fixed dollar amount of principal due at maturity that cannot
     vary or change, (B) if rated by S&P, not have an "r" highlighter affixed to
     their rating, (C) if such investments have a variable rate of interest,
     have an interest rate tied to a single interest rate index plus a fixed
     spread (if any) and must move proportionately with that index, (D) not be
     subject to liquidation prior to their maturity and (E) if such investment
     has a maturity of (1) less than one month, have a long-term rating of at
     least"A2" by Moody's, (2) up to three months, have a long-term rating of at
     least "Aa" by Moody's, (3) up to six months, have a long-term rating of at
     least "Aa3" by Moody's and (4) over six months, have a long-term rating of
     at least "Aaa" by Moodys;

                    (v)    fully Federal Deposit Insurance Corporation-insured
     demand and time deposits in, or certificates of deposit of, or bankers'
     acceptances issued by, any bank or trust company, savings and loan
     association or savings bank, the short term obligations

                                       5

<PAGE>

     of which at all times are rated in the highest short term rating category
     by each Rating Agency (or, if not rated by all Rating Agencies, rated by at
     least one Rating Agency in the highest short term rating category and
     otherwise acceptable to each other Rating Agency, as confirmed in writing
     that such investment would not, in and of itself, result in a downgrade,
     qualification or withdrawal of the initial or, if higher, then current
     ratings assigned to any class of Certificates); provided, however, that the
     investments described in this clause (v) must (A) have a predetermined
     fixed dollar of principal due at maturity that cannot vary or change, (B)
     if rated by S&P, not have a "r" highlighter affixed to their rating, (C) if
     such investments have a variable rate of interest, have an interest rate
     tied to a single interest rate index plus a fixed spread (if any) and must
     move proportionately with that index, and (D) not be subject to liquidation
     prior to their maturity;

                    (vi)   debt obligations with maturities of not more than 365
     days and at all times rated by each Rating Agency (or, if not rated by all
     Rating Agencies, rated by at least one Rating Agency and otherwise
     acceptable to each other Rating Agency, as confirmed in writing that such
     investments would not, in and of itself, result in a downgrade,
     qualification or withdrawal of the initial or, if higher, then current
     ratings assigned to the Certificates) in its second highest long-term
     unsecured debt rating category; provided, however, that the investments
     described in this clause (vi) must (A) have a predetermined fixed dollar
     amount of principal due at maturity that cannot vary or change, (B) if
     rated by S&P, not have an "r" highlighter affixed to their rating, (C) if
     such investments have a variable rate of interest, have an interest rate
     tied to a single interest rate index plus a fixed spread (if any) and must
     move proportionately with that index, (D) not be subject to liquidation
     prior to their maturity and (E) if such investment has a maturity of (1)
     less than one month, have a long-term rating of at least"A2" by Moody's,
     (2) up to three months, have a long-term rating of at least "Aa" by
     Moody's, (3) up to six months, have a long-term rating of at least "Aa3" by
     Moody's and (4) over six months, have a long-term rating of at least "Aaa"
     by Moody's;

                    (vii)  commercial paper (including both non-interest-bearing
     discount obligations and interest-bearing obligations payable on demand or
     on a specified date not more than one year after the date of issuance
     thereof) with maturities of not more than 365 days and that at all times is
     rated by each Rating Agency (or, if not rated by all Rating Agencies, rated
     by at least one Rating Agency and otherwise acceptable to each other Rating
     Agency, as confirmed in writing that such investment would not, in and of
     itself, result in a downgrade, qualification or withdrawal of the initial
     or, if higher, then current ratings assigned to any class of Certificates)
     in its second highest short-term unsecured debt rating; provided, however,
     that the investments described in this clause (vii) must (A) have a
     predetermined fixed dollar amount of principal due at maturity that cannot
     vary or change, (B) if rated by S&P, not have a "r" highlighter affixed to
     their rating, (C) if such investments have a variable rate of interest,
     have an interest rate tied to a single interest rate index plus a fixed
     spread (if any) and must move proportionately with that index, (D) not be
     subject to liquidation prior to their maturity and (E) if such investment
     has a maturity of (1) less than one month, have a long-term rating of at
     least"A2" by Moody's, (2) up to three months, have a long-term rating of at
     least "Aa" by Moody's, (3) up to six months, have a long-term rating of at
     least "Aa3" by Moody's and (4) over six months, have a long-term rating of
     at least "Aaa" by Moody's;

                                       6

<PAGE>

                    (viii)  units of taxable money market funds, which funds are
     regulated investment companies, seek to maintain a constant net asset value
     per share and have the highest rating from each Rating Agency (or, if not
     rated by all Rating Agencies, rated by at least one Rating Agency and
     otherwise acceptable to each other Rating Agency, as confirmed in writing
     that such investment would not, in and of itself, result in a downgrade,
     qualification or withdrawal of the initial or, if higher, then current
     ratings assigned to any class of Certificates) for money market funds; and

                    (ix)    any other security, obligation or investment which
     has been approved as a Permitted Investment in writing by (a) Lender and
     (b) each Rating Agency, as evidenced by a written confirmation that the
     designation of such security, obligation or investment as a Permitted
     Investment will not, in and of itself, result in a downgrade, qualification
     or withdrawal of the initial or, if higher, then current ratings assigned
     to any class of Certificates by such Rating Agency;

provided, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) earning a passive return in the
nature of interest and no obligation or security shall be a Permitted Investment
if (A) such obligation or security evidences a right to receive only interest
payments or (B) the right to receive principal and interest payments on such
obligation or security are derived from an underlying investment that provides a
yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment; and provided, further, no obligation or security, other
                           -----------------
than an obligation or security constituting real estate assets, cash, cash items
or Government securities pursuant to Code Section 856(c)(4)(A), shall be a
Permitted Investment if the value of such obligation or security exceeds ten
percent (10%) of the total value of the outstanding securities of any one
issuer.

               "Rating Criteria" with respect to any Person, shall mean that (i)
                ---------------
the short-term unsecured debt obligations of such Person are rated at least
"A-1+" by S&P and "P-1" by Moody's if deposits are held by such Person for a
period of less than one month, or (ii) the long-term unsecured debt obligations
of such Person are rated at least "AA-" by S&P and "Aa3" by Moody's if deposits
are held by such Person for a period of one month or more.

               "Sub-Accounts" shall mean, collectively, the Debt Service Payment
                ------------
Sub-Account, the Debt Service Reserve Sub-Account, the Impositions and Insurance
Reserve Sub-Account, the Replacement Reserve Sub-Account, the Cash Flow Sweep
Sub-Account, the Hazardous Materials Remediation Reserve Sub-Account, the
Deferred Maintenance Reserve Sub-Account and any other sub-accounts of the
Central Account which may hereafter be established by Lender hereunder.

               "Tenant" shall mean Lessee and any other Person that is a tenant
                ------
or occupant of any portion of any Property under any Lease with Borrower now or
hereafter in effect.

               "Tenant Direction Letter" as defined in Section 2.2(a).
                -----------------------

               "UCC" as defined in Section 5.1(a)(iv).
                ---

                                       7

<PAGE>

               II.    THE ACCOUNTS

               Section 2.1    Establishment of Central Account and Sub-Accounts.
                              -------------------------------------------------

               (a)   Central Account. Borrower acknowledges and confirms that it
                     ---------------
has established and will maintain with Agent an Eligible Account for the
purposes specified herein, which shall be entitled "Central Account for the
benefit of Merrill Lynch Mortgage Lending, Inc., as secured party" (said
account, and any account replacing the same in accordance with this Agreement,
the "Central Account"). The Central Account shall be under the sole dominion and
     ---------------
control of Lender and/or its designee including any Servicer of the Loan, and
Borrower shall have no rights to control or direct the investment or payment of
funds therein except as may be expressly provided herein.

               Any amounts that Lender may hold in reserve pursuant to the Loan
Agreement may be held by Lender in the Central Account (including in a
Sub-Account thereof) or may be held in another account or manner as specified in
the Loan Agreement.

               (b)   Sub-Accounts of the Central Account. The Central Account
                     -----------------------------------
shall be deemed to contain the following Sub-Accounts (which may be maintained
as separate ledger accounts):

                     (i)   "Debt Service Payment Sub-Account" shall mean the
                            --------------------------------
     Sub-Account of the Central Account established for the purpose of
     depositing the amounts required for payment of Monthly Debt Service
     Payments under the Loan (but without duplication of amounts covered under
     items (ii) and (iii) below);

                     (ii)  "Debt Service Reserve Sub-Account" shall mean the
                            --------------------------------
     Sub-Account of the Central Account established for the purpose of
     depositing and maintaining the Debt Service Reserve required pursuant to
     Section 6.4 of the Loan Agreement;

                     (iii) "Impositions and Insurance Reserve Sub-Account" shall
                            ---------------------------------------------
     mean the Sub-Account of the Central Account established for the purpose of
     depositing the sums required to be deposited pursuant to Section 6.3 of the
     Loan Agreement for payment of Impositions and Insurance Premiums;

                     (iv)  "Replacement Reserve Sub-Account" shall mean the
                            -------------------------------
     Sub-Account of the Central Account established for the purpose of
     depositing and maintaining the Replacement Reserve required pursuant to
     Section 6.5 of the Loan Agreement;

                     (v)   "Cash Flow Sweep Sub-Account" shall mean the
                            ---------------------------
     Sub-Account of the Central Account established for the purpose of
     depositing Excess Cash Flow during a Cash Flow Sweep Event pursuant to
     Section 2.6(D) of the Loan Agreement;

                     (vi)  "Hazardous Materials Remediation Reserve Sub-Account"
                            ---------------------------------------------------
     shall mean the Sub-Account of the Central Account established for the
     purpose of depositing and maintaining the Hazardous Materials Remediation
     Reserve required pursuant to Section 6.6 of the Loan Agreement; and

                                       8

<PAGE>

                     (vii) "Deferred Maintenance Reserve Sub-Account" shall mean
                            ----------------------------------------
     the Sub-Account of the Central Account established for the purpose of
     depositing and maintaining the Deferred Maintenance Reserve required
     pursuant to Section 6.7 of the Loan Agreement.

               (c)   In the event that the proceeds of any business interruption
or rent loss insurance maintained under Section 5.4(xi) of the Loan Agreement
(any such insurance, "Business Interruption Insurance") shall be paid in a lump
                      -------------------------------
sum (rather than on a monthly basis), Borrower and Lender shall establish a
separate Eligible Account hereunder entitled "Loss Proceeds Account for the
benefit of Merrill Lynch Mortgage Lending, Inc., as secured party" (said
account, the "Loss Proceeds Account") for deposit of such Business Interruption
              ---------------------
Insurance proceeds and such proceeds shall be held, allocated and disbursed in
accordance with the terms and conditions hereof. The Loss Proceeds Account shall
be under the sole dominion and control of Lender and/or its designee including
any Servicer of the Loan, and Borrower shall have no rights to control or direct
the investment or payment of funds therein except as expressly provided herein.

               Section 2.2   Deposits into Central Account. Borrower represents,
                             -----------------------------
warrants and covenants that:

               (a)   Borrower shall cause Lessee, as tenant under the Master
Lease, and any Tenant under any other Lease to which Borrower may hereafter be a
party, to deposit all Rents payable to Borrower thereunder directly into the
Central Account. Without limitation of the foregoing, Borrower shall notify and
advise Lessee as tenant under the Master Lease (and any Tenant under a Lease to
which Borrower may hereafter be a party) to send directly to the Central Account
all payments of Rent to be paid to Borrower pursuant to an instruction letter in
the form attached hereto as Exhibit A (a "Tenant Direction Letter").
                            ---------     -----------------------

               (b)   If, notwithstanding the provisions of this Section 2.2,
Borrower receives any Rents or other income from any Property, then (i) such
amounts shall be deemed to be Collateral and shall be held in trust for the
benefit, and as the property, of Lender, (ii) such amounts shall not be
commingled with any other funds or property of Borrower, and (iii) Borrower
shall deposit such amounts in the Central Account within two (2) Business Days
of receipt.

               (c)   Without the prior written consent of Lender, Borrower shall
not (i) terminate, amend, revoke or modify any Tenant Direction Letter in any
manner whatsoever, or (ii) direct or cause any Tenant to pay any amount in any
manner other than as provided in the related Tenant Direction Letter.
Notwithstanding the foregoing, Borrower may amend a Tenant Direction Letter
(pursuant to an amendment or revised letter in form and substance reasonably
acceptable to Lender) as may be reasonably necessary in connection with any
Property Release under Section 11.4 of the Loan Agreement.

               (d)   There are no other accounts maintained by Borrower into
which revenues from the ownership and operation of any Property are deposited.
So long as the Note shall be outstanding, Borrower shall not open any other
property account for the deposit of Rent or revenues of Borrower from any
Property; provided, however, that any account designated by
          --------  -------

                                       9

<PAGE>

Borrower for receipt of funds distributed to Borrower pursuant Section 3.3 of
this Agreement shall not be deemed to be a "property account" within this
context.

               (e)   Borrower shall also cause the proceeds of any Business
Interruption Insurance to be deposited directly into the Central Account as same
are paid (or if any such proceeds are received by Borrower, the same shall be
deposited into the Central Account within two (2) Business Days after receipt
thereof (net of any Lessee Portion permitted to be deducted by Borrower as
provided below)) and such proceeds shall be allocated and disbursed in
accordance with Section 3.3 hereof. In the event that the proceeds of any such
Business Interruption Insurance are paid in a lump sum, such proceeds shall be
deposited into the Loss Proceeds Account. Agent shall cause monthly amounts to
be transferred from the Loss Proceeds Account to the Central Account as directed
by Lender (based upon a ratable allocation of such proceeds over the casualty
restoration period or the period intended to be covered by the payment in
question, in either case, as reasonably determined by Lender) on the first (1st)
Business Day of each calendar month during the period of restoration of the
applicable Property, and after transfer of same to the Central Account, such
amounts shall be allocated and disbursed in accordance with Section 3.3 hereof.
Notwithstanding the foregoing, if Business Interruption Insurance is paid by the
insurer to Borrower, Borrower shall cause same to be deposited into the Central
Account after deducting the portion (such portion, the "Lessee Portion") of any
                                                        --------------
such Business Interruption Insurance proceeds received by Borrower that is paid
by the insurer other than on account of base rent and additional rent
(including, without limitation, any additional rent amounts on account of
Impositions and Insurance Premium escrows and reserves for Capital Expenditures
or other amounts) due or to become due under the Master Lease for the applicable
period covered by such payment, provided that such Lessee Portion is required to
be paid to Lessee pursuant to Section 14.1 of the Master Lease and Borrower, in
fact, promptly pays such Lessee Portion to Lessee. If such Business Interruption
Insurance Proceeds are paid by the insurer directly to Lender, Lender shall
cause any Lessee Portion to be released to Borrower for payment to Lessee
promptly after receipt of Borrower's certification that such amount is due to
Lessee and that any Lessee Portions previously released to Borrower have been
paid to Lessee.

               (f)   Borrower shall also cause any payments and proceeds payable
to Borrower under any Cap entered into by Borrower and pledged to Lender in
accordance with the terms of the Loan Agreement to be deposited directly into
the Central Account by the applicable Cap Provider (or, if any such proceeds are
received by Borrower or any Affiliate thereof, same shall be deposited into the
Central Account within two (2) Business Days after receipt thereof) and such
proceeds shall be allocated, disbursed and applied in accordance with Section
3.3 hereof.

               Section 2.3 Account Name. The Accounts shall each be in the name
                           ------------
of Lender, as secured party; provided, however, that in the event Lender
                             --------  -------
transfers or assigns the Loan, Agent, at Lender's request, shall change the name
of each Account to the name of the transferee or assignee. In the event Lender
retains a Servicer to service the Loan, Agent, at Lender's request, shall change
the name of each Account to the name of Servicer, as agent for Lender.

               Section 2.4 Eligible Accounts/Characterization of Accounts.
                           ----------------------------------------------
Borrower and Agent shall maintain each Account as an Eligible Account. Each
Account is and shall be treated

                                       10

<PAGE>

as a "securities account" as such term is defined in Section 8-501(a) of the
UCC. Agent hereby agrees that each item of property (whether investment
property, financial asset, securities, securities entitlement, instrument, cash
or other property) credited to each Account shall be treated as a "financial
asset" within the meaning of Section 8-102(a)(9) of the UCC. Agent shall,
subject to the terms of this Agreement, treat Lender as entitled to exercise the
rights that comprise any financial asset credited to each Account. All
securities or other property underlying any financial assets credited to each
Account (other than cash) shall be registered in the name of Agent, indorsed to
Agent or in blank or credited to another securities account maintained in the
name of Agent and in no case will any financial asset credited to any Account be
registered in the name of Borrower, payable to the order of Borrower or
specially indorsed to Borrower.

        Section 2.5 Permitted Investments. Sums on deposit in the Accounts shall
                    ---------------------
not be invested except in Permitted Investments. Except during the existence of
any Event of Default, Borrower shall have the right to direct Agent to invest
sums on deposit in the Accounts in Permitted Investments; provided, however, in
                                                          --------  -------
no event shall Borrower direct Agent to make a Permitted Investment if the
maturity date of that Permitted Investment is later than the date on which the
invested sums are required for payment of an obligation for which the Account
was created. After an Event of Default and during the continuance thereof,
Lender may direct Agent to invest sums on deposit in the Accounts in Permitted
Investments as Lender shall determine in its sole discretion. Borrower hereby
irrevocably authorizes and directs Agent to apply any income earned from
Permitted Investments to the respective Accounts. The amount of actual losses
sustained on a liquidation of a Permitted Investment shall be deposited into the
Central Account by Borrower no later than one (1) Business Day following such
liquidation. Borrower shall be responsible for payment of any federal, state or
local income or other tax applicable to income earned from Permitted
Investments. The Accounts shall be assigned the federal tax identification
number of Borrower, which number is set forth on the signature pages hereof. Any
interest, dividends or other earnings which may accrue on the Accounts shall be
added to the balance in the applicable Account and allocated and/or disbursed in
accordance with the terms hereof. Provided that no Event of Default exists
(subject to Section 7.3 of the Loan Agreement) and subject to the terms and
conditions of Sections 6.3 - 6.5 and 7.3 of the Loan Agreement, interest,
dividends and other earnings which may accrue on the Impositions and Insurance
Reserve Sub-Account, Debt Service Reserve Sub-Account and Replacement Reserve
Sub-Account shall be disbursed by Agent to Borrower promptly after the end of
each calendar quarter.

        III. DEPOSITS

        Section 3.1 Initial Deposits.
                    ----------------

        (a) Borrower shall deposit in the Debt Service Payment Sub-Account on
the date hereof the amount of $     0     .
                               -----------

        (b) Borrower shall deposit in the Debt Service Reserve Sub-Account on
the date hereof the amount of $5,000,000.

                                       11

<PAGE>

               (c) Borrower shall deliver a Letter of Credit on the date hereof
in the amount of $2,226,000 in lieu of funds to be deposited in the Impositions
and Insurance Reserve Sub-Account on account of annual Impositions.

               (d) Borrower shall cause Lessee to deliver to Lender a Letter of
Credit in the amount of $1,588,000 in lieu of depositing funds in such amount in
the Replacement Reserve Sub-Account on the date hereof.

               (e) Borrower shall deposit in the Hazardous Materials Remediation
Sub-Account on the date hereof the amount of $39,700.

               (f) Borrower shall deposit in the Deferred Maintenance Reserve
Sub-Account on the date hereof the amount of $1,647,123.

               Any Letter of Credit delivered to Lender in lieu of funds to be
deposited in the above-referenced Sub-Accounts shall be held, and may be drawn
upon, by Lender in accordance with the terms and conditions of Section 6.8 of
the Loan Agreement, subject to Section 7.3 of the Loan Agreement.

               Section 3.2 Additional Deposits. Borrower shall make such
                           -------------------
additional deposits into the Accounts as may be required by the Loan Agreement.

               Section 3.3 Allocation of Funds from the Central Account.
                           --------------------------------------------

               (a) At any time other than after the occurrence and during the
continuance of an Event of Default, Agent shall allocate all available funds on
deposit and interest earned thereon in the Central Account on each Business Day
of each Interest Accrual Period in the following amounts and order of priority:

                   (i)   First, to the Impositions and Insurance Reserve
     Sub-Account, until funds have been allocated to such Sub-Account in such
     Interest Accrual Period in an amount equal to the Monthly Impositions and
     Insurance Amount for the next Monthly Payment Date;

                   (ii)  Second, to the Debt Service Payment Sub-Account, until
     such Sub-Account contains funds necessary to pay the Monthly Debt Service
     Payment Amount under the Loan for the next Monthly Payment Date;

                   (iii) Third, to the Debt Service Reserve Sub-Account, until
     the amount, if any, deducted therefrom during any preceding Interest
     Accrual Period which has not previously been reimbursed to such Sub-Account
     has been allocated to such Sub-Account;

                   (iv)  Fourth, if Borrower is then required to make monthly
     payments therein pursuant to Section 6.5 of the Loan Agreement, to the
     Replacement Reserve Sub-Account, until funds have been allocated to such
     Sub-Account in such Interest Accrual Period in an amount equal to the
     Monthly Replacement Reserve Amount for the next Monthly Payment Date;

                                       12

<PAGE>

                   (v)  Fifth, if a Cash Flow Sweep Event has occurred and is
     continuing, any amounts remaining in the Central Account after deposits for
     items (i) through (iv) above shall be deposited in the Cash Flow Sweep
     Sub-Account; and

                   (vi) Sixth, if no Cash Flow Sweep Event has occurred and is
     continuing, all amounts remaining in the Central Account after allocation
     for items (i) through (iv) above shall be paid to Borrower.

               (b) If there are insufficient funds in the Central Account for
the deposits required by Sections 3.3(a)(i) through (iv) above on or before the
Monthly Payment Date when due, Borrower shall deposit such deficiency into the
Central Account on or before such Monthly Payment Date. The deposit by Borrower
of any such deficiency pursuant to this Section 3.3(b) shall satisfy the
obligation of Borrower to make the related deposit under the Loan Agreement. In
the event Borrower shall fail to deposit such deficiency on or before the
applicable Monthly Payment Date, such failure shall constitute an Event of
Default.

               (c) If, on any Monthly Payment Date, the aggregate balance in the
Central Account (excluding funds allocated to any Sub-Account other than funds
allocated to the Debt Service Payment Sub-Account or the Impositions and
Insurance Reserve Sub-Account) is insufficient to pay the deposits required by
Sections 3.3(a)(i) and (ii) above, then Lender may withdraw funds and pay such
deficiency from the Debt Service Reserve Sub-Account (or in the event that
Borrower has delivered a Letter of Credit in lieu of depositing funds into the
Debt Service Reserve Sub-Account pursuant to Section 6.8 of the Loan Agreement,
Lender may draw on such Letter of Credit to pay such deficiency). In the event
there are insufficient funds in the Debt Service Reserve Sub-Account to pay such
shortfall, Lender may (but shall not be obligated to) withdraw funds from any
other Sub-Account in lieu of depositing funds in such Sub-Account in such order
of priority as Lender determines in Lender's sole discretion (in each case to
the extent funds are available in each such Sub-Account).

               In the event that Lender applies the proceeds of the Debt Service
Reserve Sub-Account or elects to apply the proceeds of any other Sub-Account to
pay the deposits required by Sections 3.3(a)(i) and (ii) above, Borrower shall,
upon demand, repay to Lender the amount of such applied funds to replenish such
Sub-Account(s). If Borrower shall fail to repay such amounts within two (2)
Business Days after such demand, such failure shall constitute an Event of
Default.

               (d) Upon the expiration of a Cash Flow Sweep Event in accordance
with Section 2.6(D) of the Loan Agreement, any funds remaining in the Cash Flow
Sweep Sub-Account shall be returned to Borrower pursuant to Section 3.3(a)(vi)
provided that no Event of Default then exists.

               (e) Notwithstanding anything herein to the contrary (except as
otherwise provided in Section 7.3 of the Loan Agreement), upon the occurrence
and during the continuance of an Event of Default, all funds on deposit in the
Central Account and/or the Sub-Accounts shall be disbursed to or as directed by
Lender.

                                       13

<PAGE>

               (f) Any funds released or distributed to Borrower in accordance
with Section 3.3(a)(vi) above shall be received by Borrower free and clear of
any lien or security interest of Lender hereunder and Borrower may pay or
distribute any such funds to its Affiliates as it deems appropriate.

               IV. PAYMENT OF FUNDS FROM SUB-ACCOUNTS

               Section 4.1 Payments From Sub-Accounts.
                           --------------------------

               (a) Impositions and Insurance Reserve Sub-Account. Lender shall
                   ---------------------------------------------
have the right to withdraw amounts on deposit in the Impositions and Insurance
Reserve Sub-Account to pay Impositions and Insurance Premiums not more than
thirty (30) days before the date Impositions and Insurance Premiums are due and
payable.

               (b) Debt Service Payment Sub-Account. Lender shall have the right
                   --------------------------------
to withdraw amounts from the Debt Service Payment Sub-Account to pay: (i)
default interest and late charges, if any, and (ii) Monthly Debt Service Payment
Amounts on each Monthly Payment Date on which same are due and payable under the
Note.

               (c) Debt Service Reserve Sub-Account. Lender shall have the right
                   --------------------------------
to withdraw amounts from the Debt Service Reserve Sub-Account to fund any
deficiency in the amounts required to be deposited in the Impositions and
Insurance Reserve Sub-Account and Debt Service Payment Sub-Account under
Sections 3.3(a)(i) and (ii), respectively, as provided in Section 3.3(c).

               (d) Cash Flow Sweep Sub-Account. Subject to the provisions of
                   ---------------------------
Section 2.6(D) of the Loan Agreement, Lender shall have the right to withdraw
amounts from the Cash Flow Sweep Sub-Account to prepay a portion of the
principal amount of the Loan (without payment of any Prepayment Consideration).

               (e) Other Sub-Accounts. Amounts shall be held and/or disbursed at
                   ------------------
Lender's direction from the Replacement Reserve Sub-Account, the Hazardous
Materials Remediation Reserve Sub-Account and the Deferred Maintenance Reserve
Sub-Account pursuant to the terms and subject to the conditions of Sections 6.5,
6.6 and 6.7 of the Loan Agreement, respectively, and subject to Section 7.3 of
the Loan Agreement.

               Section 4.2 Requests for Withdrawals from the Replacement Reserve
                           -----------------------------------------------------
Sub-Account. In the event that, after the date hereof, Borrower shall be
-----------
required to make monthly payments into the Replacement Reserve Sub-Account
pursuant to Section 6.5 of the Loan Agreement, then from and after such date
Agent shall disburse funds on deposit in the Replacement Reserve Sub-Account to
reimburse Borrower (or Lessee) for Approved Capital Expenditures promptly after
written request made from time to time (but not more often than once per
calendar month) by Borrower in accordance with the terms and conditions of
Section 6.5 of the Loan Agreement.

               Section 4.3 Sole Dominion and Control. Until such time as the
                           -------------------------
Obligations are irrevocably paid in full, Borrower acknowledges and agrees that
the Accounts are subject to the sole dominion, control and discretion of Lender,
its authorized agents or designees, including

                                       14

<PAGE>

Agent, subject to the terms hereof. Until such time as the Obligations are
irrevocably paid in full, Borrower shall not have any right of withdrawal with
respect to any Account or Sub-Account except with the prior written consent of
Lender. Agent shall have the right and agrees to comply with the instructions of
Lender with respect to the Accounts without the further consent of Borrower.
Agent shall comply with all "entitlement orders" (as defined in Section
8-102(a)(8) of the UCC) and instructions originated by Lender without further
consent by Borrower or any other Person.

               V. PLEDGE OF ACCOUNTS

               Section 5.1 Security for Obligations. (a) To secure the full and
                           ------------------------
punctual payment and performance of all Obligations of Borrower under the Loan
Agreement, the Note, the Mortgages, this Agreement and all other Loan Documents,
Borrower hereby grants to Lender a first priority continuing security interest
in and to the following property of Borrower, whether now owned or existing or
hereafter acquired or arising and regardless of where located (all of the same,
collectively, the "Collateral"):
                   ----------

                        (i) the Accounts and all cash, checks, drafts,
         certificates and instruments, if any, from time to time deposited or
         held in the Accounts, including, without limitation, all deposits or
         wire transfers made to the Accounts;

                        (ii) any and all amounts invested in Permitted
         Investments;

                        (iii) all interest, dividends, cash, instruments and
         other property from time to time received, receivable or otherwise
         payable in respect of, or in exchange for, any or all of the foregoing;
         and

                        (iv) to the extent not covered by clause (i), (ii) or
         (iii) above, all "proceeds" (as defined under the Uniform Commercial
         Code as in effect in the State of New York (the "UCC")) of any or all
                                                          ---
         of the foregoing.

               (b) Lender and Agent, as agent for Lender, shall have with
respect to the Collateral, in addition to the rights and remedies herein set
forth, all of the rights and remedies available to a secured party under the
UCC, as if such rights and remedies were fully set forth herein.

               Section 5.2 Rights on Default. Upon the occurrence and during the
                           -----------------
continuance of an Event of Default, Lender shall promptly notify Agent of such
Event of Default and, without notice from Agent or Lender, (a) Borrower shall
have no further right in respect of (including, without limitation, the right to
instruct Lender or Agent to transfer from) the Accounts, (b) Lender may direct
Agent to liquidate and transfer any amounts then invested in Permitted
Investments to the Accounts or reinvest such amounts in other Permitted
Investments as Lender may reasonably determine is necessary to perfect or
protect any security interest granted or purported to be granted hereby or to
enable Agent, as agent for Lender, or Lender to exercise and enforce Lender's
rights and remedies hereunder with respect to any Collateral, and (c) Lender may
apply any Collateral to any Obligations in such order of priority as Lender may
determine. If an Event of Default has occurred and is continuing, the proceeds
of any disposition of the Collateral, or any part thereof, may be applied by
Lender to the payment of the Debt in

                                       15

<PAGE>

such priority and proportions as Lender in its discretion shall deem
proper. Upon the curing of any Event of Default, Lender shall promptly notify
Agent thereof.

               Section 5.3 Financing Statement; Further Assurances.
                           ---------------------------------------
Simultaneously herewith, Borrower shall execute and deliver to Lender for filing
a financing statement or statements in connection with the Collateral in the
form required by Lender to properly perfect Lender's security interest therein
to the extent a security interest in the Collateral may also be perfected by
filing. Borrower agrees that at any time and from time to time, at the expense
of Borrower, Borrower will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Agent or Lender may reasonably request, in order to perfect and protect
any security interest granted or purported to be granted hereby (including,
without limitation, any security interest in and to any Permitted Investments)
or to enable Agent or Lender to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. In the event of any change in name,
identity or structure of Borrower, Borrower shall notify Lender thereof and
promptly after Lender's request shall execute, file and record such UCC
financing statements (if any) as are necessary to maintain the priority of
Lender's lien upon and security interest in the Collateral, and shall pay all
reasonable expenses and fees in connection with the filing and recording
thereof. If Lender shall require the filing or recording of additional UCC
financing or continuation statements, Borrower shall, promptly after request,
execute, file and record such UCC financing or continuation statements as Lender
shall deem necessary, and shall pay all reasonable expenses and fees in
connection with the filing and recording thereof.

               Section 5.4 Termination of Agreement. This Agreement shall create
                           ------------------------
a continuing security interest in the Collateral and shall remain in full force
and effect until payment in full of the Obligations. Upon payment and
performance in full of the Obligations, this Agreement shall terminate and
Borrower shall be entitled to the return, upon their request and at their
expense, of such of the Collateral as shall not have been previously sold or
otherwise applied pursuant to the terms hereof, and Agent and/or Lender shall
execute such instruments and documents as may be reasonably requested by
Borrower to evidence such termination and the release of the lien hereof
including, without limitation, letters to Lessee (and any other Tenant then
paying rent under its Lease to the Central Account hereunder) prepared by
Borrower and reasonably acceptable to Lender rescinding the instructions set
forth in the Tenant Direction Letters and UCC-3 termination statements.

               VI. RIGHTS AND DUTIES OF LENDER AND AGENT

               Section 6.1 Reasonable Care. Beyond the exercise of reasonable
                           ---------------
care in the custody thereof or as otherwise expressly provided herein, neither
Agent nor Lender shall have any duty as to any Collateral in its possession or
control as agent therefor or bailee thereof or any income thereon or the
preservation of rights against any Person or otherwise with respect thereto.
Agent and Lender each shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which Agent or Lender accords
its own property, it being understood that neither Agent nor Lender shall be
liable or responsible for any loss or damage to any of the Collateral, or for
any diminution in value thereof, by reason of the act or omission of Agent or
Lender, or their Affiliates, agents, employees or bailees, except that Agent or
Lender shall be

                                       16

<PAGE>

responsible for loss or damage to the extent same results from such party's
gross negligence or willful misconduct, provided that nothing in this Article VI
or elsewhere in this Agreement shall be deemed to relieve Agent from the duties
and standard of care which, as a commercial bank, it generally owes to
depositors or to require Borrower to indemnify Agent with respect to Agent's
failure to observe such duties and standard of care. Neither Lender nor Agent
shall have any liability for any loss resulting from the investment of funds in
Permitted Investments in accordance with the terms and conditions of this
Agreement.

               Section 6.2 Indemnity. Agent, in its capacity as agent hereunder,
                           ---------
shall be responsible for the performance only of such duties as are specifically
set forth herein, and no duty shall be implied from any provision hereof. Agent
shall not be under any obligation or duty to perform any act which would involve
it in expense or liability or to institute or defend any suit in respect hereof,
or to advance any of its own monies. Borrower shall indemnify and hold Agent and
Lender, their respective employees and officers harmless from and against any
loss, liability, cost or damage (including, without limitation, reasonable
attorneys' fees and disbursements) incurred by Agent or Lender in connection
with the transactions contemplated hereby, except to the extent that such loss
or damage results from Agent's or Lender's gross negligence or willful
misconduct. The foregoing indemnity shall survive the termination of this
Agreement and the resignation and removal of Agent.

               Section 6.3 Reliance. Agent shall be protected in acting upon any
                           --------
notice, resolution, request, consent, order, certificate, report, opinion, bond
or other paper, document or signature believed by it to be genuine, and it may
be assumed that any person purporting to act on behalf of any Person giving any
of the foregoing in connection with the provisions hereof has been duly
authorized to do so. Agent may consult with legal counsel, and the advice or
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken or suffered by it hereunder and in good faith in
accordance therewith. Agent shall not be liable for any act or omission done or
omitted to be done by Agent in reliance upon any instruction, direction or
certification received by Agent and without gross negligence or willful or
reckless misconduct. Agent shall be entitled to execute any of the powers
hereunder or perform any duties hereunder either directly or through agents or
attorneys; provided, however, that the execution of such powers by any such
agents or attorneys shall not diminish, or relieve Agent for, responsibility
therefor to the same degree as if Agent itself had executed such powers.

               Section 6.4 Resignation of Agent.
                           --------------------

               (a) Agent shall have the right to resign as Agent hereunder upon
sixty (60) days' prior written notice to Borrower and Lender, and in the event
of such resignation, Lender shall appoint a successor Agent which must be an
Eligible Bank. No such resignation by Agent shall become effective until a
successor Agent shall have accepted such appointment and executed an instrument
by which it shall have assumed all of the rights and obligations of Agent
hereunder. If no such successor Agent is appointed within sixty (60) days after
receipt of the resigning Agent's notice of resignation, the resigning Agent may
petition a court for the appointment of a successor Agent.

               (b) In connection with any resignation by or substitution of
Agent, (i) the resigning or removed Agent shall, (A) duly assign, transfer and
deliver to the successor Agent

                                       17

<PAGE>

this Agreement and all cash and Permitted Investments held by it hereunder, (B)
execute such financing statements and other instruments prepared by Borrower and
approved by Lender or prepared by Lender as may be necessary to assign to the
successor Agent, as agent for Lender, any security interest in the Collateral
existing in favor of the retiring Agent hereunder and to otherwise give effect
to such succession and (C) take such other actions as may be reasonably required
by Lender or the successor Agent in connection with the foregoing and (ii) the
successor Agent shall establish in Lender's name, as secured party, cash
collateral accounts, which shall become the Accounts for purposes of this
Agreement upon the succession of such Agent, and which Accounts shall also be
"securities accounts" within the meaning of the UCC.

               (c) Lender at its sole discretion shall have the right, upon
thirty (30) days notice to Agent, to substitute Agent with a successor Agent
that satisfies the requirements of an Eligible Bank or to have one or more of
the Accounts held by another Eligible Bank, provided that such successor Agent
shall perform the duties of Agent pursuant to the terms of this Agreement.

               Section 6.5 Lender Appointed Attorney-In-Fact. Borrower hereby
                           ---------------------------------
irrevocably constitutes and appoints Lender as Borrower's true and lawful
attorney-in-fact, coupled with an interest and with full power of substitution,
to execute, acknowledge and deliver any instruments required under this
Agreement and to exercise and enforce every right, power, remedy, option and
privilege of Borrower with respect to the Collateral, and do in the name, place
and stead of Borrower, all such acts, things and deeds for and on behalf of and
in the name of Borrower, which Borrower is required to do hereunder or which
Agent or Lender may deem necessary or desirable to more fully vest in Lender the
rights and remedies provided for herein and to accomplish the purposes of this
Agreement including, without limitation, the filing of any UCC financing
statements or continuation statements in appropriate public filing offices on
behalf of Borrower, in any of the foregoing cases, upon Borrower's failure to
take any of the foregoing actions within five (5) Business Days after notice
from Lender. The foregoing powers of attorney are irrevocable and coupled with
an interest. If Borrower fails to perform any agreement herein contained and
such failure shall continue for five (5) Business Days after notice of such
failure is given to Borrower, Lender may perform or cause performance of any
such agreement, and any reasonable expenses of Lender and Agent in connection
therewith shall be paid by Borrower.

               Section 6.6 Acknowledgment of Lien/Offset Rights. Agent hereby
                           ------------------------------------
acknowledges and agrees that (a) the Accounts shall be held by Agent in the name
of Lender, (b) all funds held in the Accounts shall be held for the benefit of
Lender, (c) Borrower has granted to Lender a first priority security interest in
the Collateral, (d) Agent shall not disburse any funds from the Accounts except
as provided herein, and (e) Agent shall invest and reinvest any balance of the
Accounts in Permitted Investments in accordance with Section 2.5 hereof. Agent
hereby waives any right of offset, banker's lien or similar rights against, or
any assignment, security interest or other interest in, the Collateral.

               Section 6.7 Reporting Procedures. Agent shall provide Borrower
                           --------------------
and Lender with a record of all checks, wire transfers and any other items
deposited to the Central Account or processed for collection. Agent shall send a
daily credit advice to Borrower, which credit advice shall specify the amount of
each receipt deposited into each Account on such date. The

                                       18

<PAGE>

Agent shall send a monthly report to Borrower and Lender, which shall be in form
and detail reasonably acceptable to Borrower and Lender and which shall include
the credits and charges to the Accounts for the previous calendar month. In
addition to the reports and information to be provided to Borrower and Lender
above, Agent shall also send a monthly report to Lessee which shall include the
credits and charges to the Lessee Reserve Accounts for the previous calendar
month. Agent shall, at the request of Lender, establish Lender and its
designated Servicer as users of Agent's electronic data transfer system in
accordance with Agent's standard procedures. Upon request of Lender or its
designated Servicer, (i) Agent shall send to Lender or its designated Servicer,
as applicable, either (x) copies of the daily credit advices and any other
advices or reports furnished by Agent to Borrower hereunder or (y) information
on Account balances, to the extent said balances in the Accounts have changed
from the previous report, the aggregate amount of withdrawals from the Accounts
and other similar information via the electronic data transfer system or
facsimile transmission on a daily basis, and (ii) Agent shall advise Lender or
its designated Servicer, as applicable, of the amount of available funds in the
Accounts and shall deliver to Lender or its designated Servicer copies of all
statements and other information concerning the Accounts, to the extent that the
balances in the Accounts have changed from the previous report, as Lender or its
designated Servicer shall reasonably request. In the event Agent shall resign or
be replaced as Agent hereunder, Agent shall provide Borrower and Lender with a
final written accounting, including closing statements, with respect to the
Accounts, and shall provide Lessee with a final accounting, including closing
statements, with respect to the Lessee Reserve Accounts, within thirty (30) days
of resignation.

               VII. REMEDIES

               Section 7.1 Remedies. Upon the occurrence and during the
                           --------
continuance of an Event of Default, Lender or Agent at the direction of Lender,
as agent for Lender, may:

               (a) without notice to Borrower, except as required by law, and at
any time or from time to time, charge, set-off and otherwise apply all or any
part of the Collateral against the Obligations or any part thereof, including,
without limitation, costs and expenses as set forth in Section 8.4;

               (b) in its sole discretion, at any time and from time to time,
exercise any and all rights and remedies available to it under this Agreement,
and/or as a secured party under the UCC and/or under any other applicable law or
in equity; and

               (c) demand, collect, take possession of, receive, settle,
compromise, adjust, sue for, foreclose or realize upon the Collateral (or any
portion thereof) as Lender may determine in its sole discretion.

               Section 7.2 Waiver. Borrower hereby expressly waives, to the
                           ------
fullest extent permitted by law, presentment, demand, protest or any notice of
any kind in connection with this Agreement or the Collateral. Borrower
acknowledges and agrees that ten (10) days' prior written notice of the time and
place of any public sale of the Collateral or any other intended disposition
thereof shall be reasonable and sufficient notice to Borrower within the meaning
of the UCC.

                                       19

<PAGE>

               VIII. MISCELLANEOUS

               Section 8.1 Transfers and Other Liens. Borrower agrees that it
                           -------------------------
will not (i) sell or otherwise dispose of any of the Collateral or (ii) create
or permit to exist any Lien upon or with respect to all or any of the
Collateral, except for the Lien granted under this Agreement.

               Section 8.2 Lender's Right to Perform Borrower's Obligations; No
                           ----------------------------------------------------
Liability of Lender. If Borrower fails to perform any of the covenants or
-------------------
obligations contained herein, and such failure shall continue for a period five
(5) Business Days after Borrower's receipt of written notice thereof from
Lender, Lender may itself perform, or cause performance of, such covenants or
obligations, and the reasonable expenses of Lender incurred in connection
therewith shall be payable by Borrower to Lender. Notwithstanding Lender's right
to perform certain obligations of Borrower, it is acknowledged and agreed that
Borrower retains control of the Properties and notwithstanding anything
contained herein or Agent's or Lender's exercise of any of its rights or
remedies hereunder, under the Loan Documents or otherwise at law or in equity,
neither Agent nor Lender shall be deemed to be a mortgagee-in-possession of any
Property nor shall Lender be subject to any liability with respect to any
Property or otherwise based upon any claim of lender liability except as a
result of Lender's gross negligence or willful misconduct.

               Section 8.3 No Waiver. The rights and remedies provided in this
                           ---------
Agreement and the other Loan Documents are cumulative and may be exercised
independently or concurrently, and are not exclusive of any other right or
remedy provided at law or in equity. No failure to exercise or delay by Agent or
Lender in exercising any right or remedy hereunder or under the Loan Documents
shall impair or prohibit the exercise of any such rights or remedies in the
future or be deemed to constitute a waiver or limitation of any such right or
remedy or acquiescence therein. Every right and remedy granted to Agent and/or
Lender hereunder or by law may be exercised by Agent and/or Lender at any time
and from time to time, and as often as Agent and/or Lender may deem it
expedient. Any and all of Agent's and/or Lender's rights with respect to the
liens and security interests granted hereunder shall continue unimpaired, and
Borrower shall be and remain obligated in accordance with the terms hereof,
notwithstanding (a) any proceeding of Borrower under the Federal Bankruptcy Code
or any bankruptcy, insolvency or reorganization laws or statutes of any state,
(b) the release or substitution of Collateral at any time, or of any rights or
interests therein or (c) any delay, extension of time, renewal, compromise or
other indulgence granted by the Agent and/or Lender in the event of any default,
with respect to the Collateral or otherwise hereunder. No delay or extension of
time by Agent and/or Lender in exercising any power of sale, option or other
right or remedy hereunder, and no notice or demand which may be given to or made
upon Borrower by Agent and/or Lender, shall constitute a waiver thereof, or
limit, impair or prejudice Agent's and/or Lender's right, without notice or
demand, to take any action against Borrower or to exercise any other power of
sale, option or any other right or remedy. No waiver of any term or condition of
this Agreement, whether by delay, omission or otherwise, shall be effective
unless in writing and signed by the party sought to be charged, and then such
waiver shall be effective only in the specific instance and for the purpose for
which given.

               Section 8.4 Expenses. The Collateral shall secure, and Borrower
                           --------
shall pay to Agent and Lender on demand, from time to time, all reasonable costs
and expens es (including,

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<PAGE>

but not limited to, reasonable attorneys' fees and disbursements, and transfer,
recording and filing fees, taxes and other charges) of, or incidental to, the
creation or perfection of any lien or security interest granted or intended to
be granted hereby, the custody, care, sale, transfer, administration, collection
of or realization on the Collateral, or in any way relating to the enforcement,
protection or preservation of the rights or remedies of Agent and/or Lender
under this Agreement, the Loan Agreement, the Note, the Mortgages, or the other
Loan Documents. Standard and customary fees and charges associated with the
Accounts shall be included on a monthly consolidated account analysis statement
which Agent shall submit to Borrower for payment. This statement shall set forth
the fees and charges payable for such month, including, but not limited to
reasonable fees and reasonable expenses incurred in connection with this
Agreement and be accompanied by reasonably detailed supporting documentation.
Agent shall be entitled to charge the Accounts for such fees and expenses as
indicated by the analysis statement. Borrower agrees to pay Agent a monthly fee
for servicing and administration of the Accounts of $350 per month.

               Section 8.5  Entire Agreement. This Agreement constitutes the
                            ----------------
entire and final agreement between the parties with respect to the subject
matter hereof and may not be changed, terminated or otherwise varied, except by
a writing duly executed by the parties.

               Section 8.6  Successors and Assigns. This Agreement shall be
                            ----------------------
binding upon and inure to the benefit of the parties hereto, their respective
successors and permitted assigns.

               Section 8.7  Notices. All notices, demands, requests, consents,
                            -------
approvals and other communications (any of the foregoing, a "Notice") required,
                                                             ------
permitted, or desired to be given hereunder shall be in writing and delivered to
the parties at the addresses and in the manner provided in Section 14.5 of the
Loan Agreement. Notices to the Agent shall be addressed as follows:

               If to Agent:              First Union National Bank
                                         Structured Products Servicing
                                         NC 1075
                                         8739 Research Drive
                                         Charlotte, North Carolina  28288
                                         Attention:  Portfolio Management Group
                                         Facsimile No.  (704) 593-7731

                                       21

<PAGE>

               Section 8.8   Captions. All captions in this Agreement are
                             --------
included herein for convenience of reference only and shall not constitute part
of this Agreement for any other purpose.

               Section 8.9   Governing Law. This Agreement shall be governed by
                             -------------
and construed and enforced in all respects in accordance with the laws of the
State of New York without regard to conflicts of law principles of such State.

               Section 8.10  Counterparts. This Agreement may be executed in any
                             ------------
number of counterparts.


                            [SIGNATURE PAGE FOLLOWS]

                                       22

<PAGE>

               IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

                                   BORROWER:

                                   VENTAS FINANCE I, LLC,
                                   a Delaware limited liability company


                                   By: /s/ T. Richard Riney
                                      -----------------------------------------
                                            Name: T. Richard Riney
                                            Title:   Executive Vice President
                                   Taxpayer ID#:_______________________________




                                   LENDER:

                                   MERRILL LYNCH MORTGAGE LENDING, INC.,
                                   a Delaware corporation

                                   By: /s/ Chistopher M. Haynes
                                      -----------------------------------------
                                      Name: Chistopher M. Haynes
                                      Title: Vice President


                                   AGENT:

                                   FIRST UNION NATIONAL BANK,
                                   a national banking association


                                   By: /s/ Daivd Tucker
                                      -----------------------------------------
                                      Name: Daivd Tucker
                                      Title: AVP

                                       23