Document:

Exhibit 10.2

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE
AGREEMENT (“Agreement”) is made and entered into as of this 20th day of October, 2014 (the “Effective
Date”), by and between aPPLEWOOD HOLDING COMPANY, LLC, an Oregon limited
liability company and BREMERTON ASSISTED LIVING, LLC a California limited liability company (“Seller”),
and SUMMIT HEALTHCARE REIT, INC. a Maryland corporation, or its assignee (“Buyer”).

 

Therefore, in consideration
of the mutual representations, warranties and promises of the parties, the parties enter into the following:

 

AGREEMENT

 

1.          Purchase
and Sale. On the terms and conditions set forth herein, Seller shall sell, assign, transfer, convey and deliver to Buyer and
Buyer shall purchase from Seller its interest in the following, which are hereinafter referred to collectively as the “Property”:

 

(a)          The
improvements located on the Real Property, consisting of one (1) independent living facility for the elderly as described in Schedule 1(a)
attached hereto (the “Facility”), owned by Seller, and all right, title and interest of Seller in and
to the items described in this Section 1 (a) through (f) herein;

 

(b)          All
of the real estate on which the Facility is situated, together with all tenements, easements, appurtenances, privileges, rights
of way, and other rights incident thereto, all building and improvements and any parking lot to the Facility located thereon situated
in the State of Oregon, which is described in Exhibit A attached hereto and made a part hereof by this reference (collectively,
the “Real Property”);

 

(c)          All
of the tangible personal property, inventory, equipment, machinery, supplies including drugs and other supplies, spare parts, furniture,
furnishings, warranty claims, contracts, including but not limited to supply contracts, contracts rights, intellectual property,
including but not limited to patents, trade secrets, and all rights and title to the names under which the Facility operates, mailing
lists, customer lists, vendor lists, resident files, books and records owned by the Seller, who may retain copies of same, and
shall have reasonable access to such books and records after the Closing as required for paying taxes and responding to legal inquiry,
as such personal property is described in Schedule 1(c) attached hereto (collectively, the “Personal Property”);

 

(d)          All
transferable licenses, permits, certifications, assignable guaranties and warranties in favor of Seller, approvals or authorizations
and all assignable intangible property not enumerated herein which is used by the Seller in connection with each Facility, and
all other assets whether tangible or intangible; provided, that Seller shall retain all licenses required to be retained by Seller
in order to operate the current business within each Facility;

 

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(e)          All
trade names or other names commonly used to identify each Facility and all goodwill associated therewith. The intent of the parties
is to transfer to Buyer only such names and goodwill associated with the Facility itself and not with Seller or any affiliate of
Seller, so as to avoid any interference with the unrelated business activities of Seller; and

 

(f)          All
telephone numbers used in connection with the operation of the Facility, and to the extent not described above, all goodwill of
Seller associated with the Facility (the items described in clauses (d), (e) and (f) above are collectively referred to as “Intangibles”).

 

2.          Excluded
Assets. Seller’s cash, investment securities, bank account(s) and accounts receivable, and deposits attributable and
relating to the operation of the Facility, and Seller’s corporate minute books and corporate tax returns, partnership records,
and other corporate and partnership records shall be excluded from the Property sold by Seller to Buyer hereunder as well as Seller’s
real property not identified in Schedule 1(a) (the “Excluded Assets”).

 

3.          Purchase
Price; Deposits. The following shall apply with respect to the Purchase Price of the Property:

 

(a)          The
purchase price (the “Purchase Price”) payable by Buyer to Seller for the Property is Two Million Nine
Hundred Thousand Dollars ($2,900,000.00).

 

(b)          The
Purchase Price as allocated to the Facility by Seller is set forth on Schedule 3 attached hereto and made a part hereof.

 

(c)          Within
three (3) business days after this Agreement is fully executed by the parties, Buyer shall deposit the sum of Seventy Five Thousand
Dollars ($75,000) as an earnest money deposit (“Initial Deposit”) with Lawyers Title Company/Commonwealth
Title, 4100 Newport Place Drive, Suite 120, Newport Beach, California 92660, Attention: Debi Calmelat (“Title Company”
or “Escrow Agent”), and Escrow Agent will deposit it into an interest-bearing account with the interest
for the benefit of Buyer. In addition, if Buyer has not terminated this Agreement on or before the expiration of the Due Diligence
Period (defined below), then Buyer shall deposit with Escrow Agent an additional non-refundable, except as otherwise expressly
provided herein, Seventy Five Thousand Dollars ($75,000) (“Non-Refundable Additional Deposit”) within
three (3) business days following the expiration of the Due Diligence Period (the Initial Deposit and Non-Refundable Additional
Deposit, are collectively referred to as the “Deposits”). Interest earned on the Deposits shall be paid
to the party entitled to such amount as provided in this Agreement.

 

(d)          At
Closing, the Deposits shall be credited against the Purchase Price and Buyer shall deposit the balance of the Purchase Price in
Cash to the Escrow Agent.

 

(e)          Buyer
shall not assume or pay, and Seller shall continue to be responsible for, any and all debts, obligations and liabilities of any
kind or nature, fixed or contingent, known or unknown, of Seller not expressly assumed by Buyer in this Agreement. Specifically,
without limiting the foregoing, Buyer shall not assume any obligation, liability, cost, expense, claim, action, suit or proceeding
pending as of the Closing, nor shall Buyer assume or be responsible for any subsequent claim, action, suit or proceeding arising
out of or relating to any such other event occurring, with respect to the manner in which Seller conducted its business at the
Facility. Buyer shall assume all obligation, liability, cost, expense, claim, action, suit or proceeding arising out of or relating
to any event occurring, with respect to the manner in which Buyer or any third party operator of Buyer conducted its business at
the Facility on or after Closing.

 

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(f)          Each
party hereby agrees to the allocation of the Purchase Price set forth on Schedule 3 attached hereto. Neither Buyer nor Seller shall
assert an allocation of the Purchase Price which differs from that set forth in Schedule 3 to any governmental taxing authority.
Buyer shall provide Seller with copies of all final appraisals relating to the property purchased by Buyer pursuant to this Agreement.
Such appraisals shall be provided within five (5) days of receipt by Buyer.

 

4.          Closing.
The closing of the purchase and sale transactions pursuant to this Agreement (“Closing”) shall occur
on or before the date that is thirty (30) days after the expiration of the Due Diligence Period (“Closing Date”).
The Closing shall take place through Seller’s delivery of a Special Warranty Deed in the form attached hereto marked Exhibit
1 (the “Deed”), and Buyer’s delivery of cash or immediately available funds through an escrow
agreement (the “Escrow”) to be established with the Escrow Agent pursuant to form escrow instructions
which shall be modified to be consistent with the terms and provisions of this Agreement, and which shall be mutually agreed upon
by the parties hereto.

 

5.          Conveyance.
Title to the Facility shall be conveyed to Buyer by the Deed and bill of sale in form agreed to by the parties prior to the end
of the Due Diligence Period, as defined herein. Fee simple indefeasible title to the Real Property, and marketable title to the
Personal Property, shall be conveyed from Seller to Buyer or Buyer’s nominee in “AS-IS, WHERE-IS” condition,
free and clear of all liens, charges, easements and encumbrances of any kind, other than:

 

(a)          Liens
for real estate taxes or assessments not yet due and payable;

 

(b)          The
standard printed exceptions included in the Title Commitment, as defined in Section 14(a) herein;

 

(c)          Such
exceptions that appear in the Title Commitment and that are either waived or approved by Buyer in writing pursuant to Section 14(b)
herein;

 

(d)          Liens
or encumbrances caused by the actions of Buyer but not those caused by the actions of Seller; and

 

(e)          Those
matters identified as Permitted Exceptions on the attached Exhibit B.

 

The items described
in this Section 5 are sometimes collectively referred to as the “Permitted Exceptions.”

 

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6.          Buyer’s
Due Diligence.

 

(a)          Buyer
shall have sixty (60) days from the Effective Date to complete Buyer’s due diligence review of the Property (the “Due
Diligence Period”). During the Due Diligence Period, Seller shall permit the officers, employees, directors, agents,
consultants, attorneys, accountants, lenders, appraisers, architects, investors and engineers designated by Buyer and representatives
of Buyer (collectively, the “Buyer’s Consultants”) access to, and entry upon the Real Property
and the Facility to perform its normal and customary due diligence, including, without limitation, the following (collectively,
the “Due Diligence Items”):

 

(i)          Review
of vendor contracts (“Contracts”) and leases (“Leases”) to which the Facility
(or the Seller, on behalf of such Facility) are a party, as set forth on Schedule 8(f) attached hereto;

 

(ii)         Obtain
an environmental investigation (including a Phase 1 Environmental Audit);

 

(iii)        Inspection
of the physical structure of the Facility;

 

(iv)        Review
of current Title Commitment, as defined in Section 14 herein, and underlying documents referenced therein;

 

(v)         Review
of ALTA Surveys, as defined in Section 14 herein, for the Facility;

 

(vi)        Inspection
of the books and records of the Facility and that portion of the Seller’s books and records which pertain to the Facility;

 

(vii)       Review
of the Due Diligence Items, as described in Schedule 10(a)(v) attached hereto, to be provided by Seller within five
(5) business days following the Effective Date;

 

(viii)      Complete
such other inspections or investigations as Buyer may reasonably require relating to the ownership, operation or maintenance of
the Facility;

 

(ix)         View
resident files, agreements, and any other documentation regarding the residents of the Facility, which review shall in all events
be subject to all applicable laws, rules and regulations; and

 

(x)          Review
files maintained by the State of Oregon, if applicable, relating to the Facility; and

 

(xi)         Review
all drawings, plans and specifications and all engineering reports for the Facility in the possession of or readily available to
Seller; and

 

(xii)        Seller
will furnish copies of all environmental reports, property condition reports, appraisals, title reports and ALTA Surveys (or surveys)
that it currently has in its possession.

 

(xiii)       Review
copies of currently effective written employment manuals or written employment policies and/or procedures have been provided to
or for employees; and

 

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(xiv)      Successful
negotiation of the Post Closing Lease with Seller or Seller’s affiliate, as operator (“Operator”),
and Buyer.

 

Notwithstanding the
foregoing provisions of this Subsection, in the event Seller fails to deliver all Due Diligence Items listed in Schedule 10(a)(v)
on or before the time set forth in Subsection (a)(vii) above, then the Due Diligence Period shall be deemed extended
on a day-to-day basis until Seller completes such delivery of the Due Diligence Items to Buyer.

 

(b)          Buyer
agrees and acknowledges that: (i) Buyer agrees to hold in confidence and will not disclose the Due Diligence Items and/or the contents
thereof or any other materials received from Seller pursuant to this Agreement (the “Property Information”)
or any of the provisions, terms or conditions thereof, or any information disclosed therein or thereby, to any party outside of
Buyer’s organization, other than Buyer’s Consultants and Buyer shall use commercially reasonable efforts to ensure
that the Due Diligence Items are held in confidence; (ii) the Property Information is delivered to Buyer solely as an accommodation
to Buyer; (iii) Seller has not undertaken any independent investigation as to the truth, accuracy or completeness of any matters
set out in or disclosed by the Property Information; and (iv) except as expressly contained in this Agreement, Seller has not made
and does not make any warranties or representations of any kind or nature regarding the truth, accuracy or completeness of the
information set out in or disclosed by the Property Information.

 

(c)          All
due diligence activities of Buyer at the Facility shall be scheduled with Seller upon two (2) business days prior notice. Reviews,
inspections and investigations at the Facility shall be conducted by Buyer in such manner so as not to disrupt the operation of
the Facility.

 

(d)          Buyer
may, at its sole cost, obtain third party engineering and physical condition reports and a Phase I Environmental Audit covering
the Facility, certified to Buyer, prepared by an engineering and/or environmental consultants acceptable to Buyer; provided, no
inspection by Buyer’s Consultants shall involve the taking of samples or other physically invasive procedures (such as a
Phase II environmental audit) without the prior written consent of Seller, which consent shall not be unreasonably withheld or
delayed, and Buyer shall provide copies of all final reports (except for appraisals or attorney-client communications) received
from such third parties (the “Third Party Reports”) to Seller within ten (10) days of Buyer receiving
the Third Party Reports. Notwithstanding anything to the contrary contained in this Agreement, Buyer shall indemnify, defend (with
counsel acceptable to Seller) and hold Seller and its employees and agents, and each of them, harmless from and against any and
all losses, claims, damages and liabilities, without limitation, attorneys’ fees incurred in connection therewith) arising
out of or resulting from Buyer’s exercise of its right of inspection as provided for in this Section 6; provided,
however, such indemnification shall not extend to matters merely discovered by Buyer and/ or the acts or omissions of Seller or
any third party, except for the acts or omissions of Buyer’s Consultants. The indemnification obligation of Buyer under this
Section 6 shall survive the Closing or earlier termination of this Agreement for a period of twelve (12) months. Following
any audit or inspection as provided for herein, Buyer shall return the Real Property and the Facility to the condition in which
they existed immediately prior to such audit or inspection.

 

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(e)          On
or before 5:00 p.m. (Pacific Time) on the last day of the Due Diligence Period, Buyer shall provide Seller with copies of all Third
Party Reports and provide Seller with notice that:

 

(i)          The
inspections and audits are not acceptable to Buyer in its sole and absolute discretion and Buyer terminates this Agreement, and
in such event, neither party shall have any further rights and obligations under this Agreement, except the obligations which expressly
survive the termination of this Agreement; or

 

(ii)         
Provide Seller with written notice that the inspections and audits are acceptable to Buyer in its sole and absolute discretion.

 

(f)          If
this Agreement is terminated prior to Closing, Buyer shall promptly return to Seller or destroy all copies of the Due Diligence
items.

 

7.          Prorations;
Closing Costs; Possession; Post Closing Assistance.

 

(a)          There
will be no prorations at the Closing since Seller shall remain responsible for all taxes, costs and expenses relating to the Facility
following the Closing pursuant to the Post Closing Lease (as defined in Section 12(a)(v)).

 

(b)          Seller
shall pay any state, county and local transfer taxes arising out of the transfer of the Real Property.

 

(c)          Seller
shall pay the cost of the standard owner’s title insurance policy, as described in this Agreement (excluding any survey exception
or deletion of coverage). Buyer shall pay the cost of any lender’s policy for Buyer’s lender, any title endorsements
requested by Buyer and its lender and the cost of updating or obtaining new Surveys. Seller and Buyer shall share equally all fees
of Escrow Agent. All other costs associated with title and survey matters shall be paid in accordance with custom and practice
of the County in which the Facility is located.

 

(d)          Buyer
and Seller shall each pay their own attorney’s fees. Buyer shall pay for all costs of review of the Due Diligence Items and
its additional due diligence inspection costs including, without limitation, the cost of any environmental reports.

 

(e)          On
the Closing Date, Seller or Operator shall retain possession of the Facility pursuant to the Post Closing Lease.

 

8.          Representations
and Warranties of Seller. Seller hereby represents and warrants to Buyer that:

 

(a)          Legality.

 

(i)          Organization,
Corporate Powers, Etc. Seller is duly organized, validly existing and in good standing under the laws of the State of Oregon.
Seller has full power, authority and legal right (A) to execute and deliver, and perform and observe the provisions of this Agreement
and each Transaction Document, as defined herein, (B) to transfer good, indefeasible title to the Property to Buyer free and clear
of all liens, claims and encumbrances except for Permitted Exceptions (as defined in Section 5 hereof), and (C) to
carry out the transactions contemplated hereby and by such other instruments to be carried out by such party.

 

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(ii)         Due
Authorization, Etc. This Agreement and the Closing Documents (as defined in Section 10(b)) (collectively the “Transaction
Documents”) have been, and each instrument provided for herein or therein to which Seller is a party will be, when
executed and delivered as contemplated hereby authorized, executed and delivered by Seller and the Transaction Documents constitute,
and each such instrument will constitute, when executed and delivered as contemplated hereby, legal, valid and binding obligations
of Seller and enforceable in accordance with their terms.

 

(iii)        Governmental
Approvals. To the best of Seller’s knowledge, no consent, approval or other authorization (other than corporate or other
organizational consents which have been obtained), or registration, declaration or filing with, any court or governmental agency
or commission is required for the due execution and delivery of any of the Transaction Documents or for the validity or enforceability
thereof against such party other than the recording or filing for recordation of the Deed, which recordings shall be accomplished
at Closing.

 

(iv)        Other
Rights. No right of first refusal, option or preferential purchase or other similar rights are held by any person with respect
to any portion of the Property.

 

(v)         No
Litigation. Except as set forth on Schedule 8(a)(v) attached hereto, neither Seller nor its registered agent for
service of process has been served with summons with respect to any actions or proceedings pending or, to Seller’s actual
knowledge, no such actions or proceedings are threatened, against Seller before or by any court, arbitrator, administrative agency
or other governmental authority, which (A) individually or in the aggregate, are expected, in the reasonable judgment of Seller,
to materially and adversely affect Seller’s ability to carry out any of the transactions contemplated by any of the Transaction
Documents or (B) otherwise involve any portion of the Property including, without limitation, the Facility.

 

(vi)        No
Conflicts. Neither the execution and delivery of the Transaction Documents to which Seller is a party, compliance with the
provisions thereof, nor the carrying out of the transactions contemplated thereby to be carried out by such party will result in
(A) a breach or violation of (1) any material law or governmental rule or regulation applicable to Seller now in effect, (2) any
provision of any of Seller’s organizational documents, (3) any material judgment, settlement agreement, order or decree of
any court, arbitrator, administrative agency or other governmental authority binding upon Seller, or (4) any material agreement
or instrument to which Seller is a party or by which Seller or its respective properties are bound; (B) the acceleration of any
obligations of Seller; or (C) the creation of any lien, claim or encumbrance upon the Property.

 

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(b)          Property.
As of the Effective Date and the Closing Date, except as set forth on Schedule 8(b):

 

(i)          Seller
has no actual knowledge of and has not received any notice of outstanding deficiencies or work orders of any authority having jurisdiction
over any portion of the Property;

 

(ii)         Seller
has no actual knowledge of and has not received any notice of any claim, requirement or demand of any licensing or certifying agency
supervising or having authority over the Facility to rework or redesign it in any material respect or to provide additional furniture,
fixtures, equipment or inventory so as to conform to or comply with any law which has not been fully satisfied;

 

(iii)        Seller
has not received any notice from any governmental authority of any material violation of any law applicable to any portion of the
Real Property or to the Facility;

 

(c)          Condemnation.
To the actual knowledge of Seller, there is no pending or threatened condemnation or similar proceeding or assessment affecting
the Real Property, nor, to the actual knowledge of Seller, is any such proceeding or assessment contemplated by any governmental
authority.

 

(d)          Hazardous
Substances. Except as disclosed in any of the Due Diligence Items, any phase I, phase II or other environmental study commissioned
by Buyer, or on Schedule 8(d) (and as disclosed to Buyer during the Due Diligence Period), and to Seller’s actual
knowledge, there has been no production, storage, manufacture, voluntary or involuntary transmission, use, generation, treatment,
handling, transport, release, dumping, discharge, spillage, leakage or disposal at, on, in, under or about the Real Property of
any Hazardous Substances by Seller, or any affiliate or agent thereof, except in strict compliance with all applicable Laws. To
Seller’s actual knowledge there are no Hazardous Substances at, on, in, under or about the Real Property in violation of
any Law, and to Seller’s actual knowledge, there is no proceeding or inquiry by any federal, state or local governmental
agency with respect thereto. For purposes of this Agreement, “Hazardous Substances” shall mean any hazardous
or toxic substances, materials or wastes, including, without limitation, those substances, materials and wastes listed in the United
States Department of Transportation Table (49 CFR 172.1 01) or by the Environmental Protection Agency as hazardous substances (40
CFR Part 302 and amendments thereto) or such substances, materials and wastes which are or become regulated under any applicable
local, state or federal law (collectively, “Laws”), including, without limitation, any material, waste
or substance which is (i) a hazardous waste as defined in the Resource Conservation and Recovery Act of 1976, as amended (42
U.S.C. § 6901 et seq.); (ii) a pollutant or contaminant or hazardous substance as defined in the Comprehensive Environmental
Response. Compensation and Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq.); (iii) a hazardous substance pursuant
to § 311 of the Clean Water Act (33 U.S.C. § 1251, et seq., 33 U.S.C. § 1321) or otherwise listed pursuant to §
307 of the Clean Water Act (33 U.S.C. § 1317); (iv) a hazardous waste pursuant to § 1004 of the Resource Conservation
and Recovery Act (42 U.S.C. § 6901 et seq.); (v) polychlorinated biphenyls (PCBs) as defined in the Federal Toxic Substance
Control Act, as amended (15 U.S.C. § 2501 et seq.); (vi) hydrocarbons, petroleum and petroleum products; (vii) asbestos; (viii)
formaldehyde or medical or biohazardous waste; (ix) radioactive substances; (x) flammables and explosives; (xi) any state statutory
counterparts to those federal statutes listed herein; or (vii) any other substance, waste or material which could presently or
at any time in the future require remediation at the behest of any governmental agency. Any reference in this definition to Laws
shall include all rules and regulations which have been promulgated with respect to such Laws.

 

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(e)          Brokers.
Neither Seller nor Buyer has dealt with any broker or finder in connection with the transactions contemplated hereby. Each party
represents and warrants to the other party that it has not dealt with any broker, salesman, finder or consultant with respect to
this Agreement or the transactions contemplated hereby. Each party agrees to indemnify, protect, defend, protect and hold the other
party harmless from and against all claims, losses, damages, liabilities, costs, expenses (including reasonable attorneys’
fees and disbursements) and charges resulting from such indemnifying party’s breach of the foregoing representation. The
provisions of this Section 8(e) shall survive the Closing or earlier termination of this Agreement for a period of
twelve (12) months.

 

(f)          Leases
and Contracts. Schedule 8(f) is a list of all Leases and Contracts relating to the Facility to which Seller is
a party or by which Seller may be bound. Seller has made or will promptly make available to Buyer true, complete and accurate copies
of all Leases and Contracts including, without limitation, any modifications thereto. All of the Leases and Contracts are in full
force and effect without claim of material default there under, and, except as may be set forth on Schedule 8(f).

 

(g)          Financial
Statements. Within five (5) business days after the execution of this Agreement, Seller shall provide to Buyer (i) the unaudited
balance sheets of the Operating entities for the last three (3) fiscal years ending prior to the date of this Agreement and the
unaudited balance sheets of the past three (3) fiscal quarters completed prior to the date of this Agreement, and (ii) the related
consolidated statements of income, results of operations, changes in members’ equity and changes in financial position with
respect to each such period for the Operator as compared with the immediately prior period (collectively, the “Financial
Statements”). The Financial Statements taken as a whole (A) fairly present the financial condition and results of
operation of the Operator for the periods indicated, (B) are true, accurate, correct and complete in all material respects, and
(C) except as stated in Schedule 8(g) (or in the notes to the Financial Statements) have been prepared in accordance
with the Operator’s tax basis reporting, as consistently applied. Except as disclosed in Schedule 8(g), or otherwise
disclosed in writing to Buyer, to Seller’s actual knowledge neither Seller nor the Facility is obligated for or subject to
any material liabilities, contingent or absolute, and whether or not such liabilities would be disclosed in accordance with tax
basis reporting, and Schedule 8(g) sets forth all notes payable, other long term indebtedness and, to Seller’s
actual knowledge, all other liabilities to which the Facility and the Real Property are or at Closing (and following Closing) will
be subject, other than new indebtedness obtained by Buyer in connection with its purchase of the Property. Seller has received
no notice of default under any such instrument.

 

(h)          Interests
in Competitors, Suppliers and Customers. Other than the Operator, and except as set forth on Schedule 8(h), or
in Schedule 1(a) as constituting a part of the Facility, neither Seller nor any of its members has any interest in
any property used in the operation of, or holds an interest in, any competitor, supplier or customer of Seller or the Facility
within a five (5) mile radius of the Seller as further provided in Section 25 of this Agreement.

 

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(i)          Intentionally
Omitted.

 

(j)          Intentionally
Omitted.

 

(k)          Intentionally
Omitted.

 

(l)          Intentionally
Omitted

 

(m)         Number
of Units:

 

(n)          Operations.
The Facility is reasonably and adequately equipped and the Facility includes sufficient and adequate numbers of furniture, furnishings,
equipment, consumable inventory, and supplies to operate the Facility as each is presently operated by Seller. Personal Property
used to operate the Facility and to be conveyed to Buyer is free and clear of liens, security interests, encumbrances, leases and
restrictions of every kind and description, except for Permitted Encumbrances and any liens, security interests and encumbrances
to be released at Closing.

 

(o)          No
Misstatements, Etc. To Seller’s knowledge, neither the representations and warranties of Seller stated in this Agreement,
including the Exhibits and the Schedules attached hereto, nor the Due Diligence Items or any certificate or instrument furnished
or to be furnished to Buyer by Seller in connection with the transactions contemplated hereby, contains or will contain any untrue
or misleading statement of a material fact.

 

(p)          Supplementation
of Schedules; Change in Representations and Warranties. Seller shall have the continuing right and obligation to supplement
and amend the Schedules herein on a regular basis including and Seller’s warranties and representations required hereunder,
as necessary or appropriate (i) in order to make any representation or warranty not misleading due to events, circumstances or
the passage of time or (ii) with respect to any matter hereafter arising or discovered up to and including the Closing Date, but
Buyer shall not be deemed to have approved such supplemental Schedules unless Buyer expressly acknowledges approval of same in
writing. In the event Seller amends any such Schedules, or Buyer or Seller gains actual knowledge prior to the Closing that any
representation or warranty made by the other party contained in this Section 8 is otherwise untrue or inaccurate, such
party shall, within five (5) days after gaining such actual knowledge but in any event prior to the Closing, provide the other
party with written notice of such inaccuracy, whereupon the noticed party shall promptly commence, and use its best efforts to
prosecute to completion, the cure of such matter, to the extent any such matter is curable. If any such matter is not curable within
reason and is material, in Buyer’s reasonable business judgment, Buyer shall have the right to terminate this Agreement upon
written notice to Seller within five (5) business days of receipt or delivery of such notice, as applicable, on the same basis
as set forth in Section 13(a) if during the Due Diligence Period and in Section 13(b)(ii) herein if after
expiration of the Due Diligence Period.

 

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(q)          Survival
of Representations and Warranties; Updates. The representations and warranties of Seller in this Agreement shall not be merged
with the Deed at the Closing and shall survive the Closing for the period of one (1) year; provided, Seller understands and agrees
that the Post Closing Lease, shall provide for a lengthier period of survival with respect to certain matters referenced therein.

 

For purposes of this
Agreement, the phrase “to Seller’s actual knowledge” or words of similar import shall mean the
actual knowledge of seller or words similar in part shall mean the current, actual knowledge of Kevin Ricker, without investigation.
Seller represents that Kevin Ricker is the most knowledgeable person as to all matters pertaining to the Property.

 

9.          Representations
and Warranties of Buyer.

 

(a)          Buyer
hereby warrants and represents to Seller that: 

 

(i)          Organization,
Corporate Powers, Etc. Buyer is a corporation, validly existing and in good standing under the laws of the State of Maryland
and in each other state or jurisdiction in which the nature of its business requires the same except where a failure to be so qualified
does not have a material adverse effect on the business, properties, condition (financial or otherwise) or operations of that person.
Buyer has full power, authority and legal right (a) to execute and deliver, and perform and observe the provisions of this Agreement
and each Transaction Document to which it is a party, and (b) to carry out the transactions contemplated hereby and by such other
instruments to be carried out by Buyer pursuant to the Transaction Documents.

 

(ii)         Due
Authorization, Etc. The Transaction Documents have been, and each instrument provided for herein or therein to which Buyer
is a party will be, when executed and delivered as contemplated hereby, duly authorized, executed and delivered by Buyer and the
Transaction Documents constitute, and each such instrument will constitute, when executed and delivered as contemplated hereby,
legal, valid and binding obligations of the Buyer enforceable in accordance with their terms.

 

(iii)        Governmental
Approvals. To Buyer’s actual knowledge, no consent, approval or other authorization (other than corporate or other organizational
consents which have been obtained), or registration, declaration or filing with, any court or governmental agency or commission
is required for the due execution and delivery of any of the Transaction Documents to which Buyer is a party or for the validity
or enforceability thereof against such party.

 

(iv)        No
Litigation. Neither Buyer nor its registered agent for service of process has been served with summons with respect to any
actions or proceedings pending or, to Buyer’s actual knowledge, no such actions or proceedings are threatened, against Buyer
before or by any court, arbitrator, administrative agency or other governmental authority, which individually or in the aggregate,
are expected, in the reasonable judgment of Buyer, to materially and adversely affect Buyer’s ability to carry out any of
the transactions contemplated by any of the Transaction Documents.

 

    	Page 11 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

(v)         No
Conflicts. Neither the execution and delivery of the Transaction Documents to which Buyer is a party, compliance with the provisions
thereof, nor the carrying out of the transactions contemplated thereby to be carried out by such party will result in (a) a breach
or violation of (1) any material law or governmental rule or regulation applicable to Buyer now in effect, (2) any provision of
any Buyer’s organizational documents, (3) any material judgment, settlement agreement, order or decree of any court, arbitrator,
administrative agency or other governmental authority binding upon Buyer, or (4) any material agreement or instrument to which
Buyer is a party or by which Buyer or its respective properties are bound; (b) the acceleration of any obligations of Buyer; or
(c) the creation of any lien, claim or encumbrance upon any properties or assets of Buyer.

 

(vi)        No
Misstatements, Etc. To Buyer’s knowledge, neither the representations and warranties of Buyer stated in this Agreement,
including the Exhibits and the Schedules attached hereto, nor any certificate or instrument furnished or to be furnished to Seller
by Buyer in connection with the transactions contemplated hereby, contains or will contain any untrue or misleading statement of
a material fact.

 

(vii)       Survival
of Representations and Warranties; Updates. The representations and warranties of Buyer in this Agreement shall not be merged
with the Deed at the Closing and shall survive the Closing for the period of one (1) year.

 

10.         Covenants
of Seller. Seller covenants with respect to the Facility as follows: 

 

(a)          Pre-Closing.
Between the date of this Agreement and the Closing Date, except as contemplated by this Agreement or with the prior written consent
of Buyer, which shall not be unreasonably withheld, conditioned or delayed:

 

(i)          Seller
shall use its best efforts to cause the Operator to operate the Facility diligently, in accordance with the Operator’s obligations
under its lease or other arrangement with Seller, and only in the ordinary course of business.

 

(ii)         Seller
shall use its best efforts to prevent the Operator from making any material change in the operation of the Facility, and shall
prevent the Operator from selling or agreeing to sell any items of machinery, equipment or other assets of the Facility, or otherwise
entering into any agreement affecting the Facility, except in the ordinary course of business;

 

(iii)        Seller
shall use its best efforts to prevent the Operator from entering into any Lease or Contract or commitment affecting the Facility,
except for Leases or Contracts entered into in the ordinary course of business;

 

(iv)        During
normal business hours and consistent with Section 6(a) herein, Seller shall provide Buyer or its designated representative
with access to the Facility upon prior notification and coordination with Seller and the Operator; provided, Buyer shall not materially
interfere with the operation of the Facility. At such times Seller and the Operator shall permit Buyer to inspect the books and
records of the Facility;

 

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(v)         Within
five (5) business days following the execution of this Agreement by the parties, Seller has delivered or made available to Buyer
all of the Due Diligence Items which are in Seller’s possession or control. All Due Diligence Items which have not previously
been delivered are identified as the Unavailable Items (“Unavailable Items”). If any of the Unavailable
Items become available to Seller, Seller shall within five (5) days of receiving such items, deliver such items to Buyer. If Buyer
requests additional items in writing delivered by Buyer to Seller, Seller shall use commercially reasonable efforts to provide
such information within five (5) days of receipt of the request; and provided further, Seller shall continue to cause Operator
to deliver to Buyer following the expiration of the Due Diligence Period, financial reports showing among other things information
necessary to determine EBITDAR (defined below) for the Facility for the trailing six (6) month annualized operations at
any given time. The term “EBITDAR” means “earnings before interest, taxes, depreciation, amortization
and rent and reserves (reserves meaning additions to capital reserves).”

 

(vi)        Seller
shall use its best efforts to prevent the Operator from moving residents from the Facility, except (a) for health treatment purposes
or otherwise at the request of the resident, family member or other guardian or (b) upon court order or the request of any governmental
authority having jurisdiction over the Facility;

 

(vii)       Seller
shall use commercially reasonable efforts to cause the Operator to retain the services and goodwill of the employees of the Operator
until the Closing;

 

(viii)      Seller
shall maintain in force, or shall cause the Operator to maintain in force, the existing hazard and liability insurance policies,
or comparable coverage, for the Facility as are in effect as of the date of this Agreement;

 

(ix)         Seller
shall, and shall cause the Operator, to file all returns, reports and filings of any kind or nature, including but not limited
to, cost reports referred to in this Agreement, required to be filed by Seller or the Operator on a timely basis and shall timely
pay all taxes or other obligations and liabilities or recoupments which are due and payable with respect to the Facility in the
ordinary course of business with respect to the periods Seller or Operator operated the Facility;

 

(x)          Seller
shall cause the Operator (a) to maintain all required operating licenses in good standing, (b) to operate the Facility in accordance
with its current business practices and (c) to promptly notify Buyer in writing of any notices of material violations or investigations
received from any applicable governmental authority;

 

(xi)         Seller
shall use commercially reasonable efforts to cause the Operator to make all customary repairs, maintenance and replacements required
to maintain the Facility in substantially the same condition as on the date of Buyer’s inspection thereof, ordinary wear
and tear excepted;

 

(xii)        Seller
shall promptly notify Buyer in writing of any Material Adverse Change, as defined herein, of which Seller becomes aware in the
condition or prospects of the Facility including, without limitation, sending Buyer copies of all surveys and inspection reports
of all governmental agencies received after the date hereof and prior to Closing, promptly following receipt thereof by the Operator.
For purposes of this Agreement, a “Material Adverse Change” shall mean: (a) a decrease in the consolidated
adjusted rolling six (6) month EBITDAR of the Facility to less than Two Hundred Forty Thousand Dollars ($240,000) (b) failure to
settle with the appropriate governmental authority, or to satisfy on or before the Closing (either directly with such governmental
authority or by funds escrowed by Seller for such purposes) all claims for reimbursements, recoupments, taxes, fines or penalties
which may be due to any governmental authority having jurisdiction over the Facility, or (c) the occurrence of a title or survey
defect occurring after the date of this Agreement which would reasonably be expected to adversely affect the ability of Buyer to
operate an independent senior living facility at the Facility or to obtain financing for the Facility, or (d) the commencement
of any third party litigation which interferes with Seller’s ability to close the transactions contemplated by this Agreement.

 

    	Page 13 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

(xiii)       Intentionally
Omitted.

 

(xiv)      Seller
shall, at its cost and on or before Closing, obtain releases of financing statements and tax and judgment liens affecting or relating
to the Facility which have been filed or recorded with the Office of the Oregon Secretary of State and the appropriate County Recorder’s
Office.

 

(xv)       Seller
shall promptly comply with any notices of violations received relating to the Facility and shall deliver to Buyer a copy of any
such notice received and evidence of compliance with such notice.

 

(b)          Closing.
On or before the Closing Date, Seller shall deliver the following documents to Escrow Agent relating to the Facility (“Closing
Documents”):

 

(i)          One
(1) original executed Deed;

 

(ii)         Two
(2) original executed counterparts of the Post Closing Lease;

 

(iii)        Two
(2) original executed counterparts of the bill of sale for the Personal Property (“Bill of Sale”), an
assignment of Seller’s interest in the Contracts and Leases (“Assignment of Contracts and Leases”),
and other instruments of transfer and conveyance in form and substance to be agreed upon prior to the expiration of the Due Diligence
Period transferring and assigning to Buyer the Real Property, Personal Property and the Intangibles to be transferred as provided
herein with respect to the Facility (“Instruments of Assignment”);

 

(iv)        One
(1) original executed certificate executed by Seller confirming that to Seller’s actual knowledge on the Closing Date Seller’s
representations and warranties continue to be true and correct in all material respects, or stating how such representations and
warranties are no longer true and correct (“Seller’s Confirmation”);

 

(v)         All
contractor’s and manufacturer’s guaranties and warranties, if any, in Seller’s possession relating to the Facility
(collectively, the “Warranties”), which delivery will be made by leaving such materials at the Facility;
and

 

(vi)        Two
(2) original executed counterparts of each of the FIRPTA Certificate, and one original or facsimile copy of escrow agreements and
other documents required by the Title Company in connection with the transactions contemplated by this Agreement (collectively,
the “Title Company Documents”).

 

    	Page 14 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

11.         Covenants
of Buyer. Buyer hereby covenants as follows: 

 

(a)          Pre-Closing.
Between the date hereof and the Closing Date, except as contemplated by this Agreement or with the consent of Seller, Buyer agrees
that Buyer shall not take any action inconsistent with its obligations under this Agreement or which could hinder or delay the
consummation of the transaction contemplated by this Agreement. Between the date hereof and the Closing Date, Buyer agrees that
Buyer shall not (i) make any commitments to any governmental authority, (ii) enter into any agreement or contract with any governmental
authority or third parties, or (iii) alter, amend, terminate or purport to terminate in any way any governmental approval or permit
affecting the Real Property, Personal Property or the Facility, which would be binding upon Seller, the Facility, the Real Property
or Personal Property after any termination of this Agreement.

 

(b)          Closing.
On or before the Closing Date, Buyer shall deposit the following with Escrow Agent:

 

(i)          The
Purchase Price in accordance with the requirements of this Agreement;

 

(ii)         Two
(2) original executed counterparts of the Post Closing Lease;

 

(iii)        Two
(2) original executed counterparts of each of the Instruments of Assignment requiring Buyer’s signature;

 

(iv)        One
(1) original executed certificate executed by Buyer confirming that Buyer’s representations and warranties continue to be
true and correct in all material respects, or stating how such representations and warranties are no longer true and correct (“Buyer’s
Confirmation”); and

 

(v)         One
(1) original executed counterpart of each of the Title Company Documents requiring Buyer’s signature.

 

12.         Conditions
to Closing.

 

(a)          Conditions
to Buyer’s Obligations. All obligations of Buyer under this Agreement are subject to the reasonable satisfaction and
fulfillment, prior to the Closing Date, of each of the following conditions. Any one or more of such conditions may be waived in
writing by Buyer.

 

(i)          Seller’s
Representations, Warranties and Covenants. Seller’s representations,
warranties and covenants contained in this Agreement or in any certificate or document delivered in connection with this Agreement
or the transactions contemplated herein, shall be true at the date hereof and as of the Closing Date as though such representations,
warranties and covenants were then again made, except to the extent that (a) Seller has provided to Buyer, prior to the Closing,
with supplemental Schedules in accordance with Section 8(p) herein or (b) Buyer has discovered, or has been provided
with written notice from Seller, that a representation is untrue or inaccurate, and Buyer nevertheless elects to close the transaction
in the manner provided in Section 8(p) herein despite such inaccuracy, whereupon it will have waived any right of recourse
or damages against Seller resulting from such inaccuracy.

 

    	Page 15 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

(ii)         Seller’s
Performance. Seller shall have performed all of its obligations and covenants under this Agreement that are to be performed
prior to or at Closing.

 

(iii)        Damage
and Condemnation. Prior to the Closing Date, no portion of the Facility shall have been damaged or destroyed by fire or other
casualty where the estimate of damage to the Facility exceeds 20% of the Purchase Price, or proceedings be commenced or threatened
to take or condemn any material part of the Real Property or improvements comprising the Facility by any public or quasi-public
authority under the power of eminent domain. A proceeding shall be deemed to be “material” if such condemnation or
taking (a) relates to the material taking or closing of any right of access to the Real Property or Facility, (b) cause the Real
Property or Facility to become non-conforming with then current legal requirements governing such Real Property or Facility, (c)
results in the loss of parking that is material to the operation of the Facility, or (d) result in the loss of value in excess
of 20% of the Purchase Price, in Buyer’s reasonable judgment. If the Facility shall have been so damaged or destroyed, Seller
shall deliver prompt written notice of such condemnation, damage or destruction to Buyer. In the event Buyer waives this condition,
by written notice to Seller within fifteen (15) business days of receipt of notice of such proceeding, and the Closing occurs,
Seller shall assign to Buyer all its right to any insurance proceeds in connection therewith. If proceedings shall be so commenced
or threatened to take or condemn the Real Property or the Facility or portion thereof prior to Closing, and if Buyer waives this
condition and the Closing occurs, Seller shall pay or assign to Buyer all Seller’s right to the proceeds of any condemnation
award in connection thereof.

 

(iv)        Absence
of Litigation. No action or proceeding shall have been instituted, threatened or, in the reasonable opinion of Buyer, is likely
to be instituted before any court or governmental body or authority the result of which could prevent or make illegal the acquisition
by Buyer of the Facility, or the consummation of the transaction contemplated hereby, or which could materially and adversely
affect the Facility or the business or prospects of the Facility.

 

(v)         Form
of Post Closing Lease. Prior to the expiration of the Due Diligence Period, Seller and Buyer shall have agreed upon the form
of the post closing lease (the “Post Closing Lease”) between Buyer, as landlord, and Seller, or an affiliate
of Seller, as tenant, incorporating in the business terms set forth in Exhibit C attached hereto. [SUMMIT TO
PROVIDE BUSINESS TERMS]

 

(vi)        No
Material Adverse Change. No Material Adverse Change shall have occurred in the Facility.

 

(vii)       Removal
of Personal Property Liens. Seller shall have removed (or shall have sufficient payoff or other documents to remove such liens
at Closing) all personal property liens which are related to the Facility and the Facility at Closing shall be free and clear of
all liens, claims and encumbrances other than Permitted Exceptions.

 

    	Page 16 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

(viii)      Title
Insurance Policy. Title Company shall be prepared to issue the Owner’s Title Insurance Policy for the Facility as of
the Closing Date, with coverage in the amount of the Purchase Price, insuring Buyer as owner of the Facility subject only to the
Permitted Exceptions.

 

(b)          Conditions
to Seller’s Obligations. All obligations of Seller under this Agreement are subject to the fulfillment, prior to the
Closing Date, of each of the following conditions. Anyone or more of such conditions may be waived by Seller in writing.

 

(i)          Buyer’s
Representations, Warranties and Covenants. Buyer’s representations, warranties and covenants contained in this Agreement
or in any certificate or document delivered in connection with this Agreement or the transactions contemplated herein shall be
true at the date hereof and as of the Closing Date as though such representations, warranties and covenants were then again made.

 

(ii)         Buyer’s
Performance. Buyer shall have performed its obligations and covenants under this Agreement that are to be performed prior to
or at Closing.

 

(iii)        Absence
of Litigation. No action or proceeding shall have been instituted, threatened or, in the reasonable opinion of Seller, is likely
to be instituted before any court or governmental body or authority the result of which could prevent or make illegal the acquisition
by Buyer of the Facility, or the consummation of the transaction contemplated hereby, or which could materially and adversely affect
the Facility or the business or prospects of the Facility.

 

(iv)        No
Actions. There shall be no action pending or recommended by the appropriate state or federal agency to revoke, withdraw or
suspend any license to operate the Facility or the certification of the Facility, or any action of any other type with regard to
licensure or certification.

 

(v)         Form
of Post Closing Lease. Prior to the expiration of the Due Diligence Period, Seller and Buyer shall have agreed upon the form
of the Post Closing Lease.

 

13.         Termination;
Defaults.

 

(a)          Termination
For Failure of Condition. Either party may terminate this Agreement for non-satisfaction or failure of a condition to the obligation
of either party to consummate the transaction contemplated by this Agreement (including, without limitation, Buyer’s election
to disapprove the condition of the title or Surveys pursuant to Section 14 herein), unless such matter has been satisfied
or waived by the date specified in this Agreement or by the Closing Date (as same may be extended by the parties to allow the parties
to satisfy or waive conditions to close in the manner provided in this Agreement). In the event of such a termination, Escrow Agent
shall promptly return (i) to Buyer, all funds of Buyer in its possession, including the Deposit and all interest accrued thereon,
and (ii) to Seller and Buyer, all documents deposited by them respectively, which are then held by Escrow Agent. Thereafter, neither
party shall have any continuing obligation or liability to the other party except for any such matters that expressly survive the
Closing or termination of this Agreement, as provided herein. The provisions of this Section 13(a) are intended to
apply only in the event of a failure of condition, as set forth herein, which is not the result of a default by either party, but
which shall not apply in the event the non-terminating party is in default of its obligations under this Agreement.

 

    	Page 17 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

(b)          Termination
For Cause.

 

(i)          If
the Agreement is terminated by Seller because Buyer fails to consummate the Closing as a result of a default by Buyer under this
Agreement, which is not cured within three (3) days after written notice from Seller, Seller’s sole and exclusive remedy
prior to the Closing Date shall be to terminate this Agreement by giving written notice of termination to Buyer and Escrow Agent,
whereupon (a) Escrow Agent shall promptly release to Seller the Deposit, and all interest accrued thereon, (b) Escrow Agent shall
return to Buyer and Seller all documents deposited by them respectively, which are then held by Escrow Agent, (c) the parties shall
be released and relieved of all obligations to each other under this Agreement, except for provisions that expressly survive termination
as provided herein, (d) Buyer shall return to Seller all documents received by it during the course of its Due Diligence and
(e) Buyer shall have no further right to purchase the Property or legal or equitable claims against Seller (except for any breach
by Seller of provisions that survive termination) and/or the Property. Buyer shall have no liability to Seller under any circumstances
for any speculative, consequential or punitive damages. Without limiting the other provisions of this Agreement, Buyer acknowledges
that the provisions of this Subsection are a material part of the consideration being given to Seller for entering into this Agreement
and that Seller would be unwilling to enter into this Agreement in the absence of the provisions of this Subsection. The provisions
of this Subsection shall survive any termination of this Agreement. With respect to any action by Seller against Buyer or by Buyer
against Seller commenced after the Closing Date, Seller and Buyer expressly waive any right to any speculative, consequential,
punitive or special damages including, without limitation, lost profits. The parties acknowledge and agree that Seller’s
actual damages as a result of Buyer’s default would be difficult or impossible to ascertain and that the deliveries and payments
provided for in clause (a) herein constitute reasonable compensation for its actual damages. Promptly following Escrow Agent’s
receipt of written notice from Seller that this Agreement has been terminated because of a default by Buyer, Escrow Agent shall
cancel the Escrow created for this transaction. Seller and Buyer acknowledge that they have read and understand the provisions
of this Section 13(b)(i) and by their initials below agree to be bound by its terms.

 

	 	 	 	 
	Seller’s Initials	 	Buyer’s Initials	 
	 	 	 	 

 

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(ii)         If
this Agreement is terminated by Buyer because (i) Seller has defaulted in the performance of its obligations under this Agreement,
or (ii) Seller refuses to consummate the Closing, after Buyer has (A) timely met, and continues to meet, all of Buyer’s obligations
under this Agreement and (B) waived or accepted all conditions of Buyer to the Closing, then unless Buyer has defaulted in its
obligations under this Agreement, Buyer’s sole and exclusive remedies prior to the Closing Date shall be either: (1) to terminate
this Agreement by giving written notice of termination to Seller and Escrow Agent and pursue any and all remedies for Buyer’s
out-of-pocket costs (including attorneys’ fees and court costs), attributable to the termination of this Agreement, provided
however, that Seller shall have no liability to Buyer under any circumstances for any speculative, consequential or punitive damages,
whereupon (a) Escrow Agent shall promptly return to Buyer the Deposit, and all interest accrued thereon, (b) Escrow Agent shall
return to Seller and Buyer all documents deposited by them respectively, which are then held by Escrow Agent, (c) Buyer shall have
no further right to purchase the Property or legal or equitable claims against Seller (except for any breach by Seller of provisions
that survive termination) and/or the Property; and (d) Buyer shall return to Seller all documents received by it during the course
of its Due Diligence, or (2) to pursue the remedy of specific performance of Seller’s obligation to perform its obligations
under this Agreement, provided, (a) any such suit for specific performance is filed within forty-five (45) days after the then
scheduled Closing Date, and (b) Buyer is ready, willing and able to consummate the Closing as required herein. Seller shall have
no liability to Buyer under any circumstances for any speculative, consequential or punitive damages. Without limiting the other
provisions of this Agreement, Seller acknowledges that the provisions of this Subsection are a material part of the consideration
being given to Buyer for entering into this Agreement and that Buyer would be unwilling to enter into this Agreement in the absence
of the provisions of this Subsection. The provisions of this Subsection shall survive any termination of this Agreement. With respect
to any action by Buyer against Seller or by Seller against Buyer commenced after the Closing Date, Buyer and Seller expressly waive
any right to any speculative, consequential, punitive or special damages including, without limitation, lost profits. Seller and
Buyer acknowledge that they have read and understand the provisions of this Section 13.2(b) and by their initials below
agree to be bound by its terms.

 

	 	 	 	 
	Seller’s Initials	 	Buyer’s Initials	 
	 	 	 	 

 

(c)          General.

 

(i)          Upon
any termination of this Agreement, Buyer shall return to Seller all of the Due Diligence Items received by Buyer from Seller including
all copies thereof prepared by Seller or Buyer; and

 

(ii)         In
the event a party elects to terminate this Agreement such party shall deliver a notice of termination to the other party.

 

14.         Surveys
and Title Commitments.

 

(a)          Seller
has previously ordered a title commitment (the “Title Commitment”) covering the Real Property and the
Facility dated prior to the date of this Agreement, together with legible copies of any and all instruments referred to in the
Title Commitments as constituting exceptions to title of the Real Property. Immediately upon execution and delivery of this Agreement,
Seller shall order updates of the Title Commitment, together with legible copies of any and all instruments (“Title
Documents”) referred to in the Title Commitment as constituting exceptions to title and shall deliver all such documents
to Buyer along with all other Due Diligence Items.

 

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(b)          Seller
shall have delivered to Buyer a copy of the existing boundary line and/or as built surveys, if any, in Seller’s possession
for the Facility (“Survey”) in accordance with Section 10(a)(v) herein. Buyer shall be responsible
for obtaining an update of the Survey or new Survey, at Buyer’s sole cost (“New Survey”). On or
before ten (10) business days following receipt of the updated Title Commitment, Title Documents and Survey, Buyer shall notify
Seller and the Title Company (“Buyer’s Title Notice”) of any objections which Buyer may have to
the Title Commitment and/or Survey. If Buyer objects to any matters (other than the Permitted Exceptions, as defined herein) which,
in Buyer’s determination, might adversely affect the ability of Buyer to operate the Facility, Seller shall use its reasonable
business efforts to cure same, but shall not be obligated to cure matters other than to obtain the release (at Closing) of the
existing mortgage and other monetary liens caused by Seller which may be released by payment of the mortgage payoff or lien amount
from Seller’s Closing proceeds (collectively, “Monetary Liens”). If Seller delivers written notice
to Buyer (“Seller’s Title Notice”), on or before ten (10) business days following receipt of the
Buyer’s Title Notice, that Seller is unable or unwilling to cure such objections, or if, for any reason, Seller is unable
to convey title in accordance with the requirements of this Agreement, Buyer shall have an additional period of three (3) business
days following its receipt of Seller’s Title Notice in which to deliver written notice to Seller (“Buyer’s
Second Title Notice”) either (i) to waive such objections (in which event the items objected to and uncured shall
be deemed Permitted Exceptions) and to accept such title in the condition that Seller is able to convey, or (ii) terminate this
Agreement by written notice to Seller. Failure of Buyer to deliver Buyer’s Second Title Notice shall be deemed to constitute
Buyer’s approval of the state of title. Buyer shall, promptly following the execution of this Agreement, commence to use
its best efforts to obtain the New Survey as soon as practicable. Notwithstanding the foregoing provisions of this Subsection (b),
Buyer shall have the right to object, promptly upon learning of any such new matters during the Due Diligence Period, to any matters
raised in the New Survey which were not addressed in the Survey, and the parties shall cooperate with the Title Company, during
the Due Diligence Period and as promptly as possible following the delivery of Buyer’s objections to such new matters in
the New Survey, to resolve any such matters to Buyer’s satisfaction. The Due Diligence Period shall not be extended for resolution
of any such matters in the New Survey.

 

15.         Cooperation.
Following the execution of this Agreement, Buyer and Seller agree that if any event should occur, either within or without the
knowledge or control of Buyer or Seller, which would prevent fulfillment of the conditions to the obligations of any party hereto
to consummate the transaction contemplated by this Agreement, each such party shall use reasonably commercial efforts to cure or
to cause the cure of the same as expeditiously as possible. In addition, each party shall cooperate fully with each other in preparing,
filing, prosecuting, and taking any other actions with respect to, any applications, requests, or actions which are or may be reasonable
and necessary to obtain the consent of any governmental instrumentality or any third party or to accomplish the transaction contemplated
by this Agreement.

 

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16.         Indemnification.

 

(a)          Indemnification
Provisions.

 

(i)          Subject
to the limitation on damages contained in Section 13(ii)(b) hereof, Seller hereby agrees to indemnify, protect, defend
and hold harmless Buyer and its officers, directors, members, shareholders, tenants, successors and assigns, harmless from and
against any and all claims, demands, obligations, losses, liabilities, damages, recoveries and deficiencies (including interest,
penalties and reasonable attorneys’ fees, costs and expenses) which any of them may suffer as a result of: (A) any breach
of or inaccuracy in the representations and warranties, or breach, non-fulfillment or default in the performance of any of the
conditions, covenants and agreements, of Seller contained in this Agreement or in any certificate or document delivered by Seller
pursuant to any of the provisions of this Agreement, unless Seller cures such matter in the manner provided in Section 8(p)
herein or (B) the failure to discharge any federal, state or local tax liability, or to pay any other assessments, recoupments,
claims, fines, penalties or other amounts or liabilities accrued or payable with respect to any activities of Seller prior to the
Closing Date (whether brought before or after the Closing Date), or (C) any obligation which is expressly the responsibility
of Seller under this Agreement, or (D) any amounts required to cure citation violations issued by any state or federal health
or human services authority on the Facility relating to any period prior to the Closing Date (whether brought before or after the
Closing Date), or (E) any claim by any employee of Seller (whether brought before or after the Closing Date), or (F) the
existence against the Real Property of any mechanic’s or materialmen’s claims resulting from the action or inaction
of Seller or anyone acting under authority of Seller, or (G) any other cost, claim or liability arising out of or relating
to events (other than as a result of the actions of Buyer or Buyer’s Consultants) or Seller’s ownership, operation
or use of the Facility occurring prior to the Closing Date. Any amount due under the aforesaid indemnity shall be due and payable
by Seller within thirty (30) days after demand thereof. Seller shall have the right to contest any such claims, liabilities or
obligations as provided herein.

 

(ii)         Subject
to the limitation on damages contained in Section 13(b)(i) hereof, Buyer hereby agrees to indemnify, protect, defend
and hold harmless Seller and its officers, directors, members, shareholders and tenants harmless from and against any and all claims,
demands, obligations, losses, liabilities, damages, recoveries and deficiencies (including interest, penalties and reasonable attorneys’
fees, costs and expenses) which any of them may suffer as a result of: (A) any breach of or inaccuracy in the representations
and warranties, or breach, non-fulfillment or default in the performance of any of the conditions, covenants and agreements, of
Buyer contained in this Agreement or in any certificate or document delivered by Buyer pursuant to any of the provisions of this
Agreement, unless Buyer cures such matter in the manner provided in Section 8(p) herein, (B) the failure to discharge
any federal, state, or local tax liability, or to pay monetary liens or other assessments, recoupments, claims, fines, penalties,
or other amounts or liabilities accrued or payable with respect to any activities of Buyer following the Closing Date, or (C) the
existence against the Real Property of any mechanic’s or materialmen’s claims arising from actions of Buyer or Buyer’s
Consultants, (D) any obligation which is expressly the responsibility of Buyer under this Agreement, or (E) any other cost,
claim or liability arising out of or relating to events or Buyer’s ownership, operation or use of the Property or the Facility
occurring on or after the Closing Date. Any amount due under the aforesaid indemnity shall be due and payable by Buyer within thirty
(30) days after demand therefor. Buyer shall have the right to contest any such claims, liabilities or obligations as provided
herein.

 

    	Page 21 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

(iii)        The
parties intend that all indemnification claims be made as promptly as practicable by the party seeking indemnification (the “Indemnified
Party”). Whenever any claim shall arise for indemnification hereunder, the Indemnifying Party shall promptly notify
the party from whom indemnification is sought (the “Indemnitor”) of the claim, and the facts constituting
the basis for such claim (the “Indemnification Claim”). Failure to notify the Indemnitor will not relieve
the Indemnitor of any liability that it may have to the Indemnified Party, except to the extent the defense of such action is materially
prejudiced by the Indemnified Party’s failure to give such notice.

 

(iv)        An
Indemnitor shall have the right to defend against an Indemnification Claim, with counsel of its choice reasonably satisfactory
to the Indemnified Party, if (a) within fifteen (15) days following the receipt of notice of the Indemnification Claim the Indemnitor
notifies the Indemnified Party in writing that the Indemnitor will indemnify the Indemnified Party from and against the entirety
of any damages the Indemnified Party may suffer resulting from, relating to, arising out of, or attributable to the Indemnification
Claim, (b) the Indemnitor provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the
Indemnitor will have the financial resources to defend against the Indemnification Claim and pay, in cash, all damages the Indemnified
Party may suffer resulting from, relating to, arising out of, or attributable to the Indemnification Claim, (c) the Indemnification
Claim involves only money damages and does not seek an injunction or other equitable relief, (d) settlement of, or an adverse judgment
with respect to, the Indemnification Claim is not in the good faith judgment of the Indemnified Party likely to establish a precedential
custom or practice materially adverse to the continuing business interests of the Indemnified Party, and (e) the Indemnitor continuously
conducts the defense of the Indemnification Claim actively and diligently.

 

(v)         So
long as the Indemnitor is conducting the defense of the Indemnification Claim in accordance with Section 16(a)(iv),
then (a) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the
Indemnification Claim, (b) the Indemnified Party shall not consent to the entry of any order or finalization of any tentative settlement,
the only condition of which is the consent of the Indemnified Party thereto, with respect to the Indemnification Claim without
the prior written consent of the Indemnitor (not to be withheld unreasonably), and (c) the Indemnitor will not consent to the entry
of any order or finalization of any tentative settlement, the only condition of which is the consent of the Indemnified Party thereto,
with respect to the Indemnification Claim without the prior written consent of the Indemnified Party (not to be unreasonably withheld
or delayed, provided that it will not be deemed to be unreasonable for an Indemnified Party to withhold its consent with respect
to (1) any breach of any law, order or permit, (2) any violation of the rights of any person, or (3) any matter which Indemnified
Party believes could have a material adverse effect on any other actions to which the Indemnified Party or its Affiliates are party
or to which Indemnified Party has a good faith belief it may become party. Notwithstanding the foregoing provisions of this Subsection (v),
if Indemnified Party refuses its consent to any of the matters set forth in clauses (1) through (3) above, the indemnity amount
shall be determined as if such consent had been given and Indemnitor shall pay over to the Indemnified Party such amount and be
absolved from any further obligation as to that particular claim; Indemnified Party may then resolve the claim in the manner it
sees fit without further recourse against Indemnitor.

 

    	Page 22 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

(vi)        Each
party hereby consents to the non-exclusive jurisdiction of any governmental body, arbitrator, or mediator in which an action is
brought against any Indemnified Party for purposes of any Indemnification Claim that an Indemnified Party may have under this Agreement
with respect to such action or the matters alleged therein, and agrees that process may be served on such party with respect to
such claim anywhere in the world, provided however, that any venue relating to any claim or proceeding arising out of this Agreement
or any other agreement between Sellers and Buyer shall be the State of Oregon and the laws of the State of Oregon shall apply.

 

(b)          Insurance
Proceeds. In determining the amount of damages for which either party is entitled to assert an Indemnification Claim, the amount
of any such claims or damages shall be determined after deducting therefrom the amount of any insurance coverage or proceeds or
other third party recoveries received by such other party in respect of such damages. If an indemnification payment is received
by the Indemnified Party in respect of any damages and the Indemnified Party later receives insurance proceeds or other third party
recoveries in respect of such damages, the Indemnified Party shall immediately pay to the Indemnifying Party a sum equal to the
lesser of the actual amount of net insurance proceeds or other third party recoveries (remaining after recovery costs and expenses)
or the actual amount of the indemnification payment previously paid by or on behalf of the Indemnified Party.

 

(c)          No
Incidental, Consequential and Certain Other Damages. An Indemnitor shall not be liable to an Indemnified Party for incidental,
consequential, enhanced, punitive or special damages unless such damages are included in a third-party claim and such Indemnified
Party is liable to the third party claimant for such damages.

 

(d)          No
Waiver of Rights or Remedies.

 

Each Indemnified Party’s
rights and remedies set forth in this Agreement shall survive the Closing or other termination of this Agreement, shall not be
deemed waived by such Indemnified Party’s consummation of the Closing of the sale transactions (unless the Indemnified Party
has knowledge of the existence of an Indemnification Claim at Closing and decides to proceed with Closing) and will be effective
regardless of any inspection or investigation conducted by or on behalf of such Indemnified Party or by its directors, officers,
employees, or representatives or at any time (unless such inspection or investigation reveals the existence of an Indemnified Claim
and such party proceeds with Closing), whether before or after the Closing Date.

 

(e)          Other
Indemnification Provisions. A claim for any matter not involving a third party may be asserted by notice to the Party from
whom indemnification is sought.

 

    	Page 23 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

17.         Dispute
Resolution. In any dispute arising out of this Agreement the parties shall proceed as follows:

 

(a)          Mandatory
Mediation. In the event there is any dispute between the parties to this Agreement relating in any way to this Agreement, the
parties must mediate such dispute before commencement of any legal action. No party to this Agreement can bring legal action against
another party to this Agreement without first participating in mediation, unless one party refuses to submit to mediation and legal
action is brought to specifically enforce this mandatory mediation provision of this Agreement. If the parties cannot agree upon
the person to act as the mediator, then the U.S. Arbitration and Mediation Service of Portland, Oregon shall select a person to
act as the mediator. The mediator’s charges and expenses shall be split by the parties on a 50/50 basis. The mediation fees
and costs do not include each party’s attorney fees and costs. Each party shall be responsible for his or her own attorney
fees and costs at mediation. Those costs may not be assessed against the other party if the other party is the prevailing party.
If the dispute cannot be resolved at mediation either party may then proceed to arbitration as provided in Section 17(b)
of this Agreement.

 

(b)          Arbitration.
In the event any disagreement, difference or controversy shall arise between or among the parties relating to or arising out of
or under this Agreement, including any tort claims, and the parties to the controversy cannot mutually agree upon the resolution
thereof, and the mediation provided for herein does not provide a resolution, then such disagreement, difference or controversy
shall be determined by arbitration under the rules of the U.S. Arbitration and Mediation Service of Portland, Oregon. Any award
made by the arbitrator shall be final, binding and conclusive upon the parties to the arbitration and those claiming under them.
The arbitrator shall have no power to make any award inconsistent with or contrary to the terms and provisions of this Agreement.
The cost and expenses of any arbitration shall be paid by the parties on a 50/50 basis. Any party to the arbitration may file any
final arbitrator award as a judgment in the Circuit Court of the State of Oregon for Marion County and in the appropriate court
in any other county of the State of Oregon or any other state where any party to the arbitration maintains such party’s residence,
principal place of business or real property.

 

18.         Notices.
Any notice, request for consent or approval, election or other communication provided for or required by this Agreement shall be
in writing and shall be delivered by hand, by air courier service, postage prepaid (certified with return receipt requested), fax
transmission or electronic transmission followed by delivery of the hard copy of such communication by air courier service or mail
as aforesaid, addressed to the person to whom such notice is intended to be given at such address as such person may have previously
furnished in writing to the such party’s last known address. Until receipt of written notice to the contrary, the parties’
addresses for notices shall be:

 

    	Page 24 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

 

	To Buyer:	 	
        Summit Healthcare REIT, Inc.

        2 South Pointe Drive, Suite 100

        Lake Forest, CA 92630

        Attention: Kent Eikanas

        Phone: 949-535-1923

        Email: keikanas@summithealthcarereit.com

         

	 	 	 
	With a Copy to:	 	
        Seubert French Frimel & Warner LLP

        1075 Curtis Street

        Menlo Park, CA 94025

        Attention: Rachel Rosati Warner

        Phone: 650-322-2919

        Email: rachel@sffwlaw.com

         

	 	 	 
	To Sellers:	 	 
	 	 	
        Azevedo and Associates

        10720 Indian Hill Rd

        Auburn, CA 95603

        Attention: Richard Azevedo

        Phone: (530) 889-8070

         

        Sapphire Health Services

        2248 SW Nancy Pl

        Gresham, OR 97080

        Attention: Kevin Ricker

        Phone: (503) 887-7395

        Email: Kricker@sapphirehealthservices.com

 

19.         Sole
Agreement. This Agreement constitutes the entire understanding between the parties with respect to the transactions contemplated
herein, and all prior or contemporaneous oral agreements, understandings representations and statement, and all prior written agreements,
understandings, letters of intent and proposals are merged into this Agreement. Neither this Agreement nor any provisions hereof
may be waived, modified, amended, discharged or terminated except by an instrument in writing signed by the party against which
the enforcement of such waiver, modification, amendment, discharge or termination is sought, and then only to the extent set forth
in such instrument.

 

20.         Assignment;
Successors. Neither party shall assign this Agreement without the prior written consent of the other; provided, however, Buyer
may assign all of its rights, title, liability, interest and obligation pursuant to this Agreement to one or more entities owned,
controlled by or under common control with Buyer. Subject to the limitations on assignment set forth above, all the terms of this
Agreement shall be binding upon and inure to the benefit of and be enforceable by and against the heirs, successors and assigns
of the parties hereto.

 

    	Page 25 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

21.         Severability.
Should any one or more of the provisions of this Agreement be determined to be invalid, unlawful or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby
and each such provision shall be valid and remain in full force and effect.

 

22.         Risk
of Loss. Until the Closing Date, Seller shall bear the risk of loss for the Facility. From and after the Closing Date, the
risk of loss of the Facility shall be governed by the Post Closing Lease.

 

23.         Holidays.
If any date herein set forth for the performance of any obligations by Seller or Buyer or for the delivery of any instrument or
notice as herein provided should be on a Saturday, Sunday or legal holiday, the compliance with such obligations or delivery shall
be deemed acceptable on the next business day following such Saturday, Sunday or Legal Holiday. As used herein, the term “Legal
Holiday” means any state or federal holiday for which financial institutions or post offices are generally closed
in the State of Oregon for observance thereof.

 

24.         Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which together shall
be deemed to constitute one and the same instrument. Facsimile signature pages or electronically transmitted signature pages shall
constitute original counterparts for all purposes.

 

25.         Covenant
Not to Compete; Non-Solicitation of Employees. For a period of three (3) years following the Closing Date, Seller, agrees (i)
not to own, manage, lease or operate a long term skilled nursing home facility which is located within a five (5) mile radius of
the Facility, and (ii) not to solicit the transfer of patients or residents of the Facility to any long term care skilled nursing
home facility, assisted living facility and/or residential care facility for the elderly which is managed, leased or operated by
any entity owned and/or controlled by Seller or such individual within a five (5) mile radius of the Facility.

 

26.         Intentionally
Deleted.

 

27.         Exhibits
and Schedules. To the extent that one or more Exhibits or Schedules are not attached to this Agreement at the time this Agreement
is executed, Seller and Buyer agree that this Agreement is not rendered unenforceable by reason of such fact. Seller shall provide
such exhibits to Buyer during the Due Diligence Period as promptly as possible in order to allow the parties to agree upon such
Exhibits and Schedules and to afford Buyer adequate time in which to complete its due diligence review prior to the expiration
of the Due Diligence Period.

 

28.         Prevailing
Party. Subject to the limitations as otherwise set forth in this Agreement, if an action shall be brought on account of any
breach of or to enforce or interpret any of the terms, covenants or conditions of this Agreement, the prevailing party shall be
entitled to recover from the other party, as part of the prevailing party’s costs, reasonable attorney’s fees, the
amount of which shall be fixed by the court and shall be made a part of any judgment rendered.

 

29.         Time
is of the Essence. Time is of the essence of this Agreement.

 

    	Page 26 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

30.         Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Oregon.

 

31.         Seller’s
Tax Deferred Exchange. Seller may desire to effect a tax-deferred exchange with respect to its disposition of all or a portion
of the Property (“Seller’s Exchange”) pursuant to Section 1031 of the Internal Revenue Code. Seller’s
Exchange will be structured by Seller at its sole cost and expense and Buyer will have no obligation to acquire or enter into the
chain of title to any property other than the Property. Buyer’s sole obligation in connection with Seller’s Exchange
shall be to review and execute certain documentation necessary in order to effectuate Seller’s Exchange in accordance with
the foregoing and the applicable rules governing such exchanges. Buyer’s cooperation with Seller’s Exchange shall not
affect or diminish Buyer’s rights under this Agreement, delay the closing of this Agreement or be construed as Buyer’s
warranty that Seller’s Exchange in fact complies with Section 1031 of the Internal Revenue Code. Buyer shall have the
right to review and reasonably approve any documents to be executed by Buyer in connection with Seller’s Exchange. Acceptance
of title to the Property from Seller’s designated intermediary shall not modify Seller’s representations, warranties
and covenants to Buyer under this Agreement or the survival thereof pursuant to this Agreement. The Warranty Deed and all closing
documents shall run directly between Seller and Buyer. Seller shall indemnify and hold Buyer harmless from and against any and
all claims, liabilities, losses, damages, costs and expenses (including reasonable attorneys’ fees but excluding costs incurred
to review the exchange documents) arising from Seller’s Exchange (other than what would have been applicable under this Agreement
without Seller’s Exchange) which indemnification obligation shall survive the Close of Escrow. Seller is relying solely upon
the advice and counsel of professionals of Seller’s choice in structuring, executing and consummating Seller’s Exchange.

 

    	Page 27 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

IN WITNESS WHEREOF,
the undersigned have duly executed this Agreement by parties legally entitled to do so as of the day and year first set forth above.

 

	 	
        “SELLERS”:

         

	 	Bremerton Assisted Living, LLC
	 	A California limited liability company
	 	 
	 	By:	/s/ Richard Azevedo
	 	 	Richard Azevedo
	 	 	Member

 

	 	
        Applewood Holding Company, LLC,

        an Oregon limited liability company

	 	 
	 	By:	/s/ Kevin Ricker
	 	 	Kevin Ricker
	 	 	Member
	 	 
	 	“BUYER”:
	 	 
	 	
        SUMMIT HEALTHCARE REIT,
        Inc.,

        a Maryland corporation

	 	 
	 	By:	/s/ Kent Eikanas
	 	 	Kent Eikanas
	 	 	President
	 	 	 	 

 

    	Page 28 of 29      PURCHASE AND SALE AGREEMENT

    	 

    

 

SCHEDULES AND EXHIBITS OMITTEDExhibit 10.3

 

Loan No. 07- 0004596

 

 

 

GENERAL ELECTRIC CAPITAL CORPORATION

(as Administrative Agent and a Lender)

THE FINANCIAL INSTITUTIONS WHO ARE OR
HEREAFTER

BECOME PARTIES TO THIS LOAN AGREEMENT,

as Lenders,

 

and

 

HP REDDING, LLC

SUMMIT SALEM, LLC,

and

SUMMIT PORTLAND, LLC,

Each, a Delaware limited liability company,

(Borrower)

 

 

 

LOAN AGREEMENT

 

 

 

Dated as of: December 31, 2014

 

Document Prepared By:

 

Winston & Strawn LLP

101 California Street, 34th Floor

San Francisco, California 94111

 

 

 

    	[Summit Healthcare]

    	 

    

 

TABLE OF
CONTENTS

 

	ARTICLE I DEFINITIONS	1
	 	 	 
	Section 1.1.	Certain Definitions.	1
	Section 1.2.	Definitions.	20
	Section 1.3.	Phrases.	21
	 	 	 
	ARTICLE II LOAN TERMS	21
	 	 	 
	Section 2.1.	The Loan.	21
	Section 2.2.	Interest Rate; Late Charge; Default Rate.	21
	Section 2.3.	Terms of Payment; Option to Extend Scheduled Maturity Date.	22
	Section 2.4.	Prepayment.	23
	Section 2.5.	Security; Establishment of Funds.	24
	Section 2.6.	Application of Payments.	26
	Section 2.7.	Sources and Uses.	27
	Section 2.8.	Capital Adequacy; Increased Costs; Illegality.	28
	Section 2.9.	Interest Rate Protection.	29
	Section 2.10.	Libor Breakage Amount.	29
	Section 2.11.	Loan Origination Fee.	29
	Section 2.12.	Evidence of Debt.	30
	Section 2.13.	Substitution of Lenders.	31
	Section 2.14.	Defaulting Lenders.	32
	Section 2.15.	Fees and Expenses.	32
	Section 2.16.	Withholding Taxes.	33
	Section 2.17.	Partial Release.	35
	 	 	 
	ARTICLE III INSURANCE, CONDEMNATION, AND IMPOUNDS	37
	 	 	 
	Section 3.1.	Insurance.	37
	Section 3.2.	Use and Application of Insurance Proceeds.	40
	Section 3.3.	Condemnation Awards.	42
	Section 3.4.	Insurance Impounds.	43
	Section 3.5.	Real Estate Tax Impounds.	43
	 	 	 
	ARTICLE IV ENVIRONMENTAL MATTERS	44
	 	 	 
	Section 4.1.	Representations and Warranties on Environmental Matters.	44
	Section 4.2.	Covenants on Environmental Matters.	44
	Section 4.3.	Allocation of Risks and Indemnity.	45
	Section 4.4.	Administrative Agent’s Right to Protect Collateral.	46
	Section 4.5.	No Waiver.	46

 

    	[Summit Healthcare]	i	 

    	 

    

 

	ARTICLE V LEASING MATTERS	47
	 	 	 
	Section 5.1.	Representations and Warranties on Leases.	47
	Section 5.2.	[Reserved].	48
	Section 5.3.	Covenants.	48
	Section 5.4.	Tenant Estoppels.	50
	Section 5.5.	Payment of Rents Under Master Lease.	51
	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES	51
	 	 	 
	Section 6.1.	Organization, Power and Authority; Formation Documents.	51
	Section 6.2.	Validity of Loan Documents.	52
	Section 6.3.	Liabilities; Litigation.	52
	Section 6.4.	Taxes and Assessments.	53
	Section 6.5.	Other Agreements; Defaults.	53
	Section 6.6.	Compliance with Law.	53
	Section 6.7.	Condemnation.	53
	Section 6.8.	Access.	53
	Section 6.9.	Location of  Borrower.	53
	Section 6.10.	ERISA; Employees.	54
	Section 6.11.	Use of Loan Proceeds.	54
	Section 6.12.	Forfeiture.	54
	Section 6.13.	Tax Filings.	54
	Section 6.14.	Solvency.	54
	Section 6.15.	Full and Accurate Disclosure.	55
	Section 6.16.	Flood Zone.	55
	Section 6.17.	Single Purpose Entity/Separateness.	55
	Section 6.18.	Compliance With International Trade Control Laws and OFAC Regulations.	58
	Section 6.19.	Borrower’s Funds.	58
	Section 6.20.	Operators’ Agreements.	60
	Section 6.21.	Physical Condition.	60
	Section 6.22.	Healthcare Representations.	60
	Section 6.23.	No Change in Facts or Circumstances; Disclosure.	62
	 	 	 
	ARTICLE VII FINANCIAL REPORTING	62
	 	 	 
	Section 7.1.	Financial Statements.	62
	Section 7.2.	Additional Reports.	63
	Section 7.3.	Compliance Certificate.	64
	Section 7.4.	Accounting Principles.	64
	Section 7.5.	Other Information; Access.	65
	Section 7.6.	Annual Budget.	65
	Section 7.7.	Books and Records/Audits.	65

 

    	[Summit Healthcare]	ii	 

    	 

    

 

	ARTICLE VIII COVENANTS	65
	 	 	 
	Section 8.1.	Transfers or Encumbrance of Property.	66
	Section 8.2.	Taxes; Utility Charges.	68
	Section 8.3.	Management.	69
	Section 8.4.	Operation; Maintenance; Inspection.	69
	Section 8.5.	Taxes on Security.	70
	Section 8.6.	Legal Existence; Name, Etc.	70
	Section 8.7.	Further Assurances.	71
	Section 8.8.	Estoppel Certificates Regarding Loan.	71
	Section 8.9.	Notice of Certain Events.	71
	Section 8.10.	Indemnification.	71
	Section 8.11.	[Intentionally Omitted].	72
	Section 8.12.	Payment For Labor and Materials.	72
	Section 8.13.	Use and Proceeds, Revenues.	72
	Section 8.14.	Compliance with Laws and Contractual Obligations.	72
	Section 8.15.	Operating and Financial Covenants.	73
	Section 8.16.	Healthcare Laws and Covenants.	73
	Section 8.17.	Cooperation Regarding Licenses.	76
	Section 8.18.	Transactions With Affiliates.	76
	Section 8.19.	Representations and Warranties.	76
	Section 8.20.	Alterations.	76
	Section 8.21.	Business and Operations.	77
	Section 8.22.	Severability of Covenants.	77
	Section 8.23.	Post-Closing Obligations.	77
	Section 8.24.	Ground Lease.	77
	Section 8.25.	Joint Venture.	77
	 	 	 
	ARTICLE IX EVENTS OF DEFAULT	77
	 	 	 
	Section 9.1.	Payments.	77
	Section 9.2.	Insurance.	77
	Section 9.3.	Transfers.	78
	Section 9.4.	Covenants.	78
	Section 9.5.	Representations and Warranties.	78
	Section 9.6.	Other Encumbrances.	78
	Section 9.7.	Involuntary Bankruptcy or Other Proceeding.	78
	Section 9.8.	Voluntary Petitions, etc.	78
	Section 9.9.	Default Under Operators’ Agreement.	79
	Section 9.10.	Certain Covenants.	79
	Section 9.11.	Financial Information.	79
	Section 9.12.	Default Under Guaranty.	79
	Section 9.13.	Criminal Act.	79
	Section 9.14.	Master Lease.	79
	Section 9.15.	Ground Lease.	79
	Section 9.16.	Environmental Indemnity Agreement.	80
	Section 9.17.	Post-Closing Obligations.	80

 

    	[Summit Healthcare]	iii	 

    	 

    

 

	Section 9.18.	Death of Guarantor.	80
	Section 9.19.	Cash Management Agreement.	80
	Section 9.20.	Admissions Restrictions; Special Cure Rights.	80
	Section 9.21.	Healthcare Investigations; Special Cure Right with Respect to Operational Defaults.	80
	 	 	 
	ARTICLE X REMEDIES	81
	 	 	 
	Section 10.1.	Remedies - Insolvency Events.	81
	Section 10.2.	Remedies - Other Events.	82
	Section 10.3.	Administrative Agent’s Right to Perform the Obligations.	82
	 	 	 
	ARTICLE XI ADMINISTRATIVE AGENT	83
	 	 	 
	Section 11.1.	Appointment and Duties.	83
	Section 11.2.	Binding Effect.	84
	Section 11.3.	Use of Discretion.	84
	Section 11.4.	Delegation of Rights and Duties.	84
	Section 11.5.	Reliance and Liability.	85
	Section 11.6.	Administrative Agent Individually.	86
	Section 11.7.	Lender Credit Decision.	86
	Section 11.8.	Expenses; Indemnities.	86
	Section 11.9.	Resignation of Administrative Agent.	87
	Section 11.10.	Additional Secured Parties.	88
	 	 	 
	ARTICLE XII MISCELLANEOUS	88
	 	 	 
	Section 12.1.	Notices.	88
	Section 12.2.	Amendments and Waivers.	90
	Section 12.3.	Assignments and Participations; Binding Effect.	92
	Section 12.4.	Indemnities.	95
	Section 12.5.	Lender-Creditor Relationship.	95
	Section 12.6.	[Reserved].	96
	Section 12.7.	Sharing of Payments, Etc.	96
	Section 12.8.	Marshaling; Payments Set Aside.	96
	Section 12.9.	Limitation on Interest.	97
	Section 12.10.	Invalid Provisions.	97
	Section 12.11.	Reimbursement of Expenses.	98
	Section 12.12.	Approvals; Third Parties; Conditions.	98
	Section 12.13.	Administrative Agent and Lenders Not in Control; No Partnership.	99
	Section 12.14.	Contest of Certain Claims.	99
	Section 12.15.	Time of the Essence.	100
	Section 12.16.	Successors and Assigns.	100
	Section 12.17.	Renewal, Extension or Rearrangement.	100
	Section 12.18.	Waivers.	100
	Section 12.19.	Cumulative Rights; Joint and Several Liability.	100
	Section 12.20.	Singular and Plural.	100

 

    	[Summit Healthcare]	iv	 

    	 

    

 

	Section 12.21.	Exhibits and Schedules.	100
	Section 12.22.	Titles of Articles, Sections and Subsections.	101
	Section 12.23.	Promotional Material.	101
	Section 12.24.	Survival.	101
	Section 12.25.	WAIVER OF JURY TRIAL.	101
	Section 12.26.	Waiver of Punitive or Consequential Damages.	101
	Section 12.27.	Governing Law.	102
	Section 12.28.	Entire Agreement.	102
	Section 12.29.	Counterparts.	102
	Section 12.30.	Consents and Approvals.	102
	Section 12.31.	[Reserved].	102
	Section 12.32.	Effectiveness of Facsimile Documents and Signatures.	102
	Section 12.33.	Venue.	103
	Section 12.34.	Important Information Regarding Procedures for Requesting Credit.	103
	Section 12.35.	Method of Payment.	103
	Section 12.36.	Non-Public Information; Confidentiality; Disclosure.	103
	Section 12.37.	Post-Closing Obligations of Borrower.	104
	Section 12.38.	Release and Waiver Regarding Special Audits.	104
	 	 	 
	ARTICLE XIII LIMITATIONS ON LIABILITY	105
	 	 	 
	Section 13.1.	Limitation on Liability.	105
	Section 13.2.	Limitation on Liability of Lender’s Officers, Employees, etc.	108
	 	 	 
	ARTICLE XIV cross-guaranty	108
	 	 	 
	Section 14.1.	Cross-Guaranty.	108
	Section 14.2.	Waivers By Borrower.	109
	Section 14.3.	Benefit of Guaranty.	109
	Section 14.4.	Waiver of Subrogation, Etc.	109
	Section 14.5.	Election of Remedies.	110
	Section 14.6.	Limitation.	110
	Section 14.7.	Contribution with respect to Guarantee Obligations.	110
	Section 14.8.	Liability Cumulative.	111

 

    	[Summit Healthcare]	v	 

    	 

    

 

Exhibits and Schedules

 

	Exhibit A	Description of Projects and Operators; Allocated Loan Amounts
	Exhibit B	Loan Commitments
	Schedule 2.1	Conditions to Advance of Loan Proceeds
	Schedule 2.3(a)	Amortization Schedule
	Schedule 2.7	Sources and Uses
	Schedule 6.1	Organizational Information; Organizational Chart
	Schedule 6.22	Disclosures Regarding Healthcare Matters
	Schedule 6.22(a)	Third Party Payor Programs
	Schedule 6.22(b)	Primary Licenses
	Schedule 7.2	Form of Compliance Certificate
	Schedule 12.37	Post-Closing Obligations

 

    	[Summit Healthcare]	vi	 

    	 

    

 

LOAN AGREEMENT

 

This Loan Agreement
(this “Agreement”) is entered into as of December 31, 2014, by and among GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation (“GE Capital”), as Administrative Agent and collateral agent for the Lenders (as
defined herein) (in such capacity and together with its successors and permitted assigns, the “Administrative Agent”),
THE FINANCIAL INSTITUTIONS WHO ARE OR HEREAFTER BECOME PARTIES TO THIS AGREEMENT as Lenders (together with their successors and
permitted assigns, each a “Lender” and collectively, the “Lenders”), and HP
REDDING, LLC, a Delaware limited liability company (“Redding Sundial Borrower”), SUMMIT SALEM, LLC, a
Delaware limited liability company (“Salem Applewood Borrower”), and SUMMIT PORTLAND, LLC, a Delaware
limited liability company (“Portland Gateway Borrower” and, collectively with Redding Sundial Borrower
and Salem Applewood Borrower, and each, individually, as the context may require, “Borrower”).

 

ARTICLE
I

DEFINITIONS

 

Section
1.1.Certain Definitions. As used herein, the following terms have the meanings indicated:

 

“Acceleration
Prepayment Premium” has the meaning assigned in Section 2.4(d).

 

“Account
Debtor” means “account debtor”, as defined in Article 9 of the UCC, and any other obligor in respect
of an Account.

 

“ACH”
has the meaning assigned in Section 2.6(c).

 

“Acknowledgement
of Property Manager” means, individually and collectively, each Collateral Assignment, Subordination and Agreement
of a Property Manager (whether one or more) executed by a Property Manager in favor of the Administrative Agent (on behalf of itself
and the Lenders).

 

“Adjusted
Expenses” means actual operating expenses related to the Projects, excluding any rent and interest paid and depreciation
recorded by each Master Tenant on a stabilized accrual basis for the period in question (or, if no period is specified, then for
the most current previous twelve (12) month period), as reasonably adjusted by Administrative Agent, including: (i) recurring expenses
as determined under GAAP, (ii) real estate taxes, (iii) management fees (whether paid or not) in an amount not less than five percent
(5%) of effective gross income (or the actual management fee paid, if higher) and (iv) a replacement reserve (whether reserved
or not) of not less than Three Hundred Fifty and No/100 Dollars ($350.00) per Residential Unit per annum.

 

“Adjusted
Net Operating Income” or “ANOI” means annualized Adjusted Revenue less Adjusted Expenses,
based upon the financial reports provided by Borrower under Article 7 and approved by Administrative Agent in its reasonable discretion.

 

    	[Summit Healthcare]	1	 

    	 

    

  

“Adjusted
Revenue” means revenues generated by the Operators at the Projects for the period in question (and if none specified,
then for the most current twelve (12) months), as determined under GAAP, but excluding (a) nonrecurring income and non-property
related income (as determined by Administrative Agent in its sole discretion) and income from tenants that is classified as “bad
debt” under GAAP, and (b) late fees and interest income; provided, however, if actual occupancy of the Projects,
taken as a whole, exceeds 95%, Adjusted Revenue shall be proportionately reduced assuming an occupancy of 95%.

 

“Administrative
Agent” has the meaning assigned in the preamble to this Agreement.

 

“Affected
Lender” has the meaning assigned in Section 2.13(a).

 

“Affiliate”
means, with respect to any Person, (a) any corporation in which such Person or any partner, shareholder, director, officer, member,
or manager of such Person directly or indirectly owns or controls more than ten percent (10%) of the beneficial interest, (b) any
partnership, joint venture or limited liability company in which such Person or any partner, shareholder, director, officer, member,
or manager of such Person is a partner, joint venturer or member, (c) any trust in which such Person or any partner, shareholder,
director, officer, member or manager of such Person is a trustee or beneficiary, (d) any Person which is directly or indirectly
owned or controlled by such Person or any partner, shareholder, director, officer, member or manager of such Person, (e) any partner,
shareholder, director, officer, member, manager or employee of such Person, (f) any Person related by birth, adoption or marriage
to any partner, shareholder, director, officer, member, manager, or employee of such Person. Any Borrower Party shall be deemed
an Affiliate of Borrower.

 

“Affiliated
Manager” means any property manager in which Borrower, or any Affiliate of Borrower has, directly or indirectly,
any legal, beneficial or economic interest.

 

“Agreement”
means this Loan Agreement, as amended, restated, supplemented, or otherwise modified from time to time.

 

“Allocated
Loan Amount” means, with respect to each Project, the amount specified on Exhibit A hereto as
the “Allocated Loan Amount” for such Project.

 

“Anti-Money
Laundering Laws” means those laws, regulations and sanctions, state and federal, criminal and civil, that (a) limit
the use of and/or seek the forfeiture of proceeds from illegal transactions; (b) limit commercial transactions with designated
countries or individuals believed to be terrorists, narcotics dealers or otherwise engaged in activities contrary to the interests
of the United States; (c) require identification and documentation of the parties with whom a Financial Institution conducts business;
or (d) are designed to disrupt the flow of funds to terrorist organizations. Such laws, regulations and sanctions shall be deemed
to include the Patriot Act, the Bank Secrecy Act, the Trading with the Enemy Act, 50 U.S.C. App. Section 1, et seq., the
International Emergency Economic Powers Act, 50 U.S.C. Section 1701, et seq., and the sanction regulations promulgated pursuant
thereto by the OFAC, as well as laws relating to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957.

 

    	[Summit Healthcare]	2	 

    	 

    

 

“Approved
Fund” means, with respect to Administrative Agent or any Lender, any Person (other than a natural Person) that (a)
is or will be engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit
in the ordinary course of its business and (b) is advised or managed by (i) Administrative Agent or such Lender, (ii) any Affiliate
of Administrative Agent or such Lender or (iii) any Person (other than an individual) or any Affiliate of any Person (other than
an individual) that administers or manages Administrative Agent or such Lender.

 

“Approved
Insurer” means any insurer (other than Medicaid/Medicare/TRICARE) as may be approved by Administrative Agent from
time to time in its sole discretion.

 

“Assignment”
means an assignment agreement entered into by a Lender, as assignor, and any Person, as assignee, pursuant to the terms and provisions
of Section 12.3 (with the consent of any party whose consent is required by Section 12.3), accepted by the Administrative
Agent, in form and substance satisfactory to Administrative Agent.

 

“Assignment
of Hedge Agreement” means one more collateral assignments of Hedge Agreements, as amended, restated, supplemented
or otherwise modified from time to time, which may be executed and delivered by Borrower and the counterparty under such Hedge
Agreement to Administrative Agent (on behalf of itself and the Lenders), in accordance with Section 2.9 hereof.

 

“Assignment
of Leases and Rents” means, individually and collectively, each Assignment of Leases and Rents, executed by a Borrower
for the benefit of Administrative Agent (on behalf of itself and the Lenders), as amended, restated, supplemented or otherwise
modified from time to time.

 

“Assignment
of Membership Interests” means, individually and collectively, each Ownership Pledge of Membership Interests and
Security Agreement, executed by the members of a Borrower for the benefit of Administrative Agent (on behalf of the Lenders), and
pertaining to the membership interests in such Borrower, as amended, restated, supplemented or otherwise modified from time to
time.

 

“ASTM”
means the American Society for Testing and Materials.

 

“Award”
has the meaning assigned in Section 3.3.

 

“Bankruptcy
Party” has the meaning assigned in Section 9.7.

 

“Bank Secrecy
Act” means the Bank Secrecy Act, 31 U.S.C. Section 5311, et seq.

 

“Borrower”
has the meaning assigned in the preamble to this Agreement.

 

“Borrower
Formation Documents” has the meaning assigned in Section 6.1(b).

 

“Borrower
Party” means any Guarantor, any general partner of any Borrower, and any general partner in any partnership that
is a general partner of any Borrower, any manager or managing member of any Borrower, any manager or managing member in any limited
liability company that is a managing member of any Borrower and any member of any Borrower that is party to an Assignment of Membership
Interests.

 

    	[Summit Healthcare]	3	 

    	 

    

 

“Borrower’s
Knowledge” means the knowledge of any Borrower after diligent inquiry including, without limitation, review of existing
reports (e.g., environmental and property condition reports) regarding the Projects, inquiry of the current operator of each of
the Projects.

 

“Business
Day” means a day other than a Saturday, a Sunday, or a legal holiday on which national banks located in the State
of Illinois are not open for general banking business.

 

“Cash Management
Agreement” means any agreement existing as of the date hereof or from time to time during the term of the Loan among
Administrative Agent (on behalf of itself and the Lenders), a Borrower, a Master Tenant (or either of the foregoing) and a bank
approved by Administrative Agent regarding the establishment and operation of a lockbox account, blocked account or similar account
into which rents and other revenue are to be deposited, and includes the Deposit Account Control Agreement, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

 

“Casualty”
has the meaning assigned in Section 3.2.

 

“Census
Report” means, with respect to the Projects, a report which records the number of licensed beds for the Projects,
as well s the number of patients and patient census days by Third Party Payor source.

 

“Closing
Date” means the date the Loan is funded by the Lenders.

 

“Code”
means the Internal Revenue Code of 1986, as amended, and as it may be further amended from time to time, any successor statutes
thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

 

“Collateral”
means all real and personal property with respect to which Liens in favor of Administrative Agent are executed, identified or purported
to be granted pursuant to the Loan Documents and which secure the Obligations described in the Loan Documents and the Secured Hedge
Agreement, and includes, without limitation, all of each Borrower’s right, title and interest in, to and under all personal
property, real property, and other assets that arise from, are used in connection with, are related to or are located at the Projects,
whether now owned by or owing to, or hereafter acquired by or arising in favor of a Borrower (including all personal property and
other assets owned or acquired under any trade names, styles or derivations thereof), and whether owned or consigned by or to,
or leased from or to, a Borrower, and regardless of where located.

 

“Commercial
Lease” means any non-residential Lease of any portion of a Project, but excluding each Master Lease and the Ground
Lease.

 

“Compliance
Certificate” means the compliance certificate in the form of Schedule 7.2 attached hereto.

 

“CON”
means a certificate of need or similar certificate, license or approval issued by the State Regulator for the requisite number
of Residential Units in each of the Projects.

 

“Condemnation”
has the meaning assigned in Section 3.3.

 

    	[Summit Healthcare]	4	 

    	 

    

 

“Contest”
has the meaning assigned in Section 13.1(b).

 

“Contract
Rate” means a floating rate of interest equal to four percent (4.00%) per annum in excess of the LIBOR Rate.

 

“Control”
or “controls” means, when used with respect to any specified Person, the power to direct the management
and policies of such Person, directly or indirectly, whether through the ownership of voting securities or other beneficial interests,
by contract, by its position with such Person as general partner or managing member, or otherwise; and the terms “Controlling”
and “Controlled” have the meanings correlative to the foregoing.

 

“Debt”
means, for any Person, without duplication: (a) all indebtedness of such Person for borrowed money, for amounts drawn under a letter
of credit, or for the deferred purchase price of property for which such Person or any of its assets is liable, (b) all unfunded
amounts under a loan agreement, letter of credit, or other credit facility for which such Person or any of its assets would be
liable or subject, if such amounts were advanced under the credit facility, (c) all amounts required to be paid by such Person
as a guaranteed payment to partners or a preferred or special dividend, including any mandatory redemption of shares or interests,
(d) all indebtedness guaranteed by such Person, directly or indirectly, (e) all obligations under leases that constitute capital
leases for which such Person or any of its assets is liable or subject, and (f) all obligations of such Person under interest rate
swaps, caps, floors, collars and other interest hedge agreements, in each case whether such Person or any of its assets is liable
or subject contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations such Person otherwise
assures a creditor against loss.

 

“Debt Service”
means, for any particular period, the aggregate interest, fixed principal (if applicable), and other payments due during such period
under the Loan and under any other permitted Debt relating to the Projects expressly approved by Administrative Agent (but not
including payments applied to escrows or reserves required by Administrative Agent or the Lenders). In the event that Debt Service
for a period of twelve (12) months (or other calculation period) is not available, Administrative Agent shall annualize the Debt
Service for such period of time as is available.

 

“Debt Service
Coverage Ratio” means the ratio of (i) Adjusted Net Operating Income for the Projects for a particular period, to
(ii) Debt Service for such period.

 

“Default
Rate” means the lesser of (a) the maximum rate of interest allowed by applicable law, and (b) five percent (5%) per
annum in excess of the Contract Rate.

 

“Defaulting
Lender” means a Lender that (a) has given written notice to Borrower, Administrative Agent, or any other Lender that
it will fail to fund any amounts to be funded by such Lender after the Closing Date under this Agreement or otherwise fails to
fund such amount under this Agreement; (b) is in default for failing to make payments under one or more syndicated credit facilities
(unless subject to a good faith dispute); (c) has declared (or the holding company of such Lender has declared) bankruptcy or is
otherwise involved in a liquidation proceeding and Administrative Agent has determined such Lender is reasonably likely to become
a Defaulting Lender or (d) is the subject of a receivership.

 

    	[Summit Healthcare]	5	 

    	 

    

 

“Deposit
Account” means a “deposit account” (as defined in Article 9 of the UCC), an investment
account, or other account in which funds are held or invested for credit to or for the benefit of a Borrower.

 

“Deposit
Account Bank” means each bank in which any Borrower maintains a Deposit Account.

 

“Deposit
Account Control Agreement” means an agreement, in form and substance satisfactory to Administrative Agent, among
Administrative Agent, a Borrower and the Deposit Account Bank, which agreement provides that (a) such bank shall comply with instructions
originated by Administrative Agent directing disposition of the funds in such Deposit Account without further consent by Borrower,
and (b) such bank shall agree that it shall have no Lien on, or right of setoff or recoupment against, such Deposit Account or
the contents thereof, other than in respect of commercially reasonable fees and other items, in each such case expressly consented
to by Administrative Agent, and containing such other terms and conditions as Administrative Agent may require, as amended, restated,
supplemented or otherwise modified from time to time.

 

“Determination
Date” has the meaning assigned in Section 8.15(a).

 

“Dollars”
and the sign “$” each mean the lawful money of the United States of America.

 

“Electronic
Transmission” means any process of communication that does not directly involve the physical transfer of paper and
that is suitable for the retention, retrieval and reproduction of information by the recipient.

 

“Environmental
Indemnity Agreement” means that certain Hazardous Materials Indemnity Agreement dated of even date hereof in favor
of Administrative Agent (for itself and on behalf of the Lenders) executed by Borrower and Guarantor with respect to the Projects,
as amended, restated, supplemented or otherwise modified from time to time.

 

“Environmental
Laws” means any federal, state or local law (whether imposed by statute, ordinance, rule, regulation, administrative
or judicial order, or common law), now or hereafter enacted, governing health, safety, industrial hygiene, the environment or natural
resources, or Hazardous Materials, including, without limitation, such laws (a) governing or regulating the use, generation, storage,
removal, recovery, treatment, handling, transport, disposal, control, release, discharge of, or exposure to, Hazardous Materials,
(b) governing or regulating the transfer of property upon a negative declaration or other approval of a Governmental Authority
of the environmental condition of such property, or (c) requiring notification or disclosure of releases of Hazardous Materials
or other environmental conditions whether or not in connection with a transfer of title to or interest in property.

 

“ERISA”
means the Employment Retirement Income Security Act of 1974, as amended from time to time, and all rules and regulations promulgated
thereunder.

 

“ERISA
Affiliate” means each Restricted Party and all members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control that, together with such Restricted Party, are (or were at any time in the past
six years) treated as a single employer under Section 414 of the Internal Revenue Code.

 

    	[Summit Healthcare]	6	 

    	 

    

 

“Event
of Default” has the meaning assigned in Article 9.

 

“Extended
Maturity Date” means December 31, 2018.

 

“Extension
Request” has the meaning assigned in Section 2.3(c).

 

“FATCA”
means Sections 1471, 1472, 1473 and 1474 of the Code, as of the Closing Date (or any amended or successor version that is substantially
comparable and not materially more onerous to comply with), current or future United States Treasury Regulations promulgated thereunder
and published guidance with respect thereto, any agreements entered into pursuant to Section 1741(b)(1) of the Code and any
applicable intergovernmental agreements with respect thereto.

 

“Federal
Bankruptcy Code” means Chapter 11 of Title II of the United States Code (11 U.S.C. § 101, et seq.), as
amended.

 

“Financial
Institution” means a United States Financial Institution as defined in 31 U.S.C. 5312, as amended from time to time.

 

“FIRREA”
has the meaning assigned in Schedule 2.1.

 

“Funds”
means, collectively, the Replacement Escrow Fund, the Governmental Loan Holding Fund and the Master Lease Fund.

 

“GAAP”
means general accepted accounting principles of the Accounting Principles Board of the American Institute of Certified Public Accountants
and the Financial Accounting Standards Board that are applicable on the date so indicated and consistently applied.

 

“GE Capital”
has the meaning assigned in the Preamble to this Agreement.

 

“GECB”
has the meaning specified in Section 12.3.

 

“Governmental
Account Debtor” means any Account Debtor that is a Governmental Authority, including, without limitation, Medicare
and Medicaid.

 

“Governmental
Approvals” means, collectively, all consents, licenses and permits and all other authorizations or approvals required
from any Governmental Authority to operate the Projects.

 

“Governmental
Authority” means any federal, state, county or municipal government or political subdivision thereof, any governmental
or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality or public body (including, without
limitation, the State Regulator), or any court, administrative tribunal, or public body.

 

    	[Summit Healthcare]	7	 

    	 

    

 

“Governmental
Lender” means the Federal National Mortgage Association, the United States Department of Housing and Urban Development
or any similar Governmental Authority that provides or guaranties real estate debt financing secured by independent living, assisted
living, skilled nursing or other senior housing facilities.

 

“Governmental
Loan” means a loan to be advanced to a Borrower by a lender insured by a Governmental Lender.

 

“Governmental
Loan Commitment” means a commitment letter or letter of intent entered into on or before January 31, 2017, to a Borrower
by a lender insured by a Governmental Lender and Borrower that contemplates the funding of a Governmental Loan, in an amount sufficient
to repay the Partial Release Price in full on or before the Initial Maturity Date.

 

“Governmental
Loan Holding Fund Conditions” means (a) no Event of Default has occurred and is continuing; (b) Borrower
has delivered the Governmental Loan Commitment to Administrative Agent; (c) the Governmental Loan Commitment remains in full
force and effect; and (d) the Governmental Loan Commitment has not been amended or modified in a manner that would reduce
the funds available to Borrower to prepay the Loan to be less than the amount required to repay the Obligations in full.

 

“Governmental
Loan Holding Fund” has the meaning assigned in Section 2.5.

 

“Ground
Lease” means that certain Ground Lease, dated as of July 1, 1992, as amended by that certain Amendment of Ground
Lease, dated December 13, 1996, made by Ground Lessor, as lessor, and Redding Sundial Borrower, as assignee of Redding Assisted
Living Corp. pursuant to that certain Assignment of Lease, having an effective date of December 18, 2013, which is itself the assignee
of Hilltop Joint Venture, as lessee, pursuant to that certain Assignment of Lease, having an effective date of April 18, 1996,
all of which is evidenced by that certain Memorandum of Lease and recorded on July 7, 1992, in Book 2881, Page 130, of the official
records of Shasta County, California, as affected by that certain Memorandum of Assignment of Lease, dated as of April 18, 1996,
and recorded on April 18, 1996, as Document No. 13478 of the official records of Shasta County, California, as affected by that
certain Memorandum of Assignment of Ground Lease, dated as of December 18, 2013, and recorded on December 19, 2013, as Document
Number 2013-0043524 of the official records of Shasta County, California as the same may be further amended, restated, supplemented
and otherwise modified from time to time.

 

“Ground
Lessor” means D. Thomas McGregor and Ella McGregor, as co-trustees of The McGregor Family Trust under Declaration
of Trust dated February 18, 1992, and any successor in interest thereto.

 

“Guarantor”
means individually and collectively, (a) Summit Healthcare REIT, Inc. and (b) each other Person who executes and delivers
a Recourse Guaranty Agreement with respect to the Obligations of a Borrower under Section 13.1.

 

    	[Summit Healthcare]	8	 

    	 

    

 

“Hazardous
Materials” means (a) petroleum or chemical products, whether in liquid, solid, or gaseous form, or any fraction or
by product thereof, (b) asbestos or asbestos containing materials, (c) polychlorinated biphenyls (pcbs), (d) radon gas, (e) underground
storage tanks, (f)any explosive or radioactive substances, (g) lead or lead-based paint, (h) any other substance, material, waste
or mixture which is or shall be listed, defined, or otherwise determined by any Governmental Authority to be hazardous, toxic,
dangerous or otherwise regulated, controlled or giving rise to liability under any Environmental Laws, (i) any excessive moisture,
mildews, mold or other fungi in quantities and/or concentrations that could reasonably be expected to pose a risk to human health
or the environment, or negatively impact the value of the Projects or (j) any elements, material, compounds, mixtures, chemicals,
wastes, pollutants, contaminants or substances known to cause cancer or reproductive toxicity, that, because of its quantity, concentration
or physical or chemical characteristics, exposure is limited or regulated by any Governmental Authority having jurisdiction over
human health and safety, natural resources or the environment, or which poses a significant present or potential hazard to human
health and safety, or to the environment, if released into the workplace or the environment.

 

“Healthcare
Investigations” means any inquiries, investigations, probes, audits or proceedings concerning the business affairs,
practices, licensing or reimbursement entitlements of a Borrower, Guarantor or any Operator (including, without limitation, inquiries
involving the Comprehensive Error Rate Testing and any inquiries, investigations, probes, audit or procedures initiated by Fiscal
Intermediary/Medicare Administrator Contractor, Medicaid Integrity Contractor, Recovery Audit Contractor, Program Safeguard Contractor,
Zone Program Integrity Contractor, Attorney General, Office of Inspector General, Department of Justice or similar governmental
agencies or contractors for such agencies).

 

“Healthcare
Laws” means all applicable state and federal statutes, codes, ordinances, orders, rules, regulations, and guidance
relating to patient healthcare and/or patient healthcare information, including HIPAA, accreditation standards of the State Regulator,
the Health Information Technology for Economic Clinical Health Act provisions of the American Recovery and Investment Act of 2009
and the respective rules and regulations promulgated thereunder, and all other applicable state and federal laws regarding the
privacy and security of protected health information and other confidential patient information; the establishment, construction,
ownership, operation, licensure, use or occupancy of the Projects or any part thereof as an independent living, assisted living,
memory care, skilled nursing or other healthcare or senior living facility, as applicable, and all conditions of participation
pursuant to Medicare and/or Medicaid certification; fraud and abuse, including without limitation, Section 1128B(b) of the Social
Security Act, as amended, 42 U.S.C. Section 1320a-7(b) (Criminal Penalties Involving Medicare or State Health Care Programs), commonly
referred to as the “Federal Anti-Kickback Statute,” and the Social Security Act, as amended, Section
1877, 42 U.S.C. Section 1395nn (Prohibition Against Certain Referrals), commonly referred to as the “Stark Statute”,
31 U.S.C Section 3729-33, and the “False Claims Act”.

 

“Hedge
Agreement” means, collectively, any and all interest rate swap agreements, interest rate cap agreements, interest
rate collar agreements or other similar agreements intended to provide protection against to fluctuations in interest rates or
currency exchange rates, now or hereafter entered into by or on behalf of any Borrower pursuant to Section 2.9 of this Agreement,
as the same may be renewed, extended, amended or replaced from time to time.

 

“HIPAA”
means the Health Insurance Portability and Accountability Act of 1996, as amended.

 

    	[Summit Healthcare]	9	 

    	 

    

 

“HIPAA
Compliance Plan” has the meaning assigned in Section 8.16(a).

 

“HIPAA
Compliance Date” has the meaning assigned in Section 8.16(b).

 

“HIPAA
Compliant” has the meaning assigned in Section 8.16(a).

 

“Indebtedness”
means all payment obligations of Borrower or any Borrower Party to Administrative Agent or to any Lender under the Loan or any
of the Loan Documents, including, without limitation, any and all interest, whether or not accruing after the filing of any petition
in bankruptcy or the commencement of any insolvency, reorganization or similar proceeding, and whether or not a claim for post-filing
or post petition interest is allowed in any such proceeding.

 

“Indemnitee”
has the meaning assigned in Section 11.3.

 

“Initial
Maturity Date” means December 31, 2017.

 

“Insurance
Impound” has the meaning assigned in Section 3.4.

 

“Insurance
Premiums” has the meaning assigned in Section 3.1(c).

 

“Interest
Only Period” means the first twenty-four (24) Payment Dates commencing with the first Payment Date on February 1,
2015, and ending on the Payment Date on January 1, 2017.

 

“Land”
means the real property described in Exhibit A attached hereto.

 

“Laws”
means, collectively, all federal, state and local laws, statutes, codes, ordinances, orders, rules and regulations and guidances
and judicial opinions or presidential authority in the applicable jurisdiction, including quality and safety standards, accreditation
standards and requirements of any Governmental Authority or State Regulator having jurisdiction over Borrower or the ownership,
use, occupancy or operations of a Project, each as it may be amended from time to time.

 

“Lease
Party” means the party to any Lease that grants to the other party the right to use or occupy any portion of a Project,
whether it be Borrower or any Operator.

 

“Leases”
means all leases of, subleases of and occupancy agreements affecting a Project or any part thereof now existing or hereafter executed
(including all patient and resident care agreements and service agreements which include an occupancy agreement) and all amendments,
modifications or supplements thereto.

 

“Lender”
has the meaning assigned in the preamble to this Agreement. In addition to the foregoing, solely for the purpose of identifying
the Persons entitled to share in payments and collections from the Collateral and the benefit of any guarantees of the Obligations
as more fully set forth in this Agreement and the other Loan Documents, the term “Lender” shall include
Secured Hedge Providers. For the avoidance of doubt, any Person to whom any Obligations in respect of a Secured Hedge Agreement
are owed and which does not hold any portion of the Loan or commitments hereunder shall not be entitled to any other rights as
a “Lender” under this Agreement or the other Loan Documents.

 

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“Lender
Transferee” has the meaning assigned in Section 12.3(f).

 

“Liabilities”
means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties, sanctions,
costs, fees, taxes, commissions, charges, disbursements and expenses, in each case of any kind or nature (including interest accrued
thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether
joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.

 

“Libor
Breakage Amount” means an amount, as reasonably calculated by any Lender, equal to the amount of any losses, expenses
and liabilities (including, without limitation, any loss (including interest paid) and lost opportunity cost in connection with
the re-employment of such funds) that such Lender or any of its Affiliates may sustain as a result of any payment of the Loan (or
any portion thereof) on any day that is not the last day of the Libor Interest Period applicable thereto (regardless of the source
of such prepayment and whether voluntary, by acceleration or otherwise).

 

“Libor
Business Day” means a Business Day on which banks in the City of London are generally open for interbank or foreign
exchange transactions.

 

“Libor
Interest Period” means each period commencing on the first day of a calendar month and ending on the last day of
such month; provided, any Libor Interest Period that would otherwise extend beyond the Maturity Date shall end on the Maturity
Date.

 

“Libor
Rate” means the greater of (a) five tenths percent (0.50%) per annum or (b) for each Libor Interest Period,
the rate determined by the Administrative Agent to be the offered rate for ninety (90) day deposits in Dollars appearing on the
Reuters Screen LIBOR01 page as of 11:00 a.m. (London time) two (2) Business Days prior to the next preceding first day of each
Libor Interest Period. In the event that such rate does not appear on the Reuters Screen LIBOR01 page at such time, the “Libor
Rate” shall be determined by reference to such other comparable publicly available service for displaying the offered
rate for deposit in Dollars in the London interbank market as may be selected by the Administrative Agent and, in the absence of
availability, such other method to determine such offered rate as may be selected by the Administrative Agent in its sole discretion.

 

“Lien”
means any interest, or claim thereof, in a Project securing an obligation owed to, or a claim by, any Person other than the owner
of such Project, whether such interest is based on common law, statute or contract, including the lien or security interest arising
from a deed of trust, mortgage, assignment, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term “Lien” shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances
affecting such Project.

 

“Loan”
means the loan made by the Lenders to Borrower under this Agreement, together with all other amounts secured by the Loan Documents.

 

    	[Summit Healthcare]	11	 

    	 

    

 

“Loan Commitment”
means, with respect to each Lender, the commitment of such Lender to make its Pro Rata Share of the Loan to Borrower, which commitment
is in the amount set forth opposite such Lender’s name on Exhibit B under the caption “Lender’s
Loan Commitment.” The aggregate amount of the Loan Commitments on the date hereof is $13,400,000.00.

 

“Loan Documents”
means: (a) this Agreement, (b) each Note, (c) each Mortgage, (d) each Assignment of Leases and Rents, (e) Uniform Commercial Code
financing statements, (f) such assignments of management agreements, contracts and other rights as may be required under the Term
Sheet or otherwise requested by Administrative Agent or the Lenders, (g) the Business Associate Agreement, (h) each Recourse Guaranty
Agreement, (i) each Collateral Assignment of Membership Interests, (j) the Security Agreement, (k) each Cash Management
Agreement, (l) [Reserved], (m) each Acknowledgment of Property Manager, (n) any Secured Hedge Agreement, (o) all other documents
evidencing, securing, governing or otherwise pertaining to the Loan, (p) any letter of credit provided to Administrative Agent
(for itself and on behalf of the Lenders) in connection with the Loan, and (q) all amendments, modifications, renewals, substitutions
and replacements of any of the foregoing; provided however, in no event shall the term “Loan Documents”
include the Environmental Indemnity Agreement.

 

“Lockout
Period” means the period beginning on the Closing Date and ending on the last day of the calendar month that is twelve
(12) months thereafter.

 

“Management
Agreement” means, individually or collectively, as the context may require, each agreement, in the form approved
by Administrative Agent, between a Borrower and a Property Manager or a Master Tenant and a Property Manager pursuant to which
such Property Manager is engaged to manage a Project.

 

“Master
Lease” means, individually and collectively, as the context may require, each lease, in the form approved by Administrative
Agent, between a Borrower, as landlord, and a Master Tenant, as tenant, demising a Project in its entirety, together with all amendments,
restatements, supplements and modifications thereto permitted under Section 5.3(b) hereof.

 

“Master
Lease Fund” has the meaning assigned in Section 2.5.

 

“Master
Lease Subordination Agreement” means, individually and collectively, as the context may require, a Subordination,
Non-Disturbance and Attornment Agreement (whether one or more), in the form approved by Administrative Agent, executed by a Master
Tenant, a Borrower and Administrative Agent with respect to a Master Lease.

 

“Master
Tenant” means, individually or collectively as the context may require, each Person identified on Exhibit A
as the “Master Tenant” of a Project.

 

“Material
Action” means to file any insolvency, or reorganization case or proceeding, to institute proceedings to have a Borrower
or any Borrower Party be adjudicated bankrupt or insolvent, to institute proceedings under any applicable insolvency law, to seek
any relief under any law relating to relief from debts or the protection of debtors, to consent to the filing or institution of
bankruptcy or insolvency proceedings against a Borrower or any Borrower Party, to file a petition seeking, or consent to, reorganization
or relief with respect to a Borrower or any Borrower Party under any applicable federal or state law relating to bankruptcy or
insolvency, to seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any
similar official of or for a Borrower or any Borrower Party or a substantial part of its respective property, to make any assignment
for the benefit of creditors of a Borrower or any Borrower Party, the admission in writing such Borrower’s or any Borrower
Party of such Person’s inability to pay its debts generally as they become due, or to take action in furtherance of any of
the foregoing.

 

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“Material
Adverse Change” or “material adverse change” means, in Administrative Agent’s reasonable
discretion, the business prospects, operations or financial condition of a Person or property has changed in a manner which could
impair the value of the Collateral, prevent timely repayment of the Loan or otherwise prevent the applicable Person from timely
performing any of its material obligations under the Loan Documents or Environmental Indemnity Agreement.

 

“Material
Adverse Effect” or “material adverse effect” means, in Administrative Agent’s reasonable
discretion, a material adverse effect on (i) the condition (financial or otherwise), operations, business, assets, liabilities
or prospects of a Borrower, (ii) the ability of a Borrower to perform any material obligation under the Loan Documents, (iii) the
rights and remedies of the Administrative Agent and the Lenders under the Loan Documents, (iv) the ability of a Borrower or an
Operator to operate all or a material portion of the Projects owned by such Borrower or operated by such Operator or (v) the ability
of a Master Tenant to make the required rental payments under a Master Lease.

 

“Maturity
Date” means, as applicable, the earlier of (a) the Scheduled Maturity Date and (b) the date on which the
Obligations are required to be paid in full, by acceleration or otherwise, under this Agreement or any of the other Loan Documents.

 

“Medicaid”
means Title XIX of the Social Security Act, which was enacted in 1965 to provide a cooperative federal-state program for low income
and medically indigent persons, which is partially funded by the federal government and administered by the states.

 

“Medicare”
means Title XVIII of the Social Security Act, which was enacted in 1965 to provide a federally funded and administered health program
for the aged and certain disabled persons.

 

“Mortgage”
means, individually and collectively, each deed of trust, mortgage, deed to secure debt or similar security agreement securing
the Obligations that is executed by a Borrower in favor of, or for the benefit of, Administrative Agent, as amended, restated,
supplemented or otherwise modified from time to time.

 

“Non-U.S.
Lender Party” means each of the Administrative Agent, the Lenders and each participant, in each case that is not
a Domestic Person.

 

“Note”
and “Notes” means, respectively, (a) each Promissory Note executed at any time by a Borrower and payable
to the order of a Lender in evidence of the Loan of such Lender and (b) all such Promissory Notes, together with all renewals,
modifications and extensions thereof and any replacement or additional notes executed by any Borrower pursuant to the terms hereof.

 

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“Obligations”
means the Indebtedness and all other obligations of Borrower hereunder and under the other Loan Documents, including, without limitation,
any obligations under any Secured Hedge Agreements.

 

“OFAC”
means the Office of Foreign Assets Control, Department of the Treasury.

 

“Operational
Default” has the meaning assigned in Section 9.21(b).

 

“Operational
Default Forbearance Period” has the meaning assigned in Section 9.21(b).

 

“Operator”,
individually, and “Operators”, collectively, means the applicable Property Manager, Master Tenant, property
sublessee and/or operator under any Operating Agreement, approved by Administrative Agent and any successor to such Operator
approved by Administrative Agent. If there exists a Property Manager, Master Tenant and a property sublessee, or any combination
thereof, with respect to a Project, then “Operator” shall refer to all such entities, collectively and
individually as applicable and as the context may require.

 

“Operators’
Agreements” means, collectively, the Master Lease, the Management Agreement and/or other similar agreement regarding
the management and operation of a Project between a Borrower and a Master Tenant or a Master Tenant and a Property Manager.

 

“Other
Taxes” has the meaning assigned in Section 2.16(c).

 

“Partial
Release” has the meaning assigned in Section 2.17.

 

“Partial
Release Price” means an amount equal to the aggregate Allocated Loan Amount for both the Portland Gateway Project
and the Salem Applewood Project.

 

“Partial
Release Principal Reduction Payment” shall mean a payment of a principal an amount that, if it had been made and
applied to the principal balance of the Loan on the last day of the applicable fiscal quarter, would have reduced the principal
balance of the Loan to an amount that would have enabled the Retained Project Debt Yield and the Retained Project Debt Service
Coverage Ratio to be in compliance with the requirements specified in Section 2.17(a).

 

“Partial
Release Projects” means the Portland Gateway Project and the Salem Applewood Project.

 

“Patriot
Act” means the USA Patriot Act of 2001, Pub. L. No. 107-56.

 

“Payment
Date” means the first (1st) day of each calendar month.

 

“Permit”
means, with respect to any Person, any permit, approval, authorization, license, registration, certificate (including certificates
of occupancy), concession, grant, franchise, variance or permission from, and any other contractual obligations with, any Governmental
Authority, in each case whether or not having the force of law and applicable to or binding upon such Person or any of its property
or to which such Person or any of its property is subject.

 

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“Permitted
Exceptions” means the exceptions to title contained in the Title Policy insuring the liens created pursuant to the
Mortgages and any other title matter to which Administrative Agent consents in writing.

 

“Permitted
Member” means a Delaware limited liability company of which (A) Union Life (or another entity that is not an
Affiliate of Union Life approved by Administrative Agent in its sole discretion) holds, directly or indirectly, 90% of the membership
interests and (B) Guarantor and its Affiliates hold, directly or indirectly, 10% of the membership interests.

 

“Permitted
Transfer” means (a) a Transfer expressly permitted under Section 8.1(c) or (b) a Prohibited Transfer
approved by the Required Lenders pursuant to Section 8.1(a) or (d).

 

“Person”
means any individual, corporation, partnership, joint venture, association, joint stock company, trust, trustee, estate, limited
liability company, unincorporated organization, real estate investment trust, government or any agency or political subdivision
thereof, or any other form of entity.

 

“Portland
Gateway Borrower” has the meaning assigned in the preamble to this Agreement.

 

“Portland
Gateway Project” means the Project described on Part 1 of Exhibit A.

 

“Post-Closing
Obligations” means the post closing obligations described on Schedule 12.37.

 

“Potential
Default” means the occurrence of any event or condition which, with the giving of notice, the passage of time, or
both, would constitute an Event of Default.

 

“Primary
Licenses” means, with respect to a Project or Person operating a Project, as the case may be, the CON, permit or
license to operate as an assisted living, memory care or skilled nursing facility, as applicable, and each Medicaid/Medicare/TRICARE
provider agreement.

 

“Prohibited
Transfer” has the meaning assigned in Section 8.1(a).

 

“Projects”
means the Land, and facilities located thereon, and all related facilities, amenities, fixtures and personal property owned by
Borrower and any improvements now or hereafter located on such Land, and any other real property and facilities owned by Borrower
that may from time to time be encumbered by a Mortgage. Each Project is more particularly described on Exhibit A
hereto.

 

“Project
Yield” means the ratio, as of any particular date, expressed as a percentage, of (a) annualized Adjusted Net Operating
Income from the Projects, as determined by Administrative Agent as of such date, to (b) the outstanding principal balance of the
Loan as of such date.

 

“Property
Condition Report” has the meaning assigned in Schedule 2.1.

 

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“Property
Manager” means, individually or collectively as the context may require, each Person identified on Exhibit
A as the “Property Manager” of a Project, together with any successor thereto approved by Administrative Agent.

 

“Pro Rata
Outstandings” means, with respect to any Lender at any time, the outstanding principal amount of the Loan owing to
such Lender at such time.

 

“Pro Rata
Share” means, with respect to any Lender at any time (a) on or prior to the Closing Date, the percentage obtained
by dividing (i) the Loan Commitment of such Lender then in effect by (ii) the sum of the Loan Commitments and (b) after the making
of the Loan, the percentage obtained by dividing (i) the Pro Rata Outstandings of such Lender by (ii) the total outstanding principal
amount of the Loan; provided, however, that, if there are no Loan Commitments and no Pro Rata Outstandings, such
Lender’s Pro Rata Share shall be determined based on the Pro Rata Share most recently in effect, after giving effect to any
subsequent assignment and any subsequent non-pro rata payments of any Lender pursuant to the terms of this Agreement.

 

“Prorated
Interest” has the meaning assigned in Section 2.4(b).

 

“Recipient”
has the meaning assigned in Section 12.38.

 

“Recourse
Guaranty Agreement” means that certain Guaranty of Recourse Obligations executed by Guarantor, as amended, restated,
supplemented or otherwise modified from time to time.

 

“Redding
Sundial Borrower” has the meaning assigned in the preamble to this Agreement.

 

“Redding
Sundial Project” means the Project described on Part 2 of Exhibit A.

 

“Register”
has the meaning specified in Section 2.12(b).

 

“Related
Persons” means, with respect to any Person, each of such Person’s Affiliates, officers, directors, employees,
agents, trustees, representatives, attorneys, accountants, and each insurance, environmental, legal, financial and other advisor
and other consultants and agents of or to such Person or any of its Affiliates, together with, if such Person is the Administrative
Agent, each other Person or individual designated, nominated or otherwise mandated by or helping the Administrative Agent pursuant
to and in accordance with Section 11.4 or any comparable provision of any Loan Document.

 

“Replacement
Escrow Fund” has the meaning assigned in Section 2.5.

 

“Reports”
has the meaning assigned in Section 12.38.

 

“Required
Lenders” means, at any time, Lenders whose Pro Rata Shares at such time are in excess of 50% in the aggregate; provided,
however, the Loan Commitment of, and the portion of the Obligations held or deemed held by, any Defaulting Lender shall
be excluded for purposes of making a determination of Required Lenders.

 

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“Requirements
of Law” means, with respect to any Person, collectively, the common law and all federal, state, local, foreign, multinational
or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments,
writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration
thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether
or not having the force of law and that are applicable to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.

 

“Residential
Units” means, collectively, (a) each skilled nursing bed, Alzheimer’s unit and/or assisted living unit authorized
under the Primary Licenses and (b) each independent living unit comprising the Projects.

 

“Restoration
Threshold” means, as of any date, the lesser of (a) two and one-half percent (2.5%) of the replacement value of the
improvements at the affected Project as of such date, and (b) $500,000.00.

 

“Restricted
Party” means Borrower, any Affiliated Manager, Guarantor or any shareholder, partner, member or non-member manager
of Borrower or of any Affiliated Manager, or of any direct or indirect legal or beneficial owner of Borrower, of any Affiliated
Manager or of any shareholder, partner, member or any non-member manager hereof.

 

“Retained
Project Adjusted Expenses” means actual operating expenses (as adjusted by Administrative Agent) related to the Redding
Sundial Project on a stabilized accrual basis for the twelve (12) month period ending on a particular date, including: (i) recurring
expenses as determined under GAAP, (ii) real estate taxes, (iii) Insurance Premiums, (iv) management fees (whether paid or not)
in an amount not less than five percent (5%) of effective gross income (or the actual management fee paid, if higher) and (v) a
replacement reserve (whether reserved or not) of not less than Three Hundred Fifty and No/100 Dollars ($350.00) per Residential
Unit per annum.

 

“Retained
Project Adjusted Net Operating Income” means the Retained Project Adjusted Revenue less the Retained Adjusted Expenses,
based upon the financial reports provided by Borrowers under Article 7 and approved by Administrative Agent in its reasonable discretion.

 

“Retained
Project Adjusted Revenue” means revenues (as adjusted by Administrative Agent) generated by the operation of the
Redding Sundial Project for any particular period, as determined under GAAP, but excluding (a) nonrecurring income and non-property
related income (as determined by Administrative Agent in its sole discretion) and income from tenants that is classified
as “bad debt” under GAAP, and (b) late fees and interest income; provided, however, if actual occupancy of the Redding
Sundial Project exceeds 95%, Retained Project Adjusted Revenue shall be proportionately reduced assuming an occupancy of 95%.

 

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“Retained
Project Debt Service” means, for any particular period, (1) the aggregate interest, fixed principal, and other payments
due during such period under the Loan and under any other permitted Debt relating to the Redding Sundial Project expressly approved
by Administrative Agent (but not including payments applied to escrows or reserves required by Administrative Agent or Lenders)
minus (2) the aggregate interest, fixed principal and other payments due during such period under the Loan that would not have
been due had the Partial Release Price been paid immediately prior to the commencement of such period. In the event that Retained
Project Debt Service for a period of twelve (12) months is not available, Administrative Agent shall annualize the Retained Project
Debt Service for such period of time as is available.

 

“Retained
Project Debt Service Coverage Ratio” means, as of any particular date, the ratio of (i) the Retained Project Adjusted
Net Operating Income for the twelve (12) calendar month period ending on such date, to (ii) Retained Project Debt Service for the
twelve (12) calendar month period ending on such date.

 

“Retained
Project Debt Yield” means the ratio, as of any particular date, expressed as a percentage, of (a) Retained Project
Adjusted Net Operating Income, as determined by Administrative Agent for the twelve (12) calendar month period ending on such date,
to (b) the outstanding principal balance of the Loan (determined on a pro forma basis after deducting the Partial Release Price
therefrom) as of such date.

 

“Salem
Applewood Borrower” has the meaning assigned in the preamble to this Agreement.

 

“Salem
Applewood Project” means the Project described on Part 3 of Exhibit A.

 

“Scheduled
Maturity Date” means the Initial Maturity Date or, if the Initial Maturity Date has been extended in accordance with
Section 2.3(c), the Extended Maturity Date.

 

“Secured
Hedge Agreement” means any Hedge Agreement between a Borrower (or Affiliate of Borrower) and a Secured Hedge Provider.

 

“Secured
Hedge Provider” means (i) a Lender or an Affiliate of a Lender (or a Person who was a Lender or an Affiliate of a
Lender at the time of execution and delivery of a Hedge Agreement) who has entered into a Hedge Agreement with any Borrower, or
(ii) a Person with whom Borrower has entered into a Hedge Agreement provided or arranged by GE Capital or an Affiliate of GE Capital
or for which GE Capital or an Affiliate of GE Capital has provided credit enhancement through either an assignment right or a letter
of credit in favor of such Person, and any assignee thereof.

 

“Secured
Parties” means the Lenders and the Administrative Agent and each such Person’s Related Persons.

 

“Security”
means all of the real and personal property securing the Obligations described in the Loan Documents and the Secured Hedge Agreements.

 

“Security
Agreement” means, collectively, the Security Agreement(s) executed by Borrower in favor of Administrative Agent (for
itself and on behalf of the Lenders) covering certain personal property described therein, as amended, restated, supplemented or
otherwise modified from time to time.

 

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“Security
Deposits” means any and all security deposits and entrance fees from any tenant or occupant of a Project collected
or held by Borrower or any Operator.

 

“Single
Purpose Entity” means a Person (other than an individual, a government or any agency or political subdivision thereof),
which exists solely for the purpose of owning and leasing the Projects, observes corporate, company or partnership formalities,
as applicable, independent of any other entity, and which otherwise complies with the covenants set forth in Section 6.17
hereof.

 

“Site Assessment”
means an environmental engineering report for each Project prepared at Borrower’s expense by an engineer engaged by Borrower
or by Administrative Agent on behalf of Borrower, and approved by Administrative Agent, and in a manner reasonably satisfactory
to Administrative Agent, based upon an investigation relating to and making appropriate inquiries concerning the existence of Hazardous
Materials on or about such Project, and the past or present discharge, disposal, release or escape of any such substances, all
consistent with ASTM Standard E1527-05 (or any successor thereto published by ASTM) and good customary and commercial practice.

 

“Social
Security Act” means 42 U.S.C. 401 et seq., as enacted in 1935, and amended, restated or otherwise supplemented
thereafter from time to time and all rules and regulations promulgated thereunder.

 

“Specially
Designated National and Blocked Persons” means those Persons that have been designated by executive order or by the
sanction regulations of OFAC as Persons with whom U.S. Persons may not transact business or must limit their interactions to types
approved by OFAC.

 

“State
Regulator” has the meaning assigned in Section 8.14(a).

 

“Substitute
Lender” has the meaning assigned in Section 2.13(a).

 

“Survey”
has the meaning assigned in Schedule 2.1.

 

“Tax Impound”
has the meaning assigned to such term in Section 3.5.

 

“Taxes”
has the meaning assigned in Section 8.2.

 

“Tenant”
means any tenant or occupant of a Project under a Lease.

 

“Term Sheet”
means that certain letter agreement dated November 12, 2014, from Administrative Agent and accepted by and on behalf of Borrower
on November 12, 2014.

 

“Third
Party Payor Programs” means any participation or provider agreements with any third party payor, including Medicare,
Medicaid, TRICARE and any Approved Insurer, and any other private commercial insurance managed care and employee assistance program,
to which Borrower or any Operator may be subject with respect to any Project.

 

“Title
Policy” has the meaning assigned in Schedule 2.1.

 

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“Transfer”
means any direct or indirect sale, transfer, conveyance, mortgage, grant of lien or other interest, bargain, installment sale,
master lease, encumbrance, pledge, assignment, grant of any options with respect to, or any other transfer or disposition of (directly
or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) of
all or any portion of the direct or indirect legal or beneficial ownership of, or any interest in, (a) the Projects or any
part thereof or (b) any Restricted Party including any agreement to transfer or cede to another Person any voting management
or approved rights, or any other rights, appurtenant to such legal or beneficial ownership or other interest.

 

“Transferee”
has the meaning assigned in Section 8.1(d).

 

“TWEA”
has the meaning assigned in Section 6.19(f).

 

“UCC”
means the Uniform Commercial Code as from time to time in effect in the State of Illinois; provided, however, that,
in the event that, by reason of mandatory provisions of any applicable Requirement of Law, any of the attachment, perfection or
priority of Administrative Agent’s or any other Lender’s security interest in any Collateral is governed by the Uniform
Commercial Code of a jurisdiction other than the State of Illinois, “UCC” shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority
and for purposes of the definitions related to or otherwise used in such provisions.

 

“Union
Life” Union Life Insurance Co., Limited.

 

“U.S. Lender
Party” means each of Administrative Agent, the Lenders, and each participant of a Lender, in each case that is a
U.S. Person.

 

“U.S. Person”
means any United States citizen, any entity organized under the laws of the United States or its constituent states or territories,
or any entity, regardless of where organized, having its principal place of business within the United States or any of its territories.

 

“Withholding
Taxes” has the meaning assigned in Section 2.16.

 

“Zoning
Report” has the meaning assigned in Schedule 2.1.

 

Section
1.2.          Definitions. All terms defined in Section
1.1 above or otherwise in this Agreement shall, unless otherwise defined therein, have the same meanings when used in any other
Loan Document or Environmental Indemnity Agreement, or any certificate or other document made or delivered pursuant hereto. The
words “hereof”, “herein”, and “hereunder” and words
of similar import when used in this Agreement shall refer to this Agreement as a whole. The words “include”
and “include(s)” when used in this Agreement and the other Loan Documents or Environmental Indemnity
Agreement means “include(s), without limitation,” and the word “including”
means “including, but not limited to.”

 

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Section
1.3.          Phrases. When used in this Agreement and
the other Loan Documents or Environmental Indemnity Agreement, the phrases “satisfactory to Administrative Agent,”
“satisfactory to Lenders,” and “satisfactory to Required Lenders” shall mean
“in form and substance satisfactory to the applicable Person in all respects”, the phrases “with
Administrative Agent’s consent,” “with the Lenders’ consent,” and “with
the Required Lenders’ consent,” or “with Administrative Agent’s approval,”
“with the Lenders’ approval,” and “with the Required Lenders’ approval”
shall mean such consent or approval at such Person’s sole discretion, and the phrases “acceptable to Administrative
Agent,” “acceptable to Lenders,” and “acceptable to the Required Lenders”
shall mean “acceptable to such Person at such Person’s sole discretion” unless otherwise specified
in this Agreement.

 

ARTICLE
II

LOAN TERMS

 

Section
2.1.          The Loan. Upon satisfaction of all the
terms and conditions set forth in the Term Sheet and Schedule 2.1 attached hereto, each Lender severally, but not
jointly, agrees to make its Pro Rata Share of the Loan in Dollars to Borrower in the amount of such Lender’s Loan Commitment,
which shall be funded in one advance on the Closing Date and repaid in accordance with the terms of this Agreement and the Notes.
Each Borrower hereby agrees to accept the Loan on the Closing Date, subject to and upon the terms and conditions set forth herein.
The Loan is not a revolving credit loan, and Borrower is not entitled to any readvances of any portion of the Loan that is repaid
or prepaid.

 

Section
2.2.          Interest Rate; Late Charge; Default Rate.

 

(a)          Interest
Rate. The outstanding principal balance of the Loan shall bear interest, commencing on the Closing Date, at a floating
rate of interest equal to the Contract Rate.

 

(b)          Late
Charge. If any Borrower fails to pay any installment of interest or principal within five (5) days after the date on which
the same is due excluding the final installment due on the Maturity Date, Borrower shall pay to Administrative Agent, for the account
of the Lenders (other than any Defaulting Lender), a late charge on such past due amount, as liquidated damages and not as a penalty,
equal to five percent (5%) of such amount, but not in excess of the maximum amount of interest allowed by applicable law. The Administrative
Agent shall pay to each Lender (other than any Defaulting Lender) of the Loan its portion of the late charge based on each Lender’s
Pro Rata Share of the Loan in accordance with Section 2.6. The foregoing late charge is intended to compensate each Lender
for the expenses incident to handling any such delinquent payment and for the losses incurred by each Lender as a result of such
delinquent payment. Borrower agrees that, considering all of the circumstances existing on the date this Agreement is executed,
the late charge represents a reasonable estimate of the costs and losses each Lender will incur by reason of late payment. Borrower
and each Lender further agree that proof of actual losses would be costly, inconvenient, impracticable and extremely difficult
to fix. Acceptance of the late charge shall not constitute a waiver of the Event of Default arising from the overdue installment,
and shall not prevent any Lender from exercising any other rights or remedies available to such Lender with respect to such Event
of Default.

 

    	[Summit Healthcare]	21	 

    	 

    

 

(c)          Default
Rate. While any Event of Default exists, the Loan shall bear interest at the Default Rate.

 

Section
2.3.          Terms of Payment;
Option to Extend Scheduled Maturity Date. The Loan shall be payable as follows:

 

(a)          Principal
and Interest.

 

(i)          Borrower
shall pay to Administrative Agent, for the account of Lenders, from the proceeds of the Loan on the Closing Date a payment of interest
only on the principal balance of the Loan for the period from the Closing Date through the last day of the month in which the Closing
Date occurs, computed at the Contract Rate.

 

(ii)         Commencing
on February 1, 2015, and continuing on each Payment Date thereafter during the Interest Only Period, Borrower shall pay to Administrative
Agent for the account of the Lenders (other than a Defaulting Lender), interest only in arrears computed at the Contract Rate on
the outstanding principal balance of the Loan.

 

(iii)        Thereafter,
commencing on February 1, 2017, and continuing on each Payment Date thereafter through and including the Payment Date immediately
prior to the Maturity Date, Borrower shall pay to Administrative Agent for the account of the Lenders (other than a Defaulting
Lender) (A) interest in arrears computed at the Contract Rate on the outstanding principal balance of the Loan and (B)
installments of principal in accordance with the amortization schedule attached hereto as Schedule 2.3(a). Each of
such payments shall be applied (i) to the payment of interest computed at the Contract Rate and (ii) the balance applied
toward reduction of the principal sum. The constant payment required hereunder is based on a twenty-five (25) year amortization
schedule with an assumed interest rate of 6.0% per annum.

 

(b)          Maturity.
On the Maturity Date, Borrower shall pay to Administrative Agent, for the account of the Lenders (other than a Defaulting Lender),
all outstanding principal, accrued and unpaid interest, default interest, late charges, the Acceleration Prepayment Premium (if
applicable) and any and all other amounts due under the Loan Documents.

 

(c)          Option
to Extend Scheduled Maturity Date. Borrower may elect to extend the Scheduled Maturity Date from the Initial Maturity Date
to the Extended Maturity Date upon satisfaction of each the following conditions, as determined by Administrative Agent in its
reasonable discretion:

 

(i)          Borrower
shall have delivered to Administrative Agent a written notice of its request to extend the Scheduled Maturity Date (the “Extension
Request”) at least thirty (30) but no more than ninety (90) days before the then applicable Scheduled Maturity Date;

 

(ii)         Concurrently
with delivery of the Extension Request, Borrower shall have delivered to Administrative Agent a certificate in form and substance
satisfactory to Administrative Agent certifying that (A) no Potential Default (other than Potential Defaults that Borrower
is proceeding with diligence to cure, which cure shall be completed prior to the then-current Scheduled Maturity Date) or Event
of Default is in existence, and (B) as of the last day of the most recently ended month for which financial statements are
required to have been delivered pursuant to Section 7.1(a)(i), the Project Yield was equal to or greater than 16.0% based
upon Adjusted Net Operating Income for the twelve (12) month period ending on the last day of such month, which certificate shall
be accompanied by operating statements for the Project sufficient for Administrative Agent to verify compliance with the foregoing;

 

    	[Summit Healthcare]	22	 

    	 

    

 

(iii)        Within
five (5) Business Days following deliver of the Extension Request, Borrower shall have paid to Administrative Agent, for the benefit
of Lenders, an extension fee in an amount equal to one-quarter of one percent (0.25%) of the then outstanding principal balance
of the Loan;

 

(iv)        Borrower
shall have executed and delivered to Administrative Agent such documents as Administrative Agent shall request (A) evidencing
the extension of the Scheduled Maturity Date, (B) confirming that it has no claims, defenses or offsets with respect to the
Obligations, (C) releasing any potential claims, known or unknown, against Administrative Agent and Lenders and (D) containing
Guarantor’s reaffirmation of its obligations under its guaranty agreement entered into in connection with the Loan;

 

(v)         On
the Initial Maturity Date, as of the last day of the most recently ended month for which financial statements are required to have
been delivered pursuant to Section 7.1(a)(i), the Project Yield was equal to or greater than 16.0% based upon Adjusted
Net Operating Income for the twelve (12) month period ending on the last day of such month; and

 

(vi)        If
requested by Administrative Agent, Borrower shall have delivered to Administrative Agent an endorsement to each Title Policy insuring
the absence of intervening liens (excluding ad valorem taxes, a lien not yet payable).

 

Section
2.4.          Prepayment.

 

(a)          Lock-Out
Period. Except as set forth herein, the Loan is closed to prepayment in whole or in part. Notwithstanding the foregoing,
the Loan may be prepaid in whole, but not in part, at any time following the expiration of the Lockout Period without payment of
any Acceleration Prepayment Premium, provided Borrower pays with such prepayment all accrued interest and all other outstanding
amounts then due and unpaid under the Loan Documents.

 

(b)          Reserved.

 

(c)          Prepayment
Not Made on a Payment Date. If for any reason the Loan or any portion thereof is prepaid on a day other than a scheduled
monthly Payment Date, interest shall be prorated through the date of prepayment (the “Prorated Interest”).
On the prepayment date, Borrower shall pay to Administrative Agent, for the account of Lenders, the outstanding principal balance
of the Loan, Prorated Interest and Libor Breakage Amount, and any other amounts, if any, required under this Agreement.

 

(d)          Involuntary
Prepayment. If the Loan is accelerated for any reason other than casualty or condemnation, and the Loan is otherwise closed
to prepayment, Borrower shall pay to Administrative Agent, for the account of the Lenders, in addition to all other amounts outstanding
under the Loan Documents, a prepayment premium equal to the sum of (i) the Libor Breakage Amount and (ii) two percent (2%) of the
outstanding balance of the Loan (the “Acceleration Prepayment Premium”).

 

    	[Summit Healthcare]	23	 

    	 

    

 

(e)          Prepayment
Due to Casualty or Condemnation. In the event of a prepayment resulting from the application of insurance or condemnation
proceeds pursuant to Article 3 hereof, no prepayment penalty or premium shall be imposed.

 

(f)          Character
of Acceleration Prepayment Premium.  The Acceleration Prepayment Premium does not constitute a penalty, but rather represents
the reasonable estimate, agreed to between Borrower and each Lender, of fair compensation for the loss that may be sustained by
such Lender due to the payment of the principal Indebtedness prior to the Maturity Date and/or the increased cost and expense to
such Lender resulting from an acceleration of the Loan. Any Acceleration Prepayment Premium shall be paid without prejudice to
the right of any Lender to collect on its behalf any of the amounts owing under the Note, this Loan Agreement or the other Loan
Documents or otherwise, to enforce any of its rights or remedies arising out of an Event of Default.

 

(g)          Partial
Prepayment. If, notwithstanding Section 2.4(a), Administrative Agent permits the Loan to be prepaid in part, Borrower
shall pay, in addition to the principal amount prepaid, pro-rated interest on the amount of such prepayment plus any Libor Breakage
Amount applicable to such principal being prepaid. Partial prepayments may be made following the expiration of the Lockout Period
to the extent permitted under Section 2.17.

 

Section
2.5.          Security; Establishment of Funds.

 

(a)          Security.
The Loan shall be secured by the Mortgage creating a first lien on the Projects, the Assignment of Leases and Rents and the other
Loan Documents.

 

(b)          Establishment
of Funds; Disbursement of Funds.

 

(i)          Borrower
shall deposit with Administrative Agent on each Payment Date, the product of Thirty Dollars ($30) multiplied by the number of Residential
Units in the Projects, which shall be held by Administrative Agent for replacements and repairs required to be made to the Projects
during the term of the Loan (the “Replacement Escrow Fund”).

 

(ii)         Administrative
Agent shall make disbursements from the Replacement Escrow Fund as requested by Borrower, and approved by Administrative Agent
in its reasonable discretion, on a monthly basis in increments of no less than $5,000.00 upon delivery by Borrower of Administrative
Agent’s standard form of draw request accompanied by copies of paid invoices for the amounts requested and, if required by
Administrative Agent, lien waivers and releases from all parties furnishing materials and/or services in connection with the requested
payment. Administrative Agent may require an inspection of the Projects at Borrower’s expense prior to making a monthly disbursement
in order to verify completion of replacements and repairs for which reimbursement is sought.

 

    	[Summit Healthcare]	24	 

    	 

    

 

(c)          Establishment
of Governmental Loan Holding Fund. If, on or before January 31, 2017, Borrower provides Administrative Agent with a Governmental
Loan Commitment, then Administrative Agent shall place, following receipt thereof, each scheduled installment of principal paid
by Borrower pursuant to Section 2.3(a) into a reserve (the “Governmental Loan Holding Fund”) in
lieu of releasing such installment to Lenders for application to the outstanding principal balance of the Loan, provided the Governmental
Loan Holding Fund Conditions are satisfied on such date. If, on or before the Initial Maturity Date, the Obligations are repaid
in full, the funds contained in the Governmental Loan Holding Fund shall be released to Borrower in connection with such repayment.
If the Obligations are not repaid in full on or before the Initial Maturity Date, or if at any time the Governmental Loan Holding
Fund Conditions cease to be satisfied, the funds then contained in the Governmental Loan Holding Fund shall be released to Lenders
and applied to the outstanding principal balance of the Loan on the Initial Maturity Date or, if sooner, at any time following
the date upon which the Governmental Loan Holding Conditions cease to be satisfied. For avoidance of doubt, the outstanding principal
balance of the Loan, unreduced by the funds contained in Governmental Loan Holding Fund, shall bear interest in accordance with
Section 2.2.

 

(d)          Establishment
of Master Lease Fund. Each Borrower hereby agrees to the establishment of a reserve for each Project (each, a “Master
Lease Fund”), into which, during any period in which a Project is not in compliance with the “Minimum Rent
Coverage” (as defined under the Master Lease applicable to such Project) specified for such Project in the applicable Master
Lease, the applicable Borrower shall deposit an amount equal to the additional monthly deposit required under such Master Lease
to be deposited with Borrower by the Master Tenant thereunder, to the extent such deposit is made by the Master Tenant. Upon such
time as the applicable Borrower delivers evidence reasonably satisfactory to Administrative Agent (and Administrative Agent confirms
to its reasonable satisfaction) that such Project has been in compliance with the “Minimum Rent Coverage” applicable
thereto for a period of six (6) consecutive months, and provided no Event of Default is then in existence, the funds contained
in the applicable Master Lease Fund shall be released to the applicable Borrower.

 

(e)          Funds,
Generally; Pledge of Security Interest. Borrower hereby pledges to Administrative Agent and the Lenders, and grants a security
interest in, any and all monies now or hereafter deposited in the Funds as additional security for the payment of the Loan. Administrative
Agent shall hold the Funds, and any and all other impounds or reserves otherwise provided for in this Agreement, for the benefit
of all Lenders. The Lenders and Borrower acknowledge and agree that the Funds may be commingled with Administrative Agent’s
own funds at financial institutions selected by Administrative Agent in its reasonable discretion and, except as otherwise expressly
provided herein, shall be held without interest in Administrative Agent’s name. Upon the occurrence of an Event of Default,
Administrative Agent may (and at the direction of the Required Lenders shall) apply any sums then present in the Funds to the payment
of the Loan in any order in the reasonable discretion of Administrative Agent. Until expended or applied as above provided, the
Funds shall constitute additional security for the Loan. Administrative Agent shall have no obligation to release any of the Funds
while any Event of Default or Potential Default exists or any Material Adverse Change has occurred in Borrower or any Borrower
Party or the Projects. All costs and expenses reasonably incurred by Administrative Agent in the disbursement of any of the Funds
shall be paid by Borrower promptly upon demand or, at Administrative Agent’s sole discretion, deducted from the Funds.

 

    	[Summit Healthcare]	25	 

    	 

    

 

Section
2.6.          Application of Payments. 

  

(a)          Waterfall.
Prior to the occurrence of an Event of Default, all payments received by Administrative Agent under the Loan Documents shall be
applied, (i) first, to pay Obligations in respect of any cost or expense reimbursements, fees or indemnities then due to
the Administrative Agent pursuant to this Agreement or any Loan Document, (ii) second, to pay interest then due and payable
to the Lenders (other than a Defaulting Lender) calculated at the Contract Rate, (iii) third, to pay Obligations in respect
of any cost or expense reimbursements, fees or indemnities then due to the Lenders (other than a Defaulting Lender) in respect
of the Loan pursuant to this Agreement or any Loan Document, (iv) fourth, subject to Section 2.5(b), to principal
payments due under the Loan owing to the Lenders (other than a Defaulting Lender) and to the Obligations under the Secured Hedge
Agreements, (v) fifth, to any reserves, escrows or other impounds required to be maintained pursuant to the Loan Documents,
(vi) sixth, to the ratable payment of all other Obligations (other than Obligations owing to a Defaulting Lender); and (vii)
seventh, to repay all other Obligations owing to a Defaulting Lender. Upon the occurrence of an Event of Default, all payments
shall be applied in such order as the Administrative Agent shall determine in its sole discretion. Notwithstanding anything herein
to the contrary, if at any time following an Event of Default or acceleration of the Obligations or on or after the Maturity Date,
the Administrative Agent applies any payments received or the proceeds of any Collateral to principal payments on the Loan, the
Administrative Agent shall apply such payments or proceeds pro rata between such principal payments on the Loan and the Obligations
under the Secured Hedge Agreements based on the outstanding principal balance of the Loan and the Obligations under Secured Hedge
Agreements.

 

(b)          Application
of Payments Generally. All repayments of the Loan shall be applied to reduce ratably the remaining installments of such
outstanding principal amounts of the Loan in the inverse order of maturity. If sufficient amounts are not available to repay all
outstanding Obligations described in any priority level set forth in this Section 2.6, the available amounts shall be applied,
unless otherwise expressly specified herein, to such Obligations ratably based on the proportion of the Secured Parties’
interest in such Obligations. Any priority level set forth in this Section 2.6 that includes interest shall include all
such interest, whether or not accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization
or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed in any such proceeding.
All prepayments of principal shall be applied in the inverse order of maturity.

 

(c)          Payments
and Computations.  Borrower shall make each payment under any Loan Document not later than 1:00 p.m. (Eastern Standard
or Daylight Savings time) on the day when due to the Administrative Agent by wire transfer or Automated Clearing House (“ACH”)
transfer (which shall be the exclusive means of payment hereunder), which payments shall be initiated by Administrative Agent,
at its election, to the following account (or at such other account or by such other means to such other address as the Administrative
Agent shall have notified Borrower in writing within a reasonable time prior to such payment) in immediately available Dollars
and without setoff or counterclaim:

 

	Bank:	Deutsche Bank Trust Co.
	 	New York, New York
	ABA No.:	021001033
	Account Number:	50-256-477

 

    	[Summit Healthcare]	26	 

    	 

    

 

	Account Name:   	GE HFS - GEMSA
	Reference Loan No.:	07- 0004596

  

The Administrative Agent
shall cause to be distributed immediately available funds relating to the payment of principal, interest or fees to the Lenders,
in accordance with the application of payments set forth in Section 2.6(a) promptly after receipt or deemed receipt, but
no later than one Business Day following receipt (or deemed receipt) by Administrative Agent. Administrative Agent shall have no
obligation to make any payments to a Lender except out of amounts received or applied by Administrative Agent with respect to the
Loan, and only if and to the extent payable in accordance with Section 2.6(a). Payments received by the Administrative
Agent after 1:00 p.m. (Eastern Standard or Daylight Savings time) shall be deemed to be received on the next Business Day.

 

(d)          Computations
of Interest and Fees. All computations of interest and of fees shall be made by the Administrative Agent on the basis of
a fraction, the denominator of which is three hundred sixty (360) and the numerator of which is the actual number of days elapsed
from the Closing Date or the date of the preceding Payment Date, as the case may be, to the date of the next Payment Date or the
Maturity Date. Each determination of an interest rate or the amount of a fee hereunder shall be made by the Administrative Agent
and shall be conclusive, binding and final for all purposes, absent manifest error.

 

(e)          Payment
Dates. Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, the due date for such
payment shall be extended to the next succeeding Business Day without any increase in such payment as a result of additional interest
or fees.

 

(f)          Advancing
Payments. Unless the Administrative Agent shall have received notice from Borrower prior to the date on which any payment
is due hereunder that Borrower will not make such payment in full, the Administrative Agent may assume that Borrower has made such
payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause
to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that
Borrower shall not have made such payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent
on demand such amount distributed to such Lender together with interest thereon (at the Contract Rate) for each day from the date
such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent.

 

Section
2.7.          Sources and Uses. The sources and uses
of funds for the contemplated transaction are as described on Schedule 2.7 attached hereto. Borrower shall deliver
such information and documentation as Administrative Agent shall request to verify that the sources and uses are as indicated on
Schedule 2.7. A reduction in the amounts necessary for any of the uses may, at Administrative Agent’s election,
shall result in an equal reduction in the amount of the Loan. The proceeds of the Loan are intended and will be used for agricultural,
business and/or commercial purposes and are not intended and will not be used for personal, family or household purposes.

 

    	[Summit Healthcare]	27	 

    	 

    

  

Section
2.8.          Capital Adequacy; Increased Costs; Illegality.

 

(a)          If
any Lender determines that any law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or order regarding
capital adequacy, reserve requirements or similar requirements or compliance by such Lender with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not having the force of law), in each case, adopted
after the Closing Date, from any central bank or other Governmental Authority increases or would have the effect of increasing
the amount of capital, reserves or other funds required to be maintained by Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrower shall from time to time upon demand by such Lender,
pay to Lender, additional amounts sufficient to compensate Lender for such reduction. A certificate as to the amount of that reduction
and showing the basis of the computation thereof submitted by the affected Lender to Borrower shall, absent manifest error, be
final, conclusive and binding for all purposes. Each Lender agrees that, as promptly as practicable after it becomes aware of any
circumstances referred to above which would result in any such increased cost, such Lender shall, to the extent not inconsistent
with such Lender's internal policies of general application, use reasonable commercial efforts to minimize costs and expenses incurred
by it and payable to it by Borrower pursuant to this Section 2.8(a).

 

(b)          If,
due to either (i) the introduction of or any change in any law or regulation (or any change in the interpretation thereof) (other
than changes in income taxes) or (ii) the compliance with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), in each case adopted after the Closing Date, there shall be any increase in
the cost to any Lender of agreeing to make or making, funding or maintaining the Loan, then Borrower shall from time to time, upon
demand by such Lender, pay to such Lender, additional amounts sufficient to compensate such Lender for such increased cost. A certificate
as to the amount of such increased cost, submitted to Borrower by such Lender, shall be conclusive and binding on Borrower for
all purposes, absent manifest error. Each Lender agrees that, as promptly as practicable after it becomes aware of any circumstances
referred to above which would result in any such increased cost, such Lender shall, to the extent not inconsistent with such Lender's
internal policies of general application, use reasonable commercial efforts to minimize costs and expenses incurred by it and payable
to it by Borrower pursuant to this Section 2.8(b).

 

(c)          Notwithstanding
anything to the contrary contained herein, if the introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful,
for any Lender to agree to make or to make or to continue to fund or maintain any Loan bearing interest computed by reference to
the Libor Rate, then, unless such Lender is able to make or to continue to fund or to maintain the Loan at another office of such
Lender without, in such Lender's opinion, adversely affecting it or its Loan or the income obtained therefrom, on notice thereof
and demand therefor by such Lender to Borrower, (i) the obligation of such Lender to agree to make or to make or to continue to
fund or maintain the Loan shall terminate and (ii) Borrower shall prepay in full such Lender’s Pro Rata Share of the Loan,
together with interest accrued thereon, but without payment of any Acceleration Prepayment Premium, within thirty (30) days following
such Lender's demand for payment unless such Lender determines a replacement index and spread to approximate the Contract Rate
before such change in law or regulation. Each Lender will use its best efforts to determine such replacement index and spread and
will notify Borrower of the index and spread to be used and the same shall be applied to the Loan effective as of the date such
Lender determined that the Libor Rate was no longer available.

 

    	[Summit Healthcare]	28	 

    	 

    

 

(d)          Notwithstanding
anything herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines
or directives thereunder or issued in connection therewith shall be deemed to be a change in a Requirement of Law under subsection
(b) above and/or a change in capital adequacy requirements under subsection (a) above, as applicable, regardless of the date enacted,
adopted or issued.

 

Section
2.9.          Interest Rate Protection. Borrower, at
its sole cost and expense, may obtain and maintain, at its option and otherwise in compliance with this Section, an interest rate
cap for the benefit of Borrower pursuant to one or more Hedge Agreements reasonably satisfactory to the Administrative Agent. The
Hedge Agreement shall, at Administrative Agent’s request, be collaterally assigned to Administrative Agent (for the benefit
of Lenders). Any such Hedge Agreement shall be provided by either Administrative Agent or any Lender (or an Affiliate of such Person)
or a bank or other financial institution whose long-term debt rating is equal to or greater than “A”.
Upon repayment of the Obligations in full, Administrative Agent shall assign the Hedge Agreement back to Borrower or an Affiliate
of Borrower. Except in connection with a Secured Hedge Agreement, the Projects shall not be pledged or encumbered in any manner
to secure any obligation under the Hedge Agreement. Borrower shall not enter into any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement or other similar agreement pertaining to fluctuations in interest rates, or any swaps,
caps or collar agreements or similar arrangements providing for protection against fluctuations in currency exchange rates, either
generally or under specific contingencies, other than the Hedge Agreement contemplated by this Section 2.9, and not for
speculative purposes.

 

Section
2.10.         Libor Breakage Amount. Upon any payment of
the Loan (or any portion thereof) on any day that is not the last day of the Libor Interest Period applicable thereto (regardless
of the source of such prepayment and whether voluntary, by acceleration or otherwise), Borrower shall pay to Administrative Agent,
for the account of Lenders (other than a Defaulting Lender) the Libor Breakage Amount. For purposes of calculating the Libor Breakage
Amount payable to a Lender under this Section 2.10, each Lender shall be deemed to have actually funded the Loan through
the purchase of a deposit bearing interest at the Libor Rate in an amount equal to the amount of the Loan and having a maturity
and repricing characteristics comparable to the relevant Libor Interest Period; provided, however, that each Lender
may fund its Pro Rata Share of the Loan in any manner it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this Section 2.10.

 

Section
2.11.         Loan Origination Fee. Borrower agrees to pay to the
Administrative Agent for the benefit of the Lenders on the Closing Date a loan origination fee in an amount equal to 0.95% of the
amount of the Loan, which fee shall be fully earned, due and payable and non-refundable on the Closing Date.

 

    	[Summit Healthcare]	29	 

    	 

    

  

Section
2.12.         Evidence of Debt.

 

(a)          Records
of Lenders. Each Lender shall maintain in accordance with its usual practice accounts evidencing the Indebtedness of Borrower
to each Lender resulting from the Pro Rata Share of the Loan of such Lender from time to time outstanding, including the amounts
of principal and interest payable and paid to such Lender from time to time under this Agreement. In addition, with respect to
each Lender having sold a participation interest in any of the Obligations owing to it, such Lender, acting as agent of Borrower
solely for this purpose and solely for tax purposes, shall establish and maintain at its address referred to in Section 12.1
(or at such other address as Administrative Agent shall notify Borrower) a record of ownership, in which such Lender shall register
by book entry (A) the name and address of each such participant (and each change thereto, whether by assignment or otherwise) and
(B) the rights, interest or obligation of each such participant in any Obligation owing to such Lender, in any Loan Commitment
or any portion of the Loan and in any right of such Lender to receive any payment hereunder.

 

(b)          Records
of Administrative Agent. The Administrative Agent, acting as agent of Borrower solely for tax purposes and solely with
respect to the actions described in this Section 2.12, shall establish and maintain at its address referred to in Section
12.1 (or at such other address as the Administrative Agent may notify Borrower) (i) a record of ownership (the “Register”)
in which the Administrative Agent agrees to register by book entry the interests (including any rights to receive payment hereunder)
of each Lender in the Loan and the Pro Rata Outstandings, and any assignment of any such interest, obligation or right and (ii)
accounts in the Register in accordance with its usual practice in which it shall record (A) the names and addresses of the Lenders
(and each change thereto pursuant to Section 2.13 (Substitution of Lenders) and Section 12.3 (Assignments and Participations;
Binding Effect)), (B) the Loan Commitments of each Lender, (C) the amount of each of the Pro Rata Outstandings and any assignment
of a Lender’s Pro Rata Share of the Loan, (D) the amount of any principal or interest due and payable or paid, and (E) any
other payment received by the Administrative Agent from Borrower and its application to the Obligations.

 

(c)          Registered
Obligations. Notwithstanding anything to the contrary contained in this Agreement, the Loan (including any Notes evidencing
the Loan) shall constitute a registered obligation, the right, title and interest of the Lenders and their assignees in and to
the Loan shall be transferable only upon notation of such transfer in the Register and no assignment thereof shall be effective
until recorded therein. This Section 2.12 and Section 12.3 shall be construed so that the Loan is at all times maintained
in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any
related regulations (and any successor provisions).

 

(d)          Prima
Facie Evidence. The entries made in the Register and in the accounts maintained pursuant to clauses (a) and (b)
of this Section 2.12 shall, to the extent permitted by applicable Requirements of Law, be prima facie evidence of the existence
and amounts of the obligations recorded therein; provided, however, that no error in such account and no failure
of any Lender or the Administrative Agent to maintain any such account shall affect the obligations of Borrower or any Borrower
Party to repay the Loan in accordance with its terms. In addition, Borrower, the Administrative Agent, and the Lenders shall treat
each Person whose name is recorded in the Register as a Lender for all purposes of this Agreement. Information contained in the
Register with respect to any Lender shall be available for access by Borrower, the Administrative Agent and such Lender at any
reasonable time and from time to time upon reasonable prior notice. No Lender shall have access to or be otherwise permitted to
review any information in the Register other than information with respect to such Lender unless otherwise agreed by the Administrative
Agent.

 

    	[Summit Healthcare]	30	 

    	 

    

 

Section
2.13.         Substitution of Lenders. 

 

(a)          In
the event that any Lender that is not an Affiliate of the Administrative Agent (an “Affected Lender”),
(i) makes a claim under Section 2.8 or notifies Borrower and the Administrative Agent pursuant to Section 2.8 that
it becomes illegal for such Lender to continue to fund or maintain its Pro Rata Share of the Loan using the Libor Rate or (ii)
does not consent to any amendment, waiver or consent to any Loan Document or the Environmental Indemnity Agreement for which the
consent of the Required Lenders is obtained but that requires the consent of other Lenders, Borrower may, without regard to the
Lockout Period, either pay in full such Affected Lender with respect to amounts due with the consent of the Administrative Agent
or substitute for such Affected Lender any Lender or any Affiliate or Approved Fund of any Lender or any other Person acceptable
(which acceptance shall not be unreasonably withheld or delayed) to the Administrative Agent (in each case, a “Substitute
Lender”).

 

(b)          To
substitute such Affected Lender or pay in full the Obligations owed to such Affected Lender, Borrower shall deliver a notice to
the Administrative Agent and such Affected Lender. The effectiveness of such payment or substitution shall be subject to the delivery
to the Administrative Agent by Borrower (or, as may be applicable in the case of a substitution, by the Substitute Lender) of (i)
payment for the account of such Affected Lender, of, to the extent accrued through, and outstanding on, the effective date for
such payment or substitution, all Obligations owing to such Affected Lender (including those that will be owed because of such
payment and all Obligations that would be owed to such Lender if it was solely a Lender), and (ii) in the case of a substitution,
(A) payment by the Substitute Lender of the assignment fee set forth in Section 12.3 and (B) an assumption agreement in
form and substance satisfactory to the Administrative Agent whereby the Substitute Lender shall, among other things, agree to be
bound by the terms of the Loan Documents and assume the Loan Commitment of the Affected Lender.

 

(c)          Upon
satisfaction of the conditions set forth in clause (b) above, the Administrative Agent shall record such substitution or
payment in the Register, whereupon (i) in the case of any payment in full, such Affected Lender’s Loan Commitments shall
be terminated and (ii) in the case of any substitution, (A) the Affected Lender shall sell and be relieved of, and the Substitute
Lender shall purchase and assume, all rights and claims of such Affected Lender under the Loan Documents with respect to the Loan,
except that the Affected Lender shall retain such rights expressly providing that they survive the repayment of the Obligations
and the termination of the Loan Commitments, (B) the Substitute Lender shall become a “Lender” hereunder
having a Loan Commitment in the amount of such Affected Lender’s Loan Commitment and (C) the Affected Lender shall execute
and deliver to the Administrative Agent an Assignment to evidence such substitution and deliver any Note in its possession; provided,
however, that the failure of any Affected Lender to execute any such Assignment or deliver any such Note shall not render
such sale and purchase (or the corresponding assignment) invalid.

 

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Section
2.14.         Defaulting Lenders.

 

(a)          Cure
of Defaulting Lender Status.  A Defaulting Lender may regain its status as a non-defaulting Lender hereunder upon satisfaction
of each of the following conditions, as applicable: (i) payment by such Defaulting Lender of all amounts owing hereunder (whether
to the Administrative Agent for indemnity purposes or otherwise); (ii) receipt by Administrative Agent of (A) a written revocation
by Defaulting Lender of any written notice by Defaulting Lender to Borrower, Administrative Agent, or any other Lender that such
Defaulting Lender will fail to fund under this Agreement, or (B) evidence satisfactory to Administrative Agent (in consultation
with the Required Lenders) that such Defaulting Lender has publicly revoked any public announcement of the same; (iii) evidence
satisfactory to Administrative Agent (in consultation with the Required Lenders) that such Defaulting Lender is no long in default
for failing to make payments under one or more syndicated credit facilities; and (iv) evidence satisfactory to Administrative Agent
(in consultation with the Required Lenders) that such Defaulting Lender (or the holding company of such Defaulting Lender) is no
longer the subject of a bankruptcy proceeding and is not otherwise involved in any liquidation proceeding, and Administrative Agent
has determined such Defaulting Lender is able to meet its obligations hereunder.

 

(b)          Right
of Offset.  Anything herein to the contrary notwithstanding, upon receipt of any payment from Borrower hereunder for the
account of the Lenders, Administrative Agent may, in its discretion, offset against a Defaulting Lender’s Pro Rata Share
of such payment, the amount of any unfunded reimbursement obligations of such Defaulting Lender.

 

(c)          Replacement
of Defaulting Lender. If any Lender is a Defaulting Lender, the Administrative Agent may, upon notice to such Lender and
Borrower, replace such Lender by causing such Lender to assign its Loan (with the related assignment fee to be paid by such Defaulting
Lender) pursuant to Section 12.3 to one or more Persons eligible under such Section procured by the Administrative Agent.
Borrower shall pay in full all principal, interest, fees and other amounts owing to such Defaulting Lender through the date of
replacement. Any Defaulting Lender being replaced under this Section 2.14(c) shall execute and deliver an Assignment with
respect to such Lender’s Loan.

 

Section
2.15.         Fees and Expenses. Borrower agrees to pay to
the Administrative Agent for the benefit of the Lenders the fees and expenses provided in the Term Sheet.

 

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Section
2.16.         Withholding Taxes.

 

(a)          Payments
Free and Clear of Withholding Taxes.  Except as otherwise provided in this Section 2.16, each payment by Borrower
under any Loan Document shall be made free and clear of all present or future taxes, levies, imposts, deductions, charges or withholdings
and all liabilities with respect thereto (and without deduction for any of them) (collectively, but excluding the taxes set forth
in clauses (i) and (ii) below, the “Withholding Taxes”) other than for (i) taxes measured
by net income (including branch profits taxes) and franchise taxes imposed in lieu of net income taxes, in each case imposed on
any Lender as a result of a connection between such Lender and the jurisdiction of the Governmental Authority imposing such tax
or any political subdivision or taxing authority thereof or therein (other than such connection arising solely from any Lender
having executed, delivered or performed its obligations or received a payment under, or enforced, any Loan Document), (ii) taxes
that are directly attributable to the failure (other than as a result of a change in any Requirement of Law) by any Lender to deliver
the documentation required to be delivered pursuant to clause (f) below, (iii) Withholding Taxes to the extent that
the obligation to withhold amounts existed on the date that such Lender became a “Lender” under this Agreement in the
capacity under which such Lender makes a claim under this clause (b), except in each case to the extent such Lender is a direct
or indirect assignee (other than pursuant to Section 2.13 (Substitution of Lenders)) of any other Lender that
was entitled, at the time the assignment of such other Lender became effective, to receive additional amounts under Section 2.16(b)
or (iv) any United States federal withholding Taxes imposed under FATCA.

 

(b)          Gross-Up.
If any Withholding Taxes shall be required by any Requirements of Law to be deducted from or in respect of any amount payable under
any Loan Document or the Environmental Indemnity Agreement to any Lender and such Taxes are Withholding Taxes (i) such amount shall
be increased as necessary to ensure that, after all required deductions for Withholding Taxes are made (including deductions applicable
to any increases to any amount under this Section 2.16), such Lender receives the amount it would have received had no such
deductions been made, (ii) Borrower shall make such deductions, (iii) the relevant Lender shall timely pay the full amount deducted
to the relevant taxing authority or other authority in accordance with applicable Requirements of Law and (iv) within 30 days after
such payment is made, Borrower shall deliver to Administrative Agent an original or certified copy of a receipt evidencing such
payment; provided, however, that no such increase shall be made with respect to, and Borrower shall not be required
to indemnify any such Lender pursuant to clause (d) below for, Withholding Taxes to the extent that the obligation to withhold
amounts existed on the date that such Lender became a “Lender” under this Agreement in the capacity under
which such Lender makes a claim under this clause (b), except in each case to the extent such Lender is a direct or indirect
assignee (other than pursuant to Section 2.13 (Substitution of Lenders)) of any other Lender that was entitled, at the time
the assignment of such other Lender became effective, to receive additional amounts under this clause (b).

 

(c)          Other
Taxes. In addition, Borrower agrees to pay or cause to be paid, and authorizes Administrative Agent to pay in its name,
any stamp, documentary, excise or property tax, charges or similar levies imposed by any applicable Requirement of Law or Governmental
Authority and all Liabilities with respect thereto (including by reason of any delay in payment thereof), in each case arising
from the execution, delivery or registration of, or otherwise with respect to, any Loan Document or any transaction contemplated
therein (collectively, “Other Taxes”). Within thirty (30) days after the date of any payment of Withholding
Taxes or Other Taxes by Borrower, Borrower shall furnish to Administrative Agent, at its address referred to in Section 12.1,
the original or a certified copy of a receipt evidencing payment thereof.

 

(d)          Indemnification.
Borrower shall reimburse and indemnify, within thirty (30) days after receipt of demand therefor (with copy to Administrative Agent),
each Lender for all Withholding Taxes and Other Taxes (including any Withholding Taxes and Other Taxes imposed by any jurisdiction
on amounts payable under this Section 2.16) paid by such Lender and any Liabilities arising therefrom or with respect thereto,
whether or not such Withholding Taxes or Other Taxes were correctly or legally asserted. A certificate of the Lender (or of Administrative
Agent on behalf of such Lender) claiming any compensation under this clause (d), setting forth the amounts to be paid thereunder
and delivered to Borrower with copy to Administrative Agent, shall be conclusive, binding and final for all purposes, absent manifest
error. In determining such amount, Administrative Agent and such Lender may use any reasonable averaging and attribution methods.

 

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(e)          Mitigation.
 Any Lender claiming any additional amounts payable pursuant to this Section 2.16 shall use its reasonable efforts (consistent
with its internal policies and Requirements of Law) to change the jurisdiction of its lending office if such a change would reduce
any such additional amounts (or any similar amount that may thereafter accrue) and would not, in the sole determination of such
Lender, be otherwise disadvantageous to such Lender.

 

(f)          Tax
Forms. 

 

(i)          Each
Non-U.S. Lender Party that, at any of the following times, is entitled to an exemption from United States Withholding Tax or, after
a change in any Requirement of Law, is subject to such Withholding Tax at a reduced rate under an applicable tax treaty, shall
(w) on or prior to the date such Non-U.S. Lender Party becomes a “Non-U.S. Lender Party” hereunder, (x)
on or prior to the date on which any such form or certification expires or becomes obsolete, (y) after the occurrence of any event
requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (i) and (z)
from time to time if requested by Borrower or Administrative Agent (or, in the case of a participant, the relevant Lender), provide
Administrative Agent and Borrower (or, in the case of a participant, the relevant Lender) with two completed originals of each
of the following, as applicable: (A) Forms W-8ECI (claiming exemption from U.S. withholding tax because the income is effectively
connected with a U.S. trade or business), W-8BEN (claiming exemption from, or a reduction of, U.S. withholding tax under an income
tax treaty), W-8IMY or any successor forms, (B) in the case of a Non-U.S. Lender Party claiming exemption under Sections 871(h)
or 881(c) of the Code, Form W-8BEN (claiming exemption from U.S. withholding tax under the portfolio interest exemption) or any
successor form and a certificate in form and substance acceptable to Administrative Agent that such Non-U.S. Lender Party is not
(1) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of
Borrower within the meaning of Section 881(c)(3)(B) of the Code or (3) a “controlled foreign corporation” described
in Section 881(c)(3)(C) of the Code or (C) any other applicable document prescribed by the IRS certifying as to the entitlement
of such Non-U.S. Lender Party to such exemption from United States withholding tax or reduced rate with respect to all payments
to be made to such Non-U.S. Lender Party under the Loan Documents. Unless Borrower and Administrative Agent have received forms
or other documents satisfactory to them indicating that payments under any Loan Document to or for a Non-U.S. Lender Party are
not subject to United States withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, Borrower
and Administrative Agent shall withhold amounts required to be withheld by applicable Requirements of Law from such payments at
the applicable statutory rate.

 

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(ii)         Each
U.S. Lender Party shall (A) on or prior to the date such U.S. Lender Party becomes a “U.S. Lender Party” hereunder,
(B) on or prior to the date on which any such form or certification expires or becomes obsolete, (C) after the occurrence of any
event requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (f) and
(D) from time to time if requested by Borrower or Administrative Agent (or, in the case of a participant, the relevant Lender),
provide Administrative Agent and Borrower (or, in the case of a participant, the relevant Lender) with two completed originals
of Form W-9 (certifying that such U.S. Lender Party is entitled to an exemption from U.S. backup withholding tax) or any successor
form.

 

(iii)        Each
Lender having sold a participation in any of its Obligations shall collect from such participant the documents described in this
clause (f) and provide them to Administrative Agent.

 

(iv)        If
a payment made to a Non-U.S. Lender Party would be subject to United States federal withholding Tax imposed by FATCA if such Non-U.S.
Lender Party fails to comply with the applicable reporting requirements of FATCA, such Non-U.S. Lender Party shall deliver to Agent
and Borrowers’ Agent any documentation under any Requirements of Law or reasonably requested by Administrative Agent or Borrowers’
Agent sufficient for Administrative Agent or Borrowers to comply with their obligations under FATCA and to determine that such
Non-U.S. Lender has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment.
Solely for the purposes of this clause (iv), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

 

(g)          Refunds.
If a Lender has received a refund of (or tax credit with respect to) any Withholding Taxes or Other Taxes as to which it has been
indemnified by Borrower or with respect to which Borrower has paid additional amounts pursuant to this Section 2.16, it
shall pay over such refund (or the benefit realized as a result of such tax credit) to Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by Borrower under this Section 2.16 with respect to the Withholding Taxes or
Other Taxes giving rise to such refund), net of all out of pocket expenses of the Lender (including any Withholding Taxes imposed
with respect to such refund) as is determined by the Lender in good faith, and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund); provided, that Borrower, upon the request of the Lender, agree
to repay as soon as reasonably practicable the amount paid over to Borrower (plus any penalties, interest or other charges imposed
by the relevant Governmental Authority) to the Lender in the event the Lender is required to repay such refund to such Governmental
Authority. This Section 2.16 shall not be construed to require the Lender to make available its tax returns (or any other
information relating to its Withholding Taxes or Other Taxes which it deems in good faith to be confidential) to Borrower or any
other person.

 

Section 2.17.         Partial
Release. 

 

(a)          Partial
Release - Conditions. Borrower shall have a one-time right to obtain the release of both the Partial Release Projects from
the Lien of the related Mortgage and the other Loan Documents, provided that all of the following terms and conditions are satisfied
(such release herein called the “Partial Release”):

 

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(i)          Following
completion of the Partial Release, Redding Sundial Borrower shall be the sole Borrower and the Redding Sundial Project shall be
the sole Project subject to a Mortgage.

 

(ii)         The
Partial Release shall occur in connection with the funding of one or more Governmental Loans obtained by Portland Gateway Borrower
and/or Salem Applewood Borrower, which Governmental Loans will be secured by one or both of the Partial Release Projects, the proceeds
of which are used to partially refinance the Loan.

 

(iii)        No
Potential Default or Event of Default shall be in existence at the time the request for the Partial Release is made or at the time
the Partial Release occurs, and no Material Adverse Change shall have occurred (or be reasonably expected to occur in connection
with the Partial Release).

 

(iv)        Portland
Gateway Borrower and Salem Applewood Borrower shall provide to Administrative Agent, at least thirty (30) days prior to the contemplated
closing date of the Partial Release, written notice specifying the date on which the Partial Release is anticipated to occur, which
notice shall be accompanied by a certification that no Potential Default or Event of Default is in existence as of the date of
such notice or will be in existence immediately after giving effect to the Partial Release and the execution and delivery of all
documents connected therewith.

 

(v)         Administrative
Agent shall have confirmed that, as of the date of the most recent financial statements required to be delivered pursuant to Section 7.1(a)(i),
the Retained Project Debt Yield was equal to or greater than 16.0% and the Retained Project Debt Service Coverage Ratio was equal
to or greater than 1.25 to 1.00.

 

(vi)        Borrower
shall provide Administrative Agent, promptly following Administrative Agent’s request therefor, all information and documents
relating to the contemplated transaction that will result in the Partial Release.

 

(vii)       Administrative
Agent shall have determined, and, if requested by Administrative Agent, shall obtain, contemporaneously with the closing of the
Partial Release, an endorsement to the Title Policy for the Redding Sundial Project insuring, that the Partial Release will not
affect the priority of Mortgage encumbering the Redding Sundial Project.

 

(viii)      Administrative
Agent shall receive reasonable assurances that the Environmental Indemnity Agreement shall remain in full force and effect with
respect to the remaining Security and the Partial Release Projects, provided that with respect to the Partial Release Projects,
such indemnity will apply only to claims or violations or alleged violations for the period of time prior to the date of the Partial
Release.

 

(ix)         Borrower
shall pay all reasonable expenses of Administrative Agent, including reasonable attorneys fees and expenses, title insurance premiums,
recording costs and similar costs in connection with the Partial Release.

 

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(x)          Borrower
shall pay to Administrative Agent, for the account of Lenders, an amount equal to the Partial Release Price, plus the interest
accrued thereon through the date such payment is made, plus the pro rata portion of any applicable Libor Breakage Amount required
and calculated on the Partial Release Price.

 

(b)          Partial
Release Principal Reduction Payment. If Borrower is unable to complete the Partial Release solely because the Retained Project
Debt Yield or the Retained Project Debt Service Coverage Ratio does not meet the threshold required to exercise such option, Borrower,
following receipt from Administrative Agent of written notice setting forth the Partial Release Principal Reduction Payment and
the amount of the applicable LIBOR Breakage Amount (if any), may pay to Administrative Agent, for the benefit of Lenders, the applicable
Partial Release Principal Reduction Payment.

 

(c)          Effect
of Partial Release; Reamortization of Loan. Upon satisfaction of the requirements contained in this Section 2.17, in
addition to releasing the Partial Release Projects from the Lien of the applicable Mortgage, Assignment of Leases and Rents and
other Loan Documents specific to the Partial Release Projects, Administrative Agent shall also partially-release all obligations
of the Portland Gateway Borrower and the Salem Applewood Borrower under the other Loan Documents as, but only to the extent, they
relate to the Partial Release Projects. Following the Partial Release, the monthly principal payments required under Section
2.3(a) shall be recalculated based upon the outstanding principal balance of the Loan after the Partial Release Payment (and
Partial Release Principal Reduction Payment, if made) is applied by Lenders and assuming a 25-year amortization period, less the
full or partial months elapsed since the Closing Date. Such recalculated monthly payment shall be due and payable commencing on
the first Payment Date following the month in which the Partial Release occurs.

 

ARTICLE
III

INSURANCE, CONDEMNATION, AND IMPOUNDS

 

Section
3.1.          Insurance. Borrower shall maintain (or
cause to be maintained) insurance as follows:

 

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(a)          Casualty;
Business Interruption. Borrower shall keep (or cause to be kept) the Projects insured against damage by fire and the other
hazards covered by a standard extended coverage and all-risk insurance policy for the full insurable value thereof on a replacement
cost claim made basis with a deductible not to exceed $25,000, except for wind/named storms and earthquake, which shall not provide
for a deductible in excess of five percent (5%) of the total insurable value of the Project, without reduction, in any case, for
depreciation or co-insurance and without any exclusions or reduction of policy limits for acts of domestic and foreign terrorism
and other specified action/inaction, and shall maintain boiler and machinery insurance, acts of domestic and foreign terrorism
endorsement coverage and such other casualty insurance as reasonably required by Administrative Agent, and, if Borrower changes
insurance carriers while the Loan is outstanding, Borrower shall provide coverage for an extended reporting period in form and
substance acceptable to Administrative Agent. Administrative Agent reserves the right to require from time to time the following
additional insurance: flood; earthquake/sinkhole; windstorm; worker’s compensation; and/or building law or ordinance. Borrower
shall keep a Project insured against loss by flood if such Project is located currently or at any time in the future in an area
identified by the Federal Emergency Management Agency as an area having special flood hazards and in which flood insurance has
been made available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood
Insurance Reform Act of 1994 (as such acts may from time to time be amended) in an amount at least equal to the lesser of (i) the
portion of the Loan allocated to such Project by Administrative Agent, acting in its reasonable discretion or (ii) the maximum
limit of coverage available under said acts. Any such flood insurance policy shall be issued in accordance with the requirements
and current guidelines of the Federal Insurance Administration. Borrower shall maintain business interruption insurance, including
use and occupancy, rental income loss and extra expense, for all periods covered by Borrower’s property insurance for a limit
equal to twelve (12) calendar months’ exposure, all without any exclusions or reduction of policy limits for acts of domestic
and foreign terrorism or other specified action/inaction. Borrower shall not maintain any separate or additional insurance which
is contributing in the event of loss unless it is properly endorsed and otherwise reasonably satisfactory to Administrative Agent
in all respects. The proceeds of insurance paid on account of any damage or destruction to any Project shall be paid to Administrative
Agent, on behalf of the Lenders, to be applied as provided in Section 3.2.

 

(b)          Liability.
 Borrower shall maintain (or cause to be maintained) (i) commercial general liability insurance with respect to the each Project
providing for limits of liability in the amount approved by Administrative Agent for both injury to or death of a person and for
property damage per occurrence, (ii) umbrella liability coverage in the amount and to the extent required by Administrative Agent,
and (iii) other liability insurance as reasonably required by Administrative Agent. In addition, Borrower shall cause each Operator
to maintain (A) worker’s compensation insurance and employer’s liability insurance covering employees at the Projects
employed by such Operator (in the amounts required by applicable Requirements of Law) and (B) professional liability insurance.
In no event shall Borrower consent to any decrease in the amount or scope of coverage or increase the deductibles from those previously
approved by Administrative Agent.

 

(c)          Form
and Quality. All insurance policies shall be endorsed in form and substance acceptable to Administrative Agent to name
Administrative Agent (on behalf of Lenders) as an additional insured, loss payee or mortgagee thereunder, as its interest may appear,
with loss payable to Administrative Agent, without contribution, under a standard New York (or local equivalent) mortgagee clause
and shall not contain a Protective Safeguard Endorsement. Administrative Agent shall act on behalf of the Lenders in respect of
insurance matters. All such insurance policies and endorsements shall be fully paid for and contain such provisions and expiration
dates and be in such form and issued by such insurance companies licensed to do business in the state in which the applicable Project
is located, with a rating of “A-X” or better as established by Best’s Rating Guide with respect to property and
casualty insurance and a rating of “A-X” or better as established by Best’s Rating Guide or “A” or
better by Standard & Poor’s Ratings Group with respect to liability insurance. Each policy shall provide that such policy
may not be canceled or materially changed except upon thirty (30) days’ prior written notice of intention of non-renewal,
cancellation or material change to Administrative Agent and that no act or thing done by Borrower shall invalidate any policy as
against Administrative Agent. Blanket policies shall be permitted only if (i) Administrative Agent receives appropriate endorsements
and/or duplicate policies containing Administrative Agent’s right to continue coverage on a pro rata pass-through basis and
that coverage will not be affected by any loss on other properties covered by the policies and (ii) the policy contains a sublimit
equal to the replacement cost of the Projects in an amount approved by Administrative Agent which is expressly allocated for each
Project, and any such policy shall in all other respects comply with the requirements of this Section. Borrower authorizes Administrative
Agent to pay the premiums for such policies (the “Insurance Premiums”) from the Insurance Impound as
the same become due and payable annually in advance. If Borrower fails to deposit funds into the Insurance Impound sufficient to
permit Administrative Agent to pay the Insurance Premiums when due, Administrative Agent may obtain such insurance and pay the
premium therefor and Borrower shall, on demand, reimburse Administrative Agent for all expenses incurred in connection therewith.

 

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(d)          Assignment;
Delivery of Certificates and Policies. Borrower shall assign (or cause to be assigned) the policies or proofs of insurance
to Administrative Agent (for the benefit of the Lenders), in such manner and form that Administrative Agent and its successors
and assigns shall at all times have and hold the same as security for the payment of the Loan. With respect to the property and
casualty insurance required under this Section 3.1, each Borrower shall provide (i) on or before the Closing Date,
an ACORD 25 along with a policy binder which is valid for at least 60 days following the Effective Date, (ii) endorsements
required by Administrative Agent within thirty (30) days following the Closing Date if not provided on or before the Closing
Date and (iii) a copy of the full policy within sixty (60) days following the Closing Date or prior to expiration of
the binder. With respect to the liability insurance required under this Section 3.1, Borrower shall provide (i) on
or before the Closing Date, an ACORD 25 along with evidence of 30-day notice of cancellation of coverage, (ii) endorsements
required by Administrative Agent within thirty (30) days following the Closing Date if not provided on or before the Closing
Date and (c) a copy of the full policy within sixty (60) days following the Closing Date. If Borrower elects to obtain
any insurance which is not required under this Agreement, all related insurance policies shall be endorsed in compliance with Section
3.1(c), and such additional insurance shall not be canceled without prior notice to Administrative Agent. From time to time
upon Administrative Agent’s request, Borrower shall identify to Administrative Agent all insurance maintained by Borrower
or Operator with respect to the Projects. The proceeds of insurance policies coming into the possession of Administrative Agent
shall not be deemed trust funds, and Administrative Agent shall be entitled to apply such proceeds as herein provided.

 

(e)          Adjustments.
Borrower shall give (or cause to be given) immediate written notice of any loss to the insurance carrier and to Administrative
Agent. Borrower hereby irrevocably authorizes and empowers Administrative Agent, as attorney in fact for Borrower coupled with
an interest, to notify any of Borrower’s insurance carriers to add Administrative Agent (for itself and the benefit of the
Lenders) as a loss payee, mortgagee insured or additional insured, as the case may be, to any policy maintained by Borrower (regardless
of whether such policy is required under this Agreement), to make proof of loss, to adjust and compromise any claim under insurance
policies, to appear in and prosecute any action arising from such insurance policies, to collect and receive insurance proceeds,
and to deduct therefrom Administrative Agent’s reasonable expenses incurred in the collection of such proceeds. Nothing contained
in this Section 3.1(e), however, shall require Administrative Agent to incur any expense or take any action hereunder.

 

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(f)          WARNING
REGARDING RIGHT OF ADMINISTRATIVE AGENT TO PURCHASE INSURANCE: If Borrower fails to provide Administrative Agent with evidence
of the insurance coverages required by this Agreement, Administrative Agent may purchase insurance at Borrower’s expense
to protect the interest of Administrative Agent and Lenders. This insurance may, but need not, also protect Borrower’s interest.
If the Collateral becomes damaged, the coverage Administrative Agent purchases may not pay any claim Borrower makes or any claim
made against Borrower. Borrower may later cancel this coverage by providing evidence that the required property coverage was purchased
elsewhere. Borrower is responsible for the cost of any insurance purchased pursuant to this provision and such cost is payable
on demand; if Borrower fails to pay such cost, it may be added to the Indebtedness and bear interest at the Default Rate. The effective
date of coverage may be the date Borrower’s prior coverage lapsed or the date Borrower failed to provide proof of coverage.
The coverage Administrative Agent purchases may be considerably more expensive than insurance Borrower can obtain and may not satisfy
any need for property damage coverage or any mandatory liability insurance imposed by applicable Laws. 

 

(g)          Illinois
Disclosure. The following notice is provided pursuant to paragraph (3) of 815 ILCS 180/10: Unless Borrower provides evidence
of the insurance coverage required by this Loan Agreement, the Administrative Agent may purchase such insurance at Borrower’s
expense to protect the Administrative Agent’s and Lenders’ interests in the Collateral. This insurance may, but need
not, protect Borrower’s interests. The coverage that the Administrative Agent purchases may not pay any claim that Borrower
may make or any claim that is made against Borrower in connection with the Collateral. Borrower may later cancel any insurance
purchased by the Administrative Agent, but only after providing evidence that each Borrower has obtained insurance as required
by the Loan Documents. If the Administrative Agent purchases insurance for the Collateral, Borrower will be responsible for the
costs of that insurance, including the insurance premium, interest and any other charges that the Administrative Agent may impose
in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance.
The costs of the insurance may be added to the Obligations of Borrower. The costs of the insurance may be more than the cost of
insurance that Borrower may be able to obtain on Borrower’s own.

 

Section
3.2.          Use and Application of Insurance Proceeds.

 

(a)          Notice;
Repair Obligation. If any of the Projects shall be damaged or destroyed, in whole or in part, by fire or other casualty
(a “Casualty”), Borrower shall give prompt notice thereof to Administrative Agent. Following the occurrence
of a Casualty, Borrower, regardless of whether insurance proceeds are available, shall promptly proceed to restore, repair, replace
or rebuild the same to be of at least equal value and of substantially the same character as prior to such damage or destruction,
all to be effected in accordance with applicable law.

 

(b)          Application
of Insurance Proceeds. Subject, with respect to the Redding Sundial Project only, to any applicable provisions of the Ground
Lease, Administrative Agent shall make insurance proceeds available to Borrower for application to the costs of restoring the affected
Project or to the payment of the Loan as follows:

 

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(i)          if
the loss is less than or equal to the Restoration Threshold, Administrative Agent shall make the insurance proceeds available to
Borrower, which proceeds shall be used by Borrower for the restoration of the damaged Project provided (A) no Event of Default
or Potential Default exists, and (B) Borrower promptly commences and is diligently pursuing restoration of the damaged Project;

 

(ii)         if
the loss exceeds the Restoration Threshold but is not more than 25% of the replacement value of the improvements constructed on
the damaged Project, Administrative Agent shall disburse the insurance proceeds to Borrower, which proceeds shall be used by Borrower
for the restoration of the damaged Project provided that (A) at all times during such restoration no Event of Default or Potential
Default exists; (B) Administrative Agent determines throughout the restoration that there are sufficient funds available
to restore and repair the Project to a condition approved by Administrative Agent and if the Administrative Agent reasonably determines
there is any such insufficiency, Borrower provides additional security to address such insufficiency to Administrative Agent’s
satisfaction; (C) Administrative Agent determines that the Adjusted Net Operating Income of the Projects (including the damaged
Projects) during restoration, taking into account rent loss or business interruption insurance, will be sufficient to pay Debt
Service; (D) Administrative Agent determines that the ratio of the outstanding principal balance of the Loan to appraised
value of the Projects after restoration of the damaged Project will not exceed 75%; (E) Administrative Agent determines that
after restoration of the damaged Project and Borrower will comply with the financial covenants in Section 8.15; (F) Administrative
Agent determines that restoration and repair of the damaged Project to a condition approved by Administrative Agent will
be completed within six months after the date of loss or casualty and in any event ninety (90) days prior to the Maturity Date;
(G) Borrower promptly commences and is diligently pursuing restoration of the damaged Project; and (H) the damaged Project after
the restoration will be in compliance with and permitted under all applicable zoning, building and land use laws, rules, regulations
and ordinances; and

 

(iii)        if
the conditions set forth in (i) and (ii) above are not satisfied or the loss exceeds the maximum amount specified in Section
3.2(b)(ii) above, (A) if no Event of Default exists hereunder, in Required Lenders’ reasonable discretion, Required Lenders
may direct Administrative Agent to apply any insurance proceeds Administrative Agent receives as a prepayment of the Loan pursuant
to Section 2.4(e), or allow all or a portion of such proceeds to be used for the restoration of the damaged Project and
(B) if an Event of Default exists hereunder, Administrative Agent shall apply any insurance proceeds Administrative Agent receives
as a prepayment of the Loan pursuant to Section 2.4(e), unless the Required Lenders otherwise consent in writing to allow
all or a portion of the proceeds to be used for the restoration of the damaged Project.

 

(c)          Disbursement
of Insurance Proceeds. Insurance proceeds received by Administrative Agent and to be applied to restoration pursuant to
the terms of this Section 3.2 will be disbursed by Administrative Agent to Borrower on a monthly basis, commencing within ten (10)
Business Days following receipt by Administrative Agent of plans and specifications, contracts and subcontracts, schedules, budgets,
lien waivers and architects’ certificates all in form reasonably satisfactory to Administrative Agent, and otherwise in accordance
with prudent commercial construction lending practices for construction loan advances (including appropriate retainages to ensure
that all work is completed in a workmanlike manner).

 

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Section
3.3.          Condemnation Awards. Borrower shall promptly
give Administrative Agent written notice of the actual or threatened commencement of any condemnation or eminent domain proceeding
affecting any Project (a “Condemnation”) and shall deliver to Administrative Agent copies of any and
all papers served in connection with such Condemnation. Following the occurrence of a Condemnation, Borrower, regardless of whether
any award or compensation (an “Award”) is available, shall promptly proceed to restore, repair, replace
or rebuild the same to the extent practicable to be of at least equal value and of substantially the same character as prior to
such Condemnation, all to be effected in accordance with applicable Requirements of Law. Administrative Agent may participate in
any such proceeding (for itself and on behalf of the Lenders) and Borrower will deliver to Administrative Agent all instruments
necessary or required by Administrative Agent to permit such participation. Without Administrative Agent’s prior consent,
Borrower (a) shall not agree to any Award, and (b) shall not take any action or fail to take any action which would cause the Award
to be determined. All Awards for the taking or purchase in lieu of condemnation of the a Project or any part thereof are hereby
assigned to and shall be paid to Administrative Agent. Administrative Agent is hereby irrevocably appointed as Borrower’s
attorney-in-fact, coupled with an interest, with exclusive power to collect, receive and retain any Award and to make any compromise
or settlement in connection with any such Condemnation and to give proper receipts and acquittances therefor, and in Administrative
Agent’s sole discretion (in consultation with the Required Lenders) to apply the same toward the payment of the Loan, notwithstanding
that the Loan may not then be due and payable, or to the restoration of the applicable Project; provided, however,
if the Award is less than or equal to $100,000 and Borrower requests that such proceeds be used for nonstructural site improvements
(such as landscape, driveway, walkway and parking area repairs) required to be made as a result of such Condemnation, Administrative
Agent will apply the Award to such restoration in accordance with disbursement procedures applicable to insurance proceeds provided
there exists no Potential Default or Event of Default and, with respect to the Redding Sundial Project only, the Ground Lease remains
in full force and effect. Borrower, upon request by Administrative Agent, shall execute all instruments requested to confirm the
assignment of the Awards to Administrative Agent, free and clear of all liens, charges or encumbrances. Anything herein to the
contrary notwithstanding, if a Potential Default or Event of Default exists, Administrative Agent is authorized to adjust such
Award without the consent of Borrower and to collect such Award in the name of Administrative Agent (on behalf of itself and the
Lenders) and Borrower.

 

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Section
3.4.          Insurance Impounds. Borrower shall deposit
(or cause to be deposited) with Administrative Agent, monthly on each Payment Date, a sum of money (the “Insurance
Impound”) equal to one-twelfth (l/12th) of the annual charges for the Insurance Premiums. At or before the initial
advance of the Loan, Borrower shall deposit (or cause to be deposited) with Administrative Agent a sum of money which together
with the monthly installments will be sufficient to make each of such payments thirty (30) days prior to the date any delinquency
or penalty becomes due with respect to such payments. Deposits shall be made on the basis of Administrative Agent’s estimate
from time to time of the Insurance Premiums for the current year. All funds so deposited shall be held by Administrative Agent.
These sums may be commingled with the general funds of Administrative Agent, and shall not be deemed to be held in trust for the
benefit of Borrower. Borrower hereby grants to Administrative Agent (for its benefit and the benefit of the Lenders) a security
interest in all funds so deposited with Administrative Agent for the purpose of securing the Loan. Until an Event of Default exists,
Administrative Agent shall apply the funds deposited to pay Insurance Premiums as provided herein. While an Event of Default exists,
the funds deposited may be applied in payment of the Insurance Premiums for which such funds have been deposited, or to the payment
of the Loan or any other charges affecting the security of Administrative Agent, as Administrative Agent may elect, but no such
application shall be deemed to have been made by operation of law or otherwise until actually made by Administrative Agent. Borrower
shall furnish Administrative Agent with bills for the Insurance Premiums for which such deposits are required at least thirty (30)
days prior to the date on which the Insurance Premiums first become payable. If at any time the amount on deposit with Administrative
Agent, together with amounts to be deposited by Borrower or Operator before such Insurance Premiums are payable, is insufficient
to pay such Insurance Premiums, Borrower shall deposit (or cause to be deposited) any deficiency with Administrative Agent immediately
upon demand. Administrative Agent shall pay such Insurance Premiums when the amount on deposit with Administrative Agent is sufficient
to pay such Insurance Premiums and Administrative Agent has received a bill for such Insurance Premiums. On the Maturity Date,
the monies then remaining on deposit with Administrative Agent under this Section 3.4 shall, at Administrative Agent’s
option, be applied against the Indebtedness or if no Event of Default exists hereunder, returned to Borrower. Notwithstanding the
foregoing, if the Insurance Premiums are paid via a premium financing arrangement to which Administrative Agent has given its written
consent, then (i) the amount to be escrowed with Administrative Agent at any given time in respect of such Insurance Premiums shall
be three months or payments under the premium finance arrangement, (ii) Borrowers shall tender to Administrative Agent each month
(on such schedule as Administrative Agent shall reasonably request) evidence that Borrowers (or the owner of the policy if the
Borrowers share in a blanket policy) have paid the applicable premium finance amount due for the preceding month, and (iii) Administrative
Agent shall have no obligation to remit such escrowed sums in payment of the premium finance amounts.

 

Section
3.5.          Real Estate Tax Impounds. Borrower shall
deposit (or cause to be deposited) with Administrative Agent, monthly on each Payment Date, a sum of money (the “Tax
Impound”) equal to one-twelfth (1/12th) of the annual Taxes. At or before the initial advance of the Loan, Borrower
shall deposit (or cause to be deposited) with Administrative Agent a sum of money which together with the monthly installments
will be sufficient to make each of such payments thirty (30) days prior to the date any delinquency or penalty becomes due with
respect to such payments. Deposits shall be made on the basis of Administrative Agent’s estimate from time to time of the
Taxes for the current year (after giving effect to any reassessment or, at Administrative Agent’s election, on the basis
of the Taxes for the prior year, with adjustments when the Taxes are fixed for the then current year). All funds so deposited shall
be held by Administrative Agent. Borrower and Lenders acknowledge and agree that these sums may be commingled with Administrative
Agent’s general funds and shall not be deemed to be held in trust for the benefit of Borrower. Borrower hereby grants to
Administrative Agent (for its benefit and the benefit of the Lenders) a security interest in all funds so deposited with Administrative
Agent for the purpose of securing the Loan. Until an Event of Default exists, Administrative Agent shall apply the funds deposited
to pay the Taxes as provided herein. While an Event of Default exists, the funds deposited may be applied in payment of the charges
for which such funds have been deposited, or to the payment of the Loan or any other charges affecting the security of Administrative
Agent, as Administrative Agent may elect, but no such application shall be deemed to have been made by operation of law or otherwise
until actually made by Administrative Agent. Borrower shall furnish Administrative Agent with bills for the Taxes for which such
deposits are required at least thirty (30) days prior to the date on which the Taxes first become payable. If at any time the amount
on deposit with Administrative Agent, together with amounts to be deposited by Borrower before such Taxes are payable, is insufficient
to pay such Taxes, Borrower shall deposit (or cause to be deposited) any deficiency with Administrative Agent immediately upon
demand. Administrative Agent shall pay such Taxes when the amount on deposit with Administrative Agent is sufficient to pay such
Taxes and Administrative Agent has received a bill for such Taxes. The obligation of Borrower to pay the Taxes, as set forth in
the Loan Documents, is not affected or modified by the provision of this paragraph; provided, however, that Borrower
shall not be in default under the Loan for failure to pay Taxes if and to the extent there are sufficient funds on deposit in the
Tax Impound to timely pay such Taxes. On the Maturity Date, the monies then remaining on deposit with Administrative Agent under
this Section 3.5 shall, at Administrative Agent’s option, be applied against the Indebtedness or if no Event of Default
exists hereunder, returned to Borrower.

 

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ARTICLE
IV

ENVIRONMENTAL MATTERS

 

Section
4.1.          Representations and Warranties on Environmental
Matters. To Borrower’s Knowledge, except as set forth in the Site Assessment, (a) no Hazardous Material is now or
was formerly used, stored, generated, manufactured, installed, treated, discharged, disposed of or otherwise present at or about
the Projects or any property adjacent to a Project (except for cleaning and other products currently used in connection with the
routine maintenance or repair of the Projects in full compliance with Environmental Laws) and no Hazardous Material was removed
or transported from any Project, (b) all permits, licenses, approvals and filings required by Environmental Laws have been obtained,
and the use, operation and condition of each Project does not, and did not previously, violate any Environmental Laws, (c) no civil,
criminal or administrative action, suit, claim, hearing, investigation or proceeding is pending or threatened, nor have any settlements
been reached by or with any parties or any liens imposed in connection with any Project concerning Hazardous Materials or Environmental
Laws; (d) no underground storage tanks exist on any part of any Project; and (e) Borrower has not received and no prior owner or
current or prior tenant, subtenant, or other occupant of all or any part of the Projects has received, any notice from any Person,
public or private, alleging any violation of or potential liability under any Environmental Law with regard to the Projects, nor
has Borrower, nor have any of the third-parties described above, received any administrative order or entered into any administrative
consent order with any governmental agency with respect to Hazardous Materials on or at the Projects.

 

Section
4.2.          Covenants on Environmental Matters.

 

(a)          Borrower
shall (i) comply strictly and in all respects with applicable Environmental Laws; (ii) notify Administrative Agent immediately
upon Borrower’s discovery of any spill, discharge, release or presence of any Hazardous Material at, upon, under, within,
contiguous to or otherwise affecting any Project; (iii) promptly remove such Hazardous Materials and remediate the applicable Project
in full compliance with Environmental Laws or as reasonably required by Administrative Agent based upon the recommendations and
specifications of an independent environmental consultant approved by Administrative Agent; and (iv) promptly forward to Administrative
Agent copies of all orders, notices, permits, applications or other communications and reports in connection with any spill, discharge,
release or the presence of any Hazardous Material or any other matters relating to the Environmental Laws or any similar laws or
regulations, as they may affect any Project or Borrower.

 

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(b)          Borrower
shall not cause and shall prohibit any other Person from (i) causing any spill, discharge or release, or the use, storage, generation,
manufacture, installation, or disposal, of any Hazardous Materials at, upon, under, within or about any Project or the transportation
of any Hazardous Materials to or from any Project (except for cleaning and other products used in connection with routine maintenance
or repair of such Project in full compliance with Environmental Laws), (ii) installing any underground storage tanks at any Project,
or (iii) conducting any activity that requires a permit or other authorization under Environmental Laws.

 

(c)          Borrower
shall provide to Administrative Agent, at Borrower’s expense promptly upon the written request of Administrative Agent from
time to time, a Site Assessment or, if required by Administrative Agent, an update to any existing Site Assessment for the applicable
Project, to assess the presence or absence of any Hazardous Materials and the potential costs in connection with abatement, cleanup
or removal of any Hazardous Materials found on, under, at or within such Project. Borrower shall pay the cost of no more than one
such Site Assessment or update for a Project in any twelve (12) month period, unless Administrative Agent’s request for a
Site Assessment is based on information provided under Section 4.2(a), a reasonable suspicion of Hazardous Materials at
or near such Project, a breach of representations under Section 4.1, or an Event of Default, in which case any such Site
Assessment or update shall be at Borrower’s expense.

 

(d)          Each
Borrower covenants and agrees that it shall comply in all material respects with the terms and conditions of each operation and
maintenance program, if any, reasonably required by the Administrative Agent and/or Lenders to be maintained with respect to any
Project.

 

Section
4.3.          Allocation of Risks and Indemnity. As
between Borrower and Administrative Agent and each Lender, all risk of loss associated with non-compliance with Environmental Laws,
or with the presence of any Hazardous Material at, upon, within, contiguous to or otherwise affecting the Projects, shall lie solely
with Borrower. Accordingly, Borrower shall bear all risks and costs associated with any loss (including any loss in value attributable
to Hazardous Materials), damage or liability therefrom, including all costs of removal of Hazardous Materials or other remediation
required by Administrative Agent or by law. Borrower shall indemnify, defend and hold Administrative Agent and each Lender and
their respective shareholders, directors, officers, employees and agents harmless from and against all loss, liabilities, damages,
claims, costs and expenses (including reasonable costs of defense and consultant fees, investigation and laboratory fees, court
costs, and other litigation expenses) arising out of or associated, in any way, with (a) the non-compliance with Environmental
Laws, or (b) the existence of Hazardous Materials in, on, or about the Projects, (c) any personal injury (including wrongful death)
or property damage (real or personal) arising out of or related to Hazardous Materials; (d) any lawsuit brought or threatened,
settlement reached, or government order relating to such Hazardous Materials, (e) a breach of any representation, warranty or covenant
contained in this Article 4, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil
statute or common law, or (f) the imposition of any environmental lien encumbering the Projects; provided, however,
Borrower shall not be liable under such indemnification to the extent such loss, liability, damage, claim, cost or expense results
solely from such indemnified Person’s gross negligence or willful misconduct as determined by a final non-appealable judgment
of a court of competent jurisdiction. Borrower’s obligations under this Section 4.3 shall arise whether or not any
Governmental Authority has taken or threatened any action in connection with the presence of any Hazardous Material, and whether
or not the existence of any such Hazardous Material or potential liability on account thereof is disclosed in the Site Assessment
and shall continue notwithstanding the repayment of the Loan or any transfer or sale of any right, title and interest in any Project
(by foreclosure, deed in lieu of foreclosure or otherwise).

 

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Section
4.4.          Administrative Agent’s Right to Protect
Collateral. If any discharge of Hazardous Materials or the threat of any discharge of Hazardous Materials affecting any
Project occurs or Borrower fails to comply with any Environmental Laws and Borrower has not, within ten (10) Business Days of the
occurrence of such event, taken commercially reasonable steps to begin the remediation of such condition as required by Section
4.3, Administrative Agent may (but shall not be obligated to) give such notices and take such actions as it deems necessary
or advisable at the expense of Borrower in order to abate the discharge of any Hazardous Materials or remove the Hazardous Materials.
Any amounts payable to Administrative Agent by reason of the application of this Section 4.4 shall become immediately due
and payable and shall bear interest at the Default Rate from the date loss or damage is sustained by Administrative Agent until
paid. The obligations and liabilities of Borrower under this Section 4.4 shall survive any termination, satisfaction, assignment,
entry of a judgment of foreclosure or delivery of a deed in lieu of foreclosure.

 

Section
4.5.          No Waiver. Notwithstanding any provision
in this Article 4 or elsewhere in the Loan Documents, or any rights or remedies granted by the Environmental Indemnity Agreement
or the Loan Documents, neither Administrative Agent nor any Lender waives and each of them expressly reserves all rights and benefits
now or hereafter accruing to Administrative Agent and the Lenders under the “security interest” or “secured creditor”
exception under applicable Environmental Laws, as the same may be amended. No action taken by Administrative Agent or any Lender
pursuant to the Environmental Indemnity Agreement or the Loan Documents shall be deemed or construed to be a waiver or relinquishment
of any such rights or benefits under the “security interest exception.”

 

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ARTICLE
V

LEASING MATTERS

 

Section
5.1.          Representations and Warranties on Leases.

 

(a)          Leases.
Each Borrower represents and warrants to Administrative Agent and the Lenders with respect to the Leases for residential occupancy,
(i) the rent roll or Census Report for each Project delivered to Administrative Agent is true and correct; (ii) such Leases are
valid and in and full force and effect; and (iii) the interests of the landlord and the rents under such Leases have not been assigned
or pledged. Borrower represents and warrants to Administrative Agent and Lenders with respect to the Commercial Leases, if any,
(i) the rent roll with respect to such Commercial Leases, if any, delivered to Administrative Agent is true and correct; (ii) such
Commercial Leases are in full force and effect; (iii) the Commercial Leases (including amendments) are in writing, and there are
no oral agreements with respect thereto; (iv) the copies of the Leases delivered to Administrative Agent are true and complete;
(v) neither the landlord nor any tenant is in default under any of the Commercial Leases; (vi) Borrower has no knowledge of any
notice of termination or default with respect to any Commercial Lease; (vii) Borrower has not assigned or pledged any of the Commercial
Leases, the rents or any interests therein except to Administrative Agent and the Lender; (viii) no Tenant or other party has an
option to purchase all or any portion of Projects; (ix) no Tenant has the right to terminate its Commercial Lease prior to expiration
of the stated term of such Commercial Lease; (x) no Tenant has prepaid more than one month’s rent in advance (except for
bona fide security deposits not in excess of an amount equal to two months’ rent); and (xi) all existing Commercial Leases
are subordinate to the Mortgage either pursuant to their terms or a recorded subordination agreement.

 

(b)          Master
Lease. Each Borrower represents and warrants to Administrative Agent and the Lenders with respect to the Master Lease to
which such Borrower is party that: (i) such Master Lease is valid and in and full force and effect; (ii) such Master Lease (including
amendments) is in writing, and there are no oral agreements with respect thereto; (iii) the copy of such Master Lease delivered
to Administrative Agent is true and complete; (iv) neither such Borrower nor the Master Tenant party to such Master Lease is (or
as to the other party is, to such party’s knowledge), in default under such Master Lease; (v) neither such Borrower nor the
Master Tenant party to such Lease has any knowledge of any notice of termination or default with respect to such Master Lease;
(vi) such Borrower has not assigned or pledged such Master Lease, the rents or any interests therein, except to Administrative
Agent and the Lenders or except in connection with a Permitted Transfer; (vii) except as set forth in such Master Lease, the Master
Tenant party thereto does not have an option to purchase all or any portion of the Project demised thereunder; (viii) except as
set forth in such Master Lease, the Master Tenant party thereto does not have the right to terminate such Master Lease prior to
expiration of the stated term of such Master Lease (unless due to casualty or condemnation of the Project demised thereunder);
and (ix) the Master Tenant party to such Master Lease has not prepaid more than one month’s rent in advance.

 

(c)          Ground
Lease. Redding Sundial Borrower represents and warrants to Administrative Agent and the Lenders that (i) a true, complete
and correct copy of the Ground Lease, together with all amendments thereto, has been delivered to Administrative Agent; (ii) the
Ground Lease is valid and in and full force and effect; (iii) the interests of Redding Sundial Borrower under the Ground Lease
has not been assigned or pledged, other than pursuant to a Mortgage, and is not subject to any Lien, other than the Lien of the
applicable Mortgage; (iv) Redding Sundial Borrower’s interest under the Ground Lease is assignable to Administrative
Agent without the written consent of Ground Lessor, and is further assignable by Administrative Agent without Ground Lessor’s
consent; (v) under the terms of the Ground Lease and this Agreement, taken together, any insurance proceeds and Awards paid
with respect to the Redding Sundial Project or the interest of Redding Sundial Borrower therein will be applied either to the repair
or restoration of all or a portion of the Redding Sundial Project, with Administrative Agent having the right to hold and disburse
the proceeds as the repair or restoration progresses, or to the payment of the Obligations; (vi) [reserved]; (vii) neither
Redding Sundial Borrower nor Ground Lessor is in default under the Ground Lease, nor is there any event or circumstance that, with
the giving of notice or passage of time, would constitute a default under the Ground Lease; (viii) no notice of termination
or default has been given or received by Redding Sundial Borrower under the Ground Lease; and (ix) Redding Sundial Borrower
has paid all sums payable and Redding Sundial Borrower has performed all obligations required to be performed by Redding Sundial
Borrower thereunder..

 

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Section
5.2.          [Reserved]. 

 

Section
5.3.          Covenants. 

 

(a)          Leases.
Borrower shall (or cause Operator to) (i) perform the obligations which any Lease Party is required to perform under the Leases;
(ii) enforce the obligations to be performed by the Tenants under the Leases; (iii) promptly furnish to Administrative Agent any
notice of default or termination received by Borrower from any Tenant under a Commercial Lease, and any notice of default or termination
given by any Borrower to any Tenant under a Commercial Lease; (iv) not collect any rents for more than one month in advance of
the time when the same shall become due, except for bona fide Security Deposits not in excess of an amount equal to two month’s
rent; (v) not enter into any ground lease or master lease of any part of the Projects other than the Master Lease to which such
Borrower is party and, with respect to Redding Sundial Borrower only, the Ground Lease; (vi) not further assign or encumber any
Lease; (vii) not, except with Administrative Agent’s prior written consent, cancel or accept surrender or termination
of any Commercial Lease; (viii) not, except with Administrative Agent’s prior written consent, modify or amend
any Lease (except for minor modifications and amendments entered into in the ordinary course of business, consistent with prudent
property management practices, not affecting the economic terms of the Lease); and (ix) assign to Administrative Agent any letter
of credit evidencing a security deposit on such terms as may be required by Administrative Agent and shall deliver the original
of such letter(s) of credit to Administrative Agent. Any action in violation of clauses (v), (vi), (vii),or
(viii) of this Section 5.3(a) shall be void at the election of Administrative Agent. Borrower and Operator, as applicable,
will not suffer or permit any breach or default to occur in any of any Lease Party’s obligations under any of the Leases,
nor suffer or permit the same to terminate by reason of any failure of Lease Party to meet any requirement of any Lease.

 

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(b)          Master
Lease. Each Borrower shall (i) perform the obligations which such Borrower is required to perform under the Master Lease
to which such Borrower is party; (ii) enforce the material obligations to be performed by the Master Tenant under the Master Lease
to which such Borrower is party; (iii) promptly furnish to Administrative Agent any notice of default or termination received by
such Borrower from the Master Tenant, and any notice of default or termination given by such Borrower to such Master Tenant, under
the Master Lease to which such Borrower is party; (iv) not collect any rents for more than one month in advance of the time when
the same shall become due under the Master Lease to which such Borrower is party, except for bona fide security deposits not in
excess of an amount equal to two months rent; (v) not enter into any ground lease or master lease of any part of the Projects other
than the Master Lease to which such Borrower is party and, with respect to Redding Sundial Borrower only, the Ground Lease; (vi)
not further assign or encumber the Master Lease to which such Borrower is party; (vii) not, except with Administrative Agent’s
prior written consent, cancel or accept surrender or termination of the Master Lease to which such Borrower is party; and (viii)
not, except with Administrative Agent’s prior written consent, modify or amend the Master Lease to which such Borrower is
party, and any action in violation of clauses (v), (vi), (vii), or (viii) of this Section 5.3(b)
shall be void at the election of Administrative Agent. For avoidance of doubt, Administrative Agent may withhold its consent to
any amendment or modification of any Master Lease that would provide for a reduction in the amount of base rent payable thereunder.
No Borrower will suffer or permit any breach or default to occur in any of such Borrower’s obligations under the Master Lease
to which such Borrower is party nor suffer or permit the same to terminate by reason of any failure of such Borrower to meet any
requirement under the Master Lease to which such Borrower is party.

 

(c)          Ground
Lease.

 

(i)          Redding
Sundial Borrower will (A) pay on or before the due dates thereof all rents and other amounts payable under the Ground Lease; (B)
diligently perform and observe all of the terms, covenants and conditions of the Ground Lease on the part of Redding Sundial Borrower,
as tenant thereunder, to be performed and observed at least five (5) days prior to the expiration of any applicable grace period
therein provided; and (C) enforce the material obligations to be performed by Ground Lessor under the Ground Lease.

 

(ii)         Redding
Sundial Borrower shall not sublease (other than pursuant to the Master Lease to which it is party), assign, or encumber (other
than pursuant to a Mortgage securing the Obligations) its interest under the Ground Lease, and any action in violation of this
Section 5.3(c)(ii) shall be void at the election of Administrative Agent.

 

(iii)        Redding
Sundial Borrower will (A) deliver to Administrative Agent a copy of any notice of default sent by Redding Sundial Borrower
under the Ground Lease contemporaneously with the delivery thereof to Ground Lessor; and (B) deliver to Administrative Agent a
copy of any notice of default received by Redding Sundial Borrower under the Ground Lease within one (1) Business Day following
receipt thereof. For purposes of determining whether a default under the Ground Lease exists, Administrative Agent shall be entitled
to rely on, and accept as correct, any notice of default delivered by Ground Lessor. If Redding Sundial Borrower fails to promptly
cure any default under the Ground Lease, or fails to cure any default within five (5) days prior to the expiration of any cure
period, if there is a cure period under the Ground Lease, Administrative Agent shall have the right (but shall not be obligated)
to take any action to prevent or to cure any such default by Redding Sundial Borrower under the Ground Lease, and any sums of money
advanced by Administrative Agent to cure any such default shall become part of the Indebtedness, shall bear interest at the Default
Rate until repaid by Borrower, and shall be repayable by Borrower to Administrative Agent within five (5) days after receipt of
written demand.

 

(a)          Redding
Sundial Borrower will not, whether or not in accordance with the Ground Lease, do or permit anything to be done, the doing of which,
or refrain from doing anything, the omission of which, will be grounds for terminating the Ground Lease prior to its stated termination
date (including voluntarily terminating the Ground Lease) or declaring a default thereunder or a forfeiture thereof, without first
obtaining the prior written consent of Administrative Agent.

 

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(b)          Redding
Sundial Borrower will not surrender any of its rights, title or interest under the Ground Lease, nor terminate or cancel the Ground
Lease, nor accept or permit any of the foregoing, prior to its stated termination date (whether voluntarily or otherwise) and Redding
Sundial Borrower will not, without the express written consent of Administrative Agent, modify, change, supplement, alter or amend
the Ground Lease, either orally or in writing, or enter into any agreement modifying, supplementing or amending the Ground Lease.

 

(c)          Redding
Sundial Borrower shall not subordinate the Ground Lease or its leasehold estate to any mortgage, deed of trust or other encumbrance
of, or lien on, the fee interest of any owner of the Mortgaged Property. Any such attempted subordination shall be void and of
no force or effect.

 

(d)          Redding
Sundial Borrower will not waive, excuse, condone or in any way release or discharge Ground Lessor of or from the obligations, covenants
and agreements by Ground Lessor to be done and performed under or in relation to the Ground Lease. Redding Sundial Borrower, at
Borrower’s expense, will enforce the performance by Ground Lessor of Ground Lessor’s obligations under or related to
the Ground Lease.

 

(e)          Redding
Sundial Borrower shall notify Administrative Agent promptly in writing of any request made by either party to the Ground Lease
for arbitration or appraisal proceedings relating to the Ground Lease and of the institution of any such arbitration or appraisal
proceeding, as well as of all proceedings thereunder, and shall promptly deliver to Administrative Agent a copy of the determination
of the arbitrators in any such proceeding. Administrative Agent shall have the right (but not the obligation), following delivery
of written notice to Borrower, to participate in the appointment of any arbitrator or appraiser to be appointed by Borrower and
(to the extent permitted under the Ground Lease) to participate in such arbitration or appraisal proceedings in association with
Borrower or on its own behalf as an interested party. Borrower shall notify Administrative Agent of any legal proceedings involving
obligations under the Ground Lease, and Administrative Agent may intervene in any such legal proceeding and be made a party. Redding
Sundial Borrower shall promptly provide Administrative Agent with a copy of any decision rendered in any such proceeding.

 

(f)          Without
the prior written consent of Administrative Agent, Borrower will not exercise any purchase option under the Ground Lease, which
consent will not be unreasonably withheld and if granted shall be subject to such terms and conditions as may reasonably be imposed
by Administrative Agent.

 

Section
5.4.          Tenant Estoppels. 

 

(a)          Leases.
 At Administrative Agent’s request, Borrower shall obtain and furnish (or cause Operator to obtain and furnish) to Administrative
Agent, written estoppels in form and substance reasonably satisfactory to Administrative Agent, executed by Tenants under Commercial
Leases in excess of 3,000 square feet of a Project and confirming the term, rent, and other provisions and matters relating to
such Commercial Leases.

 

    	[Summit Healthcare]	50	 

    	 

    

 

(b)          Master
Lease. Promptly upon demand by Administrative Agent, Borrower shall use reasonable efforts to obtain from Master Tenant
and furnish to Administrative Agent an estoppel certificate, in form and substance satisfactory to Administrative Agent, executed
by Master Tenant and confirming the term, rent and other provisions and matters relating to the Master Lease.

 

(c)          Ground
Lease. Promptly upon demand by Administrative Agent, Redding Sundial Borrower shall use reasonable efforts to obtain from
Ground Lessor and furnish to Administrative Agent an estoppel certificate stating the date through which rent has been paid, whether
or not there are any defaults under the Ground Lease, the specific nature of any claimed defaults, and such other matters as may
be reasonably requested by Administrative Agent.

 

Section
5.5.          Payment of Rents Under Master Lease. 

 

(a)          Commencing
on the Closing Date and continuing so long as the Loan are outstanding, Borrower shall direct Master Tenant to make all payments
of rent and all other amounts due under the Master Lease (such net amount herein called the “Master Lease Payments”)
to the Deposit Account Bank for deposit in the account subject to the Deposit Account Control Agreement. So long as no Potential
Default or Event of Default is continuing, Deposit Account Bank shall be authorized to transfer on a daily basis the funds in the
account to the operating account of Borrower, excluding the Security Deposit and any supplements thereto and amounts deposited
by the Master Tenant in connection with future payments of Taxes and insurance premiums, which shall remain on deposit in a Deposit
Account subject to a Deposit Account Control Agreement.

 

(b)          If
a Potential Default or an Event of Default exists, Administrative Agent shall have the right in its sole discretion to direct the
Deposit Account Bank to disburse all amounts in the account held by the Deposit Account Bank to Administrative Agent or as otherwise
directed by Administrative Agent, and to the extent disbursed to Administrative Agent. Administrative Agent shall apply such amounts
to the Obligations, in such order as Administrative Agent, in its sole discretion, may elect.

 

ARTICLE
VI

REPRESENTATIONS AND WARRANTIES

 

Borrower and Master
Tenant, as applicable represents, warrants and covenants to Administrative Agent and Lenders unless otherwise specified,
as of the Closing Date and as of the date of each Compliance Certificate delivered to Administrative Agent pursuant to Section
7.2 hereof that:

 

Section
6.1.          Organization, Power and Authority; Formation Documents.

 

(a)          Organization,
etc. Borrower and each Borrower Party (a) is duly organized, validly existing and in good standing under the laws of the
state of its formation or existence and is in compliance with all legal requirements applicable to doing business in each state
in which a Project is located. Borrower is not a “foreign person” within the meaning of §1445(f)(3) of the Code.
Borrower and each Borrower Party has only one state of incorporation or organization. All other information regarding Borrower
and each Borrower Party contained in Schedule 6.1, including the ownership structure of Borrower and its constituent
entities, is true and correct as of the Closing Date.

 

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(b)          Formation
Documents. A true and complete copy of the formation documents creating Borrower and each Borrower Party and any and all
amendments thereto (collectively, the “Borrower Formation Documents”) has been furnished to Administrative
Agent. The Borrower Formation Documents constitute the entire agreement regarding Borrower and each Borrower Party among the members
of Borrower and shareholders of each Borrower Party and are binding upon and enforceable against each of the members or shareholders,
as applicable, in accordance with their terms. No breach exists under the Borrower Formation Documents and no condition exists
which, with the giving of notice or the passage of time would constitute a breach under the Borrower Formation Documents.

 

Section
6.2.          Validity of Loan Documents.  The execution,
delivery and performance by Borrower and each Borrower Party of the Loan Documents and the Environmental Indemnity Agreement: (a)
are duly authorized and do not require the consent or approval of any other party or Governmental Authority which has not been
obtained; and (b) will not violate any law or result in the imposition of any lien, charge or encumbrance upon the assets of any
such party, except as contemplated by the Loan Documents and/or the Environmental Indemnity Agreement. The Loan Documents and/or
the Environmental Indemnity Agreement constitute the legal, valid and binding obligations of Borrower and each Borrower Party who
is a party to the Loan Documents and/or the Environmental Indemnity Agreement, enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, or similar laws generally affecting the enforcement of creditors’ rights.

 

Section
6.3.          Liabilities; Litigation.

 

(a)          Financial
Statements. The financial statements delivered by Borrower and each Borrower Party are true and correct as of the date
prepared with no significant change since the date of preparation. Except as disclosed in such financial statements, there are
no liabilities (fixed or contingent) affecting any Project, Borrower or any Borrower Party. Except as disclosed in such financial
statements, there is no litigation, administrative proceeding, investigation or other legal action (including any proceeding under
any state or federal bankruptcy or insolvency law) pending or, to Borrower’s Knowledge, threatened, against any Project,
Borrower or any Borrower Party which if adversely determined could have a Material Adverse Effect on such party, any Project or
the Loan.

 

(b)          Contemplated
Actions. None of Borrower or any Borrower Party is contemplating either the filing of a petition by it under state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of its assets or property, and none of Borrower, or
any Borrower Party has knowledge of any Person contemplating the filing of any such petition against it.

 

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Section
6.4.          Taxes and Assessments.  There are no unpaid
or outstanding real estate or other taxes or assessments on or against the Projects or any part thereof, except general real estate
taxes not due or payable. Each Project is comprised of one or more parcels, each of which constitutes a separate tax lot and none
of which constitutes a portion of any other tax lot. There are no pending or, to Borrower’s Knowledge, proposed, special
or other assessments for public improvements or otherwise affecting any Project, nor are there any contemplated improvements to
any Project that may result in such special or other assessments.

 

Section
6.5.          Other Agreements; Defaults. None of Borrower
or any Borrower Party is a party to any agreement or instrument or subject to any court order, injunction, permit, or restriction
which might adversely affect any Project or the business, operations, or condition (financial or otherwise) of Borrower or any
Borrower Party. None of Borrower or any Borrower Party is in violation of any agreement which violation could reasonably be expected
to have a Material Adverse Effect on Borrower or any Borrower Party or Borrower’s or any Borrower Party’s business,
properties, or assets, operations or condition, financial or otherwise.

 

Section
6.6.          Compliance with Law. Borrower has all
requisite Permits to own and lease the Projects and carry on its business and to Borrower’s Knowledge each Operator has all
requisite Primary Licenses and Permits to operate the Projects and carry on its business. Except as described in each Zoning Report
and Property Condition Report delivered to Administrative Agent prior to the Closing Date, each Project in compliance with all
applicable zoning and building requirements and is free of structural defects. Except as described in the Property Condition Report
delivered to Administrative Agent prior to the Closing Date, all of the building systems contained in each Project are in good
working order, subject to ordinary wear and tear. Except as set forth in the Zoning Report, no Project constitutes, in whole or
in part, a legally non-conforming use under applicable legal requirements.

 

Section
6.7.          Condemnation.  No condemnation has been
commenced or, to Borrower’s Knowledge, is contemplated with respect to all or any portion of the Projects or for the relocation
of roadways providing access to any Project.

 

Section
6.8.          Access. Each Project has adequate rights
of access to public ways and is served by adequate water, sewer, sanitary sewer and storm drain facilities. All public utilities
necessary or convenient to the full use and enjoyment of each Project are located in the public right-of-way abutting the applicable
Project, and all such utilities are connected so as to serve such Project without passing over other property, except to the extent
such other property is subject to a perpetual easement for such utility benefitting such Project. All roads necessary for the full
utilization of each Project for its current purpose have been completed and dedicated to public use and accepted by all Governmental
Authorities.

 

Section
6.9.          Location of Borrower. Borrower’s
principal place of business and chief executive offices are located at the address stated in Schedule 6.1,
and, except as otherwise set forth in Schedule 6.1, Borrower at all times has maintained its principal place
of business and chief executive office at such location or at other locations within the same state.

 

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Section
6.10.         ERISA; Employees.

 

(a)          As
of the Closing Date and throughout the term of the Loan, (i) Borrower is not and will not be an “employee benefit plan”
as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, and (ii) the assets of Borrower do not and will not
constitute “plan assets” of one or more such plans for purposes of Title I of ERISA.

 

(b)          As
of the Closing Date and throughout the term of the Loan (i) Borrower is not and will not be a “governmental plan” within
the meaning of Section 3(3) of ERISA and (ii) transactions by or with Borrower are not and will not be subject to state statutes
applicable to Borrower regulating investments of and fiduciary obligations with respect to governmental plans.

 

(c)          No
Borrower has any employees.

 

Section
6.11.         Use of Loan Proceeds. The proceeds of the Loan are
intended and will be used for agricultural, business and/or commercial purposes and are not intended and will not be used for personal,
family or household purposes. No part of proceeds of the Loan will be used for purchasing or acquiring any “margin stock”
within the meaning of Regulations T, U or X of the Board of Governors of the Federal Reserve System.

 

Section
6.12.         Forfeiture.  There has not been and shall never
be committed by Borrower or any other person in occupancy of or involved with the operation or use of a Project any act or omission
affording the federal government or any state or local government the right of forfeiture as against such Project or any part thereof
or any monies paid in performance of Borrower’s obligations under any of the Loan Documents or the Environmental Indemnity
Agreement. Borrower hereby covenants and agrees not to commit, permit or suffer to exist any act or omission affording such right
of forfeiture.

 

Section
6.13.         Tax Filings.  Borrower and each Borrower Party
have filed (or have obtained effective extensions for filing) all federal, state and local tax returns required to be filed and
have paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by
Borrower and each Borrower Party, respectively. Borrower and each Borrower Party believe that their respective tax returns properly
reflect the income and taxes of Borrower and each Borrower Party, respectively, for the periods covered thereby, subject only to
reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit.

 

Section
6.14.         Solvency. After giving effect to the Loan,
the fair saleable value of Borrower’s assets exceeds and will, immediately following the making of the Loan, exceed Borrower’s
total liabilities, including, without limitation, subordinated, unliquidated, disputed and contingent liabilities. The fair saleable
value of Borrower’s assets is and will, immediately following the making of the Loan, be greater than Borrower’s probable
liabilities, including the maximum amount of its contingent liabilities on its Debts as such Debts become absolute and matured,
and Borrower’s assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital
to carry out its business as conducted or as proposed to be conducted. Borrower does not intend to, and does not believe that it
will, incur Debts and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such Debts
as they mature (taking into account the timing and amounts of cash to be received by Borrower and the amounts to be payable on
or in respect of obligations of Borrower). Except as expressly disclosed to Administrative Agent in writing, no petition in bankruptcy
has been filed against Borrower or any Borrower Party in the last seven (7) years, and neither Borrower nor any Borrower Party
in the last seven (7) years has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for
the benefit of debtors. Neither Borrower nor any Borrower Party is contemplating either the filing of a petition by it under state
or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its assets or property, and neither Borrower
nor any Borrower Party has knowledge of any Person contemplating the filing of any such petition against it.

 

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Section
6.15.         Full and Accurate Disclosure. No statement
of fact made by or on behalf of Borrower or any Borrower Party in this Agreement, in any of the other Loan Documents or the Environmental
Indemnity Agreement contains any untrue statement of a material fact or omits to state any material fact necessary to make statements
contained herein or therein not misleading. There is no fact presently known to Borrower which has not been disclosed to Administrative
Agent which adversely affects, nor as far as Borrower can foresee, might adversely affect, any Project or the business, operations
or condition (financial or otherwise) of Borrower or any Borrower Party. All information supplied by Borrower regarding any other
Collateral is accurate and complete in all material respects. All evidence of Borrower’s and each Borrower Party’s
identity provided to Administrative Agent and Lenders is genuine, and all related information is accurate.

 

Section
6.16.         Flood Zone. No portion of the improvements
comprising the Projects is located in an area identified by the Secretary of Housing and Urban Development or any successor thereto
as an area having special flood hazards pursuant to the National Flood Insurance Act of 1968, the Flood Disaster Protection Act
of 1973 or the National Flood Insurance Act of 1994, as amended, or any successor law, or, if located within any such area, Borrower
has obtained and will maintain the insurance prescribed in Section 3.1 hereof.

 

Section
6.17.         Single Purpose Entity/Separateness. Borrower
represents, warrants and covenants, from and after the Closing Date and for so long as any obligation under the Loan Documents
remains outstanding, as follows:

 

(a)          Limited
Purpose.  The sole purpose conducted or promoted by Borrower is to engage in the following activities:

 

(i)          to
acquire, own, hold, lease, operate, manage, maintain, develop and improve the Projects (or an undivided interest therein) and to
contract for the operation, maintenance, management and development of the Projects;

 

(ii)         to
enter into and perform its obligations under the Loan Documents and Environmental Indemnity Agreement;

 

(iii)        to
sell, transfer, service, convey, dispose of, pledge, assign, borrow money against, finance, refinance or otherwise deal with the
Projects to the extent permitted under the Loan Documents; and

 

(iv)        to
engage in any lawful act or activity and to exercise any powers permitted to limited liability companies organized under the laws
of its jurisdiction of formation that are related or incidental to and necessary, convenient or advisable for the accomplishment
of the above mentioned purposes.

 

    	[Summit Healthcare]	55	 

    	 

    

 

(b)          Limitations
on Debt, Actions. Notwithstanding anything to the contrary in the Loan Documents or in any other document governing the
formation, management or operation of Borrower, Borrower shall not:

 

(i)          guarantee
any obligation of any Person, including any Affiliate, or become obligated for the debts of any other Person or hold out its credit
as being available to pay the obligations of any other Person;

 

(ii)         engage,
directly or indirectly, in any business other than as required or permitted to be performed under this Section 6.17;

 

(iii)        incur,
create or assume any Debt other than (A) the Loan and (B) unsecured trade payables incurred in the ordinary course of its business
that are related to the ownership and operation of the Projects and which shall (1) not exceed two percent (2%) of the outstanding
balance of the Loan, (2) not be evidenced by a note, (3) be paid within sixty (60) days, and (4) otherwise expressly be permitted
under the Loan Documents;

 

(iv)        make
or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person, except that Borrower
may invest in those investments permitted under the Loan Documents;

 

(v)         to
the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, sale or other transfer of any
of its assets outside the ordinary course of Borrower’s business;

 

(vi)        buy
or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities);

 

(vii)       form,
acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other) or own any equity interest
in any other entity;

 

(viii)      own
any asset or property other than the Projects (or an undivided interest therein) and incidental personal property necessary for
the ownership or operation of the Projects; or

 

(ix)         take
any Material Action without the unanimous written approval of all members of Borrower.

 

(c)          Separateness
Covenants.  In order to maintain its status as a separate entity and to avoid any confusion or potential consolidation
with any Affiliate, Borrower represents and warrants that in the conduct of its operations since its organization it has observed,
and covenants that it will continue to observe, the following covenants:

 

(i)          maintain
books and records and bank accounts separate from those of any other Person;

 

(ii)         maintain
its assets in such a manner that it is not costly or difficult to segregate, identify or ascertain such assets;

 

    	[Summit Healthcare]	56	 

    	 

    

 

(iii)        comply
with all organizational formalities necessary to maintain its separate existence;

 

(iv)        hold
itself out to creditors and the public as a legal entity separate and distinct from any other entity;

 

(v)         maintain
separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have
its assets listed on any financial statement of any other Person; except that Borrower’s assets may be included in a consolidated
financial statement of its Affiliate so long as appropriate notation is made on such consolidated financial statements to indicate
the separateness of Borrower from such Affiliate and to indicate that Borrower’s assets and credit are not available to satisfy
the debts and other obligations of such Affiliate or any other Person;

 

(vi)        other
than with respect to the consolidated tax return of its Affiliates, prepare and file its own tax returns separate from those of
any Person to the extent required by applicable Requirements of Law, and pay any taxes required to be paid by applicable Requirements
of Law;

 

(vii)       allocate
and charge fairly and reasonably any common employee or overhead shared with Affiliates;

 

(viii)      not
enter into any transaction with any Person owned or controlled by an Affiliate of Borrower except on an arm’s-length basis
on terms which are intrinsically fair and no less favorable than would be available for unaffiliated third parties, and pursuant
to written, enforceable agreements;

 

(ix)         conduct
business in its own name, and use separate stationery, invoices and checks;

 

(x)          not
commingle its assets or funds with those of any other Person other than as required or permitted by this Agreement;

 

(xi)         not
assume, guarantee or pay the debts or obligations of any other Person;

 

(xii)        correct
any known misunderstanding as to its separate identity;

 

(xiii)       not
permit any Affiliate to guarantee or pay its obligations (other than limited guarantees and indemnities set forth in the Loan Documents
and in the Environmental Indemnity Agreement);

 

(xiv)      not
make loans or advances to any other Person;

 

(xv)       pay
its liabilities and expenses out of and to the extent of its own funds;

 

(xvi)      maintain
a sufficient number of employees in light of its contemplated business purpose and pay the salaries of its own employees, if any,
only from its own funds;

 

    	[Summit Healthcare]	57	 

    	 

    

 

(xvii)     
maintain adequate capital in light of its contemplated business purpose, transactions and liabilities; provided, however,
that the foregoing shall not require any equity owner to make additional capital contributions to Borrower;

 

(xviii)    cause
the managers, officers, employees, agents and other representatives of Borrower to act at all times with respect to Borrower consistently
and in furtherance of the foregoing and in the best interests of Borrower;

 

(xix)       not
have any obligation to, and will not, indemnify its partners, officers, directors or members, as the case may be, unless such an
obligation is fully subordinated to the Indebtedness and will not constitute a claim against it in the event that cash flow in
excess of the amount required to pay the Indebtedness is insufficient to pay such obligation;

 

(xx)        not
pledge its assets for the benefit of any other Person other than to Administrative Agent and Lenders in connection with the Loan;
and

 

(xxi)       observe
all partnership, corporate or limited liability company formalities, as applicable.

 

Failure of Borrower to
comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of Borrower
as a separate legal entity.

 

Section
6.18.         Compliance With International Trade Control Laws and
OFAC Regulations.  Borrower represents, warrants and covenants to Administrative Agent and Lenders that:

 

(a)          No
Borrower Party and no Person who owns a direct interest in Borrower is now nor shall be at any time until after the Loan is fully
repaid, a Person with whom a U.S. Person, including a Financial Institution, is prohibited from transacting business of the type
contemplated by this Agreement, whether such prohibition arises under U.S. law, regulation, executive orders and lists published
by the OFAC (including those executive orders and lists published by OFAC with respect to Specially Designated Nationals and Blocked
Persons) or otherwise.

 

(b)          Each
Borrower Party and Person who owns a direct interest in Borrower is now, and Borrower will remain, in compliance (and will cause
each Borrower Party and Person who owns a direct interest in Borrower to remain in compliance) in all material respects with all
U.S. economic sanctions laws, Executive Orders and implementing regulations as promulgated by OFAC and all applicable Anti-Money
Laundering Laws.

 

Section
6.19.         Borrower’s Funds. Borrower represents,
warrants and covenants to each Lender and the Administrative Agent that:

 

(a)          It
has taken, and shall continue to take until after the Loan is fully repaid, such measures as are required by law to verify that
the funds invested in Borrower are derived (i) from transactions that do not violate U.S. law and, to the extent such funds originate
outside the United States, do not violate the laws of the jurisdiction in which they originated; and (ii) from permissible sources
under U.S. law and to the extent such funds originate outside the United States, under the laws of the jurisdiction in which they
originated.

 

    	[Summit Healthcare]	58	 

    	 

    

 

(b)          To
Borrower’s Knowledge, no Borrower Party, nor any Person who owns a direct interest in Borrower, nor any Person providing
funds to Borrower (i) is under investigation by any governmental authority for, or has been charged with, or convicted of, money
laundering, drug trafficking, terrorist related activities, any crimes which in the United States would be predicate crimes to
money laundering, or any violation of any Anti-Money Laundering Laws; (ii) has been assessed civil or criminal penalties under
any Anti-Money Laundering Laws; and (iii) has had any of its/his/her funds seized or forfeited in any action under any Anti-Money
Laundering Laws.

 

(c)          Borrower
shall make payments on the Loan using funds invested in Borrower, Adjusted Revenues or insurance proceeds unless otherwise agreed
to by Administrative Agent.

 

(d)          To
Borrower’s Knowledge, as of the Closing Date and at all times during the term of the Loan, all revenues arising from the
Projects are and will be derived from lawful business activities of Tenants of the Projects or other permissible sources under
U.S. law.

 

(e)          On
the Maturity Date, Borrower will take reasonable steps to verify that funds used to repay the Loan in full (whether in connection
with a refinancing, asset sale or otherwise) are from sources permissible under U.S. law and to the extent such funds originate
outside the United States, permissible under the laws of the jurisdiction in which they originated.

 

(f)          Each
Borrower Party and Person who owns a direct interest in Borrower is now, and Borrower will remain in compliance (and will cause
each Borrower Party and Person who owns a direct interest in Borrower to remain in compliance) with the Office of Foreign Assets
Control sanctions and regulations promulgated under the authority granted by the Trading with the Enemy Act (“TWEA”),
50 U.S.C. App. Section 1 et seq., and the International Emergency Economic Powers Act (“IEEPA”),
50 U.S.C. Section 1701 et seq., as the TWEA and the IEEPA may apply to Borrower’s activities;

 

(g)          Each
Borrower Party and Person who owns a direct interest in any Borrower is now, and Borrower will remain in compliance (and will cause
each Borrower Party and Person who owns a direct interest in any Borrower to remain in compliance) with (i) the Patriot Act and
all rules and regulations promulgated under the Patriot Act applicable to Borrower and (ii) other federal or state laws relating
to “know your customer” and other anti-money laundering rules and regulations; and

 

(h)          Each
Borrower Party and Person who owns a direct interest in any Borrower (i) is not now, nor has ever been, under investigation by
any Governmental Authority for, nor has been charged with or convicted for a crime under, 18 U.S.C. Sections 1956 or 1957 or any
predicate offense thereunder, or a violation of the Bank Secrecy Act; (ii) has never been assessed a civil penalty under any Anti-Money
Laundering Laws or predicate offenses thereunder; (iii) has not had any of its funds seized, frozen or forfeited in any action
relating to any Anti-Money Laundering Laws or predicate offenses thereunder; (iv) has taken such steps and implemented such policies
as are reasonably necessary to ensure that such party is not promoting, facilitating or otherwise furthering, intentionally or
unintentionally, the transfer, deposit or withdrawal of criminally derived property, or of money or monetary instruments which
are (or which such party suspects or has reason to believe are) the proceeds of any illegal activity or which are intended to be
used to promote or further any illegal activity; and (v) has taken such steps and implemented such policies as are reasonably necessary
to ensure that such party is in compliance with all laws and regulations applicable to its business for the prevention of money
laundering and with anti-terrorism laws and regulations, with respect both to the source of funds from its investors and from its
operations, and that such steps include the development and implementation of an anti money laundering compliance program within
the meaning of Section 352 of the Patriot Act, to the extent any such party is required to develop such programs under the rules
and regulations promulgated pursuant to Section 352 of the Patriot Act.

 

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Section
6.20.         Operators’ Agreements. A true, correct
and complete copy of each of the Operators’ Agreements, together with all amendments thereto, have been delivered to Administrative
Agent; and the Operators’ Agreements and all amendments thereto are in full force and effect as of the Closing Date.

 

Section
6.21.         Physical Condition. Except as specifically
set forth in the Property Condition Report, to Borrower’s Knowledge, (a) the Projects, including, without limitation, all
buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection
systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural
components, are in good condition, order and repair in all material respects; and (b) there exists no structural or other material
defects or damages in any Project, whether latent or otherwise. Borrower has not received written notice from any insurance company
or bonding company of any defects or inadequacies in any Project, or any part thereof, which would adversely affect the insurability
of the same or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination
of any policy of insurance or bond.

 

Section
6.22.         Healthcare Representations. Borrower represents
and warrants to Administrative Agent and Lenders that:

 

(a)          Each
Project (i) is being operated as an independent living, skilled nursing, memory care or assisted living facility, having the number
of Residential Units as set forth on Exhibit A, attached hereto, (ii) if applicable, has a current provider agreement
that is in full force and effect under Medicare and Medicaid, and (iii) is in all material respects in compliance with all applicable
Requirements of Law (and, to the extent that failure to comply with any such Requirements of Law would materially and adversely
affect the operation of a Project, is in compliance with such Requirement of Law) including (A) staffing requirements, (B) health
and fire safety codes, including quality and safety standards, (C) accepted professional standards and principles that apply to
professionals providing services at the Projects; (D) federal, state or local laws, rules, regulations or published interpretations
or policies relating to the prevention of fraud and abuse, (E) insurance, reimbursement and cost reporting requirements, (F) government
payment program requirements and disclosure of ownership and related information requirements, (G) requirements of applicable Governmental
Authorities, including those relating to the Projects’ physical structure and environment, licensing, quality and adequacy
of medical care, distributions of pharmaceuticals, rate setting, equipment, personnel, operating policies and services and fee
splitting, and (H) any other applicable laws, regulations or agreements for reimbursement for the type of care or services provided
by Operator with respect to the Projects. There is no threatened in writing, existing or pending revocation, suspension, termination,
probation, restriction, limitation, or nonrenewal proceeding by any third-party payor under a Third Party Payor Program. The Third
Party Payor Programs to which Borrower or any Operator may presently be subject with respect to any Project are listed on Schedule
6.22(a).

 

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(b)          All
Primary Licenses necessary for using and operating the Projects for the uses described in clause (a), above are listed on
Schedule 6.22(b), are either held by, or will be held by, Borrower or the applicable Operator, as required under
applicable Law, and are in full force and effect.

 

(c)          Except
as set forth on Schedule 6.22 hereof, with respect to any Project, there are no inquiries, investigations, probes,
audits or proceedings by any Governmental Authority or notices thereof, or any other third party or any patient, employee or resident
(including whistleblower suits, or suits brought pursuant to federal or state “false claims acts” and
Medicaid, Medicare or state fraud and/or abuse laws) that are reasonably likely directly or indirectly, or with the passage of
time (i) to have a material adverse impact on Operators’ ability to accept and/or retain patients or residents or operate
such Project for its current use or result in the imposition of a fine, a sanction, a lower rate certification or a lower reimbursement
rate for services rendered to eligible patients or residents, (ii) to modify, limit or result in the transfer, suspension, revocation
or imposition of probationary use of any of the Primary Licenses, (iii) to affect any Operator’s continued participation
in the Medicaid or Medicare programs or any other Third-Party Payor Programs, or any successor programs thereto at then current
rate certifications, or (iv) result in any other civil or criminal penalty or remedy, or which could result in the appointment
of a receiver.

 

(d)          With
respect to any Project, except as set forth on Schedule 6.22, no Project has received a notice of violation at a
level that under applicable Law requires the immediate or accelerated filing of a plan of corrections, and no statement of charges
or deficiencies has been made or penalty enforcement action has been undertaken against any Project, no Operator currently has
outstanding any violation, and no statement of charges or deficiencies has been made or penalty enforcement action has been undertaken
each that remain outstanding against any Project, any Operator or against any officer, director, partner, member or stockholder
of any Operator, by any Governmental Authority, and there have been no violations threatened against any Project’s, or any
Operator’s certification for participation in Medicare or Medicaid or the other Third-Party Payor Programs that remain open
or unanswered.

 

(e)          With
respect to any Project, there are no current, pending or outstanding Third-Party Payor Programs reimbursement audits, appeals or
recoupment efforts actually pending at the Project, and there are no years that are subject to an open audit in respect of any
Third-Party Payor Program that would, in each case, adversely affect any Operator, other than customary audit rights pursuant to
Medicare/Medicaid/TRICARE programs or other Approved Insurer’s programs that would materially adversely affect Operators
or Borrower.

 

(f)          Neither
Borrower nor any Operator has received federal funds authorized under the Hill-Burton Act (42 U.S.C. 291, et seq.), as it
may be amended.

 

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(g)          With
respect to each Project, substantially all of the patient and resident care agreements with respect to such Project conform in
all material respects with the form patient or resident care agreements that have been delivered to Administrative Agent and all
such agreements are in compliance with Healthcare Laws.

 

(h)          Borrower’s
and Operator’s private payor, Medicaid, Medicare, and/or managed care company, insurance company or other third party insurance
accounts receivable with respect to the Projects are free of any Liens and neither Borrower nor Operators have pledged any of their
respective receivables as collateral security for any loan or indebtedness.

 

(i)          Neither
Borrower nor Operator is a party to any collective bargaining agreement or other labor contract applicable to persons employed
by it at the Projects and there are no threatened or pending labor disputes at the Projects.

 

Section
6.23.         No Change in Facts or Circumstances; Disclosure.
To Borrower’s Knowledge, there has been no material adverse change in any condition, fact, circumstance or event that would
make the financial statements, rent rolls, reports, certificates or other documents submitted in connection with the Loan inaccurate,
incomplete or otherwise misleading in any material respect or that otherwise materially and adversely affects the business operations
or the financial condition of Borrower or the Projects.

 

ARTICLE
VII

FINANCIAL REPORTING

 

Section
7.1.          Financial Statements. Borrower shall furnish
to Administrative Agent and shall cause each Borrower Party to furnish to Administrative Agent such financial statements and other
financial information as may be required pursuant to this Article 7 and such other financial information as Administrative Agent
may require pursuant to this Article 7 and such other financial information as Administrative Agent may reasonably request from
time to time. All such financial statements shall be in Excel format, shall reflect all material contingent liabilities in accordance
with GAAP and shall accurately and fairly present the results of operations and the financial condition of Borrower at the dates
and for the period indicated and shall be sufficient to permit Administrative Agent and Lenders to calculate and/or verify Borrower’s
calculation of Debt Service Coverage Ratio, Project Yield and Adjusted Net Operating Income.

 

(a)          Financial
Information. In furtherance of the foregoing, Borrower will furnish to Administrative Agent (or cause to be furnished to
Administrative Agent) the following financial information and reports with respect to each Borrower, each Project and/or each Operator
(as applicable), in each case in form and format and providing information satisfactory to Administrative Agent in its discretion:

 

(i)          within
forty-five (45) days after the end of each calendar month, (A) internally prepared monthly financial statements (including
income statements and balance sheets) prepared for each Borrower and each Project which fairly present the financial condition
for each Borrower and each Project for such period and year-to-date and (B) a current Census Report for each Project;

 

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(ii)         within
sixty (60) days after the end of each fiscal year, internally prepared annual financial statements (including income statements
and balance sheets) prepared for each Borrower and each Project in accordance with GAAP (except for the absence of footnotes and
year-end adjustments) and based on an accrual basis of accounting consistent with industry standards;

 

(iii)        within
one hundred twenty (120) days after the end of each fiscal year, annual consolidated audited financial statements for each Borrower
and each Project (which may be on a consolidated basis with respect to each Master Tenant), prepared in accordance with GAAP on
an accrual basis and prepared by a firm of independent public accountants reasonably satisfactory to Administrative Agent;

 

(iv)        copies
of state and local health inspection and regulatory surveys (including complaint surveys), to be provided within twenty-five (25)
days after the completion of such surveys;

 

(v)         within
forty-five (45) days after the end of each fiscal quarter, internally prepared monthly financial statements (including income statements
and balance sheets) prepared for Guarantor which fairly present the financial condition of Guarantor for such period;

 

(vi)        within
one hundred twenty (120) days after the end of each fiscal year, annual consolidated audited financial statements prepared for
Guarantor in accordance with GAAP and prepared by a firm of independent public accountants reasonably satisfactory to Administrative
Agent; and

 

(vii)       such
additional information, reports or statements regarding the Borrower, the Projects, Guarantor or Operator as Administrative Agent
may from time to time reasonably request.

 

(b)          Certification
of Financial Statements. Each financial statement provided hereunder shall be in scope and detail reasonably satisfactory
to Administrative Agent and certified by the chief financial representative of each Borrower or its manager. Borrower will maintain
a system of accounting established and administered in accordance with sound business practices to (i) permit preparation of financial
statements on an accrual basis consistent with industry standards and substantially in accordance with GAAP, and (ii) provide the
information required to be delivered to Administrative Agent hereunder.

 

Section
7.2.          Additional Reports. Borrower shall deliver
to Administrative Agent:

 

(a)          Within
thirty (30) days following the request of Administrative Agent, a description of the type and amount of all capital expenditures
at the Projects during the prior calendar year;

 

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(b)          Within
thirty (30) days following the request by Administrative Agent, evidence satisfactory to Administrative Agent that all federal
and state taxes, including, without limitation, payroll taxes, that are due have been paid in full by each Borrower, and each other
Borrower Party, to be delivered to Administrative Agent (A) with respect to federal and state taxes (other than payroll taxes),
within ten (10) days after the required filing date of the applicable tax return and (B) with respect to payroll taxes,
within thirty-five (35) days following the end of each calendar month;

 

(c)          Upon
the request of Administrative Agent, a copy of Borrowers’ or Guarantor’s income tax filings for the prior calendar
year within thirty (30) days after the filing thereof;

 

(d)          Within
forty-five (45) days after Administrative Agent’s request therefor, including, if requested by Administrative Agent,
(A) cash flow statements for the Borrowers or Operators (which may be prepared on a consolidated basis) and (B) an
accounts receivable and accounts payable aging report for each of the Projects.

 

(e)          As
soon as reasonably available but in no event later than thirty (30) days after such items become available to Borrower in final
form, copies of any final engineering or environmental reports prepared for Borrower with respect to any Project;

 

(f)          Immediately
upon receipt thereof, a copy of any notice received by Borrower from any Governmental Authority with respect to an environmental
condition existing or alleged to exist or emanate from or at any Project;

 

(g)          From
time to time, if any Lender determines that obtaining appraisals is necessary in order for such Lender to comply with applicable
Requirements of Law (including any appraisals required to comply with FIRREA), Borrower shall furnish to Administrative Agent appraisal
reports in form and substance and from appraisers reasonably satisfactory to Administrative Agent stating the then current fair
market value of each Project; provided, however, that such report shall not be required during the term of the Loan
unless (A) a Potential Default or Event of Default exists, (B) any Lender is required to obtain such report under applicable Law
more frequently than once during the term of the Loan or (C) Administrative Agent or any Lender elects to obtain such report at
its cost and expense;

 

(h)          Immediately
upon receipt or delivery thereof, notice of any alleged default under the Ground Lease.

 

Section
7.3.          Compliance Certificate. Within forty-five
(45) days after the end of each calendar quarter, Borrower shall deliver and shall cause Guarantor to deliver such financial reports
and information as Administrative Agent shall require evidencing compliance with the applicable financial covenants, together with
a fully completed Compliance Certificate executed by an officer of Borrower or Guarantor (or an officer of its manager, managing
member or general partner), and, if requested by Administrative Agent, back-up documentation as Administrative Agent shall reasonably
require evidencing compliance.

 

Section
7.4.          Accounting Principles. All financial statements
shall be prepared in accordance with GAAP (or such other accounting basis reasonably acceptable to Administrative Agent). Notwithstanding
the foregoing, all financial statements delivered hereunder shall be prepared, and all financial covenants contained herein shall
be calculated, without giving effect to any election under Statement of Financial Accounting Standards 159 (or any similar accounting
principle) permitting a Person to value its financial liabilities at the fair value thereof.

 

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Section
7.5.          Other Information; Access. Borrower shall
deliver to Administrative Agent such additional information regarding Borrower, its subsidiaries, its business, any Borrower Party,
and the Projects within thirty (30) days after Administrative Agent’s request therefor, including, if requested by Administrative
Agent, (a) copies of the regular monthly bank statements provided to Borrower or Operator and such other information relating to
the Borrower’s operating accounts as shall reasonably be requested by Administrative Agent, in each case, to the extent such
bank has the operational ability to do so, by providing Administrative Agent with internet access to such statements or information,
(b) cash flow statements for the Operator and (c) an accounts receivable and accounts payable aging report. Borrower shall permit
Administrative Agent to examine such records, books and papers of Borrower which reflect upon its financial condition and the income
and expenses of the Projects. In the event that Borrower fails to forward the financial statements required in this Article 7 within
thirty (30) days after written request, Administrative Agent shall have the right to audit such records, books and papers at Borrower’s
expense.

 

Section
7.6.          Annual Budget.  At least thirty (30) days
prior to the commencement of each fiscal year, Borrower will provide to Administrative Agent the Operator’s proposed annual
operating and capital improvements budget for the Projects for such fiscal year for review by Administrative Agent.

 

Section
7.7.          Books and Records/Audits.  Borrower shall
keep and maintain or cause to be kept and maintained at all times at the Projects, or such other place as Administrative Agent
may approve in writing, complete and accurate books of accounts and records adequate to reflect the results of the operation of
the Projects and to provide the financial statements required to be provided to Administrative Agent pursuant to Section 7.1
above and copies of all written contracts, material correspondence, and other material documents affecting the Projects. Administrative
Agent and its designated agents shall have the right to inspect and copy any of the foregoing, subject to compliance with Healthcare
Laws. Additionally, if a Potential Default or Event of Default exists or if Administrative Agent or any Lender has a reasonable
basis to believe that Borrower’s records are materially inaccurate, Administrative Agent and each Lender may, subject to
compliance with Healthcare Laws conduct a joint audit, at Borrower’s expense, and determine, in such Person’s reasonable
discretion, the accuracy of Borrower’s records and computations.

 

ARTICLE
VIII

COVENANTS

 

Borrower covenants
and agrees with each Lender and Administrative Agent as follows:

 

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Section
8.1.          Transfers or Encumbrance of Property.

 

(a)          Borrower
shall not cause or permit a Transfer of any Project or any part thereof or any legal or beneficial interest therein nor permit
a Transfer of an interest in any Restricted Party (in each case, a “Prohibited Transfer”) without the
prior written consent of the Administrative Agent, other than pursuant to Leases of space in the improvements to Tenants or a Lease
of each Project in its in entirety pursuant to a Master Lease, in each case to the extent permitted under Article V.

 

(b)          A
Prohibited Transfer shall include, but not be limited to, (i) an installment sale agreement wherein Borrower agrees to sell any
Project or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial
part of any Project for other than actual occupancy by a space tenant thereunder or a sale, assignment or other transfer of, or
the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any rents (other than pursuant
to the Master Lease); (iii) if a Restricted Party is a corporation, any merger, consolidation or Transfer of such corporation’s
stock or the creation or issuance of new stock in one or a series of transactions; (iv) if a Restricted Party is a limited or general
partnership or joint venture, any merger or consolidation or the change, removal, resignation or addition of a general partner
or the Transfer of the partnership interest of any general or limited partner or any profits or proceeds relating to such partnership
interests or the creation or issuance of new partnership interests; (v) if a Restricted Party is a limited liability company, any
merger or consolidation or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing
member, any member) or the Transfer of the membership interest of any member or any profits or proceeds relating to such membership
interest; (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Transfer of the legal or beneficial
interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; (vii) the removal or the resignation
of the Property Manager (including an Affiliated Manager) other than in accordance with Section 8.3; or (viii) a
Transfer that, with respect to the Redding Sundial Project, could result in a default under the Ground Lease.

 

(c)          Notwithstanding
the provisions of Section 8.1(b), any of the following transfers shall not be deemed to be a Prohibited Transfer, provided
that, with respect to the Redding Sundial Project, the same would not result in a default under the Ground Lease: (i) a transfer
by devise or descent or by operation of law upon the death of a member, partner or shareholder of a Restricted Party; or (ii) the
Transfer, in one or a series of transactions after the date hereof, of not more than forty-nine percent (49%) of the stock, limited
partnership interests or non-managing membership interests (as the case may be) in a Restricted Party; provided, however,
any such transfer shall be subject to the following additional conditions: (A) no such transfers shall result in a change in Control
in the Restricted Party or change in control of any Project, (B) no transfer shall be made to any Person that is not in compliance
with Section 6.18, and (C) Administrative Agent shall receive not less than thirty (30) days prior written notice of such
proposed transfer; or (iii) any Transfer of the stock in any publicly traded company whose shares are listed on the New York Stock
Exchange or such other nationally recognized stock exchange. Notwithstanding the foregoing, any transfer that results in any Person
owning in excess of forty-nine percent (49%) of the ownership interest in a Restricted Party must comply with the requirements
of Section 8.1(d) hereof.

 

(d)          In
connection with a Transfer to Union Life, Guarantor, notwithstanding the provisions of Section 8.1(b), may cause the
sole member of Portland Gateway Borrower and Salem Applewood Borrower to Transfer 100% of its membership interests in such Borrower,
provided that:

 

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(i)          no
Event of Default shall be in existence;

 

(ii)         following
such Transfer, all of the membership interests of such Borrower shall be held by a Permitted Member;

 

(iii)        Administrative
Agent shall have received and approved, in its reasonable discretion, the organizational documents of each Permitted Member, which
organizational documents shall include the covenants set forth in Sections 6.17(a), (b) and (c) hereof, modified for the sole
member of a Borrower, and each new Guarantor;

 

(iv)        if
required by Administrative Agent, Administrative Agent shall have received satisfactory tax, lien and judgment searches, authority
documents and evidence of good standing with respect to the Permitted Member;

 

(v)         Administrative
Agent shall have received an Assignment of Membership Interests from the Permitted Member of each Borrower; and

 

(vi)        Administrative
Agent shall have received such information as Administrative Agent may require to satisfy its OFAC, anti-money laundering and know
your customer requirements, shall have completed such requirements and shall be satisfied with the results thereof.

  

(e)          In
connection with a Transfer to a Person other than Union Life, Guarantor, notwithstanding the provisions of Section 8.1(b),
may cause the sole member of Portland Gateway Borrower and Salem Applewood Borrower to transfer 100% of its membership interests
in such Borrower, provided that:

 

(i)          no
Event of Default shall be in existence;

 

(ii)         at
least fifteen (15) days prior to such Transfer, Borrower provides written notice to Administrative Agent disclosing the identity
of the proposed investor, the terms of such conveyance;

 

(iii)        Administrative
Agent shall have received such information as Administrative Agent may require to satisfy its OFAC, anti-money laundering and know
your customer requirements, shall have completed such requirements and shall be satisfied with the results thereof;

 

(iv)        the
proposed investor and its principals, owners, officers and directors meet all of the eligibility, credit, management and other
standards customarily applied by Administrative Agent and the Required Lenders at the time of the proposed transfer to the approval
of borrowers in connection with the origination loans similar to the Loan on healthcare facilities, to be determined by Administrative
Agent in its sole discretion, including any standards with respect to (A) previous relationships between Administrative Agent or
any Lender and the Transferee and its principals, (B) the reputation for integrity, honesty and veracity of the Transferee and
its principals, owners, officers and directors, and (C) OFAC, money-laundering, anti-terrorism, SEC and other similar regulations
and activities;

  

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(v)         following
such Transfer, all of the membership interests of such Borrower shall be held by a Permitted Member;

 

(vi)        Administrative
Agent shall have received and approved, in its reasonable discretion, the organizational documents of each Permitted Member, which
organizational documents shall include the covenants set forth in Sections 6.17(a), (b) and (c) hereof, modified for the sole
member of a Borrower, and each Guarantor;

 

(vii)       if
required by Administrative Agent, Administrative Agent shall have received satisfactory tax, lien and judgment searches, authority
documents and evidence of good standing with respect to the Permitted Member;

 

(viii)      Administrative
Agent shall have received an Assignment of Membership Interests from the Permitted Member of each Borrower; and

 

(ix)         Guarantor
shall not have completed a previous Transfer under Section 8.1(d).

 

(f)          All
expenses incurred by Administrative Agent and Lenders in connection with a Permitted Transfer or a request for consent to a Prohibited
Transfer shall be payable by Borrower whether or not the Required Lenders consent to the Prohibited Transfer. Neither Administrative
Agent nor any Lender shall be required to demonstrate any actual impairment of its security or any increased risk of default hereunder
in order to declare the Indebtedness immediately due and payable upon a Prohibited Transfer made without the Required Lenders’
consent. This provision shall apply to each and every Prohibited Transfer, whether or not the Required Lenders have consented to
any previous Prohibited Transfer.

 

Section
8.2.          Taxes; Utility Charges. Except to the
extent sums sufficient to pay all Taxes (defined herein) have been previously deposited with Administrative Agent as part of the
Tax Impound and subject to Borrower’s right to contest in accordance with Section 12.14 hereof, Borrower shall pay
before any fine, penalty, interest or cost may be added thereto, and shall not enter into any agreement to defer, any real estate
taxes and assessments, franchise taxes and charges, and other governmental charges (the “Taxes”) that
may become a Lien upon any Project or become payable during the term of the Loan. Borrower’s compliance with Section 3.4
of this Agreement relating to impounds for Taxes shall, with respect to payment of such Taxes, be deemed compliance with this Section
8.2. Borrower shall not suffer or permit the joint assessment of any Project with any other real property constituting a separate
tax lot or with any other real or personal property. Borrower shall promptly pay for all utility services provided to each Project.

 

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Section
8.3.          Management.

 

(a)          Borrower
acknowledges that the Lenders are making the Loan, in part, based upon the operational expertise of the Property Manager. Borrower
shall not, and shall not permit Master Tenant to, surrender, terminate, cancel, modify in any material respect, renew, amend, or
extend the Management Agreement, or enter into any other agreement relating to the management or operation of the Projects with
Property Manager or any other Person, or consent to the assignment by the Property Manager of its interest under the Management
Agreement, in each case without the express written consent of Administrative Agent, which consent shall not be unreasonably withheld,
conditioned or delayed and shall be based upon Administrative Agent’s evaluation of the proposed substitute manager’s
and operator’s financial condition, credit history and credit worthiness, experience in operating and managing properties
similar to the Projects, performance and compliance history in connection with healthcare facilities, reputation for honesty and
integrity and prior experience with Administrative Agent and the Lenders. If at any time Administrative Agent consents to the appointment
of a new manager, such new manager and Borrower shall, as a condition of Administrative Agent’s consent, execute an Acknowledgment
and Agreement of Property Manager in form and substance similar to the Acknowledgment and Agreement of Property Manager executed
by the Property Manager as of the Closing Date. Any change in ownership or control of the Property Manager shall be cause for Administrative
Agent to re-approve such Property Manager and Management Agreement. Each Property Manager shall hold and maintain all necessary
licenses, certifications and permits required by law to operate and manage the Project for which it is providing management services.

 

(b)          Borrower
and Master Tenant shall cause each Property Manager to manage the Projects in accordance with the applicable Management Agreement.
Borrower and/or Master Tenant, as the case may be shall (a) diligently perform and observe all of the terms, covenants and conditions
of the applicable Management Agreement on the part of Borrower or Master Tenant, respectively, to be performed and observed, (b)
promptly notify Administrative Agent of any notice received by Borrower or Master Tenant of any default by Borrower in the performance
or observance of any of the material terms, covenants or conditions of the applicable Management Agreement on the part of Borrower
or Master Tenant, respectively, to be performed and observed, and (c) promptly deliver to Administrative Agent a copy of each financial
statement, business plan or capital expenditures plan received by it under the Management Agreement. The management fee payable
under each Management Agreement shall not exceed Five Percent (5.0%) of rental collections.

 

(c)          Administrative
Agent shall have the right to require Borrower and/or Master Tenant to replace the Property Manager with a Person which is not
an Affiliate of, but is chosen by, Borrower and approved by Administrative Agent, such approval not to be unreasonably withheld
or delayed, upon the occurrence of any one or more of the following events: (a) at any time following the occurrence and continuance
of an Event of Default, and/or (b) if Property Manager shall be in default under the Management Agreement beyond any applicable
notice and cure period or if at any time the Manager has engaged in gross negligence, fraud or willful misconduct or if at any
time the Manager is insolvent or a debtor in a bankruptcy proceeding.

 

Section
8.4.          Operation; Maintenance; Inspection.  Borrower
shall observe and comply with all legal requirements applicable to the ownership, use and operation of the Projects. Borrower shall
maintain the Projects in good condition and promptly repair any damage or casualty, normal wear and tear excepted. Borrower shall
permit Administrative Agent and its agents, representatives and employees, upon reasonable prior notice to Borrower, to inspect
the Projects and conduct such environmental and engineering studies as Administrative Agent may require, provided such inspections
and studies do not materially interfere with the use and operation of the Projects.

 

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Section
8.5.          Taxes on Security. Borrower shall pay
all taxes, charges, filing, registration and recording fees, excises and levies payable with respect to the Note or the Liens created
or secured by the Loan Documents, other than income, franchise and doing business taxes imposed on Administrative Agent or any
Lender. If there shall be enacted any law (a) deducting the Loan from the value of any Project for the purpose of taxation, (b)
affecting any Lien on the Projects, or (c) changing existing laws of taxation of mortgages, deeds of trust, security deeds, or
debts secured by real property, or changing the manner of collecting any such taxes, Borrower shall promptly pay to Administrative
Agent, on demand, all taxes, costs and charges for which Administrative Agent or any Lender is or may be liable as a result thereof;
however, if such payment would be prohibited by law or would render the Loan usurious, then instead of collecting such payment,
Administrative Agent may declare all amounts owing under the Loan Documents to be immediately due and payable.

 

Section
8.6.          Legal Existence; Name, Etc.  Borrower
shall preserve and keep in full force and effect its existence as, and at all times operate as, a Single Purpose Entity, and shall
preserve and keep in full force and effect its entity status, franchises, rights and privileges under the laws of the state of
its formation, and all qualifications, licenses and permits applicable to the ownership, use and operation of the Projects. Neither
Borrower nor any general partner or managing member of Borrower shall wind up, liquidate, dissolve, reorganize, merge, or consolidate
with or into any Person, or permit any subsidiary or Affiliate of Borrower to do so. Without limiting the foregoing, Borrower shall
not reincorporate or reorganize itself under the laws of any jurisdiction other than the jurisdiction in which it is incorporated
or organized as of the Closing Date. Borrower and each general partner or managing member in Borrower shall conduct business only
in its own name and shall not change its name, identity, state of formation, or organizational structure, or the location of its
chief executive office or principal place of business unless Borrower (a) shall have obtained the prior written consent of Administrative
Agent to such change, and (b) shall have taken all actions necessary or requested by Administrative Agent to file or amend any
financing statement or continuation statement to assure perfection and continuation of perfection of security interests under the
Loan Documents. If Borrower does not have an organizational identification number and later obtains one, such Borrower shall promptly
notify Administrative Agent of its organizational identification number. Borrower (and each general partner or managing member
in Borrower, if any) shall maintain its separateness as an entity, including maintaining separate books, records, and accounts
and observing corporate and partnership formalities independent of any other entity, shall pay its obligations with its own funds
and shall not commingle funds or assets with those of any other entity.

 

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Section
8.7.          Further Assurances.  Borrower shall promptly
(a) cure any defects in the execution and delivery of the Loan Documents and the Environmental Indemnity Agreement, (b) provide,
and cause each Borrower Party to provide, Administrative Agent such additional information and documentation on Borrower’s
and each Borrower Party’s legal or beneficial ownership, policies, procedures, and sources of funds as Administrative Agent
deems necessary or prudent to enable Administrative Agent and each Lender to comply with Anti-Money Laundering Laws as now in existence
or hereafter amended, and (c) execute and deliver, or cause to be executed and delivered, all such other documents, agreements
and instruments as Administrative Agent may reasonably request to further evidence and more fully describe the Collateral for the
Loan, to correct any omissions in the Loan Documents or the Environmental Indemnity Agreement to perfect, protect or preserve any
liens created under any of the Loan Documents and the Environmental Indemnity Agreement, or to make any recordings, file any notices,
or obtain any consents, as may be necessary or appropriate in connection therewith. Borrower grants Administrative Agent an irrevocable
power of attorney coupled with an interest for the purpose of exercising and perfecting any and all rights and remedies available
to Administrative Agent and the Lenders under the Loan Documents and the Environmental Indemnity Agreement, at law and in equity,
including without limitation such rights and remedies available to Administrative Agent pursuant to this Section 8.7. From
time to time upon the written request of Administrative Agent, Borrower shall deliver to Administrative Agent a schedule of the
name, legal domicile address and jurisdiction of organization, if applicable, for each Borrower Party and each holder of a legal
interest in Borrower.

 

Section
8.8.          Estoppel Certificates Regarding Loan.
Each Borrower, within ten (10) days after request, shall furnish to Administrative Agent a written statement, duly acknowledged,
setting forth the amount due on the Loan, the terms of payment of the Loan, the date to which interest has been paid, whether any
offsets or defenses exist against the Loan and, if any are alleged to exist, the nature thereof in detail, and such other matters
as Administrative Agent reasonably may request.

 

Section
8.9.          Notice of Certain Events.  Borrower shall
promptly notify Administrative Agent of (a) any Potential Default or Event of Default, together with a detailed statement of the
steps being taken to cure such Potential Default or Event of Default; (b) any notice of default received by Borrower under other
obligations relating to the Projects or otherwise material to Borrower’s business, including any notices of violations of
any laws, regulations, codes or ordinances; (c) any threatened or pending legal, judicial or regulatory proceedings, including
any dispute between Borrower and any Governmental Authority, materially adversely affecting Borrower, any Borrower Party or the
Projects; (d) a copy of each notice of default or termination given or made to any Operator by Borrower or received by Borrower
from any Operator; and (e) a copy of each notice of default or termination under any license or permit necessary for the operation
of the Projects in the manner required by this Agreement; and (f) any threatened or actual ban on admissions as to the Projects;
and in the case of clauses (b), (d) or (e), promptly provide Administrative Agent with copies of such notices
referred to therein.

 

Section
8.10.         Indemnification. Borrower shall protect, defend,
indemnify and save harmless Administrative Agent and each Lender, their respective shareholders, directors, officers, employees
and agents (each, an “Indemnified Person”) from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including without limitation reasonable attorneys’ fees and expenses and
other costs of investigation, or defense, including those uncured upon any appeal or in connection with responding to subpoenas,
third parties or otherwise), imposed upon or incurred by or asserted against any Indemnified Person by reason of (a) credit having
been extended, suspended or terminated under this Agreement and the other Loan Documents and the administration of such credit,
and in connection with or arising out of the transactions contemplated hereunder and thereunder and any actions or failures to
act in connection therewith; (b) ownership of the Mortgage, the Projects or any interest therein or receipt of any rents and the
exercise of rights and remedies thereunder; (c) any accident, injury to or death of persons or loss of or damage to property occurring
in, on or about the Projects or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (d) any use, nonuse or condition in, on or about the Projects or any part thereof or on the adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or ways; (e) performance of any labor or services or the furnishing
of any materials or other property in respect of the Projects or any part thereof; and (e) the failure of any Person to file timely
with the Internal Revenue Service an accurate Form 1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange Transactions, which may be required in connection with this Agreement, or to supply a copy thereof in a timely fashion
to the recipient of the proceeds of the transaction in connection with which this Agreement is made. Any amounts payable to Administrative
Agent or any Lender by reason of the application of this Section shall become immediately due and payable and shall bear interest
at the Default Rate from the date loss or damage is sustained by Administrative Agent or such Lender until paid.

 

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Section
8.11.         [Intentionally Omitted].

 

Section
8.12.         Payment For Labor and Materials.  Subject to
Borrower’s right to contest in accordance with Section 12.14 hereof, Borrower will promptly pay when due all bills
and costs for labor, materials, and specifically fabricated materials incurred in connection with the Projects and never permit
to exist beyond the due date thereof in respect of any Project or any part thereof any Lien, even though inferior to the Liens
hereof, and in any event never permit to be created or exist in respect of any Project or any part thereof any other or additional
Lien other than the Liens hereof, except for the Permitted Encumbrances (defined in the Mortgage).

 

Section
8.13.         Use and Proceeds, Revenues.  Each Borrower
shall use the proceeds of the Loan for proper business purposes. No portion of the proceeds of the Loan shall be used by Borrower
in any manner that might cause the borrowing or the application of such proceeds to violate Regulation D, Regulation T or Regulation
X or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Securities Act of 1933 or the
Securities Exchange Act of 1934. Except as otherwise specifically provided in the Loan Documents, revenues and other proceeds from
the Projects received by Borrower shall be applied to the Indebtedness then due and payable, actual operating expenses relating
to the Projects of the type included in the definition of “Adjusted Expenses”, or other budgeted capital improvements,
repairs or replacements for the Projects before distribution by Borrower to any Borrower Party.

 

Section
8.14.         Compliance with Laws and Contractual Obligations.

 

(a)          Borrower
will (and will cause Operator to) comply in all material respects with (or, to the extent that failure to comply could reasonably
be expected to materially and adversely affect the operation of a Project, will comply in all respects with) (i) the requirements
of all applicable laws, rules, regulations and orders of any Governmental Authority (including, without limitation, laws, rules,
regulations and orders relating to all building, zoning, density, land use, covenants, conditions and restrictions, subdivision
requirements, taxes, employer and employee contributions, securities, employee retirement and welfare benefits, environmental protection
matters, employee health and safety, quality and safety standards, accreditation standards and requirements of the applicable state
department of health or other applicable state regulatory agency (each a “State Regulator”)), as are
now in effect and which may be imposed upon Borrower or Operator or the maintenance, use or operation of the Projects or the provision
of services to the occupants of the Projects and (ii) the obligations, covenants and conditions contained in all other material
contractual obligations of Borrower, and as they relate to the Projects and Operator.

 

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(b)          Borrower
will obtain and maintain and will cause Operator to obtain and maintain, all licenses, qualifications and permits now held or hereafter
required to be held by Borrower or Operator for which the loss, suspension, revocation or failure to obtain or renew, could reasonably
be expected to have a material adverse effect upon the financial condition of Borrower or the ability to operate the Projects in
compliance with the requirements of the Loan Documents and as it has been operated prior to the date hereof.

 

Section
8.15.         Operating and Financial Covenants. The Projects
shall satisfy each of the following covenants as of the end of each calendar quarter (the “Determination Date”):

 

(a)          Occupancy.
The Projects shall maintain (on a combined basis) average occupancy during the calendar quarter ending on each Determination Date
of not less than 85.5%.

 

(b)          Debt
Service Coverage. As of each Determination Date, the Debt Service Coverage Ratio shall be equal to or greater than 2.00
to 1.00 based upon the trailing twelve (12) full calendar months prior to the Determination Date; provided, however, that, if a
Determination Date is less than twelve (12) months from the date on which a Borrower acquired a Project, Adjusted Net Operating
Income for such Project may be annualized based upon the period of such Borrower’s ownership of the Project.

 

(c)          Project
Yield. As of each Determination Date, the Project Yield shall be equal to or greater than the following, in each case based
upon the trailing twelve (12) full calendar months prior such to the Determination Date (i) as of each of the first four Determination
Dates, 13.0%; and (ii) as of each Determination Date thereafter, 13.5%, If a Determination Date is less than twelve (12) months
from the date on which a Borrower acquired a Project, Adjusted Net Operating Income for such Project may be annualized based upon
the period of such Borrower’s ownership of the Project.

 

Section
8.16.         Healthcare Laws and Covenants.

 

(a)          Without
limiting the generality of any other provision of this Agreement, Borrower and Operator and their employees and contractors (other
than contracted agencies) in the exercise of their duties on behalf of Borrower or Operator (with respect to its operation of the
Projects) shall be in compliance in all material respects with all applicable Healthcare Laws. Borrower and Operator will have
maintained and shall have continued to maintain in all material respects all records required to be maintained by any Governmental
Authority or otherwise under the Healthcare Laws and to Borrower’s Knowledge there are no presently existing circumstances
which would result or likely would result in material violations of the Healthcare Laws. Borrower and Operator have and will maintain
all Primary Licenses, Permits and other Governmental Approvals necessary under applicable Laws to own and/or operate the Projects,
as applicable (including such Governmental Approvals as are required under such Healthcare Laws); or, if applicable Licenses have
been applied for, but not yet issued to, Operator, Operator have entered into applicable agreements with the prior operator of
the Projects to operate the Projects under the current Primary Licenses.

 

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(b)          Borrower
represents that it is neither (i) a “covered entity” within the meaning of HIPAA or submits claims or reimbursement
requests to Third Party Payor Programs “electronically” (within the meaning of HIPAA) nor (ii) subject to the “Administrative
Simplification” provisions of HIPAA. If Borrower at any time becomes, and during any period during which Operator is, a “covered
entity” or subject to the “Administrative Simplification” provisions of HIPAA, then such Person (during any period
during which such Person is a covered entity or subject to the co-called “Administrative Simplification” provisions
of HIPAA) (x) will promptly undertake all necessary surveys, audits, inventories, reviews, analyses and/or assessments (including
any necessary risk assessments) of all areas of its business and operations required by HIPAA and/or that could be adversely affected
by the failure of such Person(s) to be HIPAA Compliant (as defined below); (y) will promptly develop a detailed plan and time line
for becoming HIPAA Compliant (a “HIPAA Compliance Plan”); and (z) will implement those provisions of
such HIPAA Compliance Plan in all material respects necessary to ensure that such Person(s) are or become HIPAA Compliant. For
purposes hereof, “HIPAA Compliant” shall mean that Person (A) is or will be in material compliance with
each of the applicable requirements of the so-called “Administrative Simplification” provisions of HIPAA on and as
of each date that any party thereof, or any final rule or regulation thereunder, becomes effective in accordance with its or their
terms, as the case may be (each such date, a “HIPAA Compliance Date”) if and to the extent such Person
is subject to such provisions, rules or regulations, and (B) is not and could not reasonably be expected to become, as of any date
following any such HIPAA Compliance Date, the subject of any civil or criminal penalty, process, claim, action or proceeding, or
any administrative or other regulatory review, survey, process or proceeding (other than routine surveys or reviews conducted by
any government health plan or other accreditation entity) that could result in any of the foregoing or that could reasonably be
expected to adversely affect such Person’s business, operations, assets, properties or condition (financial or otherwise),
in connection with any actual or potential violation by such Person of the then effective provisions of HIPAA.

 

(c)          If
and to the extent required under applicable Laws, Borrower and/or each Operator shall maintain in full force and effect throughout
the term of the Loan (i) a valid Primary License for the requisite number of Residential Units in the Projects, free from restrictions
or known conflicts, and such Primary License shall not be provisional, probationary or restricted in any manner that would materially
impair the use or operation of the Projects for the use described in Section 6.22(a) above, (ii) a provider agreement or
other required documentation of approved provider status for each Third-Party Payor Programs, if applicable; and (iii) all
other Permits and Governmental Approvals necessary to operate each Project as an independent living, assisted living, memory care
or skilled nursing facility, as applicable. The Projects shall be operated in a manner such that the Primary Licenses shall remain
in full force and effect.

 

(d)          Neither
Borrower nor any Operator shall do (or suffer to be done) any of the following with respect to any Project without the prior written
consent of Administrative Agent:

 

(i)          Transfer
the Primary Licenses to any location other than the Projects.

 

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(ii)         Rescind,
withdraw or revoke the Primary Licenses, or otherwise amend the Primary Licenses in such a manner that results in a material adverse
effect on the rates charged or otherwise diminish or impair the nature, tenor or scope of the Primary Licenses;

 

(iii)        Amend
or otherwise change any Project’s authorized units/beds capacity and/or the number of Residential Units permitted under the
Primary Licenses or otherwise approved by the State Regulator, if applicable;

 

(iv)        Replace
or transfer all or any part of any Project’s units or beds to another site or location other than to another Project; or

 

(v)         Voluntarily
transfer or encourage the transfer of any resident of any Project to any other facility (other than to another Project), unless
such transfer is (A) at the request of the resident, (B) for reasons relating to the health, required level of medical care or
safety of the resident to be transferred or the residents remaining at the facility or (C) as a result of the disruptive behavior
of the transferred resident that is detrimental to the facility.

 

(e)          If
and when Borrower or Operator participates in any Medicare or Medicaid or other Third-Party Payor Programs with respect to the
Projects, the Projects will remain in compliance with all requirements necessary for participation in Medicare and Medicaid, including
the Medicare and Medicaid Patient Protection Act of 1987, as it may be amended, and such other Third-Party Payor Programs. Each
Project is and will remain in conformance in all material respects with all insurance, reimbursement and cost reporting requirements,
and, if applicable, have a current provider agreement that is in full force and effect under Medicare and Medicaid.

 

(f)          To
Borrower’s Knowledge, there exists no Healthcare Investigations affecting the Projects. If Borrower becomes aware of any
Healthcare Investigation after the Closing Date, Borrower will promptly provide to Administrative Agent the following information
with respect thereto: (i) number of records requested, (ii) dates of service, (iii) dollars at risk, (iv) date records submitted,
(v) determinations, findings, results and denials (including number, percentage and dollar amount of claims denied, (vi) additional
remedies proposed or imposed, (vii) status update, including appeals, and (viii) any other pertinent information related thereto.

 

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Section
8.17.         Cooperation Regarding Licenses. From time to
time, upon the request of Administrative Agent, if a Potential Default or Event of Default exists hereunder, Borrower shall, and
shall cause Operator to, complete, execute and deliver to Administrative Agent any applications, notices, documentation, and other
information necessary or desirable, in Administrative Agent’s judgment, to permit Administrative Agent or its designee (including
a receiver) to obtain, maintain or renew any one or more of the Primary Licenses for the Projects (or to become the owner of the
existing Primary Licenses for the Projects) and to the extent permitted by applicable Requirements of Law to obtain any other provider
agreements or Governmental Approvals then necessary or desirable for the operation of the Projects by Administrative Agent or its
designee for their current use (including, without limitation, any applications for change of ownership of the existing Primary
Licenses or change of control of the owner of the existing Primary Licenses). To the extent permitted by applicable Requirements
of Law, (i) Administrative Agent is hereby authorized (without the consent of Borrower or Operator) to submit any such applications,
notices, documentation or other information which Borrower caused to be delivered to Administrative Agent in accordance with the
above provisions to the applicable Governmental Authorities, or to take such other steps as Administrative Agent may deem advisable
to obtain, maintain or renew any Primary License or Permits or other Governmental Approvals in connection with the operation of
the Projects for their current use, and Borrower agrees to cooperate and to cause Operator to cooperate with Administrative Agent
in connection with the same and (ii) Borrower, upon demand by Administrative Agent, shall take any action and cause Operator to
take any action necessary or desirable, in Administrative Agent’s sole judgment, to permit Administrative Agent or its designee
(including a receiver) to use, operate and maintain each Project for its current use. If Borrower fails to comply with the provisions
of this Section 8.17 for any reason whatsoever, Borrower hereby irrevocably appoints Administrative Agent and its designee
as Borrower’s attorney-in-fact, with full power of substitution, to take any action and execute any documents and instruments
necessary or desirable in Administrative Agent’s sole judgment to permit Administrative Agent or its designee to undertake
Borrower’s obligations under this Section 8.17, including obtaining any Primary Licenses or Governmental Approvals
then required for the operation of the Projects by Administrative Agent or its designee for their current uses. The foregoing power
of attorney is coupled with an interest and is irrevocable and Administrative Agent may exercise its rights thereunder in addition
to any other remedies which Administrative Agent may have against Borrower or any Borrower Party as a result of Borrower’s
breach of the obligations contained in this Section 8.17.

 

Section
8.18.         Transactions With Affiliates. Without the prior
written consent of Administrative Agent, Borrower shall not engage in any transaction affecting the Projects with an Affiliate
of Borrower, except as expressly contemplated by this Agreement.

 

Section
8.19.         Representations and Warranties.  Borrower shall
cause all representations and warranties in the Loan Documents and Environmental Indemnity Agreement to remain true and correct
at all times while any portion of the Loan remains outstanding.

 

Section
8.20.         Alterations.  Administrative Agent’s
prior approval shall be required in connection with any alterations to the Projects (except tenant improvements under any Lease
approved by Administrative Agent or under any Lease for which approval was not required by Administrative Agent under this Agreement)
(a) that adversely affect the structural components of the Projects, utilities, HVAC or the exterior of the Projects, (b) that
are reasonably likely to cause a Material Adverse Change or (c) the cost of which (including any related alteration, improvement
or replacement) is reasonably anticipated to exceed the Restoration Threshold, which approval may be granted or withheld in Administrative
Agent’s sole discretion. If the total unpaid amounts incurred and to be incurred with respect to such alterations to the
Projects shall at any time exceed the Restoration Threshold, Borrower shall promptly deliver to Administrative Agent as security
for the payment of such amounts and as additional security for Borrower’s obligations under the Loan Documents any of the
following: (i) cash, (ii) letters of credit, (iii) U.S. Obligations, (iv) other securities acceptable to Administrative Agent,
or (v) a completion bond in form acceptable to Administrative Agent. Such security shall be in an amount equal to the excess of
the total unpaid amounts incurred and to be incurred with respect to such alterations to the Projects (other than such amounts
to be paid or reimbursed by Tenants under the Leases) over the Restoration Threshold.

 

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Section
8.21.         Business and Operations. Borrower will continue
to engage only in the businesses currently conducted by it on the date hereof, as and to the extent the same are necessary for
the ownership and leasing of the Projects. Borrower shall at all times cause the Projects to be maintained in accordance with the
Projects’ use as a senior housing and healthcare facility.

 

Section
8.22.         Severability of Covenants.  Any representations,
warranties or covenants made by Borrower regarding such entities or their Affiliates (as contrasted with the Projects) shall be
deemed to have been made solely on behalf of such entity, and neither Borrower shall be deemed to be making such representations
or covenants or warranties regarding any other entity.

 

Section
8.23.        Post-Closing Obligations.  Borrower shall provide
evidence reasonably satisfactory to Administrative Agent that the Post-Closing Obligations within the time periods set forth on
Schedule 12.37.

 

Section
8.24.         Ground Lease. Redding Sundial Borrower shall
comply with each of its obligations under the Ground Lease.

 

Section
8.25.         Joint Venture. Each Borrower acknowledges that
Administrative Agent is the agent for certain lenders who, prior to the date hereof, made certain loans and other financial accommodations
available to CHP Friendswood SNF, LLC (“Friendswood”) and HP Aledo, LLC (“Aledo”),
each of which is an Affiliate of Borrower. Each Borrower covenants and agrees that, if Guarantor fails cause the sole member of
each of Portland Gateway Borrower and Summit Applewood Borrower to convey 100% of such interests to a Permitted Member in a Transfer
permitted under Section 8.1(d) or Section 8.1(e) on or before April 31, 2015, such Borrower, within thirty
(30) days following the request of Administrative Agent therefor, shall enter into such agreements as Administrative Agent may
reasonably require with Friendswood and Aledo to (a) cross-default the Loan made to Borrower hereunder and the loan made to
each of Friendswood and Aledo and (b) cause the Loan and each other loan to be secured by the Collateral and the collateral
securing the obligations of Friendswood and Aledo with respect to such loans. Each Borrower acknowledges that Lenders would not
have made the Loan available on the Closing Date but for the covenants contained in this Section 8.25.

 

ARTICLE
IX

EVENTS OF DEFAULT

 

Each of the following
shall constitute an “Event of Default” hereunder and under this Agreement and each of the other Loan
Documents.

 

Section
9.1.           Payments. Failure of Borrower to
pay any regularly scheduled installment of principal, interest or other amount due under the Loan Documents within five (5) days
of (and including) the date when due, or failure of Borrower to pay the Loan at the Maturity Date, whether by acceleration or otherwise.

 

Section
9.2.          Insurance. Borrower’s failure
to maintain insurance as required under Section 3.1 of this Agreement.

 

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Section
9.3.            Transfers. Any Prohibited Transfer
occurs in violation of Section 8.1 of this Agreement.

 

Section
9.4.          Covenants. Borrower’s failure
to perform, observe or comply with any of the agreements, covenants or provisions contained in this Agreement or in any of the
other Loan Documents or Environmental Indemnity Agreement (other than those agreements, covenants and provisions referred to elsewhere
in this Article 9), and the continuance of such failure for ten (10) days after notice by Administrative Agent to Borrower; however,
subject to any shorter period for curing any failure by Borrower as specified in any of the other Loan Documents or Environmental
Indemnity Agreement, Borrower shall have an additional sixty (60) days to cure such failure if (a)such failure does not involve
the failure to make payments on a monetary obligation; (b)such failure cannot reasonably be cured within ten (10) days; (c) Borrower
is diligently undertaking to cure such default; and (d) Borrower has provided Administrative Agent with security reasonably satisfactory
to Administrative Agent against any interruption of payment or impairment of collateral under the Loan Documents as a result of
such continuing failure. The notice and cure provisions of this Section 9.4 do not apply to the other Events of Default
described in this Article 9 or to Borrower’s failure to perform, observe or comply with any of the agreements, covenants
or provisions referenced elsewhere in this Article 9 (for which no notice and cure period shall apply).

 

Section
9.5.           Representations and Warranties.
Any representation or warranty made in any Loan Document or the Environmental Indemnity Agreement or the Compliance Certificate
proves to be untrue in any material respect when made or deemed made.

 

Section
9.6.          Other Encumbrances. Any default
under any document or instrument, other than the Loan Documents, evidencing or creating a Lien on any Project or any part thereof,
is not cured within any applicable grace or cure period therein.

 

Section
9.7.           Involuntary Bankruptcy or Other Proceeding.
Commencement of an involuntary case or other proceeding against Borrower, any Borrower Party or any other Person having an ownership
or security interest in the Projects (each, a “Bankruptcy Party”) which seeks liquidation, reorganization
or other relief with respect to it or its debts or other liabilities under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeks the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or
any of its property, and such involuntary case or other proceeding shall remain undismissed or unstayed for a period of sixty (60)
days; or an order for relief against a Bankruptcy Party shall be entered in any such case under the Federal Bankruptcy Code.

 

Section
9.8.           Voluntary Petitions, etc.
Commencement by a Bankruptcy Party of a voluntary case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its Debts or other liabilities under any bankruptcy, insolvency or other similar law or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official for it or any of its property, or consent by a Bankruptcy
Party to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding
commenced against it, or the making by a Bankruptcy Party of a general assignment for the benefit of creditors, or the failure
by a Bankruptcy Party, or the admission by a Bankruptcy Party in writing of its inability, to pay its debts generally as they become
due, or any action by a Bankruptcy Party to authorize or effect any of the foregoing.

 

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Section
9.9.           Default Under Operators’ Agreement.
The occurrence of a default by Borrower under any of the Operators’ Agreements, which remains uncured beyond any applicable
grace or cure periods available to Borrower.

 

Section
9.10.         Certain Covenants. Borrower’s
failure to (i) maintain its status as a Single Purpose Entity; (ii) timely deliver the Compliance Certificate; (iii) comply with
the provisions of Section 8.15; (iv) comply with the provisions of Section 8.16(c); (v) enter into such agreements
and modifications as Administrative Agent may require pursuant to Section 8.25 promptly following Administrative Agent’s
delivery thereof, and, in any event, within thirty (30) days following such delivery; and (vi) provide Administrative Agent with
ten (10) days subsequent written notice of changes of the state of Borrower’s formation or Borrower’s name.

 

Section
9.11.          Financial Information. Borrower’s
failure to deliver financial statements and reports as required by Article 7 and the continuance of such failure (i) in connection
with the first such failure, for a period of ten (10) days after delivery of written notice to Borrower by Administrative Agent
of such failure and (ii) thereafter, for ten (10) days after the required delivery date of such financial statement or report.

 

Section
9.12.         Default Under Guaranty. The occurrence
of a default under the Recourse Guaranty Agreement and such default is not cured within any grace or cure periods provided therein.

 

Section
9.13.         Criminal Act. Borrower’s or any
Borrower Party’s being charged with a felony crime or a crime involving moral turpitude and the individual charged in connection
therewith is not terminated within five (5) days of Borrower’s knowledge of such indictment as an officer, employee or director
of Borrower or Borrower Party.

 

Section
9.14.         Master Lease. The occurrence of a material
default under the Master Lease which continues uncured beyond any applicable notice and grace period provided under the Master
Lease.

 

Section
9.15.         Ground Lease.  If (A) there shall
occur any default by Redding Sundial Borrower, as tenant under the Ground Lease, in the observance or performance of any term,
covenant or condition of the Ground Lease on the part of Redding Sundial Borrower, to be observed or performed, that is not cured
by Borrower within five (5) days prior to the expiration of any applicable cure period (subject to extension as provided under
the Ground Lease), (B) if any one or more of the events referred to in the Ground Lease shall occur which would cause the
Ground Lease to terminate without notice or action by the Ground Lessor or which would entitle the Ground Lessor to terminate the
Ground Lease and the term thereof by giving notice to Redding Sundial Borrower, as tenant thereunder, (C) if the leasehold
estate created by the Ground Lease shall be surrendered or the Ground Lease shall be terminated or canceled for any reason or under
any circumstances whatsoever, or (D) if any of the terms, covenants or conditions of the Ground Lease shall in any manner
be modified, changed, supplemented, altered, amended or waived without the prior written consent of Administrative Agent.

 

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Section
9.16.        Environmental Indemnity Agreement. There
shall have occurred any default under the Environmental Indemnity Agreement which remains uncured beyond any applicable grace or
cure periods available under the Environmental Indemnity Agreement.

 

Section
9.17.         Post-Closing Obligations. The
failure to satisfy the Post Closing Obligations within the time periods set forth on Schedule 12.37, provided, however,
that, if Borrower has made good faith efforts to satisfy, and diligently pursued the completion of, such Post-Closing Obligations
within the time periods specified on such Schedule, Borrower shall have an additional thirty (30) days to cure such failure, provided
Borrower is diligently pursuing such cure.

 

Section
9.18.          Death of Guarantor. If any Guarantor
is an individual, the death of such Guarantor.

 

Section
9.19.         Cash Management Agreement. The occurrence
of a default under a Cash Management Agreement which remains uncured beyond any applicable grace or cure periods provided therein.

 

Section
9.20.         Admissions Restrictions; Special Cure Rights.
Any Governmental Authority ceases to permit new residents or tenants to be admitted to any of the Projects or causes the Operator
to discharge any residents or tenants from any of the Projects.

 

Section
9.21.         Healthcare Investigations; Special Cure Right with
Respect to Operational Defaults.

 

(a)          The
occurrence of a Healthcare Investigation affecting any of the Projects that results in a deficiency finding by the relevant authority.

 

(b)          Notwithstanding
the foregoing, if an event that would otherwise constitute an Event of Default under Section 9.21(a) occurs solely as a
result of an act or omission of a Master Tenant or any Operator (and such act, omission or failure is outside Borrower’s
control and not otherwise caused by Borrower) (each such failure, an “Operational Default”), such Operational
Default shall not constitute an “Event of Default” under Article 9 if (and only if) all of the following conditions
are satisfied, as determined by Administrative Agent in its reasonable discretion:

 

(i)             There
exists no other Event of Default hereunder.

 

(ii)            Borrower
sends written notice to Administrative Agent describing in reasonable detail such breach within three (3) Business Days following
the date upon which Borrower becomes aware of such Operational Default.

 

(iii)           All
debt service payments and all other amounts due under the Loan Documents are paid current at all times (regardless of whether or
not there is available revenue from the Projects or rent from the Master Lease to make such payments).

 

(iv)           Neither
the value of the Collateral nor the ability to operate the Projects is materially impaired as a result of the act or omission that
caused the Operational Default.

 

    	[Summit Healthcare]	80	 

    	 

    

 

(v)            Borrower
diligently pursues all rights and remedies available to Borrower under the Master Lease and under applicable Laws to cure (or cause
the Operator to cure) such Operational Default, and if Borrower elects to cure (or cause the Operator to cure) such Operational
Default, such Operational Default is actually cured within ninety (90) days of the occurrence of such Operational Default (such
ninety (90) day period from the occurrence of the Operational Default is referred to as the “Operational Default Forbearance
Period”).

 

(vi)           Borrower
take commercially reasonable steps to cause the Primary Licenses required to operate the Projects as assisted living or skilled
nursing facilities and the reimbursement agreements with respect to the Projects to remain in full force and effect under the Requirements
of Law.

 

(vii)          Borrower
pays all of Administrative Agent’s and each Lender's reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees) in connection with the matters set forth in this Section 9.21(b).

 

(viii)         On
a bi-weekly basis during the pendency of the Operational Default Forbearance Period, Borrower furnishes to Administrative Agent
a detailed written statement summarizing the then current status of Borrower’s attempts to cure such Operational Default.

 

(ix)            Borrower
at all times during the Operational Default Forbearance Period takes such additional action and/or executes such additional documents
(and/or causes Operator to take such additional action and/or execute such additional documents) as Administrative Agent may reasonably
require in connection with the matters set forth in this Section 9.21(b).

 

Anything herein to the
contrary notwithstanding, Administrative Agent and Lenders shall have no obligation to forbear from exercising remedies by reason
of an Operational Default of any type as to which Borrower elects to cure more than twice in the aggregate during the term of the
Loan or more than once in any twelve (12) month period during the term of the Loan. For the avoidance of doubt, Administrative
Agent and Lenders shall have no obligation to forbear from submitting any pleadings in any bankruptcy or other proceeding to the
extent that a failure to do so could result in any prejudice to Lenders, a rejection or termination of the Master Lease or otherwise
adversely affect the Collateral securing the Loan.

 

ARTICLE
X

REMEDIES

 

Section
10.1.          Remedies - Insolvency Events.  Upon the
occurrence of any Event of Default described in Sections 9.7 or 9.8, all amounts due under the Loan Documents immediately
shall become due and payable, all without written notice and without presentment, demand, protest, notice of protest or dishonor,
notice of intent to accelerate the maturity thereof, notice of acceleration of the maturity thereof, or any other notice of default
of any kind, all of which are hereby expressly waived by Borrower; however, if the Bankruptcy Party under Section 9.7 or
9.8 is other than Borrower, then all amounts due under the Loan Documents shall become immediately due and payable at Administrative
Agent’s election, in Administrative Agent’s sole discretion.

 

    	[Summit Healthcare]	81	 

    	 

    

 

Section
10.2.         Remedies - Other Events. Except as set
forth in Section 10.1 above, while any Event of Default exists, Administrative Agent may and at the direction of the Required
Lenders shall (a) by written notice to Borrower, declare the entire Loan to be immediately due and payable without presentment,
demand, protest, notice of protest or dishonor, notice of intent to accelerate the maturity thereof, notice of acceleration of
the maturity thereof, or other notice of default of any kind, all of which are hereby expressly waived by Borrower, and (b) exercise
all rights and remedies therefor under the Loan Documents and at law or in equity. Notwithstanding anything to the contrary contained
in the Loan Documents or the Environmental Indemnity Agreement, the enforcement of the obligations of Borrower and the Borrower
Parties under the Loan Documents and the Environmental Indemnity Agreement and the exercise of rights and remedies thereunder shall
be undertaken solely by Administrative Agent in its capacity as agent for the Lenders.

 

Section
10.3.          Administrative Agent’s Right to Perform
the Obligations.  If Borrower shall fail, refuse or neglect to make any payment or perform any act required by the Loan
Documents or the Environmental Indemnity Agreement, then while any Event of Default exists, and without notice to or demand upon
Borrower and without waiving or releasing any other right, remedy or recourse Administrative Agent may have because of such Event
of Default, Administrative Agent may (but shall not be obligated to) make such payment or perform such act for the account of and
at the expense of Borrower, and shall have the right to enter upon the Projects for such purpose and to take all such action thereon
and with respect to the Projects as it may deem necessary or appropriate. If Administrative Agent shall elect to pay any sum due
with reference to the Projects, Administrative Agent may do so in reliance on any bill, statement or assessment procured from the
appropriate Governmental Authority or other issuer thereof without inquiring into the accuracy or validity thereof. Similarly,
in making any payments to protect the security intended to be created by the Loan Documents, Administrative Agent shall not be
bound to inquire into the validity of any apparent or threatened adverse title, lien, encumbrance, claim or charge before making
an advance for the purpose of preventing or removing the same. Borrower shall indemnify, defend and hold Administrative Agent harmless
from and against any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits,
costs, or disbursements of any kind or nature whatsoever, including reasonable attorneys’ fees, incurred or accruing by reason
of any acts performed by Administrative Agent pursuant to the provisions of this Section 10.3, including those arising from
the joint, concurrent, or comparative negligence of Administrative Agent, except as a result of Administrative Agent’s gross
negligence or willful misconduct. All sums paid by Administrative Agent pursuant to this Section 10.3, and all other sums
expended by Administrative Agent to which it shall be entitled to be indemnified, together with interest thereon at the Default
Rate from the date of such payment or expenditure until paid, shall constitute additions to the Loan, shall be secured by the Loan
Documents and shall be paid by Borrower to Administrative Agent upon demand.

 

    	[Summit Healthcare]	82	 

    	 

    

 

ARTICLE
XI

ADMINISTRATIVE AGENT

 

Section
11.1.          Appointment and Duties. 

 

(a)          Each
Lender hereby appoints GE Capital (together with any successor Administrative Agent pursuant to Section 11.9) as the Administrative
Agent hereunder and authorizes the Administrative Agent to (i) execute and deliver the Loan Documents and the Environmental Indemnity
Agreement and accept delivery thereof on its behalf from Borrower or any Borrower Party, (ii) take such action on its behalf and
to exercise all rights, powers and remedies and perform the duties as are expressly delegated to the Administrative Agent under
such Loan Documents the Environmental Indemnity Agreement, and (iii) exercise such powers as are reasonably incidental thereto.

 

(b)          Without
limiting the generality of clause (a) above, the Administrative Agent shall have the sole and exclusive right and authority
(to the exclusion of the Lenders), and is hereby authorized, to (i) act as the disbursing and collecting agent for the Lenders
with respect to all payments and collections arising in connection with the Loan Documents and the Environmental Indemnity Agreement
(including in any proceeding described in Section 9.7 or Section 9.8 or any other bankruptcy, insolvency or similar
proceeding), and each Person making any payment in connection with any Loan Document and the Environmental Indemnity Agreement
to any Secured Party is hereby authorized to make such payment to the Administrative Agent, (ii) file and prove claims and file
other documents necessary or desirable to allow the claims of the Secured Parties with respect to any Obligation in any proceeding
described in Section 9.7 or Section 9.8 or any other bankruptcy, insolvency or similar proceeding (but not to vote,
consent or otherwise act on behalf of such Secured Party), (iii) act as collateral agent for each Secured Party for purposes of
the perfection of all Liens created by such agreements and all other purposes stated therein, (iv) manage, supervise and otherwise
deal with the Collateral, (v) take such other action as is necessary or desirable to maintain the perfection and priority of the
Liens created or purported to be created by the Loan Documents, (vi) except as may be otherwise specified in any Loan Document
or the Environmental Indemnity Agreement, exercise all remedies given to the Administrative Agent and the other Secured Parties
with respect to the Collateral, whether under the Loan Documents or the Environmental Indemnity Agreement, applicable law or otherwise,
(vii) execute any amendment, consent or waiver under the Loan Documents and the Environmental Indemnity Agreement on behalf of
any Lender that has consented in writing to such amendment, consent or waiver; provided, however, that the Administrative
Agent hereby appoints, authorizes and directs each Lender to act as collateral sub-agent for the Administrative Agent and the Lenders
for purposes of the perfection of all Liens with respect to the Collateral, including any deposit account maintained by Borrower
or a Borrower Party with, and cash and cash equivalents held by, such Lender, and may further authorize and direct the Lenders
to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral subject
thereto to the Administrative Agent, and each Lender hereby agrees to take such further actions to the extent, and only to the
extent, so authorized and directed and (viii) provide each Lender within ten (10) Business Days following receipt, copies of the
reports and financial information received from Borrower under Article 7 and notices of default delivered by or received by Administrative
Agent under this Agreement.

 

    	[Summit Healthcare]	83	 

    	 

    

 

(c)          Under
the Loan Documents and the Environmental Indemnity Agreement, the Administrative Agent (i) is acting solely on behalf of the Lenders
(except to the limited extent provided in Section 2.13(b) with respect to the Register and in Section 11.10), with
duties that are entirely administrative in nature, notwithstanding the use of the defined term “Administrative Agent”,
the terms “agent”, “administrative agent” and “collateral agent” and similar terms in any Loan
Document and the Environmental Indemnity Agreement to refer to the Administrative Agent, which terms are used for title purposes
only, (ii) is not assuming any obligation under any Loan Document or the Environmental Indemnity Agreement other than as expressly
set forth therein or any role as agent, fiduciary or trustee of or for any Lender or any other Secured Party and (iii) shall have
no implied functions, responsibilities, duties, obligations or other liabilities under any Loan Document or the Environmental Indemnity
Agreement, and each Lender hereby waives and agrees not to assert any claim against the Administrative Agent based on the roles,
duties and legal relationships expressly disclaimed in clauses (i) through (iii) above.

 

Section
11.2.          Binding Effect. Each Lender agrees that
(i) any action taken by the Administrative Agent or the Required Lenders (or, if expressly required hereby, a greater proportion
of the Lenders) in accordance with the provisions of the Loan Documents or the Environmental Indemnity Agreement, (ii) any action
taken by the Administrative Agent in reliance upon the instructions of Required Lenders (or, where so required, such greater proportion)
and (iii) the exercise by the Administrative Agent or the Required Lenders (or, where so required, such greater proportion) of
the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all of the Secured Parties.

 

Section
11.3.          Use of Discretion. 

 

(a)          The
Administrative Agent shall not be required to exercise any discretion or take, or to omit to take, any action, including with respect
to enforcement or collection, except any action it is required to take or omit to take (i) under any Loan Document or the Environmental
Indemnity Agreement or (ii) pursuant to instructions from the Required Lenders (or, where expressly required by the terms of this
Agreement, a greater proportion of the Lenders).

 

(b)          Notwithstanding
clause (a) of this Section 11.3, the Administrative Agent shall not be required to take, or to omit to take, any
action (i) unless, upon demand, the Administrative Agent receives an indemnification satisfactory to it from the Lenders (or, to
the extent applicable and acceptable to the Administrative Agent, any other Secured Party) against all Liabilities that, by reason
of such action or omission, may be imposed on, incurred by or asserted against the Administrative Agent or any Related Person thereof
or (ii) that is, in the opinion of the Administrative Agent or its counsel, contrary to any Loan Document or the Environmental
Indemnity Agreement or applicable Requirement of Law.

 

Section
11.4.          Delegation of Rights and Duties. The
Administrative Agent may, upon any term or condition it specifies, delegate or exercise any of its rights, powers and remedies
under, and delegate or perform any of its duties or any other action with respect to, any Loan Document or the Environmental Indemnity
Agreement by or through any trustee, co-agent, employee, attorney-in-fact and any other Person (including any Secured Party). Any
such Person shall benefit from this Article 11 to the extent provided by the Administrative Agent.

 

    	[Summit Healthcare]	84	 

    	 

    

 

Section
11.5.          Reliance and Liability. 

 

(a)          The
Administrative Agent may, without incurring any liability hereunder, (i) treat the payee of any Note as its holder until such Note
has been assigned in accordance with Section 12.3, (ii) rely on the Register to the extent set forth in Section 2.13,
(iii) consult with any of its Related Persons and, whether or not selected by it, any other advisors, accountants and other experts
(including advisors to, and accountants and experts engaged by, any Borrower or any Borrower Party) and (iv) rely and act upon
any document and information (including those transmitted by Electronic Transmission) and any telephone message or conversation,
in each case believed by it to be genuine and transmitted, signed or otherwise authenticated by the appropriate parties.

 

(b)          None
of the Administrative Agent and its Related Persons shall be liable for any action taken or omitted to be taken by any of them
under or in connection with any Loan Document or the Environmental Indemnity Agreement, and each Lender and Borrower and the Borrower
Parties hereby waive and shall not assert any right, claim or cause of action based thereon, except to the extent of liabilities
resulting primarily from the gross negligence or willful misconduct of the Administrative Agent or, as the case may be, such Related
Person (each as determined in a final, non-appealable judgment by a court of competent jurisdiction) in connection with the duties
expressly set forth herein. Without limiting the foregoing, the Administrative Agent:

 

(i)          shall
not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Required
Lenders or for the actions or omissions of any of its Related Persons selected with reasonable care (other than employees, officers
and directors of the Administrative Agent, when acting on behalf of the Administrative Agent);

 

(ii)         shall
not be responsible to any Secured Party for the due execution, legality, validity, enforceability, effectiveness, genuineness,
sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection
with, any Loan Document or the Environmental Indemnity Agreement;

 

(iii)        makes
no warranty or representation, and shall not be responsible, to any Secured Party for any statement, document, information, representation
or warranty made or furnished by or on behalf of any Related Person or Borrower or any Borrower Party in connection with any Loan
Document, the Environmental Indemnity Agreement or any transaction contemplated therein or any other document or information with
respect to any Borrower or any Borrower Party, whether or not transmitted or (except for documents expressly required under any
Loan Document or the Environmental Indemnity Agreement to be transmitted to the Lenders) omitted to be transmitted by the Administrative
Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence
performed by the Administrative Agent in connection with the Loan Documents; and

 

    	[Summit Healthcare]	85	 

    	 

    

 

(iv)        shall
not have any duty to ascertain or to inquire as to the performance or observance of any provision of any Loan Document or the Environmental
Indemnity Agreement, whether any condition set forth in any Loan Document or the Environmental Indemnity Agreement is satisfied
or waived, as to the financial condition of any Borrower or any Borrower Party or as to the existence or continuation or possible
occurrence or continuation of any Potential Default or Event of Default and shall not be deemed to have notice or knowledge of
such occurrence or continuation unless it has received a notice from a Borrower, any Lender describing such Potential Default or
Event of Default clearly labeled “NOTICE OF DEFAULT” (in which case the Administrative Agent shall promptly
give notice of such receipt to all Lenders);

 

and, for each of the
items set forth in clauses (i) through (iv) above, each Lender and Borrower (on its behalf and on behalf of each
of the other Borrower Parties) hereby waives and agrees not to assert any right, claim or cause of action it might have against
the Administrative Agent based thereon.

 

Section
11.6.          Administrative Agent Individually. The
Administrative Agent and its Affiliates may make loans and other extensions of credit to, acquire stock and stock equivalents of,
engage in any kind of business with, Borrower or any Borrower Party or Affiliate thereof as though it were not acting as Administrative
Agent and may receive separate fees and other payments therefor. To the extent the Administrative Agent or any of its Affiliates
makes any Loan or otherwise becomes a Lender hereunder, it shall have and may exercise the same rights and powers hereunder and
shall be subject to the same obligations and liabilities as any other Lender and the terms “Lender,” and “Required
Lender,” and any similar terms shall, except where otherwise expressly provided in any Loan Document or the Environmental
Indemnity Agreement, include, without limitation, the Administrative Agent or such Affiliate, as the case may be, in its individual
capacity as Lender or as one of the Required Lenders, respectively.

 

Section
11.7.          Lender Credit Decision. Each Lender acknowledges
that it shall, independently and without reliance upon the Administrative Agent, any other Lender or any of their Related Persons
or upon any document solely or in part because such document was transmitted by the Administrative Agent or any of its Related
Persons, conduct its own independent investigation of the financial condition and affairs of Borrower and each Borrower Party and
make and continue to make its own credit decisions in connection with entering into, and taking or not taking any action under,
any Loan Document or the Environmental Indemnity Agreement or with respect to any transaction contemplated in any Loan Document
or the Environmental Indemnity Agreement, in each case based on such documents and information as it shall deem appropriate. Except
for documents expressly required by any Loan Document or the Environmental Indemnity Agreement to be transmitted by the Administrative
Agent to the Lenders, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness
of Borrower or any Borrower Party or any Affiliate of Borrower or any Borrower Party that may come into the possession of the Administrative
Agent or any of its Related Persons.

 

Section
11.8.          Expenses; Indemnities. 

 

(a)          Each
Lender agrees to reimburse the Administrative Agent and each of its Related Persons (to the extent not reimbursed by Borrower or
any Borrower Party) promptly upon demand for such Lender’s Pro Rata Share with respect to the Loan of any costs and expenses
(including fees, charges and disbursements of financial, legal and other advisors and other taxes paid in the name of, or on behalf
of, Borrower or any Borrower Party) that may be incurred by the Administrative Agent or any of its Related Persons in connection
with the preparation, syndication, execution, delivery, administration, modification, consent, waiver or enforcement (whether through
negotiations, through any work-out, bankruptcy, restructuring or other legal or other proceeding or otherwise) of, or legal advice
in respect of its rights or responsibilities under, any Loan Document and the Environmental Indemnity Agreement.

 

    	[Summit Healthcare]	86	 

    	 

    

 

(b)          Each
Lender further agrees to indemnify the Administrative Agent and each of its Related Persons (to the extent not reimbursed by Borrower
or any Borrower Party), from and against such Lender’s aggregate Pro Rata Share with respect to the Loan of the Liabilities
(including taxes, interests and penalties imposed for not properly withholding or backup withholding on payments made to on or
for the account of any Lender) that may be imposed on, incurred by or asserted against the Administrative Agent or any of its Related
Persons in any matter relating to or arising out of, in connection with or as a result of any Loan Document or the Environmental
Indemnity Agreement, any Related Document or any other act, event or transaction related, contemplated in or attendant to any such
document, or, in each case, any action taken or omitted to be taken by the Administrative Agent or any of its Related Persons under
or with respect to any of the foregoing; provided, however, that no Lender shall be liable to the Administrative
Agent or any of its Related Persons to the extent such liability has resulted primarily from the gross negligence or willful misconduct
of the Administrative Agent or, as the case may be, such Related Person, as determined by a court of competent jurisdiction in
a final non-appealable judgment or order.

 

Section
11.9.          Resignation of Administrative Agent. 

 

(a)          The
Administrative Agent may resign at any time by delivering notice of such resignation to the Lenders and Borrower, effective on
the date set forth in such notice or, if no such date is set forth therein, upon the date such notice shall be effective. If the
Administrative Agent delivers any such notice, the Required Lenders shall have the right to appoint a successor Administrative
Agent. If, within 30 days after the retiring Administrative Agent having given notice of resignation, no successor Administrative
Agent has been appointed by the Required Lenders that has accepted such appointment, then the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative Agent from among the Lenders. Each appointment under this clause
(a) shall be subject to the prior consent of Borrower, which may not be unreasonably withheld, but shall not be required during
the continuance of a Potential Default or Event of Default.

 

(b)          Effective
immediately upon its resignation, (i) the retiring Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents and the Environmental Indemnity Agreement, (ii) the Lenders shall assume and perform all of the duties of the
Administrative Agent until a successor Administrative Agent shall have accepted a valid appointment hereunder, (iii) the retiring
Administrative Agent and its Related Persons shall no longer have the benefit of any provision of any Loan Document or the Environmental
Indemnity Agreement other than with respect to any actions taken or omitted to be taken while such retiring Administrative Agent
was, or because such Administrative Agent had been, validly acting as Administrative Agent under the Loan Documents and (iv) subject
to its rights under Section 10.3, the retiring Administrative Agent shall take such action as may be reasonably necessary
to assign to the successor Administrative Agent its rights as Administrative Agent under the Loan Documents and the Environmental
Indemnity Agreement. Effective immediately upon its acceptance of a valid appointment as Administrative Agent, a successor Administrative
Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Administrative Agent
under the Loan Documents and the Environmental Indemnity Agreement.

 

    	[Summit Healthcare]	87	 

    	 

    

 

(c)          Administrative
Agent may be removed as Administrative Agent upon the request of all Lenders (other than Affiliates of Administrative Agent) upon
the determination by a court of competent jurisdiction that Administrative Agent has committed actions constituting gross negligence
or willful misconduct under this Agreement. The provisions of subsection (b) above shall apply upon such removal.

 

Section
11.10.      Additional Secured Parties. The benefit of the provisions of
the Loan Documents and the Environmental Indemnity Agreement directly relating to the Collateral or any Lien granted thereunder
shall extend to and be available to any Secured Party that is not a Lender as long as, by accepting such benefits, such Secured
Party agrees, as among the Administrative Agent and all other Secured Parties, that such Secured Party is bound by (and, if requested
by the Administrative Agent, shall confirm such agreement in a writing in form and substance acceptable to the Administrative
Agent) this Article 11, Section 12.7 (Sharing of Payments, Etc.) and Section 12.36 (Non-Public Information; Confidentiality)
and the decisions and actions of the Administrative Agent and the Required Lenders (or, where expressly required by the terms
of this Agreement, a greater proportion of the Lenders) to the same extent a Lender is bound; provided, however,
that, notwithstanding the foregoing, (a) such Secured Party shall be bound by Section 11.8 only to the extent of Liabilities,
costs and expenses with respect to or otherwise relating to the Collateral held for the benefit of such Secured Party, in which
case the obligations of such Secured Party thereunder shall not be limited by any concept of Pro Rata Share or similar concept,
(b) except as set forth specifically herein, each of the Administrative Agent and each Lender shall be entitled to act at its
sole discretion, without regard to the interest of such Secured Party, regardless of whether any Obligation to such Secured Party
thereafter remains outstanding, is deprived of the benefit of the Collateral, becomes unsecured or is otherwise affected or put
in jeopardy thereby, and without any duty or liability to such Secured Party or any such Obligation and (c) except as set forth
specifically herein, such Secured Party shall not have any right to be notified of, consent to, direct, require or be heard with
respect to, any action taken or omitted in respect of the Collateral or under any Loan Document or the Environmental Indemnity
Agreement.

 

ARTICLE
XII

MISCELLANEOUS

 

Section
12.1.          Notices. Any notice required or permitted
to be given under this Agreement shall be in writing and either shall be mailed by certified mail, postage prepaid, return receipt
requested, or sent by overnight air courier service, or personally delivered to a representative of the receiving party, or sent
by facsimile (provided an identical notice is also sent simultaneously by mail, overnight courier, or personal delivery as otherwise
provided in this Section 12.1). All such communications shall be mailed, sent or delivered, addressed to the party for whom
it is intended at its address set forth below.

 

    	[Summit Healthcare]	88	 

    	 

    

 

	If to Borrower:	 	c/o Summit Healthcare REIT, Inc.
	 	 	2 South Pointe Drive, Suite 1400
	 	 	Lake Forest, California 92630
	 	 	Attention:  General Counsel
	 	 	Facsimile: (949) 812-8173
	 	 	 
	If to Administrative  Agent:	 	General Electric Capital Corporation
	 	 	Loan No. 07-0004596
	 	 	500 West Monroe Street
	 	 	Chicago, Illinois 60661
	 	 	Attention:  Dague Retzlaff, Vice President
	 	 	Facsimile:  (866) 579-3042
	 	 	 
	with a copy to:	 	General Electric Capital Corporation
	 	 	Loan No. 07-0004596
	 	 	500 West Monroe Street
	 	 	Chicago, Illinois  60661
	 	 	Attention:    Jeffrey M. Muchmore, Managing Director
	 	 	Facsimile:    (866) 254-1971
	 	 	 
	with a copy to:	 	General Electric Capital Corporation
	 	 	Loan No. 07-0004596
	 	 	5804 Trailridge Drive
	 	 	Austin, Texas  78731
	 	 	Attention:  Diana Pennington, Chief Counsel-
	 	 	HFS Real Estate
	 	 	Facsimile:    (866) 221-0433
	 	 	 
	If to a Lender:	 	To the address set forth on Exhibit B attached hereto.

 

Any notice or request
so addressed and sent by United States mail or overnight courier shall be deemed to be given on the earliest of (1) when actually
delivered, (2) on the first Business Day after deposit with an overnight air courier service, or (3) on the third Business Day
after deposit in the United States mail, postage prepaid, in each case to the address of the intended addressee (except as otherwise
provided in the Mortgage). Any notice or request so delivered in person shall be deemed to be given when receipted for by, or actually
received by Administrative Agent, a Lender, or Borrower, as the case may be. If given by facsimile, a notice or request shall be
deemed given and received when the facsimile is transmitted to the party’s facsimile number specified above and confirmation
of complete receipt is received by the transmitting party during normal business hours or on the next Business Day if not confirmed
during normal business hours, and an identical notice is also sent simultaneously by mail, overnight courier, or personal delivery
as otherwise provided in this Section 12.1. If given by electronic mail, a notice shall be deemed given and received when
the electronic mail is transmitted to the recipient’s electronic mail address specified above and electronic confirmation
of receipt (either by reply from the recipient or by automated response to a request for delivery receipt) is received by the sending
party during normal business hours or on the next Business Day if not confirmed during normal business hours, and an identical
notice is also sent simultaneously by mail, overnight courier or personal delivery as otherwise provided in this Section 12.1.
Except for facsimile and electronic mail notices sent as expressly described above, no notice hereunder shall be effective if sent
or delivered by electronic means. Either party may designate a change of address by written notice to the other by giving at least
ten (10) days prior written notice of such change of address.

 

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Section
12.2.          Amendments and Waivers. 

 

(a)          No
amendment or waiver of any provision of the Environmental Indemnity Agreement or any Loan Document and no consent to any departure
by Borrower or any Borrower Party therefrom shall be effective unless the same shall be in writing and signed (1) in the case of
an amendment, consent or waiver to cure any ambiguity, omission, defect or inconsistency or granting a new Lien for the benefit
of the Secured Parties or extending an existing Lien over additional property, by the Administrative Agent and Borrower, (2) in
the case of any other waiver or consent, by the Required Lenders (or by the Administrative Agent with the consent of the Required
Lenders) and (3) in the case of any other amendment, by the Required Lenders (or by the Administrative Agent with the consent of
the Required Lenders) and Borrower; provided, however, that no amendment, consent or waiver described in clause
(2) or (3) above shall be effective, unless in writing and signed by each Lender (or by the Administrative Agent with
the consent of the Lenders), in addition to any other Person the signature of which is otherwise required pursuant to any Loan
Document, and such amendment, consent or waiver does any of the following:

 

(i)          waives
any condition precedent to the effectiveness of this Agreement, except any condition referring to any other provision of any Loan
Document;

 

(ii)         increases
the Loan Commitment of any Lender or subjects any Lender to any additional obligation or otherwise increases the principal amount
of the Loan;

 

(iii)        reduces
(including through release, forgiveness, assignment or otherwise) (A) the principal amount of, the interest rate on, or any obligation
of Borrower to repay (whether or not on a fixed date), any outstanding amount under the Loan owing to Lenders or (B) any fee or
accrued interest payable to any Lender; provided, however, that this clause (iii) does not apply to (x) any
change to any provision increasing any interest rate or fee during the continuance of an Event of Default or to any payment of
any such increase or (y) any modification to any financial covenant set forth in Article 8 or in any definition set forth therein
or principally used therein;

 

(iv)        waives
or postpones any scheduled maturity date or other scheduled date fixed for the payment, in whole or in part, of principal of or
interest on the Loan (including any agreement to forbear that would have the same effect) or fee owing to such Lender or for the
reduction of such Lender’s Loan Commitment; provided, however, that this clause (iv) does not apply
to any change to mandatory prepayments, including those required under Section 2.5(c), or to the application of any payment,
including as set forth in Section 2.7;

 

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(v)         releases
all or substantially all of the Collateral or any Guarantor from its guaranty of any Obligation of Borrower;

 

(vi)        reduces
or increases the proportion of Lenders required for the Lenders (or any subset thereof) to take any action hereunder or change
the definition of the terms “Required Lenders,” “Pro Rata Share,” or “Pro Rata Outstandings”;
or

 

(vii)       amends
Section 12.7 (Sharing of Payments, Etc.) or this Section 12.2;

 

(b)          Anything
herein to the contrary notwithstanding, (A) any waiver of any payment applied pursuant to Section 2.6 (Application of Payments)
to, and any modification of the application of any such payment to the Loan shall require the consent of the Required Lenders,
(B) no amendment, waiver or consent shall affect the rights or duties under any Loan Document of, or any payment to, the Administrative
Agent (or otherwise modify any provision of Article 11 or the application thereof), and (C) (1) no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder, except that (x) the Loan Commitment or of such Lender
may not be increased or extended without the consent of such Lender, (y) the outstanding balance of such Lender’s Pro Rata
Share of the Loan may not be forgiven without the consent of such Lender, and (z) the interest rate on the Loan cannot be reduced
unless the Defaulting Lender is treated the same as all other Lenders; (2) each Lender is entitled to vote as such Lender sees
fit on any bankruptcy or insolvency reorganization plan that affects the Loan; (3) each Lender acknowledges that the provisions
of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent provisions set forth herein; and (4) the Required Lenders
may consent to allow a Borrower to use cash collateral in the context of a bankruptcy or insolvency proceeding.

 

(c)          Each
waiver or consent under any Loan Document, the Guaranty or the Environmental Indemnity Agreement shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice to or demand on Borrower or any Borrower Party
shall entitle such Person to any notice or demand in the same, similar or other circumstances. No failure on the part of any Secured
Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.

 

(d)          This
Agreement and the other Loan Documents and the Environmental Indemnity Agreement shall not be executed, entered into, altered,
amended, or modified by electronic means. Without limiting the generality of the foregoing, Borrower, Administrative Agent, and
each Lender hereby agree that the transactions contemplated by this Agreement shall not be conducted by electronic means, except
as specifically set forth in Section 12.1 regarding notices.  Any reference to a Loan Document or the Environmental
Indemnity Agreement, whether in this Agreement or in any other Loan Document or the Environmental Indemnity Agreement, shall be
deemed to be a reference to such Loan Document or the Environmental Indemnity Agreement as it may hereafter from time to time be
amended, modified, supplemented and restated in accordance with the terms hereof.

 

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(e)          Unless
also consented to in writing by such Secured Hedge Provider or, in the case of a Secured Hedge Agreement provided or arranged by
GE Capital or an Affiliate of GE Capital, GE Capital, no such amendment, waiver or consent with respect to this Credit Agreement
or any other Loan Document shall (A) alter the ratable treatment of Obligations arising under Secured Hedge Agreements such that
such Obligations become junior in right of payment to principal on the Loan or (B) result in Obligations owing to any Secured Hedge
Provider becoming unsecured (other than releases of Liens applicable to all Lenders and otherwise permitted in accordance with
the terms hereof), in each case in a manner adverse to such Secured Hedge Provider.

 

Section
12.3.          Assignments and Participations; Binding Effect.

 

(a)          This
Agreement shall become effective when it shall have been executed by the Administrative Agent, the Lenders party hereto, and Borrower.
Thereafter, it shall be binding upon and inure to the benefit of Borrower (except for Article 11), the Administrative Agent, each
Lender and, to the extent provided in Section 12.4, each other Indemnitee and Secured Party and, in each case, their respective
successors and permitted assigns. Except as expressly provided in any Loan Document or the Environmental Indemnity Agreement none
of Borrower, the Master Tenant, or the Administrative Agent shall have the right to assign any rights or obligations hereunder
or any interest herein.

 

(b)          Each
Lender (other than a Defaulting Lender) may sell, transfer, negotiate or assign all or a portion of its rights and obligations
hereunder (including all or a portion of its Loan Commitment and its rights and obligations with respect to the Loan) to (i) any
existing Lender (other than a Defaulting Lender), (ii) any Affiliate or Approved Fund of any existing Lender (so long as such Person
would not, upon acceptance of such rights and obligations hereunder, constitute a Defaulting Lender) or (iii) any other Person
acceptable (which acceptance shall not be unreasonably withheld or delayed) to the Administrative Agent; provided, however,
that the aggregate outstanding principal amount (determined as of the effective date of the applicable Assignment) of the Loan
subject to any such sale shall be in a minimum amount of $1,000,000, unless such sale is made to an existing Lender or an Affiliate
or Approved Fund of any existing Lender, is of the assignor’s (together with its Affiliates and Approved Funds) entire interest
in the Loan or is made with the prior consent of the Administrative Agent. For purposes of clarification, any sale, transfer, conveyance
or other assignment, however described, by GE Capital to GE Capital Bank, formerly known as GE Capital Financial Inc. (“GECB”),
and/or to any Affiliate of GECB, and by GECB to any of its Affiliates (including GE Capital) or to GE Capital, is expressly approved,
and each signatory hereto, including Borrower, acknowledges that no further consent or approval will be required in connection
with any such sale, transfer, conveyance or other assignment. A Defaulting Lender may not sell, transfer, negotiate or assign all
or a portion of its rights and obligations hereunder except with Administrative Agent’s consent or at Administrative Agent’s
direction in accordance with Section 2.14(c) hereof. A Defaulting Lender (or Person that would constitute a Defaulting Lender
upon acceptance of rights and obligations hereunder) may not be the recipient of the sale, transfer, negotiation or assignment
of any rights or obligations hereunder except with the consent of the Administrative Agent and, provided no Potential Default or
Event of Default is then in existence, Borrower.

 

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(c)          The
parties to each transfer or sale made in reliance on clause (b) above (other than those described in clause (d) or
(e) below) shall execute and deliver to the Administrative Agent an Assignment via an electronic settlement system designated
by the Administrative Agent (or if previously agreed with the Administrative Agent, via a manual execution and delivery of the
assignment) evidencing such transfer or sale, together with any existing Note subject to such transfer or sale (or any affidavit
of loss therefor acceptable to the Administrative Agent), any tax forms or other forms required to be delivered by the Administrative
Agent, and payment of an assignment fee in the amount of $3,500, provided that (1) if a transfer or sale by a Lender is made to
an Affiliate or an Approved Fund of such assigning Lender, then no assignment fee shall be due in connection with such transfer
or sale, and (2) if a transfer or sale by a Lender is made to an assignee that is not an Affiliate or Approved Fund of such assignor
Lender, and concurrently to one or more Affiliates or Approved Funds of such assignee, then only one assignment fee of $3,500 shall
be due in connection with such transfer or sale. Upon receipt of all the foregoing, and conditioned upon such receipt and, if such
assignment is made in accordance with Section 12.3(b)(iii), upon the Administrative Agent (and Borrower, if applicable)
consenting to such Assignment, from and after the effective date specified in such Assignment, the Administrative Agent shall record
or cause to be recorded in the Register the information contained in such Assignment.

 

(d)          Subject
to the recording of an Assignment by the Administrative Agent in the Register pursuant to Section 2.13(b), (i) the assignee
thereunder shall become a party hereto and, to the extent that rights and obligations under the Loan Documents and the Environmental
Indemnity Agreement have been assigned to such assignee pursuant to such Assignment, shall have the rights and obligations of a
Lender, (ii) any applicable Note shall be transferred to such assignee through such entry and (iii) the assignor thereunder shall,
to the extent that rights and obligations under this Agreement have been assigned by it pursuant to such Assignment, relinquish
its rights (except for those surviving the termination of the Loan Commitments and the payment in full of the Obligations) and
be released from its obligations under the Loan Documents and the Environmental Indemnity Agreement, other than those relating
to events or circumstances occurring prior to such assignment (and, in the case of an Assignment covering all or the remaining
portion of an assigning Lender’s rights and obligations under the Loan Documents and the Environmental Indemnity Agreement,
such Lender shall cease to be a party hereto except that each Lender agrees to remain bound by Article 11, Section 12.7
(Sharing of Payments) and Section 12.36 (Non-Public Information; Confidentiality).

 

(e)          In
addition to the other rights provided in this Section 12.3, each Lender may grant a security interest in, or otherwise assign
as collateral, any of its rights under this Agreement, whether now owned or hereafter acquired (including rights to payments of
principal or interest on the Loan), to (A) any federal reserve bank (pursuant to Regulation A of the Federal Reserve Board), without
notice to the Administrative Agent or (B) any holder of, or trustee for the benefit of the holders of, such Lender’s securities
by notice to the Administrative Agent; provided, however, that no such holder or trustee, whether because of such
grant or assignment or any foreclosure thereon (unless such foreclosure is made through an assignment in accordance with clause
(b) above), shall be entitled to any rights of such Lender hereunder and no such Lender shall be relieved of any of its obligations
hereunder.

 

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EACH LENDER AT ANY
TIME AND FROM TIME TO TIME MAY (I) DIVIDE AND RESTATE ITS PRO RATA SHARE OF THE LOAN OR ITS NOTE, AND/OR (II) SELL, ASSIGN OR GRANT
PARTICIPATING INTERESTS IN OR TRANSFER ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS UNDER ANY LOAN DOCUMENT, THE ENVIRONMENTAL
INDEMNITY AGREEMENT, THE LOAN, ITS NOTE, THE OBLIGATIONS AND/OR THE COLLATERAL TO OTHER PERSONS (EACH SUCH TRANSFEREE, ASSIGNEE
OR PURCHASER, A “LENDER TRANSFEREE”). Borrower agrees to cooperate with Lenders in connection with any
such restatement, division, sale, assignment or transfer. Each Lender Transferee shall have all of the rights and benefits with
respect to the Loan, Obligations, any Notes, the Collateral and/or the Loan Documents and the Environmental Indemnity Agreement
held by it as fully as if the original holder thereof, and either Lender or any Lender Transferee may be designated as the sole
agent to manage the transactions and obligations contemplated therein. Notwithstanding any other provision of any Loan Document
or the Environmental Indemnity Agreement, a Lender may disclose to any Lender Transferee all information, reports, financial statements,
certificates and documents obtained under any provision of any Loan Document.

 

(f)          In
addition to the other rights provided in this Section 12.3, each Lender may, without notice to or consent from the Administrative
Agent or Borrower, sell participations to one or more Persons in or to all or a portion of its rights and obligations under the
Loan Documents and the Environmental Indemnity Agreement; provided, however, that, whether as a result of any term
of any Loan Document or of such grant or participation, (i) no such participant shall have a commitment, or be deemed to have made
an offer to commit, to make advances of the Loan hereunder, and, except as provided in the applicable option agreement, none shall
be liable for any obligation of such Lender hereunder, (ii) such Lender’s rights and obligations, and the rights and obligations
of the Loan Parties and the Secured Parties towards such Lender, under any Loan Document and the Environmental Indemnity Agreement
shall remain unchanged and each other party hereto shall continue to deal solely with such Lender, which shall remain the holder
of the Obligations in the Register, except that (A) each such participant shall be entitled to the benefit of Sections 2.8
(Capital Adequacy; Increased Costs; Illegality), 2.9 (Interest Rate Protection), and 2.10 (Libor Breakage Amount); provided,
however, that in no case shall a participant have the right to enforce any of the terms of any Loan Document, and (iii)
the consent of such participant shall not be required (either directly, as a restraint on such Lender’s ability to consent
hereunder or otherwise) for any amendments, waivers or consents with respect to any Loan Document and the Environmental Indemnity
Agreement or to exercise or refrain from exercising any powers or rights such Lender may have under or in respect of the Loan Documents
and the Environmental Indemnity Agreement (including the right to enforce or direct enforcement of the Obligations), except for
those described in clauses (iii), (iv), and (v) of Section 12.2(a) with respect to amounts, or dates
fixed for payment of amounts, to which such participant would otherwise be entitled.

 

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Section
12.4.          Indemnities. 

 

(a)          Borrower
agrees to indemnify, hold harmless and defend the Administrative Agent, each Lender, and each of their respective Related Persons
(each such Person being an “Indemnitee”) from and against all Liabilities (including brokerage commissions,
fees and other compensation) that may be imposed on, incurred by or asserted against any such Indemnitee in any matter relating
to or arising out of, in connection with or as a result of (i) any Loan Document, any Obligation (or the repayment thereof), any
related transaction, or any securities filing of, or with respect to, Borrower, any Borrower Party or the Projects, (ii) any commitment
letter, proposal letter or term sheet with any Person and any contractual obligation entered into in connection with any E-Systems
or other Electronic Transmissions, (iii) any actual or prospective investigation, litigation or other proceeding, whether or not
brought by any such Indemnitee or any of its Related Persons, any holders of securities or creditors (and including attorneys’
fees in any case), whether or not any such Indemnitee, Related Person, holder or creditor is a party thereto, and whether or not
based on any securities or commercial law or regulation or any other Requirement of Law or theory thereof, including common law,
equity, contract, tort or otherwise, or (iv) any other act, event or transaction related, contemplated in or attendant to any of
the foregoing (collectively, the “Indemnified Matters”); provided, however, that Borrower
shall have no liability under this Section 12.4 to any Indemnitee with respect to any Indemnified Matter, and no Indemnitee
shall have any liability with respect to any Indemnified Matter other than (to the extent otherwise liable), to the extent such
liability has resulted from the gross negligence or willful misconduct of such Indemnitee, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order. Furthermore, Borrower and each Borrower Party waives and agrees not to
assert against any Indemnitee any right of contribution with respect to any Liabilities that may be imposed on, incurred by or
asserted against any Related Person.

 

(b)          Without
limiting the foregoing, “Indemnified Matters” includes all environmental Liabilities as set forth in
Article 4 whether or not, with respect to any such environmental Liabilities, any Indemnitee is a mortgagee pursuant to any leasehold
mortgage, a mortgagee in possession, the successor-in-interest to any Related Person or the owner, lessee or operator of any property
of any Related Person through any foreclosure action, in each case except to the extent such environmental Liabilities (i) are
incurred solely following foreclosure by any Secured Party or following any Secured Party having become the successor-in-interest
to Borrower or any Borrower Party and (ii) are attributable solely to acts of such Indemnitee.

 

(c)          Any
indemnification or other protection provided to any Indemnitee pursuant to any Loan Document and all representations and warranties
made in any Loan Document shall (i) survive the termination of the Loan Commitment and the payment in full of other Obligations
and (ii) inure to the benefit of any Person that at any time held a right thereunder (as an Indemnitee or otherwise) and, thereafter,
its successors and permitted assigns.

 

(d)          In
no event shall any Indemnitee be liable on any theory of liability for any special, indirect, consequential or punitive damages
(including any loss of profits, business or anticipated savings). Each of Borrower and Borrower Parties hereby waives, releases
and agrees not to sue upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued
and whether or not known or suspected to exist in its favor.

 

Section
12.5.         Lender-Creditor Relationship.  The relationship
between the Lenders and the Administrative Agent, on the one hand, and Borrower, on the other hand, is solely that of lender and
creditor. No Secured Party has any fiduciary relationship or duty to Borrower or Borrower Party arising out of or in connection
with, and there is no agency, tenancy or joint venture relationship between the Secured Parties and Borrower and Borrower Parties
by virtue of, any Loan Document or any transaction contemplated therein.

 

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Section
12.6.          [Reserved]. 

 

Section
12.7.          Sharing of Payments, Etc. If any Lender,
directly or through an affiliate or branch office thereof, obtains any payment of any Obligation of Borrower or any Borrower Party
(whether voluntary, involuntary or through the exercise of any right of setoff or the receipt of any Collateral or “proceeds”
(as defined under the applicable UCC) of Collateral) other than pursuant to Sections 2.8 (Capital Adequacy; Increased Costs;
Illegality), 2.9 (Interest Rate Protection), and 2.10 (Libor Breakage Amount) and such payment exceeds the amount such Lender would
have been entitled to receive if all payments had gone to, and been distributed by, the Administrative Agent in accordance with
the provisions of the Loan Documents, such Lender shall purchase for cash from other Secured Parties such participations in their
Obligations as necessary for such Lender to share such excess payment with such Secured Parties to ensure such payment is applied
as though it had been received by the Administrative Agent and applied in accordance with this Agreement (or, if such application
would then be at the discretion of Borrower, applied to repay the Obligations in accordance herewith); provided, however,
that (a) if such payment is rescinded or otherwise recovered from such Lender in whole or in part, such purchase shall be rescinded
and the purchase price therefor shall be returned to such Lender without interest and (b) such Lender shall, to the fullest extent
permitted by applicable Requirements of Law, be able to exercise all its rights of payment (including the right of setoff) with
respect to such participation as fully as if such Lender were the direct creditor of Borrower in the amount of such participation.

 

Section
12.8.          Marshaling; Payments Set Aside. No Secured
Party shall be under any obligation to marshal any property in favor of Borrower or any Borrower Party or any other party or against
or in payment of any Obligation. To the extent that any Secured Party receives a payment from Borrower, from the proceeds of the
Collateral, from the exercise of its rights of setoff, any enforcement action or otherwise, and such payment is subsequently, in
whole or in part, invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver
or any other party, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and
all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not occurred.

  

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Section
12.9.          Limitation on Interest. It is the intention
of the parties hereto to conform strictly to applicable usury laws. Accordingly, all agreements between Borrower, Administrative
Agent and Lenders with respect to the Loan are hereby expressly limited so that in no event, whether by reason of acceleration
of maturity or otherwise, shall the amount paid or agreed to be paid to Administrative Agent and any Lender or charged by Administrative
Agent or any Lender for the use, forbearance or detention of the money to be lent hereunder or otherwise, exceed the maximum amount
allowed by law. If the Loan would be usurious under applicable law (including the laws of the State of Illinois and the laws of
the United States of America), then, notwithstanding anything to the contrary in the Loan Documents: (a) the aggregate of all consideration
which constitutes interest under applicable law that is contracted for, taken, reserved, charged or received under the Loan Documents
and the Environmental Indemnity Agreement shall under no circumstances exceed the maximum amount of interest allowed by applicable
law, and any excess shall be credited on the Note by the holder thereof (or, if the Note has been paid in full, refunded to Borrower);
and (b) if maturity is accelerated by reason of an election by Administrative Agent, or in the event of any prepayment, then any
consideration which constitutes interest may never include more than the maximum amount allowed by applicable law. In such case,
excess interest, if any, provided for in the Loan Documents and the Environmental Indemnity Agreement or otherwise, to the extent
permitted by applicable law, shall be amortized, prorated, allocated and spread from the date of advance until payment in full
so that the actual rate of interest is uniform through the term hereof. If such amortization, proration, allocation and spreading
is not permitted under applicable law, then such excess interest shall be canceled automatically as of the date of such acceleration
or prepayment and, if theretofore paid, shall be credited on the Note (or, if the Note has been paid in full, refunded to Borrower).
The terms and provisions of this Section 12.9 shall control and supersede every other provision of the Loan Documents. The
Loan Documents and the Environmental Indemnity Agreement are contracts made under and shall be construed in accordance with and
governed by the laws of the State of Illinois, except that if at any time the laws of the United States of America permit Administrative
Agent or the Lenders to contract for, take, reserve, charge or receive a higher rate of interest than is allowed by the laws of
the State of Illinois (whether such federal laws directly so provide or refer to the law of any state), then such federal laws
shall to such extent govern as to the rate of interest which Administrative Agent or the Lenders may contract for, take, reserve,
charge or receive under the Loan Documents and the Environmental Indemnity Agreement.

 

Section
12.10.       Invalid Provisions. If any provision of any
Loan Document or the Environmental Indemnity Agreement is held to be illegal, invalid or unenforceable, such provision shall be
fully severable; the Environmental Indemnity Agreement and the Loan Documents shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part thereof; the remaining provisions thereof shall remain in full effect
and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance therefrom; and in lieu of such
illegal, invalid or unenforceable provision there shall be added automatically as a part of such Environmental Indemnity Agreement
and/or such Loan Document a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible
to be legal, valid and enforceable.

 

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Section
12.11.         Reimbursement of Expenses. 

 

(a)          Any
action taken by Borrower or any Borrower Party under or with respect to any Loan Document, even if required under any Loan Document
or at the request of any Secured Party, shall be at the expense of Borrower or such Borrower Party, and no Secured Party shall
be required under any Loan Document to reimburse any Borrower or Borrower Party therefor except as expressly provided therein.
In addition, Borrower agrees to pay or reimburse upon demand (a) the Administrative Agent for all reasonable out-of-pocket costs
and expenses incurred by it or any of its Related Persons in connection with the investigation, development, preparation, negotiation,
syndication, execution, interpretation or administration of, any modification of any term of or termination of, any Loan Document,
any commitment or proposal letter therefor, any other document prepared in connection therewith or the consummation and administration
of any transaction contemplated therein (including periodic audits in connection therewith and environmental audits and assessments),
in each case including the reasonable fees, charges and disbursements of legal counsel to the Administrative Agent or such Related
Persons, fees, costs and expenses incurred in connection with Intralinks® or any other E-System and allocated to the Loan by
the Administrative Agent in its reasonable discretion and fees, charges and disbursements of the auditors, appraisers, printers
and other of their Related Persons retained by or on behalf of any of them or any of their Related Persons, (b) the Administrative
Agent and each Lender for all reasonable costs and expenses incurred by them or any of their Related Persons in connection with
internal audit reviews, field examinations, financial investigation, and Collateral examinations, including, without limitation,
any tax service company (which shall be reimbursed, in addition to the out-of-pocket costs and expenses of such examiners, at the
per diem rate per individual charged by the Administrative Agent for its examiners), (c) each of the Administrative Agent, its
Related Persons, and each Lender for all costs and expenses incurred in connection with (i) any refinancing or restructuring of
the credit arrangements provided hereunder in the nature of a “work-out”, (ii) the enforcement or preservation of any
right or remedy under any Loan Document, any Obligation, with respect to the Collateral or any other related right or remedy or
(iii) the commencement, defense, conduct of, intervention in, or the taking of any other action with respect to, any proceeding
(including any bankruptcy or insolvency proceeding) related to Borrower or any Borrower Party or Master Tenant, Loan Document,
Obligation or related transaction (or the response to and preparation for any subpoena or request for document production relating
thereto), including reasonable fees and disbursements of counsel (including allocated costs of internal counsel), (d) costs incurred
in connection with settlement of condemnation and casualty awards, premiums for title insurance and endorsements thereto, and (e)
fees and costs for Uniform Commercial Code and litigation searches and background checks, if required.

 

(b)          Borrower
shall also pay to Administrative Agent on the first (1st) day of each month during the term of the Loan, in addition to all other
amounts due under the Loan Documents, the sum of One Hundred Fifty and No/100 Dollars ($150.00) per Project, which Administrative
Agent shall apply against the cost and expenses incurred in connection with the annual on-site audit and inspection of the Projects.

 

Section
12.12.        Approvals; Third Parties; Conditions. All
approval rights retained or exercised by Administrative Agent or the Lenders with respect to the Leases, contracts, plans, studies
and other matters are solely to facilitate Administrative Agent’s and the Lenders’ credit underwriting, and shall not
be deemed or construed as a determination that Administrative Agent or the Lenders have passed on the adequacy thereof for any
other purpose and may not be relied upon by Borrower or any other Person. This Agreement is for the sole and exclusive use of Administrative
Agent (and its successors and permitted assigns), the Lenders (and their successors and permitted assigns and participants), and
Borrower and may not be enforced, nor relied upon, by any Person other than Administrative Agent (and its successors and permitted
assigns), the Lenders (and their successors and permitted assigns and participants), and Borrower. All conditions of the obligations
of Administrative Agent and the Lenders hereunder, including the obligation to make advances, are imposed solely and exclusively
for the benefit of Administrative Agent and the Lenders, its successors and assigns, and no other Person shall have standing to
require satisfaction of such conditions or be entitled to assume that any Lender will refuse to make advances in the absence of
strict compliance with any or all of such conditions, and no other Person shall, under any circumstances, be deemed to be a beneficiary
of such conditions, any and all of which may be freely waived in whole or in part by any Lender at any time in such Lender’s
sole discretion.

 

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Section
12.13.        Administrative Agent and Lenders Not in Control;
No Partnership. None of the covenants or other provisions contained in this Agreement shall, or shall be deemed to, give
Administrative Agent or the Lenders the right or power to exercise control over the affairs or management of Borrower, the power
of Administrative Agent and the Lenders being limited to the rights to exercise the remedies referred to in the Environmental Indemnity
Agreement or the Loan Documents. No covenant or provision of the Environmental Indemnity Agreement or the Loan Documents is intended,
nor shall it be deemed or construed, to create a partnership, joint venture, agency or common interest in profits or income among
Administrative Agent and the Lenders or any of them, on the one hand, and Borrower, on the other hand, or to create an equity interest
in the Projects in Administrative Agent or any Lender. None of Administrative Agent nor any Lender undertakes or assumes any responsibility
or duty to Borrower or to any other Person with respect to the Projects or the Loan, except as expressly provided in the Environmental
Indemnity Agreement and the Loan Documents; and notwithstanding any other provision of the Environmental Indemnity Agreement or
the Loan Documents: (a) none of Administrative Agent or any Lender are, and shall not be construed as, a partner, joint venturer,
alter ego, manager, controlling person or other business associate or participant of any kind of Borrower or its stockholders,
members, or partners and Administrative Agent and the Lenders do not intend to ever assume such status; (b) Administrative Agent
and the Lenders shall in no event be liable for any Debts, expenses or losses incurred or sustained by Borrower; and (c) Administrative
Agent and the Lenders shall not be deemed responsible for or a participant in any acts, omissions or decisions of Borrower or its
stockholders, members, or partners. Administrative Agent and the Lenders and Borrower disclaim any intention to create any partnership,
joint venture, agency or common interest in profits or income among the Administrative Agent and the Lenders or any of them, on
the one hand, and Borrower, on the other hand, or to create an equity interest in the Projects in Administrative Agent or the Lenders,
or any sharing of liabilities, losses, costs or expenses.

 

Section
12.14.       Contest of Certain Claims. Borrower
may contest the validity of Taxes or any mechanic’s or materialman’s lien asserted against any Project so long as (a)
Borrower notifies Administrative Agent that it intends to contest such Taxes or liens, as applicable, (b) Borrower provides Administrative
Agent with an indemnity, bond or other security reasonably satisfactory to Administrative Agent assuring the discharge of Borrower’s
obligations for such Taxes or liens, as applicable, including interest and penalties, (c) Borrower is diligently contesting the
same by appropriate legal proceedings in good faith and at its own expense and concludes such contest prior to the tenth (10th)
day preceding the earlier to occur of the Maturity Date or the date on which any Project is scheduled to be sold for non-payment,
(d) Borrower promptly upon final determination thereof pays the amount of any such Taxes or liens, as applicable, together with
all costs, interest and penalties which may be payable in connection therewith, and (e) notwithstanding the foregoing, Borrower
shall immediately upon request of Administrative Agent pay any such Taxes or liens, as applicable, notwithstanding such contest
if, in the opinion of Administrative Agent, any Project or any part thereof or interest therein may be in danger of being sold,
forfeited, foreclosed, terminated, canceled or lost. Administrative Agent may pay over any cash deposit or part thereof to the
claimant entitled thereto at any time when, in the reasonable judgment of Administrative Agent, the entitlement of such claimant
is established.

 

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Section
12.15.        Time of the Essence. Time is of the essence
with respect to this Agreement.

 

Section
12.16.       Successors and Assigns.  This Agreement shall
be binding upon and inure to the benefit of Administrative Agent, the Lenders and Borrower and their respective successors and
assigns, provided that neither Borrower nor any other Borrower Party shall, without the prior written consent of the Lenders, assign
any of its rights, duties or obligations hereunder.

 

Section
12.17.       Renewal, Extension or Rearrangement. All
provisions of the Environmental Indemnity Agreement and the Loan Documents shall apply with equal effect to each and all promissory
notes and amendments thereof hereinafter executed which in whole or in part represent a renewal, extension, increase or rearrangement
of the Loan.

 

Section
12.18.         Waivers. 

 

(a)          No
course of dealing on the part of Administrative Agent or the Lenders or their respective officers, employees, consultants or agents,
nor any failure or delay by Administrative Agent or any Lender with respect to exercising any right, power or privilege of Administrative
Agent or the Lenders under the Environmental Indemnity Agreement and any of the Loan Documents, shall operate as a waiver thereof.

 

(b)          Borrower
hereby waives any right under the UCC or any other applicable law to receive notice and/or copies of any filed or recorded financing
statements, amendments thereto, continuations thereof or termination statements and releases and excuses Administrative Agent and
each Lender from any obligation under the UCC or any other applicable law to provide notice or a copy of any such filed or recorded
documents.

 

Section
12.19.        Cumulative Rights; Joint and Several Liability.
 Rights and remedies of Administrative Agent (on behalf of the Lenders) under the Environmental Indemnity Agreement and the
Loan Documents shall be cumulative, and the exercise or partial exercise of any such right or remedy shall not preclude the exercise
of any other right or remedy. If more than one person or entity has executed this Agreement as “Borrower,”
the obligations of all such persons or entities hereunder shall be joint and several.

 

Section
12.20.       Singular and Plural. Words used in this Agreement,
the other Loan Documents and the Environmental Indemnity Agreement, in the singular, where the context so permits, shall be deemed
to include the plural and vice versa. The definitions of words in the singular in this Agreement, the other Loan Documents, and
the Environmental Indemnity Agreement shall apply to such words when used in the plural where the context so permits and vice versa.

 

Section
12.21.       Exhibits and Schedules. The exhibits and
schedules attached to this Agreement are incorporated herein and shall be considered a part of this Agreement for the purposes
stated herein.

 

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Section
12.22.      Titles of Articles, Sections and Subsections.
All titles or headings to articles, sections, subsections or other divisions of this Agreement, the other Loan Documents, and the
Environmental Indemnity Agreement or the exhibits hereto and thereto are only for the convenience of the parties and shall not
be construed to have any effect or meaning with respect to the other content of such articles, sections, subsections or other divisions,
such other content being controlling as to the agreement between the parties hereto.

 

Section
12.23.        Promotional Material. Borrower authorizes
Administrative Agent and any Lender to issue press releases, advertisements and other promotional materials in connection with
Administrative Agent’s or such Lender’s own promotional and marketing activities, subject to Borrower’s reasonable
approval of the form of such materials, and such materials may describe the Loan in general terms and Administrative Agent’s
and such Lender’s participation therein in the Loan. All references to Administrative Agent or any Lender contained in any
press release, advertisement or promotional material issued by Borrower shall be approved in writing by Administrative Agent in
advance of issuance.

 

Section
12.24.        Survival. All of the representations, warranties,
covenants, and indemnities hereunder (including environmental matters under Article 4), under the indemnification provisions of
the other Loan Documents and under the Environmental Indemnity Agreement, shall survive the repayment in full of the Loan and the
release of the liens evidencing or securing the Loan, and shall survive the transfer (by sale, foreclosure, conveyance in lieu
of foreclosure or otherwise) of any or all right, title and interest in and to the Projects to any party, whether or not an Affiliate
of Borrower.

 

Section
12.25.       WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER
LOAN DOCUMENT, OR THE ENVIRONMENTAL INDEMNITY AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL
OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS AND THE
ENVIRONMENTAL INDEMNITY AGREEMENT OR IN ANY WAY RELATING TO THE LOAN OR THE PROJECTS (INCLUDING, WITHOUT LIMITATION, ANY ACTION
TO RESCIND OR CANCEL THIS AGREEMENT, AND ANY CLAIM OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE
VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR ADMINISTRATIVE AGENT AND EACH LENDER TO ENTER INTO THIS AGREEMENT.

 

Section
12.26.       Waiver of Punitive or Consequential Damages.
None of Administrative Agent, any Lender nor Borrower shall be responsible or liable to the other or to any other Person for any
punitive, exemplary or consequential damages which may be alleged as a result of the Loan or the transaction contemplated hereby,
including any breach or other default by any party hereto. Borrower represents and warrants to Administrative Agent and each Lender
that as of the Closing Date neither Borrower nor any Borrower Party has any claims against Administrative Agent or any Lender in
connection with the Loan.

 

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Section
12.27.        Governing Law. UNLESS OTHERWISE NOTED THEREIN
TO THE CONTRARY, THE LOAN DOCUMENTS AND THE ENVIRONMENTAL INDEMNITY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES THEREUNDER SHALL
IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS (WITHOUT GIVING
EFFECT TO ILLINOIS’ PRINCIPLES OF CONFLICTS OF LAW) AND APPLICABLE UNITED STATES FEDERAL LAW, EXCEPT FOR THOSE PROVISIONS
IN THE LOAN DOCUMENTS AND THE ENVIRONMENTAL INDEMNITY PERTAINING TO THE CREATION, PERFECTION OR VALIDITY OF OR EXECUTION ON LIENS
OR SECURITY INTERESTS ON PROPERTY LOCATED IN THE STATES WHERE THE PROJECTS ARE LOCATED, WHICH PROVISIONS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATES WHERE THE PROJECTS ARE LOCATED AND APPLICABLE UNITED STATES FEDERAL LAW.

 

Section
12.28.        Entire Agreement. This Agreement, the other
Loan Documents and the Environmental Indemnity Agreement embody the entire agreement and understanding between Administrative Agent
and each Lender and Borrower and supersede all prior agreements and understandings between such parties relating to the subject
matter hereof and thereof. Accordingly, the Loan Documents and the Environmental Indemnity Agreement may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between
the parties. If any conflict or inconsistency exists between the Term Sheet and this Agreement, any of the other Loan Documents,
or the Environmental Indemnity Agreement, the terms of this Agreement, the other Loan Documents, and the Environmental Indemnity
Agreement, as applicable, shall control.

 

Section
12.29.        Counterparts. This Agreement may be executed
in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document.

 

Section
12.30.        Consents and Approvals. To the extent that
Administrative Agent, Lenders and/or Required Lenders provide any consent or approval as provided for in this Agreement, such consent
shall be limited to the specific matter approved and shall NOT be construed to (a) relieve Borrower from compliance with all of
the other terms and obligations of this Agreement, or (b) constitute a consent to any further similar action (as to which a prospective
consent or approval shall be required and may not necessarily be granted), or (c) constitute a consent to any other obligation
to which any Lender may be a party.

 

Section
12.31.         [Reserved].

 

Section
12.32.        Effectiveness of Facsimile Documents and Signatures. The Loan Documents
and Environmental Indemnity Agreement may be transmitted and/or signed by facsimile. The effectiveness of any such documents and
signatures shall, subject to applicable law, have the same force and effect as manually signed originals and shall be binding
on all parties to the Loan Documents and Environmental Indemnity Agreement, as applicable. Administrative Agent may also require
that any such documents and signatures be confirmed by a manually signed original thereof; provided, however, that
the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature.

 

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Section
12.33.        Venue. EACH PARTY HERETO HEREBY CONSENTS
TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND IRREVOCABLY AGREES THAT,
SUBJECT TO ADMINISTRATIVE AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH PARTY HERETO EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF
THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
ADDRESSED TO BORROWER, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED COMPLETE TEN (10) DAYS AFTER
THE SAME HAS BEEN POSTED.

 

Section
12.34.      Important Information Regarding Procedures for Requesting
Credit. Each of the Administrative Agent and Lenders hereby notifies the Borrower Parties that in order to help the government
fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify,
and record information that identifies each individual or business that requests credit. Accordingly, in connection with the Loan
or any other request for credit, Administrative Agent and the Lenders will ask for the business name, business address, Employer
Identification Number, and other information which allows them to identify each Borrower Party, and may ask for other identifying
documents showing existence of each Borrower Party.

 

Section
12.35.       Method of Payment. All amounts payable under
this Agreement and the other Loan Documents must be paid by Borrower in accordance with Section 2.6(c). Payments in the
form of cash, money order, third party payment, cashier’s check, a check drawn on a foreign bank or non-bank financial institution,
or any form of payment other than those provided in the preceding sentence will not be accepted.

 

Section
12.36.      Non-Public Information; Confidentiality; Disclosure.
Borrower authorizes Administrative Agent and each Lender to disclose information about Borrower and any Borrower Party that Administrative
Agent or such Lender may at any time possess to any Affiliate of a Lender or Administrative Agent, whether such information was
supplied by Borrower or otherwise obtained by Administrative Agent or the Lender; provided to the extent Administrative Agent or
any Lender receives material non-public information hereunder concerning Borrower, the Borrower Parties, and the Master Tenant
and their Affiliates and agrees to use such information in compliance with all relevant policies, procedures and contractual obligations
and applicable Requirements of Laws (including United States federal and state securities laws and regulations).

 

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Section
12.37.        Post-Closing Obligations of Borrower. Notwithstanding
the fact that Borrower have not satisfied certain of the conditions to the advance of the Loan proceeds as of the Closing Date,
Lenders have agreed to advance the proceeds of the Loan to Borrower, subject to the satisfaction of the other conditions to funding
contained herein and each of the requirements set forth in Schedule 12.37 attached hereto. Borrower shall complete
the same (or cause the same to be completed) within the time periods specified in Schedule 12.37, which time period
may be extended by Administrative Agent in its sole discretion, all of which shall be performed in a manner satisfactory to Administrative
Agent. In addition, any Post-Closing Obligation that involves a repair, replacement or improvement of the Project shall be subject
to inspection by Administrative Agent.

 

Section
12.38.       Release and Waiver Regarding Special Audits.
Borrower and Lenders acknowledge that from time to time during the term of the Loan, one or more Lenders and/or Borrower may request
that GE Capital provide Borrower and/or the Lenders (collectively, the “Recipient”) with certain internally
generated reports (whether oral and/or written, the “Reports”), which Reports may include oral and/or
written information, assessments, notes, memoranda and analyses prepared by employees of GE Capital for the limited purpose of
preparing an audit of the progress of one or more of the Projects has made with respect to a plan of correction (or similar remedial
obligation of Borrower or any Operator under any Healthcare Laws) that may be issued from time to time with respect to one or more
of the Projects. With respect to any Reports that may be provided to the Recipient from time to time during the term of the Loan,
Lenders and Borrower hereby acknowledge and agree as follows: (a) the Reports may be prepared based on procedures that may not
include all procedures deemed necessary for the Recipient’s own purposes; (b) GE Capital will not be able or willing to make
any recommendations based on the Reports and GE Capital shall not in any way be deemed a consultant, agent or other representative
to the Recipient in any manner; (c) the Recipient does not acquire any rights as a result of the disclosure of the Reports and
its access thereto, and GE Capital assumes no duties or obligations in connection with, or as a result of, such access; (d) the
Recipient is not entitled to rely on the Report; (e) the Recipient will not distribute or disclose the Reports or the information
contained therein to any third party, except if compelled by legal process, and it will, to the extent permitted by applicable
Law, indemnify and hold harmless GE Capital, together with its employees, officers, advisors and Affiliates from and against any
and all claims, losses or expenses (including attorneys’ fees) arising as a result of GE Capital having disclosed the Reports
to the Recipient; (f) the Recipient waives its right to recover from, and releases and discharges any legal action against, GE
Capital with respect to any and all suits, actions, proceedings, investigations, demands, claims, liabilities, fines, penalties,
liens, judgments, losses, injuries, damages, settlement expenses or costs of whatever kind or nature, whether direct or indirect,
known or unknown, contingent or otherwise, including, without limitation, attorneys’ and experts’ fees and expenses,
and investigation and remediation costs that may arise on account of or in any way be connected with the Report; and (g) and with
respect to the Reports, GE Capital is not acting as an agent, fiduciary or representative for the Recipient, and the Recipient
will (i) make its own independent investigation of the subject matter of the Reports and (ii) be solely responsible for its own
review, assessments, conclusions and decisions with respect to the Loan, the Projects and the relevant Borrower and/or Operator.

 

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ARTICLE
XIII

 

LIMITATIONS
ON LIABILITY

 

Section
13.1.          Limitation on Liability. 

 

(a)          Subject
to the qualifications below, neither the Administrative Agent nor any Lender shall enforce the liability and obligation of Borrower
to perform and observe the Obligations by any action or proceeding wherein a money judgment shall be sought against Borrower, except
that Administrative Agent and the Lenders may bring a foreclosure action, an action for specific performance or any other appropriate
action or proceeding to enable Administrative Agent and the Lenders to enforce and realize upon its interest under the Note, this
Agreement, the Mortgage and the other Loan Documents, or in the Projects, or any other Collateral given to Administrative Agent
and the Lenders pursuant to the Loan Documents; provided, however, that, except as specifically provided herein,
any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest
in the Projects and in any other collateral given to Administrative Agent and the Lenders to secure the Obligations, and Administrative
Agent and each Lender, as applicable, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not
sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under
or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents.

 

(b)          The
provisions of this Section 13.1 shall not, however, (i) constitute a waiver, release or impairment of any Obligation evidenced
or secured by any of the Loan Documents; (ii) impair the right of Administrative Agent or any Lender to name Borrower as a party
defendant in any action or suit for foreclosure and sale under the Mortgage; (iii) affect the validity or enforceability of any
guaranty made in connection with the Loan or any of the rights and remedies of Administrative Agent or any Lender thereunder; (iv)
impair the right of Administrative Agent or any Lender to obtain the appointment of a receiver; (v) impair the enforcement of the
Assignment of Leases and Rents; (vi) constitute a prohibition against Administrative Agent or any Lender to commence any appropriate
action or proceeding in order for Administrative Agent or any Lender to exercise its remedies against the Projects; or (vii) constitute
a waiver of the right of Administrative Agent or any Lender to enforce the liability and obligation of Borrower, by money judgment
or otherwise, to the extent of any loss, damage, cost, expense, liability, claim or other obligation (including attorneys’
fees and costs reasonably incurred), causes of action, suits, claims, demands and judgments of any nature or description whatsoever,
which may be imposed upon, incurred by or awarded against Administrative Agent or any Lender or any affiliate thereof as a result
of, arising out of or in connection with (and Borrower shall be personally liable and shall indemnify Administrative Agent and
such Lender for) the following:

 

(i)          any
failure by Borrower or any Guarantor or any of their Affiliates or their respective employees, managers, contractors, agents or
other representatives after the occurrence and during the continuance of any Event of Default to apply any portion of the gross
income from the Projects at any time received by or payable to Borrower or any Guarantor or any of their Affiliates or their respective
employers, managers, contractors, agents or other representatives to the Loan or to customary operating expenses of the Projects;

 

    	[Summit Healthcare]	105	 

    	 

    

 

(ii)         Borrower’s
commission of a criminal act;

 

(iii)        Borrower’s
failure to permit on-site inspections of any Project or to provide the financial reports and other financial information, each
as required by, and in accordance with the terms and provisions of, this Agreement and the other Loan Documents;

 

(iv)         the
failure by Borrower or any Borrower Party to apply any funds derived from the Projects, including Security Deposits, Adjusted Revenue,
insurance proceeds and condemnation awards as required by the Loan Documents;

 

(v)          any
intentional misrepresentation by Borrower or any Borrower Party made in or in connection with the Loan Documents or the Loan;

 

(vi)         Borrower’s
collection of rents more than one month in advance or entering into or modifying or canceling Leases, or receipt of monies by Borrower
or any Borrower Party in connection with the modification or cancellation of any Leases, in violation of this Agreement or any
of the other Loan Documents;

 

(vii)        Borrower,
any Guarantor or any Affiliate of any of them contesting or in any way interfering with, directly or indirectly (collectively,
a “Contest”), any foreclosure action or sale commenced by Administrative Agent or any Lender or with
any other enforcement of Administrative Agent’s or any Lender’s rights, powers or remedies under any of the Loan Documents
or under any document evidencing, securing or otherwise relating to any of the Security (whether by making any motion, bringing
any counterclaim, claiming any defense, seeking any injunction or other restraint, commencing any action seeking to consolidate
any such foreclosure or other enforcement with any other action, or otherwise);

 

(viii)      Borrower’s
failure to turn over to Administrative Agent all Security Deposits upon Administrative Agent’s demand following an Event
of Default;

 

(ix)         any
amendment or modification of the Master Lease, or any guaranty thereof, or any termination or surrender of the Master Lease
or any guaranty thereof (except only to the extent expressly permitted under this Agreement), without the prior written consent
of Administrative Agent in each instance;

 

(x)          Borrower’s
failure to maintain insurance as required by this Agreement or to pay any Taxes or assessments affecting the Projects;

 

(xi)         damage
or destruction to any Project caused by the negligent or intentional acts or omissions of Borrower, its agents, employees, or contractors;

 

(xii)        Borrower’s
failure to perform its obligations under the Environmental Indemnity Agreement or with respect to environmental matters under Article
4;

 

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(xiii)      Borrower’s
failure to pay for any loss, liability or expense (including attorneys’ fees) incurred by Administrative Agent or any Lender
arising out of any claim or allegation made by Borrower, its successors or assigns, or any creditor of Borrower, that this Agreement
or the transactions contemplated by the Loan Documents and the Environmental Indemnity Agreement establish a joint venture, partnership
or other similar arrangement among Borrower, the Administrative Agent, or any Lender;

 

(xiv)        any
brokerage commission or finder’s fees claimed in connection with the transactions contemplated by the Loan Documents;

 

(xv)         uninsured
damage to any Project resulting from acts of terrorism;

 

(xvi)        the
physical waste of any Project;

 

(xvii)      the
removal or disposal of any personal property from any Project in which Administrative Agent or the Lenders have a security interest
in violation of the terms and conditions of the Loan Documents;

 

(xviii)     with
respect to the Redding Sundial Project only, the difference between the proceeds of any Award paid to Redding Sundial Borrower
and the Allocated Loan Amount;

 

(xix)        the
payment of any distributions to Borrower or any Guarantor or any of their Affiliates, employees, managers or contractors, other
than as permitted in this Agreement; or

 

(xx)         any
fees paid by Borrower to any Guarantor or any of their Affiliates, employees, managers or contractors after the occurrence and
during the continuation of an Event of Default under the Loan Documents.

 

(c)          Notwithstanding
anything to the contrary in this Agreement, the Note or any of the Loan Documents, all of the Obligations shall be fully recourse
to Borrower and Borrower shall be personally liable therefor in the event of: (i) any Transfer of any Project or any part thereof
or a Transfer of an interest in any Restricted Party in breach of any of the covenants in this Agreement or the Mortgage, (ii)
Borrower’s failure to comply with the covenants in Section 6.17 hereof; (iii) the commission of fraud by Borrower
or any Borrower Party in connection with the Loan, (iv) the filing by Borrower or any Borrower Party or the filing against Borrower
or any Borrower Party by Borrower, any Borrower Party or any Affiliate of Borrower of any proceeding for relief under any federal
or state bankruptcy, insolvency or receivership laws or any assignment for the benefit of creditors made by Borrower or any Borrower
Party or the consenting to, acquiescing in or joining in any such proceeding by Borrower or Borrower Party; or (v) the amendment,
modification, termination, cancellation or surrender of the Ground Lease, or the waiver of any of the terms or provisions thereof,
without Administrative Agent’s prior written consent.

 

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(d)          Borrower
also shall be personally liable to Administrative Agent and the Lenders for any and all attorneys’ fees and expenses and
court costs incurred by Administrative Agent and the Lenders in enforcing this Section 13.1 or otherwise incurred by Administrative
Agent or any Lender in connection with any of the foregoing matters, regardless whether such matters are legal or equitable in
nature or arise under tort or contract law. The limitation on the personal liability of Borrower in this Section 13.1 shall
not modify, diminish or discharge the personal liability of any Guarantor. Nothing herein shall be deemed to be a waiver of any
right which Administrative Agent or any Lender may have under Sections 506(a), 506(b), 1111(b) or any other provision of the United
States Bankruptcy Code, as such sections may be amended, or corresponding or superseding sections of the Bankruptcy Amendments
and Federal Judgeship Act of 1984, to file a claim for the full amount due to Administrative Agent and the Lenders under the Loan
Documents or to require that all collateral shall continue to secure the amounts due under the Loan Documents.

 

Section
13.2.         Limitation on Liability of Lender’s Officers,
Employees, etc. Any obligation or liability whatsoever of Administrative Agent or any Lender which may arise at any time
under this Agreement, any other Loan Document, or the Environmental Indemnity Agreement shall be satisfied, if at all, out of the
Administrative Agent’s or such Lender’s assets only. No such obligation or liability shall be personally binding upon,
nor shall resort for the enforcement thereof be had to, the property of any of Administrative Agent’s or such Lender’s
shareholders, directors, officers, employees or agents, regardless of whether such obligation or liability is in the nature of
contract, tort or otherwise.

 

ARTICLE
XIV

cross-guaranty

 

Section
14.1.         Cross-Guaranty. Each Borrower
hereby agrees that such Borrower is jointly and severally liable for, and hereby absolutely and unconditionally guarantees to the
Administrative Agent and Lenders and their respective successors and assigns, the full and prompt payment (whether at stated maturity,
by acceleration or otherwise) and performance of, all Obligations owed or hereafter owing to Administrative Agent and Lenders by
each other Borrower. Each Borrower agrees that its guaranty obligation hereunder is a continuing guaranty of payment and performance
and not of collection, that its obligations under this Article XIV shall not be discharged until payment and performance,
in full, of the Obligations has occurred, and that its obligations under this Article XIV shall be absolute and unconditional,
irrespective of, and unaffected by:

 

(a)          the
genuineness, validity, regularity, enforceability or any future amendment of, or change in, this Agreement, any other Loan Document
or any other agreement, document or instrument to which any Borrower is or may become a party;

 

(b)          the
absence of any action to enforce this Agreement (including this Article XIV) or any other Loan Document or the waiver or
consent by Administrative Agent and Lenders with respect to any of the provisions thereof;

 

(c)          the
existence, value or condition of, or failure to perfect its Lien against, any security for the Obligations or any action, or the
absence of any action, by Agent and Lenders in respect thereof (including the release of any such security);

 

(d)          the
insolvency of any Borrower or Guarantor; or

 

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(e)          any
other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor.

 

Each Borrower shall be
regarded, and shall be in the same position, as principal debtor with respect to the Obligations guaranteed hereunder.

 

Section
14.2.          Waivers By Borrower. Each Borrower
expressly waives all rights it may have now or in the future under any statute, or at common law, or at law or in equity, or otherwise,
to compel Administrative Agent or Lenders to marshal assets or to proceed in respect of the Obligations guaranteed hereunder against
any other Borrower, any other party or against any security for the payment and performance of the Obligations before proceeding
against, or as a condition to proceeding against, such Borrower. It is agreed among each Borrower, Administrative Agent and Lenders
that the foregoing waivers are of the essence of the transaction contemplated by this Agreement and the other Loan Documents and
that, but for the provisions of this Article XIV and such waivers, Administrative Agent and Lenders would decline to enter
into this Agreement.

 

Section
14.3.          Benefit of Guaranty. Each Borrower
agrees that the provisions of this Article XIV are for the benefit of Administrative Agent and Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained shall impair, as between any other Borrower and Administrative
Agent or Lenders, the obligations of such other Borrower under the Loan Documents.

 

Section
14.4.          Waiver of Subrogation, Etc. Notwithstanding
anything to the contrary in this Agreement or in any other Loan Document, and except as set forth in Section 14.7, each
Borrower hereby expressly and irrevocably waives any and all rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification or set off and any and all defenses available to a surety, guarantor or accommodation co-obligor.
Each Borrower acknowledges and agrees that this waiver is intended to benefit Administrative Agent and Lenders and shall not limit
or otherwise affect such Borrower's liability hereunder or the enforceability of this Article XIV, and that Agent, Lenders
and their respective successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this
Section 14.4.

 

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Section
14.5.          Election of Remedies. If Administrative
Agent or any Lender may, under applicable law, proceed to realize its benefits under any of the Loan Documents giving Administrative
Agent or such Lender a Lien upon any Collateral, whether owned by any Borrower or by any other Person, either by judicial foreclosure
or by non-judicial sale or enforcement, Administrative Agent or any Lender may, at its sole option, determine which of its remedies
or rights it may pursue without affecting any of its rights and remedies under this Article XIV. If, in the exercise of
any of its rights and remedies, Administrative Agent or any Lender shall forfeit any of its rights or remedies, including its right
to enter a deficiency judgment against any Borrower or any other Person, whether because of any applicable laws pertaining to “election
of remedies” or the like, each Borrower hereby consents to such action by Administrative Agent or such Lender and waives
any claim based upon such action, even if such action by Administrative Agent or such Lender shall result in a full or partial
loss of any rights of subrogation that each Borrower might otherwise have had but for such action by Administrative Agent or such
Lender. Any election of remedies that results in the denial or impairment of the right of Administrative Agent or any Lender to
seek a deficiency judgment against any Borrower shall not impair any other Borrower's obligation to pay the full amount of the
Obligations. In the event Administrative Agent or any Lender shall bid at any foreclosure or trustee's sale or at any private sale
permitted by law or the Loan Documents, Administrative Agent or such Lender may bid all or less than the amount of the Obligations
and the amount of such bid need not be paid by Administrative Agent or such Lender but shall be credited against the Obligations.
The amount of the successful bid at any such sale, whether Administrative Agent, Lender or any other party is the successful bidder,
shall be conclusively deemed to be the fair market value of the Collateral and the difference between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Article XIV,
notwithstanding that any present or future law or court decision or ruling may have the effect of reducing the amount of any deficiency
claim to which Administrative Agent or any Lender might otherwise be entitled but for such bidding at any such sale.

 

Section
14.6.         Limitation. Notwithstanding any
provision herein contained to the contrary, each Borrower's liability under this Article XIV (which liability is in any
event in addition to amounts for which such Borrower is primarily liable under Article II) shall be limited to an amount
not to exceed as of any date of determination the greater of:

 

(a)          the
net amount of all Loan proceeds advanced to any other Borrower under this Agreement and then re-loaned or otherwise transferred
to, or for the benefit of, such Borrower; and

 

(b)          the
amount that could be claimed by Agent and Lenders from such Borrower under this Article XIV without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act, Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account, among other things, such Borrower's
right of contribution and indemnification from each other Borrower under Section 14.7.

 

Section
14.7.          Contribution with respect to Guarantee Obligations.

 

(a)          To
the extent that any Borrower shall make a payment under this Article XIV of all or any of the Obligations (other than Loan
made to that Borrower for which it is primarily liable) (a “Guarantor Payment”) that, taking into account all
other Guarantor Payments then previously or concurrently made by any other Borrower, exceeds the amount that such Borrower would
otherwise have paid if each Borrower had paid the aggregate Obligations satisfied by such Guarantor Payment in the same proportion
that such Borrower's “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment)
bore to the aggregate Allocable Amounts of each of the Borrowers as determined immediately prior to the making of such Guarantor
Payment, then, following indefeasible payment in full in cash of the Obligations and termination of the Commitments, such Borrower
shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Borrower for the
amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

 

    	[Summit Healthcare]	110	 

    	 

    

 

(b)          As
of any date of determination, the “Allocable Amount” of any Borrower shall be equal to the maximum amount of
the claim that could then be recovered from such Borrower under this Article XIV without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act,
Uniform Fraudulent Conveyance Act or similar statute or common law.

 

(c)          This
Section 14.7 is intended only to define the relative rights of Borrowers and nothing set forth in this Section 14.7
is intended to or shall impair the obligations of Borrowers, jointly and severally, to pay any amounts as and when the same shall
become due and payable in accordance with the terms of this Agreement, including Section 14.1. Nothing contained in this
Section 14.7 shall limit the liability of any Borrower to pay the Loan made directly or indirectly to that Borrower and
accrued interest, fees and expenses with respect thereto for which such Borrower shall be primarily liable.

 

(d)          The
parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Borrower
to which such contribution and indemnification is owing.

 

(e)          The
rights of the indemnifying Borrower against each other Borrower under this Section 14.7 shall be exercisable upon the full
and indefeasible payment of the Obligations.

 

Section
14.8.          Liability Cumulative. The liability
of Borrower under this Article XIV is in addition to and shall be cumulative with all liabilities of each Borrower to Administrative
Agent and Lenders under this Agreement and the other Loan Documents to which such Borrower is a party or in respect of any Obligations
or obligation of the other Borrower, without any limitation as to amount, unless the instrument or agreement evidencing or creating
such other liability specifically provides to the contrary.

 

[Signatures Begin on
Following Page]

 

    	[Summit Healthcare]	111	 

    	 

    

 

EXECUTED as of the date
first written above.

 

	ADMINISTRATIVE AGENT:	GENERAL ELECTRIC CAPITAL CORPORATION,
	 	a Delaware corporation
	 	 	 
	 	By:	/s/ Dague Retzlaff
	 	Dague Retzlaff, its Duly Authorized Signatory

 

    	Signature Page – Loan Agreement
[Summit Healthcare]

    	 

    

 

	LENDER:	GENERAL ELECTRIC CAPITAL CORPORATION,
	 	a Delaware corporation
	 	 	 
	 	By:	/s/ Dague Retzlaff
	 	Dague Retzlaff, its Duly Authorized Signatory

  

    	Signature Page – Loan Agreement
[Summit Healthcare]

    	 

    

 

	BORROWER:	HP REDDING, LLC, 
	 	SUMMIT SALEM, LLC,
	 	SUMMIT PORTLAND, LLC,
	 	each, a Delaware limited liability company
	 	 
	 	By:	Summit Healthcare REIT, Inc.,
	 	 	a Maryland corporation, its Manager
	 	 	 	 
	 	 	By:	/s/ Kent Eikanas
	 	 	 	Kent Eikanas, its Chief Operating Officer

  

    	Signature Page – Loan Agreement
[Summit Healthcare]

    	 

    

 

SCHEDULES
AND EXHIBITS OMITTED

 

    	[Summit Healthcare]	1

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