Document:

Exhibit 10.3

 

EXECUTION VERSION

 

TERM LOAN AND SECURITY AGREEMENT

 

by and among

 

OXFORD FINANCE LLC,

as Agent

 

FINANCIAL INSTITUTIONS FROM TIME TO TIME
A PARTY HERETO,

as Lenders

 

and

 

CHP FRIENDSWOOD SNF, LLC,

as Borrower

 

and

 

THE OTHER CREDIT PARTIES

 

Dated as of October 6, 2015

 

     

     

    

 

EXECUTION VERSION

 

TABLE OF CONTENTS

	 	 	 	 
	 	 	Page
	 	 	 
	SECTION 1.	 	DEFINITIONS	1
	 	 	 
	1.1	Defined Terms	1
	1.2	Terms Generally	23
	1.3	Accounting Terms; GAAP	23
	 	 	 
	SECTION 2.	 	CONDITIONS PRECEDENT	23
	 	 	 
	2.1	Conditions Precedent to Initial Funding	23
	 	 	 
	SECTION 3.	 	[INTENTIONALLY OMITTED]	26
	 	 	 
	SECTION 4.	 	TERM LOAN	26
	 	 	 
	4.1	Promissory Notes Evidencing Term Loan	26
	4.2	Term Loan	26
	4.3	Borrower Representative Appointment	28
	4.4	Reserves	28
	4.5	Provisions Regarding Term Loan	30
	 	 	 
	SECTION 5.	 	[INTENTIONALLY OMITTED]	30
	 	 	 
	SECTION 6.	 	INTEREST, FEES AND EXPENSES	30
	 	 	 
	6.1	Interest on Term Loan	30
	6.2	Default Interest Rate	31
	6.3	Computation of Interest and Related Fees	31
	6.4	Out-of Pocket Expenses	31
	6.5	Loan Facility Fee	31
	6.6	Prepayment Premium; Exit Fee	31
	6.7	Capital Adequacy	32
	6.8	Taxes	32
	6.9	Obligations Absolute	34
	6.10	Authority to Charge Borrower’s Loan Account	34
	 	 	 
	SECTION 7.	 	COLLATERAL	35
	 	 	 
	7.1	Grant of Security Interests	35
	7.2	Extent of Security Interests	36
	7.3	Limited License	36
	7.4	Lien on Realty	36
	7.5	Representations, Covenants and Agreements Regarding Collateral Generally	36
	7.6	Reference to Other Loan Documents	37
	7.7	Credit Balances; Additional Collateral	37
	7.8	Power of Attorney	38
	7.9	All Asset Filing	38
	 	 	 
	SECTION 8.	 	REPRESENTATIONS AND WARRANTIES	38
	 	 	 
	8.1	Financial Condition	38

 

     

     

    

 

	8.2	Organization Matters; Collateral Locations	38
	8.3	Power and Authority; Conflicts; Enforceability	39
	8.4	Schedules	39
	8.5	Compliance with Laws; Permits; Anti-Terrorism Laws	39
	8.6	Environmental Matters	40
	8.7	Pending Litigation	40
	8.8	Regulatory Matters	41
	8.9	Disclosure	44
	8.10	Security Interest	44
	8.11	Updates of Representations	45
	8.12	Deposit Accounts	45
	 	 	 
	SECTION 9.	 	AFFIRMATIVE COVENANTS	45
	 	 	 
	9.1	Maintenance of Financial Records; Inspections	45
	9.2	Further Assurances	45
	9.3	Insurance and Condemnation	46
	9.4	Payment of Taxes	49
	9.5	Compliance with Laws	50
	9.6	Notices Concerning Environmental, Employee Benefit, Pension Matters and Healthcare Matters	50
	9.7	Collateral Reporting; Billing and Collection System	51
	9.8	Financial Reporting	52
	9.9	Audits	53
	9.10	Business Qualification	54
	9.11	Hazardous Materials; Remediation	54
	9.12	Use of Proceeds	54
	9.13	Tax Returns and Reports	54
	9.14	Material Adverse Developments	54
	9.15	Borrower Changes	55
	9.16	Business Conducted	55
	9.17	Healthcare Operations	55
	9.18	Additional Pledgors	57
	9.19	Operator Financing	57
	9.20	Syndications	57
	9.21	Maintenance of Existence; Single Purpose Entity Requirements	58
	 	 	 
	SECTION 10.	 	FINANCIAL COVENANTS	59
	 	 	 
	10.1	Fixed Charge Coverage Ratio	59
	10.2	Debt Service Coverage Ratio	59
	 	 	 
	SECTION 11.	 	NEGATIVE COVENANTS	59
	 	 	 
	11.1	Liens and Encumbrances	59
	11.2	Indebtedness	59
	11.3	Sale of Assets	59
	11.4	Corporate Change	59
	11.5	Guaranty Obligations	60
	11.6	Dividends and Distributions	60

 

     

     

    

 

	11.7	Investments	60
	11.8	Related Party Transactions	60
	11.9	Restricted Payments	61
	11.10	Manager; Management Agreements	61
	11.11	Operating Leases	61
	11.12	Prohibited Uses of Proceeds	61
	11.13	Compliance with Anti-Terrorism Laws	62
	11.14	Borrower’s Statements	62
	11.15	Limitation on Sale and Leaseback Transactions	62
	 	 	 
	SECTION 12.	 	EVENTS OF DEFAULT AND REMEDIES	62
	 	 	 
	12.1	Events of Default	62
	12.2	Remedies With Respect to Outstanding Loans	65
	12.3	Remedies with Respect to Collateral	65
	12.4	Application of Proceeds	66
	12.5	General Indemnity	66
	12.6	Authority	67
	 	 	 
	SECTION 13.	 	AGENCY	67
	 	 	 
	13.1	Appointment of Agent; Powers	67
	13.2	Delegation of Agent’s Duties	67
	13.3	Disclaimer of Agent’s Liabilities	67
	13.4	Reliance and Action by Agent	68
	13.5	Events of Default	68
	13.6	Lenders’ Due Diligence	69
	13.7	Right to Indemnification	69
	13.8	Other Transactions	69
	13.9	Resignation of Agent	69
	13.10	Copies of Statements and Financial Information	70
	13.11	Payments of Principal, Interest and Fees	70
	13.12	Privacy Laws	70
	 	 	 
	SECTION 14.	 	MISCELLANEOUS	70
	 	 	 
	14.1	Termination	70
	14.2	Waivers	71
	14.3	Entire Agreement; Control	71
	14.4	Usury Limit	71
	14.5	Severability	71
	14.6	WAIVER OF JURY TRIAL; SERVICE OF PROCESS; CONSEQUENTIAL DAMAGES	71
	14.7	Notices	72
	14.8	CHOICE OF LAW; VENUE	73
	14.9	Publications	74
	14.10	Counterparts; Effectiveness of Facsimile Documents and Signatures	74
	14.11	Assignments; Participations	74
	14.12	Sharing of Liabilities	77
	14.13	Exercise of Setoff Rights	78

 

     

     

    

 

	14.14	Confidentiality	78
	14.15	Amendments; Agent’s Discretionary Rights	79
	14.16	Deemed Consent	80
	 	 	 
	SECTION 15.	 	Inter-Borrower Provisions; Joint and Several Liability.	80
	 	 	 
	15.1	Joint and Several Liability	80
	15.2	Subrogation and Contribution Rights	81
	15.3	Certain Borrower Acknowledgments and Agreements	81
	15.4	Maximum Amount of Joint and Several Liability	82
	15.5	Authorization of Borrower Representative by Borrowers	82
	 	 	 
	SECTION 16.	 	Releases; Indemnities	83

 

EXHIBITS

 

	Exhibit A	—	Form of Assignment and Transfer Agreement
	Exhibit B	—	Form of Term Loan Promissory Note
	Exhibit C	—	Form of Closing Checklist
	Exhibit D	—	Form of Compliance Certificate
	Exhibit E	—	Single Purpose Entity Requirements

 

SCHEDULES

 

	Schedule 4.2(e)	—	Term Loan Payments
	Schedule 8.2	—	Information Certificate
	Schedule 8.6	—	Environmental Matters
	Schedule 8.7	—	Proceedings
	Schedule 8.8	—	Regulatory Matters
	Schedule 9.2	—	Post Closing Matters

 

     

     

    

 

EXECUTION VERSION

 

TERM LOAN AND SECURITY AGREEMENT

 

THIS TERM LOAN AND
SECURITY AGREEMENT (as the same may be amended, restated, modified or otherwise supplemented from time to time, this “Agreement”)
is dated as of October 6, 2015 by and among OXFORD FINANCE LLC, a Delaware limited liability company (“Oxford”),
each other financial institution from time to time party hereto pursuant to Section 14.11(a) hereof (with Oxford, collectively
“Lenders” and each a “Lender”), and Oxford, as Agent for the Lenders, and CHP FRIENDSWOOD
SNF, LLC, a Delaware limited liability company and such other Persons joined hereto as Borrowers from time to time (together
with each of their successors and assigns, individually and collectively, “Borrower”).

 

SECTION 1.

DEFINITIONS

 

1.1           Defined
Terms. As used in this Agreement:

 

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

 

Accounts
shall mean collectively (a) any right to payment of a monetary obligation, whether or not earned by performance, (b) without
duplication, any “account” (as defined in the UCC), any accounts receivable (whether in the form of payments for services
rendered or goods sold, rents, license fees or otherwise), any “health-care-insurance receivables” (as defined in the
UCC), any “payment intangibles” (as defined in the UCC) and all other rights to payment and/or reimbursement of every
kind and description, whether or not earned by performance, (c) all accounts, “general intangibles” (as defined
in the UCC), Intellectual Property, rights, remedies, Guarantees, “supporting obligations” (as defined in the UCC),
“letter-of-credit rights” (as defined in the UCC) and security interests in respect of the foregoing, all rights of
enforcement and collection, all books and records evidencing or related to the foregoing, and all rights under the Loan Documents
in respect of the foregoing, (d) all information and data compiled or derived by Borrower or to which Borrower is entitled
in respect of or related to the foregoing, and (e) all proceeds of any of the foregoing.

 

Adjusted EBITDA
means, for any period of Operator, the sum of (i) Net Income for such period plus (ii) amounts deducted in the calculation
of such Net Income for (A) Interest Expense, (B) charges against income for foreign, Federal, state and local taxes and
(C) depreciation and amortization, all determined on a consolidated basis for Operator and their Subsidiaries in accordance
with GAAP.

 

Adjusted EBITDAR
means, for any period, Adjusted EBITDA, plus rent expense deducted in the calculation of Net Income, all determined for Operator
in accordance with GAAP. Net Income shall be further reduced to the extent not already deducted in the determination of Adjusted
EBITDA, by (i) Capital Expenditures of $350 per bed per annum, (ii) a management fee equal to five percent (5%) of net revenues
per annum, and (iii) the greater of (A) actual bad debt expense in accordance with GAAP, and (B) one percent (1%) of gross revenues
for the applicable period.

 

     

     

    

 

Affiliate
shall mean, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person specified. Notwithstanding the foregoing, neither the Agent
nor any Lender shall be deemed to be an Affiliate of any Credit Party or any Affiliate thereof.

 

Agent
shall mean Oxford, in its capacity as administrative agent for itself as a Lender and for other Lenders hereunder, as such capacity
is established in, and subject to the provisions of, Article 11, and the successors of Oxford in such capacity.

 

Agent’s
Bank Account shall mean Agent’s bank account at Bank of America, N.A. (or its successor) located at 1655 Grant Street,
Concord, CA 94520 or such other bank account designated by Agent in writing to Borrower Representative.

 

Agreement
shall have the meaning given to such term in the introductory clause hereto.

 

Anti-Terrorism
Laws shall mean any Laws relating to terrorism or money laundering, including Executive Order No. 13224 (effective
September 24, 2001), the USA PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered
by OFAC.

 

Approved Fund
means any (a) investment company, fund, trust, securitization vehicle or conduit that 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 business or (b) any
Person (other than a natural person) which temporarily warehouses loans for any Lender or any entity described in the preceding
clause (a) and that, with respect to each of the preceding clauses (a) and (b), is administered or managed by (i) a Lender,
(ii) an Affiliate of a Lender, or (iii) a Person (other than a natural person) or an Affiliate of a Person (other than
a natural person) that administers or manages a Lender.

 

Assignment and
Transfer Agreement shall mean the Assignment and Transfer Agreement in the form of Exhibit A attached hereto.

 

Authorized Officer
shall mean any officer, manager or member of Borrower Representative authorized by specific resolution of Borrower to request the
Term Loan as set forth in Borrower’s resolutions delivered to Agent on the Closing Date (and updated from time to time as
necessary).

 

Blocked Person
shall mean any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224,
(b) owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject
to the provisions of, Executive Order No. 13224, (c) with which any Lender is prohibited from dealing or otherwise engaging
in any transaction by any Anti-Terrorism Law, (d) that commits, threatens or conspires to commit or supports “terrorism”
as defined in Executive Order No. 13224, or (e) that is named a “specially designated national” or “blocked
person” on the most current list published by OFAC or other similar list or is named as a “listed person” or
“listed entity” on other lists made under any Anti-Terrorism Law.

 

Borrower
shall have the meaning given to such term in the introductory clause hereto.

 

    	 	2	 

     

    

 

Borrower Representative
shall mean, in the event there is more than one Borrower hereunder, CHP Friendswood SNF, LLC, in its capacity as the borrowing
agent for itself and the other Borrowers that may become a party under this Agreement.

 

Borrower’s
Loan Account shall mean the account on Agent’s books in the name of Borrower Representative on behalf of Borrower
that is maintained at a bank acceptable to Agent, in which Borrower will be charged with all Obligations when due or incurred by
Agent or any Lender.

 

Business Day
shall mean any day except a Saturday, Sunday or other day on which Agent is closed.

 

Capital Expenditures
shall mean, for any period, the aggregate expenditures of Borrower or Operator, as applicable, during such period on account of
property, plant, equipment or similar fixed assets that, in conformity with GAAP, are required to be reflected on Consolidated
Financial Statements of Borrower.

 

Capital Improvement
Reserve Amount means $52,500.

 

Capital Lease
shall mean any lease of property (whether real, personal or mixed) which, in conformity with GAAP is accounted for as a capital
lease or a Capital Expenditure on any Consolidated Financial Statements.

 

Casualty Proceeds
shall mean (a) payments or other proceeds from an insurance carrier with respect to any loss, casualty or damage to Collateral,
and (b) payments received on account of any condemnation or other governmental taking of any of the Collateral.

 

CERCLA
shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

 

Change of Control
means any of the following: (a) the failure of Summit Health REIT, Inc. to remain actively engaged in the management of Borrower,
(b) except as provided herein, the failure of Cornerstone Healthcare Holdings 1, LLC and Healthcare Real Estate Holdings, LLC,
to beneficially own directly 100% of the issued and outstanding Equity Interests in Borrower, or (c) except as provided herein,
the sale, assignment or other transfer of the presently held (directly or indirectly) Equity Interests in Borrower (collectively,
the “Current Equityholders”).

 

Citation
shall mean any operational or physical plant deficiency with respect to any Healthcare Facility, of which Borrower or Operator
is notified in writing by any governmental body, governmental agency or Medicare intermediary having regulatory oversight of such
Healthcare Facility or the operations of Borrower and/or Operator at such Healthcare Facility, and with respect to which the reasonably
anticipated penalty for such deficiency is a loss of licensure, decertification of such Healthcare Facility from participation
in Medicare and Medicaid, the appointment of a temporary manager for such Healthcare Facility, the denial of payment for new admissions
to such Healthcare Facility, the initiation of state monitoring of such Healthcare Facility, or the closure of such Healthcare
Facility.

 

    	 	3	 

     

    

 

Closing Date
shall mean the date on which this Agreement is executed by Borrower, Agent and the Lenders that initially are parties hereto, and
delivered to Agent.

 

CMS shall
mean the Centers for Medicare and Medicaid Services.

 

Code
shall mean the Internal Revenue Code of 1986, as amended.

 

Collateral shall
have the meaning assigned to such term in Section 7.1.

 

Collateral Assignment
of Material Agreements shall mean that certain Collateral Assignment of Material Agreements dated as of the Closing Date
by and among Agent, for the benefit of the Lenders, and Borrower, as the same may from time to time be amended, restated, supplemented
or otherwise modified.

 

Collateral Assignment
of Permits and Approvals shall mean that certain Collateral Assignment of Permits and Approvals dated as of the Closing
Date by and among Agent, for the benefit of the Lenders, and Borrower, as the same may from time to time be amended, restated,
supplemented or otherwise modified.

 

Commercial Depository
Account means a Deposit Account at such bank as is acceptable to Agent, to which rental payments due to the Borrower under
the Operating Lease are sent.

 

Compliance Certificate
shall mean a certificate substantially in the form of Exhibit D.

 

CON shall
mean any certificate of need or similar license which determines that there is a need for a healthcare facility at a particular
location or within a certain geographic region.

 

Consolidated
Financial Statements shall mean, with respect to the Borrower: (i) a balance sheet, eliminating all intercompany transactions
and prepared in accordance with GAAP; (ii) income statement; and (iii) cash flow statement.

 

Contingent Liability
shall mean any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to or otherwise
to invest in a debtor, or otherwise to assure a creditor against loss) any indebtedness, obligation or other liability of any other
Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Contingent Liability shall (subject to any limitation set
forth herein) be deemed to be the outstanding principal amount (or maximum permitted principal amount, if larger) of the indebtedness,
obligation or other liability guaranteed or supported thereby.

 

Control
shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies
of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto.

 

    	 	4	 

     

    

 

Copyrights shall
mean all of Borrower’s present and hereafter acquired copyrights, copyright registrations, recordings, applications, designs,
styles, licenses, marks, prints and labels bearing any of the foregoing, all reissues and renewals thereof, all licenses thereof,
all other general intangibles, intellectual property and other rights pertaining to any of the foregoing, together with the goodwill
associated therewith, and all income, royalties and other Proceeds of any of the foregoing.

 

Credit Parties
shall mean Borrower and Guarantors and their respective successors and permitted assigns.

 

Debt Service
shall mean all debt service (principal, interest and recurring charges or fees) due and payable by Borrower and its Subsidiaries
under this Agreement and any Subordinated Debt.

 

Debt Service
Coverage Ratio shall mean, for any period, the quotient (expressed as a ratio) obtained by dividing (a) Adjusted EBITDAR
of Operator for such period, to (b) all of the Debt Service for such period.

 

Debt Service
Reserve Amount means $50,596.50.

 

Debtor Relief
Laws shall mean the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment
for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws
of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

Default
shall mean any event, fact, circumstance or condition that, with the giving of applicable notice or passage of time or both, would
constitute or be or result in an Event of Default.

 

Defaulting Lender
shall mean, so long as such failure shall remain in existence and uncured, any Lender which shall have failed to make the Term
Loan or other credit accommodation, disbursement, settlement or reimbursement required pursuant to the terms of any Loan Document.

 

Default Rate
of Interest shall mean a rate of interest equal to five percent (5%) per annum greater than the interest rate accruing
on the Obligations pursuant to Section 6.1 and Section 6.2 of this Agreement, which Agent and the Lenders
shall be entitled to charge Borrower in the manner set forth in Section 6.2 of this Agreement.

 

Deposit Account
shall mean a “deposit account” (as defined in Article 9 of the UCC), investment account or other account in which
funds are held or invested for credit to or for the benefit of Borrower, including without limitation each bank account (and the
related lockbox, if any) that is established by Agent or Borrower pursuant to the terms and provisions of this Agreement.

 

    	 	5	 

     

    

 

Depository Agreements
means those certain Depository Agreements entered into in connection with this Agreement among Borrower, Agent and a bank or financial
institution, relating to the Commercial Depository Account.

 

Derivative Obligations
shall mean every obligation of a Person under any forward contract, futures contract, exchange contract, swap, option or other
financing agreement or arrangement (including, without limitation, caps, floors, collars and similar agreement), the value of which
is dependent upon interest rates, currency exchange rates, commodities or other indices.

 

Distribution
shall mean (a) dividends (excluding all declared but unpaid and accumulated dividends) or other distributions on Equity Interests
of Borrower, (b) the redemption, repurchase or acquisition of such Equity Interests or of warrants, rights or other options
to purchase such Equity Interest, and (c) loans made to any shareholders, members, partners, officers, directors, employees
and/or Affiliates of Borrower (other than advances permitted by Section 11.9(b)(iii)).

 

Documents of
Title shall mean all present and future documents (as defined in the UCC), and any and all warehouse receipts, bills of
lading, shipping documents, chattel paper, instruments and similar documents, all whether negotiable or non-negotiable, together
with all Inventory and other Goods relating thereto, and all Proceeds of any of the foregoing.

 

Dollars,
dollars or $ refers to lawful money of the United States of America.

 

Early Maturity
Date shall mean a date prior to the Maturity Date on which Borrower or Agent terminates this Agreement or accelerates the
Term Loan in accordance with this Agreement.

 

Earn Out
shall have the meaning given to such term in Section 4.2(c) of this Agreement.

 

Earn Out Period
shall have the meaning given to such term in Section 4.2(c) of this Agreement.

 

Eligible Assignee
shall mean (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other
than a natural person) approved by Agent; provided, however, that notwithstanding the foregoing, (x) “Eligible Assignee”
shall not include any Credit Party or Operator or any of a Credit Party’s or Operator’s Affiliates and (y) no
proposed assignee intending to assume any unfunded portion of the Term Loan shall be an Eligible Assignee unless such proposed
assignee either already holds a portion of such Term Loan or has been approved as an Eligible Assignee by Agent.

 

Environmental
Laws shall mean any present and future federal, state and local laws, statutes, ordinances, rules, regulations, standards,
policies and other governmental directives or requirements, as well as common law, pertaining to the environment, natural resources,
pollution, health (including any environmental clean up statutes and all regulations adopted by any local, state, federal or other
Government Authority, and any statute, ordinance, code, order, decree, law rule or regulation all of which pertain to or impose
liability or standards of conduct concerning medical waste or medical products, equipment or supplies), safety or cleanup that
apply to Borrower and/or Operator and relate to Hazardous Materials, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. §   9601 et seq.), the Resource Conservation
and Recovery Act of 1976 (42 U.S.C. §   6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. §  
1251 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §   5101 et seq.), the Clean
Air Act (42 U.S.C. §   7401 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §  
136 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. §   11001 et seq.),
the Occupational Safety and Health Act (29 U.S.C. §   651 et seq.), the Residential Lead-Based Paint Hazard
Reduction Act (42 U.S.C. §   4851 et seq.), any analogous state or local laws, any amendments thereto, and
the regulations promulgated pursuant to said laws, together with all amendments from time to time to any of the foregoing and judicial
interpretations thereof.

 

    	 	6	 

     

    

 

Equipment
shall mean all of Borrower’s present and hereafter acquired equipment (as defined in the UCC) including all machinery, equipment,
rolling stock, furnishings and fixtures, leasehold improvements, and all additions, substitutions and replacements thereof, wherever
located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto and all
Proceeds of any of the foregoing.

 

Equity Interests
shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests
in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof
to purchase or acquire any such Equity Interest.

 

ERISA
shall mean the Employee Retirement Income Security Act or 1974, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time.

 

Event(s) of Default
shall have the meaning given to such term in Section 12.1 of this Agreement.

 

Excluded Taxes
shall mean, with respect to Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation
of Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net assets, receipts or income by the
United States of America, or by the jurisdiction under the Laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits
taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which Borrower is located
and (c) in the case of a Foreign Lender, any withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such
Foreign Lender’s failure to comply with Section 6.8(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled at the time of designation of a new lending office (or assignment), to receive additional amounts
from Borrower with respect to such withholding tax pursuant to Section 6.8(a).

 

Exit Fee
means, (i) at any time prior to or on October 6, 2017, an amount equal to the product obtained by multiplying (a) three-quarters
of one percent (.75%) by (b) the principal amount of the Term Loan that has been funded to Borrower at that time, and (ii)
at any time after October 6, 2017, an amount equal to the product obtained by multiplying (a) one and one-quarter of one percent
(1.25%) by (b) the principal amount of the Term Loan that has been funded to Borrower at that time.

 

    	 	7	 

     

    

 

Federal Funds
Rate shall mean, for any day, the rate of interest per annum (rounded upwards, if necessary, to the nearest whole multiple
of 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided, however, that (a) if such day is not a Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Business Day, and (b) if no such rate is so published on
such next preceding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to Agent on such day on
such transactions as determined by Agent.

 

Fixed Charge
Coverage Ratio shall mean, for any period, the quotient (expressed as a ratio) obtained by dividing (a) the actual
lease payments paid by the Operator to the Borrower under the Operating Lease during such period by (b) Fixed Charges of Borrower
for such period.

 

Fixed Charges
shall mean, for any period, the sum of (a) all interest obligations (including the interest component of Capital Leases) of
Borrower paid or due during such period, (b) the amount of all scheduled fees paid to Agent and the Lenders during such period,
(c) the amount of principal repaid or scheduled to be repaid on the Term Loan and other Indebtedness of Borrower during such
period, (d) unfinanced Capital Expenditures and any capital expenditures made, if any, but only to the extent any such capital
expenditures are not funded from any reserves as required hereunder, as incurred by Borrower during such period, (e) all federal,
state and local income tax expenses due and paid (other than real estate taxes) by Borrower during such period and (f) Distributions
or dividends paid by Borrower during such period.

 

Foreign Lender
shall mean any Lender that is organized under the laws of a jurisdiction other than the United States of America, each state thereof
and the District of Columbia.

 

Funded Indebtedness
means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness
or liabilities in accordance with GAAP:

 

(a)          all
obligations for borrowed money, whether current or long-term and all obligations of such Person evidenced by bonds, debentures,
notes, loan agreements or other similar instruments;

 

(b)          all
purchase money indebtedness;

 

(c)          the
principal portion of all obligations under conditional sale or other title retention agreements relating to Property purchased
by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary
course of business);

 

(d)          the
maximum amount available to be drawn under letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

 

    	 	8	 

     

    

 

(e)          all
obligations in respect of the deferred purchase price of Property or services (other than trade accounts payable in the ordinary
course of business);

 

(f)          obligations
under Capital Leases;

 

(g)          all
preferred stock or other Equity Interests providing for mandatory redemptions, sinking fund or like payments prior to the Maturity
Date;

 

(h)          “earnouts”
and similar payment obligations of such Person, to the extent required by GAAP to be included as a liability on such Person’s
balance sheet;

 

(i)          all
Funded Indebtedness of others secured by (or for which the holder of such Funded Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed; and

 

(j)          all
guarantees with respect to Funded Indebtedness of the types specified in clauses (a) through (i) above of another
Person.

 

GAAP
shall mean generally accepted accounting principles in the United States of America as in effect from time to time and for the
period as to which such accounting principles are to apply, as consistently applied.

 

General Intangibles
shall mean all of Borrower’s present and hereafter acquired general intangibles (as defined in the UCC), and shall include,
without limitation, all of Borrower’s present and future right, title and interest in and to: (a) all Trademarks, (b) Patents,
utility models, industrial models, and designs, (c) Copyrights, (d) trade secrets, (e) Permits and franchises, (f) any
other forms of intellectual property, (g) all customer lists, telephone lists and directories, choses in action, distribution
agreements, license agreements, supply agreements, blueprints, indemnification rights and tax refunds, (h) all monies and
claims for monies now or hereafter due and payable in connection with the foregoing, including payments for infringement and royalties
arising from any licensing agreement between Borrower and any licensee of any of Borrower’s General Intangibles, (i) payment
intangibles, certificates of need, books, records, contracts, contract rights, rights (if any) to or in employee or other pension,
retirement or similar plans and any assets thereof (to the extent permitted by applicable Law and subject always to the rights
of the beneficiaries thereof), or any portion thereof, including refunds for overpayments, distributions upon termination, reversion
of any surplus assets or otherwise, returned and unearned insurance premiums, rights and claims under insurance policies including
without limitation, credit insurance and key man life insurance policies, and computer information, software, records and data
and (j) all Proceeds of any of the foregoing;

 

Goods
shall mean all present and hereafter acquired “Goods,” as defined in the UCC, and all Proceeds thereof.

 

Government Authority
shall mean any nation or government, any state or other political subdivision thereof, and any agency, department or person exercising
executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation or
other person owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing, whether domestic or
foreign.

 

    	 	9	 

     

    

 

Guarantor
shall mean each of, and Guarantors shall mean the collective reference to, (i) SUMMIT HEALTHCARE REIT, INC.,
a Maryland corporation, and (ii) any other future guarantor pursuant to a Guaranty Agreement entered into with respect to
all or any part of the Obligations.

 

Guaranty Agreement
shall mean each of, and Guaranty Agreements shall mean the collective reference to, (i) each Guaranty Agreement
dated as of the date hereof made by any Guarantor in favor of Agent for the benefit of Agent and Lenders, and (ii) any other
guaranty agreement with respect to the Obligations in favor of Agent for the benefit of Agent and Lenders, as the same may from
time to time be amended, restated, modified or otherwise supplemented.

 

Hazardous Materials
shall mean petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives,
flammable materials; radioactive materials; polychlorinated biphenyls and compounds containing them; lead and lead-based paint;
asbestos or asbestos-containing materials; underground or aboveground storage tanks, whether empty or containing any substance;
any substance the presence of which is prohibited by any Environmental Laws; toxic mold; any substance that requires special handling;
and any other material or substance now or in the future defined as a “hazardous substance,” “hazardous material,”
“hazardous waste,” “toxic substance,” “toxic pollutant,” “contaminant,” “pollutant”
or other words of similar import within the meaning of any Environmental Law, including: (a) any “hazardous substance”
defined as such in (or for purposes of) CERCLA, or any so-called “superfund” or “superlien” Law, including
the judicial interpretation thereof; (b) any “pollutant or contaminant” as defined in 42 U.S.C. §  
9601(33); (c) any material now defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; (d) any petroleum
or petroleum by-products, including crude oil or any fraction thereof; (e) natural gas, natural gas liquids, liquefied natural
gas, or synthetic gas usable for fuel; (f) any “hazardous chemical” as defined pursuant to 29 C.F.R. Part 1910;
(g) any toxic or harmful substances, wastes, materials, pollutants or contaminants (including, without limitation, asbestos,
polychlorinated biphenyls (“PCBs”), flammable explosives, radioactive materials, infectious substances, materials containing
lead-based paint or raw materials which include hazardous constituents); and (h) any other toxic substance or contaminant
that is subject to any Environmental Laws or other past or present requirement of any Government Authority. “Hazardous Materials”
excludes common office, cleaning, maintenance, and other supplies in sufficient quantities to permit the efficient operation of
businesses at the Property and excludes Hazardous Materials as may be generated, used, stored, transported or disposed in connection
with the permitted uses of the Property, provided that such supplies are stored, contained and otherwise dealt with in accordance
with applicable Environmental Laws.

 

Hazardous Materials
Contamination shall mean contamination (whether now existing or hereafter occurring) of the improvements, buildings, facilities,
personalty, soil, groundwater, air or other elements on or of the relevant property by Hazardous Materials, or any derivatives
thereof, or on or of any other property as a result of Hazardous Materials, or any derivatives thereof, generated on, emanating
from or disposed of in connection with the relevant property.

 

    	 	10	 

     

    

 

Healthcare Facility
or Healthcare Facilities, as applicable, shall mean any facility (a) from which Borrower or Operator provides or furnishes
goods or services, including, without limitation, any skilled nursing facility, assisted living facility, independent living facility
or similar facility, and (b) owned by Borrower from which any Operator or other Person furnishes goods or services, and includes,
without limitation, any business location of Borrower which is subject to any Healthcare Permit, including the healthcare facilities
described on and listed in the Information Certificate. “Healthcare Facility” also shall mean the singular reference
to each respective portion of the Collateral consisting of the land, improvements and all other real and personal property encumbered
by the lien of each respective mortgage, deed of trust, deed to secure debt or similar security document constituting a part of
the Loan Documents.

 

Healthcare Laws
shall mean all applicable Laws relating to the possession, control, warehousing, marketing, sale and distribution of pharmaceuticals,
the operation of medical or senior housing facilities (such as, but not limited to, nursing homes, skilled nursing facilities,
rehabilitation hospitals, intermediate care facilities and adult care facilities), patient healthcare, patient healthcare information,
patient abuse, the quality and adequacy of medical care, rate setting, equipment, personnel, operating policies, fee splitting,
including, without limitation, (a) all federal and state fraud and abuse Laws, including, without limitation, the federal
Anti-Kickback Statute (42 U.S.C. §  1320a-7b(6)), the Stark Law (42 U.S.C. §  1395nn), the civil
False Claims Act (31 U.S.C. §  3729 et seq.), (b) TRICARE, (c) HIPAA, (d) Medicare, (e) Medicaid,
(f) quality of medical care and accreditation standards and requirements of all applicable state Laws or regulatory bodies,
(g) all Laws, policies, procedures, requirements and regulations pursuant to which Healthcare Permits are issued, and (h) any and
all other applicable health care laws, regulations, manual provisions, policies and administrative guidance, each of (a) through
(h) as may be amended from time to time.

 

Healthcare Permit
shall mean a Permit (a) issued or required under Healthcare Laws applicable to the business of Borrower or Operator or necessary
in the possession, ownership, warehousing, marketing, promoting, sale, labeling, furnishing, distribution or delivery of goods
or services under Healthcare Laws applicable to the business of Borrower or Operator, (b) issued by any Person from which
Borrower or Operator has, as of the Closing Date, received an accreditation, and/or (c) issued or required under Healthcare
Laws applicable to the ownership or operation of a Healthcare Facility.

 

HIPAA shall
mean the Health Insurance Portability and Accountability Act of 1996, as the same may be amended, modified or supplemented from
time to time, and any successor statute thereto, and any and all rules or regulations promulgated from time to time thereunder.

 

HIPAA Compliant
shall mean that the applicable Person (a) has adopted and implemented policies and procedures, and has trained its personnel,
in compliance with each of the applicable requirements of the so-called “Administrative Simplification” provisions
of HIPAA, and (b) is not and would not reasonably be expected to become subject to any Citation (not including routine surveys
or reviews conducted by any Government Authority, health plan or other accreditation entity).

 

HUD/Oxford Refinance
shall have the meaning given to such term in Section 6.6 of this Agreement.

 

    	 	11	 

     

    

 

Indebtedness
of any Person shall mean, without duplication, (a) all indebtedness for borrowed money, whether or not evidenced by bonds,
debentures, notes or similar instruments, (b) obligations with respect to Capital Leases, (c) all obligations to pay
the deferred purchase price of property or services (excluding trade accounts payable in the ordinary course of business), (d) all
indebtedness secured by a Lien on the Property of such Person, whether or not such indebtedness shall have been assumed by such
Person, (e) all obligations, contingent or otherwise, with respect to the face amount of all letters of credit (whether or
not drawn) and banker’s acceptances issued for the account of such Person, (f) all Derivative Obligations of such Person,
(g) all Contingent Liabilities, (h) all liabilities of any partnership or joint venture of which such Person is a general
partner or joint venturer, and (i) all obligations to make any payment in connection with any warrants or any other Equity
Interests including, without limitation, any put, redemption and mandatory dividends, of such Person or any Affiliate thereof.

 

Indemnified Party
shall have the meaning given to such term in Section 12.5 of this Agreement.

 

Indemnified Taxes
shall mean all Taxes other than Excluded Taxes.

 

Information
shall have the meaning provided for in Section 14.14.

 

Information Certificate
is attached hereto as Schedule 8.2.

 

Insurance Premiums
shall have the meaning as set forth in Section 4.4(ii) of this Agreement.

 

Intellectual
Property shall mean, with respect to any Person, all patents, patent applications and like protections, including improvements
divisions, continuation, renewals, reissues, extensions and continuations in part of the same, trademarks, trade names, trade styles,
trade dress, service marks, logos and other business identifiers and, to the extent permitted under applicable law, any applications
therefore, whether registered or not, and the goodwill of the business of such Person connected with and symbolized thereby, copyright
rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative works, whether
published or unpublished, technology, know-how and processes, operating manuals, trade secrets, computer hardware and software,
rights to unpatented inventions and all applications and licenses therefor, used in or necessary for the conduct of business by
such Person and all claims for damages by way of any past, present or future infringement of any of the foregoing.

 

Intercreditor
Agreement means, any intercreditor agreement entered into between Agent and any Person that extends a loan to Operator,
in form and substance satisfactory to Lender, Operator and Operator’s lender.

 

Interest Expense
means, for any period of Operator, the interest expense of Operator, as applicable, for such period payable in connection with
the Funded Indebtedness of Operator (including all computed interest on Capital Leases).

 

Inventory
shall mean all of Borrower’s present and hereafter acquired inventory (as defined in the UCC) including all merchandise and
inventory in all stages of production (from raw materials through work-in-process to finished goods), and all additions, substitutions
and replacements thereof, wherever located, together with all goods and materials used or usable in manufacturing, processing,
packaging or shipping of the foregoing, and all Proceeds of any of the foregoing.

 

    	 	12	 

     

    

 

Investment Property
shall mean all of Borrower’s present and hereafter acquired “Investment Property,” as defined in the UCC,
and all Proceeds thereof.

 

Laws
shall mean any and all federal, state, provincial, territorial, local and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, codes, injunctions, permits, governmental agreements and governmental restrictions,
whether now or hereafter in effect, which are applicable to any Credit Party or Operator in any particular circumstance. “Laws”
includes, without limitation, Healthcare Laws and Environmental Laws.

 

Lender(s)
shall have the meaning given to such term in the introductory clause hereto.

 

LIBOR Rate
means an annual rate equal to, as a reference rate, the greater of (i) the annual rate reported as the London Interbank Offer
Rate applicable to thirty (30) day deposits of United States dollars as reported in the Money Rates Section of the Wall Street
Journal on the date of determination and (ii) three quarters of one percent (.75%), as determined monthly on the last day
of the preceding month. If the Wall Street Journal (or another nationally recognized rate reporting source acceptable to Agent)
no longer reports the LIBOR Rate or if such interest rate no longer exists or if the Wall Street Journal no longer publishes the
LIBOR Rate or ceases to exist, Agent may in good faith select a replacement interest rate or replacement publication, as the case
may be.

 

Lien
shall mean any mortgage, lien, pledge, charge, security interest or similar encumbrance.

 

Loan Documents
shall mean this Agreement, the Promissory Notes, the Guaranty Agreements, the Pledge Agreements, the Mortgage, the Collateral Assignment
of Material Agreements, the Collateral Assignment of Permits and Approvals, the other closing documents executed by Borrower or
any Guarantor, and any other ancillary loan and/or credit and security agreements executed by Borrower or any Guarantor from time
to time in connection with this Agreement, all as may be renewed, amended, restated or supplemented from time to time.

 

Loan Facility
Fee shall mean the fee payable to Agent in accordance with, and pursuant to, the provisions of Section 6.5.

 

Management Agreement
shall have the meaning set forth in Section 11.10 of this Agreement.

 

Management Fees
shall mean those management fees as set forth in each Management Agreement by and between Manager and Borrower.

 

Manager shall
have the meaning set forth in Section 11.10 of this Agreement.

 

    	 	13	 

     

    

 

Material Adverse
Effect means with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding), whether singly or in conjunction with any other event
or events, act or acts, condition or conditions, occurrence or occurrences, whether or not related, (a) a material adverse
change in, or a material adverse effect upon, any of (i) the condition (financial or otherwise), operations, business, properties
or prospects of any of the Credit Parties or Operator, (ii) the rights and remedies of Agent or Lenders under any Loan Document,
or the ability of any Credit Party to perform any of its obligations under any Loan Document to which it is a party, (iii) the
legality, validity or enforceability of any Loan Document, (iv) the existence, perfection or priority of any security interest
granted in any Loan Document, (v) the value of the Real Property or any other material Collateral, (vi) any Credit Party’s
or Operator’s ability to accept, admit and/or retain patients or residents, (vii) the rate at which any Third Party
Payor reimburses a Credit Party or Operator for goods or services provided by such Credit Party or Operator, (viii) the use
or scope of any Healthcare Permits, (ix) the continued participation by any Credit Party or Operator in the Medicaid or Medicare
programs or any other Third Party Payor Program at then current rate certifications or levels; (b) any adverse change in the
continued payment or collectibility of accounts of the Operator; or (c) the imposition of a fine against or the creation of any
liability of any Credit Party or Operator to any Government Authority under any Healthcare Law in excess of $250,000.00.

 

Maturity Date
shall mean October 6, 2019.

 

Medicaid shall
mean, collectively, the healthcare assistance program established by Title XIX of the Social Security Act (42 U.S.C. §§
1396 et seq.) and any statutes succeeding thereto, and all laws, rules, regulations, manuals, orders, guidelines or requirements
(whether or not having the force of law) pertaining to such program, in each case as the same may be amended, supplemented or otherwise
modified from time to time.

 

Medicare
shall mean, collectively, the health insurance program for the aged and disabled established by Title XVIII of the Social Security
Act (42 U.S.C. §  §   1395 et seq.) and any statutes succeeding thereto, and all laws, rules,
regulations, manuals, orders or guidelines (whether or not having the force of law) pertaining to such program, in each case as
the same may be amended, supplemented or otherwise modified from time to time.

 

Mortgage
shall mean that certain Deed of Trust, Security Agreement – Financing Statement executed by a Credit Party on or about the
Closing Date in favor of Agent, for its benefit and the benefit of the Lenders, by which such Credit Party has granted to Agent,
as security for the Obligations, a Lien upon the Real Property, together with all mortgages, deeds of trust and comparable documents
now or at any time hereafter securing the whole or any part of the Obligations.

 

Net Income
means, with respect to any period, the aggregate of the net income (loss) of Operator for such period, determined in accordance
with GAAP. There shall be excluded in computing Net Income (i) any after tax gains (but not losses) attributable to dispositions
of assets (other than sales of inventory in the ordinary course of business) and (ii) any after-tax extraordinary gains (but not
losses).

 

    	 	14	 

     

    

 

Obligations
shall mean: (a) all loans, advances and other extensions of credit made by Agent for the account of the Lenders to Borrower,
or to others for Borrower’s account (including the Term Loan); (b) any and all other indebtedness, obligations and liabilities
which may be owed by Borrower to Agent or any Lender and arising out of, or incurred in connection with, this Agreement or any
of the other Loan Documents (including all Out-of-Pocket Expenses and any applicable Prepayment Premium and Exit Fee), whether
(i) now in existence or incurred by Borrower from time to time hereafter, (ii) secured by pledge, lien upon or security
interest in Borrower’s assets or property or the assets or property of any other person, firm, entity or corporation, (iii) such
indebtedness is absolute or contingent, joint or several, matured or unmatured, direct or indirect, or (iv) Borrower is liable
to Agent or any Lender for such indebtedness as principals, sureties, endorsers, guarantors or otherwise; (c) without duplication,
Borrower’s liabilities to Agent under any instrument of guaranty or indemnity, or arising under any guaranty, endorsement
or undertaking which Agent, on behalf of the Lenders, may make or issue to others for the account of Borrower pursuant to or in
connection with the Loan Documents, including any accommodations extended by Agent with respect to Agent’s acceptance of
drafts or Agent’s endorsement of notes or other instruments for Borrower’s account and benefit; and (d) any and
all indebtedness, obligations and liabilities incurred by, or imposed on, Agent or any Lender arising out of or under the Loan
Documents as a result of environmental claims relating to Borrower’s operations, premises or waste disposal practices or
disposal sites.

 

OFAC
shall mean the U.S. Department of Treasury Office of Foreign Assets Control.

 

OFAC
Lists shall mean, collectively, the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to Executive
Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other restricted Persons maintained
pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.

 

Operating Lease
shall mean (i) that certain Lease dated as of May 1, 2014 by and between Borrower, as lessor, and Operator, as lessee regarding
the Healthcare Facility located at 1500 Sunset Drive, Friendswood, Texas 77546 and all amendments thereto and extensions thereof,
including any guarantees, all in a form approved by Agent in writing, and (ii) any lease (or sublease) of any Healthcare Facility
by Borrower to an Operator approved in writing by the Lender, any ancillary documents pertaining thereto (including any operations
transfer agreement or similar agreement governing transfer of the operations for the Healthcare Facility to any Borrower or any
Operator) and all amendments thereto and extensions thereof, including any guarantees, all in a form approved by Agent in writing.

 

Operator
shall mean, Friendswood TRS, LLC in its capacity as the operator of the Healthcare Facility known as “Friendship Haven Healthcare
& Rehabilitation” that is operated on the Real Property, which is licensed under all applicable Healthcare Laws as the
operator of the Healthcare Facility.

 

Organizational
Documents means, (a) with respect to any corporation, the, charter, certificate or articles of incorporation and the
bylaws (or equivalent or comparable constituent documents with respect to any non-U.S. jurisdiction); (b) with respect to
any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with
respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable
agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection
with its formation or organization with the applicable Government Authority in the jurisdiction of its formation or organization
and, if applicable, any certificate or articles of formation or organization of such entity.

 

    	 	15	 

     

    

 

Other Collateral
shall mean all of Borrower’s: (a) present and hereafter established lockbox, blocked account and other deposit accounts
maintained with any bank or financial institution into which the proceeds of Collateral are or may be deposited (including but
not limited to, the Deposit Accounts and the Commercial Depository Account); (b) cash and other monies and property in the
possession or control of Agent or any Lender (including cash collateral held by Agent pursuant to this Agreement); (c) books,
records, ledger cards, disks and related data processing software at any time evidencing or containing information relating to
any of the Collateral described herein or otherwise necessary or helpful in the collection thereof or realization thereon; and
(d) all Proceeds of any of the foregoing.

 

Other Taxes
shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement,
other than Excluded Taxes.

 

Out-of-Pocket
Expenses shall mean all of Agent’s and the Lender’s present and future costs, fees and expenses incurred in
connection with this Agreement and the other Loan Documents, including (a) the cost of lien searches (including tax lien and
judgment lien searches), pending litigation searches and similar items; (b) fees and taxes imposed in connection with the
filing of any financing statements or other personal property security documents; (c) all costs and expenses incurred by Agent
in opening and maintaining the Deposit Accounts and any related lockboxes, depositing checks, and receiving and transferring funds
(including charges imposed on Agent for “insufficient funds” and the return of deposited checks); (d) note taxes
and intangible taxes; (e) all reasonable costs, fees and expenses incurred by Agent and the Lenders in connection with any
action taken under Section 9.1 of this Agreement, including reasonable travel, meal and lodging expenses of Agent’s
personnel; (f) all costs that Agent may incur to maintain the Required Insurance to the extent Borrower fails to do so as
required hereunder, and all reasonable costs, fees and expenses incurred by Agent in connection with the collection of Casualty
Proceeds; (g) all reasonable costs, fees, expenses and disbursements of counsel hired by Agent to consummate the transactions
contemplated by this Agreement (including the documentation and negotiation of this Agreement, the other Loan Documents and all
amendments, supplements and restatements thereto or thereof), and to advise Agent and/or the Lenders as to matters relating to
the transactions contemplated hereby; (h) all costs, fees and expenses incurred by Agent and the Lenders in connection with
any action taken under Section 12.3 of this Agreement; and (i) without duplication, all costs, fees and expenses
incurred by Agent and the Lenders in connection with the collection, liquidation, enforcement, protection and defense of the Obligations,
the Collateral and the rights of Agent and the Lenders under this Agreement, including all reasonable fees and disbursements of
outside counsel to Agent and the Lenders incurred as a result of a workout, restructuring, reorganization, liquidation, insolvency
proceeding and in any appeals arising therefrom, whether incurred before, during or after the termination of this Agreement or
the commencement of any case with respect to Borrower, any Guarantor or any subsidiary of Borrower (as the case may be) under the
United States Bankruptcy Code or any similar statute.

 

    	 	16	 

     

    

 

Owner
shall mean Borrower, in its capacity as the owner of the Real Property.

 

Oxford
shall have the meaning given to such term in the introductory clause hereto.

 

Participation
Agreements shall have the meaning given such term in Section 9.5(c) of this Agreement.

 

Patents
shall mean all of Borrower’s present and hereafter acquired patents, patent applications, registrations, all reissues and
renewals thereof, all licenses thereof, all inventions and improvements claimed thereunder, all general intangible, intellectual
property and other rights of Borrower with respect thereto, and all income, royalties and other Proceeds of the foregoing.

 

Permits
shall mean all governmental licenses, authorizations, provider numbers, supplier numbers, registrations, permits, certificates,
franchises, qualifications, accreditations, consents and approvals required under all applicable Laws and required in order to
carry on its business as now conducted, including, without limitation, Healthcare Permits.

 

Permitted Distributions
shall mean: (a) dividends from a wholly-owned subsidiary of a Borrower to Borrower; and (b) dividends payable solely
in Equity Interests of the Borrower; (c) distributions or dividends paid to a Borrower’s shareholder(s) or member(s)
solely to the extent and at the times necessary for such shareholder(s) or member(s) to pay its or their respective federal (and,
if applicable, state) income taxes arising from such shareholder(s)’ or member(s)’ respective allocable shares of Borrower’s
income that are taxable directly to such shareholder(s) or member(s).

 

Permitted Encumbrances
shall mean: (a) all liens existing on the Closing Date on specific items of Equipment and set forth in the Information Certificate;
(b) Purchase Money Liens; (c) statutory liens of landlords and liens of carriers, warehousemen, bailees, mechanics, materialmen
and other like liens imposed by law, created in the ordinary course of business and securing amounts not yet due or paid in the
ordinary course of business (or which are being contested in good faith, by appropriate proceedings or other appropriate actions
which are sufficient to prevent imminent foreclosure of such liens), and with respect to which adequate reserves or other appropriate
provisions are being maintained by Borrower in accordance with GAAP; (d) deposits made (and the liens thereon) in the ordinary
course of business of Borrower (including security deposits for leases, indemnity bonds, surety bonds and appeal bonds) in connection
with workers’ compensation, unemployment insurance and other types of social security benefits or to secure the performance
of tenders, bids, contracts (other than for the repayment or guarantee of borrowed money or purchase money obligations), statutory
obligations and other similar obligations arising as a result of progress payments under government contracts; (e) liens arising
out of any permissible refinancing, extension, renewal or refunding of any Permitted Indebtedness secured by any lien permitted
by any of the foregoing clauses provided that such lien shall at no time be extended to cover any assets or property other
than such assets or property subject thereto on the Closing Date or the date such lien was incurred, as applicable; (f) easements
(including reciprocal easement agreements and utility agreements), encroachments and any other matters reflected on a title policy
delivered to and approved in writing by Agent or in a survey obtained and delivered to and approved in writing by Agent, minor
defects or irregularities in title, variation and other restrictions, charges or encumbrances (whether or not recorded), if applicable,
and which in the aggregate do not materially interfere with the occupation, use or enjoyment by Borrower of its business or property
so encumbered; (g) liens granted to Agent, for the benefit of the Lenders, by Borrower; (h) Permitted Tax Liens; and (i) liens
granted on Property (and the proceeds thereof) acquired under Capital Leases to the extent securing Permitted Indebtedness.

 

    	 	17	 

     

    

 

Permitted Indebtedness
shall mean: (a) current unsecured Indebtedness maturing in less than one year and incurred in the ordinary course of business
for raw materials, supplies, equipment, services, Taxes or labor; (b) Indebtedness secured by Purchase Money Liens; (c) Indebtedness
arising under this Agreement; (d) deferred Taxes and other expenses incurred in the ordinary course of business; (e) Subordinated
Debt, (f) Permitted Intercompany Loans; (g) other Indebtedness existing on the Closing Date and described on and listed
in the Information Certificate and any refinancings, renewals or extensions thereof which do not increase the principal amount
thereof; and (h) a loan made by an Affiliate to Borrower, provided (i) Agent consents in writing prior to the making
of such loan, (ii) at the request of Agent, such loan is evidenced by a promissory note, the original of which shall be delivered
to Agent, and (iii) unless otherwise consented to in writing by the Agent, the promissory note evidencing such loan provides
(in form and substance satisfactory to Agent) that the repayment thereof is subordinated to the full and final payment of the Obligations.

 

Permitted Intercompany
Loan shall mean a loan made by Borrower to (i) another Borrower, provided (a) such loan is evidenced by a promissory
note, the original of which shall be delivered to Agent, and (b) the promissory note evidencing such loan provides (in form
and substance satisfactory to Agent) that the repayment thereof is subordinated to the full and final payment of the Obligations
and (ii) an Affiliate, provided (a) Agent consents in writing prior to the making of such loan, and (b) at the request
of Agent, such loan is evidenced by a promissory note, the original of which shall be delivered to Agent.

 

Permitted Investments
shall mean:

 

(a)          direct
obligations of, or obligations, the principal of and interest on, which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of acquisition thereof;

 

(b)          investments
in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from Standard & Poor’s or from Moody’s Investors Service, Inc.;

 

(c)          investments
in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital
and surplus and undivided profits of not less than $500,000,000;

 

    	 	18	 

     

    

 

(d)          investments
in money market mutual funds having portfolio assets in excess of $5,000,000,000, that comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940 and are rated AAA by Standard & Poor’s
and AAA by Moody’s Investors Service, Inc.;

 

(e)          fully
collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above
and entered into with a financial institution satisfying the criteria described in clause (c) above;

 

(f)          securities
with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States of America, or any political subdivision or taxing authority thereof, and rated at least A by Standard &
Poor’s or Moody’s Investors Service, Inc.; and

 

(g)          with
respect to any Person organized or conducting operations outside of the United States, investments denominated in the currency
of the jurisdiction in which such Person is organized or conducting business which are similar to the items specified in clauses (a)
through (f) above (other than the nationality of the governmental or non-governmental issuer or counterparty involved).

 

Permitted Tax
Liens shall mean liens for Taxes not due and payable and liens for Taxes that Borrower is contesting in good faith, by
appropriate proceedings which are sufficient to prevent imminent foreclosure of such liens, and with respect to which adequate
reserves are being maintained by Borrower in accordance with GAAP.

 

Person shall
mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Government
Authority or other entity.

 

Pledge Agreements
means the collective reference to, and Pledge Agreement means each of, the Pledge Agreements dated as of the date
hereof executed by each holder of Equity Interests in favor of Agent, for the benefit of Lenders, with respect to all of such holder’s
Equity Interests of Borrower, as the same may be amended, restated, supplemented or otherwise modified from time to time.

 

Post Closing
Matters shall have the meaning set forth in Section 9.2 of this Agreement.

 

Prepayment Premium
shall mean an amount equal to the product obtained by multiplying (a) the principal amount of the Term Loan prepaid by (i) one
and one-half percent (1.50%) if such prepayment occurs, or if the Term Loan is accelerated, on or before April 6, 2017, (ii) one
percent (1.0%) if such prepayment occurs, or if the Term Loan is accelerated, after April 6, 2017 but on or prior to the Maturity
Date. 

 

Privacy Laws
shall have the meaning set forth in Section 13.12 of this Agreement.

 

    	 	19	 

     

    

 

Pro Rata Percentage(s)
shall mean, as to each Lender at any time, (a) with respect to such Lender’s Term Loan Commitment, a fraction (expressed
as a percentage), the numerator of which is the amount of such Lender’s Term Loan Commitment at such time and the denominator
of which is the aggregate amount of all Term Loan Commitments of all Lenders to make the Term Loan at such time (or in the event
that such Term Loan Commitments of the Lenders hereunder have terminated, the numerator of which is the principal amount of Term
Loan then owed to such Lender hereunder and the denominator of which is the principal amount of the Term Loan then owed to all
Lenders hereunder) and (b) with respect to the outstanding Term Loan at any time, a fraction (expressed as a percentage),
the numerator of which is the principal amount of the outstanding Term Loan held by such Lender at such time and the denominator
of which is the aggregate outstanding principal amount of the Term Loan held by all Lenders at such time.

 

Proceeding
shall mean any actual or threatened civil, equitable or criminal proceeding litigation, action, suit, claim, investigation (governmental
or judicial or otherwise), dispute indictment or prosecution, pleading, demand or the imposition of any fine or penalty or similar
matter.

 

Proceeds
shall have the meaning given to such term in the UCC, including all Casualty Proceeds.

 

Promissory Note
shall mean, collectively, the note(s) in the form of Exhibit B-1 and Exhibit B-2 attached hereto, delivered by Borrower
to a Lender to evidence the Term Loan made by such Lender to Borrower pursuant to this Agreement.

 

Property
shall mean an interest of Borrower in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

 

Property Taxes
shall have the meaning as set forth in Section 4.4(i) of this Agreement.

 

Proposal Letter
shall mean the Proposal Letter dated August 3, 2015 issued by Agent to, and accepted by, Elizabeth A. Pagliarini, on behalf of
Borrower.

 

Purchase Money
Liens shall mean liens on any item of Equipment acquired by Borrower after the date of this Agreement, provided that (a) each
such lien shall attach only to the Equipment acquired (and the proceeds thereof), (b) a description of the Equipment so acquired
is furnished by Borrower to Agent, and (c) the indebtedness incurred by Borrower in connection with such acquisitions shall
not exceed $15,000 in the aggregate in any fiscal year of Borrower.

 

Real Property
shall mean the real property owned by Owner and leased by Operator, which consists of that certain one hundred fifty (150) bed
skilled nursing facility known as “Friendship Haven Healthcare & Rehabilitation” located at 1500 Sunset Drive,
Friendswood, Texas 77546.

 

Required Insurance
shall have the meaning provided for in Section 9.3(b) of this Agreement.

 

    	 	20	 

     

    

 

Required Lenders
shall mean those Lenders holding at least fifty-one percent (51%) of the total Term Loan Commitments. The Term Loan Commitment
held or deemed held by any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

 

Service Date
shall mean the date on which the episode of care commenced or in which goods or the services giving rise to the corresponding Account
were rendered or provided.

 

Subordinated
Debt shall mean all Indebtedness of Borrower (and the note(s) evidencing such Indebtedness) that is subordinated to the
prior payment and satisfaction of the Obligations pursuant to a Subordination Agreement.

 

Subordinated
Debt Documents means any documents evidencing and/or securing Subordinated Debt, all of which documents must be in form
and substance acceptable to Required Lenders in their respective sole discretion. As of the Closing Date, there are no Subordinated
Debt Documents.

 

Subordination
Agreement(s) shall mean an intercreditor and/or subordination agreement in form and substance satisfactory to Agent in
its sole discretion by and among Borrower, a subordinating creditor and Agent, on behalf of the Lenders, pursuant to which Subordinated
Debt is subordinated to the prior payment and satisfaction of the Obligations and the Liens securing such Subordinated Debt, if
any, granted by Borrower to such subordinated creditor are subordinated in any way to the Obligations and the Liens created hereunder
and under any other Loan Document.

 

Subsidiary
shall mean, with respect to any Person, (a) any corporation of which an aggregate of more than fifty percent (50%) of the
outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective
of whether, at the time, capital stock of any other class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person
or one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote
of more than fifty percent (50%) of such capital stock whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%) or of which
any such Person is a general partner or may exercise the powers of a general partner. Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of Borrower.

 

Taxes
shall mean all federal, state, municipal and other governmental taxes, levies, charges, claims and assessments imposed by any Government
Authority.

 

Term Loan
shall mean the term loan in the aggregate principal amount of up to Eight Million One Hundred Thousand and No/100 Dollars ($8,100,000.00)
made by the Lenders to Borrower on or about the Closing Date on the terms and conditions set forth in Section 4.2 of
this Agreement.

 

    	 	21	 

     

    

 

Term Loan Commitment
shall mean, as to each Lender, the amount of the commitment for such Lender to make Term Loan set forth on the signature page to
this Agreement or in the Assignment and Transfer Agreement to which such Lender is a party, as such amount may be reduced or increased
in accordance with the provisions of Section 14.11(a) or any other applicable provision of this Agreement.

 

Termination Date
shall mean the date that (i) all Obligations have been fully and indefeasibly paid in full and (ii) no commitments or
other obligations of any Lender to provide funds to Borrower remain outstanding.

 

Test Period
shall mean the three (3) most recent calendar months then ended (taken as one accounting period).

 

Third-Party Payor
shall mean Medicare, Medicaid, TRICARE, and other state or federal health care program, Blue Cross and/or Blue Shield, private
insurers, managed care plans and any other Person or entity which presently or in the future maintains Third-Party Payor Programs.

 

Third-Party Payor
Programs shall mean all payment and reimbursement programs, sponsored by a Third-Party Payor, in which Borrower or Operator
participates.

 

Total Debt Service
means the sum of (i) scheduled or other required payments of principal on Indebtedness of Borrower, and (ii) Interest Expense
of Borrower, in each case for such period.

 

Trademarks
shall mean all of Borrower’s present and hereafter acquired trademarks, trademark registrations, recordings, applications,
trade names, trade styles, corporate names, business names, service marks, logos and any other designs or sources of business identities,
prints and labels (on which any of the foregoing may appear), all reissues and renewals thereof, all licenses thereof, all other
general intangible, intellectual property and other rights pertaining to any of the foregoing, together with the goodwill associated
therewith, and all income, royalties and other Proceeds of any of the foregoing.

 

Transactions
shall mean the execution, delivery and performance by the Credit Parties of this Agreement and the other Loan Documents and the
borrowing of the Term Loan hereunder.

 

TRICARE
shall mean the program administered pursuant to 10 U.S.C. Section 1071 et seq.), Sections 1320a-7 and 1320a-7a of Title
42 of the United States Code and the regulations promulgated pursuant to such statutes.

 

UCC shall
mean the Uniform Commercial Code as the same may be amended and in effect from time to time in the State of New York.

 

    	 	22	 

     

    

 

1.2           Terms
Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including,” when used in any Loan Document, shall be deemed to be followed by the phrase
“without limitation.” The word “will,” when used in any Loan Document, shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference
to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document
as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements,
supplements or modifications set forth herein), (b) any reference herein to any person shall be construed to include such
person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,”
and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles
and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

 

1.3           Accounting
Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed
in accordance with GAAP, as in effect from time to time; provided that, if the Borrower Representative notifies the Agent that
the Borrower Representative requests an amendment to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Agent notifies the Borrower
Representative that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether
any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted
on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall
have been withdrawn or such provision amended in accordance herewith. In calculating compliance with any of the financial covenants
(and related definitions), any amounts taken into account in making such calculations that were paid, incurred or accrued in violation
of any provision of this Agreement shall be added back or deducted, as applicable, in order to determine compliance with such covenants.

 

SECTION 2.

CONDITIONS PRECEDENT

 

2.1           Conditions
Precedent to Initial Funding. The obligations of Agent and the Lenders to consummate the Transactions and to make the Term
Loan subject to the satisfaction, in the sole judgment of Agent, of the following conditions precedent:

 

(a)          Loan
Documents/Closing Checklist. Agent shall have received each of the agreements, opinions, reports, appraisals, surveys, approvals,
consents, certificates, environmental reports, building condition assessments and other documents set forth on the Closing Checklist
attached hereto as Exhibit C in each case in form and substance satisfactory to Agent in its sole discretion (with
such number of originals or copies as required by Agent) executed by the Credit Parties party thereto and other required Persons,
as applicable.

 

    	 	23	 

     

    

 

(b)         Lien
Searches. Agent shall have received tax lien, judgment lien and Uniform Commercial Code searches from all jurisdictions required
by Agent, and such searches shall verify that Agent, for the benefit of the Lenders, will have a first priority security interest
in the Collateral, subject to Permitted Encumbrances.

 

(c)         Insurance.
Borrower shall have delivered to Agent evidence satisfactory to Agent in its sole discretion that all Required Insurance is in
full force and effect, and Agent shall have confirmed that Agent, for the benefit of the Lenders, has been named as a lender’s
loss payee or additional insured with respect to the Required Insurance in a manner satisfactory to Agent.

 

(d)         UCC
Filings. All UCC financing statements and similar documents required to be filed in order to create in favor of Agent, for
the benefit of the Lenders, a first priority perfected security interest in the Collateral (to the extent that such a security
interest may be perfected by a filing under the UCC or applicable Law), subject to Permitted Encumbrances, shall have been properly
filed in each office in each jurisdiction required. Agent shall have received (i) acknowledgement copies of all such filings
(or, in lieu thereof, Agent shall have received other evidence satisfactory to Agent, in its sole discretion, that all such filings
have been made), and (ii) evidence that all necessary filing fees, taxes and other expenses related to such filings have been
paid in full.

 

(e)         Resolutions.
Agent shall have received a copy of resolutions of the members and manager of Borrower authorizing the execution, delivery and
performance of the Loan Documents to be executed by Borrower, certified by a manager or member of Borrower as of the date hereof,
together with a certificate of such manager or member as to the incumbency and signature of the officer(s) executing the Loan Documents
on behalf of the Borrower.

 

(f)          Organizational
Documents. Agent shall have received a copy of the Certificate or Articles of Organization of Borrower, certified by the applicable
authority in Borrower’s State of organization, and copies of the operating agreement or bylaws (as amended through the date
hereof) of Borrower, certified by the respective Secretary or Assistant Secretary or the manager thereof.

 

(g)         Manager’s/Member’s
Certificate. Agent shall have received an executed certificate of a manager or member or officer of Borrower, satisfactory
in form and substance to Agent, certifying that as of the Closing Date (i) the representations and warranties contained herein
are true and correct in all respects, (ii) Borrower is in compliance with all of the terms and provisions set forth herein
and (iii) no Default or Event of Default has occurred.

 

(h)         Disbursement
Authorizations. Borrower shall have delivered to Agent all information necessary for Agent to issue wire transfer instructions
on behalf of Borrower for the funding of the Term Loan be made under this Agreement, including disbursement authorizations in form
reasonably acceptable to Agent.

 

(i)          Examination &
Verification. Agent shall have completed and be satisfied with an updated examination and verification of the books and records
of the operations of Healthcare Facility located at the Real Property, and such examination shall indicate that no material adverse
change has occurred in the financial condition, business, prospects, profits, operations or assets thereof since December 31, 2014.

 

    	 	24	 

     

    

 

(j)          Financial
Statements. Agent shall have received such financial statements, reports, certifications, and other operational information
required to be delivered under this Agreement or otherwise required by Agent.

 

(k)         Deposit
Accounts; Payment Direction. Borrower or Agent, on behalf of the Lenders, shall have established one or more Deposit Accounts
with respect to the deposit of proceeds of Collateral.

 

(l)          Existing
Indebtedness. (i) The existing obligations of Borrower in connection with any existing Indebtedness shall be terminated,
(ii) all loans and obligations of Borrower with respect thereto shall be paid or satisfied in full utilizing the proceeds
of the initial loans to be made under this Agreement on the Closing Date, and (iii) all liens and security interests encumbering
the Collateral (other than Permitted Encumbrances) shall be terminated and/or released upon such payment.

 

(m)        Opinion.
The Agent shall have received a favorable written opinion (addressed to the Agent and the Lenders and dated the Closing Date) of
counsel for the Credit Parties, in form and substance acceptable to Agent in its sole discretion.

 

(n)         Legal
Restraints/Litigation. As of the Closing Date, there shall be no (x) injunction, writ or restraining order restraining
or prohibiting the consummation of the financing arrangements contemplated under this Agreement, or (y) suit, action, investigation
or proceeding (judicial or administrative) pending against Borrower, any Guarantor, the Operator, any subsidiary of Borrower or
any of their assets, which, in the opinion of Agent, if adversely determined, would have a Material Adverse Effect.

 

(o)         Background
Checks. Agent shall have received and be satisfied with background checks on key managers, officers, shareholders, or members,
as applicable, of each Credit Party and Operator as Agent shall designate.

 

(p)         Proposal
Letter. Borrower shall have fully complied with all of the terms and conditions of the Proposal Letter.

 

(q)         Healthcare
Regulatory Compliance. Agent shall have reviewed the results of, and found such results acceptable, in its sole discretion,
a healthcare regulatory compliance audit.

 

(r)          Payoff
Letters; Releases. To the extent applicable, Agent shall have received payoff letters and releases from all Persons having
a security interest or other interest in the Collateral (excluding Permitted Encumbrances), together with all UCC-3 terminations
or partial releases necessary to terminate each such Person’s interest in the Collateral.

 

(s)          Fees;
Expenses. Agent shall have received payment in full of all fees and expenses payable to it by Borrower or any other Person
in connection herewith, on or before disbursement of the Term Loan hereunder, including, without limitation, payment of all underwriting
fees and legal fees in accordance with customary practices of Agent.

 

    	 	25	 

     

    

 

(t)          Sufficient
Liquidity. Agent shall have received and be satisfied in its sole discretion with evidence that each of Borrower and Operator
have sufficient liquidity and working capital to carry out their business post-closing.

 

(u)         Loan-to-Value.
Agent shall have received evidence, satisfactory in its reasonable discretion, that the ratio of the principal balance of the initial
disbursement of the Term Loan as of the Closing Date to the value of the Real Property shall not exceed eighty-five percent (85%),
based on the most current appraisal of the Real Property.

 

(v)         Intentionally
Omitted.

 

(w)        Operating
Lease. Agent shall have received evidence that the Borrower and Operator have entered into triple net Operating Lease for a
term of no less than ten (10) years, which has a termination date later than October 6, 2019, and that has initial annual rental
payments of no less than $950,000.

 

(x)          Deposit
Accounts;. Borrower or Agent, on behalf of Lenders, shall have established one or more Deposit Accounts with respect to the
deposit of proceeds of Collateral, and (ii) Agent shall have entered into a Depository Agreement with respect to each Deposit Account.

 

Upon the execution of this Agreement and
the disbursement of the Term Loan hereunder, all of the above conditions precedent shall have been deemed satisfied, except as
Borrower and Agent shall otherwise agree in a separate writing.

 

SECTION 3.

[INTENTIONALLY OMITTED]

 

SECTION
4.

TERM LOAN

 

4.1           Promissory
Notes Evidencing Term Loan. If the Required Lenders elect to evidence the Term Loan with Promissory Notes, Borrower agrees
to execute and deliver to each Lender a Promissory Note to evidence the Pro Rata Percentage of the Term Loan to be extended to
Borrower by such Lender.

 

4.2           Term
Loan.

 

(a)         Funding
of Term Loan. Upon the satisfaction of the conditions set forth in Section 2.1, each of the Lenders (severally
and not jointly) agrees to advance to Borrower on the date hereof such Lender’s Pro Rata Percentage of the Term Loan.

 

    	 	26	 

     

    

 

(b)           Initial
Disbursement to Borrower on the Closing Date. The Lenders have advanced Seven Million and No/100 Dollars ($7,000,000.00) of
the Term Loan to Borrower on the Closing Date.

 

(c)           Earn
Out. The remaining balance of the Principal amount of the Term Loan, One Million One Hundred Thousand and 00/100 Dollars ($1,100,000.00)
(the “Earn Out”), will be retained by the Agent and disbursed to the Borrower upon satisfaction of the
conditions provided in Section 4.2(d) below. The Earn Out funds shall not be available after October 6, 2017 (the “Earn
Out Period”). The Earn Out shall be retained by the Agent and held by the Agent and no such sums shall be deemed
to be held in trust for the benefit of Borrower.

 

(d)           Disbursement
of the Earn Out Funds. Borrower may request, which request shall be received by Agent no less than ten (10) days prior to the
date of any such advance, and Agent will advance to the Borrower the Earn Out funds during the Earn Out Period (the “Earn
Out Disbursement”), provided that no Default or Event of Default has occurred and is continuing and after giving
effect to the advance of such funds there will be no Default or Event of Default, and Borrower has delivered to Agent the following,
in form and substance acceptable to Agent:

 

(i)          A
certification of Borrower, attesting that there exists no Default or Event of Default under this Agreement or any of the Loan Documents
and confirming all the representations and warranties as set forth in the Loan Documents remain true and correct and that no Default
or Event of Default will result from the requested release of the Earn Out funds; and

 

(ii)         Compliance
Certificates, substantially in the form of Exhibit D attached hereto, signed by an authorized financial or accounting officer
of Borrower Representative, and, if request by Agent, backup documentation, evidencing that the Borrower is in compliance with
the financial covenants set forth herein both prior to the advance of such Earn Out funds and after the advance of such Earn Out
funds; and

 

(iii)        A
certification of Borrower, together with satisfactory evidence supporting such certification, that the Operator’s Adjusted
EBITDAR for the trailing twelve (12) month period tested as of the last day of the month immediately preceding the date of any
such advance, is no less than $1,300,000; and

 

(iv)        An
updated appraisal of the Real Property in form and substance acceptable to the Agent which evidences a loan to value ratio of the
then outstanding principal balance of the Term Loan to the appraised value of the Real Property, based on the updated appraisal,
of no greater than eighty (80%) after giving effect to any disbursement of the Earn Out funds; and

 

(v)         An
endorsement to the title policy issued by the Title Company for the benefit of the Agent; and

 

(vi)        Payment
of all reasonable costs and expenses of Agent and Lender incurred in connection with the disbursements of the Earn Out funds, including
without limitation, reasonable attorneys’ fees, title insurance premiums, if required, and any other costs; and

 

    	 	27	 

     

    

 

(vii)       Such
additional documents and instruments and related due diligence items as reasonably required by Agent.

 

(e)         Repayment
of Term Loan.

 

(i)          The
principal amount of the Term Loan shall be due and payable, and Borrower shall repay the Term Loan in monthly installments commencing
on November 1, 2016 and continuing on the first day of each month thereafter. Each principal payment shall be in the amount necessary
to fully amortize the Term Loan based on a twenty-five (25) year amortization schedule, as set forth on Schedule 4.2(e)
attached hereto.

 

(ii)         The
principal amount of funds advanced in the Earn Out Disbursement shall be due and payable, and Borrower shall repay the funds advanced
in the Earn Out Disbursement, in monthly installments commencing on the first day of the first month following the date of the
Earn Out Disbursement, and continuing on the first day of each month thereafter. Each principal payment related to the Earn Out
Disbursement shall be in the amount necessary to fully amortize the funds advanced in the Earn Out Disbursement based on a twenty
five (25) year amortization schedule, commencing as of the date of the Earn Out Disbursement.

 

(iii)        The
entire outstanding principal balance of the Term Loan in the amount of $8,100,000 (the “Principal”),
together with accrued and unpaid interest and any other amounts due under the Loan Documents shall be due and payable in full on
the earlier of (a) the Maturity Date or (b) the Early Maturity Date.

 

4.3           Borrower
Representative Appointment. Each Borrower hereby irrevocably appoints the Borrower Representative, as agent for such Borrower
on its behalf, to (i) to give and receive notices under the Loan Documents and (ii) take all other action which the Borrower
Representative or Borrowers are permitted or required to take under this Agreement.

 

4.4           Reserves.
Borrower agrees to establish and maintain all of the reserves and escrows required in this Section 4.4. All sums so
reserved or escrowed may be commingled with the general funds of Agent and no such sums shall be deemed to be held in trust for
the benefit of Borrower.  No interest shall accrue on any funds reserved or escrowed hereunder. All sums so reserved, or
escrowed shall be part of the Collateral and shall stand as additional security for all of the Obligations. If Agent at any time
determines that the amount on deposit in any reserve or escrow pursuant to this Section 4.4 is insufficient for its
intended purposes, Borrower shall, within ten (10) days following notice from Agent, deposit such additional sums as may be required
by Agent. In the event of any Default by Borrower under the terms of this Agreement or any other Loan Document, Agent may, at its
discretion, apply amounts on hand in the reserves or escrows to cure such Default. Upon demand of Agent, Borrower shall replenish
the applicable reserve or escrow to restore any sums so applied by Agent. Upon the occurrence of an Event of Default and/or the
maturity of any portion of the Obligations, the moneys then remaining on deposit with Agent shall, at Agent’s option, be
applied against the Obligations in such order and manner as Agent may elect or as may otherwise be required under this Agreement.

 

    	 	28	 

     

    

 

(i)          Real
Property Taxes. A portion of the Term Loan proceeds in the amount of $121,000 shall be used to establish a real property tax
reserve. If Agent notifies Borrower that Agent has determined that the amount remaining in such reserve which is allocated to pay
any and all taxes, assessments and other similar charges levied against any portion of the Collateral constituting real property
(collectively, the “Property Taxes”) is insufficient to pay all such Property Taxes relating to Borrower and
the Real Property as such Property Taxes become due, in order to effectuate the timely payment of all Property Taxes, Borrower
shall, within ten (10) days of Agent’s request therefor, pay to Agent a sum equal to such deficient amount. In the event
such real property or any portion thereof is part of a larger tract for purposes of taxation and assessments, Agent may require
the Borrower to have the real property taxed and assessed as a separate parcel or separate parcels, or, in the alternative, to
make the deposits required under this section based upon the taxation and assessment of the larger tract. The obligation of Borrower
to pay the Property Taxes is not affected or modified by the provisions of this paragraph.

 

(ii)         Insurance
Premiums. A portion of the Term Loan proceeds in the amount of $79,840 shall be used to establish an insurance reserve to be
used to pay premiums on all insurance premiums and other similar charges in connection with the insurance required to be carried
by Borrower pursuant to this Agreement or the other Loan Documents (collectively, the “Insurance Premiums”).
If Agent notifies Borrower that Agent has determined that the amount remaining in such reserve which is allocated to Insurance
Premiums is insufficient to pay all such Insurance Premiums relating to Borrower and the Real Property as they become due, in order
to effectuate the timely payment of all premiums, Borrower shall, within ten (10) days of Agent’s request therefor, pay to
Agent a sum equal to the deficient amount. The obligation of Borrower to pay the Insurance Premiums is not affected or modified
by the provisions of this section.

 

(iii)        Capital
Improvement Reserve. On the Closing Date, Borrower shall pay to Agent an amount equal to the Capital Improvement Reserve Amount,
which shall be escrowed with and held by Agent in a capital improvement reserve (“Capital Improvement Reserve”).
So long as no Event of Default exists hereunder, the funds contained in the Capital Improvement Reserve shall be utilized to reimburse
Borrower solely for capital improvements approved in advance by Agent in writing. Agent shall reimburse Borrower from the Capital
Improvement Reserve for the actual cost of such approved capital improvements upon Borrower’s providing Agent with paid receipts,
lien waivers and other documentation deemed reasonably necessary by Agent with minimum draws of $10,000.00 which shall occur no
more frequently than twice per month.

 

    	 	29	 

     

    

 

(iv)        Debt
Service Reserve. Contemporaneously with the execution of this Agreement, Borrower shall pay to Agent a sum equal to the Debt
Service Reserve Amount to be deposited for the benefit of Agent as additional collateral for the Obligations (“Debt Service
Reserve”). Notwithstanding anything contained in the Loan Documents to the contrary, Agent may apply amounts held in
the Debt Service Reserve to the Obligations at such times and in such amounts as Agent shall from time to time determine in its
discretion without regard to whether a Default or Event of Default exists hereunder. It is the parties’ intention that at
all times until indefeasible payment in full of the Obligations, the Debt Service Reserve must hold funds sufficient to satisfy
two months’ of debt service under the Term Loan, and upon written demand from Agent, Borrower shall deposit additional amounts
into the Debt Service Reserve such that the foregoing level is at all times maintained.

 

4.5           Provisions
Regarding Term Loan.

 

(a)           Repayment
Upon Termination. In the event this Agreement is terminated in accordance with its respective terms by either Agent, the Required
Lenders or Credit Parties for any reason whatsoever, or if the Term Loan is accelerated, the Term Loan, together with all accrued
interest thereon and the applicable Prepayment Premium and Exit Fee, shall be due and payable in full on the effective date of
such termination, notwithstanding any other provision of this Agreement or the Promissory Notes to the contrary; provided, however,
Borrower hereby agrees not to terminate this Agreement on or before April 6, 2016.

 

(b)           Optional
Prepayments. Borrower, at its option, may prepay the Term Loan at any time, in whole only and not in part, provided that on
the date of such prepayment, there shall be due and payable (i) accrued interest on the principal so prepaid to the date of
such prepayment and (ii) the Prepayment Premium due with respect to such prepayment.

 

(c)           Application
of Prepayments. Except as the Required Lenders and Borrower shall otherwise agree in a separate writing, each prepayment of
the Term Loan (whether voluntary or mandatory) shall be applied to the last maturing installments of principal of the Term Loan
(in order of first to mature) until fully repaid.

 

(d)           No
Reborrowing. To the extent repaid, the principal amount of the Term Loan may not be reborrowed under this Section 4.

 

SECTION 5.

[INTENTIONALLY OMITTED]

 

SECTION 6.

INTEREST, FEES AND EXPENSES

 

6.1           Interest
on Term Loan.

 

(a)          From
and following the Closing Date, the Term Loan (excluding the funds considered Earn Out funds) shall bear interest at the sum of
(i) the LIBOR Rate, plus (ii) six and one-half percent (6.50%) per annum. Interest on the Term Loan (excluding the funds considered
Earn Out funds) shall be paid in arrears on the first (1st) day of each month and on the maturity of such Term Loan, whether by
acceleration or otherwise. Interest on all other Obligations shall be payable upon demand.

 

    	 	30	 

     

    

 

(b)          From
and following the Earn Out Disbursement, the funds advanced in the Initial Earn Out Disbursement shall bear interest at the sum
of (i) the LIBOR Rate in effect at the time of the Earn Out Disbursement, plus (ii) six and one-half percent (6.50%) per annum.
Interest on the funds advanced in the Earn Out Disbursement shall be paid in arrears on the first (1st) day of each month commencing
on the first day of the first month following the date of the Earn Out Disbursement and on the maturity of the Term Loan, whether
by acceleration or otherwise. For clarification purposes, prior to the date the Earn Out funds are advanced to the Borrower pursuant
to the terms of Section 4.2 above, the Earn Out funds shall not accrue interest and the Borrower shall not be required to pay interest
on such funds.

 

6.2           Default
Interest Rate. Upon the occurrence and during the continuation of an Event of Default, all Obligations may, at the election
of Agent or Required Lenders, bear interest at the Default Rate of Interest until such Event of Default is cured and accepted in
writing by the Agent and the Required Lenders or waived in writing by the Agent and the Required Lenders.

 

6.3           Computation
of Interest and Related Fees. All interest and fees under each Loan Document shall be calculated on the basis of a 360-day
year for the actual number of days elapsed. The date of funding of the Term Loan shall be included in the calculation of interest
while the date of payment of the Term Loan shall be excluded from the calculation of interest; provided, however, that if the Term
Loan is repaid on the same day that it is made, one (1) day’s interest shall be charged.

 

6.4           Out-of
Pocket Expenses. Borrower agrees to reimburse Agent and the Lenders for all Out-of-Pocket Expenses when charged to or paid
by Agent or the Lenders.

 

6.5           Loan
Facility Fee. To induce Agent and the Lenders to enter into this Agreement and to extend to Borrower the Term Loan, Borrower
agrees to pay to Agent a Loan Facility Fee in the amount of (i) Thirty-Five Thousand and No/100 Dollars ($35,000.00), which shall
be deemed fully earned and nonrefundable upon execution of this Agreement by Agent, the initial Lenders hereunder and Borrower
(the “Initial Facility Fee”) and (ii) Five Thousand Five Hundred and No/100 Dollars ($5,500.00), which shall be deemed
fully earned and nonrefundable upon the Earn Out Disbursement. On the Closing Date, Agent shall charge the Term Loan Commitment
for the balance of the Initial Facility Fee concurrently with the Lenders’ initial disbursement of the Term Loan hereunder.

 

6.6           Prepayment
Premium; Exit Fee. On any date after April 6, 2016, Borrower shall have the right to make prepayments of the Term Loan,
in whole only, and not in part, at any time prior to the Maturity Date on any regularly scheduled payment date; provided, however,
that Borrower (i) gives Agent at least thirty (30) days’ prior written notice, (ii) pays all fees and costs
due from Borrower to Agent and the Lenders, including any reasonable attorneys’ fees and disbursements incurred by Agent
or the Lenders as a result of the prepayment, and the applicable Prepayment Premium payable upon any termination of this Agreement
in accordance with its terms, (iii) pays and performs in full all other Obligations under this Agreement, and (iv) pays the
Exit Fee. For the avoidance of doubt, the Credit Parties hereby acknowledge and agree that the Prepayment Fee and the Exist Fee
as referenced in this Agreement and in this Section 6 are separate obligations of Borrower and Borrower shall be liable
for the Prepayment Fee and the Exit Fee in accordance with the terms and conditions of this Agreement. Partial prepayments of the
Term Loan shall not be permitted, except for partial prepayments resulting from Agent applying insurance proceeds or condemnation
awards to reduce the outstanding principal balance of a Term Loan or as otherwise specifically permitted in this Agreement. Notwithstanding
this Section 6.6, should Borrower refinance the Term Loan through a credit facility in connection with the U.S. Department
of Housing and Urban Development on or after the sixth (6th) full month following the Closing Date (a “HUD
Refinance”), no Prepayment Premium shall be due and owing by Borrower.

 

    	 	31	 

     

    

 

6.7           Capital
Adequacy. In the event that any Lender, subsequent to the Closing Date, determines in the exercise of its reasonable business
judgment that (x) any change in applicable Law, rule, regulation or guideline regarding capital adequacy, or (y) any
change in the interpretation or administration thereof, or (z) compliance by such Lender with any new request or directive
regarding capital adequacy (whether or not having the force of law) of any central bank or other governmental or regulatory authority,
has or would have the effect of reducing the rate of return on such Lender’s capital as a consequence of its obligations
hereunder to a level below that which such Lender could have achieved but for such change or compliance (taking into consideration
such Lender’s policies with respect to capital adequacy) by an amount deemed material by such Lender in the exercise of its
reasonable business judgment, Borrower agrees to pay to such Lender, no later than ten (10) days following demand by such Lender,
such additional amount or amounts as will compensate such Lender for such reduction in rate of return; provided that notwithstanding
anything in this Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case
be deemed to be a “change in applicable Law”, regardless of the date enacted, adopted or issued. In determining such
amount or amounts, such Lender may use any reasonable averaging or attribution methods. The protection of this Section 6.7
shall be available to any Lender regardless of any possible contention of invalidity or inapplicability with respect to the applicable
Law, regulation or condition. A certificate of a Lender setting forth such amount or amounts as shall be necessary to compensate
such Lender with respect to this Section 6.7 and the calculation thereof, when delivered to the Borrower, shall be
conclusive and binding on Borrower absent manifest error. In the event a Lender exercises its rights pursuant to this Section 6.7,
and subsequent thereto determines that the amounts paid by the Borrower exceeded the amount which such Lender actually required
to compensate such Lender for any reduction in rate of return on its capital, such excess shall be promptly returned to the Borrower
by such Lender.

 

6.8           Taxes.

 

(a)          Payments
Free of Taxes. Any and all payments by or on account of any obligation of Borrower hereunder shall be made free and clear of
and without deduction for any Indemnified Taxes or Other Taxes; provided that if Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this Section 6.8) Agent or Lender
(as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) Borrower
shall make such deductions and (iii) Borrower shall pay the full amount deducted to the relevant Government Authority in accordance
with applicable Law.

 

    	 	32	 

     

    

 

(b)          Payment
of Other Taxes by Borrower. In addition, Borrower shall pay any Other Taxes to the relevant Government Authority in accordance
with applicable Law.

 

(c)          Indemnification
by Borrower. Borrower shall indemnify Agent, and each Lender, within ten (10) days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by Agent or such Lender, as the case may be, on or with respect to any payment
by or on account of any obligation of Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 6.8(c)) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by
the relevant Government Authority. A certificate as to the amount of such payment or liability delivered to the Borrower Representative
by a Lender or by Agent, on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(d)          Evidence
of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by Borrower to a Government Authority,
the Borrower Representative shall deliver to Agent the original or a certified copy of a receipt issued by such Government Authority
evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory
to Agent.

 

(e)          Status
of Lenders. Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction
in which Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement
shall deliver to Agent (with a copy to Agent), at the time or times prescribed by applicable Law, such properly completed and executed
documentation prescribed by applicable Law or reasonably requested by Borrower Representative as will permit such payments to be
made without withholding or at a reduced rate. Without limiting the generality of the foregoing, in the event that Borrower is
a resident for tax purposes in the United States of America, any Foreign Lender shall deliver to Borrower and Agent (in such number
of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the request of Borrower or Agent, but only if such Foreign Lender is legally entitled
to do so), whichever of the following is applicable:

 

(i)          duly
completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the
United States of America is a party,

 

(ii)         duly
completed copies of Internal Revenue Service Form W-8ECI,

 

    	 	33	 

     

    

 

(iii)        in
the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of
the Code, (B) a “10 percent shareholder” of Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal
Revenue Service Form W-8BEN, or

 

(iv)        any
other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in United States Federal withholding
tax duly completed together with such supplementary documentation as may be prescribed by applicable Law to permit Borrower to
determine the withholding or deduction required to be made.

 

(f)          Treatment
of Certain Refunds. If Agent or a Lender determines, in its sole discretion, that it has received a refund of any 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 6.8 it shall promptly pay over such refund to Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by Borrower under this Section 6.8(f) with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of Agent or such Lender and without interest (other than any interest paid
by the relevant Government Authority with respect to such refund); provided that Borrower, upon the request of Agent or such Lender,
agrees to repay the amount paid over to Borrower (plus any penalties, interest or other charges imposed by the relevant Government
Authority) to Agent or such Lender in the event Agent or such Lender is required to repay such refund to such Government Authority.
This Section 6.8(f) shall not be construed to require Agent or any Lender to make available its tax returns (or other
information relating to its taxes which it deems confidential) to Borrower or any other person.

 

6.9           Obligations
Absolute. All payments by any Credit Party of principal, interest, fees and other Obligations shall be made in Dollars
in immediately available funds, and shall be absolute and unconditional, without defense, rescission, recoupment, setoff or counterclaim,
free of any restriction or condition, and delivered to Agent, for the account of Lenders, not later than 12:00 p.m. (Eastern
Time) on the date due.

 

6.10         Authority
to Charge Borrower’s Loan Account. Borrower hereby acknowledges and agrees that Agent is authorized to charge the
Borrower’s Loan Account with the amount of all payments due under Section 4.2 and this Section 6.10
as such payments become due.

 

    	 	34	 

     

    

 

SECTION 7.

COLLATERAL

 

7.1         Grant
of Security Interests. As security for the performance and prompt payment in full in cash of all Obligations, and as further
security for the payment and performance by Borrower, Borrower (or if referring to another Person, such Person) hereby pledges
and grants to Agent, for its benefit and for the benefit of the Lenders, a first priority continuing general lien upon, and security
interest in, all of the following now owned and hereafter acquired Collateral in which Borrower has rights (collectively, the “Collateral”):

 

(a)          Accounts,
Contract Rights, Etc. – All now owned and hereafter acquired, created, or arising accounts (including the Accounts), accounts
receivable, notes receivable, contract rights, chattel paper, documents (including Documents of Title), instruments and letters
of credit;

 

(b)          Inventory;

 

(c)          General
Intangibles;

 

(d)          Equipment;

 

(e)          Deposit
Accounts and Other Collateral – All now existing and hereafter acquired or arising deposit accounts (including without limitation
any Deposit Account), investment accounts, commercial paper, investment securities, Investment Property, and certificates of deposit,
of every nature, wherever located, and all funds received thereby, deposited therein or associated therewith and all documents
and records associated therewith, and all supporting obligations, letter of credit rights and commercial tort claims and Other
Collateral;

 

(f)          All
Property of Borrower now or hereafter in Agent’s possession;

 

(g)          Books
and Records – All books and records evidencing or relating to or associated with any of the foregoing and any and all claims,
rights and interests in any of the above;

 

(h)          Other
Information – All information and data compiled or derived by Borrower with respect to any of the foregoing (other than any
such information and data subject to legal restrictions of patient confidentiality);

 

(i)          Other
Property – All other personal Property of Borrower not described above whether now existing or hereafter acquired;

 

(j)          Proceeds
– The collections and Proceeds, whether cash or non-cash, of all of the foregoing;

 

    	 	35	 

     

    

 

(k)          to
the extent not listed above, all of Borrower’s rights as a secured party in and to the property of Operator to which Operator
granted a security interest in favor of Borrower under the Operating Lease.

 

7.2         Extent
of Security Interests. The security interest granted hereunder shall extend and attach to all Collateral which is presently
in existence or hereafter acquired and which is owned by Borrower or in which Borrower has any interest, whether held by Borrower
or by others for Borrower’s account, and wherever located, and, if any Collateral is Equipment, whether Borrower’s
interest in such Equipment is as owner, lessee or conditional vendee.

 

7.3         Limited
License. Regardless of whether Agent’s security interests in any of the General Intangibles has attached or is perfected,
Borrower hereby irrevocably grants to Agent, for its benefit and for the benefit of the Lenders, a royalty-free, nonexclusive license
to use Borrower’s Trademarks, Copyrights, Patents and other proprietary and intellectual property rights, in connection with
the advertisement for sale, and the sale or other disposition of, any Collateral by, or on behalf of, Agent in accordance with
the provisions of this Agreement.

 

7.4         Lien
on Realty. The due and punctual payment and performance of the Obligations shall also be secured by the Lien created by
the Mortgage upon the real property of Credit Parties described therein. The Mortgage shall be duly recorded (at Borrower’s
expense) in each office where such recording is required to constitute a valid Lien on the real property covered thereby. In respect
to any Mortgage, Credit Parties shall deliver to Agent, at Borrower’s expense, mortgagee title insurance policies issued
by a title insurance company reasonably satisfactory to Agent, which policies shall be in form and substance reasonably satisfactory
to Agent and shall insure a valid Lien in favor of Agent, for its benefit and the benefit of the Lenders, on the property covered
thereby, subject only to Permitted Encumbrances and those other exceptions reasonably acceptable to Agent. Credit Parties shall
also deliver to Agent such other usual and customary documents, including, without limitation, ALTA Surveys of the real property
described in the Mortgage, as Agent may request relating to the real property subject to the Mortgage.

 

7.5         Representations,
Covenants and Agreements Regarding Collateral Generally.

 

(a)          Representations
and Warranties. Borrower represents and warrants to Agent and the Lenders that except for the Permitted Encumbrances, (i) upon
the filing of UCC financing statements covering the Collateral in all required jurisdictions, this Agreement creates a valid, perfected,
first-priority and exclusive security interest in all personal property of Borrower as to which perfection may be achieved by filing,
(ii) Agent’s security interests in the Collateral constitute, and will at all times constitute, first-priority and exclusive
liens on the Collateral, and (iii) Borrower is, or will be at the time additional Collateral is acquired by Borrower, the
absolute owner of such additional Collateral with full right to pledge, sell, transfer and create a security interest therein,
free and clear of any and all claims or liens other than Permitted Encumbrances.

 

    	 	36	 

     

    

 

(b)          Covenants.
Borrower, at its expense, agrees to forever warrant and defend the Collateral from any and all claims and demands of any other
person, other than holders of Permitted Encumbrances.

 

(c)          General
Intangibles. Borrower represents and warrants to Agent and the Lenders that as of the date hereof, Borrower possesses all General
Intangibles necessary to conduct its business as presently conducted. Borrower agrees to maintain Borrower’s rights in, and
the value of, all such General Intangibles, and to pay when due all payments required to maintain in effect any licensed rights.
Borrower shall provide Agent with adequate notice of the acquisition of rights with respect to any additional patents, trademarks
and copyrights so that Agent may, for the benefit of the Lenders and to the extent permitted under the documentation granting such
rights or applicable Law, perfect Agent’s security interest in such rights in a timely manner.

 

(d)          Commercial
Tort Claims. Borrower represents and warrants to Agent and the Lenders that as of the date hereof, Borrower holds no interest
in any commercial tort claim. If Borrower at any time holds or acquires a commercial tort claim, Borrower agrees to promptly notify
Agent in writing of the details thereof, and in such writing Borrower shall grant to Agent, for the benefit of the Lenders, a security
interest in such commercial tort claim and in the Proceeds thereof, all upon the terms of this Agreement.

 

(e)          Letter
of Credit Rights. Borrower represents and warrants to Agent and the Lenders that as of the date hereof, Borrower is not the
beneficiary of any letter of credit. If Borrower becomes a beneficiary under any letter of credit, Borrower agrees to promptly
notify Agent, and upon request by Agent, Borrower agrees to either (a) cause the issuer of such letter of credit to consent
to the assignment of the proceeds of such letter of credit to Agent, for the benefit of the Lenders, pursuant to an agreement in
form and substance satisfactory to Agent, or (b) cause the issuer of such letter of credit to name Agent, for the benefit
of the Lenders, as the transferee beneficiary of such letter of credit.

 

7.6         Reference
to Other Loan Documents. Reference is hereby made to the other Loan Documents for additional representations, covenants
and other agreements of Borrower regarding the Collateral covered by such Loan Documents.

 

7.7         Credit
Balances; Additional Collateral.

 

(a)          The
rights and security interests granted to Agent and the Lenders hereunder shall continue in full force and effect, notwithstanding
the termination of this Agreement, until the termination of this Agreement and the full and final payment and satisfaction of the
Obligations. Any reserves or balances to the credit of Borrower, and any other property or assets of Borrower in the possession
of Agent or any Lender, may be held by Agent or such Lender as Other Collateral, and applied in whole or partial satisfaction of
such Obligations when due, subject to the terms of this Agreement. The liens and security interests granted to Agent, for the benefit
of the Lenders, herein and any other lien or security interest which Agent or the Lenders may have in any other assets of Borrower
secure payment and performance of all present and future Obligations.

 

    	 	37	 

     

    

 

(b)          Notwithstanding
Agent’s security interests in the Collateral, to the extent that the Obligations are now or hereafter secured by any assets
or Property other than the Collateral, or by the guaranty, endorsement, assets or property of any other Person, Agent shall have
the right in its sole discretion to determine which rights, security, liens, security interests or remedies Agent shall at any
time pursue, foreclose upon, relinquish, subordinate, modify or take any other action with respect to, without in any way modifying
or affecting any of such rights, security, liens, security interests or remedies, or any of Agent’s or the Lenders’
rights under this Agreement.

 

7.8          Power
of Attorney. Each of the officers of Agent is hereby irrevocably made, constituted and appointed the true and lawful attorney-in-fact
for Borrower (without requiring any of them to act as such) with full power of substitution to do the following (such power to
be deemed coupled with an interest): (1) endorse the name of Borrower upon any and all checks, drafts, money orders and other
instruments for the payment of monies that are payable to Borrower and constitute collections on the Collateral; (2) execute
in the name of Borrower any financing statements, schedules, assignments, instruments, documents and statements that Borrower is
obligated to give Agent hereunder or that Agent deems is necessary to perfect Agent’s security interest or lien in the Collateral;
(3) verify the validity, amount or any other matter relating to the Collateral by mail, telephone, telecopy or otherwise;
and (4) do such other and further acts and deeds in the name of Borrower that Agent may reasonably deem necessary or desirable
to enforce its right with respect to any Collateral.

 

7.9          All
Asset Filing. Borrower hereby ratifies its authorization for Agent to have filed in any UCC jurisdiction any initial financing
statements or amendments thereto indicating “all assets of the debtor” or similar language as the collateral description.

 

SECTION 8.

REPRESENTATIONS AND WARRANTIES

 

Borrower represents
and warrants to Agent and the Lenders that:

 

8.1           Financial
Condition. (i) The amount of Borrower’s assets, at fair valuation, exceeds the book value of Borrower’s
liabilities, (ii) Borrower is generally able to pay its debts as they become due and payable, and (iii) Borrower does
not have unreasonably small capital to carry on its business as currently conducted absent extraordinary and unforeseen circumstances.
All financial statements of Borrower previously furnished to Agent present fairly, in all material respects, the financial condition
of Borrower as of the date of such financial statements.

 

8.2           Organization
Matters; Collateral Locations. As of the Closing Date, the Information Certificate attached hereto as Schedule 8.2
correctly and completely sets forth the information contained therein. Schedule 8.2 attached hereto correctly and completely
sets forth (w) any change to Borrower’s exact name, as currently reflected by the records of Borrower’s jurisdiction
of organization from that which is set forth on the Information Certificate, (x) any change to Borrower’s jurisdiction
of organization from that which is set forth on the Information Certificate, (y) any change to Borrower’s federal employer
identification number and State organization identification number, (if any), from that which is set forth on the Information Certificate
and (z) any change to the address of Borrower’s chief executive office or any change to any location of Collateral from
that which is set forth on the Information Certificate.

 

    	 	38	 

     

    

 

8.3           Power
and Authority; Conflicts; Enforceability.

 

(a)          Borrower
has full power and authority to execute and deliver this Agreement and the other Loan Documents to which Borrower is a party, and
to perform all of Borrower’s obligations thereunder.

 

(b)          The
execution and delivery by Borrower of this Agreement and the other Loan Documents to which Borrower is a party, and the performance
of Borrower’s obligations hereunder and thereunder, have been duly authorized by all necessary corporate or other relevant
action, and do not (w) require any consent or approval of any director, shareholder, partner or member of Borrower that has
not been obtained, (x) violate any term, provision or covenant contained in the Organizational Documents of Borrower (such
as the certificate or articles of incorporation, certificate of origin, partnership agreement, bylaws or operating agreement),
(y) violate, or cause Borrower to be in default under, any law, rule, regulation, order, judgment or award applicable to Borrower
or its assets, or (z) violate any term, provision, covenant or representation contained in, or constitute a default under,
or result in the creation of any lien under, any loan agreement, lease, indenture, mortgage, deed of trust, note, security agreement
or pledge agreement to which Borrower is a signatory or by which Borrower or Borrower’s assets are bound or affected.

 

(c)          This
Agreement and the other Loan Documents to which Borrower is party constitute legal valid and binding obligations of Borrower, enforceable
in accordance with their respective terms, subject to applicable bankruptcy, insolvency, moratorium, fraudulent transfer and other
laws affecting creditors’ rights generally, and subject to general principles of equity, regardless of whether considered
in a proceeding at law or in equity.

 

8.4           Schedules.
Each of the Schedules attached to this Agreement set forth, in all material respects, a true, correct and complete description
of the matter or matters covered thereby.

 

8.5           Compliance
with Laws; Permits; Anti-Terrorism Laws.

 

(a)          To
Borrower’s knowledge and except as disclosed in (i) that certain Property Condition Report prepared by EMG and dated September
15, 2015 or (ii) that certain Environmental Assessment prepared by EMG and dated September 16, 2015, or (iii) that certain Zoning
Assessment prepared by Massey Consulting Group and dated October 2, 2015, each delivered and made available to Agent prior to the
Closing Date and approved by Agent, Borrower and Borrower’s properties are in compliance with all applicable Laws, and all
orders of any federal, state or local legislative, administrative or judicial body or official, except to the extent the failure
to so comply would not reasonably be expected to have a Material Adverse Effect.

 

(b)          Borrower
or Operating maintain all Permits, except to the extent the failure to have such Permits would not reasonably be expected to have
a Material Adverse Effect.

 

    	 	39	 

     

    

 

(c)          None
of the Credit Parties and, to the knowledge of the Credit Parties, none of their Affiliates or the Operator (i) is in violation
of any Anti-Terrorism Law, (ii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, (iii) is a Blocked
Person, or is controlled by a Blocked Person, (iv) is acting or will act for or on behalf of a Blocked Person, (v) is
associated with, or will become associated with, a Blocked Person or (vi) is providing, or will provide, material, financial
or technical support or other services to or in support of acts of terrorism of a Blocked Person. No Credit Party nor, to the knowledge
of any Credit Party, neither the Operator nor any of Credit Party’s Affiliates or agents acting or benefiting in any capacity
in connection with the transactions contemplated by this Agreement, (x) conducts any business or engages in making or receiving
any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages
in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar
executive order or other Anti-Terrorism Law.

 

8.6           Environmental
Matters. Except as set forth on Schedule 8.6 (for purposes of this Section 8.6, Borrower shall
be deemed to include any business or business entity (including a corporation) that is, in whole or in part, a predecessor of Borrower):

 

(a)          no
notice, notification, demand, request for information, citation, summons, complaint or order has been issued, no complaint has
been filed, no penalty has been assessed and no investigation or review is pending, or to Borrower’s knowledge, threatened
by any Government Authority or other Person with respect to any (i) alleged violation by Borrower of any applicable Environmental
Law, (ii) alleged failure by Borrower to have any Permits required in connection with the conduct of its business or to comply
with the terms and conditions thereof, (iii) any generation, treatment, storage, recycling, transportation or disposal of
any Hazardous Materials in violation of applicable Environmental Laws, or (iv) release of Hazardous Materials; and

 

(b)          no
property now owned or leased by Borrower and, to the knowledge of Borrower and except as disclosed in (i) that certain Property
Condition Report prepared by EMG and dated September 15, 2015 or (ii) that certain Environmental Assessment prepared by EMG and
dated September 16, 2015, or (iii) that certain that certain Zoning Assessment prepared by Massey Consulting Group and dated October
2, 2015, each delivered and made available to Agent prior to the Closing Date and approved by Agent, no such property previously
owned or leased by Borrower, to which Borrower has, directly or indirectly, transported or arranged for the transportation of any
Hazardous Materials, is listed or, to Borrower’s knowledge, proposed for listing, on the National Priorities List promulgated
pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any similar state list or is the subject of federal, state or local enforcement
actions or, to the knowledge of Borrower, other investigations which would reasonably be expected to lead to claims against Borrower
for cleanup costs, remedial work, damage to natural resources or personal injury claims, including, without limitation, claims
under CERCLA.

 

8.7           Pending
Litigation. Except as set forth on Schedule 8.7, there exist no Proceedings of any kind by or against Borrower
pending in any court or before any arbitrator or governmental body that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect or result in a Change of Control.

 

    	 	40	 

     

    

 

8.8           Regulatory
Matters. Without limiting the generality of any other representation or warranty made in this Agreement, Borrower hereby
represents and warrants that, except as disclosed in Schedule 8.8, the following statements are true, complete and
correct as of the Closing Date, and Borrower hereby covenants and agrees to notify Agent within five (5) Business Days following
the occurrence of any facts, events or circumstances, whether threatened, existing or pending, that would make any of the following
representations and warranties untrue, incomplete or incorrect (together with such supporting data and information as shall be
necessary to fully explain to Agent the scope and nature of the fact, event or circumstance), and shall provide to Agent within
five (5) Business Days of Agent’s request, such additional information as Agent shall request regarding such disclosure:

 

(a)          Reimbursement;
Nongovernmental Account Debtors. Borrower has provided to Agent copies of all participation agreements required by Agent with
HMOs, insurers, third-party payors, and preferred provider organizations with respect to the business operations of Borrower and
Operator. The Healthcare Facilities operated by Borrower and Operator and the services provided at such Healthcare Facilities are
qualified for participation in the Third-Party Payor Programs, and Borrower or Operator is entitled to reimbursement under the
Third-Party Payor Programs for services rendered at such Healthcare Facilities to qualified beneficiaries, and each of Borrower
and Operator complies in all material aspects with the conditions of participation in all Third-Party Payor Programs and related
contracts. Each of Borrower and Operator is in compliance in all material respects with contracts with Account Debtors other than
Governmental Account Debtors and is entitled to reimbursement under such contracts.

 

(b)          Compliance
with Healthcare Regulations.

 

(i)          Borrower,
Manager, and Operator have timely filed or shall cause to be timely filed, all cost reports and other reports of every kind whatsoever
required by a Third-Party Payor Program, to have been filed or made with respect to the business operations of Borrower, Manager
or Operator. Other than with respect to survey deficiencies, audits and recoupment claims occurring in the ordinary course of Borrower’s
business which could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, there
are no claims, actions or appeals pending (and Borrower has not filed any claims or reports which should result in any such claims,
actions or appeals) before any Government Authority pertaining to Borrower’s business operations, including, without limitation,
any intermediary or carrier, the Provider Reimbursement Review Board or the Administrator of CMS, with respect to any state or
federal Medicare or Medicaid cost reports or claims filed by Borrower, or any disallowance by any Government Authority in connection
with any audit of such cost reports;

 

(ii)         Borrower,
Manager, and Operator have obtained all necessary accreditations to operate its business as now conducted, and currently is in
compliance with all statutory and regulatory requirements applicable to it, the failure of which would have a Material Adverse
Effect upon Borrower, Manager or Operator;

 

    	 	41	 

     

    

 

(iii)        Each
of Borrower, Manager or Operator is currently or has in the past been subject to: (1) any state or local governmental investigation,
inspection or inquiry related to any license or licensure standards applicable to Borrower, Manager or Operator that would reasonably
likely result in a loss of licensure, decertification of such Healthcare Facility from participation in Medicare and Medicaid or
any other restriction or limitation in scope of such license; (2) any federal, state, local governmental or private payor
civil or criminal investigations, inquiries or audits involving and/or related to any federal, state or private payor healthcare
fraud and abuse provisions or contractual prohibition of healthcare fraud and abuse; or (3) any federal, state or private
payor inquiry, investigation, inspection or audit regarding Borrower, Manager or Operator or their activities, including, without
limitation, any federal, state or private payor inquiry or investigation of any Person having “ownership, financial or control
interest” in Borrower, Manager or Operator (as that term is defined in 42 C.F.R. §   420.201 et seq.)
involving and/or related to healthcare fraud and abuse, false claims under 31 U.S.C. §  §   3729–3731
or any similar contractual prohibition, or any qui tam action brought pursuant to 31 U.S.C. §   3729 et seq.;

 

(iv)        No
director, officer, shareholder, employee or Person with a “direct or indirect ownership interest” (as that phrase is
defined in 42 C.F.R. §   420.201) in Borrower, Operator or, to Borrower’s knowledge, Manager: (1) has
had a civil monetary penalty assessed against him or her pursuant to 42 U.S.C. §   1320a-7a; (2) has been excluded
from participation in a Federal Health Care Program (as that term is defined in 42 U.S.C. §   1320a-7b); (3) has
been convicted (as that term is defined in 42 C.F.R. §   1001.2) of any of those offenses described in 42 U.S.C.
§   1320a-7b or 18 U.S.C. §  §   669, 1035, 1347 or 1518, including without limitation
any of the following categories of offenses: (a) criminal offenses relating to the delivery of an item or service under any
Federal Health Care Program (as that term is defined in 42 U.S.C. §   1320a-7b) or healthcare benefit program (as
that term is defined in 18 U.S.C. §   24b); (b) criminal offenses under federal or state law relating to patient
neglect or abuse in connection with the delivery of a healthcare item or service; (c) criminal offenses under federal or state
law relating to fraud and abuse, theft, embezzlement, false statements to third parties, money laundering, kickbacks, breach of
fiduciary responsibility or other financial misconduct in connection with the delivery of a healthcare item or service or with
respect to any act or omission in a program operated by or financed in whole or in part by any federal, state or local governmental
agency; (d) federal or state laws relating to the interference with or obstruction of any investigations into any criminal
offenses described in (1) through (3) above; or (e) criminal offenses under federal or state law relating to the unlawful
manufacturing, distribution, prescription or dispensing of a controlled substance; or (4) has been involved or named in a U.S.
Attorney complaint made or any other action taken pursuant to the False Claims Act under 31 U.S.C. §  §  
3729–3731 or qui tam action brought pursuant to 31 U.S.C. §   3729 et seq.;

 

    	 	42	 

     

    

 

(v)         Each
of Borrower, Manager and Operator is and shall continue to be in compliance with all applicable laws relating to its relationships
with physicians;

 

(vi)        Borrower,
Operator and, to Borrower’s knowledge, Manager, and their employees and contractors (other than contracted agencies), in
the exercise of their duties on behalf of Borrower, Operator, and, to Borrower’s knowledge, Manager, is and shall continue
to be in compliance with all laws, rules, regulations, orders, decrees and directions of any Government Authority (including, without
limitation, the Social Security Act, as amended, the rules and regulations promulgated by CMS), and any state laws or contracts
relating thereto or any other Collateral, or otherwise applicable to its business and properties, a violation of which would reasonably
be expected to materially adversely affect its ability to collect on its Accounts or repay the Obligations;

 

(vii)       All
persons providing professional healthcare services for or on behalf of any Borrower or Operator (either as an employee or independent
contractor) are appropriately licensed in the jurisdiction where the Healthcare Facility is located;

 

(viii)      None
of Borrower’s or Operator’s state and local licenses, Permits, registrations, certifications and other approvals relating
to providing healthcare services and other services provided by Borrower or Operator have been suspended, revoked, limited or denied
renewal at any time; and

 

(ix)         Borrower
or Operator has not applied to reduce the number of licensed or certified beds at any Healthcare Facility or to move the right
to any and all of such licensed or certified beds to any other location and there are no proceedings pending or contemplated to
move or reduce the number of licensed or certified beds at any Healthcare Facility.

 

(c)          Healthcare
Permits. Borrower, Operator and Manager, as applicable, have made timely application for, in accordance with applicable laws,
(i) each Healthcare Permit and other rights from, and have made all declarations and filings with, all applicable Government
Authorities, all self regulatory authorities and all courts and other tribunals necessary to engage in the ownership, management
and operation of the Healthcare Facilities or the assets of Borrower or Operator, and (ii) not received a Citation, nor have
any knowledge that any Government Authority is considering limiting, suspending or revoking any Healthcare Permit. All such Healthcare
Permits are issued in the name of Borrower or Operator. All such Healthcare Permits are valid and in full force and effect and
each of Borrower and Operator is in material compliance with the terms and conditions of all such Healthcare Permits, except where
failure to be in such compliance or for a Healthcare Permit to be valid and in full force and effect would not have a Material
Adverse Effect.

 

    	 	43	 

     

    

 

(d)          HIPAA
Compliance. To the extent that and for so long as each of Borrower and Operator is a “covered entity” or “business
associate” as either such term is defined under the requirements and implementing regulations at 45 Code of Federal Regulations
(“C.F.R.”) Parts 160–64 for the Administrative Simplification provisions of Title II, Subtitle F
of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), Borrower (i) has undertaken
or will promptly undertake, and shall cause Operator to 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 Borrower or Operator to be HIPAA Compliant (as defined below); (ii) has
developed a detailed plan and time line for becoming HIPAA Compliant (a “HIPAA Compliance Plan”); and (iii) has
implemented those provisions of such HIPAA Compliance Plan in all material respects necessary to ensure that Borrower becomes,
and causes Operator to become, HIPAA Compliant. For purposes hereof, “HIPAA Compliant” shall mean that each
of Borrower and Operator (x) is or will be in compliance with each of the applicable requirements of the so-called Administrative
Simplification provisions of HIPAA on and as of each date that any part 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”) and
(y) 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 would reasonably be expected to have a Material Adverse Effect.

 

8.9           Disclosure.
No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of Borrower
to the Agent or any Lender in connection with the Transactions contemplated hereby and the negotiation of this Agreement or delivered
hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided that, with respect to any projected financial information, Borrower represents that such information was
prepared in good faith based upon assumptions believed to be reasonable at the time. Notwithstanding the foregoing, Agent and Lenders
acknowledge that the pro forma financial statements and other economic forecasts by Borrower hereunder is not factual representations
and that the actual financial results of Borrower may differ from the pro forma financial statements and other economic forecasts
submitted from time to time.

 

8.10         Security
Interest. Borrower has granted to Agent, for its benefit and the benefit of the other Lenders, a valid, perfected, first-priority
security interest in the Collateral subject to no other liens, claims or encumbrances, other than Permitted Encumbrances. Nothing
herein shall constitute an agreement to subordinate such security interest to any Permitted Encumbrance.

 

    	 	44	 

     

    

 

8.11         Updates
of Representations. Borrower shall deliver to Agent within ten (10) days of the written request of Agent a certificate
of an officer of Borrower Representative updating all of the representations and warranties contained in this Agreement and the
other Loan Documents and certifying that all of the representations and warranties contained in this Agreement and the other Loan
Documents, as updated pursuant to such certificate, are true, accurate and complete as of the date of such certificate.

 

8.12         Deposit
Accounts. The Commercial Depository Account is the only account maintained by the Borrower and the Operator has been directed
to remit all payments with respect to the Operating Lease for deposit in the Commercial Depository Account.

 

SECTION 9.

AFFIRMATIVE COVENANTS

 

On the Closing Date
and at all times thereafter until and including the Termination Date:

 

9.1           Maintenance
of Financial Records; Inspections. Borrower agrees to maintain books and records pertaining to Borrower’s financial
matters in such detail, form and scope as Agent reasonably may require. Borrower agrees that Agent may enter upon Borrower’s
premises at any time during normal business hours, upon not less than twenty-four (24) hours prior notice (or at any time without
notice during the existence of an Event of Default), and from time to time, in order to (i) examine and inspect the books
and records of Borrower, and make copies thereof and take extracts therefrom, and (ii) verify, inspect and perform physical
counts and other valuations of the Collateral and any and all records pertaining thereto. Borrower irrevocably authorizes all accountants
and third parties to disclose and deliver directly to Agent and the Lenders, at Borrower’s expense, all financial statements
and information, books, records, work papers and management reports generated by them or in their possession regarding Borrower
or the Collateral. All costs, fees and expenses incurred by Agent in connection with such examinations, inspections, physical counts
and other valuations shall constitute Out-of-Pocket Expenses for purposes of this Agreement.

 

9.2           Further
Assurances. Borrower agrees to comply with the requirements of all state and federal laws in order to grant to Agent, for
the benefit of the Lenders, valid and perfected first priority security interests in the Collateral, subject only to the Permitted
Encumbrances. Agent is hereby authorized by Borrower to file any financing statements, continuations and amendments covering the
Collateral without Borrower’s signature in accordance with the provisions of the UCC. Borrower hereby consents to and ratifies
the filing of any financing statements covering the Collateral by Agent on the Closing Date. Borrower agrees to do whatever Agent
reasonably may request from time to time, by way of (i) filing notices of liens, financing statements, amendments, renewals
and continuations thereof, (ii) cooperating with agents and employees of Agent, (iii) keeping Collateral records, (iv) transferring
proceeds of Collateral to Agent’s possession in accordance with the terms hereof and (v) performing such further acts
as Agent reasonably may require in order to effect the purposes of this Agreement, including the execution of control agreements
with respect to Deposit Accounts and Investment Property. Notwithstanding the foregoing, at Borrower’s cost and expense,
Borrower shall satisfy or deliver (or cause to be satisfied or delivered) the post closing matters or items set forth on Schedule
9.2 within the time periods set forth on said Schedule 9.2 (the “Post Closing Matters”).

 

    	 	45	 

     

    

 

9.3           Insurance
and Condemnation.

 

(a)          Required
Insurance with Respect to Equipment and Inventory. Borrower agrees to maintain insurance on all Equipment and Inventory covering
the repair and replacement costs of all such property (including the perils of flood and earthquake, to the extent required by
Agent) and coverage for business interruption and rent loss and professional liability and public liability insurance with such
insurance companies, in such reasonable amounts and covering such insurable risks as are at all times reasonably satisfactory to
Agent. All policies relating to Required Insurance, subject to the rights of any holder of a Permitted Encumbrance having priority
over the security interests of Agent, shall name Agent as an “additional insured,” as applicable, and shall be made
payable solely to Agent, for the benefit of the Lenders, in case of loss, under a standard non-contributory “mortgagee,”
“secured party” or “lender’s loss payable” clause or endorsement, and are to contain such other
provisions as Agent reasonably may require to fully protect Agent’s interest in the Collateral and to any payments to be
made under such policies. Each loss payable endorsement in favor of Agent shall provide (x) for not less than thirty (30)
days prior written notice to Agent of the exercise of any right of cancellation and (y) that Agent’s right to payment
under any property insurance policy will not be invalidated by any act or neglect of, or any breach of warranty or condition by,
Borrower or any other party. If an Event of Default shall have occurred and remain outstanding, Agent, subject to the rights of
any holder of a Permitted Encumbrance having priority over the security interests of Agent, shall have the sole right, in the name
of Agent or Borrower, to file claims under any insurance policies, to receive, receipt and give acquittances for any payments that
may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents
that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

 

    	 	46	 

     

    

 

(b)          Required
Insurance with respect to Real Property. Borrower shall obtain and maintain or cause to be obtained and maintained at Borrower’s
or Operator’s sole expense (the “Required Insurance”): (1) Real Property insurance with respect to
all insurable Real Property (and any personal property located thereon), against loss or damage by fire, lightning, windstorm,
explosion, hail, tornado and such additional hazards as are presently included in “Special Form” (also known as “all-risk”)
coverage and against any and all acts of terrorism and such other insurable hazards as Agent may reasonably require, in an amount
not less than 100% of the full replacement cost, including the cost of debris removal, without deduction for depreciation and sufficient
to prevent Borrower, Operator and Agent from becoming a coinsurer, such insurance to be in “builder’s risk” completed
value (non-reporting) form during and with respect to any construction on the Real Property; (2) if and to the extent any
portion of the improvements located on the Real Property is, under the Flood Disaster Protection Act of 1973 (“FDPA”),
as it may be amended from time to time, in a Special Flood Hazard Area, within a Flood Zone designated A or V in a participating
community, a flood insurance policy in an amount reasonably required by Agent, but in no event less than the amount sufficient
to meet the requirements of applicable law and the FDPA, as such requirements may from time to time be in effect; (3) general
liability insurance, on an “occurrence” basis, against claims for “personal injury” liability, including
bodily injury, death, or property damage liability, for the benefit of Borrower and Operator as named insured and Agent as additional
insured; (4) statutory workers’ compensation insurance with respect to any work on or about the Real Property (including
employer’s liability insurance, if required by Agent), covering all employees of Borrower and Operator and any contractor;
(5) if there is a general contractor, commercial general liability insurance, including products and completed operations
coverage, and in other respects similar to that described in clause (3) above, for the benefit of the general contractor as
named insured and Borrower, Operator and Agent as additional insureds, in addition to statutory workers’ compensation insurance
with respect to any work on or about the Real Property (including employer’s liability insurance, if required by Agent),
covering all employees of the general contractor any contractor; and (6) such other insurance on the Real Property and endorsements
as may from time to time be reasonably required by Agent (including but not limited to soft cost coverage, automobile liability
insurance, business interruption insurance or delayed rental insurance, boiler and machinery insurance, earthquake insurance, wind
insurance, sinkhole coverage, and/or permit to occupy endorsement) and against other insurable hazards or casualties which at the
time are commonly insured against in the case of Real Property similarly situated, due regard being given to the height, type,
construction, location, use and occupancy of buildings and improvements located on the Real Property (the “Required Real
Property Insurance”). All insurance policies shall be issued and maintained by insurers, in amounts, with deductibles,
limits and retentions, and in forms reasonably satisfactory to Agent, and shall require not less than ten (10) days’ prior
written notice to Agent of any cancellation for nonpayment of premiums, and not less than thirty (30) days’ prior written
notice to Agent of any other cancellation or any change of coverage. All insurance companies must be licensed to do business in
the state in which the Real Property is located and must have an A.M. Best Company financial and performance ratings of A-:IX or
better. All insurance policies maintained, or caused to be maintained, by Borrower or Operator with respect to the Real Property,
except for general liability insurance, shall provide that each such policy shall be primary without right of contribution from
any other insurance that may be carried by Borrower or Operator or Agent and that all of the provisions thereof, except the limits
of liability, shall operate in the same manner as if there were a separate policy covering each insured. If any insurer which has
issued a policy of title, hazard, liability or other insurance required pursuant to this Agreement or any other Loan Document becomes
insolvent or the subject of any petition, case, proceeding or other action pursuant to any Debtor Relief Law, or if in Agent’s
reasonable opinion the financial responsibility of such insurer is or becomes inadequate, Borrower and Operator shall, in each
instance promptly upon its discovery thereof or upon the request of Agent therefore, and at Borrower’s or Operator’s
expense, promptly obtain and deliver to Agent a like policy (or, if and to the extent permitted by Agent, acceptable evidence of
insurance) issued by another insurer, which insurer and policy meet the requirements of this Agreement or such other Loan Document,
as the case may be. Without limiting the discretion of Agent with respect to required endorsements to insurance policies, all such
policies for loss of or damage to the Real Property shall contain a standard mortgagee clause (without contribution) naming
Agent as mortgagee with loss proceeds payable to Agent notwithstanding (i) any act, failure to act or negligence of or violation
of any warranty, declaration or condition contained in any such policy by any named or additional insured; (ii) the occupation
or use of the Real Property for purposes more hazardous than permitted by the terms of any such policy; (iii) any foreclosure
or other action by Agent under the Mortgage or the Loan Documents; or (iv) any change in title to or ownership of the Real
Property or any portion thereof, such proceeds to be held for application as provided in the Loan Documents. The copies of each
initial insurance policy or satisfactory certificates of insurance evidencing such insurance shall be delivered to Agent at the
time of execution of this Agreement, with all premiums fully paid current, and each renewal or substitute policy shall be delivered
to Agent, and to the extent there is no escrow with the Agent for such premiums, evidence of all premiums fully paid current, at
least ten (10) days before the termination of the policy it renews or replaces. Borrower shall or shall cause Operator to pay all
premiums on policies required hereunder as they become due and payable, and to the extent there is no escrow with the Agent for
insurance premiums, promptly deliver to Agent evidence satisfactory to Agent of the timely payment thereof.

 

    	 	47	 

     

    

 

(c)          Agent’s
Purchase of Insurance. In the event Borrower fails to provide Agent with evidence of the Required Insurance in the manner set
forth in Section 9.3(a) or in the manner set forth in Section 9.3(b) above, Agent may purchase insurance
at Borrower’s expense to protect Agent’s interests in the Collateral. The insurance purchased by Agent may, but need
not, protect Borrower’s interests in the Collateral, and therefor such insurance 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 request that Agent cancel
any insurance purchased by Agent, but only after providing Agent with satisfactory evidence that Borrower has the Required Insurance.
If Agent purchases insurance covering all or any portion of the Collateral, Borrower shall be responsible for the costs of such
insurance, including interest (at the applicable rate set forth hereunder) and other charges accruing on the purchase price thereof,
until the effective date of the cancellation or the expiration of the insurance, and Agent may charge all of such costs, interest
and other charges to the Borrower. The costs of the premiums of any insurance purchased by Agent may exceed the costs of insurance
that Borrower may be able to purchase on its own. In the event that Agent purchases insurance, Agent will notify Borrower of such
purchase within thirty (30) days after the date of such purchase. If, within thirty (30) days after the date of receipt of such
notice, Borrower provides Agent with proof that Borrower had the Required Insurance as of the date on which Agent purchased insurance
and Borrower has continued at all times thereafter to have the Required Insurance, then Agent agrees to cancel the insurance purchased
by Agent and credit the Borrower’s Loan Account for the amount of all costs, interest and other charges associated with such
insurance that Agent previously charged to the Borrower’s Loan Account.

 

(d)          Application
of Insurance and Condemnation Proceeds. So long as no Default or Event of Default shall have occurred and remain outstanding
as of the date of Agent’s receipt of any Casualty Proceeds:

 

(i)          In
the event of any loss or damage to any Inventory by condemnation, fire or other casualty, Agent agrees to apply the Casualty Proceeds
first to repay the Term Loan in the manner set forth in Section 4.5(c).

 

(ii)         In
the event of any loss or damage to any item of Collateral other than Inventory by condemnation, fire or other casualty, if the
Casualty Proceeds relating to such condemnation, fire or other casualty are greater than or equal to $150,000, Agent may, at its
option in its sole discretion, apply such Casualty Proceeds to repair or replace such Collateral or to repay the outstanding Term
Loan.

 

    	 	48	 

     

    

 

(iii)        In
the event of any loss or damage to any item of Collateral by condemnation, fire or other casualty, if the Casualty Proceeds relating
to such condemnation, fire or other casualty are less than $150,000, the Borrower may elect (by delivering written notice to Agent
within ten (10) Business Days following Agent’s receipt of such Casualty Proceeds) to replace or repair such item of Collateral,
in which case Agent shall promptly remit such Casualty Proceeds to Borrower to be applied to the costs incurred in such repair
or replacement subject to the last paragraph of this Section 9.3.

 

(iv)        In
the event of any loss or damage to any real estate (not comprising the Real Property) leased by Borrower by condemnation, fire
or other casualty, Borrower may use the Casualty Proceeds in the manner required or permitted by the lease agreement relating thereto.
In the event of any loss or damage to any real estate owned by Borrower by condemnation, fire or other casualty, if the Casualty
Proceeds relating to such condemnation, fire or other casualty are less than $150,000, and so long as Borrower has sufficient business
interruption insurance to replace the lost profits of the facilities affected by the condemnation, fire or other casualty, Borrower
may elect to repair or replace such real estate, subject to the following terms:

 

If a Default or an
Event of Default shall have occurred and remain outstanding as of the date of Agent’s receipt of any Casualty Proceeds, or
if Borrower does not or cannot elect to use the Casualty Proceeds in the manner set forth in paragraphs (iii) or (iv) above
or if any lease of space in the Real Property shall be cancelled or terminated because of such casualty or loss, Agent may, subject
to the rights of any holder of a Permitted Encumbrance having priority over the security interests of Agent, apply the Casualty
Proceeds to the payment of the Obligations in such manner and in such order as Agent may elect in its sole and absolute discretion.

 

9.4           Payment
of Taxes. Borrower shall pay when due all Taxes lawfully levied, assessed or imposed upon Borrower or the Collateral (including
all sales taxes collected by Borrower on behalf of Borrower’s customers in connection with sales of Inventory and all payroll
taxes collected by Borrower on behalf of Borrower’s employees), unless Borrower is contesting such Taxes in good faith, by
appropriate proceedings, and are maintaining adequate reserves for such Taxes in accordance with GAAP. Notwithstanding the foregoing,
if a lien securing any Taxes is filed in any public office and such lien is not a Permitted Tax Lien, then Borrower shall pay all
Taxes secured by such lien immediately and remove such lien of record promptly. Pending the payment of such Taxes and removal of
such lien, Agent may, at its election and without curing or waiving any Event of Default which may have occurred as a result thereof,
(i) establish a reserve in the amount of such Taxes (or such other amount as Agent shall deem appropriate in the exercise
of its reasonable business judgment) or (ii) pay such Taxes on behalf of Borrower, and the amount paid by Agent shall become
an Obligation which is due and payable on demand by Agent.

 

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9.5           Compliance
with Laws.

 

(a)          Borrower
agrees to, and shall cause Operator to agree to, comply with all Laws, and all orders of any federal, state or local legislative,
administrative or judicial body or official, if the failure to so comply would reasonably be expected to have a Material Adverse
Effect; provided that Borrower may contest any acts, rules, regulations, orders and directions of such bodies or officials in any
reasonable manner which Agent determines, in the exercise of its reasonable business judgment, will not materially and adversely
affect Agent’s or the Lenders’ rights or priorities in the Collateral.

 

(b)          Without
limiting the generality of the foregoing, Borrower agrees to, and shall cause Operator to agree to, comply with all environmental
statutes, acts, rules, regulations or orders, as presently existing or as adopted or amended in the future, applicable to the ownership
and/or use of Borrower’s real property and operation of Borrower’s and Operator’s business, if the failure to
so comply would reasonably be expected to have a Material Adverse Effect. Borrower shall not be deemed to have breached any provision
of this Section 9.5(b) if (i) the failure to comply with the requirements of this Section 9.5(b) resulted
from good faith error or innocent omission, (ii) Borrower promptly commences and diligently pursues a cure of such breach
and (iii) such failure is cured within thirty (30) days following Borrower’s receipt of notice from Agent of such failure,
or if such breach cannot in good faith be cured within thirty (30) days following Borrower’s receipt of such notice, then
such breach is cured within a reasonable time frame based on the extent and nature of the breach and the necessary remediation,
and in conformity with any applicable consent order, consensual agreement and applicable Law.

 

(c)          Borrower
will and shall cause Operator to, (i) maintain in full force and effect, and free from restrictions, probations, conditions
or known conflicts which would materially impair the use or operation of any Healthcare Facility for its current use, all Permits
necessary under Healthcare Laws to continue to receive reimbursement under all Third Party Payor Programs in which any Operator,
Borrower or any Healthcare Facility participates as of the date of this Agreement, and (ii) provide to Agent upon request,
an accurate, complete and current list of all participation agreements with Third Party Payors with respect to the business of
Borrower and Operator (collectively, “Participation Agreements”). Borrower will, and Borrower shall cause Operator
to, at all times comply in all material respects with all requirements, contracts, conditions and stipulations applicable to Borrower
and Operator in order to maintain in good standing and without default or limitation all such Participation Agreements.

 

9.6           Notices
Concerning Environmental, Employee Benefit, Pension Matters and Healthcare Matters. Borrower agrees to notify Agent in
writing of:

 

(a)          any
expenditure (actual or anticipated) in excess of $25,000 for environmental clean-up, environmental compliance or environmental
testing and the impact of said expenses on Borrower’s working capital;

 

(b)          Borrower’s
or Operator’s receipt of notice from any local, state or federal authority advising Borrower or Operator of any environmental
liability (real or potential) arising from Borrower’s or Operator’s operations, its premises, its waste disposal practices
or waste disposal sites used by Borrower or Operator;

 

    	 	50	 

     

    

 

(c)          Borrower’s
receipt of notice from any governmental agency or any sponsor of any “multiemployer plan” (as that term is defined
in ERISA) to which Borrower has contributed, relating to any of the events described in Section 12.1(g) of this Agreement;

 

(d)          Borrower’s
or Operator’s receipt of material notices pertaining to Borrower, Operator or any Healthcare Facility, and copies of all
material notices received from any governmental agency or insurance company related to the Property or the Healthcare Facility
within seven (7) days after such notice is received by Borrower or Operator;

 

(e)          Borrower’s
or Operator’s receipt of notice of any investigation or audit, or pending or threatened proceedings relating to, any material
violation by Borrower or Operator of any Healthcare Law, including, without regard to materiality, (x) any investigation or
audit or proceeding involving violation of any of the Medicare and/or Medicaid fraud and abuse provisions and (y) any criminal
or civil investigation initiated, claim filed or disclosure required by the Office of Inspector General, the Department of Justice,
CMS or any other Government Authority;

 

(f)          Borrower’s
or Operator’s receipt of a written recommendation from any Government Authority or other regulatory body that such Operator
or Borrower should have its licensure, provider or supplier number or accreditation suspended, revoked or limited in any material
way, or have its eligibility to participate in Medicare, Medicaid or any other government program to accept assignments or rights
to reimbursement under Medicaid, Medicare or any other government program regulations suspended, revoked or limited in any material
way;

 

(g)          promptly
upon the chief operating officer of the manager of Borrower becoming aware of the existence of any condition or event which constitutes
a Default or Event of Default under any of the Loan Documents, together with a description of the nature and period of existence
thereto and what actions Borrower is taking (and proposes to take) with respect thereto;

 

(h)          any
notice of default, oral or written, given to Borrower by any creditor for borrowed money in excess of $50,000; and

 

(i)          any
Proceeding claiming in excess of $50,000 against Borrower or which, if adversely determined, would reasonably be expected to have
a Material Adverse Effect.

 

Borrower agrees to provide Agent promptly
(or within such timeframe specifically provided above, as applicable) with copies of all such notices and other information pertaining
to any matter set forth above if Agent so requests.

 

9.7           Collateral
Reporting; Billing and Collection System.

 

(a)          Borrower
agrees to furnish to Agent such information as Agent reasonably requires in connection with monitoring the Collateral, at the times
and in the manner determined by Agent, including Medicare and Medicaid cost reports and audits related to the Operator.

 

    	 	51	 

     

    

 

(b)          Each
Credit Party shall provide electronic access to Agent of its billing and collection system, on a read-only basis, for purposes
of permitting Agent to inspect and verify billing and collections transactions and related data in connection with the Collateral,
from time to time. Each Credit Party shall, if necessary, promptly rebill the applicable Account Debtor or, with respect to Government
Account Debtors, if requested by the primary servicer, cooperate fully with such servicer to rebill such Account Debtor.

 

9.8           Financial
Reporting. The Borrower agrees to deliver or furnish, or cause to be furnished, to Agent:

 

(a)          as
soon as available but in any event, within one hundred twenty (120) days after the end of each fiscal year of Borrower and Operator,
deliver financial statements of Borrower and Operator for such year which present fairly each of Borrower’s and Operator’s
financial condition including the balance sheet of Borrower and Operator as at the end of such fiscal year and a statement of cash
flows and income statement for such fiscal year, setting forth in comparative form, the corresponding figures as at the end of
and for the previous fiscal year, all in reasonable detail, including all supporting schedules, and internally prepared and reviewed
by independent public accountants of recognized standing, which shall be prepared in accordance with generally accepted auditing
standards;

 

(b)          as
soon as available but in any event within thirty (30) days after the end of each fiscal quarter, each of Borrower’s
and Operator’s internally prepared financial statements, along with year-to-date information, including a balance sheet,
income statement and statement of cash flows with respect to the periods measured;

 

(c)          contemporaneously
with the delivery of the annual and quarterly financial statements referred to in clauses (a) and (b) above and the monthly
financial statements referred to in clause (d) below, such financial reports and information as Agent shall require evidencing
compliance with the applicable financial covenants, which reports and information shall include, at a minimum, delivery to Agent
of a Compliance Certificate substantially in the form of Exhibit D attached hereto, signed by an authorized financial
or accounting officer or manager of the Borrower Representative (or any other Authorized Officer satisfactory to Agent), and, if
requested by Agent, backup documentation (including invoices, receipts and other evidence of costs incurred during such quarter
as Agent shall reasonably require) evidencing the propriety of the deductions from revenues in determining such compliance;

 

(d)          as
soon as available but in any event within thirty (30) days after the end of each month, deliver to Agent, Borrower’s and
Operator’s internally prepared monthly financial statements, along with year-to-date information, including census data,
a balance sheet, income statement and statement of cash flows with respect to the periods measured;

 

(e)          if
a Default or an Event of Default shall have occurred and remains outstanding, as soon as practicable and in any event: (i) within
fifteen (15) days after the end of each month, (A) a detailed trial balance of Operator’s Accounts aged by Account
Debtor per date of service, in form and substance reasonably satisfactory to Agent, including, without limitation, the names and
addresses of all Account Debtors of Operator and the patients to whom such Account Debtors relate, and (B) a summary and detail
of accounts payable (such Accounts and accounts payable divided into such time intervals as Agent may require in its sole discretion),
including a listing of any held checks; and (ii) within ten (10) days after the end of each month, (x) completed
Account Debtor reconciliation form, in a format provided by Agent, (y) a text file containing a list of Operator’s Accounts
aged by Account Debtor per date of service, including, without limitation, the names and addresses of all Account Debtors of Operator
and a payor concentration schedule, and (z) census data for the Healthcare Facility;

 

    	 	52	 

     

    

 

(f)          if
a Default or an Event of Default shall have occurred and remains outstanding, as and when filed by Borrower and Operator, copies
of all (x) financial reports, registration statements and other documents filed by such Borrower or Operator with the U.S.
Securities and Exchange Commission, as and when filed by such Borrower or Operator, and (ii) annual reports filed pursuant
to ERISA in connection with each benefit plan of each Borrower and/or Operator subject to ERISA;

 

(g)          at
least fifteen (15) days prior to the first day of each fiscal year, annual projections for each of Borrower and Operator
for such year, including a balance sheet, income statement and statement of cash flow projections, all prepared on a monthly basis;

 

(h)          if
a Default or an Event of Default shall have occurred and remains outstanding, contemporaneously with delivery of the annual financial
statements referred to in clause (a) above, census data for Operator and a good standing certificate from each Borrower’s
and Operator’s jurisdiction of organization evidencing that such Borrower and Operator remains in good standing in, and continues
to be organized under the laws of, such jurisdiction;

 

(i)          on
the last business day of each fiscal quarter, evidence satisfactory to Agent that all payroll taxes for the Borrower and Operator,
that are due have been paid in full, including without limitation, evidence of such payment;

 

(j)          promptly
upon receipt thereof, copies of all financial reports and other information Borrower receives from Operator as required under the
Operating Lease;

 

(k)          upon
Agent’s request, on the last Business Day of every month, evidence satisfactory to Agent that all federal and state taxes
that are due have been paid in full, including without limitation copies of the most recently filed Form 941 for Borrower and Operator
together with evidence of such payment; and

 

(l)          such
other data, reports, statements and information (financial or otherwise), as Agent may reasonably request.

 

Should Borrower or
Operator modify its accounting principles and procedures from those in effect on the Closing Date, Borrower agrees to prepare and
deliver to Agent and the Lenders statements of reconciliation in form and substance reasonably satisfactory to Agent.

 

9.9           Audits.
From time to time (but no more than twice in any twelve (12) month period) upon the request of Agent (or at any time during the
existence of an Event of Default), the Borrower agrees to permit Agent to perform audits of Borrower’s books and records.
The Borrower agrees to reimburse Agent for the reasonable costs and expenses relating to any such audits (but no more than twice
in any twelve (12) month period absent an Event of Default), which shall constitute Out-of-Pocket Expenses.

 

    	 	53	 

     

    

 

9.10         Business
Qualification. Borrower agrees to qualify to do business, and to remain qualified to do business and in good standing,
in each jurisdiction where the failure to so qualify, or to remain qualified or in good standing, would reasonably be expected
to have a Material Adverse Effect.

 

9.11         Hazardous
Materials; Remediation.

 

(a)          If
any release or disposal of Hazardous Materials shall occur or shall have occurred on any real property or any other assets of Borrower
or Operator, Borrower will cause, or direct the Operator to cause, the prompt containment and removal of such Hazardous Materials
and the remediation of such real property or other assets as is necessary to comply with all applicable Environmental Laws and
to preserve the value of such real property or other assets. Without limiting the generality of the foregoing, Borrower shall,
and shall cause Operator to, comply with each applicable Environmental Law requiring the performance at any real property by Borrower
or any other Operator of activities in response to the release or threatened release of any Hazardous Material.

 

(b)          In
the event the cost of removing, treating and disposing of any Hazardous Materials or Hazardous Materials Contamination is determined
to cost in excess of $250,000, Borrower will provide Agent within thirty (30) days after written demand therefor with a bond, letter
of credit or similar financial assurance evidencing to the reasonable satisfaction of Agent that sufficient funds are available
to pay the cost of removing, treating and disposing of any Hazardous Materials or Hazardous Materials Contamination and discharging
any assessment which may be established on any property as a result thereof, such demand to be made, if at all, upon Agent’s
reasonable business determination that the failure to remove, treat or dispose of any Hazardous Materials or Hazardous Materials
Contamination, or the failure to discharge any such assessment could reasonably be expected to have a Material Adverse Effect.

 

9.12         Use
of Proceeds. Borrower agrees that the proceeds of the Term Loan shall be used by Borrower solely for: (a) payment
of transaction fees incurred in connection with this Agreement, (b) refinancing or termination of the Closing Date of Indebtedness
of Borrower, and (c) for working capital purposes.

 

9.13         Tax
Returns and Reports. At Agent’s request from time to time, Borrower shall promptly furnish Agent with copies of the
annual federal and state income tax returns of Borrower.

 

9.14         Material
Adverse Developments. Borrower agrees that immediately upon it or any of its officers becoming aware of any development
or other information which would reasonably be expected to materially and adversely affect the businesses, financial condition,
property or prospects of a Borrower or Borrower’s ability to perform under this Agreement, it shall give to Agent telephonic
or facsimile notice specifying the nature of such development or information and such anticipated effect.

 

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9.15        Borrower
Changes. Borrower shall give thirty (30) days prior written notice to Agent of any changes in (a) its jurisdiction
of organization, (b) in the location of any of its chief executive office or any other places of business, or the establishment
of any new, or the discontinuance of any existing place of business, and (c) its name.

 

9.16        Business
Conducted. Borrower shall continue in the business presently operated by it using its best efforts to maintain its customers.
Borrower shall not engage, directly or indirectly, in any material respect in any line of business substantially different from
the businesses conducted by it immediately prior to the Closing Date (after giving effect to the purchase of the Healthcare Facility
and the acquisition of the Real Property).

 

9.17        Healthcare
Operations. Without limiting the generality of the foregoing covenants and to induce Agent and Lenders to enter into this
Agreement and to make the Term Loan and other credit accommodations contemplated hereby, Borrower hereby covenants and agrees with
Agent and Lenders that:

 

(a)          Borrower
will or will cause Operator or Manager to:

 

(i)          maintain
in full force and effect, and free from restrictions, probations, conditions or known conflicts which would materially impair the
use or operation of any Healthcare Facility for its current use, all Healthcare Permits necessary under Healthcare Laws (A) to
carry on the business of Borrower and Operator as it is conducted on the Closing Date, and (B) if Operator receives or has
applied for Medicaid or Medicare reimbursements as part of its business, to continue to receive reimbursement under Medicare and
Medicaid in substantial compliance with all requirements for participation in, and for the licensure required to provide the services
that are reimbursable under, Medicare and Medicaid, including, without limitation, the Medicare and Medicaid Patient Protection
Act of 1987, as the same may be amended, and such other Third Party Payor Programs as to which any Operator receives or has applied
for reimbursement as part of its business;

 

(ii)         not
suffer or permit to occur any of the following:

 

(1)         any
transfer of a Healthcare Permit or rights thereunder to any Person (other than Borrower or Lender) or to any location other than
a Healthcare Facility approved by Agent in advance in writing;

 

(2)         any
pledge or hypothecation of any Healthcare Permit as collateral security for any indebtedness other than indebtedness to Agent and
Lenders;

 

(3)         any
rescission, withdrawal, revocation, amendment or modification of or other alteration to the nature, tenor or scope of any Healthcare
Permit without Agent’s prior written consent, including, without limitation, (i) any change to the authorized units/beds
capacity of any Healthcare Facility and/or the number of units/beds approved by the applicable Government Authority, and (ii) any
transfer all or any part of any Healthcare Facility’s authorized units or beds to another site or location;

 

    	 	55	 

     

    

 

(4)         any
voluntary transfer of any resident of any Healthcare Facility to any other facility, unless such transfer is at the request of
the resident (without economic incentives being given to the resident by an Affiliate of Operator) or its payor or is for reasons
relating to non-payment or the health, required level of medical care or safety of the resident to be transferred;

 

(5)         without
Agent’s prior written consent, the provision by Operator of regulated services in addition to those required by Healthcare
Permits at any Healthcare Facility; or

 

(6)         any
fact, event or circumstance for which notice to Lender is required under Section 9.6 and which would reasonably be
expected to have a Material Adverse Effect on Borrower;

 

(iii)        cause
all Healthcare Permits and any other agreements necessary for the use and operation of the Healthcare Facility to remain in effect
without reduction in the number of licensed beds or beds authorized for use in applicable Third Party Payor Programs;

 

(iv)        following
the occurrence and during the continuance of any Event of Default, upon Lender’s request, if permitted by any applicable
legal requirements, turn over to Lender all resident deposits (and any interest theretofore earned thereon) with respect to the
Healthcare Facilities, to be held by Lender subject to the terms of their related agreements;

 

(v)         provide
to Lender upon request, an accurate, complete and current list of all participation agreements with Third Party Payors with respect
to the business of Operator; and

 

(vi)        maintain
a corporate health care regulatory compliance program (“CCP”) which includes at least the following components
and allows Lender and/or any outside consultants from time to time to review such CCP: (a) standards of conduct and procedures
that describe compliance policies regarding Laws with an emphasis on prevention of fraud and abuse; (b) specific officer within
high-level personnel identified as having overall responsibility for compliance with such standards and procedures; (c) training
and education programs which effectively communicate the compliance standards and procedures to employees and agents, including,
without limitation, fraud and abuse Laws and illegal billing practices; (d) auditing and monitoring systems and reasonable
steps for achieving compliance with such standards and procedures including, without limitation, publicizing a report system to
allow employees and other agents to anonymously report criminal or suspect conduct and potential compliance problems; (e) disciplinary
guidelines and consistent enforcement of compliance policies including, without limitation, discipline of individuals responsible
for the failure to detect violations of the CCP; and (f) mechanisms to immediately respond to detected violations of the CCP.

 

    	 	56	 

     

    

 

(b)          If
any Healthcare Facility is currently accredited by JCAHO, Operator shall (i) maintain such accreditation in good standing
and without limitation or impairment, (ii) promptly submit to JCAHO a plan of correction for any deficiencies listed on any
JCAHO accreditation survey report, and (iii) cure all such deficiencies within such time frame as is necessary to preserve
and maintain in good standing and without limitation or impairment such JCAHO accreditation.

 

(c)          If
required under applicable Healthcare Laws, Borrower has and shall maintain or shall cause Operator to have and maintain, in full
force and effect a valid CON for no less than the number of beds and units in the Healthcare Facilities as of the date of this
Agreement.

 

(d)          Borrower
shall, or shall cause Operator to, maintain any applicable CON free from restrictions or known conflicts which would materially
impair the use or operation of each Healthcare Facility for its current use, and shall not permit any CON to become provisional,
probationary or restricted in any way.

 

9.18         Additional
Pledgors. In the event that any Person becomes a holder of any Equity Interest of Borrower and such Person is not a party
to the Pledge Agreements, Borrower shall cause such Person to join such Pledge Agreements as a pledgor simultaneously with such
Person becoming such holder of Equity Interest. In the event that any equity is certificated, such Person shall deliver to Agent
such certificates representing all owned interests in Borrower with attached transfer powers executed in blank.

 

9.19         Operator
Financing. Pursuant to the terms of the Operating Lease, Borrower
shall cause Operator to grant to Borrower a lien and security interest in all tangible and intangible assets of such Operator,
which lien shall be assigned to the Agent and, if at any time on or after the Closing Date, Operator obtains a loan, debt financing
or a revolving line of credit from any bank, financial institution or lender (“Operator’s Lender”)
other than Agent, Borrower shall cause Operator’s lender, prior to closing any such financing, to enter into an Intercreditor
Agreement with Borrower or Lender in form and substance acceptable to the Lender.

 

9.20         Syndications.

 

(a)          General.
Borrower hereby acknowledges that Lenders may, with Agent’s prior written consent (which may be given as to each instance
or generally as to all instances), in one or more transactions (i) sell, or otherwise transfer the Term Loan or any portion
thereof one or more times, (ii) sell participation interests in the Term Loan one or more times, (iii) further divide
or re-divide the Term Loan into two or more separate notes or components which may take the form of senior/junior/mezzanine notes
or components or senior/subordinate notes or components or multiple components of such division, and which may be secured by some
or all of the Collateral, or (iv) grant, pledge, assign a security interest in or otherwise collaterally transfer all or any
portion of its rights under this Agreement and the other Loan Documents to secure obligations of such Lender to any other Person
(the transactions referred to in clauses (i) through (iv) above, each a “Secondary Market Transaction”,
and collectively “Secondary Market Transactions”). With respect to any Secondary Market Transaction described
in clause (iii) above, such notes or note components may be assigned different interest rates, so long as, at such time
the weighted average of the relevant interest rates equals the Libor Rate.

 

    	 	57	 

     

    

 

(b)          Borrower
Cooperation. Borrower shall cooperate with Lenders and use Borrower’s good faith efforts to facilitate the consummation
of each Secondary Market Transaction including, without limitation, by: (i) amending or causing the amendment of any Loan
Document, and executing such additional documents, instruments and agreements as may be reasonably required by Lenders in connection
with the relevant Secondary Market Transaction, provided any such amendment does not affect the economic terms contained in the
Loan Documents or otherwise increase in any material respect Borrower’s, Guarantor’s or Operator’s obligations
under the Loan Documents; (ii) promptly and reasonably providing such information (including, without limitation, financial
information) as may be requested in connection with the preparation of a private placement memorandum, prospectus or a registration
statement required to privately place or publicly distribute the securities in a manner which does not conflict with federal or
state securities laws; (iii) providing in connection with each of (A) a preliminary and a final private placement memorandum
or other offering documents or (B) a preliminary and final prospectus, as applicable (each, a “Disclosure Document”),
a certificate certifying that Borrower has carefully examined those sections of such Disclosure Documents, as applicable, pertaining
to Borrower, its Affiliates, the Term Loan, and the Healthcare Facilities and that such sections (and any other sections reasonably
requested by a Lender) do not contain any untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in the light of the circumstances under which they were made, not misleading; (iv) causing to
be rendered such opinion letters reasonably requested by the Lender for the relevant Secondary Market Transaction; (v) making
such representations, warranties and covenants, as may be reasonably requested by a Lender for the Secondary Market Transaction;
and (iv) providing any other information and materials reasonably required in the Secondary Market Transaction. Borrower shall
be responsible only for their own costs and expenses (including attorneys’ fees) and shall not be responsible for any third
party costs and expenses incurred by Lenders in connection with any Secondary Market Transaction.

 

9.21         Maintenance
of Existence; Single Purpose Entity Requirements. Borrower will preserve, renew and keep in full force and effect their
respective existence and all material rights, privileges, Permits and franchises necessary in the normal conduct of business. Borrower
will preserve, renew and keep in full force and effect their respective existence and their respective rights, privileges, Permits
and franchises necessary or desirable to, at all times, comply with all Single Purpose Entity requirements set forth on Exhibit E.
Borrower shall, as of the Closing Date and throughout the term of the Term Loan, include in their respective Organizational Documents
each of the Single Purpose Entity requirements set forth on Exhibit E.

 

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SECTION 10.

FINANCIAL COVENANTS

 

Until and including the Termination Date, Borrower agrees, on
a combined basis:

 

10.1         Fixed
Charge Coverage Ratio. For the Test Period ending on December 31, 2015, and at all times thereafter, for each Test Period
measured as of the last day of each fiscal quarter, to maintain a Fixed Charge Coverage Ratio of not less than 1.10 to 1.00.

 

10.2         Debt
Service Coverage Ratio. For the Test Period ending on December 31, 2015, and at all times thereafter, for each Test Period
measured as of the last day of each fiscal quarter, to maintain a Debt Service Coverage Ratio of not less than 1.50 to 1.00.

 

SECTION 11.

NEGATIVE COVENANTS

 

On the Closing Date
and at all times thereafter until and including the Termination Date:

 

11.1         Liens
and Encumbrances. Borrower shall not (and shall not permit Operator to) mortgage, assign, pledge, transfer or otherwise
permit any lien, charge, security interest, encumbrance or judgment (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of the Collateral or its other assets, whether now owned
or hereafter acquired, except for the Permitted Encumbrances.

 

11.2         Indebtedness.
Borrower shall not incur or create any Indebtedness other than the Permitted Indebtedness.

 

11.3         Sale
of Assets. Borrower shall not (and shall not permit Operator to) sell, lease, assign, transfer or otherwise dispose of
(a) Collateral, except as otherwise specifically permitted by this Agreement, or (b) all or any substantial part of its
assets, if any, which do not constitute Collateral. Notwithstanding the foregoing, (1) Borrower may (x) sell, transfer or
otherwise dispose of Inventory in the ordinary course of business and (y) so long as no Default or Event of Default has occurred
and is continuing, sell, transfer or otherwise dispose of Equipment for fair market value, sell or trade-in Equipment in connection
with the acquisition of replacement Equipment and sell, transfer or otherwise dispose of obsolete Equipment and (2) without the
prior consent of Lender, Healthcare Real Estate Holdings, LLC, may assign or transfer one hundred percent (100%) of its Equity
Interests in Borrower to Cornerstone Healthcare Holdings 1, LLC, provided that no Event of Default has occurred and is continuing
and Borrower shall or shall cause to be executed such documents in connection therewith that Lender may reasonably request.

 

11.4         Corporate
Change. Borrower shall not (and shall not permit Operator to) (a) merge or consolidate with any other entity, (b) change
its name or principal places of business, (c) change its structure or organizational form, or reincorporate or reorganize
in a new jurisdiction, (d) enter into or engage in any operation or activity materially different from that being conducted
as of the Closing Date by Borrower, Operator or any Guarantor, as the case may be or (e) revise its Organizational Documents;
provided that Borrower, any Guarantor and any subsidiary of Borrower may change its name or its principal place of business so
long as Borrower provides the Agent with thirty (30) days prior written notice thereof and the appropriate parties execute and
deliver to the Agent, prior to making such change, all documents and agreements required by the Agent in order to ensure that the
liens and security interests granted to the Agent, for its benefit and for the benefit of the Lenders, hereunder continue in effect
without any break or lapse in perfection.

 

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11.5         Guaranty
Obligations. Borrower shall not (and shall not permit Operator to) assume, guarantee, endorse or otherwise become liable
upon the obligations of any person, firm, entity or corporation, except pursuant to this Agreement and the other Loan Documents,
and by the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business.

 

11.6         Dividends
and Distributions. Borrower shall not declare or pay any dividend or Distribution of any kind on, or purchase, acquire,
redeem or retire, any of its Equity Interests (of any class or type whatsoever), whether now or hereafter issued and outstanding
other than Permitted Distributions, if any Default or Event of Default exists at such time or would result therefrom. For the avoidance
of doubt, subject to the terms and conditions set forth in Section 11.9, if no Default or Event of Default exists, Borrower shall
be permitted to pay dividends and make distributions in the ordinary course.

 

11.7         Investments.
Borrower shall not (and shall not permit Operator to) (i) create any new subsidiary, or (ii) make any advance or loan
to, or any investment in, any firm, entity, person or corporation other than Permitted Intercompany Loans, or (iii) acquire
all or substantially all of the assets of, or any capital stock or any Equity Interests in, any firm, entity or corporation, other
than current investments of Borrower, any Guarantor and any subsidiary of Borrower, as the case may be, in existing subsidiaries
of such entities, or Permitted Investments.

 

11.8         Related
Party Transactions. Borrower shall not (and shall not permit Operator) to enter into any transaction, including any purchase,
sale, lease, loan or exchange of property, with any shareholder, officer, director, parent (direct or indirect), subsidiary (direct
or indirect) or other person or entity otherwise affiliated with Borrower, any Guarantor or any subsidiary of Borrower, unless
(i) such transaction otherwise complies with the provisions of this Agreement, (ii) such transaction is for the sale
of goods or services rendered in the ordinary course of business and pursuant to the reasonable requirements of Borrower, any Guarantor
or any subsidiary of Borrower, as the case may be, and upon standard terms and conditions and fair and reasonable terms, no less
favorable to such entity than such entity could obtain in a comparable arms-length transaction with an unrelated third party, and
(iii) no Default or Event of Default shall have occurred and remain outstanding at the time such transaction occurs, or would
occur after giving effect to such transaction.

 

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11.9         Restricted
Payments.

 

(a)          Borrower
shall not (and shall not permit any Operator to) make any payment of the principal of, or interest on, any Subordinated Debt, or
purchase, acquire or redeem any of the Subordinated Debt, unless (x) such payment, purchase, acquisition or redemption of
such Subordinated Debt is expressly permitted by the terms of the applicable Subordination Agreement and (y) no Default or
Event of Default shall have occurred and remain outstanding on the date on which such payment or transaction occurs, or would occur
as a result thereof;

 

(b)          Borrower
shall not make or pay any dividends, salaries or other fees or compensation to any Person holding an Equity Interest in Borrower
(other than (A) payments of salaries to individuals, (B) directors’ fees, and (C) advances and reimbursements
to employees or directors, all in the ordinary course of Borrower’s business and consistent with past practices) other than
with respect to any dividend or other cash payment, those dividend or other cash payments to the extent (x) Borrower provides Agent
with a Compliance Certificate at least five (5) Business Days prior to any such dividend or payment evidencing Borrower’s
pro-forma compliance with Section 10 of this Agreement after giving effect to any such dividend or payment and (y) no Default
or Event of Default shall exist or be created by the payment of any such dividend or payment.

 

11.10         Manager;
Management Agreements. Other than the Management Agreement entered into by and between Operator and Manager, Borrower shall
not enter into any Management Agreement for any Healthcare Facility without the prior written consent of Agent. Any manager shall
be required to enter into an assignment and subordination of Management Agreement in form and substance reasonably satisfactory
to Agent.

 

11.11         Operating
Leases. Borrower shall not suffer or permit any material breach or default to occur in any of Borrower’s obligations
under any Operating Lease, nor suffer or permit the same to terminate by reason of any failure of Borrower to meet any requirement
thereof. Borrower shall notify Agent promptly in writing in the event Operator materially defaults under any Operating Lease. Furthermore,
any such Operating Lease shall not be modified or amended in any material respect without first obtaining the Agent’s prior
written approval.

 

11.12         Prohibited
Uses of Proceeds. Borrower shall not use the proceeds of any Term Loan made under this Agreement, directly or indirectly,
in violation of any applicable Law or regulation, including without limitation Regulation T, U or X of the Board of Governors of
the Federal Reserve System as from time to time in effect (and any successor regulation or official interpretation of such Board),
or to purchase or carry any “margin stock,” as defined in Regulations U and X, or any “margin security,”
“marginable OTC stock” or “foreign margin stock” within the meaning of Regulation T, U or X.

 

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11.13         Compliance
with Anti-Terrorism Laws. Agent and Lenders hereby notify Borrower that pursuant to the requirements of Anti-Terrorism
Laws, and Agent’s policies and practices, Agent and Lenders are required to obtain, verify and record certain information
and documentation that identifies Borrower and its principals, which information includes the name and address of Borrower and
its principals and such other information that will allow Agent and Lenders to identify such party in accordance with Anti-Terrorism
Laws. Borrower will not, or will not permit any Subsidiary to, directly or indirectly, knowingly enter into any Material Contracts
with any Blocked Person or any Person listed on the OFAC Lists. Borrower shall immediately notify Agent and Lenders if Borrower
has knowledge that Borrower, the Operator or any additional Credit Party or any of their respective Affiliates or agents acting
or benefiting in any capacity in connection with the transactions contemplated by this Agreement is or becomes a Blocked Person
or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over
on charges involving money laundering or predicate crimes to money laundering. Borrower will not, or will not permit any Subsidiary
to, directly or indirectly, (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including,
without limitation, the making or receiving of any contribution of funds, goods or services to or for the benefit of any Blocked
Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law, or (iii) engage in or conspire
to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.

 

11.14         Borrower’s
Statements. Borrower shall furnish to Lender no certificate or other document that contains any untrue statement of a material
fact or that omits to state a material fact necessary to make it not misleading in light of the circumstances under which it was
furnished.

 

11.15         Limitation
on Sale and Leaseback Transactions. Borrower will not, directly or indirectly, enter into any arrangement with any Person
whereby, in a substantially contemporaneous transaction, Borrower sells or transfers all or substantially all of its right, title
and interest in an asset and, in connection therewith, acquires or leases back the right to use such asset.

 

SECTION 12.

EVENTS OF DEFAULT AND REMEDIES

 

12.1         Events
of Default. Each of the following events shall constitute an “Event of Default” under this Agreement:

 

(a)          the
failure of Borrower to (i) pay any of the principal and interest payment due hereunder within four (4) days after such principal
and interest payments become due, provided that nothing contained herein shall prohibit Agent from charging such amounts to the
Borrower’s Loan Account on the due date thereof; or (ii) pay any other Obligations (other than principal and interest payments
referenced under Section 12.1(a)(i) above) on the due date thereof, provided that nothing contained herein shall prohibit Agent
from charging such amounts to the Borrower’s Loan Account on the due date thereof;

 

(b)          the
breach or violation by Borrower of any warranty, representation or covenant contained in Article 6, Article 7,
Sections 8.2, 8.3, 8.4, 9.3, 9.4, Article 10 or Article 11;

 

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(c)          the
breach or violation by Borrower of any warranty, representation or covenant contained in this Agreement (other than those referred
to in Section 12.1(b) above), provided that such breach or violation shall not be deemed to be an Event of Default
unless Borrower fails to cure such breach or violation to Agent’s reasonable satisfaction within five (5) days from
the date of such breach or violation, provided, however, Borrower shall have an additional thirty (30) days to cure such breach
or violation if (i) such breach or violation does not involve the failure to make payment on a monetary obligation (ii) such breach
or violation cannot reasonably be cured within five (5) days; and (iii) Borrower is diligently undertaking to cure such breach
or violation;

 

(d)          the
cessation of the business of any Credit Party or the Operator (so long as the Operator is an Affiliate of Borrower), or the calling
of a meeting of the creditors of any Credit Party or the Operator (so long as the Operator is an Affiliate of Borrower) for purposes
of compromising its debts and obligations;

 

(e)          the
failure of any Credit Party or the Operator (so long as the Operator is an Affiliate of Borrower) to generally meet its debts as
those debts mature;

 

(f)          
(i) the commencement by any Credit Party or the Operator (so long as the Operator is an Affiliate of Borrower) of any bankruptcy,
insolvency, arrangement, reorganization, receivership, assignment for the benefit of creditors or similar proceedings under any
federal or state law; or (ii) the commencement against any Credit Party or the Operator (so long as the Operator is an Affiliate
of Borrower) of any bankruptcy, insolvency, arrangement, reorganization, receivership, assignment for the benefit of creditors
or similar proceeding under any federal or state law by creditors of any of them, but only if such proceeding is not contested
by such Credit Party or the Operator (so long as the Operator is an Affiliate of Borrower), as applicable, within thirty (30)
days and not dismissed or vacated within sixty (60) days of commencement, or any of the actions or relief sought in any such proceeding
shall occur or be authorized by such Credit Party or the Operator (so long as the Operator is an Affiliate of Borrower), as applicable;

 

(g)          Borrower
shall (i) engage in any “prohibited transaction” as defined in ERISA, (ii) incur any “accumulated funding
deficiency” as defined in ERISA, (iii) incur any “reportable event” as defined in ERISA, (iv) terminate
any “plan”, as defined in ERISA or (v) become involved in any proceeding in which the Pension Benefit Guaranty
Corporation shall seek appointment, or is appointed, as trustee or administrator of any “plan”, as defined in ERISA,
and with respect this Section 12.1(g), such event or condition either (x) remains uncured for a period of thirty
(30) days from date of occurrence and (y) could, in Agent’s reasonable business judgment, subject Borrower to any tax,
penalty or other liability having a Material Adverse Effect;

 

(h)          the
occurrence of any default or event of default (after giving effect to any applicable grace or cure period) under any of the other
Loan Documents, or any of the other Loan Documents ceases to be valid, binding and enforceable in accordance with its terms;

 

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(i)          If
any Credit Party shall default beyond any grace period under any agreement with respect to any Indebtedness or Subordinated Debt
having a principal amount in excess of $100,000 and (i) such default consists of the failure to pay any principal, premium
or interest with respect to such Indebtedness or Subordinated Debt or (ii) such default consists of the failure to perform
any covenant or agreement with respect to such Indebtedness or Subordinated Debt, if the effect of such default is to cause or
permit such Indebtedness or Subordinated Debt to become due prior to its maturity date or prior to its regularly scheduled date
of payment;

 

(j)          Borrower
shall modify the terms or provisions of any agreement, instrument or other document relating to any Subordinated Debt without Agent’s
prior written consent, unless such modification is permitted by the applicable Subordination Agreement;

 

(k)          a
Change of Control or Material Adverse Effect shall occur;

 

(l)          a
final judgment for the payment of money in excess of $100,000 shall be rendered against Borrower or a final judgment for the payment
of money in excess of $100,000 shall be rendered against any Guarantor (other than a judgment as to which a financially sound and
reputable insurance company has acknowledged coverage of such claim in writing), and either (i) within sixty (60) days after
the entry of such judgment, shall not have been discharged or stayed pending (or if stayed pending appeal, shall not have been
discharged within thirty (30) days after the entry of a final order of affirmance on appeal), or (ii) enforcement proceedings
shall be commenced by any holder of such judgment;

 

(m)          a
default or event of default by Borrower or Operator, or the breach or threatened breach by any Person, under any Operating Lease
which Agent reasonably believes will result in, or which results in, a Material Adverse Effect;

 

(n)          any
Guarantor or pledgor shall attempt to terminate its Guaranty Agreement or Pledge Agreement or deny that such Guarantor or pledgor
has any liability thereunder, or any Guaranty Agreement or Pledge Agreement shall be declared null and void and of no further force
and effect;

 

(o)          Borrower
shall be prohibited or otherwise restrained from conducting the business theretofore conducted by it at any of its Healthcare Facilities
in any manner that has or could reasonably be expected to have or result in a Material Adverse Effect by virtue of any determination,
ruling, decision, decree, ordinance or order of any court of competent jurisdiction, Government Authority or municipality;

 

(p)          a
state or federal regulatory agency shall have revoked any material Permit, including any license, permit, certificate or Medicaid
or Medicare qualification pertaining to any Healthcare Facility of Borrower, regardless of whether such material Permit was held
by or originally issued for the benefit of Borrower;

 

(q)          any
instruction or agreement regarding the Commercial Depository Account or the bank accounts related thereto is amended or terminated
without the written consent of Agent; or

 

(r)          Borrower
or other Credit Party shall fail to satisfy or deliver, or cause to be satisfied or delivered, any Post Closing Matter in accordance
with Section 9.2.

 

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12.2         Remedies
With Respect to Outstanding Loans. Upon the occurrence and during the continuance of an Event of Default, Agent may, at
its option, and Agent shall, upon the request of the Required Lenders, (a) declare all Obligations immediately due and payable
(including, without limitation, the Prepayment Premium and the Exit Fee), (b) charge Borrower the Default Rate of Interest
on all then outstanding or thereafter incurred Obligations in lieu of the interest provided for in Section 6.1 of this
Agreement, and (c) immediately terminate this Agreement upon notice to Borrower. Notwithstanding the foregoing, this Agreement
automatically shall terminate and all Obligations shall become due and payable immediately without any declaration, notice or demand
by Agent or the Lenders, upon the commencement by any Credit Party or the Operator of any proceeding described in clause (i) of
Section 12.1(f) or the occurrence of an Event of Default described in clause (ii) of Section 12.1(f).
The exercise of any option is not exclusive of any other option that may be exercised at any time by Agent or the Lenders.

 

12.3         Remedies
with Respect to Collateral. Immediately after the occurrence and during the continuance of an Event of Default, Agent may,
at its option, and Agent shall, upon the request of the Required Lenders, to the extent permitted by applicable Law: (a) remove
from any premises where same may be located any and all books and records, computers, electronic media and software programs associated
with any Collateral (including electronic records, contracts and signatures pertaining thereto), documents, instruments and files,
and any receptacles or cabinets containing same, relating to the Accounts, and Agent may use, at Borrower’s expense, such
of Borrower’s personnel, supplies or space at Borrower’s place of business or otherwise, as may be necessary to properly
administer and control the Accounts or the handling of collections and realizations thereon; (b) bring suit, in the name of
Borrower, the Lenders or Agent on behalf of the Lenders, and generally shall have all other rights respecting the Accounts, including
the right to (i) accelerate or extend the time of payment, (ii) settle, compromise, release in whole or in part any amounts
owing on any Accounts and (iii) issue credits in the name of Borrower or Agent; (c) sell, assign and deliver the Collateral
and any returned, reclaimed or repossessed merchandise, with or without advertisement, at public or private sale, for cash, on
credit or otherwise, at Agent’s sole option and discretion, and Agent, on behalf of the Lenders, may bid or become a purchaser
at any such sale, free from any right of redemption, which right is hereby expressly waived by Borrower; (d) foreclose Agent’s
security interests in the Collateral by any available judicial procedure, or take possession of any or all of the Collateral without
judicial process, and to enter any premises where any Collateral may be located for the purpose of taking possession of or removing
the same; and (e) exercise any other rights and remedies provided at law, in equity, by contract or otherwise. While an Event
of Default exists, Agent shall have the right, without notice or advertisement, to sell, lease, or otherwise dispose of all or
any part of the Collateral whether in its then condition or after further preparation or processing, in the name of Borrower or
Agent, on behalf of the Lenders, or in the name of such other party as Agent may designate, either at public or private sale or
at any broker’s board, in lots or in bulk, for cash or for credit, with or without warranties or representations (including
warranties of title, possession, quiet enjoyment and the like), and upon such other terms and conditions as Agent in its sole discretion
may deem advisable, and Agent shall have the right to purchase at any such sale on behalf of the Lenders. In exercising its remedies
hereunder in accordance with the terms hereof, if any Inventory and Equipment shall require rebuilding, repairing, maintenance
or preparation, Agent shall have the right, at its option, to do such of the aforesaid as is necessary, for the purpose of putting
the Inventory and Equipment in such saleable form as Agent shall deem appropriate. Borrower agrees, at the request of Agent while
an Event of Default exists, to assemble the Inventory and Equipment, and to make it available to Agent at premises of Borrower
or elsewhere and to make available to Agent the premises and facilities of Borrower for the purpose of Agent’s taking possession
of, removing or putting the Inventory and Equipment in saleable form. If notice of intended disposition of any Collateral is required
by law, it is agreed that ten (10) days notice shall constitute reasonable notification and full compliance with the law. The net
cash proceeds resulting from Agent’s exercise of any of the foregoing rights (after deducting all Out-of-Pocket Expenses
relating thereto) shall be applied by Agent to the payment of the Obligations in the order set forth in Section 12.4
hereof, and Borrower shall remain liable to Agent and the Lenders for any deficiencies to the extent permitted by applicable law,
and Agent, in turn, agrees to remit to Borrower or their successors or assigns, any surplus resulting therefrom. The enumeration
of the foregoing rights is not intended to be exhaustive and the exercise of any right shall not preclude the exercise of any other
right of Agent or the Lenders under applicable Law or the other Loan Documents, all of which shall be cumulative.

 

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12.4         Application
of Proceeds. Following the occurrence and during the continuance of an Event of Default, Agent agrees to apply payments
received in respect of the Obligations and the net cash proceeds resulting from Agent’s exercise of any of the foregoing
rights (after deducting all Out-of-Pocket Expenses relating thereto) to the payment of the Obligations in the following order:
(a) first, to all unpaid Out-of-Pocket Expenses; (b) second, to all accrued and unpaid fees owed to Agent and the Lenders;
(c) third, to accrued and unpaid interest on the Obligations; (d) fourth, to the unpaid principal amount of the Obligations;
and (e) fifth, to Borrower as provided under Section 12.3 hereof.

 

12.5         General
Indemnity. In addition to Borrower’s agreement to reimburse Agent for Out-of-Pocket Expenses, but without duplication,
Borrower hereby agrees to indemnify Agent and the Lenders, and each of their respective officers, directors, employees, attorneys
and agents (each, an “Indemnified Party”) from, and to defend and hold each Indemnified Party harmless against,
any and all losses, liabilities, obligations, claims, actions, judgments, suits, damages, penalties, costs, fees, expenses (including
reasonable attorney’s fees) of any kind or nature which at any time may be imposed on, incurred by, or asserted against,
any Indemnified Party to the extent: (a) resulting from Agent’s exercise of (or failure to exercise) any of Agent’s
rights and remedies hereunder, including (i) any sale or transfer of the Collateral, (ii) the preservation, repair, maintenance,
preparation for sale or securing of any Collateral, and (iii) the defense of Agent’s interests in the Collateral (including
the defense of claims brought by Borrower as a debtor-in-possession or otherwise, any secured or unsecured creditors of Borrower,
or any trustee or receiver in bankruptcy); (b) resulting from any environmental pollution, hazardous material or environmental
clean-up and Borrower’s off-site disposal practices; (c) arising in connection with any regulatory investigation or
proceeding by any regulatory authority or agency having jurisdiction over Borrower; and (d) otherwise relating to or arising
out of the transactions contemplated by this Agreement and the other Loan Documents, or any action taken (or failure to act) by
any Indemnified Party with respect thereto; provided that an Indemnified Party’s conduct in connection with the any of the
foregoing matters does not constitute gross negligence or willful misconduct, as finally determined by a court of competent jurisdiction.
This indemnification shall survive the termination of this Agreement and the payment in full and satisfaction of the Obligations.

 

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12.6         Authority.
If an Event of Default shall have occurred and is continuing, Borrower hereby authorizes Agent, or any person or agent which Agent
may designate, at Borrower’s cost and expense, to exercise all of the following powers, which authority shall be irrevocable
until the termination of this Agreement and the full and final payment and satisfaction of the Obligations to: (a) receive,
take, endorse, sign, assign and deliver, all in the name of Agent or Borrower, any and all checks, notes, drafts, and other documents
or instruments relating to the Collateral; (b) receive, open and dispose of all mail addressed to Borrower, and to notify
postal authorities to change the address for delivery thereof to such address as Agent may designate; (c) request from customers
indebted on Accounts at any time, in the name of Agent, information concerning the amounts owing on the Accounts; (d) request
from customers indebted on Accounts at any time, in the name of Borrower, any certified public accountant designated by Agent or
any other designee of Agent, information concerning the amounts owing on the Accounts; (e) transmit to customers indebted
on Accounts notice of Agent’s interest therein and to notify customers indebted on Accounts to make payment directly to Agent
for Borrower’s account; and/or (f) take or bring, in the name of Agent, the Lenders, or Borrower, all steps, actions,
suits or proceedings deemed by Agent necessary or desirable to enforce or effect collection of the Accounts.

 

SECTION 13.

AGENCY

 

13.1         Appointment
of Agent; Powers. Each Lender hereby irrevocably designates and appoints Oxford to act as Agent for such Lender under this
Agreement and the other Loan Documents, and irrevocably authorizes Oxford, as Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents, and to exercise such powers and perform such duties
as are expressly delegated to Agent by the terms of this Agreement and the other Loan Documents, together with such other powers
as are reasonably incidental thereto. In performing its functions under this Agreement, Agent is acting solely as an agent of the
Lenders, and Agent does not assume, and shall not be deemed to have assumed, an agency or other fiduciary relationship with Borrower
or any Lender. Agent shall not have any (a) duty, responsibility, obligation or liability to any Lender, except for those
duties, responsibilities, obligations and liabilities expressly set forth in this Agreement, or (b) fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents, or otherwise exist against Agent.

 

13.2         Delegation
of Agent’s Duties. Agent may execute any of its duties under this Agreement and all ancillary documents by or through
agents or attorneys, and shall be entitled to the advice of counsel concerning all matters pertaining to such duties.

 

13.3         Disclaimer
of Agent’s Liabilities. Neither Agent nor any of its Affiliates, or its or its Affiliates’ officers, directors,
employees, agents, or attorneys shall be liable to any Lender for any action lawfully taken or not taken by Agent or such person
under or in connection with this Agreement and the other Loan Documents (except for Agent’s or such person’s gross
negligence or willful misconduct). Without limiting the generality of the foregoing, Agent shall not be liable to the Lenders for
(a) any recital, statement, representation or warranty made by Borrower or any officer thereof contained in (i) this
Agreement, (ii) any other Loan Document or (iii) any certificate, report, audit, statement or other document referred
to or provided for in this Agreement or received by Agent under or in connection with this Agreement, (b) the value, validity,
effectiveness, enforceability or sufficiency of this Agreement, the other Loan Documents or Agent’s security interests in
the Collateral, (c) any failure of Borrower to perform their respective obligations under this Agreement and the other Loan
Documents, (d) any loss or depreciation in the value of, delay in collecting the Proceeds of, or failure to realize on, any
Collateral, (e) Agent’s delay in the collection of the Obligations or enforcing Agent’s rights against Borrower,
or the granting of indulgences or extensions to Borrower, or any account debtor of Borrower, or (f) any mistake, omission
or error in judgment in passing upon or accepting any Collateral. In addition, Agent shall have no duty or responsibility to ascertain
or to inquire as to the observance or performance of any of the terms, conditions, covenants or other agreements of Borrower contained
in this Agreement or the other Loan Documents, or to inspect, verify, examine or audit the assets, books or records of Borrower
at any time.

 

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13.4         Reliance
and Action by Agent. Agent shall be entitled to rely, and shall be fully protected in relying, upon legal counsel, independent
public accountants and experts selected by Agent, and shall not be liable to the Lenders for any action taken or not taken in good
faith based upon the advice of such counsel, accountants or experts. In addition, Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, facsimile, statement,
order or other document believed by Agent in good faith to be genuine and correct, and to have been signed, sent or made by the
proper person or persons. Agent shall be fully justified in taking or refusing to take any action under this Agreement and the
other Loan Documents unless Agent (a) receives the advice or consent of the Lenders or the Required Lenders, as the case may
be, in a manner that Agent deems appropriate, or (b) is indemnified by the Lenders to Agent’s satisfaction against any
and all liability, cost and expense which may be incurred by Agent by reason of taking or refusing to take any such action. Agent
shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents
in accordance with a request of all Lenders or the Required Lenders, as the case may be, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all Lenders.

 

13.5         Events
of Default. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless Agent has received written notice from Borrower or a Lender describing such Default or Event of Default with specificity.
In the event that Agent receives such a notice, Agent shall promptly give notice thereof to all Lenders. Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably directed by the Lenders or Required Lenders, as
the case may be, provided that (a) if appropriate, Agent may require indemnification from the Lenders under Section 13.7
prior to taking such action, (b) under no circumstances shall Agent have an obligation to take any action that Agent believes
in good faith would violate any law or any provision of this Agreement or the other Loan Documents, and (c) unless and until
Agent shall have received direction from the Lenders or Required Lenders, as the case may be, Agent may (but shall not be obligated
to) take such action or refrain from taking action with respect to such Default or Event of Default as Agent shall deem advisable
and in the best interests of the Lenders.

 

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13.6         Lenders’
Due Diligence. Each Lender expressly acknowledges that neither Agent, nor any of its officers, directors, employees or
agents, has made any representation or warranty to such Lender regarding the transactions contemplated by this Agreement or the
financial condition of Borrower, and such Lender agrees that no action taken by Agent hereafter, including any review of the business
or financial affairs of Borrower, shall be deemed to constitute a representation or warranty by Agent to any Lender. Each Lender
also acknowledges that such Lender has, independently and without reliance upon Agent or any other Lender and based on such documents
and information as such Lender has deemed appropriate, made its own credit analysis, appraisal of an investigation into the business,
operations, property, financial condition and creditworthiness of Borrower, and made its own decision to enter into this Agreement.
Each Lender agrees, independently and without reliance upon Agent or any other Lender and based on such documents and information
as such Lender shall deem appropriate at the time, (a) to continue to make its own credit analyses and appraisals in deciding
whether to take or not take action under this Agreement and (b) to make such investigations as such Lender deems necessary
to inform itself as to the business, operations, property, financial condition and creditworthiness of Borrower.

 

13.7         Right
to Indemnification. The Lenders agree to indemnify Agent (to the extent not reimbursed by Borrower and without limiting
the obligation of Borrower to do so), from and against any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time be imposed on, incurred by or asserted
against Agent in any way relating to or arising out of (a) this Agreement or any other Loan Document, (b) the transactions
contemplated hereby or (c) any action taken or not taken by Agent under or in connection with any of the foregoing, provided
that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from Agent’s gross negligence or willful misconduct.

 

13.8         Other
Transactions. Agent and any Lender may make loans to and generally engage in any kind of business with Borrower, as though
Agent or such Lender were not Agent or a Lender hereunder. With respect to loans made by Agent under this Agreement as a Lender,
Agent shall have the same rights and powers, duties and liabilities under this Agreement and the other Loan Documents as any other
Lender, and may exercise the same as though it were Agent, and the terms “Lender” and “Lenders”
shall include Agent in its individual capacity as such.

 

13.9         Resignation
of Agent. Agent may resign as Agent upon thirty (30) days notice to the Lenders, and such resignation shall be effective
on the earlier of (a) the appointment of a successor Agent by the Lenders or (b) the date on which such 30-day period
expires. If Agent provides the Lenders with notice of its intention to resign as Agent, the Lenders agree to appoint a successor
to Agent as promptly as possible thereafter, whereupon such successor shall succeed to the rights, powers and duties of Agent,
and the term “Agent” shall mean such successor effective upon its appointment. Upon the effective date of an
Agent’s resignation, such Agent’s rights, powers and duties as Agent hereunder immediately shall terminate, without
any other or further act or deed on the part of such former Agent or any of the parties to this Agreement. After an Agent’s
resignation hereunder, the provisions of this Section 13.9 shall continue to inure to such Agent’s benefit as
to any actions taken or not taken by such Agent while acting as Agent.

 

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13.10         Copies
of Statements and Financial Information. Agent shall forward to each Lender a copy of the monthly loan account statement
delivered by Agent to Borrower. In addition, Agent agrees to provide the Lenders with copies of all financial statements, projections
and business plans of Borrower that Agent receives from Borrower or their advisors from time to time, without any duty to confirm
or verify that such information is true, correct or complete.

 

13.11         Payments
of Principal, Interest and Fees. After Agent’s receipt of, or charging of, any principal payments, or any interest
and fees earned under this Agreement, Agent agrees to remit promptly to the Lenders its respective Pro Rata Percentages of:

 

(a)          fees
payable by Borrower hereunder, provided that (i) other than as set forth in subsection (ii) below, the Lenders shall
not share the fees set forth in Section 6 of this Agreement, and (ii) the Lenders shall share in the Loan Facility
Fee in accordance with its respective agreements with Agent; and

 

(b)          principal
and interest paid on the Term Loan.

 

13.12         Privacy
Laws. Agent acknowledges and agrees that Borrower may be required to adhere to certain restrictions and conditions regarding
the use and/or disclosure of patient health information to which Lender may have access under this Agreement in order to comply
with federal and state laws and/or regulations governing the security, integrity, and confidentiality of patient health information,
including, but not limited to, regulations, standards and rules promulgated under the Health Insurance Portability and Accountability
Act of 1996 (collectively, the “Privacy Laws”). Agent agrees to maintain the confidentiality of patient information
obtained as a result of this Agreement in accordance with the Privacy Laws and shall not obtain, use, disclose or release patient
information except as specifically authorized herein or as required by the Privacy Laws (but in all events in material compliance
with Privacy Laws).

 

SECTION 14.

MISCELLANEOUS

 

14.1         Termination.
Except as otherwise provided in Section 12.2 hereof, Required Lenders (acting through Agent) may terminate this Agreement
only as of the Maturity Date. The Borrower, or any one of them, may terminate this Agreement at any time prior to the Maturity
Date only in accordance with the terms of Section 6.6. A termination by one Borrower shall be deemed to be a termination
by each Borrower. All Obligations shall become due and payable in full on the earlier of the (a) Maturity Date or (b) the
Early Maturity Date and, pending a final accounting of the Obligations, Agent may withhold any reserves previously deposited with
Agent (unless supplied with an indemnity satisfactory to Agent) as a cash reserve to cover any contingent Obligation then outstanding.
All Term Loan Commitments shall terminate upon termination of this Agreement. All of Agent’s and Lenders’ rights, liens
and security interests granted pursuant to the Loan Documents shall continue after any termination of this Agreement until all
Obligations have been fully and finally paid and satisfied.

 

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14.2         Waivers.
The Borrower hereby waives diligence, demand, presentment, protest and any notices thereof as well as notices of nonpayment, intent
to accelerate and acceleration. No waiver of an Event of Default by Agent shall be effective unless such waiver is in writing and
signed by Agent and the Required Lenders. No delay or failure of Agent or the Lenders to exercise any right or remedy hereunder,
whether before or after the happening of any Event of Default, shall impair any such right or remedy, or shall operate as a waiver
of such right or remedy, or as a waiver of such Event of Default. A waiver on any occasion shall not be construed as a bar to or
waiver of any right or remedy on any future occasion. No single or partial exercise by Agent or the Lenders of any right or remedy
precludes any other or further exercise thereof, or precludes any other right or remedy.

 

14.3         Entire
Agreement; Control. This Agreement and the other Loan Documents: (a) constitute the entire agreement among the Borrower,
Agent and/or the Lenders; and (b) supersede any prior agreements (including the agreements set forth in the Proposal Letter
and any confidentiality agreement). Should the provisions of any other Loan Document conflict with the provisions of this Agreement,
the provisions of this Agreement shall apply and govern.

 

14.4         Usury
Limit. In no event shall the Borrower, upon demand by Agent for payment of any indebtedness relating hereto, by acceleration
of the maturity thereof, or otherwise, be obligated to pay interest and fees in excess of the amount permitted by law. Regardless
of any provision herein or in any agreement made in connection herewith, Agent and the Lenders shall never be entitled to receive,
charge or apply, as interest on any indebtedness relating hereto, any amount in excess of the maximum amount of interest permissible
under applicable Law. If Agent or the Lenders ever receive, collect or apply any such excess, it shall be deemed a partial repayment
of principal and treated as such. If as a result, the entire principal amount of the Obligations is paid in full, any remaining
excess shall be refunded to the Borrower. This Section 14.4 shall control every other provision of this Agreement,
the other Loan Documents and any other agreement made in connection herewith.

 

14.5         Severability.
If any provision hereof or of any other Loan Document is held to be illegal or unenforceable, such provision shall be fully severable,
and the remaining provisions of the applicable agreement shall remain in full force and effect and shall not be affected by such
provision’s severance. Furthermore, in lieu of any such provision, there shall be added automatically as a part of the applicable
agreement a legal and enforceable provision as similar in terms to the severed provision as may be possible.

 

14.6         WAIVER
OF JURY TRIAL; SERVICE OF PROCESS; CONSEQUENTIAL DAMAGES.

 

(a)          EACH
OF BORROWER, AGENT AND THE LENDERS HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREUNDER. BORROWER HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
AND CONSENTS TO SERVICE OF PROCESS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED.

 

(b)          IN
NO EVENT WILL AGENT OR THE LENDERS BE LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.

 

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(c)          IN
THE EVENT ANY SUCH ACTION OR PROCEEDING IS BROUGHT OR FILED IN ANY UNITED STATES FEDERAL COURT SITTING IN THE STATE OF CALIFORNIA
OR IN ANY STATE COURT OF THE STATE OF CALIFORNIA, AND THE WAIVER OF JURY TRIAL SET FORTH IN THIS AGREEMENT IS DETERMINED OR HELD
TO BE INEFFECTIVE OR UNENFORCEABLE, THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS SHALL BE RESOLVED BY REFERENCE TO A PRIVATE
JUDGE SITTING WITHOUT A JURY, PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1, BEFORE A MUTUALLY ACCEPTABLE
REFEREE OR, IF THE PARTIES CANNOT AGREE, A REFEREE SELECTED BY THE PRESIDING JUDGE OF ORANGE COUNTY, CALIFORNIA. SUCH PROCEEDING
SHALL BE CONDUCTED IN ORANGE COUNTY, CALIFORNIA, WITH CALIFORNIA RULES OF EVIDENCE AND DISCOVERY APPLICABLE TO SUCH PROCEEDING.
IN THE EVENT ANY ACTIONS OR PROCEEDINGS ARE TO BE RESOLVED BY JUDICIAL REFERENCE, ANY PARTY MAY SEEK FROM ANY COURT HAVING JURISDICTION
THEREOVER ANY PREJUDGMENT ORDER, WRIT OR OTHER RELIEF AND HAVE SUCH PREJUDGMENT ORDER, WRIT OR OTHER RELIEF ENFORCED TO THE FULLEST
EXTENT PERMITTED BY LAW NOTWITHSTANDING THAT ALL ACTIONS OR PROCEEDINGS ARE OTHERWISE SUBJECT TO RESOLUTION BY JUDICIAL REFERENCE.
EACH OF THE PARTIES HERETO AGREES THAT ANY OF THEM MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY AND THE AGREEMENTS CONTAINED
HEREIN REGARDING THE APPLICATION OF JUDICIAL REFERENCE IN THE EVENT OF THE INVALIDITY OF SUCH JURY TRIAL WAIVER.

 

14.7         Notices.
All notices, requests and other communications to any party hereunder shall be in writing (including prepaid overnight courier,
facsimile transmission or similar writing) and shall be given to such party at its address or facsimile number set forth below
(or, in the case of any such Lender who becomes a Lender after the date hereof, in an assignment agreement or in a notice delivered
to Borrower Representative and Agent by the assignee Lender forthwith upon such assignment) or at such other address or facsimile
number as such party may hereafter specify for the purpose by notice to Agent and Borrower Representative:

 

if to Agent, at:

 

Oxford Finance LLC

133 North Fairfax Street

Alexandria, VA 22314

Attn: Portfolio Manager (CHP Friendswood SNF, LLC)

 

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with a copy to:

 

Oxford Finance LLC

133 North Fairfax Street

Alexandria, VA 22314

Attn: John Toufanian, Senior Counsel

Telecopier No.: (703) 519-4910

 

if to the Borrower at:

 

CHP Friendswood SNF, LLC

c/o Summit Healthcare REIT, Inc.

2 S. Pointe Drive, Suite 100

Lake Forest, CA 92630

Attn: Kent Eikanas

Telecopier No.: (949) 535-2054

 

with a copy to:

 

Hanson Bridgett
LLP

425 Market St.,
26th Floor

San Francisco, CA
94105

Attn: Anita Zerounian,
Esq.

Telecopier No.: (415) 995-3461

 

Each such notice, request
or other communication shall be effective (i) if given by facsimile, when such notice is transmitted to the facsimile number
specified by this Section 14.7 and the sender receives a confirmation of transmission from the sending facsimile machine,
or (ii) if given by mail, prepaid overnight courier or any other means, when received or when receipt is refused at the applicable
address specified by this Section 14.7.

 

14.8         CHOICE
OF LAW; VENUE. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CONFLICTS OF LAWS PROVISIONS EXCEPT TO THE EXTENT THAT ANY OTHER LOAN
DOCUMENT INCLUDES AN EXPRESS ELECTION TO BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION. BORROWER AND AGENT HEREBY CONSENTS TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK, NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO 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.

 

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14.9         Publications.
Borrower or Affiliate thereof will not in the future issue any press releases or other public disclosure using the name “Oxford
Finance LLC” or its Affiliates or any other Lender or its Affiliates or referring to this Agreement or the other Loan
Documents without at least two (2) Business Days’ prior notice to Oxford and without the prior written consent of Oxford
unless (and only to the extent that) Borrower or Affiliate is required to do so under law and then, in any event, Borrower or Affiliate
will consult with Oxford before issuing such press release or other public disclosure. Borrower expressly consents to and authorizes
the publication by Agent or any Lender of a summary description of the transaction(s) contemplated by this Agreement in any format
(including tombstones, deal listings or similar advertising materials), which may be published in one or more of financial or other
industry periodicals, newspapers, reporting services, trade organizations, written promotional materials, Agent or Lender web site,
etc., provided, however, that Borrower shall have the right to review and approve, in its reasonable discretion, any such publication
prior to the publication thereof. In addition, Borrower or Affiliate expressly consents to and authorizes Agent or Lender to provide
to financial or other industry periodicals, newspapers, reporting services or trade organizations information necessary and customary
for inclusion of the transaction(s) in league table measurements, including the aggregate dollar value of the transaction, provided,
however, that Borrower shall have the right to review and approve, in its reasonable discretion, any such publication prior to
the publication thereof.

 

14.10         Counterparts;
Effectiveness of Facsimile Documents and Signatures. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same instrument. Loan Documents 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 Borrower, all Guarantors, Agent and the Lenders.
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.

 

14.11         Assignments;
Participations.

 

(a)          Assignments.

 

(i)          Borrower
shall not have the right to assign this Agreement or any interest therein except with the prior written consent of Agent and all
Lenders.

 

(ii)         Any
Lender may make, carry or transfer the Term Loan at, to or for the account of, any Affiliate of such Lender.

 

(iii)        Each
Lender may, with the consent of Agent but without the consent of any other Lender or Credit Party, assign to one or more Eligible
Assignee all or a portion of its rights and obligations under this Agreement and the other Loan Documents; provided that (i) for
each such assignment, the parties thereto shall execute and deliver to the applicable Agent, for its acceptance and recording in
the Register (as defined below), an Assignment and Transfer Agreement, and a processing and recordation fee of Three Thousand Five
Hundred and No/100 Dollars ($3,500.00) to be paid by the assignee, and (ii) no such assignment shall be for less than Five
Hundred Thousand and No/100 Dollars ($500,000.00) (or, if less, all of assignor’s remaining portion of the Term Loan). Upon
such execution and delivery of the Assignment and Transfer Agreement to the Agent, from and after the date specified as the effective
date in the Assignment and Transfer Agreement, (x) the assignee thereunder shall be a party hereto, and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such Assignment and Transfer Agreement, such assignee shall
have the rights and obligations of a Lender hereunder and (y) the assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and Transfer Agreement, relinquish its rights (other
than any rights it may have pursuant to this Agreement which by their terms will survive) and be released from its obligations
under this Agreement (and, in the case of an Assignment and Transfer Agreement covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).

 

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(iv)        By
executing and delivering an Assignment and Transfer Agreement, the assignee thereunder confirms and agrees as follows: (a) other
than as provided in such Assignment and Transfer Agreement, the assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement and
the other Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement
or any of the other Loan Documents, (b) such assigning Lender makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Credit Party or the performance or observance by any Credit Party of its obligations
under this Agreement, (c) such assignee confirms that it has received a copy of this Agreement and the other Loan Documents,
together with copies of the financial statements referred to in Section 9.8 of this Agreement and such other documents
and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Transfer
Agreement, (d) such assignee will, independently and without reliance upon Agent, such assigning Lender or any other Lender,
and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement, (e) such assignee appoints and authorizes the applicable Agent to take
such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to Agent by the terms hereof,
together with such powers as are reasonably incidental thereto and (f) such assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

 

(v)         Agent
shall maintain (acting solely for this purpose as an agent of the Borrower) at its address referred to in Section 14.7
of this Agreement a copy of each Assignment and Transfer Agreement delivered to and accepted by it and a register for the recordation
of the names and addresses of Lenders, the Term Loan Commitments of each Lender and principal and any stated interest amount of
the Term Loan owing to, each Lender from time to time (collectively, the “Register”). No assignment of any rights
or obligations under or in respect of the Term Loan or the Promissory Notes evidencing such Term Loan shall be effective unless
and until the applicable Agent shall have recorded the assignment in the Register, and the entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and Borrower, Agent and Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The Register and copies of each Assignment and Transfer
Agreement shall be available for inspection by Borrower, Agent or any Lender at any reasonable time and from time to time upon
reasonable prior written notice. Borrower hereby designates Agent to serve as Borrower’s agent solely for purposes of maintaining
the Register as provided in this Section 14.11, and Borrower hereby agrees that the entity serving as Registrar and its
Affiliates, and their respective officers, directors, employees and Agent shall constitute an Indemnified Party under Section 12.5
and a Releasee under Section 16.1. At the request of the registered Lender, the Registrar shall note a collateral assignment
of a Term Loan on the Register and, provided that the Registrar has been given the name and address of such collateral assignee,
the Registrar (i) shall not permit any further transfers of the Term Loan on the Register absent receipt of written consent
to such transfers from such collateral assignee and (ii) shall record the transfer of the Term Loan on the Register to such
collateral assignee (or such collateral assignee’s designee, nominee or assignee) upon written request by such collateral
assignee.

 

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(vi)        Upon
its receipt of an Assignment and Transfer Agreement executed by an assigning Lender, the applicable Agent shall, if such Assignment
and Transfer Agreement has been completed and is in substantially the form of Exhibit A hereto, (a) accept such
Assignment and Transfer Agreement, (b) record the information contained therein in the Register and (c) give prompt notice
thereof to Borrower Representative if such Assignment and Transfer Agreement is to a Person that is not a Lender or an Affiliate
of a Lender. Within five (5) Business Days after its receipt of such notice, Borrower shall execute and deliver to the applicable
Agent in exchange for the surrendered promissory note or notes, a new promissory note or notes to the order of the assignee in
amounts equal to such assignee’s Term Loan Commitments and the outstanding Term Loan hereunder and, if the assigning Lender
has retained a portion of the Term Loan, a new promissory note or notes to the order of the assigning Lender in an amount equal
to the remaining Term Loan Commitments and the outstanding Term Loan hereunder of such assigning Lender under the terms of this
Agreement. Such new promissory note or notes shall re-evidence the indebtedness outstanding under the old promissory note or notes
and shall be in the aggregate principal amount of such surrendered promissory note or notes, shall be dated of even date herewith
and shall otherwise be in substantially the form of the promissory note or notes subject to such assignment.

 

(b)        Participations
and Financings.

 

(i)          Each
Lender may sell participations (without the consent of Agent, any Credit Party or any other Lender) to one or more parties, in
or to all (or a portion) of its rights and obligations under this Agreement (including, without limitation, all or a portion of
the Term Loan Commitments or the Term Loan owing to it); provided that (i) such Lender’s obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) Borrower, Agent, and the other Lenders shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations under this Agreement and (iv) such Lender shall not transfer,
grant, assign or sell any participation under which the participant shall have rights to approve any amendment or waiver of this
Agreement.

 

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(ii)         Each
Lender may (without the consent of Agent, any Credit Party or any other Lender) transfer, assign, pledge or collaterally assign
and grant a security interest in or to all (or a portion) of its rights and obligations under this Agreement in connection with
its own financing or securitization transactions, including all rights, benefits, warranties, representations, covenants, indemnities
and remedies, and all proceeds of the foregoing, contained in this Agreement and any of the other Loan Documents and, notwithstanding
any provision in this Agreement or any other Loan Document to the contrary, there shall be no requirement, limitation or restriction
on the ability of each such transferee, pledgee or assignee to foreclose upon and further assign or otherwise transfer all (or
a portion) of such rights upon the occurrence of a default, event of default or similar occurrence with respect to such financing
or securitization transaction; provided that in each case, no such transfer, pledge or assignment shall release such Lender from
any of its obligations hereunder or substitute any such transferee, pledgee or assignee for such Lender as a party hereto unless
such transferee, pledgee or assignee executes and delivers to the Agent, for its acceptance and recording in the Register, an Assignment
and Transfer Agreement, and a processing and recordation fee of Three Thousand Five Hundred and No/100 Dollars ($3,500.00) to be
paid by the assignee.

 

(iii)        In
connection with the efforts of any Lender to assign its rights or obligations or to participate in interests, subject to compliance
with applicable Laws, such Lender may disclose any information in its possession regarding Credit Parties.

 

(iv)        Borrower
agrees to provide commercially reasonable efforts to assist any Lender in assigning, pledging or selling participations in all
or any part of the Term Loan made by such Lender, to another Person identified by such Lender.

 

14.12         Sharing
of Liabilities. In the event that Agent, the Lenders or any of them is sued or threatened with a suit, action or claim
by the Borrower, or by a creditor, committee of creditors, trustee, receiver, liquidator, custodian, administrator or other similar
official acting for or on behalf of the Borrower, on account of (a) any preference, fraudulent conveyance or other voidable
transfer alleged to have occurred or been received as a result of the operation of this Agreement or the transactions contemplated
hereby, or (b) any lender liability theory based on any action taken or not taken by such person in connection with this Agreement
or the transactions contemplated hereby, any money paid in satisfaction or compromise of such suit, action, claim or demand, and
any expenses, costs and attorneys’ fees paid or incurred in connection therewith (whether by Agent, the Lenders or any of
them), shall be shared proportionately by the Lenders according to their respective Pro Rata Percentages, except to the extent
that such Person’s own gross negligence or willful misconduct directly gave rise to such suit, action or claim. In addition,
any costs, expenses, fees or disbursements incurred by agents or attorneys retained by Agent to collect the Obligations or enforce
any rights in the Collateral, including enforcing, preserving or maintaining rights under this Agreement, shall be shared among
the Lenders according to their respective Pro Rata Percentages to the extent not reimbursed by the Borrower or from the Proceeds
of Collateral. The provisions of this Section 14.12 shall not apply to any suits, actions, proceedings or claims that
(a) are filed or asserted prior to the Closing Date or (b) are based on transactions, actions or omissions occurring
prior to the date of this Agreement.

 

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14.13         Exercise
of Setoff Rights. The Borrower authorizes each Lender, and each Lender shall have the right, after the occurrence and during
the continuation of an Event of Default, without notice, to setoff and apply against any and all property or assets of Borrower
held by, or in the possession of such Lender, any of the Obligations owed to such Lender. Promptly after the exercise of any right
to setoff, the Lender exercising such right irrevocably agrees to purchase for cash (and the other Lenders irrevocably agree to
sell) participation interests in each other Lender’s outstanding Term Loan Commitment as would be necessary to cause such
Lender to share the amount of the property setoff with the other Lenders based on each Lender’s Pro Rata Percentage. The
Borrower agrees, to the fullest extent permitted by law, that any Lender also may exercise its right to setoff with respect to
amounts in excess of such Lender’s Pro Rata Percentage of the Obligations then outstanding, and may purchase participation
interests in the amounts so setoff from the other Lenders, and upon doing so shall deliver such excess to Agent, for distribution
to the other Lenders in settlement of the participation purchases described above in this Section 14.13. Notwithstanding
the foregoing, each Lender hereby agrees with each other Lender that no Lender shall independently take any action to enforce or
protect its rights arising out of this Agreement or any other Loan Document (including the exercise of any right of setoff) without
first obtaining the prior written consent of Agent or the Required Lenders, it being the intent of the Lenders that any such action
shall be taken in concert and at the direction of Agent or the Required Lenders.

 

14.14         Confidentiality.
Each of Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, Rating
Agencies, portfolio management servicers, legal counsel and other advisors (it being understood that the persons to whom such disclosure
is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential),
(b) to the extent requested by any regulatory authority (including any self-regulatory authority, such as the National Association
of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal
process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or any of the other Loan Documents or the enforcement of rights hereunder
or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section 14.14
to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under
this Agreement, (g) to a person that is a trustee, investment advisor, collateral manager, servicer, noteholder or secured
party in a Securitization in connection with the administration, servicing and reporting on the assets serving as collateral for
such Securitization, (h) with the consent of the Borrower Representative or (i) to the extent such Information (i) becomes
publicly available, other than as a result of a breach of this Section 14.14 or (ii) becomes available to Agent
or any Lender on a nonconfidential basis from a source other than a Credit Party. Notwithstanding the foregoing, each of Agent
and the Lenders may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the
transactions described herein and all materials of any kind (including opinions and tax analysis) that have been provided to such
Persons relating to the tax treatment and tax structure of the transactions described herein (it being understood that this authorization
is retroactively effective to the commencement of the first discussions between or among any of the parties regarding the transactions
described herein). For the purposes of this Section 14.14, (i) “Information” means all information
received from any Credit Party or the Operator relating to any Credit Party or the Operator or its business, other than any such
information that is available to Agent or any Lender on a nonconfidential basis prior to disclosure by such Credit Party or Operator;
provided that, in the case of Information received from a Credit Party or Operator after the date hereof, such Information
is clearly identified as confidential at the time of delivery. Any person required to maintain the confidentiality of Information
as provided in this Section 14.14 shall be considered to have complied with its obligation to do so if such person
has exercised the same degree of care to maintain the confidentiality of such Information as such person would accord to its own
confidential information and (ii) “Rating Agencies” means Moody’s Investor Services, Inc., Standard and
Poor’s Ratings Group, a Division of McGraw-Hill Corporation, Fitch Ratings Ltd., or any other nationally recognized rating
agency or service. The obligations of any person required to maintain the confidentiality of Information as provided in this Section 14.14
shall continue with respect to any item of Information for only so long as the item of Information has or retains a confidential
nature, but in no event beyond a period of two (2) years from the date of delivery of such item of Information to such Person.
In no event shall Agent or any Lender be obligated or required to return any Information or other materials furnished by a Credit
Party or Operator.

 

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14.15         Amendments;
Agent’s Discretionary Rights. No provision of this Agreement or any other Loan Document may be amended, waived or
otherwise modified unless such amendment, waiver or other modification is in writing and is signed by Borrower and the Required
Lenders (and, if (x) any amendment, waiver or other modification would increase such Lender’s funding obligations in
respect of the Term Loan, by such Lender and (y) the rights or duties of Agent are affected thereby, by Agent); provided that
no such amendment, waiver or other modification shall, unless signed by all the Lenders directly affected thereby, (a) amend
or waive the Borrower’s compliance with any term or provision of this Agreement, if the effect of such amendment or waiver
would be to (i) reduce the principal of, or rate of interest on, the Term Loan, (ii) reduce or waive the payment of any
fee in which all Lenders share hereunder or (iii) extend the Maturity Date or the date fixed for payment of any installment
thereof; (b) alter or amend the definitions of “Collateral” or “Required Lenders”; or
(c) except as otherwise expressly permitted or required hereunder, release any Collateral having a value (as determined by
Agent in its reasonable business judgment) of more than Twenty-Five Thousand and 00/100 Dollars ($25,000.00) in any fiscal year
of the Borrower. In all other respects Agent is authorized to take or to refrain from taking any action which Agent, in the exercise
of its reasonable business judgment, deems to be advisable and in the best interest of the Lenders, unless this Agreement specifically
requires the Borrower or Agent to obtain the consent of, or act at the direction of, the Required Lenders. Without limiting the
generality of the foregoing sentence, and notwithstanding any other provision of this Agreement to the contrary, Agent shall have
the right in its sole discretion to (i) release any Collateral having a value (as determined by Agent in its reasonable business
judgment) of up to Twenty-Five Thousand and 00/100 Dollars ($25,000.00) in each fiscal year of the Borrower, and (ii) amend
any provision of this Agreement or the other Loan Documents in order to cure any error, ambiguity, defect or inconsistency set
forth therein. In the event Agent terminates this Agreement pursuant to the terms hereof, Agent agrees to cease making additional
loans or advances upon the effective date of termination, except for loans or advances which Agent in its sole discretion determines
are reasonably required to preserve, protect or realize upon the Collateral. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Term
Loan Commitment of such Lender may not be increased or extended without the consent of such Lender.

 

    	 	79	 

     

    

 

14.16         Deemed
Consent. If a Lender’s consent to a waiver amendment or other course of action is required under the terms of this
Agreement and such Lender does not respond to any request by Agent for such consent within ten (10) Business Days after the date
of such request, such failure to respond shall be deemed a consent to the requested course of action.

 

SECTION 15.

Inter-Borrower Provisions; Joint and Several Liability.

 

15.1         Joint
and Several Liability. In the event that there is more than one Borrower under this Loan Agreement, the parties agree that
the Term Loan made to the Borrowers shall be deemed jointly funded to, and received by, the Borrowers and that the terms of Section
15 hereof shall apply and be in full force and effect. Each Borrower jointly and severally agrees to pay, and shall be jointly
and severally liable for the payment and performance of, all Obligations directly incurred by any other Borrower, regardless of
whether such Borrower actually receives the proceeds of the indebtedness governed hereby or the benefit of any other extensions
of credit hereunder. Each Borrower acknowledges and agrees that the joint and several liability of the Borrowers is provided as
an inducement to Agent and the Lenders to provide loans and other financial accommodations to the Borrowers, and that the Term
Loan or other financial accommodation shall be deemed to have been done or extended by Agent and the Lenders in consideration of,
and in reliance upon, the joint and several liability of the Borrowers. The joint and several liability of each Borrower hereunder
is absolute, unconditional and continuing, regardless of the validity or enforceability of any of the Obligations, or the fact
that a security interest or lien in any Collateral may not be enforceable or subject to equities or defenses or prior claims in
favor of others, or may be invalid or defective in any way and for any reason. Each Borrower hereby waives: (i) all notices
to which such Borrower may be entitled as a co-obligor with respect to the Obligations, including notice of (x) acceptance
of this Agreement, (y) the making of the Term Loan or other financial accommodations under this Agreement, or the creation
or existence of the Obligations, and (z) presentment, demand, protest, notice of protest and notice of non-payment; and (ii) all
defenses based on (w) any modification (or series of modifications) of this Agreement, the other Loan Documents, that may
create a substituted contract, or that may fundamentally alter the risks imposed on such Borrower hereunder, (x) the release
of any other Borrower from its duties this Agreement, the other Loan Documents, or the extension of the time of performance of
any other Borrower’s duties hereunder or thereunder, (y) the taking, releasing, impairment or abandonment of any Collateral,
or the settlement, release or compromise of the Obligations or any other Borrower’s liabilities with respect to all or any
portion of the Obligations, or (z) any other act (or any failure to act) that fundamentally alters the risks imposed on such
Borrower by virtue of its joint and several liability hereunder. It is the intent of each Borrower by this paragraph to waive any
and all suretyship defenses available to such Borrower with respect to the Obligations, whether or not specifically enumerated
above. Borrowers acknowledge that the credit provided hereunder is on terms more favorable than any Borrower acting alone would
receive and that each Borrower benefits directly and indirectly from the Term Loan made hereunder. Each Borrower shall be jointly
and severally liable for all Obligations regardless of, inter alia, which Borrower received proceeds of the Term Loan.

 

    	 	80	 

     

    

 

15.2         Subrogation
and Contribution Rights. Each Borrower hereby agrees that until the full and final payment and satisfaction of the Obligations
and the expiration and termination of the Term Loan Commitments of the Lenders under this Agreement, such Borrower will not exercise
any subrogation, contribution or other right or remedy against any other Borrower or against any security for any of the Obligations
arising by reason of such Borrower’s performance or satisfaction of its joint and several liability hereunder. In addition,
each Borrower agrees that (i) such Borrower’s right to receive any payment of amounts due with respect to such subrogation,
contribution or other rights is subordinated to the full and final payment and satisfaction of the Obligations, and (ii) such
Borrower agrees not to demand, sue for or otherwise attempt to collect any such payment until the full and final payment and satisfaction
of the Obligations and the termination of the Term Loan Commitments of the Lenders under this Agreement.

 

15.3         Certain
Borrower Acknowledgments and Agreements.

 

(a)          Each
Borrower acknowledges that it will enjoy significant benefits from the business conducted by the other Borrowers because of, inter
alia, their combined ability to bargain with other persons including their ability to receive the credit extensions under this
Agreement and the other Loan Documents on favorable terms granted by this Agreement and other Loan Documents which would not have
been available to an individual Borrower acting alone. Each Borrower has determined that it is in its best interest to procure
the credit facilities contemplated hereunder, with the credit support of the other Borrowers as contemplated by this Agreement
and the other Loan Documents.

 

(b)          Agent
and Lenders have advised the Borrowers that each of them is unwilling to enter into this Agreement, the other Loan Documents and
make available the credit facilities extended hereby or thereby to any Borrower unless each Borrower agrees, among other things,
to be jointly and severally liable for the due and proper payment of the Obligations of each other Borrower under this Agreement
and other Loan Documents. Each Borrower has determined that it is in its best interest and in pursuit of its purposes that it so
induce the Agent and Lender to extend credit pursuant to this Agreement and the other documents executed in connection herewith
(i) because of the desirability to each Borrower of the credit facilities hereunder and the interest rates and the modes of
borrowing available hereunder and thereunder, (ii) because each Borrower may engage in transactions jointly with other Borrowers
and (iii) because each Borrower may require, from time to time, access to funds under this Agreement for the purposes herein
set forth.

 

(c)          Each
Borrower has determined that it is and, after giving effect to the transactions contemplated by this Agreement, the other Loan
Documents (including the inter-Borrower arrangement set forth in this Section 15) will have assets having a fair saleable
value in excess of the amount required to pay its probable liability on its existing debts as they fall due for payment and that
the sum of its debts is not and will not then be greater than all of its Property at a fair valuation, that such Borrower has and
will have, access to adequate capital for the conduct of its business and the ability to pay its debts from time to time incurred
in connection therewith as such debts mature and that the value of the benefits to be derived by such Borrower from the access
to funds under this Agreement (including the inter-Borrower arrangement set forth in this Section 14) is reasonably
equivalent to the Obligations undertaken pursuant hereto.

 

    	 	81	 

     

    

 

(d)          Borrower
Representative (on behalf of each Borrower) shall maintain records specifying (i) all Obligations incurred by each Borrower,
(ii) the date of such incurrence, (iii) the date and amount of any payments made in respect of such Obligations, and
(iv) all inter-Borrower obligations pursuant to this Section 15. Borrower Representative shall make copies of
such records available to the Agent, upon request.

 

15.4         Maximum
Amount of Joint and Several Liability. Notwithstanding any provisions of this Agreement to the contrary, it is the intent
of the parties hereto that the primary and secondary nature of the liabilities of the Borrowers, and the security interests granted
by the Borrowers to secure the Obligations directly incurred by any Borrower not constitute a fraudulent conveyance under Section 548
of Chapter 11 of Title II of the United States Code (11 U.S.C. § 101, et seq.), as amended, or a fraudulent
conveyance or fraudulent transfer under the applicable provisions of any fraudulent conveyance, fraudulent transfer or similar
law of any state, nation or other governmental unit, as in effect from time to time or otherwise be rendered invalid or unenforceable
due to the nature of the joint and several liability. Accordingly, Agent, the Lenders and the Borrowers agree that if the obligations
and liabilities of any Borrower hereunder or under any Loan Document, or any security interests granted by such Borrower securing
the Obligations would, but for the application of this sentence, constitute a fraudulent conveyance or fraudulent transfer under
applicable Law, or would otherwise render Borrower’s Obligations or the security interests granted herein invalid or unenforceable,
the Obligations of such Borrower hereunder, as well as the security interests securing such Obligations and liabilities, shall
be valid and enforceable only to the maximum extent that would not cause such Obligations, liabilities or security interests to
constitute a fraudulent conveyance or fraudulent transfer under applicable Law or otherwise result in such invalidity or unenforceability;
provided, however, that each Borrower’s Obligations hereunder and under the other Loan Documents shall be presumptively
valid and enforceable to their fullest extent in accordance with the terms hereof or thereof, as if this Section 15.4
were not a part of this Agreement.

 

15.5         Authorization
of Borrower Representative by Borrowers. Each Borrower hereby irrevocably authorizes Borrower Representative to give notices,
make requests, make payments, receive payments and notices, give receipts and execute agreements, make agreements or take any other
action whatsoever on behalf of such Borrower under and with respect to any Loan Document and each Borrower shall be bound thereby.
This authorization is coupled with an interest and shall be irrevocable, and Agent and Lenders may rely on any notice, request,
information supplied by Borrower Representative, every document executed by Borrower Representative, every agreement made by Borrower
Representative or other action taken by Borrower Representative in respect of Borrowers or any thereof as if the same were supplied,
made or taken by any or all Borrowers. Without limiting the generality of the foregoing, the failure of one or more Borrowers to
join in the execution of any writing in connection herewith shall not, unless the context clearly requires, relieve any such Borrower
from obligations in respect of such writing.

 

    	 	82	 

     

    

 

SECTION
16.

Releases; Indemnities

 

16.1         To
the fullest extent permitted by applicable law, in consideration of Agent and Lenders entering into this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which each Borrower hereby acknowledges, each Borrower, on its
own behalf and on behalf of its successors (including, without limitation, any receiver or trustee acting on behalf of such Borrower
and any debtor-in-possession with respect to such Borrower), assigns, subsidiaries and Affiliates (collectively, the “Releasors”),
hereby forever release, discharge and acquit Agent and Lenders and their parents, subsidiaries, shareholders, Affiliates, partners,
trustees, officers, employees, directors, Agent and attorneys and their respective successors, heirs and assigns (collectively,
the “Releasees”) from any and all claims, demands, liabilities, responsibilities, disputes, causes, damages,
actions and causes of actions (whether at law or in equity) indebtedness and obligations (collectively, “Claims”)
of every type, kind, nature, description or character, including, without limitation, any so-called “lender liability”
claims or defenses, and irrespective of how, why or by reason of what facts, whether such Claims have heretofore arisen, are now
existing or hereafter arise, or which could, might or be claimed to exist, of whatever kind or nature, whether known or unknown,
suspected or unsuspected, liquidated or unliquidated, matured or unmatured, fixed or contingent, each as though fully set forth
herein at length, which may in any way arise out of, are connected with or in any way relate to actions or omissions which occurred
on or prior to the date hereof with respect to any Borrower, this Agreement, the Obligations, any Collateral, any other Loan Document
and any third parties liable in whole or in part for the Obligations. This provision shall survive and continue in full force and
effect whether or not Credit Parties shall satisfy all other provisions of this Agreement or the Loan Documents, including payment
in full of the Obligations.

 

16.2         Each
of the Releasors further agrees to indemnify the Releasees and hold the Releasees harmless from and against any and all such Claims
(as such term is defined in the immediately preceding paragraph) which may be brought against any of the Releasees on behalf of
any entity or Person, including, without limitation, officers, directors, Agent, trustees, creditors, partners or shareholders
of any of the Releasors, whether threatened or initiated, asserting any claim for legal or equitable remedy under any statute,
regulation or common law principle arising from or in connection with the negotiation, preparation, execution, delivery, performance,
administration and enforcement of this Agreement or any other Loan Document, the Obligations or any Collateral. The foregoing indemnity
shall survive the payment in full of the Obligations and the termination of this Agreement and the other Loan Documents.

 

16.3         Each
of the Releasors further specifically waives any rights that it may have under Section 1542 of the California Civil Code (to
the extent applicable), which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR,” and further waives any similar rights under applicable laws.

 

    	 	83	 

     

    

 

[remainder
of page intentionally left blank; signature page follows]

 

    	 	84	 

     

    

 

[Signature Page to Term Loan and Security
Agreement]

[S-1 of 2]

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the date set forth above.

 

	BORROWER:	CHP FRIENDSWOOD SNF, LLC,
	 	a Delaware  limited liability company
	 	 
	 	By:	SUMMIT HEALTHCARE REIT, INC.,
	 	 	a Maryland corporation
	 	Its:	Manager
	 	 	 	 
	 	 	By:	/s/ Elizabeth A. Pagliarini
	 	 	 	Name:  Elizabeth A. Pagliarini
	 	 	 	Title:  Chief Financial Officer

 

	AGENT:	OXFORD FINANCE LLC,
	 	a Delaware limited liability company, as Agent
	 	 	 
	 	By:	/s/ Mark Davis
	 	Name:  Mark Davis
	 	Title:  Vice President of Finance, Secretary and Treasurer

 

     

     

    

 

[Signature Page to Term Loan and Security
Agreement]

[S-2 of 2]

 

	LENDER:	OXFORD FINANCE LLC,
	 	a Delaware limited liability company, as a Lender
	 	 	 
	 	By:	/s/ Mark Davis
	 	 	Name:  Mark Davis
	 	 	Title:  Vice President of Finance, Secretary and Treasurer

 

     

     

    

 

EXHIBIT A

 

FORM OF
ASSIGNMENT AND TRANSFER AGREEMENT

 

Reference is made to
the Term Loan and Security Agreement dated as of October 6, 2015 (as amended, restated, supplemented or otherwise modified and
in effect from time to time, the “Loan Agreement”) by CHP FRIENDSWOOD SNF, LLC, a Delaware limited liability
company and such other Persons joined hereto as Borrowers from time to time (together with each of their successors and assigns,
individually and collectively, “Borrower”) and the financial institutions from time to time party thereto, as
lenders (collectively, the “Lenders”, and individually, each a “Lender”), and Oxford Finance
LLC, a Delaware limited liability company, as agent for the Lenders (in such capacity, the “Agent”). Capitalized
terms used in this Assignment and Transfer Agreement (this “Agreement”) and not otherwise defined shall have
the meanings given to such terms in the Loan Agreement. This Agreement, between the Assignor (as defined and set forth on Schedule 1,
which is made a part of this Agreement) and the Assignee (as defined and set forth on Schedule 1) is effective as of
Effective Date (as set forth on Schedule 1).

 

1.          The
Assignor hereby irrevocably sells and assigns to the Assignee, without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor, without recourse to the Assignor, as of the Effective Date, an undivided interest (the
“Assigned Interest”) in and to all of the Assignor’s rights and obligations under the Loan Agreement respecting
those, and only those, portions of the financing facilities contained in the Loan Agreement as are set forth on Schedule 1
(collectively, the “Assigned Facilities”), in an amount for each of the Assigned Facilities as set forth on
Schedule 1.

 

2.          The
Assignor (i) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties
or representations made in or in connection with the Loan Agreement or any other instrument, document or agreement executed or
delivered in connection therewith (collectively the “Loan Documents”), or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement, any Collateral thereunder or any of the other Loan Documents,
other than a representation and warranty that the Assignor is the legal and beneficial owner of the Assigned Interest and that
the Assigned Interest is free and clear of any adverse claim; and (ii) makes no representation or warranty and assumes no
responsibility with respect to (x) the financial condition of Borrower or any Guarantor, or (y) the performance or observance
by Borrower or any Guarantor of any of their respective obligations under the Loan Agreement or any of the Loan Documents.

 

    	 	A-1	 

     

    

 

3.          The
Assignee (i) represents and warrants that it is legally authorized to enter into this Agreement, (ii) confirms that it
has received a copy of the Loan Agreement as amended through the Effective Date, together with the copies of the Borrower’s
most recent financial statements and such other documents and information as the Assignee has deemed appropriate to make its own
credit analysis, (iii) agrees that the Assignee will, independently and without reliance upon Agent, the Assignor or any other
Lender and based on such documents and information as the Assignee shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Agreement, (iv) appoints and authorizes Agent to take such
action as agent on the Assignee’s behalf and to exercise such powers under the Loan Agreement as are delegated to Agent by
the terms thereof, together with such powers as are reasonably incidental thereto, (v) agrees that the Assignee will be bound
by the provisions of the Loan Agreement and will perform in accordance with its terms all the obligations which by the terms of
the Loan Agreement are required to be performed by it as Lender, and (vi) if the Assignee is organized under the laws of a
jurisdiction outside the United States, attaches the forms prescribed by the IRS certifying as to the Assignee’s exemption
from United States withholding taxes with respect to all payments to be made to the Assignee under the Loan Agreement or such other
documents as are necessary to indicate that all such payments are subject to such tax at a rate reduced by an applicable tax treaty.

 

4.          Following
the execution of this Assignment and Transfer Agreement, such agreement will be delivered to Agent for acceptance by Agent, effective
as of the Effective Date.

 

5.          Upon
such acceptance, from and after the Effective Date, Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignee, whether such amounts have accrued prior to the Effective
Date or accrue subsequent to the Effective Date. The Assignor and the Assignee shall make all other appropriate adjustments in
payments for periods prior to the Effective Date made by Agent or with respect to the making of this assignment directly between
themselves.

 

6.          From
and after the Effective Date, (i) the Assignee shall be a party to the Loan Agreement and, to the extent provided in this
Agreement, have the rights and obligations of a Lender thereunder, and (ii) the Assignor shall, to the extent provided in
this Agreement, relinquish its rights and be released from its obligations under the Loan Agreement.

 

7.          THIS
ASSIGNMENT AND TRANSFER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed by its respective duly authorized officers on Schedule 1
hereto.

 

    	 	A-2	 

     

    

 

Schedule 1 to Assignment and Transfer
Agreement

 

Name of Assignor:      __________________________

 

Name of Assignee:       __________________________

 

Effective Date of Assignment:                  _________, 20___

 

	Assigned Facilities	 	Percentage of
 Facilities Assigned	 	 	Dollar Amount Assigned	 
	 	 	 	 	 	 	 
	 	 	 	_____	%	 	$	_________	 

 

	 	ASSIGNOR:
	 	 
	 	 
	 	 	 
	 	By:	 
	 	Its:	 
	 	 
	 	ASSIGNEE:
	 	 
	 	 
	 	 	 
	 	By:	 
	 	Its:	 
	 	 
	 	Accepted by Agent:
	 	 
	 	OXFORD FINANCE LLC, as Agent as aforesaid
	 	 	 
	 	By:	 
	 	Its:	 

 

    	 	A-3	 

     

    

 

EXHIBIT B-1

 

FORM OF
TERM LOAN PROMISSORY NOTE

 

	$7,000,000	October 6, 2015

 

FOR VALUE RECEIVED,
the undersigned, CHP FRIENDSWOOD SNF, LLC, a Delaware limited liability company (“Borrower”),
absolutely and unconditionally, promises to pay to the order of OXFORD FINANCE LLC, a Delaware limited liability company,
(in such capacity, “Lender”), at Lender’s office located at 133 North Fairfax Street, Alexandria, Virginia
22314, in lawful money of the United States of America and in immediately available funds, the principal amount of Seven
Million and 00/100 Dollars ($7,000,000.00). Capitalized terms used in this Note and defined in the Loan Agreement (as defined
below) shall have the meanings given to such terms in the Loan Agreement unless otherwise specifically defined herein.

 

The Borrower, absolutely
and unconditionally, further agrees to pay principal and interest at the times and in the amounts set forth in the Term Loan and
Security Agreement of even date herewith among Lender, each other financial institution from time to time a party thereto (collectively
with Lender, “Lenders”), Oxford Finance LLC, as agent for Lenders (in such capacity, “Agent”)
and Borrower (the “Loan Agreement”).

 

This Note is a Promissory
Note referred to in the Loan Agreement, evidences the Term Loan made to Borrower thereunder, and is subject to, and entitled to,
all provisions and benefits thereof, including optional and mandatory prepayment, in whole or in part, as provided therein.

 

Notwithstanding any
other provision of this Note to the contrary, upon the occurrence of any Event of Default specified in the Loan Agreement, or upon
termination of the Loan Agreement for any reason, all amounts then remaining unpaid on this Note may become, or be declared to
be, at the sole election of Lender, immediately due and payable as provided in the Loan Agreement.

 

This Note shall be
held in registered form, and transfers of this Note must be made pursuant to the Register maintained pursuant to Section 14.11
of the Loan Agreement. Borrower may deem and treat the person in whose name this Note is recorded on the Register as the absolute
owner of this Note for the purpose of receiving payment of, or on account of, the principal and interest due on this Note and for
all other purposes, notwithstanding notice to the contrary.

 

[remainder of page intentionally
left blank; signature page follows]

 

    	 	B-1	 

     

    

 

[Signature Page to Term Loan Promissory
Note]

 

	 	CHP FRIENDSWOOD SNF, LLC,
	 	a Delaware limited liability company
	 	 
	 	By:	SUMMIT HEALTHCARE REIT, INC.,
	 	 	a Maryland corporation
	 	Its:	Manager
	 	 	 	 
	 	 	By:	 
	 	 	 	Name:  Elizabeth A. Pagliarini
	 	 	 	Title:  Chief Financial Officer
	 	 	 	Duly Authorized

 

    	 	B-1	 

     

    

 

EXHIBIT B-2

 

FORM OF
TERM LOAN PROMISSORY NOTE

 

	$1,100,000	October 6, 2015

 

FOR VALUE RECEIVED,
the undersigned, CHP FRIENDSWOOD SNF, LLC, a Delaware limited liability company (“Borrower”),
absolutely and unconditionally, promises to pay to the order of OXFORD FINANCE LLC, a Delaware limited liability company,
(in such capacity, “Lender”), at Lender’s office located at 133 North Fairfax Street, Alexandria, Virginia
22314, in lawful money of the United States of America and in immediately available funds, the principal amount of ONE
Million ONE HUNDRED THOUSAND and 00/100 Dollars ($1,100,000.00), or so much thereof as may be advanced by Lender to Borrower
under the Loan Agreement (as defined below). Capitalized terms used in this Note and defined in the Loan Agreement (as defined
below) shall have the meanings given to such terms in the Loan Agreement unless otherwise specifically defined herein.

 

The Borrower, absolutely
and unconditionally, further agrees to pay principal and interest at the times and in the amounts set forth in the Term Loan and
Security Agreement of even date herewith among Lender, each other financial institution from time to time a party thereto (collectively
with Lender, “Lenders”), Oxford Finance LLC, as agent for Lenders (in such capacity, “Agent”)
and Borrower (the “Loan Agreement”).

 

This Note is a Promissory
Note referred to in the Loan Agreement, evidences the Term Loan made to Borrower thereunder, and is subject to, and entitled to,
all provisions and benefits thereof, including optional and mandatory prepayment, in whole or in part, as provided therein.

 

Notwithstanding any
other provision of this Note to the contrary, upon the occurrence of any Event of Default specified in the Loan Agreement, or upon
termination of the Loan Agreement for any reason, all amounts then remaining unpaid on this Note may become, or be declared to
be, at the sole election of Lender, immediately due and payable as provided in the Loan Agreement.

 

This Note shall be
held in registered form, and transfers of this Note must be made pursuant to the Register maintained pursuant to Section 14.11
of the Loan Agreement. Borrower may deem and treat the person in whose name this Note is recorded on the Register as the absolute
owner of this Note for the purpose of receiving payment of, or on account of, the principal and interest due on this Note and for
all other purposes, notwithstanding notice to the contrary.

 

[remainder of page intentionally
left blank; signature page follows]

 

    	 	B-2	 

     

    

 

[Signature Page to Term Loan Promissory
Note]

 

	 	CHP FRIENDSWOOD SNF, LLC,
	 	a Delaware limited liability company
	 	 	 
	 	By:	SUMMIT HEALTHCARE REIT, INC.,
	 	 	a Maryland corporation
	 	Its:	Manager
	 	 	 	 
	 	 	By:	 
	 	 	 	Name:  Elizabeth A. Pagliarini
	 	 	 	Title:  Chief Financial Officer
	 	 	 	Duly Authorized

 

    	 	B-2	 

     

    

 

EXHIBIT C

 

FORM OF
CLOSING CHECKLIST

 

[see attached]

 

    	 	C	 

     

    

 

EXHIBIT D

 

FORM OF
COMPLIANCE CERTIFICATE

 

Oxford Finance LLC, as Agent

133 North Fairfax Street

Alexandria, Virginia 22314

 

The undersigned, CHP
FRIENDSWOOD SNF, LLC, a Delaware limited liability company, as Borrower Representative, on behalf of itself and such other
Persons joined hereto as Borrowers from time to time (together with each of their successors and assigns, individually and collectively,
“Borrower”), hereby delivers this Compliance Certificate to induce OXFORD FINANCE LLC, as Agent for itself and
certain other lenders (“Agent”), in accordance with the requirements of that certain Term Loan and Security
Agreement dated October 6, 2015 among Borrower, Agent and the lenders identified therein (the “Agreement”).
All capitalized terms used herein which are not otherwise defined hereunder shall have the meanings given to them in the Agreement.

 

1.          Based
upon my review of the balance sheets and statements of income of Borrower for the [fiscal year] [quarterly period] ending [INSERT
DATE], copies of which along with the calculations for each covenant, are attached hereto, I hereby certify that:

 

(i)          the
Fixed Charge Coverage Ratio is _____ to 1.00;

 

(ii)         the
Debt Service Coverage Ratio is _____ to 1.00;

 

2.          No
Event of Default or Unmatured Event of Default has occurred and is continuing.

 

3.          The most recent
survey was performed on __________ and a copy is attached hereto, unless previously provided.

 

4.          The most recent
real estate taxes and provider taxes were paid on ________ and a copy evidencing such payment is attached hereto, unless previously
provided.

 

3.          There
has been no material adverse change since _________ in the operations or condition of Borrower (whether financial or otherwise).

 

4.          All
warranties and representations set forth in the Agreement and all related agreements, instruments and documents (except such warranties
and representations made as of a specific date) are true and correct as of the date hereof.

 

[remainder of
page intentionally left blank; signature page follows]

 

    	 	D-1	 

     

    

 

[Signature Page
to Compliance Certificate]

 

	BORROWER REPRESENTATIVE:	CHP FRIENDSWOOD SNF, LLC,
	 	a Delaware  limited liability company
	 	 
	 	By:	SUMMIT HEALTHCARE REIT, INC.,
	 	 	a Maryland corporation
	 	Its:	Manager
	 	 	 	 
	 	 	By:	 
	 	 	 	Name:  Elizabeth A. Pagliarini
	 	 	 	Title:  Chief Financial Officer

 

[attach appropriate exhibits]

 

    	 	D-1	 

     

    

 

EXHIBIT E

 

single PURPOSE
ENTITY REQUIREMENTS

 

1.          The
Borrower’s business and purposes are and will continue to be limited to the following:

 

(a)          to
enter into and perform its obligations under this Agreement and the other Loan Documents;

 

(b)          to
acquire, own, hold, lease, maintain, develop and improve the Real Property;

 

(c)          to
sell, transfer, service, convey, dispose of, pledge, assign, borrow money against, finance or otherwise deal with the Real Property
to the extent permitted under the Loan Documents;

 

(d)          to
refinance the Real Property in connection with a permitted repayment of the Term Loan; and

 

(e)          to
engage in any lawful act or activity and to exercise any powers permitted to entities of the type (e.g., limited partnerships,
limited liability companies, corporations, as applicable to Borrower) formed under the laws of the state of organization of such
Person as of the date of this Agreement that are related or incidental to and necessary, convenient or advisable for the accomplishment
of the above mentioned purposes.

 

2.          Borrower
shall do (or cause to be done) all things necessary in order to preserve their existence to the fullest extent permitted by law.
Borrower shall do (or cause to be done) all of the following:

 

(a)          not
own any asset or property other than (i) a fee interest in the Real Property, and (ii) incidental personal property necessary
for the ownership or operation thereof;

 

(b)          not
enter into any contract or agreement with any Affiliate of the Borrower, any constituent party of the Borrower, any guarantor or
indemnitor under any of the Loan Documents or any Affiliate of any such constituent party or guarantor or indemnitor, except upon
terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s-length
basis with third parties other than any such party;

 

(c)          maintain
their intention to remain solvent and pay their debts and liabilities (including, as applicable, shared personnel and overhead
expenses) from their assets, to the extent of their assets, as the same shall become due;

 

(d)          do
or cause to be done all things necessary to observe organizational formalities of the Borrower and preserve its existence, and
not terminate or fail to comply with any of the provisions hereof;

 

    	 	E-1	 

     

    

 

(e)          maintain
all of their books, records, financial statements and bank accounts separate from those of their Affiliates and any other person
or entity; provided, however, that the Borrower’s financial position, assets, results of operations and cash flows may be
included in a consolidated financial statement of an Affiliate of the Borrower in accordance with GAAP so long as any such consolidated
financial statement contains a note indicating that the Borrower and its Affiliates comprising the consolidated group are separate
legal entities;

 

(f)          hold
themselves out to the public as a legal entities separate and distinct from each other and from any other entity (including any
Affiliate of the Borrower, any guarantor or any constituent party of the Borrower), correct any known misunderstanding regarding
their status as a separate entities, conduct business in their own name, and not identify themselves or any of their Affiliates
as a division or part of the other; provided, however, that Borrower shall be permitted to, and shall at all times, hold itself
out to the public as an entity that operates as a common enterprise;

 

(g)          to
the extent of cash flow available from ownership of the Real Property and other business of the Borrower, intend to maintain adequate
capital for the normal obligations reasonably foreseeable in a business of their size and character and in light of their contemplated
business operations;

 

(h)          not
commingle the funds and other assets of the Borrower with those of any Affiliate or constituent party, any guarantor or any other
person, except for funds deposited into any lockbox accounts or other cash management arrangements required under this Agreement;

 

(i)          maintain
their assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets
from those of any Affiliate or constituent party, any guarantor or any other person or entity;

 

(j)          not
permit any Affiliate or constituent party independent access to the Borrower’s bank accounts;

 

(k)          pay
the salaries of their own employees, if any;

 

(l)          compensate
each of their consultants and agents, if any;

 

(m)          maintain
an arm’s-length relationship with their Affiliates;

 

(n)          allocate
fairly and reasonably shared expenses, if any, including shared office space;

 

(o)          not
pledge any of their assets for the benefit of any person or entity other than Agent;

 

(p)          have
no obligation to indemnify their equity owners or their respective officers, directors or members, as the case may be, except to
the extent that payment of such obligation is fully subordinated to the payment of the Obligations; provided, however, the foregoing
shall not apply where the indemnity is paid from third party funds, such as insurance proceeds;

 

    	 	E-2	 

     

    

 

(q)          maintain
records, books of account and bank accounts separate and apart from any other person or entity (other than any lockbox account
or other cash management arrangement required hereunder); and file their own tax returns, if any, as may be required under applicable
law, provided, however, that the Borrower may file its federal tax return on a consolidated basis); and maintain its books, records,
resolutions and agreements as official records; and

 

(r)          not
make any loans or advances to any third party, and not acquire obligations or securities of their Affiliates, except, in each case,
as permitted under the Loan Documents.

 

3.          So
long as any commitment to lend shall exist, the Borrower shall not do (or cause to be done) any of the following, except to the
extent otherwise permitted under the Loan Documents (if at all):

 

(a)          assume,
guarantee, become obligated for, or hold themselves out to be responsible for the debts or obligations of any other person or entity
or the decisions or actions respecting the daily business or affairs of any other person;

 

(b)          engage,
directly or indirectly, in any business other than the actions required or permitted to be performed under the Borrower’s
Organizational Documents (as the same may be amended or supplemented from time to time with Agent’s consent);

 

(c)          incur,
create or assume any indebtedness other than the Term Loan;

 

(d)          make
or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any person or entity;

 

(e)          form,
acquire or hold any Subsidiary (whether corporate, partnership, limited liability company or other); or

 

(f)          to
the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger or sale of all or substantially
all of their assets.

 

    	 	E-3	 

     

    

 

Schedule 4.2(e) – Term Loan
Payments

 

	Payment	 	 	 
	Date	 	Principal	 
	 	 	 	 
	11/1/15	 	$	0.00	 
	12/1/15	 	$	0.00	 
	1/1/16	 	$	0.00	 
	2/1/16	 	$	0.00	 
	3/1/16	 	$	0.00	 
	4/1/16	 	$	0.00	 
	5/1/16	 	$	0.00	 
	6/1/16	 	$	0.00	 
	7/1/16	 	$	0.00	 
	8/1/16	 	$	0.00	 
	9/1/16	 	$	0.00	 
	10/1/16	 	$	0.00	 
	11/1/16	 	$	6,895.09	 
	12/1/16	 	$	8,346.47	 
	1/1/17	 	$	6,990.25	 
	2/1/17	 	$	7,033.89	 
	3/1/17	 	$	11,289.28	 
	4/1/17	 	$	7,148.28	 
	5/1/17	 	$	8,593.02	 
	6/1/17	 	$	7,246.55	 
	7/1/17	 	$	8,688.72	 
	8/1/17	 	$	7,346.04	 
	9/1/17	 	$	7,391.90	 
	10/1/17	 	$	8,830.25	 
	11/1/17	 	$	7,493.17	 
	12/1/17	 	$	8,928.88	 
	1/1/18	 	$	7,595.70	 
	2/1/18	 	$	7,643.12	 
	3/1/18	 	$	11,842.99	 
	4/1/18	 	$	7,764.77	 
	5/1/18	 	$	9,193.35	 
	6/1/18	 	$	7,870.64	 
	7/1/18	 	$	9,296.45	 
	8/1/18	 	$	7,977.82	 
	9/1/18	 	$	8,027.62	 
	10/1/18	 	$	9,449.31	 
	11/1/18	 	$	8,136.73	 
	12/1/18	 	$	9,555.56	 
	1/1/19	 	$	8,247.19	 
	2/1/19	 	$	8,298.67	 
	3/1/19	 	$	12,438.81	 
	4/1/19	 	$	8,428.14	 
	5/1/19	 	$	9,839.33	 
	6/1/19	 	$	8,542.18	 
	7/1/19	 	$	9,950.38	 
	8/1/19	 	$	8,657.63	 
	9/1/19	 	$	8,711.68	 
	10/6/19	 	$	6,700,310.12	 
	Total:	 	$	7,000,000.00	 

 

    	 	Schedule 4.2(e) – Page 1	 

     

    

 

Schedule 8.2 – Information
Certificate

[see attached]

 

    	 	Schedule 8.2 – Page 1	 

     

    

 

Schedule 8.6 – Environmental
Matters

 

None.

 

    	 	Schedule 8.6 – Page 1	 

     

    

 

Schedule 8.7 – Proceedings

 

None.

 

    	 	Schedule 8.7 – Page 1	 

     

    

 

Schedule 8.8 – Regulatory
Matters

 

None.

 

    	 	Schedule 8.8 – Page 1	 

     

    

 

Schedule 9.2 – Post Closing Matters

 

1.
Within thirty (30) days of the date hereof, Borrower shall deliver to Agent, evidence satisfactory to Agent that all UCC-1 Financing
Statements filed against Borrower and Cornerstone Healthcare Holdings 1, LLC (other than those filings in favor of Agent) have
been released, including (a) that certain UCC Financing Statement, initial filing number 20123543669, filed on September 13, 2012
with the Delaware Secretary of State identifying CHP Friendswood SNF, LLC, as debtor, and General Electric Capital Corporation,
as secured party, (b) that certain Suit No. 15-TX-0553 filed on August 3, 2015 in the District Court of Galveston County - 212
District Court, Texas by Galveston County against CHP Friendswood SNF, LLC, and (c) that certain UCC Financing Statement, initial
filing number 20122317974, filed June 15, 2012 with the Delaware Secretary identifying Cornerstone Healthcare Holdings 1, LLC,
as debtor, and General Electric Capital Corporation, as secured party.

 

    	 	Schedule 9.2 – Page 1Exhibit

Exhibit 10.23

SECOND AMENDMENT TO 
MASTER REPURCHASE AGREEMENT
dated as of August 17, 2015
among
JPMorgan Chase Bank, N.A.,
as a Buyer and as Administrative Agent for the Buyers
from time to time party thereto
and
Universal American Mortgage Company of California
and
Universal American Mortgage Company, LLC,
jointly and severally, as Sellers

and
J.P. MORGAN SECURITIES LLC
Sole Bookrunner and Sole Lead Arranger

SECOND AMENDMENT TO MASTER REPURCHASE AGREEMENT
Dated as of August 17, 2015
Between:

UNIVERSAL AMERICAN MORTGAGE COMPANY, LLC, as Seller jointly and severally with the other Sellers
and
UNIVERSAL AMERICAN MORTGAGE COMPANY OF CALIFORNIA, as Seller jointly and severally with the other Sellers
and
JPMORGAN CHASE BANK, N.A., as Administrative Agent
1.THIS AMENDMENT
The Parties hereby agree to amend (for the second time) the Master Repurchase Agreement dated November 21, 2013, between them (the “Original MRA”, as amended by the First Amendment to Master Repurchase Agreement dated December 20, 2014, and as further supplemented, amended or restated from time to time, the “MRA”) to extend the latest Termination Date and make certain other changes to the MRA, and they hereby amend the MRA as follows (paragraphs below are numbered to correspond to the numbering of the paragraphs of the MRA amended hereby and consequently are sometimes nonsequential):
All capitalized terms used in the MRA and used, but not defined differently, in this amendment (this “Amendment”) have the same meanings here as there.
2.DEFINITIONS; INTERPRETATION
A.      Subparagraph (xxii) of the definition of “Eligible Mortgage Loan” in Section 2(a) of the MRA is hereby amended to read as follows:
(xxii)    which, if a Jumbo Loan, its Purchase Price, when added to the sum of the Purchase Prices of all other Jumbo Loans that are then subject to Transactions, is less than or equal to $30,000,000 at any one time;
B.    The definition of “Termination Date” in Section 2(a) of the MRA is hereby amended to read as follows:
“Termination Date” means the earliest of (i) that Business Day which Administrative Agent (solely in accordance with Section 36) designates as the Termination Date, (ii) that Business Day which any Seller designates as the Termination Date by written notice to Administrative Agent at least fifteen (15) days prior to such date, (iii) the date of declaration of the Termination Date pursuant to Section 12(b), and (iv) August 15, 2016 [enter date that is 364 days after the effective date of this Second Amendment].

11.    Seller’s Covenants
A.    Section 11(g)(v) of the MRA is hereby amended to read as follows:
(v)    Subject to applicable Agency confidentiality requirements (if any), photocopies of any audits completed by any Agency of Seller or any of its Subsidiaries, not later than five (5) days after receiving such audit;
B.    Section 11(w)(ii) of the MRA is hereby amended to read as follows:
(ii)    Minimum Adjusted Tangible Net Worth.  Seller shall not permit the Adjusted Tangible Net Worth of all Sellers (and, if applicable, their Subsidiaries, on a consolidated basis), computed as of the end of each calendar month to be less than $75,000,000.
C.    Section 11(w)(iii)(A) of the MRA is hereby amended to read as follows:
(A)    maintain at all times unencumbered Liquidity in an amount greater than or equal to $20,000,000;
Exhibit C
A new Exhibit C in the form attached hereto as Exhibit C is hereby made part of the MRA in place of the Exhibit C currently attached to the MRA.
Schedule IV 
A new Schedule IV in the form attached hereto as Schedule IV is hereby made part of the MRA in place of the Schedule IV currently attached to the MRA.
(The remainder of this page is intentionally blank)

As amended hereby, the MRA remains in full force and effect, and the Parties hereby ratify and confirm it.

	
	
	JPMORGAN CHASE BANK, N.A., as Administrative Agent

	 

	By:/s/ Carolyn Johnson______

	Name:Carolyn Johnson

	Title:Senior Underwriter

	
	
	UNIVERSAL AMERICAN MORTGAGE COMPANY, LLC,
jointly and severally with the
other Sellers

	 

	By:  /s/ Robert S. Greaton__

	Name:  Robert S. Greaton

	Title:  Vice President

	
	
	UNIVERSAL AMERICAN MORTGAGE COMPANY OF CALIFORNIA,
jointly and severally with the
other Sellers

	 

	By:  /s/ Robert S. Greaton

	Name:  Robert S. Greaton

	Title:  Vice President

EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE
		
	SELLER:
	[NAME OF APPLICABLE SELLER]

		
	ADMINISTRATIVE AGENT:
	JPMORGAN CHASE BANK, N.A.

a national banking association
		
	TODAY’S DATE:
	____/____/____

		
	REPORTING PERIOD ENDED:
	_____ month(s) ended ____/____/____

This certificate is delivered to Administrative Agent under the Master Repurchase Agreement dated effective as of November 21, 2013, between Sellers and Administrative Agent (the “Agreement”), all the defined terms of which have the same meanings when used herein.
I hereby certify that with respect to Seller indicated above:  (a) I am, and at all times mentioned herein have been, the duly elected, qualified, and acting Chief Financial Officer of Seller; (b) to the best of my knowledge, the Financial Statements of Seller from the period shown above (the “Reporting Period”) and which accompany this certificate were prepared in accordance with GAAP and present fairly the financial condition of Seller as of the end of the Reporting Period and the results of its operations for Reporting Period; (c) a review of the Agreement and of the activities of Seller during the Reporting Period has been made under my supervision with a view to determining Seller’s compliance with the covenants, requirements, terms, and conditions of the Agreement, and such review has not disclosed the existence during or at the end of the Reporting Period (and I have no knowledge of the existence as of the date hereof) of any Default or Event of Default with respect to any Seller, except as disclosed herein (which specifies the nature and period of existence of each Default or Event of Default, if any, and what action Seller has taken, is taking, and proposes to take with respect to each); (d) the calculations described on the pages attached hereto evidence that Seller is in compliance with the requirements of the Agreement at the end of the Reporting Period (or if Seller is not in compliance, showing the extent of non-compliance and specifying the period of non-compliance and what actions Seller proposes to take with respect thereto); (e) Seller was, as of the end of the Reporting Period, in compliance and good standing with applicable CL, Fannie Mae, Ginnie Mae, Freddie Mac, and HUD net worth requirements; (f) this certificate is being delivered by me in my capacity as the Chief Financial Officer of Seller and not in my personal capacity.
By:        
Name:
Title:  Chief Financial Officer

SELLER:
REPORTING PERIOD ENDED:    ____/____/____
All financial calculations set forth herein are as of the end of the Reporting Period.1 
		
	I.
	TANGIBLE NET WORTH

	
		
	The Tangible Net Worth is:
	 

	Shareholder’s equity:
	$

	Minus:  intangible assets - goodwill, intellectual property
	$

	Minus:  capitalized servicing rights
	$

	Minus:  Employee Loans
(unless they are advances against commissions)
	$

	Minus:  Assets pledged to secure liabilities not included in Debt:
	$

	Minus:  Any assets unacceptable to Administrative Agent or Agencies 
	$

	TANGIBLE NET WORTH:
	$

		
	II.
	ADJUSTED TANGIBLE NET WORTH 

	
		
	Adjusted Tangible Net Worth is:
	 

	Tangible Net Worth (from above):
	$

	Plus:  Qualified Subordinated Debt:
	$

	Plus: Lesser of (i) 1.00% times unpaid principal balance of Seller’s Mortgage Loans with Servicing Rights and (ii) capitalized value of Seller’s Servicing Rights
	$

	Plus:  Lesser of (A) 50% of net book value of Mortgage Loans held for investment and (B) $20,000,000
	 

	Minus: 100% of net book value of Mortgage Loans held for investment
	$

	Minus: 50% of net book value of REO Property
	$

	Minus: 50% of net book value of other illiquid investments
	$

	Minus:  Advances of loans to Affiliates:
	 

	Minus:  Investments in Affiliates, pledged assets, etc. (per definition):
	 

	ADJUSTED TANGIBLE NET WORTH:
	$

	REQUIRED MINIMUM (through Termination Date)
	$75,000,000

	In compliance?  
	Yes No

1 Calculation chart to be matched to financial covenants.

		
	III.
	DEBT OF SELLER 

	
		
	Total Liabilities 
	$

	Plus:  off balance sheet debt:  
	$

	Minus:  loan loss reserves (if included in liabilities):
	$

	Minus:  deferred taxes arising from capitalized excess servicing fees:
	$

	Minus: operating leases
	$

	Minus: Qualified Subordinated Debt
	$

	DEBT:
	$

		
	IV.
	LEVERAGE RATIO:  DEBT TO ADJUSTED TANGIBLE NET WORTH

	
		
	Debt (from above):
	$

	Adjusted Tangible Net Worth:
	$

	RATIO OF DEBT/ADJUSTED TANGIBLE NET WORTH:
	__:1

	Maximum permitted 
	10:1

	In compliance?
	Yes No

		
	V.
	LIQUIDITY 

	
		
	Cash (including Cash Pledge Account balance but excluding other pledged cash and restricted cash)
	$

	Cash Equivalents
	$

	Total Required Liquidity:
	$20,000,000

	Total Liquidity:
	$

	In compliance?
	Yes No

		
	VI.
	NET INCOME (tested each fiscal quarter for most recently ended period of two consecutive fiscal quarters)/NET LOSS (tested each fiscal quarter)

	
		
	Net Income for period of last two consecutive fiscal quarters:
	$

	Minimum required:
	$1.00

	In compliance?
	Yes No

	Net Operating Loss for fiscal quarter
	$

	Maximum permitted:
	$2,500,000

	In compliance?
	Yes No

		
	VII.
	PRODUCTION

	
			
	Volume
	Current Month
	Year-to-Date

	Residential Mortgage Loans Funded
	$
	$

	Commercial Loans Funded *
	$
	$

	TOTAL VOLUME
	$
	$

* Commercial loans include 5 or more unit multi-family properties and mixed use properties.  

	
			
	Volume
	Current Month
	Year-to-Date

	Banked Loan Production
	$
	$

	Brokered Loan Production
	$
	$

	TOTAL VOLUME
	$
	$

	
			
	By Channel/Source
	Current Month
	Year-to-Date

	Retail as % of Total
	%
	%

	TPO Loans as a % of Total
	%
	%

	Correspondent as a % of Total**
	%
	%

	TOTAL (Must = 100%) 
	%
	%

*Correspondent loans are defined as those that are purchased as closed loans from third parties.
	
			
	By Category
	Current Month
	Year-to-Date

	Government as % of Total
	%
	%

	Conventional as % of Total
	%
	%

	Jumbo as % of Total
	%
	%

	Alt A as % of Total
	%
	%

	Subprime as % of Total
	%
	%

	Second Mortgages as %
	%
	%

	Other (Describe)
	%
	%

	Total (Must = 100%)
	%
	%

	By Finance Type
	Current Month
	Year-to-Date

	Purchase as % of Total
	%
	%

	Refinance as a % of Total
	%
	%

	TOTAL (Must = 100%) 
	%
	%

	
			
	Others
	Current Month
	Year-to-Date

	Average FICO
	%
	%

	Average LTV
	%
	%

	Average CLTV
	 
	 

		
	VIII.
	FACILITIES (Please list all Available Warehouse Capacity including off balance sheet facilities)

	
			
	Institution
	Total (committed or uncommitted, please indicate “C” or “U”)
	Outstanding

	 
	$_____________
	$

	 
	$
	$

	SUB TOTALS
	$
	$

	JPM syndicate
	 
	 

	Chase Commitment
	$
	$

	Other participants’ commitment
	$
	$

	TOTAL JPM Facility Amount
	$
	$

	 
	 

	X.Chase Commitment
	$

	Y.Sum of Available Warehouse Facilities (including Facility Amount)
	$

	Ratio X/Y (stated as a percentage)
	  _____%

	Maximum ratio of Chase Commitment to Available Warehouse Facilities (including JPM Facility Amount)
	66-2/3%

	In compliance?
	Yes No

		
	IX.
	REPURCHASES / INDEMNIFICATIONS (R&I)

	
					
	Repurchases
	UPB
	# of Loans
	Actual or Estimated Loss
	How were they recorded on the financials?

	Beginning Open R&I’s 
	 
	 
	 
	 

	 
	$
	 
	$
	 

	New R&I’s received this month
	 
	 
	 
	 

	 
	$
	 
	$
	 

	R&I’s rescinded this month
	$
	 
	$
	n/a

	R&I’s settled this month
	$
	 
	$
	 

	Ending Open R&I’s
	$
	 
	$
	 

* If you have a detailed schedule of loans subject to repurchases that includes the investor requesting, reason for repurchases, origination date, loan characteristics such as LTV, lien position, occupancy etc., and valuation method if you have estimated your loss exposure, please attach it with this table.
		
	X.
	FORECLOSURES

	
			
	 
	Current Month
	Year-to-Date

	Foreclosure loan units
	$
	$

	Foreclosure loan volumes
	$
	$

	Expected loss on Foreclosures
	$
	$

	TOTALS
	$
	$

		
	XI.
	LOAN LOSS RESERVE

	
			
	 
	Current Month
	Year-to-Date

	Beginning loan loss reserve
	$
	$

	Additional loss provision
	$
	$

	Actual charge off
	$
	$

	Ending Loan Loss Reserve
	$
	$

		
	XII.
	LOAN SERVICING

	
			
	Total Servicing portfolio at end of period
	 

	Number of Mortgage Loans serviced:
	 

	Aggregate principal balance of Mortgage Loans serviced:
	$

	 
	Current Month
	Year-to-Date

	60 days delinquency (Unit)
	 
	 

	60 days delinquency volumes
	$
	$

	Loan servicing report attached
	 
	 

		
	XIII.
	LITIGATION

	
			
	 
	Current Month
	Year-to-Date

	Pending litigation (Unit)
	 
	 

	Expected losses on litigation
	$
	$

		
	XIV.
	THIRD PARTY REPORTS

All reports received from third parties (such as the SEC, Fannie Mae, Ginnie Mae, Freddie Mac) subsequent to the last reporting period are attached hereto.  These reports include the following (if none, write “None”):  ____
		
	XV.
	DEFAULTS OR EVENTS OF DEFAULT

Disclose nature and period of existence and action being taken in connection therewith; if none, write “None”:  ___
		
	XVI.
	OTHER REPORTS REQUIRED (Please attach if applicable)

		
	a.
	Buyer Warehouse Loans T& I Escrow reconciliation

		
	b.
	Indemnification & Repurchase Report for the prior year and current YTD.

c.    Hedge Reports (including:  position summary report, MBS & whole loan trade detail, loan level detail report with weighted average take out price)

Schedule IV
	
							
	Jumbo Funding Criteria Matrix

	Amortizing Fixed & ARM Loans
	 
	Combination of Maximum CLTV and Minimum FICO

	Purpose
	Property Type(1)
	<$1.0MM
	>$1.0MM-$1.5MM
	>$1.5MM - $2.0MM
	$2.0MM-$3.0MM(3)

	Purchase and No Cash Out Refinance
	1 Unit or PUD / Condo (Attached/Detached),
Co-op(2)
	85%(4) 740
80% 700
70% 680
	85%(4) 740
80% 740
75% 700
65% 680
	80% 740
70% 720
65% 700
60% 680
	75% 760
70% 720
65% 700
60% 680

	2 Unit
	75% 740
	70% 740
	65% 740
	65% 740

	3 Unit
	70% 740
	65% 740
	Not Eligible
	Not Eligible

	4 Unit
	65% 740
	60% 740
	Not Eligible
	Not Eligible

	Second / Vacation Home
1 Unit or PUD / Condo
(Attached/Detached)
	70% 740
65% 720
	60% 740
55% 720
	50% 740
	50% 740

	Cash Out Refinance (Max $250,000)
	1 Unit or PUD
Attached/Detached, Condo
Attached/Detached, Co-op(2)
	80% 760
75% 740
70% 720
65% 700
	75% 760
70% 740
65% 720
55% 700
	70% 760
65% 740
55% 720
50% 700
	65% 760
60% 740
50% 720

	2 Unit
	70% 740
	65% 740
	60% 740
	55% 740

	3-4 Unit
	Not Eligible

	Second / Vacation Home
	Not Eligible

	
							
	Interest Only ARM Loans
	 
	Combination of Maximum CLTV and Minimum FICO

	Purchase and No Cash Out Refinance
	1 Unit or PUD / Condo (Attached/Detached),
Co-op(2)
	<$1.0MM
	>$1.0MM-$1.5MM
	>$1.5MM - $2.0MM
	$2.0MM-$3.0MM(3)

	2 Unit
	70% 740
60% 720
55% 700
	70% 800
65% 740
55% 720
	65% 780
60% 740
55% 720
	65% 780
60% 740
55% 720

	3-4 Unit
	Not Eligible

	Second / Vacation Home
1 Unit or PUD / Condo
(Attached/Detached), Co-op(2)
	60% 740
	55% 740
	50% 740
	50% 740

	Cash Out Refinance (Max $250,000)
	1 Unit or PUD
Attached/Detached, Condo
Attached/Detached, Co-op(2)
	Not Eligible

	2 Unit

	3-4 Unit

		
	(1)
	Primary residence only, unless otherwise noted.

		
	(2)
	Co-op eligible in NY only

		
	(3)
	Permitted in certain geographic locations only; not eligible in Florida

		
	(4)
	Non-Occupant Co-borrower transactions are not permitted on loans with LTVs > 80%

SECOND AMENDED AND RESTATED 
ADMINISTRATION AGREEMENT
This Second Amended and Restated Administration Agreement (this “Agreement”) dated as of August 17, 2015 (the “Effective Date”), is made by and among JPMORGAN CHASE BANK, N.A. (“Chase”), a national banking association, as a Buyer and as administrative agent for the Buyers (in that capacity, Chase is herein referred  to as the “Administrative Agent”) and the other Buyers party hereto from time to time (collectively with Chase, “Buyers” and each a “Buyer”) and UNIVERSAL AMERICAN MORTGAGE COMPANY, LLC and UNIVERSAL AMERICAN MORTGAGE COMPANY OF CALIFORNIA (collectively, “Sellers”, and each a “Seller”).  Administrative Agent, Buyers and Sellers are sometimes also referred to herein individually as a “Party” and collectively as the “Parties”.  Administrative Agent, Chase, Comerica Bank, Branch Banking and Trust Company, and Sellers entered into an Amended and Restated Administration Agreement dated as of December 20, 2014 (the “Amended and Restated Administration Agreement”).  Effective as of the Effective Date, this Agreement amends and restates the Amended and Restated Administration Agreement in its entirety.  This Agreement shall henceforth be the Administration Agreement referred to in the Repurchase Agreement (defined below). 
Recitals
Sellers, Chase, as a Buyer and as Administrative Agent for the Buyers, and such other Buyers have entered into a Master Repurchase Agreement dated as of November 21, 2013 (as amended by the First Amendment to Master Repurchase Agreement dated December 20, 2014, the Second Amendment to Master Repurchase Agreement dated as of the Effective Date, and as it may be further supplemented, amended or restated from time to time, the “Repurchase Agreement”) 
Pursuant to the Repurchase Agreement, Chase, as Administrative Agent for the Buyers, has agreed to enter into Transactions for the purchase from Sellers of mortgage loans (the “Purchased Mortgage Loans”), subject to the Sellers’ joint and several obligation to repurchase such Purchased Mortgage Loans at the Repurchase Price on or before the Repurchase Date.
The Buyers desire that such Transactions be allocated to them by the Administrative Agent.
The Administrative Agent desires to allocate to Buyers, and each Buyer has agreed to purchase, Purchased Mortgage Loans and the rights related thereto up to such Buyer’s Commitment (as defined below).
Administrative Agent desires to administer the Repurchase Agreement and the allocation of the Purchased Mortgage Loans as agent and representative of the Buyers.
Agreements
In consideration of the mutual covenants contained herein and for other good and valuable consideration, the Parties, intending to be legally bound, hereto agree as follows:

Article 1
DEFINED TERMS
Section 1.1    Defined Terms.
(a)    All capitalized terms defined in the Repurchase Agreement and used, but not defined differently, in this Agreement have the same meanings here as there.
(b)    As used herein, the following terms have the following meanings:
“Administrative Questionnaire” means a form sent by the Administrative Agent to an assignee in accordance with clause (iv) of Section 8.5(b).
“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Buyer, (b) an Affiliate of a Buyer or (c) an entity or an Affiliate of an entity that administers or manages a Buyer. 
“Available Commitment” means, with respect to any Buyer, the excess (if any) of (x) such Buyer’s Commitment over (y) the sum of the amounts funded by such Buyer and outstanding in respect of Transactions.
“Buyer’s Swing Line Purchase Price” means the relevant Buyer’s Purchase Price Share of a Transaction initially funded as a Swing Line Transaction.
“Commitment” means, for any day, the maximum amount for which a Buyer is committed on that day to enter into Transactions with the Sellers pursuant to the Repurchase Agreement, on its terms and subject to its conditions.  The Commitments for the Buyers are as set forth on Schedule 1, as it may be updated, amended and restated by Administrative Agent from time to time.
“Custodial Assets Schedule” means a schedule of Purchased Mortgage Loans held by the Administrative Agent.
“Declining Buyer” is defined in Section 2.1(b).
“Exception Mortgage Loan” is defined in Section 6.2(h). 
“Facility Reduction Date” shall have the meaning given to such term in that certain Third Amendment to Side Letter dated as of the Effective Date by and between Sellers and Administrative Agent.
“Increase Date” shall have the meaning given to such term in that certain Third Amendment to Side Letter dated as of the Effective Date by and between Sellers and Administrative Agent.
“Maximum Swing Line Purchase Price” means the lesser of (x) $270,000,000 prior to the Facility Reduction Date and after the Increase Date, and during the period from the Facility Reduction Date until the Increase Date, $225,000,000 and (y) the Facility Amount minus the Aggregate Purchase Price then outstanding other than the aggregate outstanding Purchase Prices with respect to the Swing Line Transactions.
“New Buyer” means a bank or other lending institution that becomes a Buyer as a result of the events described in Section 2.3 or Section 5.3(c).
“Participant” is defined in Section 8.5(a).

“Pro Rata” means in accordance with the Buyers’ respective ownership interests in the Transactions: the ratio of that Buyer’s aggregate outstanding Purchase Price to the Aggregate Purchase Price outstanding for all Buyers.  On any day, the Buyers will each own an undivided interest in the Purchased Mortgage Loans, both principal and accrued interest, and a corresponding undivided interest in all Mortgage Assets and all rights to the Mortgage Assets equal to that Buyer’s undivided ownership interest in the Purchased Mortgage Loans, that bears the same ratio to all Purchased Mortgage Loans then held by Administrative Agent (as agent and representative of Buyers) as that Buyer’s aggregate outstanding Purchase Price bears to the Aggregate Purchase Price outstanding for all Buyers, subject to the following adjustment:  if at any time or times, any Buyer fails to fund any of its Purchase Price Share of any Transaction or fails to fund the re-funding of any Swing Line Transaction and one or more of the other Buyers at its option funds it, then:
(a)    the respective ownership interests in the Transactions of both (1) the Declining Buyer and (2) the Buyer (or Buyers) that paid the corresponding amount for such Purchase Price Share(s), shall be proportionately decreased and increased, respectively, to the same extent as if their respective Commitments were changed in direct proportion to the unreimbursed balance outstanding from time to time thereafter of the amount so funded;
(b)    the Declining Buyer’s share of all future distributions of any payments and prepayments on the Transactions and any fees paid by Sellers pursuant to this Agreement or the other Transaction Documents shall be paid Pro Rata among such other Buyers in accordance with their respective unrecovered amount paid on account of such Declining Buyer’s Purchase Price Share to the Buyer(s) that so funded such Declining Buyer’s Purchase Price Share until all such funding Buyers have been fully repaid the amount so funded; and
(c)    such adjustment shall remain in effect until such time as the Buyer(s) that funded such Purchase Price Share have been so fully repaid.
If no other Buyer funds the Declining Buyer’s Purchase Price Share, then the Pro Rata ownership interest in the Transactions of the Buyers shall be changed, in that case so that each Buyer’s Pro Rata ownership interest in the Transactions is equal to the ratio of that Buyer’s aggregate outstanding Purchase Price to the Aggregate Purchase Price (for all Buyers).  Notwithstanding the change in the Buyers’ Pro Rata ownership interests in the Transactions due to any Buyer’s failure to fund its Purchase Price Share of any Transaction(s), such failure to fund shall not diminish any Buyer’s funding obligation for its Purchase Price Shares of any subsequent Transactions. 
“Purchase Price Share” means the ratio of (a) a Buyer’s Commitment to (b) the aggregate of the Commitments of all Buyers.
“Replacement Buyer” means the Buyer who is replacing the Retiring Buyer in accordance with Section 5.3. 
“Required Buyers” means, for any day, the Buyers with aggregate Commitments evidencing fifty-one percent (51%) or more of (a) the aggregate Commitments if on that day the Buyers are committed to enter into Transactions under the Repurchase Agreement or (b) the Aggregate Purchase Price if on or after that day the Buyers’ Commitments have expired or have been terminated and have not been reinstated; provided, that (i) the Commitment of any Declining Buyer shall not be included in determining the consent of Required Buyers hereunder, and (ii) “Required Buyers” shall include at least two (2) Buyers unless all Buyers other than the consenting Buyer are Declining Buyers.
“Retiring Buyer” is defined in Section 5.3(c).
“Settlement Account” means the account described in Section 3.3(a).

“Swing Line Commitment” means Chase’s commitment to enter into Swing Line Transactions pursuant to Article 3.
“Swing Line Repurchase Date” means, with respect to a Swing Line Transaction, the Business Day next following the day that the Swing Line Transaction was entered into but in no event later than the Termination Date.
“Swing Line Transaction” means Transactions that the Sellers will enter into with Chase to initially fund the Sellers’ daily Purchase Price requirements for Transactions under the Repurchase Agreement.

Article 2
COMMITMENTS TO ENTER INTO TRANSACTIONS
Section 2.1    Commitment to Enter into Transactions.  
(a)    Subject to the terms and conditions of this Agreement and the Repurchase Agreement and provided that no Default or Event of Default has occurred under the Repurchase Agreement, the Administrative Agent, as agent and representative of Buyers, agrees to enter into Transactions with Sellers up to the Facility Amount.  The Buyers’ respective Commitments are set forth on Schedule 1.  Each Buyer shall be obligated to fund only that Buyer’s own Purchase Price Share of any Transaction requested, and no Buyer shall be obligated to the Sellers, the Administrative Agent or any other Buyer to fund a (i) greater share of any Transaction or (ii) a share in excess of such Buyer’s Available Commitment, notwithstanding any contrary inference of the provisions of the penultimate grammatical paragraph of Section 1 of the Side Letter.
(b)    No Buyer shall be excused from funding its applicable Purchase Price Share of any Transaction merely because any other Buyer has failed or refused to fund its Purchase Price Share of that or any other Transaction.  If any Buyer fails to fund its Purchase Price Share of any Transaction or of the re-funding of any Swing Line Transaction (a “Declining Buyer”), (i) the Administrative Agent as a Buyer (in its sole and absolute discretion) may choose to fund the Purchase Price Share of the Declining Buyer, or (ii) the Administrative Agent as a Buyer and the other Buyers who are willing to do so shall have the right (but no obligation, except as provided in Section 3.3(c) below with respect to a failure to refund a Swing Line Transaction) to fund the Declining Buyer’s Purchase Price Share in the proportion that the Commitment of each bears to the sum of the Commitments of all Buyers that have funded (or are funding) their own Purchase Price Shares of that Transaction.
(c)    Regardless of whether the other Buyers fund the Purchase Price Share of the Declining Buyer, the respective ownership interests of the Buyers in the Transaction shall be adjusted Pro Rata as described in the definition thereof.
(d)    Should the Administrative Agent fund the Declining Buyer’s Purchase Price Share of any Transaction, then the Declining Buyer shall have the obligation to the Administrative Agent, the Sellers and the other Buyers to deliver such amount to the Administrative Agent in collected funds on the next Business Day.
(e)     Notwithstanding that multiple Buyers are purchasing Purchase Price Shares of the Transactions entered into under the Repurchase Agreement, all Transactions shall be deemed a single Transaction and all of the Mortgage Assets shall be security for all of the Obligations thereunder. 

Section 2.2    Expiration or Termination of the Commitments.  Unless extended in writing or terminated earlier in accordance with this Agreement and the Repurchase Agreement, the Buyers’ Commitments to enter into Transactions under this Agreement and the other Transaction Documents (including Chase’s Swing Line Commitment) shall automatically expire at the close of business on the Termination Date, without any requirement for notice or any other action by the Administrative Agent, any of the Buyers or any other Person.
Section 2.3    Request for Increase in the Facility Amount.  
(a)    If the Sellers shall request an increase in the Facility Amount in accordance with Section 1 of the Side Letter, the Administrative Agent shall use commercially reasonable efforts to obtain increased Commitments from existing Buyers, new Commitments from prospective new Buyers or such combination thereof as the Administrative Agent shall elect, to achieve such requested increase; each Buyer’s decision whether to increase its Commitment shall be in such Buyer’s sole and absolute discretion. 
(b)    The Administrative Agent shall (i) first offer the opportunity to each then-existing Buyer to proportionately increase its Commitment before offering prospective new Buyers the opportunity to join as Buyers, and (ii) will next offer the opportunity to the then-existing Buyers who have agreed to increase their Commitments to further proportionately increase them to include any Commitment increase offered to but not accepted by any of the other then-existing Buyers.
(c)    If the increase in the Facility Amount is achieved in whole or in part (whether by some or all of the existing Buyers’ increasing their Commitments, written joinder in the Repurchase Agreement by a New Buyer or New Buyers, or both), then (i) the Pro Rata ownership interest in the Transactions of each Buyer (if any) that does not proportionately increase its Commitment shall automatically be reduced and adjusted proportionately and (ii) Schedule 1 shall be updated and the updates executed and delivered by the Administrative Agent to the Sellers and each of the Buyers and shall automatically supersede and replace the then-existing corresponding schedule for all purposes.  The amount and Buyers offering any Facility Amount increase shall be subject to the prior written consent of the Sellers, which consent shall not be unreasonably withheld, conditioned or delayed.
Article 3
SWING LINE COMMITMENT
Section 3.1    Swing Line Commitment. In addition to its Commitment under Section 2.1, Chase agrees to enter into Swing Line Transactions with the Sellers in amounts that do not on any day exceed the Maximum Swing Line Purchase Price for purposes of initially entering into Transactions under the Repurchase Agreement (excluding the initial Transaction for the repurchase from Chase of purchased mortgage loans then held by Chase under the Prior Chase-only MRA and their purchase by Administrative Agent as agent and representative of Buyers, as described in Section 33(b) of the Repurchase Agreement, which shall be funded by all Buyers).  The rights and obligations of Chase set forth in this Section 3.1 shall not modify the rights and obligations of Chase in its capacity as a Buyer.
Section 3.2    Swing Line Transactions.  Each requested Transaction (other than said initial Transaction) shall be initially funded by Chase as a Swing Line Transaction, provided that:
(a)    no Default or Event of Default has occurred and is continuing or would exist after funding of such Swing Line Transaction;
(b)    after such funding, Chase’s aggregate Purchase Price would not exceed its Commitment; 
(c)    the Maximum Swing Line Purchase Price would not be exceeded; and

(d)    neither the Sellers nor Chase is aware of any reason why the requested Swing Line Transaction cannot or will not be fully funded by the Buyers according to their respective Purchase Price Shares on the Swing Line Repurchase Date.
Section 3.3    Re-funding of Swing Line Transactions.
(a)    By 10:00 AM, Houston time, on the Swing Line Repurchase Date, Administrative Agent will deliver written notice to each Buyer stating the amount of such Buyer’s Swing Line Purchase Price for the Swing Line Transaction funded on the immediately preceding Business Day and the amount due from each Buyer to Administrative Agent to pay such Buyer’s Swing Line Purchase Price to Chase (such amount due being such Buyer’s Swing Line Purchase Price net of the sum of such Buyer’s Pro Rata share of any Repurchase Price, Price Differential Payments and other payments theretofore received by Administrative Agent from Sellers, or from Takeout Investors or others for Sellers’s account, and not previously paid or credited by Administrative Agent to such Buyer), and each Buyer will wire such amount by 1:00 PM, Houston time, on such Swing Line Repurchase Date to the Administrative Agent by federal funds wire transfer to such account as Administrative Agent shall specify (the “Settlement Account”).
(b)    Each Swing Line Transaction shall be re-funded on its Swing Line Repurchase Date by the Administrative Agent’s paying over to Chase out of the Settlement Account and/or the Funding Account, and Chase’s applying against such Swing Line Transaction, an amount equal to the aggregate Purchase Price funded by Chase in such Swing Line Transaction less Chase’s own Purchase Price Share of such Transaction.
(c)    The other Buyers shall be unconditionally and irrevocably obligated subject to the provisions of this Agreement and the other Transaction Documents to timely purchase their respective Purchase Price Shares of each Swing Line Transaction and when they have done so each Swing Line Transaction will be converted to an ordinary Transaction by the Administrative Agent; provided that no Buyer shall be required to purchase its Purchase Price Share of any Swing Line Transaction to the extent that such purchase would result in such Buyer having an outstanding Purchase Price in excess of its Commitment.  In addition to the foregoing, if at the time such Swing Line Transaction was funded, Chase reasonably believed that no Default or Event of Default had occurred and was then continuing, the other Buyers shall remain unconditionally and irrevocably obligated (subject to the provisions of this Agreement and the other Transaction Documents) to timely fund their respective Purchase Price Shares of the Swing Line Transaction, irrespective of whether in the meantime any Default or Event of Default has occurred or been discovered, and irrespective of whether in the meantime some or all of the Buyers’ Commitments have lapsed, expired or been canceled, rescinded or terminated with or without cause, or have been waived, released or excused for any reason whatsoever.  If any Buyer nonetheless fails to fund its Purchase Price Share of the Swing Line Transaction, upon Chase’s request, each other Buyer shall fund, in addition to its own Purchase Price Share thereof, that fraction of the Declining Buyer’s Purchase Price Share whose numerator is such Buyer’s Commitment and whose denominator is the sum of the Commitments of all Buyers other than such Declining Buyer; provided that no Buyer shall be required to fund any portion of a Declining Buyer’s Purchase Price Share that would result in such Buyer having an aggregate outstanding Purchase Price in excess of its Commitment.
(d)    All accrued Price Differential on Swing Line Transactions shall be due and payable by the Sellers to the Administrative Agent (for distribution to Chase) on the later of (x) the fifteenth (15th) day of the next month (with the first Price Differential payment due August 15, 2015) or (y) two (2) Business Days after the Administrative Agent bills the Sellers for such accrued Price Differential.

Article 4

DISTRIBUTION OF PAYMENTS
Section 4.1    Pro Rata Distributions.  All payments received by the Administrative Agent from the Sellers pursuant to the Repurchase Agreement and the Side Letter (including, without limitation, Non-Usage Fee, Price Differential and the Repurchase Price, but excluding fees provided for in the Fee Letter, which shall belong solely to Chase) shall be distributed by the Administrative Agent to the Buyers Pro Rata in accordance with their respective ownership interests in the Transactions or as otherwise may be expressly provided in the Repurchase Agreement or Side Letter.  By 10:00 AM, Houston time on the Business Day next following a Business Day when the Administrative Agent receives any such payments, their amounts and each Buyer’s Pro Rata share of them shall be described in a report delivered by the Administrative Agent to the Buyers, and the Buyers’ Pro Rata shares of such payments shall be distributed by the Administrative Agent to the Buyers by wire transfers initiated by the Administrative Agent before 1:00 PM (Houston time) on that same day, either directly to the Buyers or to such account at another financial institution as is designated from time to time by a Buyer in writing.
Article 5
THE BUYERS
Section 5.1    Buyers’ Cooperation.  The Buyers agree to cooperate among themselves and with the Administrative Agent and from time to time upon the Administrative Agent’s request, to execute and deliver such papers as may be reasonably necessary to enable the Administrative Agent, in its capacity as lead buyer and servicer, to effectively administer and service the Purchased Mortgage Loans and Transactions in the manner contemplated by this Agreement and the Repurchase Agreement.
Section 5.2     Buyers’ Sharing Arrangement.  Each of the Buyers agrees that if it should receive any amount (whether by voluntary payment, realization upon security, the exercise of the right of set-off or otherwise) which is applicable to the payment of the Repurchase Price of or Price Differential on the Purchased Mortgage Loans and related Transactions, or of any fees or expenses owing by Sellers to Buyers under the Repurchase Agreement or any other Transaction Document, of an amount that with respect to the related sum or sums received (or receivable) by the other Buyers is in greater proportion than that Buyer’s Pro Rata ownership of the Purchased Mortgage Loans and related Transactions, then such Buyer receiving such excess amount shall purchase from the other Buyers an interest in the Obligations of the Sellers under this Agreement or any of the Transaction Documents in such amount as shall result in a proportional participation by all of the Buyers in such excess amount; provided that if all or any portion of such excess amount is thereafter recovered from such Buyer, such purchase shall be rescinded and the purchase price of such participation interest restored to the extent of such recovery; and provided further that the provisions of this Section 5.2 shall not apply to any of Chase’s fees under the Fee Letter.
Section 5.3    Buyers’ Acknowledgment. 
(a)    Each Buyer other than Chase hereby acknowledges that Chase has made no representations or warranties with respect to the Purchased Mortgage Loans other than as expressly set forth in this Agreement and the Transaction Documents and that Chase shall have no responsibility (in its capacity as a Buyer, the Administrative Agent or in any other capacity or role) for:
(i)    the collectability of the Purchased Mortgage Loans; or
(ii)    the value, validity, effectiveness, genuineness, enforceability, or sufficiency of any Purchased Mortgage Loans or other Mortgage Assets or any property at any time subject to Transactions or otherwise covered by the Transaction Documents; or 

(iii)    any recital, statement, representation or warranty of the Sellers or any of its Subsidiaries or Affiliates in the Repurchase Agreement or any other Transaction Document, or in any other writing at any time furnished by or on behalf of any Seller or any of its Subsidiaries or Affiliates in connection therewith; or
(iv)    the legality, validity, enforceability, or any legal effect of any of the Transaction Documents, or any insurance, bond or similar device purportedly protecting any obligation to the Buyers or any Purchased Mortgage Loans or other Mortgage Assets; or
(v)    the financial condition of any Seller or any of its Subsidiaries or Affiliates, the status, health or viability of any industry in which any of them is involved, the prospects for repayment of the Transactions or the effectiveness of any of the provisions of the Transaction Documents (including the financial covenants, tests and hedging requirements) or any aspect of their implementation or administration at any time to reduce or control risks of any type, to produce returns, profits, yields or spreads or to reduce or control losses; or
(vi)    the truthfulness, accuracy or completeness of any information at any time supplied or to be supplied in connection with any Seller or any of its Subsidiaries or Affiliates, or otherwise with respect to the Purchased Mortgage Loans, any other Mortgage Assets, or any source of equity or other financing for any of such companies, or whether any such information is current or meets the requirements of the Transaction Documents; or 
(vii)    any failure of any Seller or any other obligor under the Repurchase Agreement, any of the other Transaction Documents to perform any of its obligations thereunder.
(b)    Each Buyer acknowledges and agrees that, independently and without reliance on the Administrative Agent or any other Buyer, and based on the financial statements and other information furnished by any Seller, its Subsidiaries and Affiliates, and such other documents and information as such Buyer deems necessary or appropriate (all of which such Buyer has obtained and reviewed to enable it to make the decision described in Section 5.3(b)(i)), such Buyer:
(i)    has made its own complete analysis of the credit quality of each Seller and its Subsidiaries and the Underwriting and Acquisition Guidelines, and its own decision to make its Commitment and enter into the Repurchase Agreement, this Agreement and the other Transaction Documents;
(ii)     will continue, until the Transactions are repurchased and such Buyer’s Commitment has terminated, to make its own credit analysis and its own decision to take or not to take any action in connection with the Transactions, this Agreement and the other Transaction Documents; and
(iii)    will, until all Purchased Mortgage Loans in all Transactions are repurchased and such Buyer’s Commitment has terminated, maintain current and complete credit information on the Sellers and update, revise and review for itself the credit quality of each Seller and its Subsidiaries and the Transactions and their documentation.
(c)    Compensation Claim; Replacement of a Buyer or Termination of Repurchase Agreement.  If any Buyer (or one of its Participants) becomes entitled to claim any additional amounts pursuant to Section 8 of the Repurchase Agreement, the Buyer shall promptly notify the Administrative Agent of the event by reason of which it has become so entitled.  Provided that no Default or Event of Default has occurred, in the event any Buyer becomes a Declining Buyer or any Buyer (or one of its Participants) becomes entitled to claim any additional amounts pursuant to Section 8 of the Repurchase Agreement (in either case, herein referenced to as a “Retiring Buyer”) (i) the Sellers may seek to replace such Retiring Buyer or (ii) the Sellers may elect to terminate the Repurchase Agreement by giving an irrevocable written notice to the Administrative Agent specifying as the termination date a date no earlier than sixty (60) days, and no later 

than ninety (90) days after the date of the notice, and on the termination date so specified, provided that the Obligations (including the Non-Usage Fee accrued through such termination date) are then fully paid and satisfied.  The replacement of a Retiring Buyer pursuant to this Section 5.3 shall be effective on the tenth (10th) Business Day following the date of a notice to the Retiring Buyer and each other Buyer through the Administrative Agent, subject to satisfaction of the following conditions:
(i)    The Replacement Buyer(s) shall pay to the Retiring Buyer an amount equal in the aggregate to the sum of (x) the aggregate outstanding Purchase Price of the Retiring Buyer, together with all accrued and unpaid Price Differential thereon, and (y) the Retiring Buyer’s Pro Rata share of any accrued and unpaid fees and other Obligations owing under the Repurchase Agreement.
(ii)    The Sellers shall have paid to the Administrative Agent for the account of the Retiring Buyer an amount equal to all obligations owing to the Retiring Buyer by the Sellers (other than those obligations of the Sellers owing but not yet due that are referred to in this Section 5.3(c)).
(iii)    The Retiring Buyer shall assign all of its rights, obligations and liabilities under the Transaction Documents to a Replacement Buyer approved by the Sellers and the Administrative Agent (such approvals not to be unreasonably withheld, conditioned or delayed); provided that the consent of the Sellers shall not be required if (A) the Replacement Buyer is a Buyer (including permitted assignees thereof); (B) the assignee is an Affiliate of a Buyer; (C) the assignee is an Approved Fund or (D) an Event of Default has occurred and is continuing and provided further that the consent of the Administrative Agent shall not be required if the assignee is (A) a Buyer (including assignees thereof); (B) an Affiliate of a Buyer or (C) an Approved Fund; provided further that (1) no such assignment shall result in a Buyer having an aggregate Commitment of less than Five Million Dollars ($5,000,000); and (2) the Administrative Agent shall have no obligation to consent to there being more than a total of ten (10) Buyers (a participant is not a Buyer).
(iv)    The Retiring Buyer and the Replacement Buyer shall execute and deliver to the Administrative Agent an Assignment Agreement substantially in the form of Exhibit A hereof and the Replacement Buyer, if it is not a current Buyer, shall deliver to the Administrative Agent an Administrative Questionnaire in form and substance acceptable to the Administrative Agent.
Upon such assignment, the Retiring Buyer shall have no further right or obligation with respect to the rights and obligations assigned to and assumed by the Replacement Buyer, the Replacement Buyer shall be a Buyer for all purposes under this Agreement and the other Transaction Documents and the Commitments shall be adjusted appropriately.  Each Replacement Buyer that is a New Buyer shall become a Buyer and the Retiring Buyer shall cease to be a Buyer; provided that this Agreement and the Repurchase Agreement shall continue to govern the rights and obligations of a Retiring Buyer with respect to any Transactions or other actions taken by such Retiring Buyer while it was a Buyer and the obligations of the Sellers under Section 16 of the Repurchase Agreement shall survive with respect to such Retiring Buyer.  The Sellers agree to execute such papers and agreements as are reasonably necessary to substitute the Replacement Buyer for the Retiring Buyer, including documents necessary to protect all liens and security interests of the Replacement Buyer.

Article 6
ACTIONS REQUIRING CONSENT
Section 6.1    Actions Requiring All Buyers’ Consent.  Notwithstanding any provision of the Repurchase Agreement or the Side Letter that it is within the sole discretion of the Administrative Agent to do so (the Parties intend and agree that Sellers have no right to inquire into Administrative Agent’s authority 

to act as agent and representative of Buyers), without the written consent or ratification of all Buyers the Administrative Agent shall not:
(a)    increase the Facility Amount;
(b)    agree to reduction of the Non-Usage Fee or any Pricing Rates specified in the Side Letter or in any Price Differential or Repurchase Price;
(c)    release any material Lien held under the Transaction Documents other than in accordance with the Transaction Documents;
(d)    enter into any Transaction for the purchase of any ineligible Mortgage Loans (other than pursuant to the Administrative Agent’s discretionary authority under Section 6.2(h));
(e)    change any Buyer’s Purchase Price Share or Pro Rata share of a Transaction other than in accordance with the express provisions of the Transaction Documents; 
(f)    increase the concentration limits set forth in the definition in the Repurchase Agreement of Eligible Mortgage Loan (or otherwise modify such definition), or consent to any increases in the Purchase Prices specified in the Side Letter;
(g)    agree to any change in the nature of the Buyers’ respective Commitments from several to joint, in whole or in part;
(h)    agree to any change to the definition of “Required Buyers”;
(i)    extend the Termination Date;
(j)    release any Seller from any of its material obligations under the Transaction Documents;
(k)    release any guaranty (if any);
(l)    change any provision of any Transaction Document that provides for the pro rata nature of disbursements by or payments to the Buyers;
(m)    extend the due date for payment of the Upfront Fee or any Non-Usage Fee, or any Remittance Date, other than in accordance with the express provisions of the Transaction Documents; or
(n)    agree to any change in this Section 6.1 or in Section 6.2 below.
Section 6.2    Actions Requiring Required Buyers’ Consent.  Notwithstanding any provision of the Repurchase Agreement or the Side Letter that it is within the sole discretion of the Administrative Agent to do so, without the written consent or ratification of the Required Buyers, the Administrative Agent shall not:
(a)     notify the Sellers that the Buyers do not intend to enter into Transactions as a result of the failure of the conditions precedent (specified in Section 7 of the Repurchase Agreement) to be satisfied;
(b)    agree to any material change to, or waive in writing, any of the material conditions precedent to Transactions specified in Section 7 of the Repurchase Agreement;
(c)    agree to any material change to, or waive in writing, any of the material representations and warranties of Sellers specified in Section 10 of the Repurchase Agreement;
(d)    exercise any of the remedies for default described in Section 12 of the Repurchase Agreement; 
(e)    waive any Event of Default under the Transaction Documents;

(f)    unless directed by the Required Buyers not to make a Margin Call, fail to make a Margin Call when the related Margin Deficit exceeds Two Million Five Hundred Thousand Dollars ($2,500,000);
(g)    except as otherwise expressly provided for in this Section 6.2, cause or permit any material change in the terms of any affirmative or negative covenants in the Repurchase Agreement or other Transaction Documents; or
(h)    cause or permit any material change in the eligibility standards for Mortgage Loans under the Repurchase Agreement or materially change the definition of Eligible Mortgage Loan, provided that the Administrative Agent may in its discretion approve or continue to treat a Mortgage Loan as an Eligible Mortgage Loan (including for purposes of Section 4(d) of the Repurchase Agreement) that otherwise would be ineligible due to concentration limitations or aging limits or breaches of representations and warranties (such Mortgage Loans “Exception Mortgage Loans”) but only to the extent that the sum of the Purchase Prices of such Exception Mortgage Loans do not exceed five percent (5.0%) of the Facility Amount at the time of approval.
Section 6.3    Action Requiring Consent of Affected Buyer.  Without the written consent or ratification of each Buyer affected thereby, the Administrative Agent shall not increase any Buyer’s Commitment.
Section 6.4    Administrative Agent’s Discretionary Actions.  Except as provided in Section 6.1 and Section 6.2, in its capacity as Administrative Agent and without seeking or obtaining the consent, agreement or approval of any of the other Buyers (although Administrative Agent may elect to obtain any such consent, agreement or approval before acting if in its sole discretion it deems that desirable), the Administrative Agent may:
(a)    agree or consent to any change in the handling of the Purchased Mortgage Loans or other Mortgage Assets which in the Administrative Agent’s reasonable judgment is unlikely to have a Material Adverse Effect;
(b)    release, reconvey or change, in whole or in part, any Mortgage Asset which is required to be released or reconveyed in accordance with the Transaction Documents;
(c)    approve any new investor proposed by the Sellers (and the Administrative Agent will promptly provide to any Buyer that requests it a current list of Approved Takeout Investors);
(d)    approve any Seller’s declaration or payment of any dividend;
(e)    determine the Market Value of Purchased Mortgage Loans; and
(f)    do or perform any act or thing that, in the Administrative Agent’s reasonable judgment, is necessary or appropriate to enable the Administrative Agent to properly discharge and perform its duties under this Agreement, the Repurchase Agreement, the Side Letter or any other Transaction Document, or which in its reasonable judgment is necessary or appropriate to preserve or protect the validity, integrity or enforceability of the Transaction Documents, the Purchased Mortgage Loans or other Mortgage Assets or the financial condition, operations or prospects in respect of Sellers or to preserve and protect the interest of the Buyers in any of the foregoing.
Section 6.5    Buyers’ Consent to Amendments to Transaction Documents.  Each undersigned Buyer, by its execution of this Agreement, authorizes Administrative Agent to enter into the Second Amendment to Master Repurchase Agreement and the Third Amendment to Side Letter, each dated as of the Effective Date with Sellers, and consents to the amendments to the Transaction Documents set forth therein.

Article 7
JPMORGAN AS AGENT
Section 7.1    Administrative Agent’s Duties.  In its capacity as Administrative Agent and until all Transactions are fully paid and satisfied, the Administrative Agent shall:
(a)    hold the Transaction Documents, the Purchased Mortgage Loans and the other Mortgage Assets as agent for itself and each other Buyer, and each Buyer (including Chase) shall be deemed to have an interest in the Transaction Documents, the Purchased Mortgage Loans and the other Mortgage Assets on any day in proportion to its Pro Rata interest in the outstanding Transactions on that day;
(b)    send, in accordance with the Repurchase Agreement, bills to the Sellers for accrued Price Differential, the Non-Usage Fee and other sums due and receive all payments of Repurchase Price, Price Differential, Non-Usage Fee and other sums on account of the Transactions or with respect to them;
(c)    use reasonable diligence to obtain from the Sellers and promptly remit to each Buyer such Buyer’s Pro Rata shares of Repurchase Price, Price Differential, Non-Usage Fee and other sums received by the Administrative Agent on account of the Transactions or with respect to them, in accordance with this Agreement;
(d)    use reasonable diligence to recover from the Sellers all expenses incurred that are reimbursable by the Sellers, and promptly remit to each Buyer its Pro Rata share (if any) thereof;
(e)    enforce the terms of this Agreement and the Repurchase Agreement, including, with the approval or at the direction of the Required Buyers, the remedies afforded the Buyers pursuant to Section 12 of the Repurchase Agreement;
(f)    hold all security interests ratably for itself as a Buyer and as agent and bailee for and on behalf of the other Buyer(s); 
(g)    request from the Sellers, and promptly forward to the other Buyers, such information as the other Buyers may reasonably request the Administrative Agent to obtain from the Sellers, consistent with the terms of this Agreement and the Repurchase Agreement; 
(h)    deliver to the Buyers within a reasonable period of time any notices Administrative Agent receives under Section 11(d) of the Repurchase Agreement; 
(i)    without limiting the Administrative Agent’s rights set forth in Section 5 of the Repurchase Agreement, give notice to the Buyers of any Margin Deficit in excess of Two Million Five Hundred Thousand Dollars ($2,500,000); and
(j)    upon request of a Buyer (such request not to be made more than once per week), the Administrative Agent shall deliver a copy of the Custodial Assets Schedule to such Buyer.
Section 7.2    Administrative Agent’s Representations to Buyers.  The Administrative Agent hereby represents and warrants to the Buyers (other than itself) that:
(a)    the Administrative Agent has delivered to each Buyer true copies of the originals of those Transaction Documents that have been specifically requested by that Buyer; and

(b)    the Administrative Agent has no current actual knowledge that any Event of Default has occurred and is continuing on the date of this Agreement.
Section 7.3    Administrative Agent’s Duty of Care, Express Negligence Waiver and Release.  AT ALL TIMES UNTIL THE  TRANSACTIONS HAVE BEEN PAID IN FULL, THE ADMINISTRATIVE AGENT SHALL EXERCISE THE SAME DEGREE OF CARE IN ADMINISTERING THE TRANSACTIONS, THE PURCHASED MORTGAGE LOANS AND THE OTHER MORTGAGE ASSETS AS CHASE EXERCISES WITH RESPECT TO TRANSACTIONS AND PURCHASED MORTGAGE LOANS THAT ARE HELD SOLELY BY CHASE FOR ITS OWN ACCOUNT, AND THE ADMINISTRATIVE AGENT, IN ITS CAPACITY AS ADMINISTRATIVE AGENT SHALL HAVE NO RESPONSIBILITY TO THE BUYERS OTHER THAN TO EXERCISE SUCH STANDARD OF CARE AND, IN ANY EVENT, CHASE SHALL HAVE NO LIABILITY WITH RESPECT TO ANY OTHER BUYER’S PRO RATA INTEREST IN THE TRANSACTIONS EXCEPT FOR CHASE’S OWN FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  EXCEPT IN THE CASE OF ITS OWN FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NEITHER THE ADMINISTRATIVE AGENT, ANY BUYER, NOR ANY OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS SHALL BE LIABLE FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY IT OR THEM UNDER THIS AGREEMENT, THE REPURCHASE AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS REASONABLY BELIEVED BY IT OR THEM TO BE WITHIN THE DISCRETION OR POWER CONFERRED UPON IT OR THEM BY THE TRANSACTION DOCUMENTS OR BE RESPONSIBLE FOR CONSEQUENCES OF ANY ERROR OF JUDGMENT, THE BUYERS EXPRESSLY INTENDING TO HEREBY WAIVE AND RELEASE ALL PRESENT AND FUTURE CLAIMS AND RIGHTS AGAINST THE ADMINISTRATIVE AGENT (I) OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT LIABILITY, OR (II) FOR DAMAGES OR INJURIES CAUSED OR CONTRIBUTED TO BY ANY INDEMNIFIED PARTY’S SOLE OR CONCURRENT ORDINARY NEGLIGENCE THAT DOES NOT AMOUNT TO GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. Except as otherwise specifically and expressly set forth in this Agreement, the Administrative Agent shall not be responsible in any manner to anyone for the effectiveness, enforceability, genuineness, validity or the due execution of this Agreement, any supplement, amendment or restatement of it or of any other Transaction Documents or for any representation, warranty, document, certificate, report or statement made or furnished in, under or in connection with this Agreement or any of the other Transaction Documents or be under any obligation to anyone to ascertain or to inquire as to the performance or observation of any of the terms, covenants or conditions of this Agreement or of the other Transaction Documents or any Guaranty on the part of the Sellers, any Guarantor or anyone else.  Without limiting the generality of the foregoing provisions of this Section 7.3, the Administrative Agent may seek and rely upon the advice of legal counsel in taking or refraining to take any action under any of the Transaction Documents or otherwise in respect of the Transactions, the Mortgage Assets and its parties, and shall be fully protected in good faith relying upon such advice. 
Section 7.4    Resignation of the Administrative Agent.  The Administrative Agent, or any agent or agents hereafter appointed, at any time may resign by giving written notice of resignation to the Sellers and the Buyers and complying with the applicable provisions of this Section 7.4.  Upon receiving such notice of resignation or removal, with the Sellers’ consent, which consent shall not unreasonably be conditioned, delayed or withheld (and shall not be required if any Default or Event of Default has occurred that the Administrative Agent has not declared in writing to have been cured or waived), a successor Administrative Agent shall be promptly appointed by all of the Buyers by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Administrative Agent and one copy to the successor Administrative Agent.

Section 7.5    Successor Administrative Agent.  Any successor Administrative Agent appointed as provided in Section 7.4 shall execute and deliver to the Sellers, the Buyers and to its predecessor Administrative Agent an instrument accepting such appointment, and thereupon the resignation or removal of the predecessor Administrative Agent shall become effective and such successor Administrative Agent, without any further act, deed or conveyance, shall become vested with all the rights and obligations of its predecessor, with like effect as if originally named as the Administrative Agent; provided that upon the written request of the Sellers, Required Buyers or the successor Administrative Agent, the Administrative Agent ceasing to act shall execute and deliver (a) an instrument transferring to such successor Administrative Agent all of the rights of the Administrative Agent so ceasing to act and (b) to such successor Administrative Agent such instruments as are necessary to transfer the Mortgage Assets to such successor Administrative Agent (including assignments of all Mortgage Assets or Transaction Documents).  Upon the request of any such successor Administrative Agent made from time to time, the Sellers shall execute any and all papers which the successor Administrative Agent shall request or require to more fully and certainly vest in and confirm to such successor Administrative Agent all such rights.  
Section 7.6    Merger of the Administrative Agent.  Any Person into which the Administrative Agent may be merged or converted or with which it may be consolidated, or any Person surviving or resulting from any merger, conversion or consolidation to which the Administrative Agent shall be a party or any Person succeeding to the commercial banking business of the Administrative Agent, shall be the successor Administrative Agent without the execution or filing of any paper or any further act on the part of any of the parties.
Article 8
GENERAL
Section 8.1    Amendments.  Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Administrative Agent, the Buyers (as and to the extent required by Section 6.1, Section 6.2 or Section 6.3, as the case may be) and the Sellers.
Section 8.2    Termination.  This Agreement shall terminate upon the repayment of all Obligations of Sellers under the Repurchase Agreement and termination thereof.
Section 8.3    Headings. The headings in this Agreement are for convenience of reference only and shall not define or limit the provisions hereof.
Section 8.4    Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which together shall constitute but one instrument.
Section 8.5    Assignment; Successors and Assigns. 
(a)    Participations.  (i)  Any Buyer may, without the consent of the Sellers or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Buyer’s Pro Rata shares of Transactions, or their Commitment; provided that (A) such Buyer’s obligations under this Agreement and the Repurchase Agreement shall remain unchanged, (B) such Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Sellers, the Administrative Agent and the other Buyers shall continue to deal solely and directly with such Buyer in connection with such Buyer’s rights and obligations under this Agreement and the Repurchase Agreement.  Any agreement or instrument pursuant to which a Buyer sells such a participation shall provide that such Buyer shall retain the sole right to enforce this Agreement and the Repurchase Agreement and to approve any amendment, modification or waiver of any provision of this Agreement and the Repurchase Agreement; provided that such agreement or instrument may provide that such Buyer will not, without the 

consent of the Participant, agree to any amendment, modification or waiver described in Section 6.1 hereof that affects such Participant. In those cases (if any) where a Buyer grants rights to any of its Participants to approve amendments, modifications or waivers of any Transaction Documents pursuant to the immediately preceding sentence, such Buyer shall use commercially reasonable efforts to include a voting mechanism as to all such approval rights in the relevant participation agreement(s); provided, that if no such voting mechanism is provided for or is fully and immediately effective, then the vote of such Buyer itself shall be the vote for all of such Buyer’s Pro Rata portions of the Transactions.  Subject to Section 8.5(a)(ii) hereof, the Sellers agree that each Participant shall be entitled to the benefits of Sections 7 and 8 of the Repurchase Agreement to the same extent as if it were a Buyer and had acquired its interest by assignment pursuant to Section 8.5(b) hereof.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 8 of the Repurchase Agreement as though it were a Buyer, provided such Participant agrees to be subject to Article 5 hereof as though it were a Buyer.  Notwithstanding any other provision of this Section 8.5(a), neither Sellers, any other Buyer nor Administrative Agent shall have any responsibility or obligation to collect any payments from or remit any payments to any Buyer’s Participant, provide any information, reports or statements to any Buyer’s Participant, obtain any approval, agreement or consent of any Buyer’s Participant or poll any Buyer’s Participants’ votes.
(ii)    A Participant shall not be entitled to receive any greater payment under the Repurchase Agreement than the applicable Buyer would have been entitled to receive with respect to the participation sold to such Participant.  
(b)    Assignments.
(i)    Neither Seller may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Buyer (and any attempted assignment or transfer by any Seller without such consent shall be null and void).
(ii)    Any Buyer may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Pro Rata share of the Transactions at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld, conditioned or delayed) of the Sellers and the Administrative Agent; provided that the consent of the Sellers shall not be required if (A) the assignee is a Buyer (including permitted assignees thereof); (B) the assignee is an Affiliate of a Buyer; (C) the assignee is an Approved Fund or (D) if a Default or an Event of Default has occurred and is continuing and provided further that the consent of the Administrative Agent shall not be required if the assignee is (A) a Buyer (including permitted assignees thereof); (B) an Affiliate of a Buyer or (C) an Approved Fund; provided further that (1) no such assignment shall result in a Buyer having an aggregate Commitment of less than Five Million Dollars ($5,000,000); (2) the Administrative Agent shall have no obligation to consent to there being more than a total of ten (10) Buyers (a participant is not a Buyer) and (3) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment Agreement substantially in the form of Exhibit A hereof and the assignee, if the assignee is not a current Buyer, shall deliver to the Administrative Agent an Administrative Questionnaire in form and substance acceptable to the Administrative Agent.
(iii)    Upon such assignment, the assignee shall be a Buyer for all purposes under this Agreement and the other Transaction Documents, if the assignment is an assignment of all of the assignor’s interest in the Pro Rata share of the Transactions or Commitments and its security to an assignor, the assignor shall be automatically released from all of its obligations and liabilities hereunder and under the Transaction Documents, and, whether it is such a complete assignment or only a partial assignment, the Pro Rata share of the Transactions or Commitments shall be adjusted appropriately, and the parties agree to approve in writing a revised and updated version of Schedule 1.

Section 8.6    Notices. Any notices or other communications required or permitted hereunder shall be sufficiently given if given in accordance with Section 15 of the Repurchase Agreement.
Section 8.7    Applicable Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (EXCEPT FOR SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 8.8    Consent to Jurisdiction. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  NOTHING IN THIS Section 8.8 SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT TO BRING ANY ACTION OR PROCEEDING AGAINST ANY SELLER OR ITS PROPERTY IN THE COURTS OF OTHER JURISDICTIONS.  EACH PARTY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO IT AT ITS ADDRESS FOR NOTICES HEREUNDER SPECIFIED IN THE REPURCHASE AGREEMENT OR IN ANY RELATED JOINDER AGREEMENT.
Section 8.9    Jury Trial Waiver. EACH OF SELLERS, BUYERS AND ADMINISTRATIVE AGENT (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) BETWEEN ANY SELLER AND ADMINISTRATIVE AGENT OR ANY BUYER ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO BUYERS AND ADMINISTRATIVE AGENT TO PROVIDE THE FACILITY EVIDENCED BY THIS AGREEMENT.
Section 8.10    Entirety. This Agreement and the Transaction Documents represent the entire agreement between the Parties with respect to the subject matter.  This Agreement supersedes all prior agreements and understandings, oral or written, with respect to the subject matter.  In the event of a conflict between this Agreement and the Repurchase Agreement with respect to the Sellers’ rights or obligations, the Repurchase Agreement shall prevail.
Section 8.11    Intent. This Agreement is intended to constitute a security agreement or arrangement or other credit enhancement related to the “Repurchase Agreement” and transactions thereunder as defined under Section 101(47)(v)  of the Bankruptcy Code.
Section 8.12    No Third Party Beneficiaries. Except as expressly set forth herein, there are no intended third party beneficiaries to this Agreement. 
Section 8.13    General Interpretive Principles. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a)    the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

(b)    accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
(c)    references herein to Articles, Sections and other subdivisions without specification of a document are to designated Articles, Sections and other subdivisions of this Agreement;
(d)    a reference to a paragraph or clause without reference to a specific Section is a reference to the paragraph or clause contained in the same Section in which the reference appears;
(e)    the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision;
(f)    the term “include” or “including” means without limitation by reason of enumeration; 
(g)    all times specified herein (unless expressly specified otherwise) are Central times unless otherwise stated.
Section 8.14    Multiple Sellers. Sellers acknowledge and agree that the representations, warranties, covenants and agreements set forth in Section 30 of the Repurchase Agreement are incorporated herein by reference.
Section 8.15    Execution of Transaction Documents. Each Party represents to the other Parties that this Agreement, the Repurchase Agreement and the Side Letter were executed (to the extent executed by such Party) by such Party outside the State of Florida.   

(The remainder of this page is intentionally blank; counterpart signature pages follow.)

EXECUTED as of the Effective Date.

	
	
	JPMORGAN CHASE BANK, N.A., as Administrative Agent and as a Buyer

	 

	By:/s/ Carolyn W. Johnson

	Carolyn W. Johnson

	Senior Vice President and Underwriter

	
	
	COMERICA BANK
(a Buyer)

	 

	By:/s/ Daniel Voigt

	      Daniel Voigt, Vice President

	 

Address for Notices:

Comerica Bank
Comerica Bank Tower
1717 Main St., Mail Code 6577
Dallas, Texas 75201
Attention: Daniel Voigt
phone: (214) 462-4277
fax: (214) 462-4280
email: djvoigt@comerica.com

	
	
	Branch Banking and Trust Company
(a Buyer)

	 

	By: /s/ Samuel Bryan

	Name:___Samuel Bryan________________
Title:_SVP___________________________

	 

COLUMBIA STATE BANK
(a Buyer)

By: /s/ Hieu Tran    
Name:    Hieu Tran                    
Title:    Commercial Banking Officer                    

	
	
	UNIVERSAL AMERICAN MORTGAGE COMPANY, LLC,
jointly and severally with the other Sellers

	 

	By:_/s/ Robert S. Greaton _______________

	 

	Name:  ___Robert S. Greaton ____________

	 

	Title:___Vice President_________________

	
	
	UNIVERSAL AMERICAN MORTGAGE COMPANY OF CALIFORNIA,
jointly and severally with the
other Sellers

	 

	By:_/s/ Robert S. Greaton _______________

	 

	Name:  ___Robert S. Greaton __

	 

	Title:___Vice President_________________

Schedule 1

Buyers’ Commitments

	
			
	BUYERS
	COMMITMENTS PRIOR TO REDUCTION DATE AND FROM AND AFTER INCREASE DATE
	COMMITMENTS FROM AND AFTER REDUCTION DATE UNTIL INCREASE DATE

	JPMorgan Chase Bank, N.A.
	$325,000,000
	$205,000,000

	Comerica Bank
	$125,000,000
	$85,000,000

	Branch Banking and Trust Company
	$125,000,000
	$85,000,000

	Columbia State Bank
	$25,000,000
	$25,000,000

	Total Facility Amount 
	$600,000,000
	$400,000,000

Exhibit A

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Administration Agreement identified below (as amended, the “Administration Agreement”) and the Repurchase Agreement, as defined in the Administration Agreement.  Assignee hereby acknowledges receipt of a copy of the Repurchase Agreement and the Administration Agreement.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Administration Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Buyer under the Repurchase Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees, and Swing Line Transactions included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Buyer) against any Person, whether known or unknown, arising under or in connection with the Administration Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

1.    Assignor:            ______________________________

		
	2.
	Assignee:            ______________________________

[and is a Buyer Affiliate of [identify Buyer]]

		
	3.
	Sellers:                ______________________________

		
	4.
	Administrative Agent:        ______________________, as the agent and representative of the Buyers under the Administration Agreement

		
	5.
	Administration Agreement:    The [amount] Administration Agreement dated as of _______ among [name of Sellers], the Buyers parties thereto and [name of Administrative Agent], as Administrative Agent

		
	6.
	Assigned Interest:

    
	
			
	Aggregate Amount of Commitment/Commitments for all Buyers
	Amount of Commitment/Transactions Assigned
	Percentage Assigned of Commitment/Transactions

	$
	$
	____%

Effective Date:   _____________ ___, 20___ [TO BE INSERTED BY THE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

[NAME OF ASSIGNOR]

By:______________________________
     Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By:______________________________
     Title:

[Consented to and] Accepted:

[NAME OF AGENT], as 
  Administrative Agent

By_________________________________
    Title:

[Consented to:] 

[NAME OF RELEVANT PARTY]

By________________________________
    Title:

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

1.    Representations and Warranties.  

1.1    Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Administration Agreement or any other Transaction Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Transaction Documents or any collateral thereunder, (iii) the financial condition of the Sellers, any of its (their) Subsidiaries or Affiliates or any other Person obligated in respect of any Transaction Documents or (iv) the performance or observance by the Sellers, any of its (their) Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Transaction Document.

1.2.    Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Buyer under the Administration Agreement, (ii) it satisfies the requirements, if any, specified in the Administration Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Buyer, (iii) from and after the Effective Date, it shall be bound by the provisions of the Administration Agreement as a Buyer thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Buyer thereunder, (iv) it has received a copy of the Administration Agreement, together with copies of the most recent financial statements delivered pursuant to the Administration Agreement, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Buyer, and (v) if it is a Person that is organized under the legal requirements of any jurisdiction other than the United States of America or any State thereof, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Administration Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Buyer, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Transaction Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Transaction Documents are required to be performed by it as a Buyer.

2.    Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

3.    General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall 

be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

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