10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly period ended March 31, 2012

OR

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to             

Commission File Number: 000-54474

Care Investment Trust Inc.

(Exact name of Registrant as Specified in Its Charter)

Maryland	38-3754322
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)
780 Third Avenue, 21st Floor, New York, New York	10017
(Address of Registrant’s Principal Executive Offices)	(Zip Code)

(212) 446-1410

(Registrant’s Telephone Number, Including Area Code)

Not applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ¨    No  x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of May 14, 2012, there were 10,225,551 shares, par value $0.001, of the registrant’s common stock outstanding.

Care Investment Trust Inc.

INDEX

Part I Financial Information	1
Item 1. Financial Statements	1
Condensed Consolidated Balance Sheets	1
Condensed Consolidated Statements of Operations	2
Condensed Consolidated Statements of Stockholders’ Equity	3
Condensed Consolidated Statements of Cash Flows	4
Notes to Consolidated Financial Statements	5
Item  2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	29
Item 4. Controls and Procedures	29
Part II Other Information	30
Item 1. Legal Proceedings	30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3. Defaults Upon Senior Securities	30
Item 4. Mine Safety Disclosures	30
Item 5. Other Information	30
Item 6. Exhibits	31
Signatures	33
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-10.5
EX-10.6
EX-10.7
EX-10.8
EX-10.9
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

Part I — Financial Information

ITEM 1. Financial Statements.

Care Investment Trust Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(dollars in thousands — except share and per share data)

	March 31, 2012			December 31, 2011
	(Unaudited)
Assets:
Real estate:
Land	$	10,620		$	10,620
Buildings and improvements		116,222			116,222
Less: accumulated depreciation and amortization		(5,386	)		(4,540	)
Total real estate, net		121,456			122,302
Investment in loans		5,680			5,766
Investments in partially-owned entities		2,492			2,491
Identified intangible assets — leases in place, net		6,766			6,939
Cash and cash equivalents		49,867			52,306
Other assets		5,939			4,412
Total Assets	$	192,200		$	194,216
Liabilities and Stockholders’ Equity
Liabilities:
Mortgage notes payable	$	95,659		$	96,079
Accounts payable and accrued expenses		1,520			2,170
Accrued expenses payable to related party		92			1,794
Other liabilities		641			593
Total Liabilities		97,912			100,636
Commitments and Contingencies
Stockholders’ Equity
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding		—			—
Common stock: $0.001 par value, 250,000,000 shares authorized 10,223,427 and 10,171,550 shares issued and outstanding, respectively		11			11
Additional paid-in capital		84,029			83,615
Retained earnings		10,248			9,954
Total Stockholders’ Equity		94,288			93,580
Total Liabilities and Stockholders’ Equity	$	192,200		$	194,216

See Notes to Condensed Consolidated Financial Statements

1

Care Investment Trust Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

(dollars in thousands — except share and per share data)

	Three Months Ended March 31, 2012			Three Months Ended March 31, 2011
Revenue
Rental income	$	3,442		$	2,961
Reimbursable income		351			315
Income from investments in loans		182			245
Total Revenue		3,975			3,521
Expenses
Base services fees to related party		112			104
Incentive fee to related party		—			305
Marketing, general and administrative (including stock-based compensation of $69 and $30, respectively)		1,172			828
Reimbursed property expenses		351			308
Depreciation and amortization		982			868
Operating Expenses		2,617			2,413
Other (Income) Expense
(Income) or loss from investments in partially-owned entities, net		(81	)		614
Unrealized (gain) or loss on derivative instruments, net		(420	)		256
Interest income		(21	)		(3	)
Interest expense including amortization of deferred financing costs		1,586			1,354
Net income (loss)	$	294		$	(1,113	)
Net income or (loss) per share of common stock
Net income (loss), basic	$	0.03		$	(0.11	)
Net income (loss), diluted	$	0.03		$	(0.11	)
Weighted average common shares outstanding, basic		10,175,438			10,140,422
Weighted average common shares outstanding, diluted		10,186,222			10,140,422

See Notes to Condensed Consolidated Financial Statements

2

Care Investment Trust Inc. and Subsidiaries

Condensed Consolidated Statement of Stockholders’ Equity (Unaudited)

(dollars in thousands, except share data)

	Common Stock				Additional paid-in capital		Retained earnings		Total
	Shares		$
Balance at December 31, 2011		10,171,550	$	11	$	83,615	$	9,954	$	93,580
Stock-based compensation to directors for services		2,304		*		15		—		15
Stock-based compensation to employees		—		—		54		—		54
Issuance of stock for related party incentive fee		49,573		*		345		—		345
Net income		—		—		—		294		294
Balance at March 31, 2012		10,223,427	$	11	$	84,029	$	10,248	$	94,288

* Less than $500

See Notes to Condensed Consolidated Financial Statements

3

Care Investment Trust Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(dollars in thousands)

	For the Three Months Ended March 31, 2012			For the Three Months Ended March 31, 2011
Cash Flow From Operating Activities
Net income (loss)	$	294		$	(1,113	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities
Increase in deferred rent receivable		(399	)		(594	)
(Income) or loss from investments in partially-owned entities		(81	)		614
Distribution of income from partially-owned entities		80			1,222
Amortization of above-market leases		52			52
Amortization of deferred financing costs		67			—
Amortization of mortgage note premium		(37	)		(37	)
Stock-based compensation		69			30
Non-cash incentive fee		—			61
Depreciation and amortization on real estate and fixed assets, including intangible assets		982			868
Unrealized (gain) loss on derivative instruments		(420	)		256
Changes in operating assets and liabilities:
Other assets		—			409
Accounts payable and accrued expenses		(743	)		419
Other liabilities including payable to related parties		(1,310	)		240
Net cash (used in) provided by operating activities		(1,446	)		2,427
Cash Flow From Investing Activities
Fixed asset purchases		—			(221	)
Cash deposit for derivative		(632	)		—
Proceeds from loan repayments		86			1,276
Net cash (used in) provided by investing activities		(546	)		1,055
Cash Flow From Financing Activities
Principal payments under mortgage notes payable		(383	)		(168	)
Financing costs		(64	)		—
Net cash used in financing activities		(447	)		(168	)
Net increase (decrease) in cash and cash equivalents		(2,439	)		3,314
Cash and cash equivalents, beginning of period		52,306			5,032
Cash and cash equivalents, end of period	$	49,867			8,346
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	1,559		$	912
Cash paid for taxes	$	227		$	2
Non-cash financing and investing activities
Reduction of accrued expenses for shares issued to related parties	$	360		$	—
Accrued expenses for financing costs	$	157		$	—

See Notes to Condensed Consolidated Financial Statements

4

Care Investment Trust Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

March 31, 2012

Note 1 — Organization

Care Investment Trust Inc. (together with its subsidiaries, the “Company” or “Care” unless otherwise indicated or except where the context otherwise requires, “we”, “us” or “our”) is a healthcare equity real estate investment trust (“REIT”) with a geographically diverse portfolio of senior housing and healthcare-related real estate assets in the United States of America (the “U.S.”). On August 13, 2010, Tiptree Financial Partners, L.P. (“Tiptree”) acquired control of the Company (the “Tiptree Transaction”). As part of the Tiptree Transaction, we entered into a hybrid management structure whereby senior management was internalized and we entered into a services agreement with TREIT Management, LLC (“TREIT”) for certain advisory and support services (the “Services Agreement”). TREIT is an affiliate of Tiptree Capital Management, LLC (“Tiptree Capital”) by which Tiptree is externally managed. On April 19, 2012, Tiptree and Tricadia Holdings entered into an agreement whereby TREIT and Tiptree Capital will become wholly-owned subsidiaries of Tiptree. The Services Agreement will remain in full effect following the closing of this transaction. As of March 31, 2012, Care’s portfolio of assets consisted of senior housing facilities, both wholly-owned and owned through a joint venture, as well as a mortgage loan on senior housing facilities, healthcare-related assets and a multifamily property. Our wholly-owned senior housing facilities are leased, under “triple-net” leases, which require the tenants to pay all property-related expenses.

We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”) commencing with our taxable year ended December 31, 2007. To maintain our tax status as a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders. At present, we do not have any taxable REIT subsidiaries (“TRS”), but in the normal course of business we may form such subsidiaries as necessary.

Note 2 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited. In our opinion, all estimates and adjustments necessary to present fairly the financial position, results of operations and cash flows have been made. The condensed consolidated balance sheet as of December 31, 2011 has been derived from the audited consolidated balance sheet as of that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the U. S. (“GAAP”) have been omitted in accordance with Article 10 of Regulation S-X and the instructions to Form 10-Q. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three months ended March 31, 2012 are not necessarily indicative of the operating results for the full year ending December 31, 2012.

Consolidation

The condensed consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or controlled by us. All intercompany balances and transactions have been eliminated. Our condensed consolidated financial statements are prepared in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.

Comprehensive Income

We have no items of other comprehensive income, and accordingly net income (loss) is equal to comprehensive income (loss) for all periods presented.

Segment Reporting

ASC 280 Segment Reporting (“ASC 280”) establishes standards for the way that public entities report information about operating segments in the financial statements. We are a REIT focused on originating and acquiring healthcare-related real estate and commercial mortgage debt and currently operate in only one reportable segment.

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Included in cash and cash equivalents at March 31, 2012 and December 31, 2011 is approximately $49.9 million and approximately $52.3 million, respectively, deposited with one major financial institution.

Real Estate and Identified Intangible Assets

Real estate and identified intangible assets are carried at cost, net of accumulated depreciation and amortization. Betterments, major renewals and certain costs directly related to the improvement and leasing of real estate are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is provided on a straight-line basis over the assets’ estimated useful lives, which range from 9 to 40 years. Amortization is provided on a straight-line basis over the life of the in-place leases.

5

Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, personal property and identified intangible assets such as above and below market leases, acquired in-place leases and customer relationships) and acquired liabilities in accordance with ASC 805 Business Combinations (“ASC 805”), and ASC 350 Intangibles — Goodwill and Other (“ASC 350”), and we allocate purchase price based on these assessments. We assess fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, leases in place, known trends, and market/economic conditions that may affect the property. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each property and the respective tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods and market conditions. In estimating carrying costs, the Company includes estimates of lost rents at estimated market rates during the hypothetical expected lease-up periods, which are dependent on local market conditions and expected trends.

We review the carrying value of our real estate assets and intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets, (“ASC 360”). If such reviews indicate that the asset is impaired, the asset’s carrying amount is written down to its fair value. An impairment loss is measured based on the excess of the carrying amount over the fair value. We determine fair value by using a discounted cash flow model and appropriate discount and capitalization rates. Estimates of future cash flows are based on a number of factors including the historical operating results, leases in place, known trends, and market/economic conditions that may affect the property. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. If our anticipated holding periods change or estimated cash flows decline based on market conditions or otherwise, an impairment loss may be recognized. Long-lived assets to be disposed of are recorded at the lower of carrying value or fair value less estimated costs to sell. There were no impairments of our wholly-owned real estate investments and intangibles for the three-month period ended March 31, 2012 and 2011.

Investments in Loans

We account for our investment in loans in accordance with ASC Topic 948 Financial Services — Mortgage Banking (“ASC 948”). Under ASC 948, loans expected to be held for the foreseeable future or to maturity should be held at amortized cost, and all other loans should be held at lower of cost or market (“LOCOM”), measured on an individual basis. In accordance with ASC 820 Fair Value Measurements and Disclosures (“ASC 820”), the Company includes nonperformance risk in calculating fair value adjustments. As specified in ASC 820, the framework for measuring fair value is based on observable inputs of market data.

We periodically review our loans held for investment. Impairment losses are taken for impaired loans based on the fair value of collateral and a recoverability analysis on an individual loan basis. The fair value of the collateral may be determined by an evaluation of operating cash flow from the property during the projected holding period, and/or estimated sales value computed by applying an expected capitalization rate to the current net operating income of the specific property, less selling costs. Whichever method is used, other factors considered relate to geographic trends and project diversification, the size of the portfolio and current economic conditions. When it is probable that we will be unable to collect all amounts contractually due, the loan would be considered impaired.

Interest income is generally recognized using the effective interest method or on a basis approximating a level rate of return over the term of the loan. Nonaccrual loans are those on which the accrual of interest has been suspended. Loans are placed on nonaccrual status and considered nonperforming when full payment of principal and interest is in doubt, or when principal or interest is 90 days or more past due or if cash collateral, if any, is insufficient to cover principal and interest. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred loan fees is suspended. Interest income on nonaccrual loans may be recognized only to the extent it is received in cash. However, where there is doubt regarding the ultimate collectability of loan principal, cash receipts on such nonaccrual loans are applied to reduce the carrying value of such loans. Nonaccrual loans may be returned to accrual status when repayment is reasonably assured and there has been demonstrated performance under the terms of the loan or, if applicable, the restructured terms of such loan. The Company did not have any loans on non-accrual status as of March 31, 2012 or December 31, 2011.

Our intent is to hold the remaining loan to maturity and as such it is carried on the March 31, 2012 and December 31, 2011 balance sheets at its amortized cost basis, net of principal payments received.

Investments in Partially-Owned Entities

We invest in common equity and preferred equity interests that allow us to participate in a percentage of the underlying property’s cash flows from operations and proceeds from a sale or refinancing. At the inception of the investment, we must determine whether such investment should be accounted for as a loan, joint venture or as real estate. Investments in partially-owned entities where we exercise significant influence over operating and financial policies of the subsidiary, but do not control the subsidiary, are reported under the equity method of accounting. Under the equity method of accounting, the Company’s share of the investee’s earnings or loss is included in the Company’s operating results. As of March 31, 2012 and December 31, 2011, we held one (1) such equity investment and account for such investment under the equity method.

6

We assess whether there are indicators that the value of our partially owned entities may be impaired. An investment’s value is impaired if we determine that a decline in the value of the investment below its carrying value is other than temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated value of the investment. For the three-month periods ended March 31, 2012 and 2011, we did not recognize any impairment on investments in partially owned entities.

Rental Revenue

We recognize rental revenue in accordance with ASC 840 Leases (“ASC 840”). ASC 840 requires that revenue be recognized on a straight-line basis over the non-cancelable term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Renewal options in leases with rental terms that are higher than those in the primary term are excluded from the calculation of straight line rent if the renewals are not reasonably assured. We commence rental revenue recognition when the tenant takes control of the leased space. The Company recognizes lease termination payments as a component of rental revenue in the period received, provided that there are no further obligations under the lease. Amortization expense of above-market leases reduces rental income on a straight-line basis over the non-cancelable term of the lease. Taxes, insurance and reserves collected from tenants are separately shown as reimbursable income and corresponding payments are included in reimbursed property expenses.

Deferred Financing Costs

Deferred financing costs represent commitment fees, legal and other third party costs associated with obtaining such financing. These costs are amortized over the terms of the respective financing agreements and the amortization of such costs is reflected in interest expense. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close.

Stock-based Compensation Plans

We have two stock-based compensation plans. We recognize compensation cost for stock-based compensation ratably over the service period of the award for employees, board members and non-employees. Compensation cost recorded for employees (including awards to non-employee directors) is measured based on the estimated fair value of the award on the grant date, and such amount is charged to compensation expense on a straight-line basis over the vesting period. Compensation cost recorded for our non-employees are adjusted in each subsequent reporting period based on the fair value of the award at the end of the reporting period until such time as the award has vested and the service being provided, if required, is substantially completed or, under certain circumstances, likely to be completed, whichever occurs first.

Derivative Instruments

We account for derivative instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”). In the normal course of business, we may use a variety of derivative instruments to manage, or hedge, interest rate risk. We will require that hedging derivative instruments be effective in reducing the interest rate risk exposure they are designated to hedge. This effectiveness is essential for qualifying for hedge accounting. Some derivative instruments may be associated with an anticipated transaction. In those cases, hedge effectiveness criteria also require that it be probable that the underlying transaction will occur. Instruments that meet these hedging criteria, to the extent we elect to utilize hedge accounting, will be formally designated as hedges at the inception of the derivative contract.

To determine the fair value of derivative instruments, we may use a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date including standard market conventions and techniques such as discounted cash flow analysis, option-pricing models, replacement cost, and termination cost. All methods of assessing fair value result in a general approximation of fair value, and such value may never actually be realized.

Unrealized gain or loss on the change in the value of a derivative instrument for which hedge accounting is elected, to the extent that it is determined to be an effective hedge, is included in other comprehensive income. Realized gain or loss on a derivative instrument, as well as the unrealized gain or loss on a derivative instrument for which hedge accounting is not elected, or the portion of such derivative instrument which is not an effective hedge, will be included in net income (loss) from operations.

We may use a variety of commonly used derivative products that are considered “plain vanilla” derivatives. These derivatives typically include interest rate swaps, caps, collars and floors. Similarly, we may also become a party to the sale or “short” of U.S. Treasury securities in anticipation of entering into a fixed rate mortgage of approximately equal duration. We expressly prohibit the use of unconventional derivative instruments and using derivative instruments for trading or speculative purposes. Further, we have a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors; therefore, we do not anticipate nonperformance by any of our counterparties.

7

Income Taxes

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our REIT taxable income to stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to Federal income tax on our taxable income at regular corporate rates and we will not be permitted to qualify for treatment as a REIT for Federal income tax purposes for four (4) years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distributions to stockholders. We believe that we will continue to operate in such a manner as to qualify for treatment as a REIT for Federal income tax purposes. We may, however, be subject to certain state and local taxes.

Deferred tax assets and liabilities, if any, are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as, operating loss and tax credit carryforwards. As a REIT, we generally will not be subject to Federal income tax on taxable income that we distribute to our stockholders and, therefore, the inclusion of Federal deferred tax assets and liabilities in our financial statements may not be applicable. Notwithstanding the foregoing, subject to certain limitations, net operating losses (“NOLs”) incurred by the Company can be treated as a carryforward for up to 20 years and utilized to reduced our taxable income in future years, thereby reducing the amount of taxable income which we are required to distribute to our shareholders in order to maintain our REIT status or, to the extent that we elect to distribute less than 100% of our taxable income to our shareholders, reducing our Federal tax liability on that portion of our taxable income which we elect not to distribute.

In assessing the potential realization of deferred tax assets, if any, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences reverse and/or NOL carryforwards are available. Management considers the scheduled reversal of deferred tax assets and liabilities, projected future taxable income, and tax planning strategies in making this assessment. Due to our limited operating history, management does not believe that it is more likely than not that the Company will realize the benefits of these temporary differences and NOL carryforwards and therefore established a full valuation allowance at March 31, 2012 and December 31, 2011.

We account for uncertain tax positions in accordance with FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes — An Interpretation (“ASC 740”) of FASB Statement No. 109 (“FIN 48”). ASC 740 prescribes a recognition threshold and measurement attribute for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740 requires that the financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts, but without considering time values. We evaluate uncertainties of tax positions taken or expected to be taken in our tax returns based on the probability of whether it is more likely than not those positions would be sustained upon audit by applicable tax authorities, based on technical merit for open tax years. We assessed the Company’s tax positions for open federal, state and local tax years from 2008 through 2011. The Company does not have any uncertain tax positions as of March 31, 2012. Our policy is, if necessary, to account for interest and penalties related to uncertain tax positions as a component of our income tax provision.

Earnings per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur, if securities or other contracts to issue common stock were exercised or converted into common stock where such exercise or conversion would result in a lower earnings per share amount.

In accordance with ASC 260 Earnings Per Share, regarding the determination of whether instruments granted in share-based payments transactions are participation securities, we have applied the two-class method of computing basic EPS. This guidance clarifies that outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends or dividend equivalent payments participate in undistributed earnings with common stockholders and are considered participating securities.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the consolidated financial statements and the accompanying notes. Significant estimates are made for the valuation of real estate and related intangibles, valuation of financial instruments, impairment assessments and fair value assessments with respect to purchase price allocations. Actual results could differ from those estimates.

8

Concentrations of Credit Risk

Real estate triple-net leases and financial instruments, primarily consisting of cash, mortgage loan investments and interest receivable, potentially subject us to concentrations of credit risk. We may place our cash investments in excess of insured amounts with high quality financial institutions. We perform ongoing analysis of credit risk concentrations in our real estate and loan investment portfolios by evaluating exposure to various markets, underlying property types, investment structure, term, sponsors, tenant mix and other credit metrics. Our triple-net leases rely on our underlying tenants. The collateral securing our investment in our remaining loan is real estate properties located in the U.S.

In addition, we are required to disclose fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate that value. In cases where quoted market prices are not available, fair value is based upon the application of discount rates to estimated future cash flows based on market yields or other appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Reclassification

Certain prior period amounts have been reclassified to conform to the current period presentation.

Recent Accounting Pronouncements

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). The amendments in ASU 2011-04 change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments are intended to create comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and International Financial Reporting Standards. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material effect on the condensed consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”), which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. This ASU does not change the items that must be reported in other comprehensive income. ASU 2011-05 is effective for interim and annual periods beginning after December 15, 2011. As we have no other comprehensive income, the adoption of this standard did not have any effect on the condensed consolidated financial statements.

Note 3 — Investments in Real Estate

As of March 31, 2012 and December 31, 2011, we own 17 senior housing facilities. In 2008, we acquired 14 senior living properties located in four (4) states, of which six (6) are in Iowa, five (5) in Illinois, two (2) in Nebraska and one (1) in Indiana. These 14 properties were acquired in two separate transactions from Bickford Senior Living Group, L.L.C., a privately-held owner and operator of senior housing facilities (“Bickford”). We lease those properties to Bickford Master I, LLC (the “Bickford Master Lessee”) for an initial annual base rent of approximately $9.1 million and additional base rent of approximately $0.3 million, with fixed escalations of 3.0% per annum through June 2023. The leases provide for four (4) renewal options of ten (10) years each. The additional base rent was deferred and accrued until July 2011 and is being paid over a 24 month period which commenced at that time. See also Note 7 for the mortgage loans underlying the Bickford properties.

As an enticement for the Company to enter into the leasing arrangement for the properties, we received additional collateral and guarantees of the lease obligation from parties affiliated with Bickford. The additional collateral pledged in support of Bickford’s obligation to the lease commitment included ownership interests in Bickford affiliated companies.

The Bickford real estate assets, including personal property, consist of the following at each period end (in millions):

	March 31, 2012			December 31, 2011
Land	$	5.0		$	5.0
Buildings and improvements		102.0			102.0
Less: accumulated depreciation and amortization		(5.2	)		(4.4	)
Total real estate, net	$	101.8		$	102.6

In September 2011, the Company acquired three (3) assisted living and memory care facilities located in Virginia from affiliates of Greenfield Senior Living, Inc., a privately-held owner and operator of senior housing facilities (“Greenfield”). The aggregate purchase price for the three (3) properties was $20.8 million, of which approximately $15.5 million was funded with the proceeds of a first mortgage bridge loan (the “Bridge Loan”) with KeyBank National Association (“KeyBank”) (see Notes 7 and 13), and the balance

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with cash on hand. Concurrent with the acquisition, the properties were leased to three (3) wholly-owned affiliates of Greenfield, which are responsible for operating each of the properties pursuant to a triple net master lease (the “Greenfield Master Lease”). The initial term of the Greenfield Master Lease is 12 years with two (2) renewal options of ten (10) years each. Rent payments during the first year are approximately $1.7 million, with rental increases of 2.75% per annum during the initial term of the lease. At the end of the initial term, Greenfield, subject to certain conditions, holds a one-time purchase option that provides the right to acquire all three (3) of the properties at the then fair market value. Greenfield has guaranteed the obligations of the tenants under the Greenfield Master Lease.

The Greenfield real estate assets, including personal property, consist of the following at each period end (in millions):

	March 31, 2012			December 31, 2011
Land	$	5.6		$	5.6
Buildings and improvements		14.2			14.2
Less: accumulated depreciation and amortization		(0.2	)		(0.1	)
Total real estate, net	$	19.6		$	19.7

For the three months ended March 31, 2012, revenues from the Bickford and Greenfield tenants accounted for approximately 95% of total revenue and for the three months ended March 31 2011, revenues from the Bickford tenants accounted for approximately 93% of total revenue.

Note 4 — Investments in Loans

As of March 31, 2012 and December 31, 2011, our remaining loan investment is part of a larger credit facility, in which we have an approximately one-third interest. The loan is secured by a total of ten (10) properties consisting of skilled nursing facilities, assisted living facilities and a multifamily property all located in Louisiana. Originally scheduled to mature on February 1, 2011, the loan was extended several times during 2011 and eventually restructured in November 2011. Pursuant to the restructuring, the revised loan has a five (5) year term with a maturity date of November 1, 2016, a 25 year amortization schedule and a limited cash sweep. The interest rate on the loan was increased from London Interbank Offered Rate (“Libor”) plus 4.00% to Libor plus 6.00% in year one through year three, Libor plus 8.00% in year four and Libor plus 10.00% in year five. At the time of the restructuring, our portion of the loan had a notional balance of approximately $10.1 million. In conjunction with the restructuring, we received a revised note with a face amount of approximately $10.5 million. As part of the analysis at the time of the restructuring of the loan, we determined that expected future gross receipts, exclusive of interest payments, from this investment were approximately equal to our carrying value of approximately $5.8 million. Accordingly, all principal amortization payments, including prepayments received from the limited cash sweep are applied to the carrying value of our asset. No gain or loss was recognized as a result of the restructuring. One month Libor was 0.24% and 0.30% at March 31, 2012 and December 31, 2011, respectively. Pursuant to Accounting Standards Codification Topic 310 Receivables (“ASC 310”), we recognize interest income at the effective interest rate based on Libor in effect at the inception of the restructured loan and using a weighted average spread of 7.20%. Accordingly, cash interest will be less than effective interest during the first three (3) years of the loan and cash interest will be greater than effective interest during the last two (2) years of the loan. As part of the restructuring, a new independent operator was brought in to manage the properties. Our cost basis in the loan at March 31, 2012 and December 31, 2011 was approximately $5.7 million and approximately $5.8 million, respectively.

Note 5 — Investments in Partially Owned Entities

The following table summarizes the Company’s investments in partially owned entities at March 31, 2012 and December 31, 2011 (in millions):

Investment	March 31, 2012		December 31, 2011
Senior Management Concepts Senior Living Portfolio		2.5		2.5
Total	$	2.5	$	2.5

Cambridge Medical Office Building Portfolio

On November 30, 2011, we sold our entire interest in the Cambridge Medical Office Portfolio (the “Cambridge Portfolio”) and subsequently dissolved our related partnership entities, ERC Sub, L.P. and ERC Sub, LLC. In December of 2007, we acquired an 85% equity interest in eight (8) limited partnerships that own nine (9) Class A medical office buildings owned and operated by affiliates of

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Cambridge Holdings, Inc. (“Cambridge”). Our total investment was approximately $72.4 million consisting of: (i) approximately $61.9 million of cash, of which approximately $2.8 million was held back to perform tenant improvements; and (ii) subject to the properties achieving certain performance hurdles, the commitment to issue to Cambridge 700,000 operating partnership units (the “OP Units”) in ERC Sub, L.P. (the limited partnership through which we held our investment in the Cambridge Portfolio) with a stated value of $10.5 million. Total rentable area of the Cambridge Portfolio was approximately 767,000 square feet. As originally structured, Cambridge retained ownership of the remaining 15% interest in each of the limited partnerships and continued to operate the underlying properties pursuant to long-term management contracts. In accordance with the terms of our management agreements, Cambridge acted as the manager and leasing agent of each medical office building.

On April 14, 2011 (effective as of April 15, 2011) we entered into an Omnibus Agreement (the “Omnibus Agreement”) with Cambridge and certain of its affiliates (the “Cambridge Parties”) regarding our investment in the Cambridge Portfolio. Pursuant to the Omnibus Agreement, we simultaneously entered into a settlement agreement with Cambridge in regard to the ongoing litigation between ourselves and Cambridge. The economic terms of our investment in the Cambridge Portfolio were amended by the Omnibus Agreement as follows:

• The number and terms of the OP Units were revised such that Cambridge retained rights to 200,000 OP Units. These OP Units were entitled to dividend equivalent payments equal to any ordinary dividend declared and paid by Care to its stockholders, but were no longer convertible into or redeemable for shares of common stock of Care and had limited voting rights in ERC Sub, L.P.;

• We issued a warrant (the “Warrant”) to Cambridge to purchase 300,000 shares of our common stock at $6.00 per share;

• Our obligation to fund up to approximately $0.9 million in additional tenant improvements in the Cambridge Portfolio was eliminated;

• Our aggregate interest in the Cambridge Portfolio was converted from a stated equity interest of 85% to a fixed dollar investment of $40 million with a preferred return of 14%;

• Retroactive to January 1, 2011, we were to receive a preferential distribution of cash flow from operations with a target distribution rate of 12% on our $40 million fixed dollar investment with any cash flow from operations in excess of the target distribution rate being retained by Cambridge;

• We had a preference with regard to any distributions from special events, such as property sales, refinancings and capital contributions, equal to the sum of our outstanding fixed dollar investment plus our accrued but unpaid preferred return;

• Cambridge received the right to purchase our interest in the Cambridge Portfolio at any time during the term of the Omnibus Agreement for an amount equal to the sum of our outstanding fixed dollar investment plus our accrued but unpaid preferred return plus a cash premium that increased annually as well as the return to Care of the OP Units, the Warrant and any Care stock acquired upon a cashless exercise of the Warrant (the “Redemption Price” as defined in the Omnibus Agreement);

Prior to April 15, 2011, we included 85% of the operating losses from the Cambridge Portfolio in our statements of operations and reduced the value of our investment in the Cambridge Portfolio based on such losses and the receipt of cash distributions. Our statement of operations for the three months ended March 31, 2011 includes the aforementioned allocated loss of approximately $0.8 million as well as a loss of approximately $0.3 million pertaining to an increase in the liability associated with the operating partnership units. The OP Units had been accounted for as a derivative obligation on our balance sheet. Their value was derived from our stock price (as each OP Unit was redeemable for one share of our common stock, or at the cash equivalent thereof, at our option), and the overall performance of the Cambridge Portfolio (as the number of OP Units eventually payable to Cambridge was subject to reduction to the extent such OP Units were utilized as credit support for our preferred distribution). The modified OP Units were valued based on the expected dividend equivalent payments equal to expected ordinary dividends declared and paid on our common stock to be made during the expected term of the OP Units, discounted by a risk adjusted rate.

On October 19, 2011, we entered into an agreement with Cambridge to amend the Omnibus Agreement (the “First Amendment”). Pursuant to the First Amendment, Cambridge was granted the ability to purchase our interest in the Cambridge Portfolio at any time up to December 9, 2011 for an amount equal to the sum of our $40 million fixed dollar investment plus our accrued but unpaid preferred return (approximately $2.0 million inclusive of our preferred distribution of cash flow from operations). As consideration for the First Amendment, Cambridge agreed to forfeit all of its rights and interests in the Warrant and the OP Units upon the earlier of the closing of such purchase or December 9, 2011.

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On November 30, 2011, Cambridge completed its acquisition of our preferred interest in the Cambridge Portfolio. In connection therewith, the parties to the Omnibus Agreement terminated the agreement. We received proceeds of approximately $42 million of which, approximately $40.8 million of the proceeds received were treated as proceeds from sale of investments and the balance of approximately $1.2 million as income from investments in partially-owned entities.

Summarized financial information as of and for the three months ended March 31, 2011 of the Cambridge Portfolio is as follows (amounts in millions):

	2011
Assets	$	234.9
Liabilities	$	218.4
Equity	$	16.5
Revenue	$	6.3
Expenses	$	7.6
Net loss	$	(1.3	)

Senior Management Concepts Senior Living Portfolio

Until May 2011, we owned a preferred and common equity investment in four (4) independent and assisted living facilities located in Utah and operated by Senior Management Concepts, LLC (“SMC”), a privately held owner and operator of senior housing facilities. The four (4) private pay facilities contain 408 units of which 243 are independent living units and 165 are assisted living units. At the time of our acquisition, four (4) affiliates of SMC each entered into 15-year leases for the respective facilities that expire in 2022. We acquired our preferred and common equity interest in the SMC portfolio in December 2007, paying approximately $6.8 million in exchange for 100% of the preferred equity interests and 10% of the common equity interests in the four (4) properties. At the time of our initial investment, we entered into an agreement with SMC that provides for payments to us of an annual cumulative preferred return of 15.0% on our investment. In addition, we are to receive a common equity return payable for up to ten (10) years equal to 10.0% of budgeted free cash flow after payment of debt service and the preferred return as such amounts were determined prior to closing, as well as 10% of the net proceeds from a sale of one or more of the properties. Subject to certain conditions being met, our preferred equity interest in the properties is subject to redemption at par. If our preferred equity interest is redeemed, we have the right to put our common equity interests to SMC within 30 days after notice at fair market value as determined by a third-party appraiser. In addition, we have an option to put our preferred equity interest to SMC at par any time beginning on January 1, 2016, along with our common equity interests at fair market value as determined by a third-party appraiser.

In May 2011, with our prior consent, three (3) of the four (4) SMC properties were sold. We received approximately $6.6 million of gross proceeds consisting of approximately $5.2 million representing a return of our preferred equity investment allocable to the three (3) sold properties, approximately $0.9 million representing our 10% common equity interest in the three (3) sold properties and approximately $0.4 million which satisfied all outstanding delinquent preferred return and default interest payments. In conjunction with the sale of the three (3) properties, we returned a security deposit of approximately $0.4 million which was held by us as payment collateral for those facilities. We received approximately $12,000 in excess of the then current cost basis of our investment.

Subsequent to the aforementioned sale and through March 31, 2012, we retain our 100% preferred equity interest and 10% common equity interest in the remaining property in Utah. The remaining facility contains 120 units of which approximately one-half are assisted living and one-half are independent living. The property is subject to a lease which expires in 2022.

The summarized financial information as of March 31, 2012 and December 31, 2011 and for the three months ended March 31, 2012 and 2011, for the Company’s unconsolidated joint venture in SMC, which for the three months ended March 31, 2011 includes the net results of operations for the three (3) properties sold in May 2011 as discontinued operations, is as follows (amounts in millions):

	March 31, 2012			December 31, 2011
Assets	$	11.0		$	11.1
Liabilities		14.7			14.6
Equity	$	(3.6	)	$	(3.5	)

	For the three months ended March 31, 2012			For the three months ended March 31, 2011
Revenue	$	0.9		$	3.3
Expenses		0.9			3.2
Net loss from discontinued operations		—			(0.0	)
Net income (loss)	$	(0.1	)	$	0.1

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Note 6 — Identified Intangible Assets — leases in-place, net

The following table summarizes the Company’s identified intangible assets at March 31, 2012 and December 31, 2011 (in millions):

	March 31, 2012			December 31, 2011
Leases in-place — including above market leases of $2.7	$	7.7		$	7.7
Accumulated amortization		(0.9	)		(0.8	)
Total	$	6.8		$	6.9

The Company amortizes these intangible assets over the terms of the underlying leases on a straight-line basis. Amortization expense for each of the next five (5) years is expected to be approximately $0.4 million per annum and the amortization for above-market leases, which reduces rental income, is expected to be approximately $0.2 million per annum for each of the next five (5) years.

Note 7 — Borrowings under Mortgage Notes Payable

The following table summarizes the Company’s outstanding mortgage notes as of March 31, 2012 and December 31, 2011 (dollars in millions):

	Interest Rate	Date of Mortgage Note	Maturity Date	March 31, 2012		December 31, 2011
Red Mortgage Capital, Inc (12 properties)(1)	6.845%	June 2008	July 2015	$	72.6	$	72.8
Red Mortgage Capital, Inc (2 properties)(1)	7.17%	September 2008	July 2015		7.4		7.5
Key Bank National Association (3 properties)(2)	Libor +4.00%	September 2011	June 2012		15.2		15.3
Subtotal					95.2		95.6
Unamortized premium(3)					0.5		0.5
Total				$	95.7	$	96.1

(1) The mortgage loan obtained on June 26, 2008 (the “June Bickford Loan”) requires a fixed monthly payment of approximately $0.5 million for both principal and interest, until maturity in July 2015, at which time the then outstanding balance of approximately $69.6 million is due and payable. The mortgage loan obtained on September 30, 2008 together with the June Bickford Loan, the “Bickford Loans”) provides for a fixed monthly debt service payment of approximately $52,000 for principal and interest until the maturity in July 2015 when the then outstanding balance of approximately $7.1 million is due and payable. In addition, we are required to make monthly escrow payments for taxes and reserves for which we are reimbursed by the Bickford Master Lessee under the Bickford Master Lease. Both mortgage loans are serviced by and payable to Red Mortgage Capital, Inc. (“Red Capital”) and contain prepayment restrictions that impact our ability to refinance either of the mortgage loans prior to 2015. The Bickford Loans are secured by separate cross-collateralized, cross-defaulted first priority mortgages/deeds of trust on each of the Bickford properties. The Bickford Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for the Bickford Loans. Each Bickford Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Bickford Loans, which would result in all amounts owing under each of the Bickford Loans to become immediately due and payable since all of the Bickford Loans are cross-defaulted. On March 31, 2012, the Bickford Loans had an effective yield of 6.88% and the Company was in compliance with respect to the financial covenants related to the Bickford Loans.

(2) On September 20, 2011, in connection with our acquisition of the Greenfield properties, the Company entered into the Bridge Loan with KeyBank in the principal amount of approximately $15.5 million (see Notes 3 and 13). The Bridge Loan is secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. Care has guaranteed payment of up to $5.0 million of the obligations under the Bridge Loan. The Bridge Loan bears interest at a floating rate per annum equal to Libor plus 400 basis points, with no Libor floor, and provides for monthly interest and principal payments commencing on October 1, 2011. The Bridge Loan was scheduled to mature on June 20, 2012. On March 31, 2012, the Bridge Loan had an effective yield of 4.25% and the Company was in compliance with respect to the financial covenants related to the Bridge Loan. On April 24, 2012, Care refinanced the Bridge Loan for the Greenfield properties by entering into three separate non-recourse loans (each a “Greenfield Loan” and collectively the “Greenfield Loans”) with KeyCorp Real Estate Capital Markets, Inc. (“KeyCorp”) for an aggregate amount of $15,680,000. The Greenfield Loans bear interest at a fixed rate of 4.76%, amortize over a 30-year period, provide for monthly interest and principal payments commencing on June 1, 2012 and mature on May 1, 2022. The Greenfield Loans are secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. The Greenfield Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for each Greenfield Loan. Each Greenfield Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Greenfield Loans, which would result in all amounts owing under each of the Greenfield Loans to become immediately due and payable since all of the Greenfield Loans are cross-defaulted. KeyCorp intends to sell each of the Greenfield Loans to Federal Home Loan Mortgage Corporation (“Freddie Mac”) under Freddie Mac’s CME Program.

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(3) As a result of the utilization of push-down accounting in connection with the Tiptree Transaction, the Red Mortgage Capital mortgage notes payable were recorded at their then fair value of approximately $82.1 million, an increase of approximately $0.8 million over the combined amortized loan balances of approximately $81.3 million at August 13, 2010. The premium is amortized over the remaining term of such loans.

On February 1, 2012, the Company became party to the short sale of a $15.5 million 2.00% U.S. Treasury Note due November 15, 2021 (the “10-Year U.S. Treasury Note”). Care entered into this transaction in conjunction with its application to Freddie Mac for a ten-year fixed rate mortgage to be secured by the Greenfield properties in order to limit its interest rate exposure. For the three month period ended March 31, 2012, we had an unrealized gain on this open position of approximately $0.4 million (see Note 9). The Company closed the aforementioned short position upon rate locking the Freddie Mac mortgage on April 18, 2012 and realized a net gain of approximately $0.1 million. Tiptree acted as agent, through its prime broker, for us with respect to this transaction and assigned to us all of its rights and obligations related to this transaction.

Note 8 — Related Party Transactions

Services Agreement with TREIT Management LLC

The Company has a Services Agreement with TREIT pursuant to which TREIT provides certain advisory and support services related to the Company’s business. For such services, the Company: (i) pays TREIT a monthly base services fee in arrears of one-twelfth of 0.5% of the Company’s Equity (as defined in the Services Agreement) as adjusted to account for Equity Offerings (as defined in the Services Agreement); (ii) provides TREIT with office space and certain office-related services (as provided in the Services Agreement and subject to a cost sharing agreement between the Company and TREIT); and (iii) pays, to the extent earned, a quarterly incentive fee equal to the lesser of (a) 15% of the Company’s adjusted funds from operations (“AFFO”) Plus Gain/(Loss) on Sale (as defined in the Services Agreement) and (b) the amount by which the Company’s AFFO Plus Gain /(Loss) on Sale exceeds an amount equal to Adjusted Equity multiplied by the Hurdle Rate (as defined in the Services Agreement). Twenty percent (20%) of any such incentive fee shall be paid in shares of common stock of the Company, unless a greater percentage is requested by TREIT and approved by an independent committee of directors. On November 9, 2011, we entered into an amendment to the Services Agreement which clarified the basis upon which the Company calculates the quarterly incentive fee. The initial term of the Services Agreement extends until December 31, 2013. Unless terminated earlier in accordance with its terms, the Services Agreement will be automatically renewed for one year periods following such date unless either party elects not to renew. If the Company elects to terminate without cause, or elects not to renew the Services Agreement, a Termination Fee (as defined in the Services Agreement) shall be payable by the Company to TREIT. Such termination fee is not fixed and determinable.

For the three months ended March 31, 2012 and 2011, we incurred approximately $0.1 million and $0.1 million, respectively, in base service fee expense to TREIT. In addition, during the three months ended March 31, 2012 and 2011, we incurred an incentive fee payable to TREIT of none and approximately $0.3 million, respectively, of which 20% was paid in the Company’s common stock. For the three month period ended March 31, 2012, TREIT’s reimbursement to the Company for certain office related services was approximately $4,000. At March 31, 2012, accrued expenses payable to TREIT of approximately $43,000 for the outstanding base service fee was offset by the reimbursement due to us.

Other Transactions with Related Parties

At March 31, 2012 and December 31, 2011, Tiptree owns a warrant (the “2008 Warrant”) to purchase 652,500 shares of the Company’s common stock at $11.33 per share under the Manager Equity Plan adopted by the Company on June 21, 2007 (the “Manager Equity Plan”). The warrant is immediately exercisable and expires on September 30, 2018.

Note 9 — Fair Value Measurements

The Company has established processes for determining fair value measurements. Fair value is based on quoted market prices, where available. If listed prices or quotes are not available, then fair value is based upon internally developed models that primarily use inputs that are market-based or independently-sourced market parameters.

An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of valuation hierarchy are defined as follows:

Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The following describes the valuation methodologies used for the Company’s assets and liabilities measured at fair value, as well as the general classification of such pursuant to the valuation hierarchy.

Real estate — The estimated fair value of tangible and intangible assets and liabilities recorded in connection with real estate properties acquired are based on Level 3 inputs. We estimated fair values utilizing income and market valuation techniques. The

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Company may estimate fair values using market information such as recent sales data for similar assets, income capitalization, or discounted cash flow models. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations.

Investments in loans — The estimated fair value of loans is determined utilizing either internal modeling using Level 3 inputs or third party appraisals. The methodology used to value the loans is based on collateral performance, credit risk, interest rate spread movements, and market data. Loans of the type which the Company invests in are infrequently traded and market quotes are not widely available and disseminated.

Obligation to issue operating partnership units — Prior to the sale of our interest in the Cambridge Portfolio, the fair value of our obligation to issue the OP Units associated with the Cambridge acquisition was based on internally developed valuation models, as quoted market prices were not available nor were quoted prices available for similar liabilities. Our model involved the use of management estimates as well as some Level 2 inputs. The variables in the model prior to April 15, 2011 included the estimated release dates of the shares out of escrow, based on the expected performance of the underlying properties, a discount factor of approximately 21%, and the market price and expected quarterly dividend of Care’s common shares at each measurement date. As discussed above in Note 5, pursuant to the Omnibus Agreement, as of April 15, 2011, the number of OP Units outstanding was reduced to 200,000 and the terms of such OP Units were altered to eliminate any conversion right and provided for forfeiture of the OP Units upon the occurrence of certain events. Under the modified terms, the variables (Level 3 inputs) in the model include the expected life of the OP Units, and the expected dividend rate on our common stock and a discount factor of 12%. The obligation with respect to OP Units was eliminated in conjunction with the sale of the Cambridge Portfolio.

U.S. Treasury Short-Sale — The estimated fair value of our position in a 10-Year U.S. Treasury Note is based on market quoted prices, a Level 1 input. For the purposes of determining fair value we obtain market quotes from at least two independent sources.

ASC 820 requires disclosure of the amounts of significant transfers among levels of the fair value hierarchy and the reasons for the transfers. In addition, ASC 820 requires entities to separately disclose, in their roll-forward reconciliation of Level 3 fair value measurements, changes attributable to transfers in and/or out of Level 3 and the reasons for those transfers. Significant transfers into a level must be disclosed separately from transfers out of a level. We had no transfers among levels for the three month periods ended March 31, 2012 and 2011.

Recurring Fair Value Measurement

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets as of March 31, 2012 (as of December 31, 2011 we had no such assets or liabilities):

	Fair Value at March 31, 2012
(dollars in millions)	Level 1		Level 2		Level 3		Total
Assets
10-Year U.S. Treasury Note (short sale)(1)	$	0.4	$	—	$	—	$	0.4

(1) For the three month period ended March 31, 2012, we recorded an unrealized gain of approximately $0.4 million related to our short position on the 10-Year U.S. Treasury Note of November 15, 2021. Related to this position we were required to maintain approximately $0.6 million on margin which has been included in our other assets as of March 31, 2012 (see Note 7).

The tables below present reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant Level 3 inputs during the three month period ended March 31, 2011 (for the three month period ended March 31, 2012 we had no such assets or liabilities). Level 3 instruments presented in the tables include a liability to issue OP Units, which were carried at fair value. The Level 3 instruments were valued using internally developed valuation models that, in management’s judgment, reflect the assumptions a marketplace participant would utilize:

Level 3 Instruments Fair Value Measurements March 31, 2011 (dollars in millions)	Obligation to Issue Partnership Units
Balance, December 31, 2010	$	(2.1	)
Net change in unrealized loss from obligations		(0.3	)
Balance, March 31, 2011	$	(2.4	)

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We are required to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. As discussed in Note 5, Cambridge forfeited all of its rights and interests in the OP Units upon the closing of the purchase of Care’s interest in the Cambridge Portfolio on November 30, 2011. As of December 31, 2011, we did not have any derivative instruments outstanding. As of March 31, 2012, the Company had one derivative instrument that pertained to the short position of the 10-Year U.S. Treasury Note due November 15, 2021, which had a fair value of approximately $0.4 million (see Note 7).

(dollars in millions)	March 31, 2012
Derivatives not designated as hedging instruments	Balance Sheet Location		Fair Value
10-Year U.S. Treasury Note (short-sale)		Other assets	$	0.4

(dollars in millions)	Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives not designated as hedging instruments	Location of (Gain) Loss Recognized in Income on Derivative	Three Months Ended March 31, 2012		Three Months Ended March 31, 2011
Operating partnership units	Unrealized loss on derivative instruments	$	—	$	(0.3	)
10-Year U.S. Treasury Note (short sale)	Unrealized gain on derivative instruments	$	0.4	$	—

Estimates of other assets and liabilities in financial statements

We are required to disclose fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate that value. In cases where quoted market prices are not available, fair value is based upon the application of discount rates to estimated future cash flows based on market yields or other appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

In addition to the amounts reflected in the financial statements at fair value as provided above, cash and cash equivalents, restricted cash, accrued interest receivable, accounts payable and other liabilities reasonably approximate their fair values due to the short maturities of these items. The mortgage notes payable that were used to finance the acquisitions of the Bickford properties have a combined fair value of approximately $83.9 and $84.8 million as of March 31, 2012 and December 31, 2011, respectively. The fair value of the debt was calculated by determining the present value of the agreed upon interest and principal payments at a discount rate reflective of financing terms currently available to us for collateral with the similar credit and quality characteristics (based on Level 2 measurements). The Bridge Loan used to finance the Greenfield acquisition is a floating rate facility and closed on September 20, 2011. Due to the short -term nature of the Bridge Loan and the fact that it has a floating interest rate, the carrying value of the Bridge Loan approximates fair market value as of March 31, 2012 and December 31, 2011. We determined that the fair value of our loan investment, computed by discounting expected future cash flow at market rate, was approximately equal to our carrying value at March 31, 2012 and December 31, 2011.

Note 10 — Stockholders’ Equity

Our authorized capital stock consists of 100,000,000 shares of preferred stock, $0.001 par value and 250,000,000 shares of common stock, $0.001 par value. As of March 31, 2012 and December 31, 2011, no shares of preferred stock were issued and outstanding and 10,223,427 and 10,171,550 shares of our common stock were issued and outstanding, respectively.

Tiptree owns the 2008 Warrant which entitles it to purchase 652,500 shares of our common stock at a price of $11.33 per share under the Manager Equity Plan, which was adopted in June 2007 (the “Manager Equity Plan”). The 2008 Warrant is immediately exercisable and expires on September 30, 2018.

On January 3, 2012, we issued 2,304 shares of common stock with a combined aggregate fair value of approximately $15,000 to our independent directors as part of their retainer for the fourth quarter of 2011. Each independent director receives an annual base retainer of $50,000, payable quarterly in arrears, of which 70% is paid in cash and 30% in shares of Care common stock. Shares are issued under our Equity Plan, which was adopted in June 2007 (the “Equity Plan”).

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On March 30, 2012, we issued 49,573 common shares with a combined aggregate fair value of approximately $345,000 to TREIT in conjunction with the 2011 fourth quarter incentive fee due under the Services Agreement (see Note 8). These shares were issued under the Manager Equity Plan.

As of March 31, 2012, 172,260 common shares remain available for future issuances under the Equity Plan and 134,629 shares (which is net of 652,500 shares that are reserved for potential issuance upon conversion of the 2008 Warrant) remain available for future issuances under the Manager Equity Plan.

Note 11 — Income (Loss) per Share (in thousands, except share and per share data)

	Three Months Ended
	March 31, 2012		March 31, 2011
Net income or (loss) per share of common stock
Net income (loss) per share, basic	$	0.03	$	(0.11	)
Net income (loss) per share, diluted	$	0.03	$	(0.11	)
Numerator:
Net income (loss), basic and diluted	$	294	$	(1,113	)
Denominator:
Weighted average common shares outstanding, basic		10,175,438		10,140,422
Shares underlying RSU Grants		10,784		—
Weighted average common shares outstanding, diluted		10,186,222		10,140,422

For the three months ended March 31, 2012, diluted income per share includes the effect of 100,153 unvested restricted stock units which were granted to certain officers and employees on December 30, 2011. The restricted stock units are participating securities.

For the three months ended March 31, 2011, diluted loss per share was the same as basic loss per share and excludes the effect of 501,966 common shares pertaining to the OP Units issued to Cambridge (see Note 5) that were held in escrow, prior to being restructured on April 15, 2011 in conjunction with the Omnibus Agreement, when they were no longer redeemable for or convertible into shares of our common stock, as they were anti-dilutive.

All periods above exclude the dilutive effect of the 2008 Warrant convertible into 652,500 shares because the exercise price was more than the average market price during such periods.

Note 12 — Commitments and Contingencies

The table below summarizes our remaining contractual obligations as of March 31, 2012.

Amounts in millions	2012		2013		2014		2015		2016		2017		Thereafter		Total
Mortgage notes payable and related interest	$	20.0	$	6.5	$	6.5	$	80.4	$	—	$	—	$	—	$	113.4
Base Service Fee Obligations(1)		0.5		0.5		—		—		—		—		—		1.0
Operating Lease Obligations(2)		0.2		0.2		0.2		0.2		0.3		0.2		0.4		1.7
Total	$	20.7	$	7.2	$	6.7	$	80.6	$	0.3	$	0.2	$	0.4	$	116.1

(1) TREIT base service fee, subject to increase based on changes in shareholders’ equity. The termination fee payable to TREIT in the event of non-renewal of the Services Agreement by the Company is not fixed and determinable and is therefore not included in the table.

(2) Minimum rental obligations for Company office lease.

For the three month periods ended March 31, 2012 and 2011, rent expense for the Company’s office lease was approximately $0.1 million and $0.1 million, respectively.

Litigation

Care is not presently involved in any material litigation or, to our knowledge, is any material litigation threatened against us or our investments, other than routine litigation arising in the ordinary course of business. Management believes the costs, if any, incurred by us related to litigation will not materially affect our financial position, operating results or liquidity.

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Note 13 — Subsequent Events

Share Issuances

On April 3, 2012, we issued 2,124 shares of common stock with a combined aggregate fair value of approximately $15,000 to our independent directors as part of their quarterly retainer for the quarter ended March 31, 2012.

Dividends Declaration

On April 3, 2012, the Company declared a cash dividend of $0.135 per share of common stock with respect to the fourth quarter of 2011 which was paid on May 1, 2012 to stockholders of record as of April 17, 2012. Such dividend will be treated as a 2012 distribution for tax purposes.

On May 10, 2012, the Company declared a cash dividend of $0.135 per share of common stock for the quarter ended on March 31, 2012 payable on June 7, 2012 to stockholders of record as of May 24, 2012.

Mortgage Financing

On April 24, 2012, Care refinanced the Bridge Loan for the Greenfield properties by entering into three (3) separate non-recourse loans with KeyCorp for an aggregate amount of $15,680,000. The Greenfield Loans bear interest at a fixed rate of 4.76%, amortize over a 30-year period, provide for monthly interest and principal payments commencing on June 1, 2012 and mature on May 1, 2022. The Greenfield Loans are secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. The Greenfield Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for each Greenfield Loan. Each Greenfield Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Greenfield Loans, which would result in all amounts owing under each of the Greenfield Loans to become immediately due and payable since all of the Greenfield Loans are cross-defaulted. KeyCorp intends to sell each of the Greenfield Loans to Freddie Mac under Freddie Mac’s CME Program.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Information

Our disclosure and analysis in this Form 10-Q, and the documents that are incorporated by reference herein contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements provide our current expectations or forecasts of future events and are not statements of historical fact. These forward-looking statements include information about possible or assumed future events, including, among other things, discussion and analysis of our future financial condition, results of operations and funds from operations (“FFO”) and adjusted funds from operations (“AFFO”), our strategic plans and objectives, cost management, occupancy and leasing rates and trends, liquidity and ability to refinance our indebtedness as it matures, anticipated capital expenditures (and access to capital) required to complete projects, amounts of anticipated cash distributions to our stockholders in the future and other matters. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. You should not place undue reliance on these forward looking statements. We are not obligated to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Statements regarding the following subjects, among others, are forward-looking by their nature:

• our business and financing strategy;

• our ability to acquire investments on attractive terms;

• our ability to pay down, refinance, restructure and/or extend our indebtedness as it becomes due;

• our understanding of our competition;

• our projected operating results;

• market trends;

• estimates relating to our future dividends;

• completion of any pending transactions;

• projected capital expenditures; and

• impact of technology on our operations and business.

Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect or false. You are cautioned to not place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to:

• risks and uncertainties related to the current market environment, the national and local economies, and the real estate industry in general and in our specific markets, which may have a negative effect on the following, among other things:

• the financial condition and performance of our tenants, borrowers, operators, corporate customers, joint-venture partners, lenders and/or institutions that hold our cash balances, which may expose us to increased risks of default by these parties;

• our ability to obtain equity or debt financing on attractive terms or at all, which may adversely impact our ability to pursue acquisition opportunities and refinance existing debt and our future interest expense; and

• the value of our real estate investments, which may limit our ability to divest our assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis.

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• general volatility of the securities markets in which we invest and the market price of our common stock;

• changes in our business or investment strategy;

• changes in healthcare laws and regulations;

• availability, terms and deployment of capital;

• our ability to pay distributions and the amount of such distributions;

• our dependence upon key personnel whose continued service is not guaranteed and our ability to identify, hire and retain highly qualified executives in the future;

• changes in our industry, interest rates, the debt securities markets, the general economy or the commercial finance and real estate markets specifically;

• the degree and nature of our competition;

• the risks associated with the Company’s investments in joint ventures and unconsolidated entities, including its lack of sole decision-making authority and its reliance on its joint venture partners’ financial condition and continued cooperation;

• increased rates of default and/or decreased recovery rates on our investments;

• potential environmental contingencies, and other liabilities;

• our ability to maintain our status as a real estate investment trust (“REIT”) for federal and state income tax purposes;

• increased prepayments or extensions of the mortgages and other loans underlying our mortgage portfolio;

• actual and potential conflicts of interest with Tiptree Financial Partners, L.P. (“Tiptree”), TREIT Management LLC (“TREIT”), Tiptree Capital Management LLC (“Tiptree Capital”), their respective affiliates and their related persons and entities;

• the extent of future or pending healthcare reform and regulation;

• changes in governmental regulations, tax rates and similar matters;

• legislative and regulatory changes (including changes to laws governing the taxation of REITs or the exemptions from registration as an investment company);

• the adequacy of our cash reserves and working capital; and

• the timing of cash flows, if any, from our investments.

This list of risks and uncertainties, however, is only a summary of some of the most important factors to us and is not intended to be exhaustive. New factors may also emerge from time to time that could materially and adversely affect us.

The following should be read in conjunction with the condensed consolidated financial statements and notes included herein. This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) contains certain non-GAAP financial measures. See “Non-GAAP Financial Measures” and supporting schedules for reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures.

Overview

Care Investment Trust Inc. (all references to “Care,” “the Company,” “we,” “us,” and “our” means Care Investment Trust Inc. and its subsidiaries) is an equity real estate investment trust (“REIT”) that invests in healthcare facilities including assisted-living, independent-living, memory care, skilled nursing and other healthcare-related real estate assets. The Company, which utilizes a hybrid management structure containing components of both internal and external management, was incorporated in Maryland in March 2007 and completed its initial public offering on June 22, 2007.

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As of March 31, 2012, we maintain a geographically-diversified investment portfolio consisting of approximately $2.5 million (2%) in unconsolidated joint ventures that own real estate, approximately $128.2 million (94%) in wholly-owned real estate and approximately $5.7 million (4%) in mortgage loans. As of March 31, 2012, Care’s portfolio of assets consists of wholly-owned real estate of senior housing facilities, including assisted living, independent living and memory care facilities, as well as a joint-venture which owns an assisted / independent living facility and a mortgage loan secured by senior housing facilities and a multifamily property. Our wholly-owned senior housing facilities are leased, under triple-net leases, which require the tenants to pay all property-related expenses.

As a REIT, we are generally not subject to income taxes. To maintain our REIT status, we are required to distribute on an annual basis dividends equal to at least 90% of our REIT taxable income, as defined by the Internal Revenue Code of 1986, as amended (the “Code”), to our stockholders, among other requirements. If we fail to qualify as a REIT in any taxable year, we would be subject to U.S. federal income tax on our taxable income at regular corporate tax rates.

Transactions in 2011 and 2012

In May 2011, with our prior consent, Senior Management Concept, LLC (“SMC”) sold three (3) of the four (4) properties in our SMC portfolio. We received approximately $6.6 million of gross proceeds consisting of approximately $5.2 million which represented a return of our preferred equity investment in the three (3) sold properties, approximately $0.9 million representing our 10% common equity interest in the three (3) sold properties and approximately $0.4 million which satisfied all outstanding delinquent preferred return and default interest payments owed us. In conjunction with the sale of the three (3) properties, we returned a security deposit of approximately $0.4 million which was held by us as payment collateral for those facilities. We received approximately $12,000 in excess of the then current cost basis of our investment.

In September of 2011, the Company acquired three (3) assisted living and memory care facilities located in Virginia from affiliates of Greenfield Senior Living, Inc. (“Greenfield”). The aggregate purchase price for the three (3) properties was $20.8 million, of which approximately $15.5 million was funded with the proceeds of a first mortgage bridge loan (the “Bridge Loan”) with KeyBank N. A. (“KeyBank”), and the balance with cash on hand. Concurrent with the acquisition, the properties were leased to three (3) wholly-owned affiliates of Greenfield, which are responsible for operating each of the properties pursuant to a triple net master lease (the “Greenfield Master Lease”). The initial term of the Greenfield Master Lease is 12 years with two (2) renewal options of ten (10) years each. Rent payments during the first year are approximately $1.7 million, with annual rental increases of 2.75% during the initial term of the lease. At the end of the initial term, Greenfield, subject to certain conditions, holds a one-time purchase option that provides the right to acquire all three (3) of the properties at the then fair market value. Greenfield has guaranteed the obligations of the tenants under the Greenfield Master Lease.

In November 2011, Care consummated the sale of its interest in its nine (9) property medical office portfolio (the “Cambridge Portfolio”) for total cash consideration of approximately $42.0 million, which included approximately $1.2 million of income allocable to our preferred distribution of cash flow from operations. Pursuant to an amendment to the Omnibus Agreement entered into in October 2011, the Company granted to Cambridge Holdings LLC and its affiliates (“Cambridge”) the option to purchase all of Care’s interest in the medical office portfolio at any time up to December 9, 2011, for an amount equal to the sum of the Company’s $40.0 million preferred fixed dollar investment plus its accrued but unpaid preferred return of approximately $2.0 million. In connection with the sale, the remaining 200,000 operating partnership units and a warrant to purchase 300,000 shares of the Company’s common stock previously issued to Cambridge were canceled.

Critical Accounting Policies

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2011 in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no significant changes to those policies during the three-month period ended March 31, 2012.

Results of Operations

Comparison of the three months ended March 31, 2012 and the three months ended March 31, 2011

Revenue

During the three month period ended March 31, 2012, we recognized approximately $3.4 million of rental revenue and approximately $0.4 million of reimbursable income on our Bickford properties (the “Bickford Portfolio”) and our Greenfield properties (the “Greenfield Portfolio”), as compared with approximately $3.0 million of rental revenue and approximately $0.3 million of reimbursable income related solely to the Bickford Portfolio during the comparable period in 2011. We did not acquire the Greenfield Portfolio until September 2011. This represents an increase of approximately $0.4 million in rental revenue and an increase of approximately $0.1 million in reimbursable income for the comparable three month periods. Reimbursable income includes real estate taxes and certain other escrows that we collect on behalf of our Bickford and Greenfield Portfolios and which are used to pay such expense as they come due.

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We earned interest income on our remaining loan investment, which is part of a syndicated loan in which we have an approximately one-third interest, of approximately $0.2 million for each of the three month periods ended March 31, 2012 and 2011. Our loan portfolio had a lower average outstanding principal loan balance during the three month period ended March 31, 2012, as compared with the comparable period during 2011, as a result of scheduled principal payments and prepayments received. The impact of the reduction in the outstanding principal balance is partially offset by the increase in the applicable interest rate for the three months ended March 31, 2012 resulting from a restructuring of the loan in November 2011. We recognized interest income for the three months ended March 31, 2012 at an effective interest rate based on Libor in effect at the inception of the restructured loan and using a weighted average spread of 7.20%. For the three months ended March 31, 2011, the effective yield was 4.30%.

Expenses

For the three months ended March 31, 2012, we recorded base service fee and incentive fee expense under our services agreement with TREIT for certain advisory and support services (the “Services Agreement”) of approximately $0.1 million (base) and none (incentive), respectively, as compared with approximately $0.1 million (base) and approximately $0.3 million (incentive), respectively, for the comparable period in 2011. The decrease of approximately $0.3 million in incentive fee expense in 2012 is primarily attributable to the sale of our interest in the Cambridge Portfolio which occurred in November 2011, thereby reducing the Company’s AFFO Plus Gain (Loss) on Sale (as defined in the Services Agreement) for three month period ended March 31, 2012 as compared to the comparable period in 2011.

Marketing, general and administrative expenses, which include fees for professional services, such as audit, legal and investor relations; directors & officers (D&O) insurance; general overhead costs for the Company; and employee salaries and benefits, as well as, fees paid to our directors were approximately $1.2 million for the three month period ended March 31, 2012 as compared with approximately $0.8 million for the comparable period in 2011, an increase of approximately $0.4 million. The increase is primarily attributable to an increase of approximately $0.3 million in professional fees incurred during the first quarter of fiscal 2012 and an increase of approximately $0.1 million in compensation expense and benefits relating to stock-based compensation costs associated with restricted stock units granted on December 30, 2011 and an increase in the number of full-time employees. The increase in these costs were partially offset by a reduction in D&O insurance costs during the three months ended March 31, 2012 as compared to the comparable period in 2011.

The services fees, incentive fees, expense reimbursements, and the relationship between us and our advisor, TREIT, are discussed further in Note 8 to the Condensed Consolidated Financial Statements.

Reimbursed property expenses include real estate taxes and other reserves that we collect and disburse on behalf of our tenants in our owned properties. Reimbursable expenses for the three months ended March 31, 2012 were approximately $0.4 million as compared to approximately $0.3 million during the comparable period in 2011. The increase is primarily attributable to the additional properties acquired in the September 2011 Greenfield transaction. Reimbursable income approximately offsets reimbursable expenses.

Depreciation and Amortization

Depreciation and amortization expenses amounted to approximately $1.0 million for the three months ended March 31, 2012 as compared to approximately $0.9 million during the three months ended March 31, 2011. The depreciation and amortization expense for the three month period ended March 31, 2011 related to the Bickford Portfolio. For the three month period ended March 31, 2012, depreciation and amortization expense included the Bickford Portfolio as well as the Greenfield Portfolio which the Company acquired in September 2011. Also included in depreciation and amortization were expenses related to the amortization of the in-place leases related to these properties as well as depreciation related to the Company’s corporate headquarters.

Income or loss from investments in partially-owned entities

For the three month period ended March 31, 2012 income from partially-owned entities amounted to approximately $0.1 million as compared with a loss of approximately $0.6 million for the comparable period in 2011, a change of approximately $0.7 million. For the first three months of 2011, our allocable non-cash operating loss from the Cambridge Portfolio was approximately $1.1 million, which included approximately $2.6 million attributable to our share of the depreciation and amortization expenses associated with these properties. We sold our interest in the Cambridge Portfolio in November 2011. This was partially offset by our share of equity income in the SMC properties for the period of approximately $0.4 million which included approximately $0.1 million of delinquent payments that we had not previously recognized. In May 2011, three (3) of the four (4) SMC properties were sold, thereby reducing our quarterly income for the three month period ended March 31, 2012 to approximately $0.1 million. In November 2011 we sold our entire interest in the Cambridge Portfolio and, accordingly, did not recognize a non-cash operating loss with respect to this asset in the period ended March 31, 2012.

Unrealized gain or loss on derivative instruments

During the three month period ended March 31, 2012, we recognized an unrealized gain on derivative instruments of approximately $0.4 million relating to our short-position on a 2.00% U.S. Treasury Note due November 15, 2021 (the “10-Year U.S.

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Treasury Note”), as compared to an approximately $0.3 million unrealized loss recognized during the comparable period in 2011 relating to the fair value of our obligation to issue operating partnership units (“OP Units”) related to the Cambridge Portfolio, a difference of approximately $0.7 million. During the quarter ended March 31, 2012, we became party to the short sale of a $15.5 million 10-Year U.S. Treasury Note in anticipation of entering into a ten-year fixed rate mortgage secured by our Greenfield Portfolio, the interest rate on which would be determined by a fixed spread over the 10-year U.S. Treasury Note (see Note 7 to the Condensed Consolidated Financial Statements). Our obligation with respect to the OP Units associated with the Cambridge Portfolio was eliminated upon the sale of our interest in the Cambridge Portfolio in the fourth quarter of 2011.

Interest Expense

We incurred interest expense of approximately $1.6 million for the three month period ended March 31, 2012 as compared with interest expense of approximately $1.4 million for the three month period ended March 31, 2011. Interest expense for both of these periods ended March 31 includes the interest payable on the mortgage debt secured by the Bickford Portfolio. Interest expense for the comparable period in 2012 also includes the interest in the amount of approximately $0.2 million on our Bridge Loan with KeyBank secured by the Greenfield Portfolio (see Notes 7 and 13 to the Condensed Consolidated Financial Statements).

Liquidity and Capital Resources

Short-term Liquidity Needs

Liquidity is a measurement of our ability to meet short and long-term cash needs. Our principal current cash needs are: (i) to fund operating expenses, including potential expenditures for repairs and maintenance of our properties and debt service on our outstanding mortgage loan obligations; (ii) to distribute 90% of our REIT taxable income to our stockholders in order to maintain our REIT status; and (iii) to fund other general ongoing business needs, including employee compensation expense, D&O insurance, administrative expenses, as well as property acquisitions and investments. As of March 31, 2012, we did not have any development and / or redevelopment projects or any outstanding purchase obligations for the acquisition of additional assets. Our primary sources of liquidity are our current working capital, rental income from our wholly-owned real estate properties, distributions from our interest in a partially-owned entity which holds real estate, interest income and principal paydowns on our remaining loan investment and interest income earned from our available cash balances. Management currently believes that the Company has adequate liquidity to meet its short-term capital needs.

We intend to invest in additional healthcare-related real estate properties only as suitable opportunities arise. In the short term, we may seek to fund any future acquisitions, developments or redevelopments with a combination of cash on hand, working capital and equity and/or debt financing. In evaluating acquisition opportunities, the Company takes into consideration its current and future cash needs as well as the availability of equity and/or debt financing.

Long-term Liquidity Needs

Our long-term liquidity requirements consist primarily of funds necessary for scheduled debt maturities, property acquisitions, developments and redevelopments of health-care facilities and other non-recurring capital expenditures that are needed periodically for our properties. We currently do not have a revolving credit facility or other credit line. As we grow our business, we may seek additional equity and/or debt financing. We may also pursue joint ventures with equity partners as a means of capitalizing property acquisitions. We may also in the future issue operating partnerships units in either UpREIT or DownREIT transactions, which units could be convertible into our common stock. However, our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by potential and current lenders. Our ability to access additional equity and/or debt capital will be dependent on a number of factors as well, including general market conditions for REITs and market perceptions about our Company. Nevertheless, we believe that these sources of liquidity, in addition to existing working capital and cash provided by operations, will allow us to meet our anticipated future liquidity needs.

We routinely review our liquidity requirements and believe that our current cash flows are sufficient to allow us to continue operations, satisfy our contractual obligations and pay dividends to our stockholders. Sources of cash and cash equivalents, cash flows provided by (used in) operating activities, investing activities and financing activities are discussed below.

Cash and Cash Equivalents

Cash and cash equivalents were approximately $49.9 million at March 31, 2012 as compared with approximately $52.3 million at December 31, 2011, a decrease of approximately $2.4 million. The decrease in cash during the three months ended March 31, 2012 was primarily due to the payment of approximately $1.4 million in base service fees and incentive fees to our advisor TREIT, posting of approximately $0.6 million cash as margin for our U.S. Short Treasury position, payment of approximately of $0.4 million principal payments on outstanding mortgage loans and payment of approximately $0.8 million in 2011 cash bonuses. This amount was partially offset by positive net operating results for the three months ended March 31, 2012. During our first fiscal quarter of 2012, cash of approximately $1.4 million was used in operating activities, approximately $0.5 million used in investing activities, and approximately $0.4 million used in financing activities.

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Cash Uses

The Company continually evaluates new investment opportunities in healthcare properties as well as expansions and/or modifications to existing investments. The availability of attractive investment opportunities that are suitable for our risk-adjusted return parameters, and the availability of third-party financing will impact our uses of cash in 2012. In addition, in 2012 we expect to use cash to fund operating expenses, including potential expenditures for repairs and maintenance of our properties and debt service on our outstanding mortgage loan obligations, as well as other general ongoing business needs, including employee compensation expense, D&O insurance, professional fees and rent. We also expect to distribute cash to our stockholders in the form of dividends and/or return of capital.

Cash from Operating Activities

Net cash used in operating activities for the three months ended March 31, 2012 was approximately $1.4 million as compared with approximately $2.4 million provided by operating activities for the comparable 2011 period, a difference of approximately $3.8 million. The change was primarily attributable to an approximately $0.4 million increase in operating expenses associated with legal, audit, tax and other professional fee expenses and incremental compensation expense; an increase in rental revenues of approximately $0.5 million; a reduction of approximately $1.1 million of cash distributions from the Company’s investments in partially-owned entities resulting from our sale of the Cambridge Portfolio; and a decrease of approximately $0.3 million in fees incurred to our advisor TREIT, of which 20% is payable in stock. The net change in operating assets and liabilities used was approximately $2.1 million in the three month period ended March 31, 2012.

Cash from Investing Activities

Net cash used in investing activities for the three months ended March 31, 2012 was approximately $0.5 million as compared with approximately $1.1 million provided by investing activities for the three months ended March 31, 2011, a difference of approximately $1.6 million. The change is primarily attributable to the receipt of loan repayments of approximately $1.3 million in the first quarter 2011 as compared to the receipt of loan repayments of approximately $0.1 million for the comparable period in 2012; the posting of approximately $0.6 million cash used as margin for our U.S. Short Treasury position during the three month period ended March 31, 2012; and fixed asset purchases in 2011 of approximately $0.2 million.

Cash from Financing Activities

Net cash used in financing activities for the three months ended March 31, 2012 was approximately $0.4 million as compared with approximately $0.2 million for the three months ended March 31, 2011, a difference of approximately $0.2 million. The change is primarily attributable to the scheduled principal repayments under our mortgage notes of approximately $0.4 million for the three months ended March 31, 2012 as compared to approximately $0.2 million for the comparable 2011 period, partially offset by approximately $0.1 million of cash expenses pertaining to deferred financing costs in 2012 that did not occur in the comparable period in 2011.

Debt

On June 26, 2008, in connection with the acquisition of the initial 12 properties from Bickford Senior Living Group LLC (“Bickford”) (discussed in Note 3 to the Condensed Consolidated Financial Statements), we entered into a mortgage loan with Red Mortgage Capital, Inc. (“Red Capital”) in the principal amount of approximately $74.6 million. The mortgage loan has a fixed interest rate of 6.845% and requires a fixed monthly payment of approximately $0.5 million for principal and interest, until maturity in July 2015, at which time the then outstanding balance of approximately $69.6 million is due and payable. In addition, we are required to make monthly escrow payments for taxes and reserves for which we are reimbursed by the tenants of these properties. The mortgage loan is collateralized by the 12 properties.

On September 30, 2008, we acquired two (2) additional properties from Bickford and entered into a second mortgage loan with Red Capital in the principal amount of approximately $7.6 million. The mortgage loan has a fixed interest rate of 7.17% and it provides for a fixed monthly debt service payment of approximately $52,000 for principal and interest until the maturity in July 2015 when the then outstanding balance of approximately $7.1 million is due and payable. In addition, we are required to make monthly escrow payments for taxes and reserves for which we are reimbursed by the tenants of these properties. The mortgage loan is collateralized by the two (2) properties.

Both mortgage loans payable to Red Capital (the “Bickford Loans”) contain prepayment restrictions that impact our ability to refinance either of the mortgage loans prior to 2015. The Bickford loans are secured by separate cross-collateralized, cross-defaulted first priority mortgages/deeds of trust on each of the Bickford properties. The Bickford loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for the Bickford loans. Each Bickford Loan contains typical representations and covenants for loans of this type. A breach of the

24

representations or covenants could result in a default under each of the Bickford Loans, which would result in all amounts owing under each of the Bickford Loans to become immediately due and payable since all of the Bickford Loans are cross-defaulted. As of March 31, 2012, approximately $0.5 million of premium remains to be amortized over the remaining term of the two (2) mortgage loans.

On September 20, 2011, we entered into the Bridge Loan with KeyBank in the principal amount of approximately $15.5 million for the purpose of financing the purchase price for the Greenfield Portfolio. The Bridge Loan bore interest at a floating interest rate equal to Libor plus 4.00% with no Libor floor, and provided for monthly interest and principal payments commencing on October 1, 2011. On March 31, 2012, the Bridge Loan had an effective yield of 4.25%. On April 24, 2012 Care refinanced the Bridge Loan for the Greenfield Portfolio by entering into three separate non-recourse loans (each a “Greenfield Loan” and collectively the “Greenfield Loans”) with KeyCorp Real Estate Capital Markets, Inc. (“KeyCorp”) for an aggregate amount of $15,680,000. The Greenfield Loans bear interest at a fixed rate of 4.76%, amortize over a 30-year period, provide for monthly interest and principal payments commencing on June 1, 2012 and mature on May 1, 2022. The Greenfield Loans are secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. The Greenfield Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for each Greenfield Loan. Each Greenfield Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Greenfield Loans, which would result in all amounts owing under each of the Greenfield Loans to become immediately due and payable since all of the Greenfield Loans are cross-defaulted. KeyCorp intends to sell each of the Greenfield Loans to Federal Home Loan Mortgage Corporation (“Freddie Mac”) under Freddie Mac’s CME Program.

The Company leases its corporate office space with monthly rental payments approximating $20,000. The lease expires March 7, 2019.

Per the terms of the Services Agreement, the Company is obligated to: (i) pay TREIT a monthly base services fee of one-twelfth of 0.5% of the Company’s Equity (as defined in the Services Agreement), as adjusted to account for Equity Offerings (as defined in the Services Agreement), (ii) provide TREIT with office space and certain office related services (as provided in the Services Agreement and subject to a cost sharing agreement between the Company and TREIT); and (iii) pay a quarterly incentive fee, if earned, equal to the lesser of (a) 15% of the Company’s AFFO Plus Gain/(Loss) on Sale (as defined in the Services Agreement) and (b) the amount by which the Company’s AFFO Plus Gain /(Loss) on Sale exceeds an amount equal to Adjusted Equity multiplied by the Hurdle Rate (as defined in the Services Agreement) (see Note 8 to the Condensed Consolidated Financial Statements). On November 9, 2011, we entered into an amendment to the Services Agreement which clarified the basis upon which the Company calculates the quarterly incentive fee. On April 19, 2012, Tiptree and Tricadia Holdings entered into an agreement whereby TREIT and Tiptree Capital will become wholly-owned subsidiaries of Tiptree. The Services Agreement will remain in full effect following the closing of this transaction.

Equity

As of March 31, 2012, we had 10,223,427 shares of common stock and no shares of preferred stock outstanding.

On March 30, 2012, the Company issued 49,573 common shares to TREIT in conjunction with its quarterly incentive fee due under the Services Agreement for the fourth quarter of 2011. These shares were issued under the Manager Equity Plan, which was adopted in June 2007 (the “Manager Equity Plan”).

On January 3, 2012, we issued 2,304 shares of common stock with a combined aggregate fair value of approximately $15,000 to our independent directors as part of their quarterly retainer for the fourth quarter of 2011. The shares were issued under the equity plan, which was adopted in June 2007 (the “Equity Plan”). Each independent director receives an annual base retainer of $50,000, payable quarterly in arrears, of which 70% is paid in cash and 30% in shares of Care common stock. Shares granted as part of the annual retainer vest immediately and are included in general and administrative expense.

Tiptree owns a warrant (the “2008 Warrant”) to purchase 652,500 shares of our common stock at a price of $11.33 per share. The 2008 Warrant is immediately exercisable and expires on September 30, 2018.

In December 2011, we granted 100,153 restricted stock units (“RSUs”) to certain officers and employers at a grant date fair value of approximately $0.7 million. During the three months ended March 31, 2012, we recognized approximately $54,000 as compensation cost related to the ratable vesting.

As of March 31, 2012, 172,260 common shares remain available for future issuances under the Equity Plan and 134,629 shares (which is net of 652,500 shares that are reserved for potential issuance upon conversion of the 2008 Warrant) remain available for future issuances under the Manager Equity Plan.

Distributions

We are required to distribute 90% of our REIT taxable income (excluding the deduction for dividends paid and capital gains) on an annual basis in order to qualify as a REIT for federal income tax purposes. Accordingly, we intend to make, but are not

25

contractually bound to make, regular quarterly distributions to holders of our common stock and, when applicable, dividend equivalent payments to holders of RSUs. All such distributions are authorized at the discretion of our board of directors. We consider market factors and our performance in addition to REIT requirements in determining distribution levels.

On April 3, 2012, the Company declared a cash dividend of $0.135 per share of common stock for the quarter ended on December 31, 2011, which was paid to stockholders of record at the close of business on April 17, 2012. For tax purposes, this will be treated as a 2012 distribution.

On May 10, 2012, the Company declared a cash dividend of $0.135 per share of common stock for the quarter ended on March 31, 2012 payable on June 7, 2012 to stockholders of record as of May 24, 2012.

Our ability to make future distributions depends upon a number of factors, including our future earnings. We may be unable to maintain our current rate of distributions and future distributions may be suspended or paid at a lesser rate than the distributions we now pay.

Current Market Conditions

The U.S. economy is still experiencing weakness from the recent economic conditions, which resulted in increased unemployment, weakening of tenant financial condition, large-scale business failures and tight credit markets. Our results of operations may be sensitive to changes in overall economic conditions that impact tenant leasing practices. Adverse economic conditions affecting tenant income, such as employment levels, business conditions, interest rates, tax rates, fuel and energy costs and other matters, could reduce overall tenant leasing or cause tenants to shift their leasing practices. In addition, periods of economic slowdown or recession, rising interest rates or declining demand for real estate, could result in a general decline in rents or an increased incidence of defaults under existing leases. Recently, high levels of unemployment have persisted, and rental rates and valuations have not fully recovered to pre-recession levels and may not for a number of years. Furthermore, the uncertainty surrounding the rapidly increasing national debt of the U.S. and continuing global economic malaise have kept markets volatile. These unstable conditions could continue for a prolonged period of time. It is difficult to determine the breadth and duration of the financial market problems and the many ways in which they may affect our tenants and our business in general. A significant additional deterioration in the U.S. economy or the bankruptcy or insolvency of one or more of our significant tenants could cause our current plans to meet any projected cash obligations to be insufficient.

Contractual Obligations

The table below summarizes our contractual obligations as of March 31, 2012 (amounts in millions):

	Payments due by Period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Mortgage notes payable and related interest	$	113.4	$	21.7	$	91.7	$	—	$	—
Base service fee obligations(1)		1.0		0.5		0.5		—		—
Operating lease obligations(2)		1.7		0.2		0.7		0.7		0.1
Total	$	116.1	$	22.4	$	92.9	$	0.7	$	0.1

(1) TREIT base service fee, subject to increase based on changes in shareholders’ equity. The termination fee payable to TREIT in the event of non-renewal of the Services Agreement by the Company is not fixed and determinable and is therefore not included in the table.

(2) Minimum rental obligations for Company office lease.

On November 4, 2010, the Company entered into the Services Agreement with TREIT pursuant to which TREIT will provide certain advisory services related to the Company’s business. For such services, the Company will pay TREIT a monthly base services fee in arrears of one-twelfth of 0.5% of the Company’s Equity (as defined in the Services Agreement). The initial term of the Services Agreement shall expire on December 31, 2013 and will renew automatically each year thereafter for an additional one-year period unless the Company or TREIT elects not to renew.

For a discussion of Care’s debt, see “Liquidity and Capital Resources — Debt.”

Acquisitions and Dispositions

Management continually monitors potential investment and expansion opportunities. Our focus is on potential acquisitions in the senior housing industry which provide attractive risk adjusted returns. Our overall strategy is to identify strong and experienced regional operators of assisted living, independent living and memory care facilities who are looking to expand and diversify their operations by entering into strategic relationships with capital partners. We believe that by entering into such relationships, we will not only generate attractive current returns for our stockholders, but create a forward pipeline of additional opportunities as well. While cap rates for larger portfolios have compressed during the past few years, thereby increasing the cost of acquisitions, we continue to see opportunities to acquire small portfolios of three (3) to ten (10) properties at attractive yields.

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As of March 31, 2012, the Company did not have any definitive purchase and sale obligations with regard to any real estate transactions. The Company regularly evaluates potential real estate acquisitions and dispositions. While current and projected returns for a subject property significantly influence the decision making process, other items, such as the impact on the geographical diversity of the Company’s portfolio, the type of property, the Company’s experience with and the overall reputation of the property operator and the availability of mortgage financing are also taken into consideration. Applicable capitalization rates for such acquisitions vary depending on a number of factors including, but not limited to, the type of facility, its location, competition and barriers to entry in the particular marketplace, age and physical condition of the facility, status and experience of the property operator and the existence or availability of mortgage financing. The property net operating income for prospective acquisitions is generally based upon the EBITDA for such property adjusted for market vacancy and property management fees as well as applicable maintenance, operating and tax reserves.

Impact of Inflation

Inflation may affect us in the future by changing the underlying value of our real estate or by impacting our cost of financing our operations. Our revenues are generated primarily from long-term investments. Inflation has remained relatively low during recent periods. There can be no assurance that future Medicare, Medicaid or private pay rate increases will be sufficient to offset future inflation increases. Certain of our leases require increases in rental income based upon annual rent escalation clauses.

Off-Balance Sheet Arrangements

As of March 31, 2012, we maintain an interest in one (1) unconsolidated joint venture. Our risk of loss associated with this investment is limited to our investment in this joint venture. We have no material off-balance sheet arrangements as of March 31, 2012.

Recent Accounting Pronouncements

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). The amendments in ASU 2011-04 change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments are intended to create comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and International Financial Reporting Standards. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material effect on the condensed consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”), which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. This ASU does not change the items that must be reported in other comprehensive income. ASU 2011-05 is effective for interim and annual periods beginning after December 15, 2011. As we have no other comprehensive income, the adoption of this standard did not have any effect on the condensed consolidated financial statements.

Related Party Transactions

We have relationships with certain of our affiliates and other related parties whereby those persons or entities receive income from us, including the following:

• On November 4, 2010, the Company entered into a Services Agreement with TREIT pursuant to which TREIT provides certain advisory services related to the Company’s business. On November 9, 2011, we entered into an amendment to the Services Agreement that clarified the basis upon which the Company calculates the quarterly incentive fee.

• Tiptree owns the 2008 Warrant to purchase 652,500 shares of our common stock at a price of $11.33per share. The 2008 Warrant is immediately exercisable and expires in September 30, 2018.

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Non-GAAP Financial Measures

Funds from Operations

Funds From Operations, or FFO, which is a non-GAAP financial measure, is a widely recognized measure of REIT performance. We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT, which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently.

The revised White Paper on FFO, approved by the Board of Governors of NAREIT in April 2002, defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis.

Adjusted Funds from Operations

Adjusted Funds From Operations, or AFFO, is a non-GAAP financial measure. We calculate AFFO as net income (loss) (computed in accordance with GAAP), excluding gains (losses) from debt restructuring and gains (losses) from sales of property, the effects of straight lining lease revenue, plus the expenses associated with depreciation and amortization on real estate assets, certain expenses associated with real estate acquisitions, non-cash equity compensation expenses, and excess cash distributions from the Company’s equity method investments and one-time events pursuant to changes in GAAP and other non-cash charges. Proportionate adjustments for unconsolidated partnerships and joint ventures will also be taken when calculating the Company’s AFFO.

We believe that FFO and AFFO provide additional measures of our core operating performance by eliminating the impact of certain non-cash and capitalized expenses and facilitating a comparison of our financial results to those of other comparable REITs with fewer or no non-cash charges and comparison of our own operating results from period to period. The Company uses FFO and AFFO in this way and also uses AFFO as one performance metric in the Company’s executive compensation program as well as a variation of AFFO in calculating the Incentive Fee payable to its advisor, TREIT (as adjusted pursuant to the Services Agreement). Additionally, the Company believes that its investors also use FFO and AFFO to evaluate and compare the performance of the Company and its peers, and as such, the Company believes that the disclosure of FFO and AFFO is useful to (and expected by) its investors.

However, the Company cautions that neither FFO nor AFFO represent cash generated from operating activities in accordance with GAAP and they should not be considered as an alternative to net income (determined in accordance with GAAP), or an indication of our cash flow from operating activities (determined in accordance with GAAP), as a measure of our liquidity, or an indication of funds available to fund our cash needs, including our ability to make cash distributions. In addition, our methodology for calculating FFO and/or AFFO may differ from the methodologies employed by other REITs to calculate the same or similar supplemental performance measures, and accordingly, our reported FFO and/or AFFO may not be comparable to the FFO and AFFO reported by other REITs.

The following is a reconciliation of FFO and AFFO to net income (loss), which is the most directly comparable GAAP performance measure, for the three month periods ended March 31, 2012 and 2011, respectively (in thousands, except share and per share data):

	For the three months ended March 31, 2012					For the three months ended March 31, 2011
	FFO		AFFO			FFO			AFFO
Net income (loss)	$	294	$	294		$	(1,113	)	$	(1,113	)
Add:
Depreciation and amortization from partially-owned entities		—		—			2,601			2,601
Depreciation and amortization on owned properties		968		968			854			854
Stock-based compensation		—		69			—			30
Amortization of above-market leases		—		52			—			—
Amortization of deferred financing costs		—		67			—			—
Other non-cash		—		79			—			—
Straight-line effect of lease revenue		—		(399	)		—			(594	)
Excess cash distributions from the Company’s equity method investments		—		—			—			1
Unrealized (gain) on derivative instruments		—		(420	)		—			—
Change in the obligation to issue OP Units		—		—			—			255
Funds From Operations and Adjusted Funds From Operations	$	1,262	$	708		$	2,342		$	2,034
FFO and Adjusted FFO per share basic	$	0.12	$	0.07		$	0.23		$	0.20
FFO and Adjusted FFO per share diluted	$	0.12	$	0.07		$	0.23		$	0.20
Weighted average shares outstanding — basic(1)(2)		10,175,438		10,175,438			10,140,422			10,140,422
Weighted average shares outstanding — diluted(1)(2)		10,186,222		10,186,222			10,140,422			10,140,422

(1) The diluted FFO and AFFO per share calculations exclude the dilutive effect of the 2008 Warrant convertible into 652,500 common shares for the three month periods ended March 31, 2012 and 2011, respectively, because the exercise price was more than the average market price for each of those periods.

(2) For 2011, does not include original operating partnership units issued to Cambridge that were held in escrow and were reduced and restructured in conjunction with the Omnibus Agreement (see Note 5 to the Condensed Consolidated Financial Statements).

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

ITEM 4. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Notwithstanding the foregoing, no matter how well a control system is designed and operated, it can provide only reasonable, not absolute, assurance that it will detect or uncover failures within our Company to disclose material information otherwise required to be set forth in our periodic reports.

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during the three months ended March 31, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings.

Care is not presently involved in any material litigation or, to our knowledge, is any material litigation threatened against us or our investments, other than routine litigation arising in the ordinary course of business. Management believes the costs, if any, incurred by us related to litigation will not materially affect our financial position, operating results or liquidity.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information.

None.

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ITEM 6. Exhibits

(a) Exhibits

3.1	Third Articles of Amendment and Restatement of the Registrant (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on September 3, 2010 and herein incorporated by reference).
3.2	Third Amended and Restated Bylaws of the Registrant (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on November 8, 2010 and herein incorporated by reference).
4.1	Form of Certificate for Common Stock (previously filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form S-11, as amended (File No. 333-141634), filed on June 7, 2007 and herein incorporated by reference).
10.1	Senior Housing Loan and Security Agreement by and between Care GSL Stafford LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.2	Multifamily Note by Care GSL Stafford LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.3	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Stafford Loan, dated as of April 24, 2012 (filed herewith).
10.4	Senior Housing Loan and Security Agreement by and between Care GSL Fredericksburg LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.5	Multifamily Note by Care GSL Fredericksburg LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.6	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Fredericksburg Loan, dated as of April 24, 2012 (filed herewith).
10.7	Senior Housing Loan and Security Agreement by and between Care GSL Berryville LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.8	Multifamily Note by Care GSL Berryville LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.9	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Berryville Loan, dated as of April 24, 2012 (filed herewith).
31.1	Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2	Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*

31

* Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at March 31, 2012 (unaudited) and December 31, 2011, (ii) the Condensed Consolidated Statements of Operations (unaudited) for the three month periods ended March 31, 2012 and 2011, (iii) the Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the three month period ended March 31, 2012, (iv) the Condensed Consolidated Statements of Cash Flows (unaudited) for the three month periods ended March 31, 2012 and 2011 and (v) the Notes to the Condensed Consolidated Financial Statements (unaudited).

Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Care Investment Trust Inc.
Date: May 15, 2012	By:	/s/ Salvatore (Torey) V. Riso, Jr.
		Salvatore (Torey) V. Riso, Jr.
		President and Chief Executive Officer Care Investment Trust Inc.
Date: May 15, 2012	By:	/s/ Steven M. Sherwyn
		Steven M. Sherwyn
		Chief Financial Officer and Treasurer Care Investment Trust Inc.

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EXHIBIT INDEX

Exhibit No.	Description
3.1	Third Articles of Amendment and Restatement of the Registrant (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on September 3, 2010 and herein incorporated by reference).
3.2	Third Amended and Restated Bylaws of the Registrant (previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-33549), filed on November 8, 2010 and herein incorporated by reference).
4.1	Form of Certificate for Common Stock (previously filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form S-11, as amended (File No. 333-141634), filed on June 7, 2007 and herein incorporated by reference).
10.1	Senior Housing Loan and Security Agreement by and between Care GSL Stafford LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.2	Multifamily Note by Care GSL Stafford LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.3	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Stafford Loan, dated as of April 24, 2012 (filed herewith).
10.4	Senior Housing Loan and Security Agreement by and between Care GSL Fredericksburg LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.5	Multifamily Note by Care GSL Fredericksburg LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.6	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Fredericksburg Loan, dated as of April 24, 2012 (filed herewith).
10.7	Senior Housing Loan and Security Agreement by and between Care GSL Berryville LLC and KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.8	Multifamily Note by Care GSL Berryville LLC to KeyCorp Real Estate Capital Markets, Inc., dated as of April 24, 2012 (filed herewith).
10.9	Guaranty by the Registrant for the benefit of KeyCorp Real Estate Capital Markets, Inc., providing a guaranty for the Berryville Loan, dated as of April 24, 2012 (filed herewith).
31.1	Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
32.2	Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document *
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*

34

* Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at March 31, 2012 (unaudited) and December 31, 2011, (ii) the Condensed Consolidated Statements of Operations (unaudited) for the three month periods ended March 31, 2012 and 2011, (iii) the Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the three month period ended March 31, 2012, (iv) the Condensed Consolidated Statements of Cash Flows (unaudited) for the three month periods ended March 31, 2012 and 2011 and (v) the Notes to the Condensed Consolidated Financial Statements (unaudited).

Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

35

EX-10.1

Exhibit 10.1

Freddie Mac Loan Number: 504183354

Property Name: Greenfield Assisted Living of Stafford

SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME)

(Revised 9-1-2011)

Borrower:	CARE GSL STAFFORD LLC, a Delaware limited liability company
Lender:	KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation
Date:	April 24, 2012

Reserve Fund Information

(See Article IV)

Imposition Reserves	Deferred Insurance	Collect Taxes	Deferred water/sewer
(fill in “Collect” or “Deferred”
as appropriate for each item)	N/A Ground Rents	Deferred assessments/other charges
Repair Reserve	Repairs required?	x Yes	¨ No
	If Yes, is a Reserve required?	¨ Yes	x No
If Yes to Repairs, but No Reserve, is a Letter of Credit required?		¨ Yes	x No

Replacement Reserve	x Yes                    If Yes:	x Funded	¨ Deferred
	¨ No
Rental Achievement Reserve	¨ Yes                     If Yes:	¨ Cash	¨ Letter of Credit
	x No

External Rate Cap Reserve	¨ Yes                        x No
Other Reserve(s)	¨ Yes                        x No

If Yes, specify:

TABLE OF CONTENTS

	Page
ARTICLE I     DEFINITIONS; CONSTRUCTION		1
1.01   Defined Terms		1
1.02   Construction		1
ARTICLE II     LOAN		2
2.01   Loan Terms		2
2.02   Prepayment Premium		2
2.03   Exculpation		2
2.04   Application of Payments		2
2.05   Usury Savings		2
2.06   Adjustable Rate Mortgage – Third Party Cap Agreement		2
ARTICLE III     LOAN SECURITY AND GUARANTY		3
3.01   Security Instrument		3
3.02   Reserve Funds		3
3.03   Uniform Commercial Code Security Agreement		4
3.04   Cap Collateral		4
3.04   Guaranty		4
3.06   Collateral Assignment of Licenses, Certificates and Permits		4
ARTICLE IV     RESERVE FUNDS AND REQUIREMENTS		4
4.01   Reserves Generally		4
4.02   Reserves for Taxes, Insurance and Other Charges		5
4.03   Repairs; Repair Reserve Fund		6
4.04   Replacement Reserve Fund		7
4.05   Rental Achievement Provisions		7
4.06   Reserved		7
4.07   External Cap Agreement Reserve Fund Guaranty		7
ARTICLE V     REPRESENTATIONS AND WARRANTIES		7
5.01   Review of Documents		7
5.02   Condition of Mortgaged Property		7
5.03   No Condemnation		7
5.04   Actions; Suits; Proceedings		7
5.05   Environmental		8
5.06   Commencement of Work; No Labor or Materialmen’s Claims		9
5.07   Compliance with Applicable Laws and Regulations		9
5.08   Access; Utilities; Tax Parcels		10
5.09   Licenses and Permits		10
5.10   No Other Interests		11
5.11   Term of Leases		11
5.12   No Prior Assignment; Prepayment of Rents		11

Seniors Housing Loan and Security Agreement (CME) Page i

5.13   Illegal Activity	12
5.14   Taxes Paid	12
5.15   Title Exceptions	12
5.16   No Change in Facts or Circumstances	12
5.17   Financial Statements	12
5.18   ERISA – Borrower Status	13
5.19   No Fraudulent Transfer or Preference	13
5.20   No Insolvency or Judgment	13
5.21   Working Capital	13
5.22   Cap Collateral	14
5.23   Ground Lease	14
5.24   Purpose of Loan	14
5.25   Intended Use	14
5.25   Furniture, Fixtures, Equipment and Motor Vehicles	15
5.26   Participant in Federal Programs	15
5.27   Certificate of Need	15
5.28   Contracts	16
5.29   Material Contracts	16
5.30   No Financing Statements	17
5.31   Compliance with Medicare and Medicaid Requirements	17
5.32   Third-Party Payer Programs and Private Commercial Insurance Managed Care and Employee Assistance Programs	17
5.33   No Transfer or Pledge of Licenses	17
5.34   No Pledge of Receivables	17
5.35   Patient and Resident Care Agreements	18
5.36   Patient and Resident Records	18
5.37   No Facility Deficiencies, Enforcement Actions or Violations	18
5.38   Survival	18
ARTICLE VI     BORROWER COVENANTS	18
6.01   Compliance with Laws	18
6.02   Compliance with Organizational Documents	18
6.03   Use of Mortgaged Property	19
6.04   Non-Residential Leases	20
6.05   Prepayment of Rents	21
6.06   Inspection	21
6.07   Books and Records; Financial Reporting	22
6.08   Taxes; Operating Expenses; Ground Rents	25
6.09   Preservation, Management and Maintenance of Mortgaged Property	26
6.10   Property and Liability Insurance	28
6.11   Condemnation	36
6.12   Environmental Hazards	38
6.13   Single Purpose Entity Requirements	41
6.14   Repairs and Capital Replacements	46
6.15   Residential Leases Affecting the Mortgaged Property	47
6.16   Litigation; Government Proceedings	47

Seniors Housing Loan and Security Agreement (CME) Page ii

6.17   Further Assurances and Estoppel Certificates; Lender’s Expenses	47
6.18   Cap Collateral	48
6.19   Ground Lease	48
6.20   ERISA Requirements	48
6.21   Operation of the Facility	49
6.22   Facility Reporting	50
6.23   Covenants Regarding Material Contracts	51
6.24   Pledge of Receivables	51
6.25   Property Manager and Operator of the Facility	51
6.26   Residential Leases and Agreements	52
6.27   Performance Under Leases	52
6.28   Governmental Payer Programs	52
ARTICLE VII     TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER	53
7.01   Permitted Transfers	53
7.02   Prohibited Transfers	54
7.03   Conditionally Permitted Transfers	55
7.04   Preapproved Intrafamily Transfers	57
7.05   Lender’s Consent to Prohibited Transfers	57
ARTICLE VIII     SUBROGATION	57
ARTICLE IX     EVENTS OF DEFAULT AND REMEDIES	58
9.01   Events of Default	58
9.02   Protection of Lender’s Security; Security Instrument Secures Future Advances	61
9.03   Remedies	62
9.04   Forbearance	63
9.05   Waiver of Marshalling	64
ARTICLE X     RELEASE; INDEMNITY	64
10.01   Release	64
10.02   Indemnity	64
ARTICLE XI     SENIORS HOUSING OPERATOR	70
ARTICLE XII      MISCELLANEOUS PROVISIONS	70
12.01   Waiver of Statute of Limitations, Offsets and Counterclaims	70
12.02   Governing Law; Consent to Jurisdiction and Venue	70
12.03   Notice	70
12.04   Successors and Assigns Bound	71
12.05   Joint and Several Liability	71
12.06   Relationship of Parties; No Third Party Beneficiary	71
12.07   Severability; Amendments	72
12.08   Disclosure of Information	72
12.09   Determinations by Lender	72

Seniors Housing Loan and Security Agreement (CME) Page iii

12.10   Sale of Note; Change in Servicer; Loan Servicing	73
12.11   Supplemental Financing	73
12.12   Defeasance	77
12.13   Lender’s Rights to Sell or Securitize	81
12.14   Cooperation with Rating Agencies and Investors	81
12.15   Time is of the Essence	82
ARTICLE XIII     DEFINITIONS	82
ARTICLE XIV     INCORPORATION OF ATTACHED RIDERS	99
ARTICLE XV     INCORPORATION OF ATTACHED EXHIBITS	100
A.     ARTICLE XI IS DELETED AND REPLACED WITH THE FOLLOWING:	1

Seniors Housing Loan and Security Agreement (CME) Page iv

SENIORS HOUSING LOAN AND SECURITY AGREEMENT

THIS SENIORS HOUSING LOAN AND SECURITY AGREEMENT (“Loan Agreement”) is dated as of the 24^th day of April, 2012 and is made by and between CARE GSL STAFFORD LLC, a Delaware limited liability company (“Borrower”), and KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation (together with its successors and assigns, “Lender”).

RECITAL

Lender has agreed to make and Borrower has agreed to accept a loan in the original principal amount of Six Million Four Hundred Twenty-Four Thousand and No/100 Dollars ($6,424,000.00) (“Loan”). Lender is willing to make the Loan to Borrower upon the terms and subject to the conditions set forth in this Loan Agreement.

AGREEMENT

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

ARTICLE I DEFINITIONS; CONSTRUCTION.

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

1.02 Construction. The captions and headings of the Articles and Sections of this Loan Agreement are for convenience only and will be disregarded in construing this Loan Agreement. Any reference in this Loan Agreement to an “Exhibit,” an “Article” or a “Section” will, unless otherwise explicitly provided, be construed as referring, respectively, to an Exhibit attached to this Loan Agreement or to an Article or Section of this Loan Agreement. All Exhibits and Riders attached to or referred to in this Loan Agreement are incorporated by reference in this Loan Agreement. Any reference in this Loan Agreement to a statute or regulation will be construed as referring to that statute or regulation as amended from time to time. Use of the singular in this Loan Agreement includes the plural and use of the plural includes the singular. As used in this Loan Agreement, the term “including” means “including, but not limited to” and the term “includes” means “includes without limitation.” The use of one gender includes the other gender, as the context may require. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document in this Loan Agreement will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth in this Loan Agreement), and (b) any reference in this Loan Agreement to any Person will be construed to include such Person’s successors and assigns.

Seniors Housing Loan and Security Agreement (CME) Page 1

ARTICLE II LOAN.

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

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

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

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

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

2.06 Adjustable Rate Mortgage – Third Party Cap Agreement. If (a) the Note does not provide for interest to accrue at an adjustable or variable interest rate, and (b) a third party Cap Agreement is not required, then this Section 2.06 and Section 3.04 will be of no force or effect.

Seniors Housing Loan and Security Agreement (CME) Page 2

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

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

ARTICLE III LOAN SECURITY AND GUARANTY.

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

3.02 Reserve Funds.

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

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

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

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

Seniors Housing Loan and Security Agreement (CME) Page 3

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

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

3.04 Cap Collateral. Reserved.

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

3.06 Collateral Assignment of Licenses, Certificates and Permits. Reserved.

ARTICLE IV RESERVE FUNDS AND REQUIREMENTS.

4.01 Reserves Generally.

(a) Establishment of Reserve Funds; Investment of Deposits. Unless otherwise provided in Section 4.04, each Reserve Fund will be established on the date of this Loan Agreement and all Reserve Funds will be deposited in an Eligible Account at an Eligible Institution or invested in “permitted investments” as then defined and required by the Rating Agencies. Lender will not be obligated to open additional accounts or deposit Reserve Funds in additional institutions when the amount of any Reserve Fund exceeds the maximum amount of the federal deposit insurance or guaranty. Borrower acknowledges and agrees that it will not have the right to direct Lender as to any specific investment of monies in any Reserve Fund. Lender will not be responsible for any losses resulting from investment of monies in any Reserve Fund or for obtaining any specific level or percentage of earnings on such investment.

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

Seniors Housing Loan and Security Agreement (CME) Page 4

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

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

4.02 Reserves for Taxes, Insurance and Other Charges.

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

[Deferred]	Hazard Insurance premiums or premiums for other Insurance required by Lender under Section 6.10
[Collect ]	Taxes and payments in lieu of taxes
[Deferred]	water and sewer charges that could become a Lien on the Mortgaged Property
[ N/A ]	Ground Rents
[Deferred]	assessments or other charges that could become a Lien on the Mortgaged Property

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

Seniors Housing Loan and Security Agreement (CME) Page 5

(b) Disbursement of Imposition Reserve Deposits. Lender will apply the Imposition Reserve Deposits to pay Impositions so long as no Event of Default has occurred and is continuing. Lender will pay all Impositions from the Imposition Reserve Deposits held by Lender upon Lender’s receipt of a bill or invoice for an Imposition. If Borrower holds a ground lessee interest in the Mortgaged Property and Imposition Reserve Deposits are collected for Ground Rent, then Lender will pay the monthly or other periodic installments of Ground Rent from the Imposition Reserve Deposits, whether or not Lender receives a bill or invoice for such installments. Lender will have no obligation to pay any Imposition to the extent it exceeds the amount of the Imposition Reserve Deposits then held by Lender. Lender may pay an Imposition according to any bill, statement or estimate from the appropriate public office, Ground Lessor (if applicable) or insurance company without inquiring into the accuracy of the bill, statement or estimate or into the validity of the Imposition.

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

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

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

4.03 Repairs; Repair Reserve Fund. Reserved.

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4.04 Replacement Reserve Fund. See Rider.

4.05 Rental Achievement Provisions. Reserved.

4.06 Reserved.

4.07 External Cap Agreement Reserve Fund. Reserved.

ARTICLE V REPRESENTATIONS AND WARRANTIES.

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

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

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

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

5.04 Actions; Suits; Proceedings.

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

(b) Without limiting the generality of subsection (a) above, neither Borrower, any operator of the Facility, nor the Facility are subject to any proceeding, suit or investigation by any Governmental Authority and neither Borrower nor any operator of the Facility has received any notice from any Governmental Authority which may, directly or indirectly, or with the passage of time, result in the imposition of a fine, or interim or final sanction, or would (i) have a Material

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Adverse Effect, (ii) result in the appointment of a receiver or trustee, (iii) affect Borrower’s or any operator of the Facility’s ability to accept and retain residents, (iv) result in the Downgrade, revocation, transfer, surrender or suspension, or non-renewal or reissuance or other impairment of any License, or (v) affect Borrower’s or operator’s continued participation in Medicare, Medicaid, TRICARE, or any similar governmental payor program, as applicable, or any successor programs thereto, at current rate certifications.

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

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

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

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

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

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

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

(g) Borrower has received no actual or constructive notice of any written complaint, order, notice of violation or other communication from any Governmental

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Authority with regard to air emissions, water discharges, noise emissions or Hazardous Materials, or any other environmental, health or safety matters affecting the Mortgaged Property or any property that is adjacent to the Mortgaged Property.

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

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

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

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

5.07 Compliance with Applicable Laws and Regulations.

(a) To the best of Borrower’s knowledge after due inquiry and investigation, (i) all Improvements and the use of the Mortgaged Property comply with all applicable statutes, rules and regulations, including all applicable statutes, rules and regulations pertaining to requirements for equal opportunity, anti-discrimination, fair housing, environmental protection, zoning and land use (“legal, non-conforming” status with respect to uses or structures will be considered to comply with zoning and land use requirements for the purposes of this representation), (ii) the Improvements comply with applicable health, fire, and building codes, and (iii) there is no evidence of any illegal activities relating to controlled substances on the Mortgaged Property.

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(b) Without limiting the generality of subsection (a) above, Borrower, any operator of the Facility, and the Facility (and its operation) and all residential care agreements and residential Leases are in compliance with the applicable provisions of all laws, regulations, ordinances, orders or standards of any Governmental Authority having jurisdiction over the operation of the Facility (including any governmental payor program requirements and disclosure of ownership and related information requirements), including without limitation: (i) Healthcare Laws, Privacy Laws, fire and safety codes and building codes (and no waivers of such requirements exist at the Facility); (ii) laws, rules, regulations and published interpretations thereof regulating the preparation and serving of food; (iii) laws, rules, regulations and published interpretations thereof regulating the handling and disposal of medical or biological waste; (iv) the applicable provisions of all laws, rules, regulations and published interpretations thereof to which Borrower or the Facility is subject by virtue of its Intended Use; and (v) all criteria established to classify the Facility as housing for older persons under the Fair Housing Amendments Act of 1988.

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

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

5.09 Licenses and Permits.

(a) Borrower, any commercial tenant of the Mortgaged Property and/or any operator of the Mortgaged Property (i) is in possession of all material licenses, permits and authorizations required for use of the Mortgaged Property, which are valid and in full force and effect as of the date of this Loan Agreement, and (ii) will remain in material compliance with all material licenses, permits and other legal requirements necessary and required to conduct its business.

(b) Without limiting the generality of subsection (a) above, Borrower has obtained or has caused any operator of the Facility to obtain all Licenses necessary to use, occupy or operate the Facility for its Intended Use (such Licenses being in its own name or in the name of an operator of the Facility, if any, and in any event in the names of the Persons required by the applicable Governmental Authorities), and all such Licenses are in full force and effect. Borrower has provided Lender with

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complete and accurate copies of all Licenses. The Intended Use of the Facility is in conformity with all certificates of occupancy and Licenses and any other restrictions or covenants affecting the Facility. The Facility has all equipment, staff and supplies necessary to use and operate the Facility for its Intended Use.

(c) Each License, and the name of the Person in whose name each License is issued, if other than Borrower, is identified on Exhibit J, and a copy of each License is attached as Exhibit J.

(d) As of the Closing Date, the Licenses attached as Exhibit J are true and complete copies, the Licenses are current, and Borrower has not received any notice of pending violations or investigations that have not been brought to Lender’s attention in writing.

(e) Other than the Licenses attached as Exhibit J, as of the Closing Date, no other Licenses are required to operate the Facility as it is currently being operated and for its Intended Use.

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

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

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

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

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5.13 Illegal Activity. No portion of the Mortgaged Property has been or will be purchased with the proceeds of any illegal activity and Borrower will not permit any portion of the Mortgaged Property to be used for any illegal activity.

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

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

5.16 No Change in Facts or Circumstances.

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

(b) There has been no Material Adverse Change since the Loan Application was submitted to Lender in any fact or circumstance that would make any information submitted as part of the Loan Application incomplete or inaccurate.

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

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

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5.18 ERISA – Borrower Status. Borrower is not one of the following:

(a) An “investment company,” or a company under the Control of an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

(b) An “employee benefit plan,” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA and the assets of Borrower do not constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101.

5.19 No Fraudulent Transfer or Preference. No Borrower or Borrower Principal (a) has made, or is making in connection with and as security for the Loan, a transfer of an interest in property of the Borrower or Borrower Principal to or for the benefit of Lender or otherwise as security for any of the obligations under the Loan Documents which is or could constitute a voidable preference under federal bankruptcy, state insolvency or similar applicable creditors’ rights laws or (b) has made, or is making in connection with the Loan, a transfer (including any transfer to or for the benefit of an insider under an employment contract) of an interest of Borrower or any Borrower Principal in property, or (c) has incurred, or is incurring in connection with the Loan, any obligation (including any obligation to or for the benefit of an insider under an employment contract) within 2 years of the date of this Loan Agreement which is or could constitute a fraudulent transfer under federal bankruptcy, state insolvency, or similar applicable creditors’ rights laws.

5.20 No Insolvency or Judgment.

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

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

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

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5.22 Cap Collateral. Reserved.

5.23 Ground Lease. Reserved.

5.24 Purpose of Loan. The purpose of the Loan is as indicated by the checked box(es) below:

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

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

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

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

¨ made previously by Borrower and/or Borrower’s Affiliates

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

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

1.	Independent Living Units	0	%
		0	units
2.	Assisted Living Residences	50	%
		22	units
		28	beds

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3.	Assisted Living Residences devoted to Alzheimer’s care, dementia care and/or memory care	50	%
		22	units
		34	beds
4.	Skilled Nursing Beds	0	%
		0	units
		0	beds
5.	Continuing Care Retirement Community with the following percentages of use:	N/A	%
	a.         Seniors Apartments	N/A	units
	b.         Independent Living Units	N/A	%
		N/A	units
	c.         Assisted Living Residences	N/A	%
		N/A	units
		N/A	beds
	d.         Skilled Nursing Beds	N/A	%
		N/A	units
		N/A	beds

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

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

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

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5.29 Contracts.

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

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

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

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

5.30 Material Contracts.

(a) Exhibit M lists all Material Contracts in effect as of the date of this Loan Agreement.

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

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

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

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

5.32 Compliance with Medicare and Medicaid Requirements. The Facility is in compliance with all requirements for participation in Medicare and Medicaid, including without limitation, the Medicare and Medicaid Patient and Program Protection Act of 1987. The Facility is in conformance in all material respects with all insurance, reimbursement and cost reporting requirements and has a current provider agreement that is in full force and effect under Medicare and Medicaid, as applicable. As of the date of this Loan Agreement, neither Borrower nor any operator of the Facility has received any notice from any Governmental Authority of any overbilling of Medicare, Medicaid, TRICARE (or any so-called “waiver program” associated therewith) or any other Governmental Authority payor for similar goods or services with respect to the Facility and there are no current or pending Medicare, Medicaid, TRICARE or similar governmental payor program recoupment efforts at the Facility, and there are no current, pending or outstanding audits or appeals with respect thereto (or which remain open to audit with respect thereto).

5.33 Third-Party Payor Programs and Private Commercial Insurance Managed Care and Employee Assistance Programs. There is no threatened or pending revocation, suspension, termination, probation, restriction, limitation or nonrenewal affecting Borrower or operator of the Facility, of any participation or provider agreement with any third-party payor, including Medicare, Medicaid, TRICARE, and any private commercial insurance managed care and employee assistance program to which Borrower or operator of the Facility is subject. All Medicare, Medicaid, TRICARE and private insurance cost reports and financial reports submitted by Borrower or operator of the Facility are and will be materially accurate and complete and have not been and will not be misleading in any material respects. No cost reports for the Facility remain “open” or unsettled.

5.34 No Transfer or Pledge of Licenses. The Licenses, including, without limitation, the certificate of need, may not be, and have not been, transferred to any location other than the Facility, have not been pledged as collateral security for any other loan or indebtedness, and are held free from restrictions or known conflicts that would materially impair the use or operation of the Facility for its Intended Use, and are not provisional, probationary, or restricted in any way.

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

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

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

5.38 No Facility Deficiencies, Enforcement Actions or Violations.

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

(b) [RESERVED]

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

ARTICLE VI BORROWER COVENANTS.

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

6.02 Compliance with Organizational Documents. Borrower will at all times comply with all laws, regulations and requirements of any Governmental Authority relating to Borrower’s

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

6.03 Use of Mortgaged Property.

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

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

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

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

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

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

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

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

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

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

6.04 Non-Residential Leases.

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

(b) Reserved.

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

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

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

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

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

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

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

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

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

6.06 Inspection.

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

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

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

Borrower has not received any written complaint, notice, letter or other written communication from any tenant, Property Manager, operator of the Facility or governmental authority regarding mold, fungus, microbial contamination or pathogenic organisms (“Mold”) or any activity,

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condition, event or omission that causes or facilitates the growth of Mold on or in any part of the Mortgaged Property or, if Borrower has received any such written complaint, notice, letter or other written communication, that Borrower has investigated and determined that no Mold activity, condition or event exists or alternatively has fully and properly remediated such activity, condition, event or omission in compliance with the Moisture Management Plan for the Mortgaged Property.

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

6.07 Books and Records; Financial Reporting.

(a) Delivery of Books and Records. Borrower will keep and maintain at all times at the Mortgaged Property or the Property Manager’s or operator of the Facility’s office, and upon Lender’s request will make available at the Mortgaged Property (or, at Borrower’s option, at the Property Manager’s or operator of the Facility’s office), complete and accurate books of account and records (including copies of supporting bills and invoices) adequate to reflect correctly the operation of the Mortgaged Property, in accordance with GAAP consistently applied (or such other method which is reasonably acceptable to Lender), and copies of all written contracts, Leases, and other instruments which affect the Mortgaged Property. The books, records, contracts, Leases and other instruments will be subject to examination and inspection by Lender at any reasonable time.

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

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

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

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

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

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

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(C) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal quarter.

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

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

(B) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal year.

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

(D) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.

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

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

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

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

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

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

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

(e) Failure to Timely Provide Financial Statements. If Borrower fails to provide in a timely manner the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f), Lender will give Notice to Borrower specifying the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) that Borrower has failed to provide. If Borrower has not provided the required statements, schedules and reports within 10 Business Days following such Notice, then (i) Borrower will pay a late fee of $500 for each late statement, schedule or report, plus an additional $500 per month that any such statement, schedule or report continues to be late, and (ii) Lender will have the right to have Borrower’s books and records audited, at Borrower’s expense, by independent certified public accountants selected by Lender in order to obtain such statements, schedules and reports, and all related costs and expenses of Lender will become

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immediately due and payable and will become an additional part of the Indebtedness as provided in Section 9.02. Notice to Borrower of Lender’s exercise of its rights to require an audit will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

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

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

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

6.08 Taxes; Operating Expenses; Ground Rents.

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

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

(c) Payment of Impositions and Reserve Funds. If Lender is collecting Imposition Reserve Deposits pursuant to Article IV, then so long as no Event of Default

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

(d) Right to Contest. Borrower, at its own expense, may contest by appropriate legal proceedings, conducted diligently and in good faith, the amount or validity of any Imposition other than Insurance premiums and Ground Rent (if applicable), if (i) Borrower notifies Lender of the commencement or expected commencement of such proceedings, (ii) the Mortgaged Property is not in danger of being sold or forfeited, (iii) if Borrower has not already paid the Imposition, Borrower deposits with Lender reserves sufficient to pay the contested Imposition, if requested by Lender, and (iv) Borrower furnishes whatever additional security is required in the proceedings or is reasonably requested by Lender, which may include the delivery to Lender of reserves established by Borrower to pay the contested Imposition.

6.09 Preservation, Management and Maintenance of Mortgaged Property.

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

(b) Abandonment of Mortgaged Property. Borrower will not abandon the Mortgaged Property.

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

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(d) Property Management. Borrower will provide for professional management of the Mortgaged Property by the Property Manager at all times under a property management agreement approved by Lender in writing. Borrower will not surrender, terminate, cancel, modify, renew or extend its property management agreement, or enter into any other agreement relating to the management or operation of the Property with Property Manager or any other Person, or consent to the assignment by the Property Manager of its interest under such property management agreement, in each case without the consent of Lender, which consent will not be unreasonably withheld. If at any time Lender consents to the appointment of a new Property Manager, such new Property Manager and Borrower will, as a condition of Lender’s consent, execute an Assignment of Management Agreement in a form acceptable to Lender. If any such replacement Property Manager is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered on the Closing Date, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to the Rating Agencies (unless waived by the Rating Agencies) with regard to nonconsolidation.

(e) Alteration of Mortgaged Property. Borrower will give Notice to Lender of and, unless otherwise directed in writing by Lender, will appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement. Borrower will not (and will not permit any tenant or other Person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property, including any removal, demolition or alteration occurring in connection with a rehabilitation of all or part of the Mortgaged Property, except (i) Repairs or Capital Replacements pursuant to the terms of Sections 4.03 or 4.04, (ii) in connection with the replacement of tangible Personalty, (iii) if Borrower is a cooperative housing corporation or association, to the extent permitted with respect to individual dwelling units under the form of a proprietary lease or occupancy agreement, (iv) Repairs and Capital Replacements in connection with making an individual unit ready for a new occupant or pursuant to the terms of Sections 6.09(a) and (c), and (v) Repairs made in connection with and pursuant to the Repair Schedule of Work, if applicable.

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

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

6.10 Property and Liability Insurance.

(a) Hazard and Other Insurance. At all times during the term of this Loan Agreement, Borrower will maintain, at its sole cost and expense, for the mutual benefit of Borrower and Lender, the following Insurance coverages:

(i) All-Risks of Physical Loss. Insurance against any peril included within the classification “All Risks of Physical Loss” in amounts not less than the Replacement Cost of the Mortgaged Property. In all cases where any of the Improvements or the use of the Mortgaged Property will at any time constitute legal non-conforming structures or uses under applicable legal requirements of any Governmental Authority, the policy referred to in this Section 6.10 will include “Ordinance and Law Coverage,” with “Loss to the Undamaged Portion of the Building,” “Demolition Cost” and “Increased Cost of Construction” endorsements, in the amount of coverage required by Lender and will either include a “Time Element” endorsement or the business income/rental value Insurance for the Mortgaged Property will be endorsed to cover income/rent loss arising out of any increased time necessary to repair or rebuild the Mortgaged Property due to the enforcement of any zoning laws.

(ii) Commercial General Liability. Commercial general liability Insurance on an occurrence-based policy form that insures against legal liability resulting from bodily injury, property damage, personal injury and advertising injury, and includes contractual liability coverage and any and all claims, including all legal liability (to the extent insurable) imposed upon Borrower and all Attorneys’ Fees and Costs arising out of or connected with the possession, use, leasing, operation, maintenance or condition of the Mortgaged Property with a combined limit of not less than $2,000,000 in the aggregate and $1,000,000 per occurrence; umbrella or excess liability coverage with minimum limits in the aggregate and per occurrence of $1,000,000 in coverage for each story of the Improvements with a maximum required coverage of $8,000,000 (provided, however, that if the Indebtedness is $3,000,000 or less and the Improvements have 3 stories or fewer, then no umbrella or excess liability coverage is required); and if the Borrower owns, leases, hires, rents, borrows, uses, or has another use on its behalf a vehicle in conjunction with the operation of the Mortgaged Property, vehicle liability Insurance of not less than $1,000,000 per occurrence. The maximum per occurrence deductible or self-insured retention, or combined deductible or self-insured retention, for all coverage required under this Section 6.10(a)(ii), will not exceed $35,000.

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(iii) Business Income/Rental Value. Business income/rental value Insurance for the Mortgaged Property in an amount equal to at least the estimated gross Rents attributable to the Mortgaged Property for 12 months (18 months when (A) the Improvements have 5 or more stories, or (B) at all times during which the Indebtedness is equal to or greater than $50,000,000) based on gross Rents for the immediately preceding year and otherwise sufficient to avoid any co-insurance penalty; coverage will include a 90-day extended period of indemnity if (X) the Improvements have 5 or more stories, or (Y) the Indebtedness is equal to or greater than $25,000,000. The waiting period for this coverage will not exceed 72 hours.

(iv) Flood. If any portion of the Improvements is located within an area identified by the Federal Emergency Management Agency (or any successor) as a special flood hazard area (“SFHA”), flood Insurance in an amount equal to the greater of the following:

(A) The maximum flood Insurance available under the National Flood Insurance Program (“NFIP”) for each building within a SFHA.

(B) The sum of the following for each building within a SFHA being insured:

(1) The Replacement Cost of all areas of the Improvements below grade.

(2) The Replacement Cost of the bottom two stories (above grade) of the Improvements.

(3) Any additional coverage dictated by the nature of the Mortgaged Property as determined by Lender in Lender’s Discretion.

Such coverage may be purchased through excess carriers if the required coverage exceeds the maximum Insurance available under the NFIP.

(v) Boiler and Machinery. If the Mortgaged Property contains a central heating, ventilation and cooling system (“HVAC System”) where steam boilers and/or other pressurized systems are in operation and are regulated by the Property Jurisdiction, Insurance providing coverage for damage to the HVAC System or other portions of the Mortgaged Property, if the damage is the result of an explosion of steam boilers, pressure vessels or similar apparatus now or hereafter installed at the Mortgaged Property, with minimum limits at least equal to the Replacement Cost of the building housing the HVAC System, including the Replacement Cost of the HVAC System.

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(vi) Terrorism. Insurance coverage required under Section 6.10(a)(i) through (iii) will cover perils of terrorism and acts of terrorism. Such coverage may be provided through one or more separate policies, which will be on terms (including amounts) consistent with those required under Section 6.10(a)(i) through (iii).

(vii) Builder’s All Risk. During any period of Restoration, builder’s “All Risk” Insurance (including fire and other perils within the scope of a policy known as a “Causes of Less – Special Form” or “All Risk” policy) in an amount at least equal to 100% of the sum of the contract or contracts and all materials to complete the Restoration (as determined by Lender in Lender’s Discretion).

(viii) Earthquake. If Lender requires earthquake Insurance, the amount of coverage will be equal to the greater of the following:

(A) $1,000,000.

(B) 150% of the difference between the following items:

(1) The Replacement Cost of the Mortgaged Property multiplied by the probable maximum loss for the Mortgaged Property, as determined by a Site Specific Seismic Report.

(2) The Replacement Cost of the Mortgaged Property multiplied by the projected loss with a 20% probable maximum loss.

Lender will not require earthquake Insurance if the probable maximum loss for the Mortgaged Property is less than 20%. If any updated reports or other documentation are reasonably required by Lender in order to determine whether such additional Insurance is necessary or prudent, Borrower will pay for all such documentation at its sole cost and expense.

(ix) Windstorm. If windstorm and/or windstorm related perils and/or “named storms” (“Windstorm Coverage”) are excluded from the “All Risks” policy required under Section 6.10(a)(i), Borrower will obtain separate coverage for such risks, either through an endorsement or a separate policy. Windstorm Coverage will be written in an amount equal to 100% of the Replacement Cost. Business income/rental value Insurance required under Section 6.10(a)(iii) will be in force for all losses covered by Windstorm Coverage.

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(x) Other. Such other Insurance against loss or damage with respect to the Improvements and Personalty located on the Mortgaged Property as required by Lender (including liquor/dramshop and Mold Insurance) provided such Insurance is of the kind for risks from time to time customarily insured against and in such minimum coverage amounts and maximum deductibles as are generally required by institutional lenders for properties comparable to the Mortgaged Property or which Lender may deem necessary in Lender’s Discretion.

All Insurance required pursuant to Section 6.10(a)(i) and Section 6.10(a)(iii) through (x) will be referred to as “Hazard Insurance.”

(b) Deductibles. The Insurance required pursuant to Section 6.10(a)(i), (iv), (v), (vi), (vii) and (ix) will have a per occurrence deductible meeting the following requirements:

(i) The deductible will not exceed $50,000 if the Replacement Cost of the Mortgaged Property is less than $10,000,000.

(ii) The deductible will not exceed $75,000 if the Replacement Cost of the Mortgaged Property is equal to or greater than $10,000,000.

(iii) For Windstorm Coverage the deductible will not exceed 5% of the Replacement Cost if the Mortgaged Property is located (1) in Florida, or (2) within 50 miles of the coast of any East Coast or Gulf Coast state.

(iv) For flood insurance provided under the NFIP, the deductible will comply with the NFIP deductible for the type of improvement insured.

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

(d) Policy Requirements. All policies will be in a form approved by Lender. All policies of Hazard Insurance will include a standard non-contributing, non-reporting mortgagee clause in favor of, and in a form approved by, Lender. All policies for general liability Insurance will contain a standard additional insured provision, in favor of, and in a form approved by Lender. If any policy referred to in this Section 6.10 contains a coinsurance clause, such coinsurance clause will be offset by an agreed amount endorsement in an amount not less than the Replacement Cost. All Insurance policies and renewals of Insurance policies required by this Section 6.10 will be for such periods as Lender may from time to time require. Unless required otherwise by state law, all policies of Hazard Insurance will provide that the insurer will notify the named mortgagee in writing at least 10 days before the cancelation of the policy for nonpayment of the premium or nonrenewal and at least 30 days before cancelation for any other reason.

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(e) Evidence of Insurance; Renewals. Borrower will deliver to Lender a legible copy of each Insurance policy (or duplicate original), and Borrower will promptly deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies. Borrower will ensure that the Mortgaged Property is continuously covered by the required Insurance policies and will deliver to Lender evidence acceptable to Lender in Lender’s Discretion that each policy has been renewed at least 15 days prior to the expiration date of such Insurance policy. If the evidence of a renewal does not include a legible copy of the renewal policy (or duplicate original), Borrower will deliver a legible copy of such renewal policy (or duplicate original) in a form satisfactory to Lender in Lender’s Discretion prior to the earlier of (i) 60 days after the expiration date of the original policy, or (ii) the date of any Notice to Lender under Section 6.10(i).

(f) Insurance Company Rating Requirements. Borrower will maintain the Insurance coverage described in this Section 6.10 with companies acceptable to Lender having the following ratings:

(i) A rated claims paying ability rating of at least “A-” for financial strength or its equivalent by A.M. Best Company.

(ii) A financial size rating or its equivalent by A.M. Best Company of at least one of the following:

(A) “VII” for companies with an Aggregate Carrier Exposure of $5,000,000 or less.

(B) “VIII” for companies with an Aggregate Carrier Exposure greater than $5,000,000 and less than or equal to $25,000,000.

(C) “IX” for companies with an Aggregate Carrier Exposure greater than $25,000,000 and a rated claims paying ability of at least one of the following:

(1) “A-” or its equivalent by Fitch, Inc.

(2) “A-” or its equivalent by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

(3) “A3” or its equivalent by Moody’s Investors Service, Inc.

All insurers providing Insurance required by this Loan Agreement will be authorized to issue Insurance in the Property Jurisdiction.

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

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(h) Blanket Insurance; Master Program. Borrower may provide Insurance coverage described in this Section 6.10 under a blanket insurance policy or master program which provides one “per occurrence” (per peril) limit of coverage for two or more properties (“Blanket Insurance Policy”) provided that each of the following conditions is met:

(i) The Blanket Insurance Policy is acceptable to Lender in Lender’s Discretion.

(ii) The coverages under the Blanket Insurance Policy meet the requirements of this Section 6.10.

(iii) Borrower will provide evidence acceptable to Lender in Lender’s Discretion that the per occurrence limit of the Insurance coverages provided by the Blanket Insurance Policy will be no less than the Replacement Cost of the property with the largest replacement cost exposure covered by the Blanket Insurance Policy unless a higher amount is required by Lender in Lender’s Discretion.

(iv) The maximum per occurrence deductible for the Blanket Insurance Policy providing property damage coverage and/or Windstorm Coverage is as follows:

Aggregate Replacement Cost of the covered properties	Maximum per occurrence deductible
$5,000,000 or less	$50,000
Greater than $5,000,000 but less than or equal to $7,500,000	$75,000
Greater than $7,500,000	1% of the Replacement Cost of the covered properties (to a maximum of $250,000)

However, if the Blanket Insurance Policy provides Windstorm Coverage and the Mortgaged Property is located (A) in Florida, or (B) within 50 miles of the coast of any East Coast or Gulf Coast state, then the maximum per occurrence deductible for Windstorm Coverage will not exceed 5% of the aggregate Replacement Cost of the covered properties.

(v) The minimum umbrella or excess liability coverage required if the Blanket Insurance Policy provides commercial general liability Insurance is as follows:

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Number of properties covered by the policy	Number of stories in any  of the covered properties	Minimum umbrella or excess liability
2 to 3	3 or fewer	$	3,000,000
2 to 3	More than 3	$	10,000,000
4 to 5	3 or fewer	$	5,000,000
4 to 5	More than 3	$	12,000,000
6 to 10	3 or fewer	$	7,000,000
6 to 10	More than 3	$	15,000,000
11 to 19	3 or fewer	$	9,000,000
11 to 19	More than 3	$	20,000,000
20 or more	3 or fewer	$	15,000,000
20 or more	More than 3	$	30,000,000

(i) Obligations Upon Casualty; Proof of Loss.

(i) In the event of loss, Borrower will give immediate written notice to the Insurance carrier and to Lender.

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

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

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

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(iii) Subject to Section 6.10(j), Borrower may take the following actions:

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

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

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

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

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

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

(iv) The Restoration will not be completed by the earlier of (A) at least one year before the Maturity Date (or 6 months before the Maturity Date if re-leasing of the Mortgaged Property will be completed within such 6 month period) or (B) the expiration of the business interruption coverage.

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

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

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

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

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

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

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

6.11 Condemnation.

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

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

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

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

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

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

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

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

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(v) Lender determines that the Restoration will not be completed within one year after the date of the Condemnation.

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

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

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

(e) Right to Apply Condemnation Proceeds in Connection with a Partial Release. Notwithstanding anything to the contrary set forth in this Loan Agreement, including but not limited to this Section 6.11, for so long as the Loan or any portion thereof is included in a Securitization, if any portion of the Mortgaged Property is released from the Lien of the Loan in connection with a Condemnation and if the ratio of (i) the unpaid principal balance of the Loan to (ii) the value of the Mortgaged Property (taking into account only the related land and buildings and not any personal property or going-concern value), as determined by Lender in its sole and absolute discretion based on a commercially reasonable valuation method permitted in connection with a Securitization, is greater than 125% immediately after such Condemnation and before any Restoration or repair of the Mortgaged Property (but taking into account any planned Restoration or repair of the Mortgaged Property as if such planned Restoration or repair were completed) Lender will apply any net proceeds or awards from such Condemnation, in full, to the payment of the principal of the Indebtedness whether or not then due and payable, unless Lender will have received an opinion of counsel that a different application of such net proceeds or awards will not cause such Securitization to fail to meet applicable federal income tax qualification requirements or subject such Securitization to any tax.

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

6.12 Environmental Hazards.

(a) Prohibited Activities and Conditions. Except for matters described in this Section 6.12, Borrower will not cause or permit Prohibited Activities or Conditions.

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Borrower will comply with all Hazardous Materials Laws applicable to the Mortgaged Property. Without limiting the generality of the previous sentence, Borrower will (i) obtain and maintain all Environmental Permits required by Hazardous Materials Laws and comply with all conditions of such Environmental Permits, (ii) cooperate with any inquiry by any Governmental Authority, and (iii) comply with any governmental or judicial order that arises from any alleged Prohibited Activity or Condition.

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

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

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

(i) Borrower’s discovery of any Prohibited Activity or Condition.

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

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

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

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

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

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complete the work by the time required by applicable Hazardous Materials Law. If Borrower fails to begin on a timely basis or diligently prosecute any required Remedial Work, Lender may, at its option, cause the Remedial Work to be completed, in which case Borrower will reimburse Lender on demand for the cost of doing so. Any reimbursement due from Borrower to Lender will become part of the Indebtedness as provided in Section 9.02.

6.13 Single Purpose Entity Requirements.

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

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

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

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

(iv) It will not merge or consolidate with any other Person.

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

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

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

(B) Institute proceedings under any applicable insolvency law.

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

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

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

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

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

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

(I) Take action in furtherance of any of the foregoing.

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

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

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

(x) It will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than, (A) the Indebtedness (and any further indebtedness as described in Section 12.11 with regard to Supplemental Instruments) and (B) customary unsecured trade payables incurred in the ordinary course of owning and operating the Mortgaged Property provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of 2% of the original principal amount of the Indebtedness and are paid within 60 days of the date incurred.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(A) Be formed and organized under Delaware law.

(B) Have either one springing member that is a corporation whose stock is 100% owned by the sole member of Borrower and that satisfies the requirements for a corporate springing member set forth below in this Section or two springing members who are natural persons.

(C) Otherwise comply with all Rating Agencies criteria for single member limited liability companies (including the delivery of Delaware single member limited liability company opinions acceptable in all respects to Lender and to the Rating Agencies). If the springing member is a corporation, such springing member will at all times comply, and will cause Borrower or SPE Equity Owner (as applicable) to comply, with each of the representations, warranties and covenants contained in Section 6.13 as if such representation, warranty or covenant were made directly by such corporation. If there is more than one springing member, only one springing member will be the sole member of Borrower or SPE Equity Owner (as applicable) at any one time, and the second springing member will become the sole member only upon the first springing member ceasing to be a member.

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

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

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

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

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

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

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

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

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

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

6.14 Repairs and Capital Replacements.

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

(b) Purchases. Without the prior written consent of Lender, no materials, machinery, equipment, fixtures or any other part of the Repairs or Capital Replacements will be purchased or installed under conditional sale contracts or lease agreements, or any other arrangement wherein title to such Repairs or Capital Replacements is retained or subjected to a purchase money security interest, or the right is reserved or accrues to anyone to remove or repossess any such Repairs or Capital Replacements, or to consider them as personal property.

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

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

6.15 Residential Leases Affecting the Mortgaged Property.

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

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

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

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

6.16 Litigation; Government Proceedings. Borrower will give prompt Notice to Lender of any litigation or governmental proceedings pending or, to the best of Borrower’s knowledge, threatened in writing against Borrower which might have a Material Adverse Effect.

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

(a) Deliver to Lender a written statement, signed and acknowledged by Borrower, certifying to Lender or any Person designated by Lender, as of the date of such

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

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

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

6.18 Cap Collateral. Reserved.

6.19 Ground Lease. Reserved.

6.20 ERISA Requirements.

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

(b) Borrower will deliver to Lender such certifications or other evidence from time to time throughout the term of this Loan Agreement, as requested by Lender in Lender’s Discretion, that (i) Borrower is not an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA, (ii) Borrower is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans, and (iii) one or more of the following circumstances is true:

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

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

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

6.21 Operation of the Facility.

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

(b) Borrower will, or will cause any operator of the Facility to, operate the Facility in a manner such that all applicable Licenses now or hereafter in effect will remain in full force and effect. Borrower will not, and will not allow any operator of the Facility to, (i) transfer any License (or any rights thereunder) to any location other than the Facility, (ii) pledge any License (or any rights thereunder) as collateral security for any other loan or indebtedness, (iii) terminate any License or permit any License not to be renewed or reissued as applicable, (iv) rescind, withdraw, revoke, amend, supplement, modify or otherwise alter the nature, tenor or scope of any License, or (v) permit any License to become the subject of any Downgrade, revocation, suspension, restriction, condition or probation (including without limitation any restriction on new admissions or residents).

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

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6.22 Facility Reporting.

(a) Borrower will, or will cause any operator of the Facility to, furnish to Lender, within 10 days after receipt by Borrower or any operator of the Facility, any and all written notices from any Governmental Authority that (i) any License is being Downgraded, revoked, terminated, suspended, restricted or conditioned or may not be renewed or reissued or that action is pending or being considered to Downgrade, revoke, terminate, suspend, restrict or condition (or not renew or reissue) any such License, (ii) any violation, fine, finding, investigation or corrective action concerning any License is pending or being considered, rendered or adopted, or (iii) any Healthcare Law or any health or safety code or building code violation or other deficiency at the Mortgaged Property has been identified, but in each case only if the subject matter of such written notice (A) could materially impact the operation or value of the Facility, or (B) requires additional formal or informal action by Borrower or operator of the Facility that is more than development or implementation of a routine plan of correction, including, without limitation, participation in hearings concerning continued licensing or Medicare or Medicaid participation, entering into consent orders affecting licensing affecting the Facility, or engaging in oversight management.

(b) Borrower will, or will cause any operator of the Facility to, furnish to Lender, within 10 days after receipt by Borrower or any operator of the Facility, a copy of any survey, report or statement of deficiencies by any Governmental Authority, but only if the subject matter of such survey, report or statement of deficiencies (i) could materially impact the operation or value of the Facility, or (ii) requires additional formal or informal action by Borrower or operator of the Facility that is more than development or implementation of a routine plan of correction, including, without limitation, participation in hearings concerning continued licensing or Medicare or Medicaid participation, entering into consent orders affecting licensing affecting the Facility, or engaging in oversight management. Within the time period specified by the Governmental Authority for furnishing a plan of correction, the Borrower, or if applicable, an operator of the Facility, will do so and will furnish or will cause to be furnished to Lender a copy of the plan of correction concurrently therewith. Borrower will correct or will cause to be corrected in a timely manner (and in all events by the date required by the Governmental Authority) any deficiency if the failure to do so could cause any License to be Downgraded, revoked, suspended, restricted, conditioned or not renewed or reissued.

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

(d) Borrower will provide Lender with a copy of any License issued or renewed in the future by a Governmental Authority within 30 days after its issuance or renewal. To the extent that any such License is assignable, Borrower will assign it to Lender as additional security for the Indebtedness, using a form of assignment

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acceptable to Lender in its discretion. If any License is issued to an operator of the Facility, to the extent such License is assignable, Borrower will cause such operator or management agent to assign the License to Lender as additional security for the Indebtedness, using a form of assignment acceptable to Lender in its discretion.

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

6.23 Covenants Regarding Material Contracts.

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

(b) Borrower will (or if Borrower is not a party thereto, will cause an operator of the Facility to) fully perform all of its obligations under each Contract, and Borrower will not (and Borrower will not permit an operator of the Facility to) enter into, terminate or amend, modify, assign or otherwise encumber its interest in any Material Contract without the prior written approval of Lender. If Borrower or an operator of the Facility enters into any Material Contract in the future (with Lender’s consent thereto), Borrower will (or will cause the operator to), simultaneously with entering into the Material Contract, if requested by Lender (i) assign its rights under and interest in the Material Contract to Lender as additional security for the Indebtedness and (ii) obtain and provide to Lender a consent to that assignment by the other party(ies) to the Material Contract. Both the assignment and the consent shall be in a form acceptable to Lender in its discretion.

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

6.25 Property Manager and Operator of the Facility. Borrower will not surrender, terminate, cancel, modify, renew or extend its property management agreement or any operating lease; permit the change of the Property Manager or any operator of the Facility; enter into any other agreement relating to the management or operation of the Facility with Property

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

6.26 Residential Leases and Agreements.

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

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

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

6.28 Governmental Payer Programs. If Borrower or any operator of the Facility participates in Medicare, Medicaid, TRICARE

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or any similar governmental payor program with respect to the Facility, then (i) Borrower will not and will not permit any breach or violation of any Healthcare Laws pertaining thereto, including without limitation, any Healthcare Laws pertaining to billing for goods or services by Borrower or any operator of the Facility and (ii) Borrower will not and will not permit any circumstance to occur which would (A) cause Borrower, an operator of the Facility or the Facility to be disqualified for participation in any such program or (B) which would cause the non renewal or termination of participation in any such program by Borrower, an operator of the Facility or the Facility, as applicable. Neither Borrower, nor any operator of the Facility will, other than in the normal course of business, change the terms of any governmental payor program or its normal billing, payment or reimbursement policies and procedures with respect thereto, including without limitation, the amount and timing of finance charges, fees and write-offs.

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

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

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

(a) A Transfer to which Lender has consented in Lender’s sole discretion (without limiting Lender’s sole discretion, Lender will not consent to a Transfer while an Event of Default exists) so long as Lender has received (i) a $5,000 review fee as a condition of Lender’s considering any proposed Transfer, (ii) a transfer fee in an amount equal to 1% of the unpaid principal balance of the Indebtedness immediately before the Transfer as a condition of Lender’s consent to the proposed Transfer, (iii) reimbursement for all of Lender’s out-of-pocket costs (including reasonable Attorney’s Fees and Costs) incurred in reviewing the Transfer request and any fees charged by the Rating Agencies, (iv) if any certificates evidencing the Securitization remain outstanding, a Rating Confirmation, (v) evidence satisfactory to Lender that the transferee and any SPE Equity Owner of such transferee meet the requirements of Section 6.13, and (vi) such legal opinions from the transferee’s counsel as Lender deems necessary, including an opinion that the transferee and any SPE Equity Owner is in compliance with Section 6.13, a nonconsolidation opinion (if a nonconsolidation opinion was delivered at origination of the Loan and if required by Lender), an opinion that the assignment and assumption of the Loan Documents has been duly authorized, executed, and delivered and that the assignment documents and the Loan Documents are enforceable as the obligation of the transferee.

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

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

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

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

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

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

(h) A Supplemental Instrument that complies with Section 12.11 or Defeasance that complies with Section 12.12.

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

(a) A Transfer of all or any part of the Mortgaged Property or any interest in the Mortgaged Property.

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

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

(d) A Transfer of any general partnership interest in a partnership or any manager interest (whether a member manager or nonmember manager) in a limited liability company that is a Borrower or a Designated Entity for Transfers.

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

(f) The grant, creation or existence of any Lien, whether voluntary, involuntary or by operation of law, and whether or not such Lien has priority over the Lien of the Security Instrument, on either of the following:

(i) The Mortgaged Property (other than the Lien of the Security Instrument or, if this Loan Agreement is entered into in connection with a Supplemental Loan, the Lien of the Senior Instrument, or any other Lien to which Lender has consented).

(ii) The ownership interests in Borrower or any Designated Entity for Transfers.

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

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

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

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

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

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

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

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

(A) Borrower reaffirms the representations and warranties under Article V.

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

(v) Borrower or Beneficiary causes to be delivered to Lender such legal opinions as Lender deems necessary, in Lender’s Discretion, including an opinion that the Beneficiary and any SPE Equity Owner of Beneficiary is in compliance with Section 6.13 (if applicable), a nonconsolidation opinion (if a nonconsolidation opinion was delivered on the Closing Date and if required by Lender), an opinion that the ratification of the Loan Documents and Guaranty (if applicable) have been duly authorized, executed, and delivered and that the ratification documents and Guaranty (if applicable) are enforceable as the obligations of Borrower, Beneficiary or Guarantor, as applicable.

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

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

(i) Borrower provides Lender with at least 30 days prior Notice of the proposed grant and pays the Transfer Review Fee to Lender.

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

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

(iv) If the Note is held by a REMIC trust, if required by Lender, Borrower provides an opinion of counsel for Borrower, in form and substance satisfactory to Lender in its sole and absolute discretion, confirming each of the following:

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

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

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

(c) Publicly-Held Fund or Real Estate Investment Trust. If a Designated Entity for Transfers is a publicly-held fund or real estate investment trust, the public issuance of common stock, convertible debt, equity or other similar securities (“Public Fund/REIT Securities”) and the subsequent Transfer of such Public Fund/REIT Securities; provided, however, that no Public Fund/REIT Securities holder may acquire an ownership percentage of 10% or more unless otherwise approved by Lender.

(d) Reserved.

7.04 Preapproved Intrafamily Transfers. Not applicable.

7.05 Lender’s Consent to Prohibited Transfers. Not applicable.

ARTICLE VIII SUBROGATION.

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

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ARTICLE IX EVENTS OF DEFAULT AND REMEDIES.

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

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

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

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

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

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

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

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

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

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

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

(k) Any of the following occurs:

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

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

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

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

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

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

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(n) If the Loan is a Supplemental Loan, any Event of Default occurs under (i) the Senior Note, the Senior Instrument or any other Senior Loan Document, or (ii) any loan document related to another loan in connection with the Mortgaged Property, regardless of whether Borrower has obtained Supplemental Lender’s approval of the placement of such Lien on the Mortgaged Property. In addition, if the Loan is a Supplemental Loan, as Borrower under both the Supplemental Instrument and the Senior Instrument, Borrower acknowledges and agrees that if there is an Event of Default under the Supplemental Note, the Supplemental Instrument or any other Supplemental Loan Document, such Event of Default will be an Event of Default under the terms of the Senior Instrument and will entitle Senior Lender to invoke any and all remedies permitted to Senior Lender by applicable law, the Senior Note, the Senior Instrument or any of the other Senior Loan Documents.

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

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

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

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

(iii) If Lender approves a replacement Guarantor, Borrower pays the Transfer Review Fee to Lender.

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

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

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

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

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

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

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

(t) Any continuing representation or warranty made by Borrower in this Loan Agreement or any other Loan Document becomes false or misleading in any material respect.

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

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

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

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

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

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

9.03 Remedies.

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

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

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

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

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

9.04 Forbearance.

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

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

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

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

(iv) Accept a renewal of the Note.

(v) Modify the terms and time of payment of the Indebtedness.

(vi) Join in any extension or subordination agreement.

(vii) Release any portion of the Mortgaged Property.

(viii) Take or release other or additional security.

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

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

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

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

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

ARTICLE X RELEASE; INDEMNITY.

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

10.02 Indemnity.

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

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

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

(i) Any breach of any representation or warranty of Borrower in Section 5.05 (Environmental).

(ii) Any failure by Borrower to perform any of its obligations under Section 6.12 (Environmental Hazards).

(iii) The existence or alleged existence of any Prohibited Activity or Condition.

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

(v) The actual or alleged violation of any Hazardous Materials Law.

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

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(d) Securitization Indemnification.

(i) Borrower and each Guarantor agree to provide in connection with each Disclosure Document, an indemnification certificate, as set forth in Section 10.02(d)(ii), indemnifying Lender, any Issuer Person, the Issuer Group and/or the Underwriter Group (as those terms are defined in Section 10.02(d)(vii)) (each, an “Indemnified Party,” and collectively “Indemnified Parties”) for any losses to which any Indemnified Party may become subject under the conditions set forth in this Section.

(ii) The indemnification certificate will provide that

(A) Borrower and each Guarantor have carefully examined those sections of the Disclosure Documents relating to the following:

(1) Borrower, any SPE Equity Owner, any operator of the Facility, any Guarantor, any Property Manager, their respective Affiliates, the Loan and the Mortgaged Property (“Borrower Information”).

(2) The sections entitled “Special Considerations,” and/or “Risk Factors,” and “Certain Legal Aspects of the Mortgage Loan,” or similar sections but only to the extent such sections specifically refer to Borrower Information (“Borrower Information Sections”).

(B) To the best of Borrower’s and each Guarantor’s knowledge with regard to Borrower Information, the Borrower Information Sections 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.

Notwithstanding the foregoing, any indemnification certificate may expressly exclude any information contained in third party reports prepared by parties that are not Affiliates of Borrower or of any Guarantor (“Third Party Information”), and the obligations and liability of Borrower and any Guarantor pursuant to this Section will not extend to the Third Party Information.

(iii) Borrower’s and each Guarantor’s agreement to indemnify the Indemnified Parties for any losses to which any Indemnified Party may become subject will extend only to such losses that arise out of or are based upon any untrue statement of any material fact contained in the Borrower Information or the Borrower Information Sections of the Disclosure Documents or arise out of or are based upon the omission to state in the Borrower Information or the Borrower Information Sections of the Disclosure Documents a material fact required to be stated in such sections necessary in order to make the statements in such sections or in light of the circumstances under which they were made, not misleading (collectively, “Securities Liabilities”).

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(iv) Borrower and each Guarantor agrees to reimburse any Indemnified Party for any legal or other expenses reasonably incurred by such Indemnified Party in investigating or defending the Securities Liabilities.

(v) The indemnitors will be liable under Section 10.02(d) (ii), (iii) or (iv) only to the extent that such Securities Liabilities arise out of, or are based upon, any such untrue statement or omission made in the Disclosure Documents in reliance upon, and in conformity with, Borrower Information furnished to any Indemnified Party by or on behalf of Borrower or a Guarantor in connection with the preparation of the Disclosure Documents or in connection with the underwriting of the Loan, including financial statements of Borrower, any SPE Equity Owner, any Guarantor or any operator of the Facility, and operating statements and rent rolls with respect to the Mortgaged Property.

(vi) This indemnity is in addition to any liability which Borrower may otherwise have and will be effective whether or not an indemnification certificate described in this Section 10.02(d) is provided and will be applicable based on information previously provided by or on behalf of Borrower or a Guarantor if the indemnification certificate is not provided.

(vii) For purposes of this Section 10.02(d):

(A) The term “Lender” will include its officers and directors.

(B) An “Issuer Person” will include all of the following:

(1) Any Affiliate of Lender that has filed the registration statement, if any, relating to the Securitization.

(2) Any Affiliate of Lender which is acting as issuer, depositor, sponsor and/or in a similar capacity with respect to the Securitization.

(C) The “Issuer Group” will include all of the following:

(1) Each director and officer of any Issuer Person.

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

(D) The “Underwriter Group” will include all of the following:

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

(2) Each of its directors and officers.

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

(4) The directors and officers of such entity described in Section 10.02(d)(vii)(D)(1).

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

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

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

(i) Any amendment or modification of any Loan Document.

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

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

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

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

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

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

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

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

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

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

(i) Other Obligations. The provisions of this Article X will be in addition to any and all other obligations and liabilities that Borrower may have under applicable law or under other Loan Documents, and each Indemnitee will be entitled to indemnification under this Article X without regard to whether Lender or that Indemnitee has exercised any rights against the Mortgaged Property or any other security, pursued any rights against any Guarantor, or pursued any other rights available under the Loan Documents or applicable law. If Borrower consists of more than one Person, the obligation of those Persons to indemnify the Indemnitees under this Article X will be joint and several. The obligation of Borrower to indemnify the Indemnitees under this Article X will survive any repayment or discharge of the Indebtedness, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Lien of the Security Instrument. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of, or held title to, the

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Mortgaged Property, Borrower will have no obligation to indemnify the Indemnitees under this Article X after the date of the release of record of the Lien of the Security Instrument by payment in full at the Maturity Date or by voluntary prepayment in full.

ARTICLE XI SENIORS HOUSING OPERATOR.

Reserved.

ARTICLE XII MISCELLANEOUS PROVISIONS.

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

12.02 Governing Law; Consent to Jurisdiction and Venue.

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

(b) Borrower agrees that any controversy arising under or in relation to the Note, the Security Instrument, this Loan Agreement or any other Loan Document may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that may arise under or in relation to the Note, any security for the Indebtedness or any other Loan Document. Borrower irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 12.02 is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Loan Agreement in any court of any other jurisdiction.

12.03 Notice.

(a) All Notices under or concerning this Loan Agreement will be in writing. Each Notice will be deemed given on the earliest to occur of (i) the date when the Notice is received by the addressee, (ii) the first Business Day after the Notice is delivered to a recognized overnight courier service, with arrangements made for

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payment of charges for next Business Day delivery, or (iii) the third Business Day after the Notice is deposited in the United States mail with postage prepaid, certified mail, return receipt requested. Addresses for Notice are as follows:

If to Lender:	KeyCorp Real Estate Capital Markets, Inc. 11501 Outlook Street, Suite 300 Overland Park, Kansas 66211 Mailcode: KS-01-11-0501 Attention: Servicing Manager
If to Borrower:	Care GSL Stafford LLC c/o Care Investment Trust Inc. 780 Third Avenue, 21st Floor New York, New York 10017 Attention: Counsel/Greenfield – Freddie Mac

(b) Any party to this Loan Agreement may change the address to which Notices intended for it are to be directed by means of Notice given to the other party in accordance with this Section 12.03. Each party agrees that it will not refuse or reject delivery of any Notice given in accordance with this Section 12.03, that it will acknowledge, in writing, the receipt of any Notice upon request by the other party and that any Notice rejected or refused by it will be deemed for purposes of this Section 12.03 to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service or the courier service.

(c) Any Notice under the Note and any other Loan Document that does not specify how Notices are to be given will be given in accordance with this Section 12.03.

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

12.05 Joint and Several Liability. If more than one Person signs this Loan Agreement as Borrower, the obligations of such Persons will be joint and several.

12.06 Relationship of Parties; No Third Party Beneficiary.

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

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

12.07 Severability; Amendments.

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

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

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

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

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

12.11 Supplemental Financing.

(a) This Section will apply only if at the time of any application referred to in Section 12.11(b), Freddie Mac has in effect a product described in its Multifamily Seller/Servicer Guide under which it purchases supplemental mortgages on multifamily properties that meet specified criteria (“Supplemental Mortgage Product”).

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

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

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

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

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

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

  to

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

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

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

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

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

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

(Y) If the loan has an external interest rate cap, the external interest rate cap.

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

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

(v) No Supplemental Loan may cause the combined loan to value ratio of the Mortgaged Property after the making of that Supplemental Loan to exceed

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the Required LTV, as determined by Freddie Mac. As used in this Section, “combined loan to value ratio” means, with respect to the Mortgaged Property, the ratio, expressed as a percentage, of:

(A) the aggregate outstanding principal balances of all of the following:

(I) the Indebtedness under this Loan Agreement,

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

(III) the proposed “Indebtedness” for any Supplemental Loan,

  to

(B) the value of the Mortgaged Property.

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

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

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

(viii) The loan term of each Supplemental Loan will be coterminous with the Senior Indebtedness or longer than the Senior Indebtedness, including any “Extension Period” described in the Note secured by the Senior Instrument, at Freddie Mac’s discretion.

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

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

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

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

(xiii) Notwithstanding anything to the contrary in Article IV, Borrower will make all required deposits under the Senior Indebtedness for the payment of any Impositions, so long as a Supplemental Loan is outstanding, and such deposits will be credited to the payment of any such required Impositions under any Supplemental Loan.

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

(c) No later than 5 Business Days after Lender’s receipt of a written request from Borrower, Lender will provide the following information to an Approved Seller/Servicer upon Borrower’s written request. Lender will only be obligated to provide this information in connection with Borrower’s request for a Supplemental Loan from an Approved Seller/Servicer; provided, however, if Freddie Mac is the owner of the Note, Lender will not be obligated to provide such information:

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

(ii) Payment history of the Senior Indebtedness.

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

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

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

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

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

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

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

12.12 Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). This Section 12.12 will apply if the Note is assigned to a REMIC trust prior to the Cut-off Date, and, subject to Section 12.12(a) and (c), Borrower will have the right to defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions:

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

(i) If the Loan is not assigned to a REMIC trust.

(ii) During the Lockout Period.

(iii) After the expiration of the Defeasance Period.

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

(b) Borrower will give Lender Notice (“Defeasance Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which the Defeasance Notice is received by Lender. Lender will acknowledge receipt of the Defeasance Notice and will state in such receipt whether Lender will designate the Successor Borrower or will permit Borrower to designate the Successor Borrower.

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(c)	The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”). If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice will terminate.
(d)	(i)	If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Fee as liquidated damages for Borrower’s default and, except as provided in Section 12.12(d)(ii), Borrower will be released from all further obligations under this Section 12.12. Borrower acknowledges that Lender will incur financing costs in arranging and preparing for the release of the Mortgaged Property from the Lien of the Security Instrument in reliance on the executed Defeasance Notice. Borrower agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Loan Agreement, of the damages Lender will incur by reason of Borrower’s default.
	(ii)	If the Defeasance is not consummated on the Defeasance Closing Date for any reason, Borrower agrees to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 12.12(d)(i)) incurred by Lender in reliance on the executed Defeasance Notice, within 5 Business Days after Borrower receives a written demand for payment, accompanied by a statement, in reasonable detail, of Lender’s third party costs and expenses.
	(iii)	All payments required to be made by Borrower to Lender pursuant to this Section 12.12 will be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.
(e)	No Event of Default has occurred and is continuing.
(f)	Each of the following documents must be delivered to Lender on or prior to the Defeasance Closing Date:
	(i)	An opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that Lender has a valid and perfected Lien and security interest of first priority in the Defeasance Collateral and the proceeds thereof.
	(ii)	An opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that the Pledge Agreement is duly authorized, executed, delivered and enforceable against Borrower in accordance with the respective terms.
	(iii)	Unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and

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substance satisfactory to Lender, to the effect that the Transfer and Assumption Agreement is duly authorized, executed, delivered and enforceable against Successor Borrower in accordance with the respective terms.

(iv) Unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Successor Borrower has been validly created.

(v) If Borrower designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation of the assets of the Successor Borrower with those of its Affiliates by a bankruptcy court.

(vi) Unless waived by Lender, an opinion of counsel for Borrower, in form and substance satisfactory to Lender, confirming each of the following:

(A) If, as of the Defeasance Closing Date, the Note is held by a REMIC trust, (1) the Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time), (2) the qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Defeasance, and (3) the REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of the Defeasance.

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

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

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

(ix) Lender’s form of a transfer and assumption agreement (“Transfer and Assumption Agreement”), whereupon Borrower and any Guarantor (in each case, subject to satisfaction of all requirements under this Loan Agreement) will be relieved from liability in connection with the Loan (other than any liability under Sections 6.12 and 10.02 for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance Closing Date) and Successor Borrower will assume all remaining obligations.

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

(xi) Such other opinions, certificates, documents or instruments as Lender may reasonably request.

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

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

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

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

 (C) It is arranged such that redemption payments received from the Defeasance Collateral are paid directly to Lender to be applied on account of the Scheduled Debt Payments.

 (D) Unless otherwise agreed in writing by Lender, the pledge of the Defeasance Collateral will be effected through the book-entry facilities of a qualified securities intermediary designated by Lender in conformity with all applicable laws.

(ii) All accrued and unpaid interest and all other sums due under the Note, this Loan Agreement and under the other Loan Documents, including all amounts due under Section 12.12(i), up to the Defeasance Closing Date.

(h) If Lender permits Borrower to designate the Successor Borrower, then Borrower will, at Borrower’s expense, designate or establish an accommodation borrower (“Successor Borrower”) satisfactory to Lender (or Lender, at its option, may designate the Successor Borrower) which satisfies Lender’s then current requirements for a “Single Purpose Entity” to assume at the time of Defeasance ownership of the Defeasance Collateral and liability for all of Borrower’s obligations under the Pledge Agreement and the Loan Documents (to the extent that liability thereunder survives release of the Lien of the Security Instrument).

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Borrower will pay to Successor Borrower a fee of $1,000.00 as consideration of Successor Borrower’s assumption of Borrower’s obligations under the Loan Documents. Notwithstanding any contrary provision in this Loan Agreement, no Transfer Fee is payable to Lender upon a Transfer of the Loan in accordance with this Section.

(i) Borrower will pay all reasonable costs and expenses incurred by Lender in connection with the Defeasance in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments and whether or not Defeasance is completed. Such expenses include the following:

(A) All fees, costs and expenses incurred by Lender and its agents in connection with the Defeasance (including reasonable Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described in this Loan Agreement and any related documentation, and any servicing fees, Rating Agencies’ fees or other costs related to the Defeasance).

(B) Reasonable Attorneys’ Fees and Costs.

(C) A processing fee to cover Lender’s administrative costs to process Borrower’s Defeasance request.

Lender reserves the right to require that Borrower post a deposit to cover costs which Lender reasonably anticipates will be incurred.

12.13 Lender’s Rights to Sell or Securitize. Borrower acknowledges that Lender, and each successor to Lender’s interest, may (without prior Notice to Borrower or Borrower’s prior consent), sell or grant participations in the Loan (or any part of the Loan), sell or subcontract the servicing rights related to the Loan, securitize the Loan or include the Loan as part of a trust. Borrower, at its expense, agrees to cooperate with all reasonable requests of Lender in connection with any of the foregoing including executing or causing to be executed any financing statements or other documents deemed necessary by Lender or its transferee to create, perfect or preserve the rights and interest to be acquired by such transferee, providing any updated financial information with appropriate verification through auditors letters, delivering revised organizational documents and counsel opinions satisfactory to the Rating Agencies, executed amendments to the Loan Documents, and review information contained in a preliminary or final private placement memorandum, prospectus, prospectus supplements or other Disclosure Document, and providing a mortgagor estoppel certificate and such other information about Borrower, any SPE Equity Owner, any Guarantor, any operator of the Facility, any Property Manager or the Mortgaged Property as Lender may require for Lender’s offering materials.

12.14 Cooperation with Rating Agencies and Investors. Borrower covenants and agrees that if

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Lender decides to include the Loan as an asset of a Secondary Market Transaction, Borrower will (a) at Lender’s request, meet with representatives of the Rating Agencies and/or investors to discuss the business and operations of the Mortgaged Property, and (b) permit Lender or its representatives to provide related information to the Rating Agencies and/or investors, and (c) cooperate with the reasonable requests of the Rating Agencies and/or investors in connection with all of the foregoing.

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

ARTICLE XIII DEFINITIONS.

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

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

“Affiliate” of any Person means (i) any other Person which, directly or indirectly, is in Control of, is under the Control of, or is under common Control with, such Person; (ii) any other Person who is a director or officer of (A) such Person, (B) any subsidiary of such Person, or (C) any Person described in clause (i) of this definition; or (iii) any corporation, limited liability company or partnership which has as a director any Person described in Section (ii) of this definition.

“Aggregate Carrier Exposure” means:

(i) For each individual carrier providing Hazard Insurance, one of the following:

(A) The sum of the required building coverage limits and required business income/rental value Insurance if such coverage is provided by specific Insurance or a policy covering only the Mortgaged Property.

(B) The blanket Insurance or master program limit if such coverage is provided by a Blanket Insurance Policy or master program from a single carrier.

(C) The total limit provided by the carrier in all layers in which the carrier participates if such coverage is provided by a Blanket Insurance Policy or master program with more than one carrier participating with layered limits.

(ii) For each individual carrier providing liability Insurance pursuant to Section 6.10(a)(ii) or as otherwise required by Lender, one of the following:

(A) The total aggregate limits (general liability plus excess/umbrella) if such coverage is provided by specific Insurance or a policy covering only the Mortgaged Property.

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(B) The total aggregate limits (general liability plus excess/umbrella) if such coverage is provided by liability Insurance for multiple properties or a master program from a single carrier.

(C) The total limit provided by the carrier in all layers in which the carrier participates if such coverage is provided by an individual policy, liability Insurance policy for multiple properties or a master program with more than one carrier participating with layered limits Blanket Insurance Policy or master program with more than one carrier participating with layered limits.

“Approved Seller/Servicer” is defined in Section 12.11(b).

“Assignment of Management Agreement” means the Collateral Assignment of Management Agreement and Subordination of Management Fees of even date herewith among Borrower, Lender and Property Manager, including all schedules, riders, allonges and addenda, as such Assignment of Management Agreement may be amended from time to time.

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

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

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

“Blanket Insurance Policy” is defined in Section 6.10(h).

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

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

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

“Borrower Principal” means any of the following:

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

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

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

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

“Borrower Proof of Loss Threshold” means the amount that is the greater of (i) $50,000, or (ii) $32,000.00.

“Borrower Proof of Loss Maximum” means $128,000.00.

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

“Capital Replacement” means the replacement of those items listed on Exhibit F and such other replacements of equipment, major components or capital systems related to the Improvements as may be approved in writing or required by Lender.

“Capped Interest Rate” is defined in the Note.

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

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

“Commitment Letter” means the commitment letter or early rate lock application dated April 17, 2012, from Lender to Borrower, as it may have thereafter been modified, amended or extended.

“Completion Date” means July 22, 2012, or such other date(s) as may be specified for particular Repairs in Exhibit C, as such date may be extended.

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

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

“Contract” means any present or future contract for the provision of goods or services (or with respect to payment therefore), together with all modifications, extensions and renewals, in connection with the operation or management of the Facility (other than Leases), including without limitation (i) those with Borrower or an operator of the Facility and (ii) Third Party Provider Agreements, together with all modifications, extensions or renewals.

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

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

“Default Rate” is defined in the Note.

“Defeasance” is defined in Section 12.12.

“Defeasance Closing Date” is defined in Section 12.12(b).

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

“Defeasance Fee” is defined in Section 12.12(c).

“Defeasance Notice” is defined in Section 12.12(b).

“Defeasance Period” is defined in the Note.

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

“Disclosure Document” is defined in Section 12.08.

“Downgrade” as it applies to a License, means a License is modified so as to permit a less acute level of care (such as, but not limited to, elimination of skilled nursing or assisted living care or services included therein) by the Governmental Authority responsible for issuing such License.

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

“Eligible Institution” means a federal or state chartered depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations or commercial paper of which are rated at least A-1 by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., P-1 by Moody’s Investors Service, Inc. and F-3 by Fitch, Inc. in the case of accounts in which funds are held for 30 days or less or, in the case of letters of credit or accounts in which funds are held for more than 30 days, the long term

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unsecured debt obligations of which are rated at least “A” by Fitch, Inc. and Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and “A2” by Moody’s Investors Service, Inc. If at any time an Eligible Institution does not meet the required rating, the Loan Servicer must move the Eligible Account within 30 days of such event to an appropriately rated Eligible Institution.

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

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

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

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

“External Cap Agreement Reserve Fund” means the account established pursuant to Section 4.07, if applicable, to pay for the cost of a Replacement Cap Agreement.

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

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

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

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

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

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

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

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“GAAP” means generally accepted accounting principles.

“Governmental Authority” means any board, commission, department, agency or body of any municipal, county, state or federal governmental unit, or any subdivision of any of them, that has or acquires jurisdiction over the Mortgaged Property, or the use, operation or improvement of the Mortgaged Property, or over Borrower including, without limitation, all applicable licensing or accreditation bodies or agencies (whether federal, state, county, district, municipal, city or otherwise, whether now or hereafter in existence, including without limitation, applicable non-governmental organizations, such as the Joint Commission on the Accreditation of Healthcare Organizations) that have or acquire jurisdiction over Borrower, an operator of the Facility (as pertains to the Facility), the Facility or the use, operation, improvement, accreditation, licensing or permitting of the Facility or the operations thereof.

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

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

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

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

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

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“Healthcare Laws” means all federal, state, municipal or other Governmental Authority laws, codes and statutes and all regulations and rules promulgated thereunder and all Governmental Authority interpretations thereof, applicable or pertaining to the ownership, leasing, operation or management of medical or senior housing facilities (including without limitation, Independent Living Units, adult care facilities, Assisted Living Residences, skilled nursing care, rehabilitation services, CCRC’s, and dementia and/or memory care facilities), including without limitation those pertaining to Licenses necessary to operate or manage any such facility, those pertaining to billing Medicare, Medicaid or TRICARE (or any so-called “waiver program” associated therewith) or any other Governmental Authority payor for similar goods or services or providing goods or services to natural persons receiving benefits under Medicare, Medicaid or TRICARE or other Governmental Authority programs, those pertaining to patient care and Privacy Laws, quality and safety standards, accepted professional standards, and principles that apply to professionals providing services to the Facility, accreditation standards, and requirements of the applicable state department of health and all other Governmental Authorities including, without limitation, those requirements relating to the Facility’s physical structure and environment, licensing, quality and adequacy of medical care, distribution of pharmaceuticals, rate setting, equipment, personnel, operating policies, additions to facilities and services and fee splitting.

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

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

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

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

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

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

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

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

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

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

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“Inspection Fee” means a fee payable to Lender or Loan Servicer for performing any inspection required by this Agreement in an amount not to exceed $750.00 per inspection.

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

“Intended Use” is defined in Section 5.25.

“Intercreditor Agreement” is defined in Section 12.11(b)(xi).

“Investment Fee” means a one time fee for establishing the (i) Replacement Reserve Fund in the amount of $500.00 and (ii) Repair Reserve Fund in the amount of $1,000.00.

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

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

“Land” means the land described in Exhibit A.

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

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

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

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

“LIBOR Index Rate” is defined in the Note.

“License” means any license, permit, regulatory agreement, certificate, approval, certificate of need or similar certificate, authorization, accreditation, approved provider status in any approved provider payment program, or approval issued by an applicable state department of health (or any subdivision thereof) or state licensing agency, as applicable, in each instance whether issued by a Governmental Authority or otherwise, used in connection with, or necessary or desirable to use, occupy or operate the Facility for its Intended Use, including without limitation, the provision of all goods and services to be provided by Borrower or the operator of the Facility to the residents of the Facility.

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

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

“Loan Agreement” means this Seniors Housing Loan and Security Agreement.

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

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

“Loan Servicer” means the entity that from time to time is designated by Lender to collect payments and deposits and receive Notices under the Note, the Security Instrument, this Loan Agreement and any other Loan Document, and otherwise to service the Loan evidenced by the Note for the benefit of Lender. Unless Borrower receives Notice to the contrary, the Loan Servicer is the entity identified as “Lender” in the first paragraph of this Loan Agreement.

“Lockout Period” is defined in the Note.

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

“Margin” is defined in the Note.

“Material Adverse Change” means any set of circumstances or events which, in Lender’s Discretion would have or is then reasonably expected to have a Material Adverse Effect on (i) the validity or enforceability of this Loan Agreement or the other Loan Documents taken as a whole, (ii) the ability of Borrower to duly and punctually pay the Indebtedness or perform its obligations, (iii) the ability of Lender to enforce its legal remedies pursuant to this Loan Agreement or the other Loan Documents taken as a whole, including by realizing upon any collateral or any guaranty, (iv) the business prospects or financial condition of Borrower or any Guarantor, (v) the financial performance or market value of the Mortgaged Property, or (vi) the compliance of the Mortgaged Property with any law dealing with the use, ownership or operation of the Mortgaged Property or any law, the noncompliance with which could reasonably be expected to have a Material Adverse Effect on the financial performance or market value of the Mortgaged Property.

“Material Adverse Effect” means a significant detrimental effect on (i) the Mortgaged Property (including, without limitation, the Facility), (ii) the business, prospects, profits, operations or condition (financial or otherwise) of Borrower or any operator of the Facility, (iii) the enforceability, validity, perfection or priority of the Lien of any Loan Document, (iv) the ability of Borrower or any operator of the Facility to perform any obligations under any Loan Document

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or (v) Borrower’s or any operator of the Facility’s interest in the Facility including, without limitation, a Downgrade, termination, revocation or suspension of, or refusal to renew or reissue, any applicable License, or a ban on new resident admissions.

“Material Contract” means Contracts:

(i) for preparing or serving food (but do not include food supply Contracts);

(ii) for medical services or healthcare provider agreements;

(iii) the average annual consideration of which, directly or indirectly, is at least $20,000;

(iv) having a term of more than one year unless subject to termination by Borrower or if Borrower is not a party to the Contract, the operator of the Facility, and their respective successors and assigns, upon not more than thirty days notice, without cause and without payment of any termination fee, penalty or extra charge; or

(v) determined by Lender to be material to the operation of the Facility.

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

“MMP” means a moisture management plan to control water intrusion and prevent the development of Mold or moisture at the Mortgaged Property throughout the term of this Loan Agreement.

“Modified Non-Residential Lease” means an extension or modification of any Non-Residential Lease, which Non-Residential Lease was in existence as of the date of this Loan Agreement.

“Mold” means mold, fungus, microbial contamination or pathogenic organisms.

“Mortgaged Property” means all of Borrower’s present and future right, title and interest in and to all of the following:

(i) The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease, the Ground Lease and the Leasehold Estate.

(ii) The Improvements (including, without limitation, the Facility).

(iii) The Fixtures.

(iv) The Personalty.

(v) All current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights of way, strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses and appurtenances related to or benefiting the Land or the Improvements, or both, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated.

Seniors Housing Loan and Security Agreement (CME) Page 91

(vi) All proceeds paid or to be paid by any insurer of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, whether or not Borrower obtained the Insurance pursuant to Lender’s requirement.

(vii) All awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Land or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, including any awards or settlements resulting from Condemnation proceedings or the total or partial taking of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property under the power of eminent domain or otherwise and including any conveyance in lieu thereof.

(viii) All contracts, options and other agreements for the sale of the Land, or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations.

(ix) All proceeds from the conversion, voluntary or involuntary, of any of the items described in items (i) through (viii) of this definition, into cash or liquidated claims, and the right to collect such proceeds.

(x) All Rents and Leases.

(xi) All earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed proceeds of the Loan.

(xii) All Imposition Reserve Deposits.

(xiii) All refunds or rebates of Impositions by any Governmental Authority or insurance company (other than refunds applicable to periods before the real property tax year in which this Loan Agreement is dated).

(xiv) All tenant security deposits which have not been forfeited by any tenant under any Lease and any bond or other security in lieu of such deposits.

(xv) All names under or by which any of the Mortgaged Property may be operated or known, and all trademarks, trade names and goodwill relating to any of the Mortgaged Property.

(xvi) If required by the terms of Section 4.05, all rights under the Letter of Credit and the Proceeds, as such Proceeds may increase or decrease from time to time.

(xvii) All payments received and all rights to receive payments from any source, which payments (or rights thereto) arise from operation of or at the Facility, including, without limitation, entrance fees, application fees, processing fees, community

Seniors Housing Loan and Security Agreement (CME) Page 92

fees and any other amounts or fees deposited or to be deposited by any resident or tenant, payments received and the right to receive payments of second party charges added to base rental income, base and additional meal sales, payments received and rights to receive payments from commercial operations located at or on the Facility or provided as a service to the occupants of the Facility, rental from guest suites, seasonal lease charges, rental payments under furniture leases, income from laundry service, and income and fees from any and all other services provided to residents of the Facility.

(xviii) All rights to payments from Medicare, Medicaid or TRICARE programs or similar federal, state or local programs or agencies and rights to payment from private insurers, arising from the operation of the Facility.

(xix) All Licenses.

(xx) All Contracts, including without limitation, operating contracts, franchises, licensing agreements, healthcare services contracts, food service contracts and other contracts for services related to the operation of the Facility.

(xxi) All utility deposits.

(xxii) If the Note provides for interest to accrue at an adjustable or variable rate and there is a Cap Agreement, the Cap Collateral.

(xxiii) Without duplication of the foregoing or the inclusions in Mortgaged Property set forth elsewhere in this Loan Agreement, all of the real and personal property, both tangible and intangible, described on Exhibit N.

“NFIP” is defined in Section 6.10(a)(iv).

“Non-Residential Lease” is a Lease of a portion of the Mortgaged Property to be used for non-residential purposes.

“New Non-Residential Lease” is any Non-Residential Lease not in existence as of the date of this Loan Agreement.

“Note” means the Multifamily Note (including any Amended and Restated Note, Consolidated, Amended and Restated Note, or Extended and Restated Note) executed by Borrower in favor of Lender and dated as of the date of this Loan Agreement, including all schedules, riders, allonges and addenda, as such Multifamily Note may be amended, modified and/or restated from time to time.

“Notice” or “Notices” means all notices, demands and other communication required under the Loan Documents, provided in accordance with the requirements of Section 12.03.

“O&M Program” is defined in Section 6.12(c) and consists of the following: Asbestos O&M as set forth in that environmental report dated October 12, 2011 prepared by EMG Corporation.

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

“Person” means any natural person, sole proprietorship, corporation, general partnership, limited partnership, limited liability company, limited liability partnership, limited liability limited partnership, joint venture, association, joint stock company, bank, trust, estate, unincorporated organization, any federal, state, county or municipal government (or any agency or political subdivision thereof), endowment fund or any other form of entity.

“Personalty” means all of the following:

(i) Accounts (including deposit accounts) of Borrower related to the Mortgaged Property.

(ii) Equipment and inventory owned by Borrower, which are used now or in the future in connection with the ownership, management or operation of the Land or Improvements or are located on the Land or Improvements, including furniture, furnishings, machinery, building materials, goods, supplies, tools, books, records (whether in written or electronic form) and computer equipment (hardware and software).

(iii) Other tangible personal property owned by Borrower which is used now or in the future in connection with the ownership, management or operation of the Land or Improvements or is located on the Land or in the Improvements, including ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances (other than Fixtures).

(iv) Any operating agreements relating to the Land or the Improvements.

(v) Any surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements.

(vi) All other intangible property, general intangibles and rights relating to the operation of, or used in connection with, the Land or the Improvements, including all governmental permits relating to any activities on the Land and including subsidy or similar payments received from any sources, including a Governmental Authority.

(vii) Any rights of Borrower in or under any Letter of Credit.

“Pledge Agreement” is defined in Section 12.12(f)(viii).

“Prepayment Premium Period” is defined in the Note.

“Prior Lien” means a pre-existing mortgage, deed of trust or other Lien encumbering the Mortgaged Property.

Seniors Housing Loan and Security Agreement (CME) Page 94

“Privacy Laws” means all federal, state, municipal or other Governmental Authority laws, codes and statutes and all regulations and rules promulgated thereunder and all Governmental Authority interpretations thereof, applicable or pertaining to resident, tenant and patient privacy. Privacy Laws include, but are not limited to, HIPAA.

“Proceeding” means, whether voluntary or involuntary, any case, proceeding or other action against Borrower or any SPE Equity Owner under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors.

“Proceeds” means the cash obtained by a draw on a Letter of Credit.

“Prohibited Activity or Condition” means each of the following:

(i) The presence, use, generation, release, treatment, processing, storage (including storage in above-ground and underground storage tanks), handling or disposal of any Hazardous Materials on or under the Mortgaged Property.

(ii) The transportation of any Hazardous Materials to, from or across the Mortgaged Property.

(iii) Any occurrence or condition on the Mortgaged Property, which occurrence or condition is or may be in violation of Hazardous Materials Laws.

(iv) Any violation of or noncompliance with the terms of any Environmental Permit with respect to the Mortgaged Property.

(v) Any violation or noncompliance with the terms of any O&M Program.

However, the term “Prohibited Activity or Condition” expressly excludes lawful conditions permitted by an O&M Program or the safe and lawful use and storage of quantities of (i) medical products or devices or medical waste, (ii) pre-packaged supplies, cleaning materials and petroleum products customarily used in the operation and maintenance of comparable multifamily properties, (iii) cleaning materials, personal grooming items and other items sold in pre-packaged containers for consumer use and used by tenants and occupants of residential dwelling units in the Mortgaged Property, and (iv) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Mortgaged Property’s parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance with Hazardous Materials Laws.

“Property Jurisdiction” means the jurisdiction in which the Land is located.

“Property Manager” means Greenfield Management, L.L.C., a Virginia limited liability company, or such other residential rental property manager approved by Lender in writing.

“Property Seller” is defined in Section 5.24.

“Public Fund/REIT Securities” is defined in Section 7.03(c).

Seniors Housing Loan and Security Agreement (CME) Page 95

“Rating Agencies” means Fitch, Inc., Moody’s Investors Service, Inc., or Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor entity of the foregoing, or any other nationally recognized statistical rating organization.

“Release Instruments” is defined in Section 12.12(f)(x).

“Remedial Work” is defined in Section 6.12(f).

“Rent(s)” means all rents (whether from residential or non-residential space), revenues and other income of the Land or the Improvements, parking fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property, whether now due, past due or to become due, and deposits forfeited by tenants, and, if Borrower is a cooperative housing corporation or association, maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements, whether now due, past due or to become due.

“Rent Schedule” means a written schedule for the Mortgaged Property showing the name of each tenant, and for each tenant, the space occupied, the lease expiration date, the rent payable for the current month, the date through which rent has been paid, and any related information requested by Lender.

“Repairs” means the repairs to be made to the Mortgaged Property, as described on the Repair Schedule of Work or as otherwise required by Lender in accordance with this Loan Agreement.

“Replacement Cost” means the estimated replacement cost of the Improvements, Fixtures, and Personalty (or, when used in reference to a property that is not the Mortgaged Property, all improvements, fixtures, and personalty located on such property), excluding any deduction for depreciation, all as determined annually by Borrower using customary methodology and sources of information acceptable to Lender in Lender’s Discretion. Replacement Cost will not include the cost to reconstruct foundations or site improvements, such as driveways, parking lots, sidewalks, and landscaping.

“Required DSCR” means, with respect to a Supplemental Loan, (i) if the Senior Indebtedness bears interest at a fixed rate, then (A) 1.30:1 for Mortgaged Properties classified by Lender as Independent Living and (B) 1.40:1 for Mortgaged Properties classified by Lender as Assisted Living, or (ii) if the Senior Indebtedness bears interest at an adjustable rate, then (A) 1.15:1 for Mortgaged Properties classified by Lender as Independent Living and (B) 1.20:1 for Mortgaged Properties classified by Lender as Assisted Living.

“Required LTV” means 75%.

“Reserve Fund” means each account established for Imposition Reserve Deposits, the Replacement Reserve Fund, the Repair Reserve Fund (if any), the External Cap Agreement Reserve Fund (if any), the Rental Achievement Fund (if any), and any other account established pursuant to Article IV of this Loan Agreement.

“Restoration” is defined in Section 6.10(i).

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“Scheduled Debt Payments” is defined in Section 12.12(g)(ii).

“Secondary Market Transaction” means (i) any sale or assignment of this Loan Agreement, the Note and the other Loan Documents to one or more investors as a whole loan, (ii) a participation of the Loan to one or more investors, (iii) any deposit of this Loan Agreement, the Note and the other Loan Documents with a trust or other entity which may sell certificates or other instruments to investors evidencing an ownership interest in the assets of such trust or other entity, or (iv) any other sale, assignment or transfer of the Loan or any interest in the Loan to one or more investors.

“Securities Liabilities” is defined in Section 10.02(d).

“Securitization” means when the Note or any portion of the Note is assigned to a REMIC trust.

“Security Instrument” means the mortgage, deed of trust, deed to secure debt or other similar security instrument encumbering the Mortgaged Property and securing Borrower’s performance of its Loan obligations, including Borrower’s obligations under the Note and this Loan Agreement (including any Amended and Restated Security Instrument, Consolidation, Modification and Extension Agreement, Extension and Modification Agreement or similar agreement or instrument amending and restating existing security instruments).

“Senior Indebtedness” means, for a Supplemental Loan, if any, the Indebtedness evidenced by the Senior Note and secured by the Senior Instrument for the benefit of Senior Lender.

“Senior Instrument” – Not applicable.

“Senior Lender” means the holder of the Senior Note.

“Senior Loan Documents” means, for a Supplemental Loan, if any, all documents relating to the loan evidenced by the Senior Note.

“Senior Note” means, for a Supplemental Loan, if any, the Multifamily Note secured by the Senior Instrument.

“Seniors Apartments” means age-restricted apartments for senior residents who are able to function independently. These residences are typically restricted to residents 55 and older (or 62 and older). Seniors Apartments do not provide healthcare services, medication assistance, meal services or other third-party contract services

“Servicing Arrangement” is defined in Section 12.06(b).

“SFHA” is defined in Section 6.10(a)(iv).

“Single Purpose Entity” is defined in Section 6.13(a).

“Skilled Nursing Beds” means a portion of a property that provides licensed skilled nursing care and related services for patients who require medical, nursing or rehabilitative services, including Alzheimer’s care.

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“SPE Equity Owner” is not applicable. Borrower will not be required to maintain an SPE Equity Owner in its organizational structure during the term of the Loan and all references to SPE Equity Owner in this Loan Agreement and in the Note will be of no force or effect.

“Successor Borrower” is defined in Section 12.12(h).

“Supplemental Indebtedness” the Indebtedness evidenced by the Supplemental Note and secured by the Supplemental Instrument for the benefit of Supplemental Lender, if any.

“Supplemental Instrument” means, for a Supplemental Loan, if any, the Security Instrument executed to secure the Supplemental Note.

“Supplemental Lender” means, for a Supplemental Loan, if any, the Approved Seller/Servicer named in the Supplemental Instrument and its successors and/or assigns.

“Supplemental Loan” means a loan that is subordinate to the Senior Indebtedness.

“Supplemental Loan Documents” means, for a Supplemental Loan, if any, all documents relating to the loan evidenced by the Supplemental Note.

“Supplemental Mortgage Product” is defined in Section 12.11(a).

“Supplemental Note” means, for a Supplemental Loan, if any, the Multifamily Note secured by the Supplemental Instrument.

“Tax Code” means the Internal Revenue Code of the United States, 26 U.S.C. Section 1 et seq., as amended from time to time.

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

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

“Third Party Provider Agreements” means any contract pursuant to which payments arising from operation of or at the Facility are to be made by or pursuant to Medicare, Medicaid or TRICARE programs or similar federal, state or local programs or agencies or private insurers.

“Transfer” means any of the following:

(i) A sale, assignment, transfer or other disposition or divestment of any interest in Borrower or the Mortgaged Property (whether voluntary, involuntary or by operation of law).

(ii) The granting, creating or attachment of a Lien, encumbrance or security interest (whether voluntary, involuntary or by operation of law).

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(iii) The issuance or other creation of an ownership interest in a legal entity, including a partnership interest, interest in a limited liability company or corporate stock.

(iv) The withdrawal, retirement, removal or involuntary resignation of a partner in a partnership or a member or Manager in a limited liability company.

(v) The merger, dissolution, liquidation, or consolidation of a legal entity or the reconstitution of one type of legal entity into another type of legal entity.

(vi) A change of the Guarantor.

For purposes of defining the term “Transfer,” the term “partnership” means a general partnership or a limited partnership, and the term “partner” means a general partner or a limited partner.

“Transfer” does not include any of the following:

(i) A conveyance of the Mortgaged Property at a judicial or non-judicial foreclosure sale under the Security Instrument.

(ii) The Mortgaged Property becoming part of a bankruptcy estate by operation of law under the Bankruptcy Code.

(iii) The filing or recording of a Lien against the Mortgaged Property for local taxes and/or assessments not then due and payable.

“Transfer and Assumption Agreement” is defined in Section 12.12(f)(ix).

“Transfer Fee” means a fee paid when the Transfer is completed. Unless otherwise specified, the Transfer Fee will be equal to 1% of the outstanding principal balance of the Indebtedness as of the date of the Transfer. Notwithstanding anything set forth in Article VII to the contrary, the Transfer Fee will not exceed 1% of the outstanding principal balance of the Loan.

“Transfer Review Fee” means a nonrefundable fee of $5,000 for Lender’s review of a proposed Transfer.

“U.S. Treasury Obligations” means direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by the United States of America.

“UCC Collateral” is defined in Section 3.03.

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

“Uniform Commercial Code” means the Uniform Commercial Code as promulgated in the applicable jurisdiction.

“Windstorm Coverage” is defined in Section 6.10(a)(ix).

ARTICLE XIV INCORPORATION OF ATTACHED RIDERS.

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The following Riders are attached to this Loan Agreement:

Name of Rider	Date Revised
Seniors Housing Operator	9/1/2011
Recycled Borrower	9/1/2011
Replacement Reserve Fund – Immediate Deposits	9/1/2011
Entity Guarantor	9/1/2011
Month to Month Leases	1/1/2012
Affiliate Transfer	9/1/2011
Repairs – No Repair Reserve Established	9/1/2011
Alzheimer’s Care, Dementia Care and/or Memory Care	1/11/2012
Cash Management Agreement	9/1/2011
Trade Names	1/11/2012

ARTICLE XV INCORPORATION OF ATTACHED EXHIBITS.

The following Exhibits, if marked with an “X” in the space provided, are attached to this Loan Agreement:

x	Exhibit A	Description of the Land (required)
x	Exhibit B	Modifications to Seniors Housing Loan and Security Agreement
x	Exhibit C	Repair Schedule of Work
¨	Exhibit D	Repair Disbursement Request
¨	Exhibit E	Work Commenced at Mortgaged Property
x	Exhibit F	Capital Replacements (required)
¨	Exhibit G	Description of Ground Lease
x	Exhibit H	Organizational Chart of Borrower as of the Closing Date (required)
x	Exhibit I	Designated Entities for Transfers and Guarantor(s) (required)
x	Exhibit J	Licenses (required)

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x	Exhibit K	Furniture, Fixtures, Equipment and Motor Vehicles (required)
x	Exhibit L	Contracts (required)
x	Exhibit M	Material Contracts (required)
x	Exhibit N	Additional Mortgaged Property (required)

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURES ON FOLLOWING PAGES

Seniors Housing Loan and Security Agreement (CME) Page 101

BORROWER:
CARE GSL STAFFORD LLC, a Delaware limited liability company
By:	/s/ Salvatore (Torey) V. Riso, Jr.
Name: Salvatore (Torey) V. Riso, Jr.
Title: President and Chief Executive Officer

SIGNATURES CONTINUE ON FOLLOWING PAGE

Seniors Housing Loan and Security Agreement (CME) Page 102

LENDER: KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation
By:	/s/ Crystal L. Williams
Name: Crystal L. Williams
Title: Vice President

Seniors Housing Loan and Security Agreement (CME) Page 103

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME)

SENIORS HOUSING OPERATOR

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Article XI is deleted and replaced with the following:

  ARTICLE XI SENIORS HOUSING OPERATOR.

11.01 Additions to Definitions. The following terms, when used in this Loan Agreement, will have the following meanings or will add to the definitions in Article XIII, as applicable:

(a) The term “Lease” includes any master lease agreement or operating lease under which control of the use or operation of part or all of the Mortgaged Property has been granted to another entity.

(b) “Operating Lease” or “operating lease” means that Lease, dated as of September 20, 2011, entered into by and between Borrower, as landlord, and Operator, as tenant, leasing the Land and Improvements, together with certain personal property used in connection therewith, as described in said Lease, and all modifications, extensions or renewals.

(c) “Operator” or “operator” means Greenfield Assisted Living of Stafford, L.L.C., a Virginia limited liability company, the tenant of the Land and Improvements under the Operating Lease, together with its permitted successors and assigns.

11.02 Additional Covenants. In addition to those covenants contained in Article VI, Borrower covenants to Lender as follows:

(a) Borrower will furnish to Lender (i) within 5 days after the receipt by Borrower from Operator, copies of any and all notices of Borrower’s default or failure to pay or perform an obligation under the Operating Lease, and/or (ii) immediately upon the issuance by Borrower to Operator, copies of any and all notices of Operator’s default or failure to pay or perform an obligation under the Operating Lease.

(b) Borrower will not surrender, terminate, cancel, modify, renew or extend the Operating Lease; permit the change of the Operator; enter into any other agreement relating to the operation of the Facility with the Operator or any other Person; or consent to the assignment by the Operator of its

Rider to Seniors Housing Loan and Security Agreement (CME)

Seniors Housing Operator

interest under the Operating Lease or similar agreement, as applicable, in each case without the prior written approval of Lender, and in each such instance the approval by Lender of the Operating Lease; provided, however, with respect to a new operator, such consent may be conditioned upon Borrower delivering a Rating Confirmation as to such new operator. If at any time Lender consents to the appointment of a new operator of the Facility, such new operator and Borrower will, as a condition of Lender’s consent, execute an assignment of operating agreement, in a form acceptable to Lender in its discretion. If any such replacement operator is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered at the origination of the Loan, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to the Rating Agencies (unless waived by the Rating Agencies) with regard to nonconsolidation.

11.03 Additional Representations and Warranties. In addition to those representations and warranties contained in Article V, Borrower represents and warrants to Lender as follows:

(a) Any management or similar agreement or Operating Lease between Borrower and Operator or between Operator and any management agent or operator of the Facility are in full force and effect and there is no default, breach or violation existing under any management or similar agreement or Operating Lease by any party thereto and no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach or violation by any party under any management or similar agreement or Operating Lease.

11.04 Additional Events of Default. In addition to the Events of Default listed in Article IX, each of the following will also constitute an Event of Default:

(a) With regard to the Operating Lease, (i) if the Operating Lease is terminated for any reason prior to the stated term of the Operating Lease or during any renewal period of the Operating Lease, or (ii) if Operator fails to exercise any or all renewal options contained in the Operating Lease or (iii) if Borrower and Operator amend, modify or revise in any way the Operating Lease without the prior written consent of Lender, which consent will be given in Lender’s sole and exclusive discretion or (iv) if a default occurs under the Operating Lease. Notwithstanding the foregoing, it will not be an Event of Default upon the occurrence of any of (i), (ii) or (iv), if Borrower has entered into a new operating lease for the Facility with a term commencing upon the termination of the existing Operating Lease (or as to circumstances described in clause (iv), commencing upon the termination of the existing Operating Lease, which will be on a date agreed to by Lender, in Lender’s sole and exclusive discretion), containing the same terms and conditions as such existing

Rider to Seniors Housing Loan and Security Agreement (CME)

Seniors Housing Operator

Operating Lease or including such other terms and conditions as Lender may have approved in writing, with a new operator for the Facility which Lender has approved in writing prior to the execution of the new operating lease, which approval will be given in Lender’s sole and exclusive discretion in accordance with the terms of Section 11.02(b).

(b) Any change of the operator of the Facility or of any management agent of the Facility as of the date of this Instrument without Lender’s prior written consent, which consent will be given in Lender’s sole and exclusive discretion in accordance with the terms of Section 11.02(b); provided, however, that Sections 7.02(b) through 7.02(e) and the definition of “Controlling Entity” will apply to the Operator as modified solely for purposes of this subsection as follows: the word “Borrower” used in these subsections will be deleted and replaced with “Operator”.

(c) Any failure by Operator to perform any of its obligations as and when required under any Loan Document which continues beyond the applicable cure period, if any, specified in that Loan Document.

11.05 Financial Reporting

(a) Sections 6.07(d) and (e) are deleted and replaced with the following:

(d) Form of Statements; Audited Financials. A natural person having authority to bind Borrower (or the SPE Equity Owner, Operator or guarantor, as applicable) will certify each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b) to be complete and accurate. Each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c)(i) and (iii), 6.07(f) and 11.05(b) will be in such form and contain such detail as Lender may reasonably require. Lender also may require that any of the statements, schedules or reports listed in Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b) be audited at Borrower’s expense by independent certified public accountants acceptable to Lender, at any time when an Event of Default has occurred and is continuing or at any time that Lender, in its reasonable judgment, determines that audited financial statements are required for an accurate assessment of the financial condition of Borrower or of the Mortgaged Property.

(e) Failure to Timely Provide Financial Statements. If Borrower fails to provide, or cause to be provided, in a timely manner the statements, schedules and reports required by Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b), Lender will give Borrower Notice specifying the statements, schedules and reports required by Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b) that Borrower has failed to provide or cause to be provided. If Borrower has not provided or caused to be provided the required statements, schedules and reports within 10 Business Days following such Notice, then (i) Borrower will pay a late fee of $500 for each late

Rider to Seniors Housing Loan and Security Agreement (CME)

Seniors Housing Operator

statement, schedule or report, plus an additional $500 per month that any such statement, schedule or report continues to be late, and (ii) Lender will have the right to have the books and records relating to the Mortgaged Property audited, at Borrower’s expense, by independent certified public accountants selected by Lender in order to obtain such statements, schedules and reports, and all related costs and expenses of Lender will become immediately due and payable and will become an additional part of the Indebtedness as provided in Section 9.02. Notice to Borrower of Lender’s exercise of its rights to require an audit will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

(b) In addition to those financial reporting covenants in Section 6.07, Borrower will cause Operator to furnish to Lender each of the following:

(i) If, in connection with this Loan, the Borrower purchased the Mortgaged Property, then a statement of income and expenses for Operator’s operation of the Mortgaged Property from the origination date to the end of the first full calendar quarter following such origination date, such statement to be provided within 25 days after the end of such quarter; or, for all other cases (for example, a refinance of a loan, a purchase of partnership or other interests, or new debt being placed on the Mortgaged Property), a statement of income and expenses for Operator’s operation of the Mortgaged Property for the trailing 6 months, such statement to be provided within 25 days after the end of such quarter.

(ii) After Borrower has caused Operator to furnish such statements required by Section 11.05(b)(i) above, within 25 days after the end of each subsequent calendar quarter of Operator, the following:

(A) A Rent Schedule.

(B) A statement of income and expenses for Operator’s operation of the Mortgaged Property for that calendar quarter.

(iii) Within 25 days after the end of each fiscal quarter of Operator, Borrower will cause Operator to furnish to Lender a statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Operator relating to the Mortgaged Property as of the end of that fiscal quarter.

(iv) Within 90 days after the end of each fiscal year of Operator, Borrower will cause Operator to furnish to Lender each of the following:

(A) An annual statement of income and expenses for Operator’s operation of the Mortgaged Property for that fiscal year.

Rider to Seniors Housing Loan and Security Agreement (CME)

Seniors Housing Operator

(B) A statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal year.

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

(D) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.

(v) Borrower will cause Operator to furnish to Lender each of the following:

(A) Prior to a Securitization, and thereafter upon Lender’s reasonable request, a monthly Rent Schedule and a monthly statement of income and expenses for Operator’s operation of the Mortgaged Property.

(B) Such other financial information or property management information (including, without limitation, information on tenants under Leases to the extent such information is available to Operator, copies of bank account statements from financial institutions where funds owned or controlled by Operator are maintained, and an accounting of security deposits) as may be required by Lender from time to time.

Rider to Seniors Housing Loan and Security Agreement (CME)

Seniors Housing Operator

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME)

RECYCLED BORROWER

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. The following is added as a new Section to Article V:

5.40 Recycled Borrower.

(a) Underwriting Representations. Borrower hereby represents that from the date of its formation, each of the following is true:

(i) Borrower is and always has been duly formed, validly existing, and in good standing in the state of its formation and in all other jurisdictions where it is qualified to do business.

(ii) Borrower has no judgments or liens of any nature against it except for tax liens not yet due.

(iii) Borrower is in compliance with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Loan Agreement, has received all permits necessary for it to operate.

(iv) Borrower is not involved in any dispute with any taxing authority.

(v) Borrower has paid all taxes which it owes.

(vi) Borrower has never owned any real property other than the Mortgaged Property and personal property necessary or incidental to its ownership or operation of the Mortgaged Property and has never engaged in any business other than the ownership and operation of the Mortgaged Property.

(vii) Borrower is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending or that resulted in a judgment against it that has not been paid in full.

(viii) Borrower has provided Lender with complete financial statements that reflect a fair and accurate view of the entity’s financial condition.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

(ix) Borrower has obtained a current Phase I environmental site assessment (“ESA”) for the Mortgaged Property prepared consistent with ASTM Practice E 1527 and the ESA has not identified any recognized environmental conditions that require further investigation or remediation.

(x) Borrower has no material contingent or actual obligations not related to the Mortgaged Property.

(xi) Each amendment and restatement of Borrower’s organizational documents has been accomplished in accordance with, and was permitted by, the relevant provisions of said documents prior to its amendment or restatement from time to time.

(b) Separateness Representations. Borrower hereby represents that from the date of its formation, each of the following is true:

(i) Borrower has not entered into any contract or agreement with any Related Party Affiliate, except upon terms and conditions that are commercially reasonable and substantially similar to those available in an arm’s-length transaction with an unrelated party.

(ii) Borrower has paid all of its debts and liabilities from its assets.

(iii) Borrower has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence.

(iv) Borrower has maintained all of its books, records, financial statements and bank accounts separate from those of any other Person.

(v) Borrower has not had its assets listed as assets on the financial statement of any other Person.

(vi) Borrower has filed its own tax returns (except to the extent that it has been a tax-disregarded entity not required to file tax returns under applicable law) and, if it is a corporation, has not filed a consolidated federal income tax return with any other Person.

(vii) Borrower has been, and at all times has held itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate or other Related Party Affiliate);

(viii) Borrower has corrected any known misunderstanding regarding its status as a separate entity.

(ix) Borrower has conducted all of its business and held all of its assets in its own name.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

(x) Borrower has not identified itself or any of its affiliates as a division or part of the other.

(xi) Borrower has maintained and utilized separate stationery, invoices and checks bearing its own name.

(xii) Borrower has not commingled its assets with those of any other Person and has held all of its assets in its own name.

(xiii) Borrower has not guaranteed or become obligated for the debts of any other Person.

(xiv) Borrower has not held itself out as being responsible for the debts or obligations of any other Person.

(xv) Borrower has allocated fairly and reasonably any overhead expenses that have been shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Party Affiliate.

(xvi) Borrower has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the Loan.

(xvii) Borrower has maintained adequate capital in light of its contemplated business operations.

(xviii) Borrower has maintained a sufficient number of employees in light of its contemplated business operations and has paid the salaries of its own employees from its own funds.

(xix) Borrower has not owned any subsidiary or any equity interest in any other entity.

(xx) Borrower has not incurred any indebtedness that is still outstanding other than Indebtedness that is permitted under the Loan Documents.

(xxi) Borrower has not had any of its obligations guaranteed by an Affiliate or other Related Party Affiliate, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the Loan) or guarantees that are expressly contemplated by the Loan Documents.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

(xxii) None of the tenants holding leasehold interests with respect to the Mortgaged Property are an Affiliate of Borrower or other Related Party Affiliate.

B. The following definition is added to Article XII:

“Related Party Affiliate” means any of the Borrower’s Affiliates, constituents, or owners, or any guarantors of any of the Borrower’s obligations or any Affiliate of any of the foregoing.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

REPLACEMENT RESERVE FUND – IMMEDIATE DEPOSITS

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 4.04 is deleted and replaced with the following:

4.04 Replacement Reserve Fund.

(a) Deposits to Replacement Reserve Fund. On the Closing Date, the parties will establish the Replacement Reserve Fund and Borrower will pay the Initial Deposit to Lender for deposit into the Replacement Reserve Fund. Commencing on the date the first installment of principal and/or interest is due under the Note and continuing on the same day of each successive month until the Loan is paid in full, Borrower will pay the Monthly Deposit to Lender for deposit into the Replacement Reserve Fund, together with its regular monthly payments of principal and/or interest as required by the Note. A transfer of funds into the Replacement Reserve Fund from the Repair Reserve Fund, pursuant to the terms of Section 4.03(e), if applicable, will not alter or reduce the amount of any deposits to the Replacement Reserve Fund.

(b) Fees Deducted From Replacement Reserve Fund. Lender will be entitled to deduct from the Replacement Reserve Fund (i) the Investment Fee for establishing the Replacement Reserve Fund and (ii) the Inspection Fee for any inspection required pursuant to this Section 4.04. If Lender, in its discretion, retains a professional inspection engineer or other qualified third party to inspect any Capital Replacements pursuant to the terms of Section 6.06, Lender also will be entitled to deduct from the Replacement Reserve Fund an amount sufficient to pay all reasonable fees and expenses charged by such third party inspector.

(c) Adjustments to Replacement Reserve Fund. Lender reserves the right to adjust the amount of the Monthly Deposit based on Lender’s assessment of the physical condition of the Mortgaged Property. Unless the Loan has an initial term of greater than 120 months, Lender will not make such an adjustment prior to the date that is 120 months after the first installment due date, nor more frequently than every 10 years thereafter during the term of the Loan. Upon Notice from Lender or Loan Servicer, Borrower will begin paying the Revised Monthly Deposit on the first monthly payment date that is at least 30 days after the date of Lender’s or Loan Servicer’s Notice. If Lender or Loan Servicer does not provide Borrower with Notice of a Revised Monthly Deposit, Borrower will continue to pay the Monthly Deposit or the Revised Monthly Deposit then in effect.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

(d) Insufficient Amount in Replacement Reserve Fund. If Borrower requests disbursement from the Replacement Reserve Fund for a Capital Replacement in accordance with this Loan Agreement in an amount which exceeds the amount on deposit in the Replacement Reserve Fund, Lender will disburse to Borrower only the amount on deposit in the Replacement Reserve Fund. Borrower will pay all additional amounts required in connection with any such Capital Replacement from Borrower’s own funds.

(e) INTENTIONALLY OMITTED.

(f) INTENTIONALLY OMITTED.

(g) Disbursements from Replacement Reserve Fund.

(i) Requests for Disbursement. Lender will disburse funds from the Replacement Reserve Fund as follows:

(A) Borrower’s Request. If Borrower determines, at any time or from time to time, that a Capital Replacement is necessary or desirable, Borrower will perform such Capital Replacement and request from Lender, in writing, reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed description of the Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital Replacement has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor or materials for such Capital Replacement.

(B) Lender’s Request. If Lender reasonably determines at any time or from time to time, that a Capital Replacement is necessary for the proper maintenance of the Mortgaged Property, it will so notify Borrower, in writing, requesting that Borrower obtain and submit to Lender bids for all labor and materials required in connection with such Capital Replacement. Borrower will submit such bids and a time schedule for completing each Capital Replacement to Lender within 30 days after Borrower’s receipt of Lender’s Notice. Borrower will perform such Capital Replacement and request from Lender, in writing, reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed description of the

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital Replacement has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor or materials for such Capital Replacement.

(C) Borrower’s Requests for Incremental Disbursements. Notwithstanding the provisions of Sections 4.04(g)(i)(A) and (B) above, Borrower shall have the right to request reimbursement for a portion of the cost of any Capital Replacement performed under this Agreement (each, a “Partial Payment”) prior to the completion of such Capital Replacement provided that each of the following conditions are satisfied:

(1) the cost of such Capital Replacement shall exceed $50,000;

(2) prior to the commencement of such Capital Replacement, Lender shall receive the following, all of which shall be acceptable to Lender in its discretion: (a) the agreement(s) of each contractor and material supplier providing labor or materials for such Capital Replacement, and (b) a proposed schedule of disbursements for such Capital Replacement that sets forth the amount and timing of each proposed Partial Payment and that specifies what portion of the Capital Replacement shall be completed prior to the disbursement of each Partial Payment (such schedule, as approved by Lender, the “Schedule of Disbursement”);

(3) prior to the disbursement of each such Partial Payment, Lender receives the following: (a) evidence satisfactory to Lender that all work required under the Schedule of Disbursement to be completed prior to such Partial Payment has been completed, (b) evidence satisfactory to Lender that the amount of such Partial Payment has been paid (or, subject to the requirements of this paragraph, will be paid from such disbursement) and does not exceed the amount contemplated in the Schedule of Disbursement, and (c) if required by Lender, partial lien waivers from any contractor and/or material supplier providing labor or materials for such

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

Capital Replacement. Upon Borrower’s request, Lender may in its discretion agree that such Partial Payment may be used to pay amounts owed to any contractor and/or material supplier providing labor or materials for such Capital Replacement rather than to reimburse Borrower for such payment, in which event such disbursements shall be made by Lender either directly to such contractor or supplier on behalf of Borrower or by joint check to Borrower and such contractor or supplier, as Lender shall elect at its sole option.

(ii) Conditions Precedent. Disbursement from the Replacement Reserve Fund will be made no more frequently than once every Replacement Reserve Disbursement Period and, except for the final disbursement, no disbursement will be made in an amount less than the Minimum Replacement Disbursement Request Amount. Disbursements (including any disbursements for Partial Payments) will be made only if the following conditions precedent have been satisfied, as reasonably determined by Lender in Lender’s Discretion:

(A) Each Capital Replacement has been performed and/or installed on the Mortgaged Property in a good and workmanlike manner with suitable materials (or in the case of a partial disbursement, performed and/or installed on the Mortgaged Property to an acceptable stage), in accordance with good building practices and all applicable laws, ordinances, rules and regulations, building setback lines and restrictions applicable to the Mortgaged Property, and has been paid for by Borrower as evidenced by copies of all applicable paid invoices or bills submitted to Lender by Borrower at the time Borrower requests disbursement from the Replacement Reserve Fund.

(B) There is no condition, event or act that would constitute a default (with or without Notice and/or lapse of time).

(C) No Lien or claim based on furnishing labor or materials has been recorded, filed or asserted against the Mortgaged Property, unless Borrower has properly provided a bond or other security against loss in accordance with applicable law.

(D) All licenses, permits and approvals of any Governmental Authority required for the Capital Replacement as completed to the applicable stage have been obtained and submitted to Lender upon Lender’s request.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

(h) Right to Complete Capital Replacements. If Borrower abandons or fails to proceed diligently with any Capital Replacement in a timely fashion or an Event of Default occurs and continues under this Loan Agreement for 30 days after Notice of such failure by Lender to Borrower, Lender will have the right (but not the obligation) to enter upon the Mortgaged Property and take over and cause the completion of such Capital Replacement. However, no such Notice or cure period will apply in the case of such failure which could, in Lender’s sole and absolute judgment, absent immediate exercise by Lender of a right or remedy under this Loan Agreement, result in harm to Lender, tenants or third parties or impairment of the security given under this Loan Agreement, the Security Instrument or any other Loan Document. Any contracts entered into or indebtedness incurred upon the exercise of such right may be in the name of Borrower, and Lender is irrevocably appointed the attorney in fact for Borrower, such appointment being coupled with an interest, to enter into such contracts, incur such obligations, enforce any contracts or agreements made by or on behalf of Borrower (including the prosecution and defense of all actions and proceedings in connection with the Capital Replacement and the payment, settlement or compromise of all bills and claims for materials and work performed in connection with the Capital Replacement) and do any and all things necessary or proper to complete any Capital Replacement, including signing Borrower’s name to any contracts and documents as may be deemed necessary by Lender. In no event will Lender be required to expend its own funds to complete any Capital Replacement, but Lender may, in Lender’s Discretion, advance such funds. Any funds advanced will be added to the Indebtedness, secured by the Security Instrument and payable to Lender by Borrower in accordance with the provisions of the Note, this Loan Agreement, the Security Instrument and any other Loan Document pertaining to the protection of Lender’s security and advances made by Lender.

(i) Completion of Capital Replacements. Lender’s disbursement of monies from the Replacement Reserve Fund or other acknowledgment of completion of any Capital Replacement in a manner satisfactory to Lender in Lender’s Discretion will not be deemed a certification by Lender that the Capital Replacement has been completed in accordance with applicable building, zoning or other codes, ordinances, statutes, laws, regulations or requirements of any Governmental Authority. Borrower will at all times have the sole responsibility for ensuring that all Capital Replacements are completed in accordance with all such requirements of any Governmental Authority.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

B. The following definitions are added to Article XIII:

“Initial Deposit” means $0.

“Minimum Replacement Disbursement Request Amount” means $5,000.00

“Monthly Deposit” means $1,309.00.

“Replacement Reserve Deposit” means the Initial Deposit, the Monthly Deposit and/or the Revised Monthly Deposit, as appropriate.

“Replacement Reserve Disbursement Period” means the interval between disbursements from the Replacement Reserve Fund, which interval will be no shorter than once a month.

“Replacement Reserve Fund” means the account established pursuant to this Loan Agreement to defray the costs of Capital Replacements.

“Revised Monthly Deposit” means the adjusted amount per month that Lender determines Borrower must deposit in the Replacement Reserve Fund following any adjustment determination by Lender pursuant to Section 4.04(c).

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

ENTITY GUARANTOR

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. The following is added as a new subsection to Section 9.01:

(w) Guarantor fails to comply with the provisions of the Section of the Guaranty entitled “Material Adverse Change” or “Minimum Net Worth/Liquidity Requirements”, as applicable.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Entity Guarantor

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

MONTH TO MONTH LEASES

(Revised 1-11-2012)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 5.11 is deleted and replaced with the following:

5.11 Term of Leases. Unless otherwise approved in writing by Lender, all Leases for residential dwelling units with respect to the Mortgaged Property are on forms acceptable to Lender, are for initial terms of at least 6 months and not more than 2 years, and do not include options to purchase; provided, however, that up to 100% of all Leases may be for an initial term of less than 6 months, but not less than 1 month.

B. Section 6.15(a) is deleted and replaced with the following:

(a) Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect. All Leases for residential dwelling units will be on forms acceptable to Lender, will be for initial terms of at least 6 months and not more than 2 years, and will not include options to purchase; provided, however, that up to 100% of all Leases may be for an initial term of less than 6 months, but not less than 1 month.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Month to Month Leases

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME)

AFFILIATE TRANSFER

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 7.03(d) is deleted and replaced with the following:

(d) Affiliate Transfer. A Transfer of any direct or indirect interests in Borrower held by an entity wholly-owned and controlled by Care Investment Trust Inc., a Maryland corporation, to one or more of its Affiliates (“Affiliate Transfer”) provided that each of the following conditions is satisfied:

(i) Borrower provides Lender with at least 30 days prior Notice of the proposed Affiliate Transfer and pays to Lender the Transfer Review Fee.

(ii) At the time of the proposed Affiliate Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(iii) Lender determines, in Lender’s Discretion, that the Affiliate meets Lender’s eligibility, credit, management and other standards for seniors housing properties.

(iv) After the Affiliate Transfer, Control and management of the day-to-day operations of Borrower and the Facility continue to be held by the Person exercising such Control and management immediately prior to the Affiliate Transfer and there is no change in the Guarantor, if applicable.

(v) Lender receives organizational charts reflecting the structure of Borrower prior to and after the Affiliate Transfer.

(vi) Borrower pays or reimburses Lender, upon demand, for all costs and expenses including all Attorneys’ Fees and Costs, incurred by Lender in connection with the Affiliate Transfer.

(vii) At the time of the Affiliate Transfer, Borrower pays a $25,000 Transfer Fee to Lender.

(viii) If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to the Affiliate Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a 50% direct or indirect interest in Borrower as of the Closing Date, Borrower delivers to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation.

Rider to Seniors Housing Loan & Security Agreement (CME)

Affiliate Transfer

(ix) If required by Lender, Lender receives confirmation acceptable to Lender that the requirements of Section 6.13 continue to be satisfied.

(x) Borrower delivers to Lender a search confirming that the Affiliate is not on the list of Specially Designated Nationals or other blocked persons published by the U.S. Office of Foreign Assets Control, or on the list of persons or entities prohibited from doing business with the Department of Housing and Urban Development.

B. The following definition is added to Article XIII:

“Affiliate Transfer” is defined in Section 7.03(d).

Rider to Seniors Housing Loan & Security Agreement (CME)

Affiliate Transfer

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME)

REPAIRS – NO REPAIR RESERVE ESTABLISHED

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 4.03 is deleted and replaced with the following:

4.03 Repairs – No Repair Reserve Fund Established. No Repair Reserve Fund has been established. Borrower must commence and complete the Repairs as required pursuant to Section 6.14.

(a) Reporting Requirements; Completion. Prior to the Completion Date, Borrower will deliver all of the following to Lender:

(i) Contractor’s Certificate. If required by Lender, a certificate signed by each major contractor and supplier of materials, as reasonably determined by Lender, engaged to provide labor or materials for the Repairs to the effect that such contractor or supplier has been paid in full for all work completed and that the portion of the Repairs provided by such contractor or supplier has been fully completed in accordance with the plans and specifications (if any) provided to it by Borrower and that such portion of the Repairs is in compliance with all applicable building codes and other rules and regulations promulgated by any applicable regulatory authority or Governmental Authority.

(ii) Borrower’s Certificate. A certificate signed by Borrower to the effect that the Repairs have been fully paid for and no claim exists against Borrower or against the Mortgaged Property out of which a lien based on furnishing labor or material exists or might ripen. Borrower may except from the certificate described in the preceding sentence any claim(s) that Borrower intends to contest, provided that any such claim is described in Borrower’s certificate. If required by Lender, Borrower also must certify to Lender that such portion of the Repairs is in compliance with all applicable building codes and zoning ordinances.

(iii) Engineer’s Certificate. If required by Lender, a certificate signed by the professional engineer employed by Lender to the effect that the Repairs have been completed in a good and workmanlike manner in compliance with the Repair Schedule of Work and all applicable building codes, zoning ordinances and other rules and regulations promulgated by applicable regulatory or Governmental Authority.

Rider to Seniors Housing Loan & Security Agreement (CME)

Repairs – No Repair Reserve Established

(iv) Other Certificates. Any other certificates of approval, acceptance or compliance required by Lender from any Governmental Authority having jurisdiction over the Mortgaged Property and the Repairs.

(b) Right to Complete Repairs. If Borrower abandons or fails to proceed diligently with the Repairs or otherwise or there exists an Event of Default under this Loan Agreement, Lender will have the right (but not the obligation) to enter upon the Mortgaged Property and take over and cause the completion of the Repairs. Any contracts entered into or indebtedness incurred upon the exercise of such right may be in the name of Borrower, and Lender is irrevocably appointed the attorney in fact of Borrower, such appointment being coupled with an interest, to enter into such contracts, incur such obligations, enforce any contracts or agreements made by or on behalf of Borrower (including the prosecution and defense of all actions and proceedings in connection with the Repairs and the payment, settlement, or compromise of all claims for materials and work performed in connection with the Repairs) and do any and all things necessary or proper to complete the Repairs including signing Borrower’s name to any contracts and documents as may be deemed necessary by Lender. In no event will Lender be required to expend its own funds to complete the Repairs, but Lender may, in Lender’s sole and absolute discretion, advance such funds. Any funds advanced will be added to the Indebtedness, secured by the Security Instrument and payable to Lender by Borrower in accordance with the provisions of the Loan Documents pertaining to the protection of Lender’s security and advances made by Lender.

(c) Completion of Repairs. Any acknowledgment by Lender of completion of any Repair in a manner satisfactory to Lender will not be deemed a certification by Lender that the Repair has been completed in accordance with applicable building, zoning or other codes, ordinances, statutes, laws, regulations or requirements of any Governmental Authority. Borrower will at all times have the sole responsibility for insuring that all Repairs are completed in accordance with all such governmental requirements.

B. The following definition is added to Article XIII:

“Repair Schedule of Work” means the Repair Schedule of Work attached to this Loan Agreement as Exhibit C.

Rider to Seniors Housing Loan & Security Agreement (CME)

Repairs – No Repair Reserve Established

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

ALZHEIMER’S CARE, DEMENTIA CARE AND/OR MEMORY CARE

(Revised 1-11-2012)

The following changes are made to the Loan Agreement which precedes this Rider:

A. The following is added to Section 5.25:

The bed count identified in the Intended Uses as “Assisted Living Residences devoted to Alzheimer’s care, dementia care and/or memory care”, may vary up to the limits allowed in the current licensing for the Mortgaged Property, provided that no more than 60% of the beds at the Mortgaged Property (including any beds added by the construction of any additional units) may be dedicated to the care of residents with Alzheimer’s disease or other dementia.

Rider to Seniors Housing Loan & Security Agreement (CME and Portfolio)

Alzheimer’s Care, Dementia Care and/or Memory Care

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME)

CASH MANAGEMENT AGREEMENT

(Revised 9-1-2011)

The following modifications are made to the Loan Agreement which precedes this Rider:

A. The definition of Collateral Agreement in Article XII is deleted and replaced with the following:

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

B. The following definitions are added to Article XII:

“Cash Management Agreement” means that certain cash management agreement dated the same date as this Loan Agreement among Borrower, Lender and Property Manager.

“Clearing Account Agreement” means that certain clearing account agreement dated the same date as this Loan Agreement among Borrower, Lender and Clearing Bank.

“Clearing Bank” is defined in the Clearing Account Agreement.

Rider to Multifamily Loan & Security Agreement (CME)

Cash Management Agreement

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

TRADE NAMES

(Revised 1-11-2012)

The following changes are made to the Loan Agreement which precedes this Rider:

A. The following new subsection is added to Section 6.29 as follows:

         . Lender’s Right To Use Trade Name. Notwithstanding anything contained in this Loan Agreement, Borrower agrees that Lender will have an irrevocable license, coupled with an interest and for which consideration has been paid and received, to use the name “Greenfield Assisted Living of Stafford” and/or associated trademark rights and trade names relating to any of the Mortgaged Property for a period not to exceed 120 days after the date Lender acquires the Mortgaged Property by foreclosure or deed-in-lieu of foreclosure.

B. Subsection “(xv)” of the definition of “Mortgaged Property” in Article XIII is deleted and replaced with the following:

(xv) all names under or by which any of the Mortgaged Property may be operated or known, and all trademarks, trade names and goodwill relating to any of the Mortgaged Property; provided however, that the name “Greenfield Assisted Living of Stafford” and/or associated trademark rights are not assigned to Lender, subject to Section 6.29 of this Loan Agreement.

Rider to Seniors Housing Loan and Security Agreement (CME and Portfolio)

Trade Names

EXHIBIT A

DESCRIPTION OF THE LAND

ALL that certain piece, parcel or tract of land situate, lying and being in the County of Stafford, Commonwealth of Virginia, being known and designated as Parcel “A”, according to a plat of survey recorded in the Clerk’s Office of the Circuit Court of Stafford County, Virginia (the “Clerk’s Office”) in Plat Book 24, page 133 and containing 5.857 acres according to a more recent plat of survey entitled “30 Kings Crest Drive, Stafford County, Stafford, Virginia”, dated August 10, 2011, revised August 24, 2011, by Site Design, Inc., and according to said plat, having the following metes and bounds, to wit:

BEGINNING at an old  ¹/2” rebar iron pin located on the Northwestern right of way of Jefferson Davis Highway (US Route 1) at the joint corner of Pointe Apartment Associates, LP property, now or formerly, said iron pin also being 528.3 ± Southwest of the Southern right of way of Little Forest Church Road; thence running with the Northwestern right of way of Jefferson Davis Highway (US Route 1) S. 28°49’30” W. 462.35 feet to an old  ³/4” open top iron pin at the joint corner of other property of Pointe Apartment Associates, LP, now or formerly; thence turning and running along the common lines of the Pointe Apartment Associates, LP property the following courses and distances: N. 47°24’12” W. 357.60 feet to an old 5/8” rebar iron pin; thence N. 28°48’52” E. 781.50 feet to a mag nail set; thence along a curve to the right having a radius of 73.25 feet, an arc length of 111.03 feet and a chord bearing and distance of N. 81°48’23” E. 100.70 feet to an old  ¹/2” rebar iron pin; thence along a curve to the right having a radius of 102.11 feet, an arc length of 46.97 feet and a chord bearing and distance of S. 41°35’35” E. 46.56 feet to an old  ¹/2” rebar iron pin; thence S. 28°41’22” E. 93.30 feet to an old 5/8” rebar iron pin; thence along a curve to the right having a radius of 83.00 feet, an arc length of 82.94 feet and a chord bearing and distance of S. 00°24’09” W. 79.53 feet to an old  ¹/2” rebar iron pin; thence S. 28°50’02” W. 222.40 feet to an old nail; thence along a curve to the left having a radius of 62.00 feet, an arc length of 97.61 feet and a chord bearing and distance of S. 16°07’34” E. 87.84 feet to an old 5/8” rebar iron pin; thence along a curve to the right having a radius of 44.72 feet, an arc length of 70.10 feet and a chord bearing and distance of S. 16°07’52” E. 63.14 feet to the point and place of beginning.

TOGETHER WITH a non-exclusive easement for the purpose of access to and ingress to and from the land herein conveyed, as more particularly described in and Easement Agreement between Silver Communities, Inc. and The National Bank of Fredericksburg dated March 26, 1993, recorded in the Clerk’s Office in Deed Book 925, page 49, and subject to all of the terms and conditions set forth in said Easement Agreement.

BEING the same real estate conveyed to Care GSL Stafford LLC from Greenfield Assisted Living of Stafford, L.L.C. by Deed dated September 20, 2011 and recorded in the Clerks’ Office in LR110016241.

Seniors Housing Loan and Security Agreement (CME) Page A-1

EXHIBIT B

MODIFICATIONS TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

1. Section 5.04(b) of the Loan Agreement is deleted and the following is inserted in lieu thereof:

“(b) Without limiting the generality of subsection (a) above, neither Borrower, to the best of Borrower’s knowledge after due inquiry and investigation, any operator of the Facility, nor the Facility are subject to any proceeding, suit or investigation by any Governmental Authority and neither Borrower nor to the best of Borrower’s knowledge after due inquiry and investigation, any operator of the Facility has received any notice from any Governmental Authority which may, directly or indirectly, or with the passage of time, result in the imposition of a fine, or interim or final sanction, or would (i) have a Material Adverse Effect, (ii) result in the appointment of a receiver or trustee, (iii) affect Borrower’s or any operator of the Facility’s ability to accept and retain residents, (iv) result in the Downgrade, revocation, transfer, surrender or suspension, or non-renewal or reissuance or other impairment of any License, or (v) affect Borrower’s or operator’s continued participation in any Governmental Payor Program, or any successor programs thereto, at current rate certifications.”

2. Sections 5.07(b) and (c) are deleted and the following are inserted in lieu thereof:

“(b) Without limiting the generality of subsection (a) above, Borrower, any operator of the Facility, and the Facility (and its operation) and all residential care agreements and residential Leases are in compliance with the applicable provisions of all laws, regulations, ordinances, orders or standards of any Governmental Authority having jurisdiction over the operation of the Facility (including any Governmental Payor Program requirements and disclosure of ownership and related information requirements), including without limitation: (i) Healthcare Laws, Privacy Laws, fire and safety codes and building codes (and no waivers of such requirements exist at the Facility); (ii) laws, rules, regulations and published interpretations thereof regulating the preparation and serving of food; (iii) laws, rules, regulations and published interpretations thereof regulating the handling and disposal of medical or biological waste; (iv) the applicable provisions of all laws, rules, regulations and published interpretations thereof to which Borrower or the Facility is subject by virtue of its Intended Use; and (v) all criteria established to classify the Facility as housing for older persons under the Fair Housing Amendments Act of 1988.

(c) Borrower has received no written notice of, and is not aware of, any violation of applicable antitrust laws or securities laws relating to the Facility, the Borrower, or any operator of the Facility.”

Seniors Housing Loan and Security Agreement (CME) Page B-1

3. Section 5.09(f) is deleted and the following is inserted in lieu thereof:

“(f) Neither the execution and delivery of the Note, this Loan Agreement, the Security Instrument nor any other Loan Document, Borrower’s performance under the Loan Documents, nor the recordation of the Security Instrument, nor the exercise of any remedies by Lender pursuant to the Loan Documents, at law or in equity, will adversely affect the Licenses. Notwithstanding anything to the contrary contained in this subsection, the exercise of certain remedies by Lender against the Operator pursuant to the Subordination, Non-Disturbance and Attornment Agreement which results in the termination of the Master Lease or the operation of the Property directly by Lender may adversely affect the Licenses.”

4. Section 5.14 is deleted and the following is inserted in lieu thereof:

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

5. Section 5.32 of the Loan Agreement must be deleted and replaced with the following:

“Medicare and Medicaid. Borrower represents and warrants that neither Borrower nor any management agent for the Mortgaged Property or any operator of the Mortgaged Property currently participates in any Governmental Payor Program in connection with the operation of the Mortgaged Property.”

6. Section 5.34 is deleted and the following is inserted in lieu thereof:

“5.34 No Transfer or Pledge of Licenses. The Licenses, including, without limitation, the certificate of need, may not be, and have not been, transferred to any location other than the Facility, have not been pledged as collateral security for any other loan or indebtedness (other than existing debt being refinanced by this Loan, the liens for which have been released), and are held free from restrictions or known conflicts that would materially impair the use or operation of the Facility for its Intended Use, and are not provisional, probationary, or restricted in any way.”

7. Section 5.35 is deleted and the following is inserted in lieu thereof:

“5.35 No Pledge of Receivables. Neither Borrower nor the operator of the Facility has pledged its receivables as collateral security for any other loan or indebtedness (other than existing debt being refinanced by this Loan, the liens for which have been released).”

Seniors Housing Loan and Security Agreement (CME) Page B-2

8. Section 5.38 is deleted and the following is inserted in lieu thereof:

“5.38 No Facility Deficiencies, Enforcement Actions or Violations.

(a) The Facility has not received a statement of charges or deficiencies (other than with respect to non-material deficiencies that have been noted during routine licensure surveys and that have been cured) and no penalty enforcement actions have been undertaken against the Facility, the operator of the Facility or Borrower or against any officer, director or stockholder thereof, by any Governmental Agency during the last three calendar years, and there have been no violations over the past three years that have threatened the Facility’s or the operator of the Facility’s or Borrower’s certification for participation in any third-party payor programs.

(b) [RESERVED]”

9. Section 6.01 is deleted and the following is inserted in lieu thereof:

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

10. Section 6.04(a) is deleted and the following is inserted in lieu thereof:

“(a) Prohibited New Non-Residential Leases or Modified Non-Residential Leases. Borrower will not enter into any New Non-Residential Lease, enter into any Modified Non-Residential Lease or terminate any Non-Residential Lease (but not including any Non-Residential Lease in existence on the date of this Loan Agreement which may be terminated at Borrower’s option so long as Borrower provides notice of such termination to Lender promptly thereafter) without the prior written consent of Lender; provided, however, that Lender’s prior written consent and prior written approval shall not be required with respect to Non-Residential Leases covering floor space not exceeding 2,000 square feet and further providing that no residential units are converted to commercial leased space.”

Seniors Housing Loan and Security Agreement (CME) Page B-3

11. Section 6.04(d) is deleted and the following is inserted in lieu thereof:

“(d) Subordination and Attornment Requirements. All new Non-Residential Leases and Modified Non-Residential Leases will specifically include the following provisions:

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

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

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

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

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

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

12. Section 6.07(b) is deleted and the following is inserted in lieu thereof:

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

(i) Within 25 days after the end of each calendar quarter prior to Securitization and within 35 days after each calendar quarter after Securitization (provided however that the statement of changes and other information set forth in Section 6.07(b)(i)(C) may be provided within 45 days after each calendar quarter after Securitization), each of the following:

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

Seniors Housing Loan and Security Agreement (CME) Page B-4

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

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

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

(C) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal quarter.

(ii) Within 120 days after the end of each fiscal year of Borrower, each of the following:

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

(2) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal year.

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

(4) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.

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

13. Section 6.07(c) is deleted and the following is inserted in lieu thereof:

“(c) Delivery of Borrower Financial Statements Upon Request. Borrower will furnish or cause to be furnished to Lender each of the following:

(i) Upon Lender’s request, in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s

Seniors Housing Loan and Security Agreement (CME) Page B-5

Discretion, a monthly Rent Schedule and a monthly statement of income and expenses for Borrower’s operation of the Mortgaged Property, in each case within 25 days after the end of each month.

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

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

(iv) Upon Lender’s request in Lender’s Discretion, a monthly property management report for the Mortgaged Property, showing the number of inquiries made and rental applications received from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender within 45 days after such request. However, Lender will not require the foregoing more frequently than quarterly except when there has been an Event of Default and such Event of Default is continuing, in which case Lender may require Borrower to furnish the foregoing more frequently.”

14. Section 6.07(f) is deleted and the following is inserted in lieu thereof:

“(f) Delivery of Guarantor and SPE Equity Owner Financial Statements Upon Request. Borrower will cause each Guarantor and, at Lender’s request in Lender’s Discretion, any SPE Equity Owner, to provide to Lender (i) within 120 days after the close of such party’s fiscal year, such party’s balance sheet and profit and loss statement (or if such party is a natural person, within 120 days after the close of each calendar year, such party’s personal financial statements) in form reasonably satisfactory to Lender and certified by such party to be accurate and complete; and (ii) such additional financial information (including copies of state and federal tax returns with respect to any SPE Equity Owner but Lender will only require copies of such tax returns with respect to each Guarantor if an Event of Default has occurred and is continuing) as Lender may

Seniors Housing Loan and Security Agreement (CME) Page B-6

reasonably require from time to time and in such detail as reasonably required by Lender. Provided no Event of Default has occurred and is continuing and so long as Guarantor is publicly traded on a nationally recognized stock exchange and so long as the Guarantor certifies to Lender that such filings are true, correct and complete, the filings required to be made by the applicable statutes and regulations will fulfill the requirements of sub-section (i) hereof.”

15. Section 6.08(b) is deleted and the following is inserted in lieu thereof:

“(b) Payment of Operating Expenses. Subject to the provisions of Section 6.08(c), Borrower will (i) pay the expenses of operating, managing, maintaining and repairing the Mortgaged Property (including utilities, Repairs and Capital Replacements) before the last date upon which each such payment may be made without any penalty or interest charge being added, and (ii) pay Insurance premiums, within the time periods set forth in Section 6.10(e) prior to the expiration date of each policy of Insurance, unless applicable law specifies some lesser period.”

16. Section 6.09(c) is deleted and the following is inserted in lieu thereof:

“(c) Preservation of Mortgaged Property. Borrower will restore or repair promptly, in a good and workmanlike manner, any damaged part of the Mortgaged Property to the equivalent of its original condition, or such other condition as Lender may approve in writing, whether or not Insurance proceeds or Condemnation awards are available to cover any costs of such Restoration or repair; provided, however, that Borrower will not be obligated to perform such Restoration or repair if (i) no Event of Default has occurred and is continuing, and (ii) Lender has elected to apply any available Insurance proceeds and/or Condemnation awards to the payment of Indebtedness pursuant to Section 6.10(j) or Section 6.11(d). For the purposes hereof, the term “original condition” shall mean the condition of the Mortgaged Property as of the date of this Agreement, as enhanced or improved by (i) any repairs or replacements required under the terms of this Agreement or any other Loan Document to be completed prior to the date of such damage or destruction, and (ii) any repairs or replacements otherwise completed prior to the date of such damage or destruction to the extent the same were completed in accordance with the applicable terms and conditions of this Agreement and the other Loan Documents.”

17. Section 6.09(d) is deleted and the following is inserted in lieu thereof:

“(d) Property Management. Borrower will or will cause the Operator to provide for professional management of the Mortgaged Property by the Property Manager at all times under a property management agreement approved by Lender in writing. Borrower will not and will cause the Operator not to surrender, terminate, cancel, modify, renew or extend its property management agreement, or enter into any other agreement relating to the overall management or operation of the

Seniors Housing Loan and Security Agreement (CME) Page B-7

Property with Property Manager or any other Person, or consent to the assignment by the Property Manager of its interest under such property management agreement, in each case without the consent of Lender, which consent will not be unreasonably withheld. If at any time Lender consents to the appointment of a new Property Manager, such new Property Manager and Borrower will, as a condition of Lender’s consent, execute an Assignment of Management Agreement in a form acceptable to Lender. If any such replacement Property Manager is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered on the Closing Date, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to the Rating Agencies (unless waived by the Rating Agencies) with regard to nonconsolidation.”

18. Section 6.09(e) is deleted and the following is inserted in lieu thereof:

“(e) Alteration of Mortgaged Property. Borrower will give Notice to Lender of and, unless otherwise directed in writing by Lender, will appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement. Borrower will not (and will not permit any tenant or other Person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property, including any removal, demolition or alteration occurring in connection with a rehabilitation of all or part of the Mortgaged Property, except (i) Repairs or Capital Replacements pursuant to the terms of Sections 4.03 or 4.04, (ii) in connection with the replacement of tangible Personalty, (iii) if Borrower is a cooperative housing corporation or association, to the extent permitted with respect to individual dwelling units under the form of a proprietary lease or occupancy agreement, (iv) Repairs and Capital Replacements in connection with making an individual unit ready for a new occupant or pursuant to the terms of Sections 6.09(a) and (c), and (v) Repairs made in connection with and pursuant to the Repair Schedule of Work, if applicable. Notwithstanding any provisions to the contrary in this Section 6.9(e), as long as no Event of Default, or any event which, with the service of notice, passage of time, or both, if incurred, would constitute an Event of Default hereunder has occurred and is continuing, Borrower shall be entitled to make improvements or alterations to the Improvements on the Mortgaged Property from time to time, subject to the following restrictions: (i) such alterations and additions are completed in a lien free and good and workmanlike manner in accordance with applicable laws and the provisions of this Loan Agreement, (ii) neither the performance nor completion of the alterations or additions (A) adversely affects the structural integrity of the Improvements or the occupancy of the Improvements, (B) changes unit configurations, or (C) reduces the total number of units, and (iii) the aggregate costs of all such alterations and additions does not exceed $100,000 per year.”

19. Section 6.10(a)(ii) is deleted and the following is inserted in lieu thereof:

Seniors Housing Loan and Security Agreement (CME) Page B-8

“(ii) Commercial General Liability. Commercial general liability Insurance on a claims made and/or occurrence-based policy form that insures against legal liability resulting from bodily injury, property damage, personal injury and advertising injury, and includes contractual liability coverage and any and all claims, including all legal liability (to the extent insurable) imposed upon Borrower and all Attorneys’ Fees and Costs arising out of or connected with the possession, use, leasing, operation, maintenance or condition of the Mortgaged Property with a combined limit of not less than $2,000,000 in the aggregate and $1,000,000 per occurrence; umbrella or excess liability coverage with minimum limits in the aggregate and per occurrence of $1,000,000 in coverage for each story of the Improvements with a maximum required coverage of $8,000,000 (provided, however, that if the Indebtedness is $3,000,000 or less and the Improvements have 3 stories or fewer, then no umbrella or excess liability coverage is required); and if the Borrower owns, leases, hires, rents, borrowers, uses, or has another use on its behalf a vehicle in conjunction with the operation of the Mortgaged Property, vehicle liability Insurance of not less than $1,000,000 per occurrence. The maximum per occurrence deductible or self-insured retention, or combined deductible or self-insured retention, for all coverage required under this Section 6.10(a)(ii), will not exceed $35,000.”

20. Section 6.10(a)(x) is deleted and the following is inserted in lieu thereof:

“(x) Other. Such other Insurance against loss or damage with respect to the Improvements and Personalty located on the Mortgaged Property as required by Lender to the extent available (including liquor/dramshop and Mold Insurance) provided such Insurance is of the kind for risks from time to time customarily insured against and in such minimum coverage amounts and maximum deductibles as are generally required by institutional lenders for properties comparable to the Mortgaged Property or which Lender may deem necessary in Lender’s Discretion.”

21. Section 6.10(e) is deleted and the following is inserted in lieu thereof:

“(e) Evidence of Insurance; Renewals. Borrower will deliver to Lender a legible copy of each Insurance policy (or duplicate original), and Borrower will promptly deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies. Borrower will ensure that the Mortgaged Property is continuously covered by the required Insurance policies and will deliver to Lender evidence acceptable to Lender in Lender’s Discretion that each policy has been renewed at least 10 days prior to the expiration date of such Insurance policy provided, however, that such evidence that the policy has been renewed may be provided to Lender at least 5 days prior to the expiration date if and only if the policy contains a “Lenders Endorsement” stating that the Lender’s coverage will not be terminated in the event the policy is not renewed prior to expiration. If the evidence of a renewal does not include a

Seniors Housing Loan and Security Agreement (CME) Page B-9

legible copy of the renewal policy (or duplicate original), Borrower will deliver a legible copy of such renewal policy (or duplicate original) in a form satisfactory to Lender in Lender’s Discretion prior to the earlier of (i) 60 days after the expiration date of the original policy, or (ii) the date of any Notice to Lender under Section 6.10(i).”

22. Section 6.10(i)(i) is deleted and the following is inserted in lieu thereof:

“(i) Obligations Upon Casualty; Proof of Loss.

(i) In the event of loss for which the total cost of repair is equal to $25,000 or greater, Borrower will give immediate written notice to the Insurance carrier and to Lender.”

23. Section 6.10(i)(ii)(A) is deleted and the following is inserted in lieu thereof:

“(A) Require a “repair or replacement” settlement, in which case the proceeds will be used to reimburse Borrower for the cost of restoring and repairing the Mortgaged Property to the equivalent to its original condition, or to a condition approved by Lender (“Restoration”). If Lender determines to require a repair or replacement settlement and to apply Insurance proceeds to Restoration, Lender will apply the proceeds in accordance with Lender’s then-current policies relating to the Restoration of casualty damage on similar multifamily properties. For the purposes hereof, the term “original condition” shall mean the condition of the Mortgaged Property as of the date of this Agreement, as enhanced or improved by (i) any repairs or replacements required under the terms of this Agreement or any other Loan Document to be completed prior to the date of such damage or destruction, and (ii) any repairs or replacements otherwise completed prior to the date of such damage or destruction to the extent the same were completed in accordance with the applicable terms and conditions of this Agreement and the other Loan Documents.”

24. Section 6.13(a)(i) is deleted and the following is inserted in lieu thereof:

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

25. Section 6.13(a)(v) is deleted and the following is inserted in lieu thereof:

“(v) It will not take any action to dissolve, wind-up, terminate or liquidate in whole or in part; to sell, transfer or otherwise dispose of all or substantially all of its assets; to change its legal structure; transfer or permit the direct or indirect transfer of any partnership, membership or other equity interests, as applicable, other than

Seniors Housing Loan and Security Agreement (CME) Page B-10

Transfers permitted under this Loan Agreement; issue additional partnership, membership or other equity interests, as applicable, or seek to accomplish any of the foregoing. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof Borrower admitted Care Investment Trust Inc. as a second member of Borrower, and that such admission shall not be deemed a violation of this Section.”

26. Section 6.13(a)(ix) is deleted and the following is inserted in lieu thereof:

“(ix) It will not commingle its assets with the assets of any other Person and will hold all of its assets in its own name, except as required under the terms of the Cash Management Agreement – Seniors (CME), and the Clearing Account Agreement – Seniors (CME) each dated of even date herewith.”

27. Section 6.13(a)(xi) is deleted and the following is inserted in lieu thereof:

“(xi) It will maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person and will not list its assets as assets on the financial statement of any other Person, except as required under the terms of the Cash Management Agreement – Seniors (CME) and the Clearing Account Agreement – Seniors (CME) each dated of even date herewith; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (A) appropriate notation will be made on such consolidated financial statements to indicate the separateness of Borrower from such Affiliate and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (B) such assets will also be listed on Borrower’s own separate balance sheet. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof, Borrower maintained joint bank accounts with Related Borrowers and Care Investment Trust, Inc., and that such previously existing joint accounts shall not be a violation of this section.”

28. Section 6.13(a)(xii) is deleted and the following is inserted in lieu thereof:

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

29. Section 6.13(a)(xiii) is deleted and the following is inserted in lieu thereof:

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

Seniors Housing Loan and Security Agreement (CME) Page B-11

person, except as required under the terms of the Cash Management Agreement Seniors (CME) and the Clearing Account Agreement – Seniors (CME) each dated of even date herewith.”

30. Section 6.13(a)(xiv) is deleted and the following is inserted in lieu thereof:

“(xiv)  It will not assume or guaranty (excluding any guaranty that has been executed and delivered in connection with the Note) the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person (other than in connection with the Loan and the Cross-Collateralization Agreement), or hold out its credit as being available to satisfy the obligations of any other Person except as set forth in the Contribution Agreement.”

31. Section 6.13(a)(xviii) is deleted and the following is inserted in lieu thereof:

“(xviii)  It will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and will pay its debts and liabilities from its own assets as the same become due. provided, however, that compliance with this subsection shall not require the members of the Borrower to make additional capital contributions.”

32. Section 6.13(a)(xx) is deleted and the following is inserted in lieu thereof:

“(xx)   It will pay (or cause the Property Manager or any operator of the Facility to pay on behalf of Borrower from Borrower’s funds) its own liabilities (including salaries of its own employees) from Borrower’s own funds, provided, however, that compliance with this subsection shall not require the members of the Borrower to make additional capital contributions.”

33. Section 6.13(a)(xxiii) is deleted and the following is inserted in lieu thereof:

“(xxiii)  It will maintain a sufficient number of employees (if any) in light of its contemplated business operations and pay the salaries of its own employees, if any, only from its own funds, provided, however, that compliance with this subsection shall not require the members of the Borrower to make additional capital contributions.”

34. The final paragraph of Section 6.17 is deleted and the following is inserted in lieu thereof:

“Borrower acknowledges and agrees that, in connection with each request by Borrower under this Loan Agreement or any Loan Document, Borrower will pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender and Loan Servicer, including any fees charged by the Rating Agencies, regardless of whether the matter is approved, denied or withdrawn. Any amounts payable by Borrower under this Loan

Seniors Housing Loan and Security Agreement (CME) Page B-12

Agreement will be deemed a part of the Indebtedness, will be secured by the Security Instrument and will bear interest at the Default Rate if not fully paid within 10 days of written demand for payment.”

35. Section 6.22(a) is deleted and the following is inserted in lieu thereof:

“(a) Borrower will, or will cause any operator of the Facility to, furnish to Lender, within 10 days after receipt by Borrower or any operator of the Facility, any and all written notices from any Governmental Authority that (i) any License is being Downgraded, revoked, terminated, suspended, restricted or conditioned or may not be renewed or reissued or that action is pending or being considered to Downgrade, revoke, terminate, suspend, restrict or condition (or not renew or reissue) any such License, (ii) any violation, fine, finding, investigation or corrective action concerning any License is pending or being considered, rendered or adopted, or (iii) any Healthcare Law or any health or safety code or building code violation or other deficiency at the Mortgaged Property has been identified, but in each case only if the subject matter of such written notice (A) could materially adversely impact the operation or value of the Facility, or (B) requires additional formal or informal action by Borrower or operator of the Facility that is more than development or implementation of a routine plan of correction, including, without limitation, participation in hearings concerning continued licensing or Medicare or Medicaid participation, entering into consent orders affecting licensing affecting the Facility, or engaging in oversight management.”

36. Section 6.22(d) is deleted and the following is inserted in lieu thereof:

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

37. Section 6.28 of the Loan Agreement must be deleted and replaced with the following:

“6.28 Medicare and Medicaid.

(a) Without the prior written consent of Lender, which may be granted or withheld in Lender’s discretion, Borrower will not, and will not permit any management agent for the Mortgaged Property or any operator of the Mortgaged Property to, participate in any Governmental Payor Program, or any provider agreement under any Governmental Payor Program, or accept any resident whose ability to reside in the Mortgaged Property requires that Borrower, the Mortgaged Property or any management agent for the Mortgaged Property or any operator of the Mortgaged Property participate in any Governmental Payor Program.

Seniors Housing Loan and Security Agreement (CME) Page B-13

(b) In addition to the Events of Default listed in Section 9.01, it also will constitute an Event of Default if Borrower participates, or permits any management agent for the Mortgaged Property or operator of the Mortgaged Property to participate, in any Governmental Payor Program.”

38. Section 7.03(c) is deleted and the following is inserted in lieu thereof:

“(c) Publicly-Held Fund or Real Estate Investment Trust. If a Designated Entity for Transfers is a publicly held fund or real estate investment trust, the public issuance of common stock, convertible debt, equity or other similar securities (“Public Fund/REIT Securities”) and the subsequent Transfer of such Public Fund/REIT Securities; provided that each of the following conditions is satisfied:

(i) If any Public Fund/REIT Securities holder acquires and ownership percentage of more than 10% (“10% Transfer”), the Designated Entity for Transfers provides Lender with Notice of the 10% Transfer within 30 days after the Transfer along with a copy of the Securities and Exchange Commission Form 4.

(ii) Lender receives confirmation that after the 10% Transfer, there will not be a change of Control of the Borrower, if applicable.

(iii) If there is a change of Control of the Borrower such that the Guarantor, if applicable, no longer Controls the Borrower, Borrower provides Lender with a substitute Guarantor or other collateral acceptable to Lender (“Substitute Collateral”). If the Substitute Collateral is a letter of credit or cash, the amount of the Substitute Collateral will be 10% of the outstanding principal balance of the Mortgage.”

39. Section 7.03 is amended by the addition of the following new subsection 7.03(e) at the end thereof:

“(e) Any Condemnation, provided that Borrower has complied with the obligations under the applicable provisions of the Loan Documents, including, without limitation, Section 6.11 of the Loan Agreement, with respect thereto.”

40. Section 12.03 is amended by the addition of the following new subsection (d):

“(d) Lender shall endeavor to give the individuals or entities listed below courtesy copies of any notice given to Borrower and Borrower by Lender, at the addresses set forth below; provided, however, that failure to provide

Seniors Housing Loan and Security Agreement (CME) Page B-14

such courtesy copies of notices shall not affect the validity or sufficiency of any notice to Borrower or Borrower, shall not affect Lender’s rights and remedies hereunder or under any other Loan Documents, nor subject Lender to any claims by or liability to Borrower or any other individual or entity, it being acknowledged and agreed that no individual or entity listed below is a third-party beneficiary to any of the Loan Documents.

Bass, Berry & Sims, PLC

150 3^rd Avenue South, Suite 2800

Nashville, TN 37212

Attn: Susan W. Foxman”

41. The following is added as a new subsection to 12.11(b):

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

42. Section 12.13 is amended by adding the following at the end thereof:

“provided, however, that Borrower will not be required to modify or amend any Loan Document if such modification or amendment would (i) change the interest rate, the stated maturity or the amortization of principal set forth in the Note, or (ii) modify or amend any other material economic term of the Loan.”

43. The following definitions are added to Article XIII:

“Contribution Agreement” means that certain Contribution Agreement dated of even date herewith by and between Borrower and Related Borrowers.

“Governmental Payor Program” means any Medicare, Medicaid, TRICARE programs or similar federal, state, local or any other third party payors’ programs or other similar provider payment programs.

“Master Lease” means that certain Master Lease dated September 20, 2011, by and between Borrower and Related Borrowers, as Lessors, and Operator and Related Operators as Lessees.

“Operator” means Greenfield Assisted Living of Stafford, L.L.C.

“Related Borrowers” means Care GSL Fredericksburg LLC, a Delaware limited liability company, and Care GSL Berryville LLC, a Delaware limited liability company

“Related Operators” means Greenfield Assisted Living of Fredericksburg, L.L.C. and Greenfield Assisted Living of Berryville, LLC.”

44. The definition of “Material Contracts” is deleted from Article XIII and the following is inserted in lieu thereof:

Seniors Housing Loan and Security Agreement (CME) Page B-15

““Material Contract” means Contracts:

(i) for preparing or serving food (but do not include food supply Contracts);

(ii) for medical services or healthcare provider agreements but not including the following:

Agreement to Provide Consultant Services dated October 11, 2010 (Re: registered dietitian)*	Greenfield Assisted Living; Donna Howard
Agreement for Mental Health Services, last executed July 29, 2010	Greenfield of Stafford; Nelia San-Jose Carlson, MD
Consultant Pharmacist Retainer Agreement dated October 1, 2010	Greenfield Senior Living of Stafford; Mast Long Term Care
Vendor Pharmacy Retainer Agreement dated October 1, 2010	Greenfield Senior Living of Stafford; Mast Long Term Care

(iii) the average annual consideration of which, directly or indirectly, is at least $50,000;

(iv) having a term of more than one year and the aggregate amount payable over the life of such contract is equal to or greater than $125,000.00 unless such contract is subject to termination by Borrower or if Borrower is not a party to the Contract, the operator of the Facility, and their respective successors and assigns, upon not more than thirty days notice, without cause and without payment of any termination fee, penalty or extra charge; or

(v) determined by Lender to be material to the operation of the Facility.”

45. The definition of “Prohibited Activity or Condition” is deleted from Article XIII and the following is inserted in lieu thereof:

““Prohibited Activity or Condition” means each of the following:

(i) The presence, use, generation, release, treatment, processing, storage (including storage in above-ground and underground storage tanks), handling or disposal of any Hazardous Materials on or under the Mortgaged Property.

(ii) The transportation of any Hazardous Materials to, from or across the Mortgaged Property.

(iii) Any occurrence or condition on the Mortgaged Property, which occurrence or condition is or may be in violation of Hazardous Materials Laws.

Seniors Housing Loan and Security Agreement (CME) Page B-16

(iv) Any violation of or noncompliance with the terms of any Environmental Permit with respect to the Mortgaged Property.

(v) Any violation or noncompliance with the terms of any O&M Program.

However, the term “Prohibited Activity or Condition” expressly excludes lawful conditions permitted by an O&M Program or the safe and lawful use and storage of quantities of (i) medical products or devices or medical waste, (ii) pre-packaged supplies, cleaning materials and petroleum products customarily used in the operation and maintenance of comparable senior housing properties, (iii) cleaning materials, personal grooming items and other items sold in pre-packaged containers for consumer use and used by tenants and occupants of residential dwelling units in the Mortgaged Property, and (iv) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Mortgaged Property’s parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance with Hazardous Materials Laws.”

46. Sections 11.05(b)(iii) and (iv) of the Rider to Seniors Housing Loan and Security Agreement (CME) Seniors Housing Operators are deleted and the following are inserted in lieu thereof:

“(iii) Within 25 days after the end of each fiscal quarter of Operator, Borrower will cause Operator to furnish to Lender a statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Operator relating to the Mortgaged Property as of the end of that fiscal quarter, provided however, that after Securitization, such information shall be furnished within 45 days after the end of each fiscal quarter.

(iv) Within 120 days after the end of each fiscal year of Operator, Borrower will cause Operator to furnish to Lender each of the following:

(A) An annual statement of income and expenses for Operator’s operation of the Mortgaged Property for that fiscal year.

(B) A statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal year.

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

(D) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.”

Seniors Housing Loan and Security Agreement (CME) Page B-17

47. Section A(a)(v) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

“(v) Borrower has paid all taxes which it owes prior to delinquency.”

48. Section A(b)(iv) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

“(iv)   Borrower has maintained all of its books, records, financial statements and bank accounts separate from those of any other person or entity. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof, Borrower maintained joint bank accounts with Related Borrowers and Care Investment Trust, Inc., and that such previously existing joint accounts shall not be a violation of this section.”

49. Section A(b)(xii) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

“(xii)   Borrower has not commingled its assets with those of any other person or entity and has held all of its assets in its own name. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof, Borrower maintained joint bank accounts with Related Borrowers and Care Investment Trust, Inc., and that such previously existing joint accounts shall not be a violation of this section.”

50. Section A(b)(xvi) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

“(xvi)  Borrower has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the loan being refinanced, which pledge has been satisfied and released, and the Loan.”

51. The Replacement Reserve Fund Rider – Immediate Deposits is modified as shown by the blacklined changes on said Rider attached hereto.

Seniors Housing Loan and Security Agreement (CME) Page B-18

EXHIBIT C

REPAIR SCHEDULE OF WORK

1. Replace/repair damaged portions of chain-link fencing throughout property; photos available in PCR

2. Cut, repair and patch areas of significant asphalt failure and deterioration along the main drive aisle and in select parking spaces near the entry drive.

Seniors Housing Loan and Security Agreement (CME) Page C-1

EXHIBIT D

REPAIR DISBURSEMENT REQUEST

The undersigned hereby requests from                                               (“Lender”) the disbursement of funds in the amount of $                (“Disbursement Request”) from the Repair Reserve Fund established pursuant to the Multifamily Loan and Security Agreement dated        , 20         by and between Lender and the undersigned (the “Loan Agreement”) to pay for repairs to the multifamily apartment project known as                                      and located in                                                              .

The undersigned hereby represents and warrants to Lender that the following information and certifications provided in connection with this Disbursement Request are true and correct as of the date hereof:

1. Purpose for which disbursement is requested:

2. To whom the disbursement will be made (may be the undersigned in the case of reimbursement for advances and payments made or cost incurred for work done by the undersigned):                                                                          

3. Estimated costs of completing the uncompleted Repairs as of the date of this Disbursement Request:                                              

4. The undersigned certifies that each of the following is true:

(a) The disbursement requested pursuant to this Disbursement Request will be used solely to pay a cost or costs allowable under the Loan Agreement.

(b) None of the items for which disbursement is requested pursuant to this Disbursement Request has formed the basis for any disbursement previously made from the Repair Reserve Fund.

(c) All labor and materials for which disbursements have been requested have been incorporated into the Improvements or suitably stored upon the Property in accordance with reasonable and standard building practices, the Loan Agreement and all applicable laws, ordinances, rules and regulations of any governmental authority having jurisdiction over the Property.

(d) The materials, supplies and equipment furnished or installed for the Repairs are not subject to any Lien or security interest or that the funds to be disbursed pursuant to this Disbursement Request are to be used to satisfy any such Lien or security interest.

Seniors Housing Loan and Security Agreement (CME) Page D-1

5. All capitalized terms used in this Disbursement Request without definition will have the meanings ascribed to them in the Loan Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Disbursement Request as of the day and date first above written.

	BORROWER:
Date:	CARE GSL STAFFORD LLC, a Delaware limited liability company
	By:
	Name:
	Title:

Seniors Housing Loan and Security Agreement (CME) Page D-2

EXHIBIT E

WORK COMMENCED AT MORTGAGED PROPERTY

None

Seniors Housing Loan and Security Agreement (CME) Page E-1

EXHIBIT F

CAPITAL REPLACEMENTS

• Carpet/vinyl flooring

• Window treatments

• Roofs

• Furnaces/boilers

• Air conditioners

• Ovens/ranges

• Refrigerators

• Dishwashers

• Water heaters

• Garbage disposals

The following additional items may also be funded from the Replacement Reserve Fund:

Common area walls and ceilings, commercial kitchen equipment, commercial washers, elevators

Seniors Housing Loan and Security Agreement (CME) Page F-1

EXHIBIT G

DESCRIPTION OF GROUND LEASE

Not Applicable

Seniors Housing Loan and Security Agreement (CME) Page G-1

EXHIBIT H

ORGANIZATIONAL CHART OF BORROWER AS OF THE CLOSING DATE

FINAL ORGANIZATIONAL CHART OF BORROWER

Seniors Housing Loan and Security Agreement (CME) Page H-1

EXHIBIT I

DESIGNATED ENTITIES FOR TRANSFERS AND GUARANTOR(S)

Designated Entities for Transfers

Care GSL Holdings LLC

Care Investment Trust Inc.

Guarantor(s)

Care Investment Trust Inc.

Seniors Housing Loan and Security Agreement (CME) Page I-1

EXHIBIT J

LICENSES

LICENSE	HOLDER
Commonwealth of Virginia Department of Social Services Assisted Living Facility License – Residential and Assisted Living Care (license number NLO-1103730) dated January 27, 2011	Greenfield Assisted Living of Stafford (Operated by: Greenfield Assisted Living of Stafford, L.L.C.)
Commonwealth of Virginia Department of Health Food Establishment/Adult Care Home Food Service Permit	Greenfield Assisted Living of Stafford, LLC
Commonwealth of Virginia Department of Health Professions Assisted Living Facility Administrator License (license number 1706000134) dated October 27, 2008	Cary Douglas Nevitt
Commonwealth of Virginia Department of Professional and Occupational Regulation Cosmetologist License (license number 1201004049)	Susan B. Miller

Seniors Housing Loan and Security Agreement (CME) Page J-1

EXHIBIT K

FF&E AND MOTOR VEHICLES

All of the following is owned by the Borrower and leased to Greenfield Assisted Living of Stafford, L.L.C. pursuant to the Master Lease:

QTY	Item
5	Activity Table
1	Amour
13	Arm Chair
3	Ash tray stand
2	Bathroom cabinet
10	Bedside chest
3	Bench
1	Blender
14	Book Shelves
10	Box spring
2	Buffet Table
8	Bulletin board
2	Canopy
1	Cart
97	Chair
1	China Cabinet
4	Clock
5	Coffee Dispenser
1	Coffee maker
10	Computer (keyboard, monitor, hard drive )
1	Cooling rack
1	Deep freezer
6	Desk
6	Desk chairs
3	Easel
2	Fax machine
24	File Cabinet
2	Floor Lamps
8	Food shelves
96	Frames
2	Garden hose
1	Gas grill
3	Hanging Mirror
1	Hot box (kitchen)
1	Ice machine
18	Lamp
1	Leather Chair
10	Mattress

Seniors Housing Loan and Security Agreement (CME) Page K-1

2	Medication cart
3	Microwave
5	Mini frig
1	Mixer (large)
1	Oven/stove
11	Phones
2	Piano
2	Pillows
14	Plastic Plants
1	Podium
2	Portable stove
6	Prep Table (kitchen)
8	Printers
4	Push cart (kitchen)
3	Radio
1	Reach in refrig
1	Record player
1	Refrigerator
1	Round Table
2	Rug
6	Seat cushion
2	Shelf
2	Shredder, paper
1	Side Server
19	Side Table
2	Sofa Bed
3	Sofa Table
1	Steam table (kitchen)
1	Swing
29	Table
4	Table lamps
8	Television
2	Television stand
1	Toaster (kitchen)
1	Tool shed
5	Trash can (large)
5	Wall scones
1	Water Dispenser
1	Weight chair
1	Wheel barrel

Seniors Housing Loan and Security Agreement (CME) Page K-2

The following is owned by third parties and leased to Greenfield Assisted Living of Stafford, L.L.C.:

- 1 Dishmachine Model PA1 and related parts and equipment pursuant to Clean Force Dishmachine Lease dated January 18, 2007 between Greenfield of Stafford and U.S. Foodservice, Inc.

- 1 Konica C-250 copier pursuant to Lease Agreement, last executed on September 28, 2005, between Greenfield Assisted Living of Stafford, LLC and Wells Fargo Financial Leasing, Inc.

- 1 2010 FORD ELKHARD COACH (VIN 1FDEE3FL2ADA34943) PURSUANT TO LEASE AGREEMENT DATED JUNE 18, 2010 BETWEEN GREENFIELD ASSISTED LIVING OF STAFFORD, L.L.C. AND KEY EQUIPMENT FINANCE INC.

Seniors Housing Loan and Security Agreement (CME) Page K-3

EXHIBIT L

CONTRACTS

CONTRACTS	PARTIES
Advertising Agreement dated May 6, 2010*	Greenfield of Stafford; Idearc Media LLC
Business Class Service Order Agreement (undated) (Re: cable television and internet service)*	Greenfield Stafford; Comcast Cable Communications Management, LLC
Service Contract Special Laundry Services & Maintenance dated August 15, 2007 (Re: maintenance of laundry equipment)	Greenfield Assisted Living of Stafford; Caldwell & Gregory, Inc.
Integrated Pest Management Program Service Agreement dated July 3, 2003	Greenfield Assisted Living of Stafford; PermaTreat
Maintenance and Technical Support Agreement dated June 23, 2009 (Re: maintenance of telephone equipment)	Greenfield Assisted Living; CWPS, Inc.
Subscription Agreement dated March 12, 2009 (Re: license to use referral software)*	Greenfield Assisted Living of Stafford, LLC; Extended Care Information Network, Inc. d/b/a Allscripts
Illustratus Group Newsletter Service Agreement, last executed October 30, 2007 (Re: design and printing of monthly community newsletters)	Greenfield Senior Living; Uhlig LLC
Elevator Maintenance Agreement, last executed July 7, 2003*	Greenfield Assisted Living; ThyssenKrupp Elevator
Clean Force Dishmachine Lease, last executed January 18, 2007*	Greenfield of Stafford; U.S. Foodservice, Inc.; Puritan Services, Inc.
Assisted / Independent Living Referral Agreement dated September 1, 2009*	Greenfield; Senior-Living.com, Inc.
Eldercare Information Service Agreement dated December 4, 2007 (Re: referral services)	Greenfield Senior Living; A Place for Mom, Inc.
Lease Agreement, last executed September 28, 2005 (Re: copier equipment)*	Greenfield Assisted Living of Stafford, LLC; Wells Fargo Financial Leasing, Inc., as lessor; L&J Copier Clinic, Inc., as vendor
Maintenance Agreement dated October 15, 2008 (Re: landscaping)*	Greenfield Assisted Living; ValleyCrest Landscape Maintenance, Inc.
Service Agreement dated June 9, 2008 (Re: medical waste disposal)*	Greenfield Assisted Living; Stericycle, Inc.

Seniors Housing Loan and Security Agreement (CME) Page L-1

Agreement to Provide Consultant Services dated October 11, 2010 (Re: registered dietitian)*	Greenfield Assisted Living; Donna Howard
Agreement for Mental Health Services, last executed July 29, 2010	Greenfield of Stafford; Nelia San-Jose Carlson, MD
Consultant Pharmacist Retainer Agreement dated October 1, 2010	Greenfield Senior Living of Stafford; Mast Long Term Care
Vendor Pharmacy Retainer Agreement dated October 1, 2010	Greenfield Senior Living of Stafford; Mast Long Term Care
Lease Agreement dated June 18, 2010 (Re: 2010 Ford Elkhard Coach)*	Greenfield Assisted Living of Stafford, L.L.C.; Key Equipment Finance Inc.
Greenfield Management Agreement dated May             , 2003, as amended by Amendment to Management Agreement of even date herewith	Greenfield Assisted Living of Stafford, L.L.C.; Greenfield Management, L.L.C.

* Does not provide that it is terminable by Borrower or the operator of the Facility upon not more than 30 days notice without the necessity of establishing cause and without payment of a penalty or termination fee by Borrower or the operator of the Facility or their respective successors or assigns.

Seniors Housing Loan and Security Agreement (CME) Page L-2

EXHIBIT M

MATERIAL CONTRACTS

MATERIAL CONTRACTS	PARTIES
Greenfield Management Agreement dated May             , 2003, as amended by Amendment to Management Agreement of even date herewith	Greenfield Assisted Living of Stafford, L.L.C.; Greenfield Management, L.L.C.

Seniors Housing Loan and Security Agreement (CME) Page M-1

EXHIBIT N

ADDITIONAL MORTGAGED PROPERTY

1. All of Borrower’s present and future right, title and interest in and to all of the following that are used now or in the future in connection with the ownership, management or operation of the Land and/or the Improvements on such Land (“Property”), including without limitation, the Facility: machinery, equipment, engines, boilers, incinerators, installed building materials; systems and equipment for the purpose of supplying or distributing heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring and conduits used in connection with radio, television, security, fire prevention or fire detection or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposals, washers, dryers, and other appliances; light fixtures, awnings, storm windows and storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors, cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants; swimming pools; and exercise equipment (any of the foregoing that are so attached to the Property as to constitute fixtures under applicable law are referred to below as “Facility Fixtures”).

2. All furniture, furnishings, equipment, machinery, building materials, appliances, goods, supplies, tools, books, records (whether in written or electronic form), computer equipment (hardware and software) healthcare equipment, recreational equipment, pool equipment, dishes, silverware, glassware, kitchen equipment and other tangible personal property (other than Facility Fixtures) that are used now or in the future in connection with the ownership, management or operation of the Property or are located on the Property, and any operating leases relating to the Property, and any surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Property and all other intangible property and rights relating to the operation of, or used in connection with, the Property, including all governmental permits relating to any activities on the Property (“Facility Personalty”).

3. All current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights-of-way, strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses, and appurtenances related to or benefiting the Property, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated.

4. All proceeds paid or to be paid by any insurer of the Property, the Facility Fixtures, the Personalty or any other item listed in this Schedule 1.

5. All awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Property, the Facility Fixtures, the Facility Personalty or any other item listed in this Schedule 1, including any awards or settlements resulting from condemnation proceedings or the total or partial taking of the

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Property, the Facility Fixtures, the Facility Personalty or any other item listed in this Schedule 1 under the power of eminent domain or otherwise and including any conveyance in lieu thereof.

6. All contracts, options and other agreements for the sale of the Property, the Facility Fixtures, the Facility Personalty or any other item listed in this Schedule 1 entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations; and all other contracts and agreements pertaining to the ownership, leasing, operation or management of the Property, including without limitation, management and similar agreements, utility contracts and agreements for the provision of goods or services (or payment therefor) at the Facility (whether to Borrower, Operator or the residents of the Facility), including without limitation Third Party Provider Agreements.

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

8. All earnings, royalties, accounts receivable (including accounts receivable for all rents, revenues and other income of the Property), including parking fees, issues and profits from the Property or its operation, or any other item listed in this Schedule 1, and all undisbursed proceeds of the loan secured by the security interests to which this financing statement relates and, if Borrower is a cooperative housing corporation, maintenance charges or assessments payable by shareholders or residents.

9. All refunds or rebates of (a) water and sewer charges, (b) premiums for fire and other hazard insurance, rent loss insurance and any other insurance required by Lender, (c) taxes, assessments, vault rentals, and (d) other charges or expenses required by Lender to protect the Property, to prevent the imposition of liens on the Property, or otherwise to protect Lender’s interests by any municipal, state or federal authority or insurance company; and all refunds of utility deposits.

10. All tenant security deposits which have not been forfeited by any tenant under any Lease.

11. Subject to the terms of this Loan Agreement, all names under or by which the Property or any part of it may be operated or known, and all trademarks, trade names, and goodwill relating to any of the Property or any part of it.

12. All payments received and all rights to receive payments from any source, which payments (or rights thereto) arise from operation of or at the Property, including without limitation, entrance fees, application fees, processing fees, community fees and any other amounts or fees deposited or to be deposited by any resident or tenant, payments received

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and the right to receive payments of second party charges added to base rental income, base and additional meal sales, payments received and the right to receive payments from commercial operations located on the Property or provided as a service to the occupants of the Facility, rental from guest suites, seasonal lease charges, rental payments under furniture leases, income from healthcare services, income from laundry service, income from vending machines and income and fees from any and all other services provided to residents of the Property.

13. All rights to payments from Medicare, Medicaid or TRICARE programs or similar federal, state or local programs or agencies and rights to payment from private insurers.

14. All Licenses, approvals, permits, accreditations, determinations of need, certificates of need, and other certificates.

15. All operating contracts, franchises, license agreements, healthcare services contracts, food service contracts and other contracts for services related to the Property.

16. All utility deposits.

17. All proceeds from the conversion, voluntary or involuntary, of any of the above into cash or liquidated claims, and the right to collect such proceeds and any supporting obligations of any of the above.

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EX-10.2

Exhibit 10.2

Freddie Mac Loan Number: 504183354

Property Name: Greenfield Assisted Living of Stafford

MULTIFAMILY NOTE

(CME)

MULTISTATE – FIXED RATE

DEFEASANCE

(Revised 2-2-2012)

US $6,424,000.00 Effective Date: April 24, 2012

FOR VALUE RECEIVED, CARE GSL STAFFORD LLC, a Delaware limited liability company (together with such party’s or parties’ successors and assigns, “Borrower”) jointly and severally (if more than one) promises to pay to the order of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation, the principal sum of Six Million Four Hundred Twenty-Four Thousand and No/100 Dollars ($6,424,000.00), with interest on the unpaid principal balance, as hereinafter provided.

1. Defined Terms.

(a) As used in this Note:

“Base Recourse” means a portion of the Indebtedness equal to 0% of the original principal balance of this Note.

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

“Cut-off Date” means the 12^th Installment Due Date.

“Defeasance Date” means the 2^nd anniversary of the “startup date” of the last REMIC within the meaning of Section 860G(a)(9) of the Tax Code which holds all or any portion of the Loan.

“Default Rate” means an annual interest rate equal to 4 percentage points above the Fixed Interest Rate. However, at no time will the Default Rate exceed the Maximum Interest Rate.

“Defeasance Period” is the period beginning the day after the Defeasance Date until but not including the first day of the Window Period. The Defeasance Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.

Multifamily Multistate Fixed Rate Note (CME)

Defeasance

“Fixed Interest Rate” means the annual interest rate of 4.76%.

“Installment Due Date” means, for any monthly installment of interest-only or principal and interest, the date on which such monthly installment is due and payable pursuant to Section 3 of this Note. The “First Installment Due Date” under this Note is June 1, 2012.

“Lender” means the holder from time to time of this Note.

“Loan” means the loan evidenced by this Note.

“Loan Agreement” means the Multifamily Loan and Security Agreement entered into by and between Borrower and Lender, effective as of the effective date of this Note, as amended, modified or supplemented from time to time.

“Lockout Period” means the period beginning on the day that this Note is assigned to a REMIC trust until and including the Defeasance Date. The Lockout Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.

“Maturity Date” means the earlier of (i) May 1, 2022 (“Scheduled Maturity Date”), or (ii) the date on which the unpaid principal balance of this Note becomes due and payable by acceleration or otherwise pursuant to the Loan Documents or the exercise by Lender of any right or remedy under any Loan Document; provided, however, that if the unpaid principal balance of this Note becomes due and payable by acceleration but such acceleration is rendered null and void and of no further force and effect by operation of law or agreement by Lender, such acceleration will have no effect on the Maturity Date.

“Maximum Interest Rate” means the rate of interest which results in the maximum amount of interest allowed by applicable law.

“Prepayment Premium Period” means the period during which, if a prepayment of principal occurs, a prepayment premium will be payable by Borrower to Lender. The Prepayment Premium Period is the period from and including the date of this Note until but not including (i) the day that this Note is assigned to a REMIC trust, if this Note is assigned to a REMIC trust prior to the Cut-off Date, or (ii) the first day of the Window Period, if this Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date.

“Security Instrument” means the multifamily mortgage, deed to secure debt or deed of trust effective as of the effective date of this Note, from Borrower to or for the benefit of Lender and securing this Note, as amended, modified or supplemented from time to time.

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“Window Period” means the 3 consecutive calendar month period prior to the Scheduled Maturity Date.

“Yield Maintenance Expiration Date” means November 1, 2021.

“Yield Maintenance Period” means the period from and including the date of this Note until but not including (i) the day that this Note is assigned to a REMIC trust, if this Note is assigned to a REMIC trust prior to the Cut-off Date, or (ii) the Yield Maintenance Expiration Date, if this Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date.

(b) Other capitalized terms used but not defined in this Note will have the meanings given to such terms in the Loan Agreement.

2. Address for Payment. All payments due under this Note will be payable at P.O. Box 145404, Cincinnati, Ohio 45250, or such other place as may be designated by Notice to Borrower from or on behalf of Lender.

3. Payments.

(a) Interest will accrue on the outstanding principal balance of this Note at the Fixed Interest Rate, subject to the provisions of Section 8 of this Note.

(b) Interest under this Note will be computed, payable and allocated on the basis of an actual/360 interest calculation schedule (interest is payable for the actual number of days in each month, and each month’s interest is calculated by multiplying the unpaid principal amount of this Note as of the first day of the month for which interest is being calculated by the Fixed Interest Rate, dividing the product by 360, and multiplying the quotient by the number of days in the month for which interest is being calculated). The portion of the monthly installment of principal and interest under this Note attributable to principal and the portion attributable to interest will vary based upon the number of days in the month for which such installment is paid. Each monthly payment of principal and interest will first be applied to pay in full interest due, and the balance of the monthly installment payment paid by Borrower will be credited to principal.

(c) Unless disbursement of principal is made by Lender to Borrower on the first day of a calendar month, interest for the period beginning on the date of disbursement and ending on and including the last day of such calendar month will be payable by Borrower simultaneously with the execution of this Note. If disbursement of principal is made by Lender to Borrower on the first day of a calendar month, then no payment will be due from Borrower at the time of the execution of this Note. The Installment Due Date for the first monthly installment payment under

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Section 3(d) of interest-only or principal and interest, as applicable, will be the First Installment Due Date set forth in Section 1(a) of this Note. Except as provided in this Section 3(c), Section 10 and in Section 11, accrued interest will be payable in arrears.

(d) Beginning on the First Installment Due Date, and continuing until and including the monthly installment due on the Maturity Date, principal and accrued interest will be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar month. The amount of the monthly installment of principal and interest payable pursuant to this Section 3(d) on an Installment Due Date will be $33,549.36.

(e) All remaining Indebtedness, including all principal and interest, will be due and payable by Borrower on the Maturity Date.

(f) All payments under this Note must be made in immediately available U.S. funds.

(g) Any regularly scheduled monthly installment of interest-only or principal and interest payable pursuant to this Section 3 that is received by Lender before the date it is due will be deemed to have been received on the due date for the purpose of calculating interest due.

(h) Any accrued interest remaining past due for 30 days or more, at Lender’s discretion, may be added to and become part of the unpaid principal balance of this Note and any reference to “accrued interest” will refer to accrued interest which has not become part of the unpaid principal balance. Any amount added to principal pursuant to the Loan Documents will bear interest at the applicable rate or rates specified in this Note and will be payable with such interest upon demand by Lender and absent such demand, as provided in this Note for the payment of principal and interest.

4. Application of Partial Payments. If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, Lender may apply the amount received to amounts then due and payable in any manner and in any order determined by Lender, in Lender’s discretion. Borrower agrees that neither Lender’s acceptance of a payment from Borrower in an amount that is less than all amounts then due and payable nor Lender’s application of such payment will constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction.

5. Security. The Indebtedness is secured by, among other things, the Security Instrument and reference is made to the Security Instrument and Loan Agreement for other rights of Lender as to collateral for the Indebtedness.

6. Acceleration. If an Event of Default has occurred and is continuing, the entire unpaid principal balance, any accrued interest, any prepayment premium payable under

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Section 10 and Section 11, and all other amounts payable under this Note and any other Loan Document, will at once become due and payable, at the option of Lender, without any prior Notice to Borrower (except if notice is required by applicable law, then after such notice). Lender may exercise this option to accelerate regardless of any prior forbearance. For purposes of exercising such option, Lender will calculate the prepayment premium as if prepayment occurred on the date of acceleration. If prepayment occurs thereafter, Lender will recalculate the prepayment premium as of the actual prepayment date.

7. Late Charge.

(a) If any monthly installment of interest or principal and interest or other amount payable under this Note or under the Loan Agreement or any other Loan Document is not received in full by Lender within 10 days after the installment or other amount is due, counting from and including the date such installment or other amount is due (unless applicable law requires a longer period of time before a late charge may be imposed, in which event such longer period will be substituted), Borrower must pay to Lender, immediately and without demand by Lender, a late charge equal to 5% of such installment or other amount due (unless applicable law requires a lesser amount be charged, in which event such lesser amount will be substituted). If the Loan is not fully amortizing, the late charge will not be due on the final payment of principal owed on the Maturity Date if such payment is not timely made.

(b) Borrower acknowledges that its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan and that it is extremely difficult and impractical to determine those additional expenses. Borrower agrees that the late charge payable pursuant to this Section represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional expenses Lender will incur by reason of such late payment. The late charge is payable in addition to, and not in lieu of, any interest payable at the Default Rate pursuant to Section 8.

8. Default Rate.

(a) So long as (i) any monthly installment under this Note remains past due for 30 days or more or (ii) any other Event of Default has occurred and is continuing, then notwithstanding anything in Section 3 of this Note to the contrary, interest under this Note will accrue on the unpaid principal balance from the Installment Due Date of the first such unpaid monthly installment or the occurrence of such other Event of Default, as applicable, at the Default Rate.

(b) From and after the Maturity Date, the unpaid principal balance will continue to bear interest at the Default Rate until and including the date on which the entire principal balance is paid in full.

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(c) Borrower acknowledges that (i) its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan, (ii) during the time that any monthly installment under this Note is delinquent for 30 days or more, Lender will incur additional costs and expenses arising from its loss of the use of the money due and from the adverse impact on Lender’s ability to meet its other obligations and to take advantage of other investment opportunities, and (iii) it is extremely difficult and impractical to determine those additional costs and expenses. Borrower also acknowledges that, during the time that any monthly installment under this Note is delinquent for 30 days or more or any other Event of Default has occurred and is continuing, Lender’s risk of nonpayment of this Note will be materially increased and Lender is entitled to be compensated for such increased risk. Borrower agrees that the increase in the rate of interest payable under this Note to the Default Rate represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional costs and expenses Lender will incur by reason of the Borrower’s delinquent payment and the additional compensation Lender is entitled to receive for the increased risks of nonpayment associated with a delinquent loan.

9. Limits on Personal Liability.

(a) Except as otherwise provided in this Section 9, Borrower will have no personal liability under this Note, the Loan Agreement or any other Loan Document for the repayment of the Indebtedness or for the performance of or compliance with any other obligations of Borrower under the Loan Documents and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and remedies with respect to the Mortgaged Property and to any other collateral held by Lender as security for the Indebtedness. This limitation on Borrower’s liability will not limit or impair Lender’s enforcement of its rights against any Guarantor of the Indebtedness or any Guarantor of any other obligations of Borrower.

(b) Borrower will be personally liable to Lender for the amount of the Base Recourse, plus any other amounts for which Borrower has personal liability under this Section 9.

(c) In addition to the Base Recourse, Borrower will be personally liable to Lender for the repayment of a further portion of the Indebtedness equal to any loss or damage suffered by Lender as a result of the occurrence of any of the following events:

(i) Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender is entitled under Section 3 of the Security Instrument and the amount of all security deposits collected by Borrower from tenants then in residence. However, Borrower will not be personally liable for any failure described in this Section 9(c)(i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

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(ii) Borrower fails to apply all Insurance proceeds and Condemnation proceeds as required by the Loan Agreement. However, Borrower will not be personally liable for any failure described in this Section 9(c)(ii) if Borrower is unable to apply Insurance or Condemnation proceeds as required by the Loan Agreement because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

(iii) Either of the following occurs:

(A) Borrower fails to deliver the statements, schedules and reports required by Section 6.07 of the Loan Agreement and Lender exercises its right to audit those statements, schedules and reports.

(B) If an Event of Default has occurred and is continuing, Borrower fails to deliver all books and records relating to the Mortgaged Property or its operation in accordance with the provisions of Section 6.07 of the Loan Agreement.

(iv) Borrower fails to pay when due in accordance with the terms of the Loan Agreement the amount of any item below marked “Deferred”; provided however, that if no item is marked “Deferred”, this Section 9(c)(iv) will be of no force or effect.

[Deferred]  Hazard Insurance premiums or other Insurance premiums

[Collect]  Taxes or payments in lieu of taxes (PILOT)

[Deferred]  water and sewer charges (that could become a lien on the Mortgaged Property)

[N/A]  Ground Rents

[Deferred]  assessments or other charges (that could become a lien on the Mortgaged Property)

(v) Borrower engages in any willful act of material waste of the Mortgaged Property.

(vi) Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v) of the Loan Agreement (subject to possible full recourse liability as set forth in Section 9(f)(ii)).

(vii) Any of the following Transfers occurs:

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(A) Any Person that is not an Affiliate creates a mechanic’s lien or other involuntary lien or encumbrance against the Mortgaged Property and Borrower has not complied with the provisions of the Loan Agreement.

(B) A Transfer of property by devise, descent or operation of law occurs upon the death of a natural person and such Transfer does not meet the requirements set forth in the Loan Agreement.

(C) Borrower grants an easement that does not meet the requirements set forth in the Loan Agreement.

(D) Borrower executes a Lease that does not meet the requirements set forth in the Loan Agreement.

(d) In addition to the Base Recourse, Borrower will be personally liable to Lender for all of the following:

(i) Borrower will be personally liable for the performance of and compliance with all of Borrower’s obligations under Sections 6.12 and 10.02(b) of the Loan Agreement (relating to environmental matters).

(ii) Borrower will be personally liable for the costs of any audit under Section 6.07 of the Loan Agreement.

(iii) Borrower will be personally liable for any costs and expenses incurred by Lender in connection with the collection of any amount for which Borrower is personally liable under this Section 9, including Attorneys’ Fees and Costs and the costs of conducting any independent audit of Borrower’s books and records to determine the amount for which Borrower has personal liability.

(e) All payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Loan Agreement and the other Loan Documents will be applied first to the portion of the Indebtedness for which Borrower has no personal liability.

(f) Notwithstanding the Base Recourse, Borrower will become personally liable to Lender for the repayment of all of the Indebtedness upon the occurrence of any of the following Events of Default:

(i) Borrower fails to comply with Section 6.13(a)(i) or (ii) of the Loan Agreement or any SPE Equity Owner fails to comply with Section 6.13(b)(i) or (ii) of the Loan Agreement.

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(ii) Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v) of the Loan Agreement and a court of competent jurisdiction holds or determines that such failure or combination of failures is the basis, in whole or in part, for the substantive consolidation of the assets and liabilities of Borrower or any SPE Equity Owner with the assets and liabilities of a debtor pursuant to Title 11 of the Bankruptcy Code.

(iii) A Transfer that is an Event of Default under Section 7.02 of the Loan Agreement occurs other than a Transfer set forth in Section 9(c)(vii) above (for which Borrower will have personal liability for Lender’s loss or damage); provided, however, that Borrower will not have any personal liability for a Transfer consisting solely of the involuntary removal or involuntary withdrawal of a general partner in a limited partnership or a manager in a limited liability company).

(iv) There was fraud or written material misrepresentation by Borrower or any officer, director, partner, member or employee of Borrower in connection with the application for or creation of the Indebtedness or there is fraud in connection with any request for any action or consent by Lender.

(v) Borrower or any SPE Equity Owner voluntarily files for bankruptcy protection under the Bankruptcy Code.

(vi) Borrower or any SPE Equity Owner voluntarily becomes subject to any reorganization, receivership, insolvency proceeding, or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights.

(vii) The Mortgaged Property or any part of the Mortgaged Property becomes an asset in a voluntary bankruptcy or becomes subject to any voluntary reorganization, receivership, insolvency proceeding, or other similar voluntary proceeding pursuant to any other federal or state law affecting debtor and creditor rights.

(viii) An order of relief is entered against Borrower or any SPE Equity Owner pursuant to the Bankruptcy Code or other federal or state law affecting debtor and creditor rights in any involuntary bankruptcy proceeding initiated or joined in by a Related Party.

(ix) An involuntary bankruptcy or other involuntary insolvency proceeding is commenced against Borrower or any SPE Equity Owner (by a party other than Lender) but only if Borrower or such SPE Equity Owner has failed to use commercially reasonable efforts to dismiss such proceeding or has consented to such proceeding. “Commercially reasonable efforts” will not

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require any direct or indirect interest holders in Borrower or any SPE Equity Owner to contribute or cause the contribution of additional capital to Borrower or any SPE Equity Owner.

(g) For purposes of Section 9(f) the term “Related Party” will include all of the following:

(i) Borrower, any Guarantor or any SPE Equity Owner.

(ii) Any Person that holds, directly or indirectly, any ownership interest (including any shareholder, member or partner) in Borrower, any Guarantor or any SPE Equity Owner or any Person that has a right to manage Borrower, any Guarantor or any SPE Equity Owner.

(iii) Any Person in which Borrower, any Guarantor or any SPE Equity Owner has any ownership interest (direct or indirect) or right to manage.

(iv) Any Person in which any partner, shareholder or member of Borrower, any Guarantor or any SPE equity Owner has an ownership interest or right to manage.

(v) Any Person in which any Person holding an interest in Borrower, any Guarantor or any SPE Equity Owner also has any ownership interest.

(vi) Any creditor of Borrower that is related by blood, marriage or adoption to Borrower, any Guarantor or any SPE Equity Owner.

(vii) Any creditor of Borrower that is related to any partner, shareholder or member of, or any other Person holding an interest in, Borrower, any Guarantor or any SPE Equity Owner.

(h) If Borrower, any Guarantor, any SPE Equity Owner or any Related Party has solicited creditors to initiate or participate in any proceeding referred to in Section 9(f), regardless of whether any of the creditors solicited actually initiates or participates in the proceeding, then such proceeding will be considered as having been initiated by a Related Party.

(i) To the extent that Borrower has personal liability under this Section 9, Lender may, to the fullest extent permitted by applicable law, exercise its rights against Borrower personally without regard to whether Lender has exercised any rights against the Mortgaged Property or any other security, or pursued any rights against any Guarantor, or pursued any other rights available to Lender under this Note, the Loan Agreement, any other Loan Document or applicable law. To the fullest extent permitted by applicable law, in any action to enforce Borrower’s personal liability under this Section 9, Borrower waives any right to set off the value of the Mortgaged Property against such personal liability.

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10. Voluntary and Involuntary Prepayments During the Prepayment Premium Period (Section Applies unless and until Loan is Assigned to REMIC Trust Prior to the Cut-off Date).

(a) This Section 10 will apply unless and until this Note is assigned to a REMIC trust prior to the Cut-off Date.

(b) Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment under this Note.

(c) During the Prepayment Premium Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. Unless Lender has previously notified Borrower of the expiration of the Prepayment Premium Period, upon receipt of such Notice from Borrower, Lender will notify Borrower if the Note has been assigned to a REMIC trust prior to the Cut-off Date and the Prepayment Premium Period has expired. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this Section 10 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled Installment Due Date.

(d) Notwithstanding Section 10(c), Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 10(c) above and meets the other requirements set forth in this Section 10(d). Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a Business Day other than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower will be responsible for all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment.

(e) Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all of the principal of this Note, Borrower must pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment, plus (iii) any prepayment premium calculated pursuant to Section 10(f).

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(f) Except as provided in Section 10(g), a prepayment premium will be due and payable by Borrower in connection with any prepayment of principal under this Note during the Prepayment Premium Period. The prepayment premium will be computed as follows:

(i) For any prepayment made during the Yield Maintenance Period, the prepayment premium will be whichever is the greater of subsections (A) and (B) below:

(A) 1.0% of the amount of principal being prepaid; or

(B) the product obtained by multiplying:

(1) the amount of principal being prepaid or accelerated,

by

(2) the excess (if any) of the Monthly Note Rate over the Assumed Reinvestment Rate,

by

(3) the Present Value Factor.

For purposes of Section 10(f)(i)(B), the following definitions will apply:

Monthly Note Rate: 1/12 of the Fixed Interest Rate, expressed as a decimal calculated to 5 digits.

Prepayment Date: in the case of a voluntary prepayment, the date on which the prepayment is made; in the case of the application by Lender of collateral or security to a portion of the principal balance, the date of such application.

Assumed Reinvestment Rate: 1/12 of the yield rate expressed as a decimal to 2 digits, as of the close of the trading session which is 5 Business Days before the Prepayment Date, found among the Daily Treasury Yield Curve Rates, commonly known as Constant Maturity Treasury (“CMT”) rates, with a maturity equal to the remaining Yield Maintenance Period, as reported on the U.S. Department of the Treasury website. If no published CMT maturity matches the remaining Yield Maintenance Period, Lender will interpolate as a decimal to 2 digits the yield rate between (a) the CMT with a maturity closest to, but shorter than, the remaining Yield Maintenance Period, and (b) the CMT with a maturity closest to, but longer than, the remaining Yield Maintenance Period, as follows:

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A = yield rate for the CMT with a maturity shorter than the remaining Yield Maintenance Period

B = yield rate for the CMT with a maturity longer than the remaining Yield Maintenance Period

C = number of months to maturity for the CMT maturity shorter than the remaining Yield Maintenance Period

D = number of months to maturity for the CMT maturity longer than the remaining Yield Maintenance Period

E = number of months remaining in the Yield Maintenance Period

In the event the U.S. Department of the Treasury ceases publication of the CMT rates, the Assumed Reinvestment Rate will equal the yield rate on the first U.S. Treasury security which is not callable or indexed to inflation and which matures after the expiration of the Yield Maintenance Period.

The Assumed Reinvestment Rate may be a positive number, a negative number or zero.

If the Assumed Reinvestment Rate is a positive number or a negative number, Lender will calculate the prepayment premium using such positive number or negative number, as appropriate, as the Assumed Reinvestment Rate in 10(f)(i)(B)(2) and in the calculation of the Present Value Factor.

If the Assumed Reinvestment Rate is zero, Lender will calculate the prepayment premium twice as set forth in (I) and (II) below and will average the results to determine the actual prepayment premium.

(I) Lender will calculate the prepayment premium using an Assumed Reinvestment Rate of one basis point (+0.01%) in Section 10(f)(i)(B)(2) and in the calculation of the Present Value Factor.

(II) Lender will calculate the prepayment premium using an Assumed Reinvestment Rate of negative one basis point (-0.01%) in Section 10(f)(i)(B)(2) and in the calculation of the Present Value Factor.

Present Value Factor: the factor that discounts to present value the costs resulting to Lender from the difference in interest rates during the months remaining in the Yield Maintenance Period, using the Assumed Reinvestment Rate as the discount rate, with monthly compounding, expressed numerically as follows:

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n = the number of months remaining in Yield Maintenance Period; provided, however, if a prepayment occurs on an Installment Due Date, then the number of months remaining in the Yield Maintenance Period will be calculated beginning with the month in which such prepayment occurs and if such prepayment occurs on a Business Day other than an Installment Due Date, then the number of months remaining in the Yield Maintenance Period will be calculated beginning with the month immediately following the date of such prepayment.

ARR = Assumed Reinvestment Rate

(ii) For any prepayment made after the expiration of the Yield Maintenance Period but during the remainder of the Prepayment Premium Period, the prepayment premium will be 1.0% of the amount of principal being prepaid.

(g) Notwithstanding any other provision of this Section 10, no prepayment premium will be payable with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award under the Loan Agreement.

(h) Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the unpaid principal balance of this Note will not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments.

(i) Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth in this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that the prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions.

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11. Voluntary and Involuntary Prepayments During the Lockout Period and During the Defeasance Period (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date).

(a) This Section 11 will apply in the event this Note is assigned to a REMIC trust prior to the Cut-off Date. This Section 11 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date or if this Note is not assigned to a REMIC trust.

(b) Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment under this Note.

(c) Borrower may not voluntarily prepay any portion of the principal balance of this Note during the Lockout Period or during the Defeasance Period; provided, however, any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award under the Loan Agreement will be permitted during the Lockout Period and during the Defeasance Period. If any portion of the principal balance of this Note is prepaid during the Lockout Period or during the Defeasance Period by reason of the application by Lender of any proceeds of collateral or other security to any portion of the unpaid principal balance of this Note or following a determination that the prohibition on voluntary prepayments during the Lockout Period or during the Defeasance Period is in contravention of applicable law, then Borrower must also pay to Lender upon demand by Lender, a prepayment premium equal to 5.0% of the amount of principal being prepaid.

(d) Notwithstanding any other provision of this Section 11, no prepayment premium will be payable with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award under the Loan Agreement.

(e) After the expiration of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this Section 11 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled Installment Due Date.

(f) Notwithstanding Section 11(e) above, following the end of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of the unpaid

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principal balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 11(e) and meets the other requirements set forth in this Section 11(f). Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a Business Day other than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower will be responsible for all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment.

(g) Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all of the principal of this Note, Borrower must also pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment.

(h) Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the unpaid principal balance of this Note will not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments.

(i) Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth in Section 11(c) of this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that the lockout and prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions.

(j) If, after the expiration of the Lockout Period, Borrower defeases the Loan as described in Section 11.12 of the Loan Agreement during the Defeasance Period, Borrower will not have the right to voluntarily prepay any of the principal of this Note at any time.

12. Defeasance (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date).

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(a) This Section 12 will apply in the event this Note is assigned to a REMIC trust prior to the Cut-off Date. This Section 12 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date or if this Note is not assigned to a REMIC trust.

(b) Section 5 of this Note is amended by adding a new paragraph at the end of the Section as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, the Indebtedness will be secured by the Pledge Agreement and reference will be made to the Pledge Agreement for other rights of Lender as to collateral for the Indebtedness.

(c) Section 9 of this Note is amended by adding a new paragraph at the end thereof as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, Borrower will have no personal liability under this Note or the Pledge Agreement for the repayment of the Indebtedness or for the performance of any other obligations of Borrower under this Note or the Pledge Agreement (other than any liability under Section 6.12 or Section 10.02 of the Loan Agreement for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance Closing Date), and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and remedies with respect to the collateral held by Lender under the Pledge Agreement as security for the Indebtedness.

(d) Section 21(a) of this Note is amended by adding a new paragraph at the end of that subsection as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, all Notices, demands and other communications required or permitted to be given pursuant to this Note will be given in accordance with the Pledge Agreement.

13. Costs and Expenses. To the fullest extent allowed by applicable law, Borrower must pay all expenses and costs, including Attorneys’ Fees and Costs incurred by Lender as a result of any default under this Note or in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure proceeding. Borrower acknowledges and agrees that, in connection with each request by Borrower under this Note or any Loan Document, Borrower must pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees charged by the Rating Agencies, regardless of whether the matter is approved, denied or withdrawn.

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14. Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note, the Loan Agreement, or any other Loan Document or otherwise afforded by applicable law, will not be a waiver of or preclude the exercise of that or any other right or remedy. The acceptance by Lender of any payment after the due date of such payment, or in an amount which is less than the required payment, will not be a waiver of Lender’s right to require prompt payment when due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment. Enforcement by Lender of any security for Borrower’s obligations under this Note will not constitute an election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender.

15. Waivers. Borrower and all endorsers and Guarantors of this Note and all other third party obligors waive presentment, demand, notice of dishonor, protest, notice of acceleration, notice of intent to demand or accelerate payment or maturity, presentment for payment, notice of nonpayment, grace, and diligence in collecting the Indebtedness.

16. Loan Charges. Neither this Note nor any of the other Loan Documents will be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate greater than the Maximum Interest Rate. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower in connection with the Loan is interpreted so that any interest or other charge provided for in any Loan Document, whether considered separately or together with other charges provided for in any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate that violation. The amounts, if any, previously paid to Lender in excess of the permitted amounts will be applied by Lender to reduce the unpaid principal balance of this Note. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, will be deemed to be allocated and spread ratably over the stated term of this Note. Unless otherwise required by applicable law, such allocation and spreading will be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of this Note.

17. Commercial Purpose. Borrower represents that Borrower is incurring the Indebtedness solely for the purpose of carrying on a business or commercial enterprise, and not for personal, family, household, or agricultural purposes.

18. Counting of Days. Any reference in this Note to a period of “days” means calendar days, not Business Days except where otherwise specifically provided.

19. Governing Law. This Note will be governed by the law of the Property Jurisdiction.

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20. Captions. The captions of the Sections of this Note are for convenience only and will be disregarded in construing this Note.

21. Notices; Written Modifications.

(a) All Notices, demands and other communications required or permitted to be given pursuant to this Note will be given in accordance with Section 11.03 of the Loan Agreement.

(b) Any modification or amendment to this Note will be ineffective unless in writing and signed by the party sought to be charged with such modification or amendment; provided, however, in the event of a Transfer under the terms of the Loan Agreement that requires Lender’s consent, any or some or all of the Modifications to Multifamily Note set forth in Exhibit A to this Note may be modified or rendered void by Lender at Lender’s option, by Notice to Borrower and the transferee, as a condition of Lender’s consent.

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

23. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (a) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (b) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

24. State-Specific Provisions. N/A

25. Attached Riders. The following Riders are attached to this Note:

Seniors Housing

Recycled Borrower and/or Recycled SPE Equity Owner

26. Attached Exhibit. The following Exhibit, if marked with an “X” in the space provided, is attached to this Note:

x Exhibit A         Modifications to Multifamily Note

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IN WITNESS WHEREOF, and in consideration of the Lender’s agreement to lend Borrower the principal amount set forth above, Borrower has signed and delivered this Note under seal or has caused this Note to be signed and delivered under seal by its duly authorized representative. Borrower intends that this Note will be deemed to be signed and delivered as a sealed instrument.

CARE GSL STAFFORD LLC,
a Delaware limited liability company
By:	/s/ Salvatore (Torey) V. Riso, Jr.
Name: Salvatore (Torey) V. Riso, Jr.
Title: President and Chief Executive Officer

45-3274337

Borrower’s Employer ID Number

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PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE CORPORATION WITHOUT RECOURSE.

KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation
By:	/s/ Crystal L. Williams
Name: Crystal L. Williams
Title: Vice President
Date: April 24, 2012

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RIDER TO MULTIFAMILY NOTE

(CME AND PORTFOLIO)

SENIORS HOUSING

(Revised 3-20-2012)

The following changes are made to the Note which precedes this Rider:

A. The following new subsections are added to Section 9(c):

(viii) Borrower fails to cause the renewal, continuation, extension or maintenance of all Licenses required to legally operate the Mortgaged Property as a seniors housing Facility.

(ix) Borrower fails upon an Event of Default to cooperate, or Borrower otherwise intentionally interferes with, hinders or delays Lender (or its nominee or designee), in connection with the timely and orderly transfer of any and all Licenses.

B. In Sections 11(j), 12(b), 12(c) and 12(d), all references to “Section 11.12” are modified to refer to “Section 12.12”.

Multifamily Multistate Fixed Rate Note (CME)

Defeasance

RIDER TO MULTIFAMILY NOTE

(CME)

RECYCLED BORROWER AND/OR RECYCLED SPE EQUITY OWNER

(Revised 9-1-2011)

The following changes are made to the Note which precedes this Rider:

A. The following is added as a new subsection to Section 9(c):

(x) Any of the Underwriting Representations set forth in Section 5.40(a) of the Loan Agreement or any of the Separateness Representations set forth in Section 5.40(b) of the Loan Agreement are false or misleading in any material respect.

Rider to Multifamily Note (CME)

Recycled Borrower and/or Recycled SPE Equity Owner

EXHIBIT A

MODIFICATIONS TO MULTIFAMILY NOTE

The following modifications are made to the text of the Note that precedes this Exhibit.

1. The word “Multifamily” is deleted and the phrase “Seniors Housing” is inserted in the first line of the definition of the Loan Agreement in Section 1 of the Note.

2. Section 9(c)(i) is deleted and the following is inserted in lieu thereof:

“(i) Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender is entitled under Section 3 of the Security Instrument and the amount of all security deposits collected by Borrower from tenants then in residence and not applied pursuant to the terms of the tenant’s lease. However, Borrower will not be personally liable for any failure described in this Section 9(c)(i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.”

3. Section 9(c) of the Note is modified by adding the following new subsection:

“(xi) the avoidance, in whole or in part, of the transfer creating the lien of the Security Instrument, or a court order providing an alternative remedy to that avoidance, because of the occurrence on or before the date that the Security Instrument was recorded of a fraudulent transfer or a preference under federal bankruptcy, state insolvency, or similar creditors’ rights laws.”

4. The following is added as Section 9(d)(iv):

“(iv) Borrower will be personally liable for the amount of, and any loss or damage suffered by Lender by reason of any failure to fully and timely pay, all recordation, transfer, or similar taxes, if any, imposed in connection with the Loan or any advances thereof, any indebtedness or obligation refinanced in whole or in part by the Loan, any mortgage or deed of trust that secured any such indebtedness or obligation, this Note, the Security Instrument, any default under any Loan Document, or any other transaction relating to or arising out of the Loan, plus all interest, penalties and fines that may be or may become due.”

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EX-10.3

Exhibit 10.3

Freddie Mac Loan Number: 504183354

Property Name: Greenfield Assisted Living of Stafford

GUARANTY

(CME AND PORTFOLIO)

MULTISTATE

(Revised 10-18-2011)

THIS GUARANTY (“Guaranty”) is entered into to be effective as of April 24, 2012, by CARE INVESTMENT TRUST INC., a Maryland corporation, (“Guarantor”, collectively if more than one), for the benefit of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation (“Lender”).

RECITALS

A. Pursuant to the terms of a Multifamily Loan and Security Agreement dated the same date as this Guaranty (as amended, modified or supplemented from time to time, the “Loan Agreement”), CARE GSL STAFFORD LLC, a Delaware limited liability company (“Borrower”) has requested that Lender make a loan to Borrower in the amount of Six Million Four Hundred Twenty-Four Thousand and No/100 Dollars ($6,424,000.00) (“Loan”). The Loan will be evidenced by a Multifamily Note from Borrower to Lender dated effective as of the effective date of this Guaranty (as amended, modified or supplemented from time to time, the “Note”). The Note will be secured by a Multifamily Mortgage, Deed of Trust, or Deed to Secure Debt dated effective as of the effective date of the Note (as amended, modified or supplemented from time to time, the “Security Instrument”), encumbering the Mortgaged Property described in the Loan Agreement.

B. As a condition to making the Loan to Borrower, Lender requires that Guarantor execute this Guaranty.

C. Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material benefit from the making of the Loan.

AGREEMENT

NOW, THEREFORE, in order to induce Lender to make the Loan to Borrower, and in consideration thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

Guaranty - Multistate (CME and Portfolio)

1. Defined Terms. The terms “Indebtedness”, “Loan Documents”, and “Property Jurisdiction”, and other capitalized terms used but not defined in this Guaranty, will have the meanings assigned to them in the Loan Agreement.

2. Scope of Guaranty.

(a) Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender each of the following:

(i) Guarantor guarantees the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, of each of the following:

(A) Guarantor guarantees a portion of the Indebtedness equal to 0% of the original principal balance of the Note (“Base Guaranty”).

(B) In addition to the Base Guaranty, Guarantor guarantees all other amounts for which Borrower is personally liable under Sections 9(c), 9(d) and 9(f) of the Note (provided, however, that Guarantor will have no liability for failure of Borrower or SPE Equity Owner to comply with (I) Section 6.13(a)(xviii) of the Loan Agreement, and (II) the requirement in Section 6.13(a)(x)(B) of the Loan Agreement as to payment of trade payables within 60 days of the date incurred). (CME loans only)

(C) Guarantor guarantees all costs and expenses, including reasonable Attorneys’ Fees and Costs incurred by Lender in enforcing its rights under this Guaranty.

(ii) Guarantor guarantees the full and prompt payment and performance of and/or compliance with all of Borrower’s obligations relating to environmental matters under Sections 6.12 and 10.02 of the Loan Agreement when due and the accuracy of Borrower’s representations and warranties under Section 5.05 of the Loan Agreement.

(b) If the Base Guaranty stated in Section 2(a)(i)(A) is 100% of the original principal balance of the Note, then the following will be applicable:

(i) The Base Guaranty will mean and include, and Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender, the full and complete prompt payment of the entire Indebtedness, the performance of and/or compliance with all of Borrower’s obligations under the Loan Documents when due, and the accuracy of Borrower’s representations and warranties contained in the Loan Documents.

Guaranty - Multistate (CME and Portfolio) Page 2

(ii) For so long as the Base Guaranty remains in effect (there being no limit to the duration of the Base Guaranty unless otherwise expressly provided in this Guaranty), the obligations guaranteed pursuant to Sections 2(a)(i)(B) and 2(a)(i)(C) will be part of, and not in addition to or in limitation of, the Base Guaranty.

(c) If the Base Guaranty stated in Section 2(a)(i)(A) is less than 100% of the original principal balance of the Note, then Section 2(b) will be completely inapplicable.

(d) If Guarantor is not liable for the entire Indebtedness, then all payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Loan Agreement and the other Loan Documents (except this Guaranty) will be applied first to the portion of the Indebtedness for which neither Borrower nor Guarantor has personal liability.

3. Guarantor’s Obligations Survive Foreclosure. The obligations of Guarantor under this Guaranty will survive any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Security Instrument, and, in addition, the obligations of Guarantor relating to Borrower’s representations and warranties under Section 5.05 of the Loan Agreement and Borrower’s obligations relating to environmental matters under Sections 6.12 and 10.02 of the Loan Agreement will survive any repayment or discharge of the Indebtedness. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of or held title to the Mortgaged Property, Guarantor will have no obligation under this Guaranty relating to Borrower’s representations and warranties under Section 5.05 of the Loan Agreement or Borrower’s obligations relating to environmental matters under Sections 6.12 and 10.02 of the Loan Agreement after the date of the release of record of the lien of the Security Instrument as a result of the payment in full of the Indebtedness on the Maturity Date or by voluntary prepayment in full.

4. Guaranty of Payment and Performance. Guarantor’s obligations under this Guaranty constitute an unconditional guaranty of payment and performance and not merely a guaranty of collection.

5. No Demand by Lender Necessary; Waivers by Guarantor – All States Except California. The obligations of Guarantor under this Guaranty must be performed without demand by Lender and will be unconditional regardless of the genuineness, validity, regularity or enforceability of the Note, the Loan Agreement, or any other Loan Document, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor. Guarantor hereby waives, to the fullest extent permitted by applicable law, all of the following:

(a) The benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty and agrees that Guarantor’s obligations will not be affected by any circumstances, whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor.

Guaranty - Multistate (CME and Portfolio) Page 3

(b) The benefits of any right of discharge under any and all statutes or other laws relating to a guarantor, a surety, a borrower or a mortgagor, and any other rights of a surety, a guarantor, a borrower or a mortgagor under such statutes or laws.

(c) Diligence in collecting the Indebtedness, presentment, demand for payment, protest, all notices with respect to the Note and this Guaranty which may be required by statute, rule of law or otherwise to preserve Lender’s rights against Guarantor under this Guaranty, including notice of acceptance, notice of any amendment of the Loan Documents, notice of the occurrence of any default or Event of Default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by Borrower of any obligation or indebtedness.

(d) All rights to cause a marshalling of the Borrower’s assets or to require Lender to do any of the following:

(i) Proceed against Borrower or any other guarantor of Borrower’s payment or performance under the Loan Documents (an “Other Guarantor”).

(ii) Proceed against any general partner of Borrower or any Other Guarantor if Borrower or any Other Guarantor is a partnership.

(iii) Proceed against or exhaust any collateral held by Lender to secure the repayment of the Indebtedness.

(iv) Pursue any other remedy it may now or hereafter have against Borrower, or, if Borrower is a partnership, any general partner of Borrower.

(e) Any right to object to the timing, manner or conduct of Lender’s enforcement of its rights under any of the Loan Documents.

(f) Any right to revoke this Guaranty as to any future advances by Lender under the terms of the Loan Agreement to protect Lender’s interest in the Mortgaged Property.

6. Modification of Loan Documents. At any time or from time to time and any number of times, without notice to Guarantor and without affecting the liability of Guarantor, all of the following will apply:

(a) Lender may extend the time for payment of the principal of or interest on the Indebtedness or renew the Indebtedness in whole or in part.

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(b) Lender may extend the time for Borrower’s performance of or compliance with any covenant or agreement contained in the Note, the Loan Agreement or any other Loan Document, whether presently existing or in this Guaranty after entered into, or waive such performance or compliance.

(c) Lender may accelerate the Maturity Date of the Indebtedness as provided in the Note, the Loan Agreement, or any other Loan Document.

(d) Lender and Borrower may modify or amend the Note, the Loan Agreement, or any other Loan Document in any respect, including an increase in the principal amount.

(e) Lender may modify, exchange, surrender or otherwise deal with any security for the Indebtedness or accept additional security that is pledged or mortgaged for the Indebtedness.

7. Joint and Several Liability. The obligations of Guarantor (and each party named as a Guarantor in this Guaranty) and any Other Guarantor will be joint and several. Lender, in its sole and absolute discretion, may take any of the following actions:

(a) Lender may bring suit against Guarantor, or any one or more of the parties named as a Guarantor in this Guaranty, and any Other Guarantor, jointly and severally, or against any one or more of them.

(b) Lender may compromise or settle with Guarantor, any one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, for such consideration as Lender may deem proper.

(c) Lender may release one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, from liability.

(d) Lender may otherwise deal with Guarantor and any Other Guarantor, or any one or more of them, in any manner.

No action of Lender described in this Section 7 will affect or impair the rights of Lender to collect from any one or more of the parties named as a Guarantor under this Guaranty any amount guaranteed by Guarantor under this Guaranty.

8. Subordination of Borrower’s Indebtedness to Guarantor. Any indebtedness of Borrower held by Guarantor now or in the future is and will be subordinated to the Indebtedness and Guarantor will collect, enforce and receive any such indebtedness of Borrower as trustee for Lender, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.

9. Waiver of Subrogation. Guarantor will have no right of, and hereby waives any claim for, subrogation or reimbursement against Borrower or any general partner of Borrower

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by reason of any payment by Guarantor under this Guaranty, whether such right or claim arises at law or in equity or under any contract or statute, until the Indebtedness has been paid in full and there has expired the maximum possible period thereafter during which any payment made by Borrower to Lender with respect to the Indebtedness could be deemed a preference under the United States Bankruptcy Code.

10. Preference. If any payment by Borrower is held to constitute a preference under any applicable bankruptcy, insolvency, or similar laws, or if for any other reason Lender is required to refund any sums to Borrower, such refund will not constitute a release of any liability of Guarantor under this Guaranty. It is the intention of Lender and Guarantor that Guarantor’s obligations under this Guaranty will not be discharged except by Guarantor’s performance of such obligations and then only to the extent of such performance.

11. Financial Information. Guarantor, from time to time upon written request by Lender, will deliver to Lender such financial statements as Lender may reasonably require. If an Event of Default has occurred and is continuing, Guarantor will deliver to Lender upon written request copies of its state and federal tax returns.

12. Assignment. Lender may assign its rights under this Guaranty in whole or in part and upon any such assignment, all the terms and provisions of this Guaranty will inure to the benefit of such assignee to the extent so assigned. The terms used to designate any of the parties in this Guaranty will be deemed to include the heirs, legal representatives, successors and assigns of such parties, and the term “Lender” will also include any lawful owner, holder or pledgee of the Note.

13. Complete and Final Agreement. This Guaranty and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements. There are no unwritten oral agreements between the parties. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this Guaranty and the other Loan Documents. Guarantor acknowledges that Guarantor has received a copy of the Note and all other Loan Documents. Neither this Guaranty nor any of its provisions may be waived, modified, amended, discharged, or terminated except by a writing signed by the party against which the enforcement of the waiver, modification, amendment, discharge, or termination is sought, and then only to the extent set forth in that writing.

14. Governing Law. This Guaranty will be governed by and enforced in accordance with the laws of the Property Jurisdiction, without giving effect to the choice of law principles of the Property Jurisdiction that would require the application of the laws of a jurisdiction other than the Property Jurisdiction.

15. Jurisdiction; Venue. Guarantor agrees that any controversy arising under or in relation to this Guaranty may be litigated in the Property Jurisdiction, and that the state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies which will arise under or in relation to this Guaranty. Guarantor irrevocably consents to service, jurisdiction and venue of such courts for any

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such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Guaranty is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters arising under this Guaranty against Guarantor or any of Guarantor’s assets in any court of any other jurisdiction.

16. Guarantor’s Interest in Borrower. Guarantor represents to Lender that Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material financial benefit from the making of the Loan.

17. State-Specific Provisions.

Guarantor waives the benefit of the provisions of Sections 49-25 and 49-26 of the Code of Virginia (1950), as amended.

18. Community Property Provision.

Not applicable.

19. WAIVER OF TRIAL BY JURY.

(a) GUARANTOR AND LENDER EACH COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY.

(b) GUARANTOR AND LENDER EACH WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

20. Attached Riders. The following Riders, if marked with an “X” in the space provided, are attached to this Guaranty:

¨ None

¨  Material Adverse Change Rider

x  Minimum Net Worth/Liquidity Requirements Rider

¨  Other             

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21. Attached Exhibit. The following Exhibit, if marked with an “X” in the space provided, is attached to this Guaranty:

x Exhibit A         Modifications to Guaranty

(Remainder of page intentionally left blank; signature pages follow.)

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IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal or has caused this Guaranty to be signed and delivered under seal by its duly authorized representative. Guarantor intends that this Guaranty will be deemed to be signed and delivered as a sealed instrument.

CARE INVESTMENT TRUST INC., a Maryland corporation
By:	/s/ Salvatore (Torey) V. Riso, Jr.
Name: Salvatore (Torey) V. Riso, Jr.
Title: President and Chief Executive Officer

STATE OF New York

COUNTY OF New York

The foregoing instrument was acknowledged before me this 13^th day of April, 2012 by Salvatore (Torey) V. Riso, Jr., President and Chief Executive Officer of CARE INVESTMENT TRUST INC., a Maryland corporation, on behalf of the corporation.

/s/ Danielle M. DePalma

Notary Public

Printed Name: Danielle M. DePalma

My Commission Expires:

January 10, 2015

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(a) Name and Address of Guarantor

Name:	Care Investment Trust Inc.
Address:	780 Third Avenue, 21st Floor New York, New York 10017
Attention:	Counsel/Greenfield – Freddie Mac

(b) Guarantor represents and warrants that Guarantor is:

¨ single

¨ married

x an entity

(c) Guarantor represents and warrants that Guarantor’s state of residence is N/A.

GUARANTOR CARE INVESTMENT TRUST INC., a Maryland corporation
By:	/s/ Salvatore (Torey) V. Riso, Jr.
Name: Salvatore (Torey) V. Riso, Jr.
Title: President and Chief Executive Officer

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RIDER TO GUARANTY

(CME AND PORTFOLIO)

MINIMUM NET WORTH/LIQUIDITY

(Revised 9-1-2011)

The following changes are made to the Guaranty which precedes this Rider:

A. The following is added as a new Section:

22. Minimum Net Worth/Liquidity Requirements.

(a) Guarantor must maintain a minimum net worth of $5,000,000.00 with liquid assets of at least $642,400.00 (collectively, “Minimum Net Worth Requirement”).

(b) In addition to the financial information that Guarantor is required to provide pursuant to Section 11 of this Guaranty, annually within 120 days after the end of each fiscal year of Guarantor, Guarantor must provide Lender with a written certification (“Guarantor Certification”) of the net worth and liquid assets of Guarantor, as of the end of such fiscal year derived in accordance with customarily acceptable accounting practices. The Guarantor must certify the Guarantor Certification under penalty of perjury as true and complete. So long as no Event of Default has occurred and is continuing, and so long as Guarantor is publically traded on a nationally recognized stock exchange and so long as such filings are certified by Guarantor to Lender to be true, correct and complete, the filings required to be made by the applicable statutes and regulations will fulfill the requirements of this sub-section.

(c) Within 30 days of receipt of Notice from Lender that Guarantor has failed to maintain the Minimum Net Worth Requirement, Guarantor must either:

(i) cause one or more natural persons or entities who individually or collectively, as applicable, meet the Minimum Net Worth Requirement and is/are acceptable to Lender, in its sole discretion, to execute and deliver to Lender a guaranty in the same form as this Guaranty, without any cost or expense to Lender; or

(ii) deliver to Lender a letter of credit or other collateral acceptable to Lender in its discretion meeting the following conditions, as applicable:

(A) If Guarantor supplies a letter of credit, the letter of credit must be in the form found on Freddie Mac’s website at: http://www.freddiemac.com/multifamily/cme_documents.html

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The letter of credit must name Lender as the sole beneficiary, have an initial term of not less than 12 months and be issued by a bank acceptable to Lender in its sole discretion.

(B) The letter of credit or other collateral must be in an amount equal to the greatest of:

(X) the positive difference, if any, obtained by subtracting the net worth identified in the Guarantor Certification from the minimum net worth required under the Minimum Net Worth Requirement,

(Y) the positive difference, if any, obtained by subtracting the liquid assets identified in the Guarantor Certification from the minimum liquid assets required under the Minimum Net Worth Requirement, and

(Z) $100,000.

(C) If Guarantor supplies cash, the cash deposited with Lender shall be credited to Guarantor’s net worth and liquid assets in determining compliance with the Minimum Net Worth Requirement subsequent to such delivery for the purpose of determining whether or not additional collateral will be required, but not for the purposes of determining whether or not the collateral will be released.

(d) Provided no Event of Default then exists, Guarantor will be entitled to request at any time after ninety (90) days after the Letter of Credit or other collateral, as applicable, is delivered to Lender, but in no event more often than once every three (3) months, a return of the unused portion, if any, of the letter of credit or other collateral in the event it delivers to Lender evidence in form and substance satisfactory to Lender, including a Guarantor Certification prepared as of the date of such delivery, that Guarantor has satisfied the Minimum Net Worth Requirement. Provided no Event of Default then exists, Lender will, within a reasonable period of time following Guarantor’s request, return the unused portion, if any, of the letter of credit or other collateral.

(e) Guarantor conveys, pledges, transfers and grants to Lender a security interest pursuant to the Uniform Commercial Code of the Property Jurisdiction or any other applicable law in and to the Letter of Credit and/or any other collateral, including cash, delivered to Lender in accordance with this Section, as the same may increase or decrease from time to time, to secure the Indebtedness and/or Guarantor’s obligations pursuant to the terms of this Guaranty and the other Loan Documents.

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EXHIBIT A

MODIFICATIONS TO GUARANTY

The following modifications are made to the text of the Guaranty that precedes this Exhibit.

1. The word “Multifamily” is deleted and the phrase “Seniors Housing” is inserted in lieu thereof in the first line of Recital A.

2. Section 11 is deleted and the following is inserted in lieu thereof:

“Financial Information. Guarantor, from time to time upon written request by Lender, will deliver to Lender such financial statements as Lender may reasonably require. If an Event of Default has occurred and is continuing, Guarantor will deliver to Lender upon written request copies of its state and federal tax returns. So long as no Event of Default has occurred and is continuing, and so long as Guarantor is publically traded on a nationally recognized stock exchange, and so long as such filings are certified by Guarantor to Lender to be true, correct and complete, the filings required to be made by the applicable statutes and regulations will fulfill the requirements of this Section.”

3. A new Section 22 is added, reading as follows:

“22. The obligations of Guarantor shall not be impaired or in any way limited by (i) any action taken by Lender to enforce its rights under or realize upon collateral for any of the “Related Loans” as defined in the Cross-Collateralization Agreement and Amendment to Security Instrument dated the same date as this Guaranty between Lender and Borrower (the “Cross-Collateralization Agreement”), (ii) the fact that Lender may be seeking to realize upon some but not all of the collateral for the “Loans” as defined in the Cross-Collateralization Agreement, or (iii) the exercise or not, concurrently, consecutively or otherwise, of any of the rights or remedies available to Lender under the Cross-Collateralization Agreement or applicable law.”

4. The Rider to Guaranty, Minimum Net Worth/Liquidity is modified as shown by the blacklined changes on said Rider attached hereto.

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EX-10.4

Exhibit 10.4

Freddie Mac Loan Number: 504183362

Property Name: Greenfield Assisted Living of Fredericksburg

SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME)

(Revised 9-1-2011)

Borrower:	CARE GSL FREDERICKSBURG LLC, a Delaware limited liability company
Lender:	KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation
Date:	April 24, 2012

Reserve Fund Information

(See Article IV)

Imposition Reserves	Deferred Insurance	Collect Taxes	Deferred water/sewer
(fill in “Collect” or “Deferred”as appropriate for each item)	N/A Ground Rents	Deferred assessments/other charges

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

Replacement Reserve	x    Yes	If Yes:	x    Funded	¨    Deferred
	¨    No
Rental Achievement Reserve	¨    Yes	If Yes:	¨    Cash	¨    Letter of Credit
	x    No

External Rate Cap Reserve	¨	Yes	x	No
Other Reserve(s)	¨	Yes	x	No

If Yes, specify:                                                                                                                          

TABLE OF CONTENTS

		Page
ARTICLE I DEFINED TERMS; CONSTRUCTION			1
1.01	Defined Terms		1
1.02	Construction		1
ARTICLE II LOAN			2
2.01	Loan Terms		2
2.02	Prepayment Premium		2
2.03	Exculpation		2
2.04	Application of Payments		2
2.05	Usury Savings		2
2.06	Adjustable Rate Mortgage – Third Party Cap Agreement		2
ARTICLE III LOAN SECURITY AND GUARANTY			3
3.01	Security Instrument		3
3.02	Reserve Funds		3
3.03	Uniform Commercial Code Security Agreement		4
3.04	Cap Collateral		4
3.05	Guaranty		4
3.06	Collateral Assignment of Licenses, Certificates and Permits		4
ARTICLE IV RESERVE FUNDS AND REQUIREMENTS			4
4.01	Reserves Generally		4
4.02	Reserves for Taxes, Insurance and Other Charges		5
4.03	Repairs; Repair Reserve Fund		6
4.04	Replacement Reserve Fund		7
4.05	Rental Achievement Provisions		7
4.06	Reserved		7
4.07	External Cap Agreement Reserve Fund		7
ARTICLE V REPRESENTATIONS AND WARRANTIES			7
5.01	Review of Documents		7
5.02	Condition of Mortgaged Property		7
5.03	No Condemnation		7
5.04	Actions; Suits; Proceedings		7
5.05	Environmental		8
5.06	Commencement of Work; No Labor or Materialmen’s Claims		9
5.07	Compliance with Applicable Laws and Regulations		9
5.08	Access; Utilities; Tax Parcels		10
5.09	Licenses and Permits		10
5.10	No Other Interests		11
5.11	Term of Leases		11
5.12	No Prior Assignment; Prepayment of Rents		11

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5.13	Illegal Activity	12
5.14	Taxes Paid	12
5.15	Title Exceptions	12
5.16	No Change in Facts or Circumstances	13
5.17	Financial Statements	13
5.18	ERISA – Borrower Status	13
5.19	No Fraudulent Transfer or Preference	13
5.20	No Insolvency or Judgment	14
5.21	Working Capital	14
5.22	Cap Collateral	14
5.23	Ground Lease	14
5.24	Purpose of Loan	15
5.25	Intended Use	15
5.26	Furniture, Fixtures, Equipment and Motor Vehicles	15
5.27	Participant in Federal Programs	16
5.28	Certificate of Need	16
5.29	Contracts	17
5.30	Material Contracts	17
5.31	No Financing Statements	17
5.32	Compliance with Medicare and Medicaid Requirements	17
5.33	Third-Party Payer Programs and Private Commercial Insurance Managed Care and Employee Assistance Programs	17
5.34	No Transfer or Pledge of Licenses	17
5.35	No Pledge of Receivables	17
5.36	Patient and Resident Care Agreements	18
5.37	Patient and Resident Records	18
5.38	No Facility Deficiencies, Enforcement Actions or Violations	18
5.39	Survival	18
ARTICLE VI BORROWER COVENANTS		18
6.01	Compliance with Laws	18
6.02	Compliance with Organizational Documents	18
6.03	Use of Mortgaged Property	19
6.04	Non-Residential Leases	20
6.05	Prepayment of Rents	21
6.06	Inspection	21
6.07	Books and Records; Financial Reporting	22
6.08	Taxes; Operating Expenses; Ground Rents	25
6.09	Preservation, Management and Maintenance of Mortgaged Property	26
6.10	Property and Liability Insurance	28
6.11	Condemnation	36
6.12	Environmental Hazards	38
6.13	Single Purpose Entity Requirements	41
6.14	Repairs and Capital Replacements	46
6.15	Residential Leases Affecting the Mortgaged Property	47
6.16	Litigation; Government Proceedings	47

Seniors Housing Loan and Security Agreement (CME) Page ii

6.17	Further Assurances and Estoppel Certificates; Lender’s Expenses	47
6.18	Cap Collateral	48
6.19	Ground Lease	48
6.20	ERISA Requirements	48
6.21	Operation of the Facility	49
6.22	Facility Reporting	50
6.23	Covenants Regarding Material Contracts	51
6.24	Pledge of Receivables	51
6.25	Property Manager and Operator of the Facility	51
6.26	Residential Leases and Agreements	52
6.27	Performance Under Leases	52
6.28	Governmental Payer Programs	52
ARTICLE VII TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER		53
7.01	Permitted Transfers	53
7.02	Prohibited Transfers	54
7.03	Conditionally Permitted Transfers	55
7.04	Preapproved Intrafamily Transfers	57
7.05	Lender’s Consent to Prohibited Transfers	57
ARTICLE VIII SUBROGATION		57
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES		58
9.01	Events of Default	58
9.02	Protection of Lender’s Security; Security Instrument Secures Future Advances	62
9.03	Remedies	62
9.04	Forbearance	63
9.05	Waiver of Marshalling	64
ARTICLE X RELEASE; INDEMNITY		64
10.01	Release	64
10.02	Indemnity	64
ARTICLE XI SENIORS HOUSING OPERATOR		70
ARTICLE XII MISCELLANEOUS PROVISIONS		70
12.01	Waiver of Statute of Limitations, Offsets and Counterclaims	70
12.02	Governing Law; Consent to Jurisdiction and Venue	70
12.03	Notice	70
12.04	Successors and Assigns Bound	71
12.05	Joint and Several Liability	71
12.06	Relationship of Parties; No Third Party Beneficiary	71
12.07	Severability; Amendments	72
12.08	Disclosure of Information	72
12.09	Determinations by Lender	72

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12.10	Sale of Note; Change in Servicer; Loan Servicing	73
12.11	Supplemental Financing	73
12.12	Defeasance	77
12.13	Lender’s Rights to Sell or Securitize	81
12.14	Cooperation with Rating Agencies and Investors	81
12.15	Time is of the Essence	82
ARTICLE XIII DEFINITIONS		82
ARTICLE XIV INCORPORATION OF ATTACHED RIDERS		100
ARTICLE XV INCORPORATION OF ATTACHED EXHIBITS		100

Seniors Housing Loan and Security Agreement (CME) Page iv

SENIORS HOUSING LOAN AND SECURITY AGREEMENT

THIS SENIORS HOUSING LOAN AND SECURITY AGREEMENT (“Loan Agreement”) is dated as of the 24^th day of April, 2012 and is made by and between CARE GSL FREDERICKSBURG LLC, a Delaware limited liability company (“Borrower”), and KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation (together with its successors and assigns, “Lender”).

RECITAL

Lender has agreed to make and Borrower has agreed to accept a loan in the original principal amount of Three Million Five Hundred Ninety-One Thousand and No/100 Dollars ($3,591,000.00) (“Loan”). Lender is willing to make the Loan to Borrower upon the terms and subject to the conditions set forth in this Loan Agreement.

AGREEMENT

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

ARTICLE I        DEFINITIONS; CONSTRUCTION.

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

1.02 Construction. The captions and headings of the Articles and Sections of this Loan Agreement are for convenience only and will be disregarded in construing this Loan Agreement. Any reference in this Loan Agreement to an “Exhibit,” an “Article” or a “Section” will, unless otherwise explicitly provided, be construed as referring, respectively, to an Exhibit attached to this Loan Agreement or to an Article or Section of this Loan Agreement. All Exhibits and Riders attached to or referred to in this Loan Agreement are incorporated by reference in this Loan Agreement. Any reference in this Loan Agreement to a statute or regulation will be construed as referring to that statute or regulation as amended from time to time. Use of the singular in this Loan Agreement includes the plural and use of the plural includes the singular. As used in this Loan Agreement, the term “including” means “including, but not limited to” and the term “includes” means “includes without limitation.” The use of one gender includes the other gender, as the context may require. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document in this Loan Agreement will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth in this Loan Agreement), and (b) any reference in this Loan Agreement to any Person will be construed to include such Person’s successors and assigns.

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ARTICLE II        LOAN.

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

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

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

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

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

2.06 Adjustable Rate Mortgage – Third Party Cap Agreement. If (a) the Note does not provide for interest to accrue at an adjustable or variable interest rate, and (b) a third party Cap Agreement is not required, then this Section 2.06 and Section 3.04 will be of no force or effect.

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

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

ARTICLE III        LOAN SECURITY AND GUARANTY.

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

3.02 Reserve Funds.

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

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

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

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

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

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

3.04 Cap Collateral. Reserved.

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

3.06 Collateral Assignment of Licenses, Certificates and Permits. Reserved.

ARTICLE IV        RESERVE FUNDS AND REQUIREMENTS.

4.01 Reserves Generally.

(a) Establishment of Reserve Funds; Investment of Deposits. Unless otherwise provided in Section 4.04, each Reserve Fund will be established on the date of this Loan Agreement and all Reserve Funds will be deposited in an Eligible Account at an Eligible Institution or invested in “permitted investments” as then defined and required by the Rating Agencies. Lender will not be obligated to open additional accounts or deposit Reserve Funds in additional institutions when the amount of any Reserve Fund exceeds the maximum amount of the federal deposit insurance or guaranty. Borrower acknowledges and agrees that it will not have the right to direct Lender as to any specific investment of monies in any Reserve Fund. Lender will not be responsible for any losses resulting from investment of monies in any Reserve Fund or for obtaining any specific level or percentage of earnings on such investment.

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

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

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

4.02 Reserves for Taxes, Insurance and Other Charges.

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

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

[Collect] Taxes and payments in lieu of taxes

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

[N/A] Ground Rents

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

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

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(b) Disbursement of Imposition Reserve Deposits. Lender will apply the Imposition Reserve Deposits to pay Impositions so long as no Event of Default has occurred and is continuing. Lender will pay all Impositions from the Imposition Reserve Deposits held by Lender upon Lender’s receipt of a bill or invoice for an Imposition. If Borrower holds a ground lessee interest in the Mortgaged Property and Imposition Reserve Deposits are collected for Ground Rent, then Lender will pay the monthly or other periodic installments of Ground Rent from the Imposition Reserve Deposits, whether or not Lender receives a bill or invoice for such installments. Lender will have no obligation to pay any Imposition to the extent it exceeds the amount of the Imposition Reserve Deposits then held by Lender. Lender may pay an Imposition according to any bill, statement or estimate from the appropriate public office, Ground Lessor (if applicable) or insurance company without inquiring into the accuracy of the bill, statement or estimate or into the validity of the Imposition.

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

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

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

4.03 Repairs; Repair Reserve Fund. Reserved.

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4.04 Replacement Reserve Fund. See Rider.

4.05 Rental Achievement Provisions. Reserved.

4.06 Reserved.

4.07 External Cap Agreement Reserve Fund. Reserved.

ARTICLE V        REPRESENTATIONS AND WARRANTIES.

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

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

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

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

5.04 Actions; Suits; Proceedings.

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

(b) Without limiting the generality of subsection (a) above, neither Borrower, any operator of the Facility, nor the Facility are subject to any proceeding, suit or investigation by any Governmental Authority and neither Borrower nor any operator of the Facility has received any notice from any Governmental Authority which may, directly or indirectly, or with the passage of time, result in the imposition of a fine, or interim or final sanction, or would (i) have a Material

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Adverse Effect, (ii) result in the appointment of a receiver or trustee, (iii) affect Borrower’s or any operator of the Facility’s ability to accept and retain residents, (iv) result in the Downgrade, revocation, transfer, surrender or suspension, or non-renewal or reissuance or other impairment of any License, or (v) affect Borrower’s or operator’s continued participation in Medicare, Medicaid, TRICARE, or any similar governmental payor program, as applicable, or any successor programs thereto, at current rate certifications.

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

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

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

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

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

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

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

(g) Borrower has received no actual or constructive notice of any written complaint, order, notice of violation or other communication from any Governmental

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Authority with regard to air emissions, water discharges, noise emissions or Hazardous Materials, or any other environmental, health or safety matters affecting the Mortgaged Property or any property that is adjacent to the Mortgaged Property.

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

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

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

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

5.07 Compliance with Applicable Laws and Regulations.

(a) To the best of Borrower’s knowledge after due inquiry and investigation, (i) all Improvements and the use of the Mortgaged Property comply with all applicable statutes, rules and regulations, including all applicable statutes, rules and regulations pertaining to requirements for equal opportunity, anti-discrimination, fair housing, environmental protection, zoning and land use (“legal, non-conforming” status with respect to uses or structures will be considered to comply with zoning and land use requirements for the purposes of this representation), (ii) the Improvements comply with applicable health, fire, and building codes, and (iii) there is no evidence of any illegal activities relating to controlled substances on the Mortgaged Property.

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(b) Without limiting the generality of subsection (a) above, Borrower, any operator of the Facility, and the Facility (and its operation) and all residential care agreements and residential Leases are in compliance with the applicable provisions of all laws, regulations, ordinances, orders or standards of any Governmental Authority having jurisdiction over the operation of the Facility (including any governmental payor program requirements and disclosure of ownership and related information requirements), including without limitation: (i) Healthcare Laws, Privacy Laws, fire and safety codes and building codes (and no waivers of such requirements exist at the Facility); (ii) laws, rules, regulations and published interpretations thereof regulating the preparation and serving of food; (iii) laws, rules, regulations and published interpretations thereof regulating the handling and disposal of medical or biological waste; (iv) the applicable provisions of all laws, rules, regulations and published interpretations thereof to which Borrower or the Facility is subject by virtue of its Intended Use; and (v) all criteria established to classify the Facility as housing for older persons under the Fair Housing Amendments Act of 1988.

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

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

5.09 Licenses and Permits.

(a) Borrower, any commercial tenant of the Mortgaged Property and/or any operator of the Mortgaged Property (i) is in possession of all material licenses, permits and authorizations required for use of the Mortgaged Property, which are valid and in full force and effect as of the date of this Loan Agreement, and (ii) will remain in material compliance with all material licenses, permits and other legal requirements necessary and required to conduct its business.

(b) Without limiting the generality of subsection (a) above, Borrower has obtained or has caused any operator of the Facility to obtain all Licenses necessary to use, occupy or operate the Facility for its Intended Use (such Licenses being in its own name or in the name of an operator of the Facility, if any, and in any event in the names of the Persons required by the applicable Governmental Authorities), and all such Licenses are in full force and effect. Borrower has provided Lender with

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complete and accurate copies of all Licenses. The Intended Use of the Facility is in conformity with all certificates of occupancy and Licenses and any other restrictions or covenants affecting the Facility. The Facility has all equipment, staff and supplies necessary to use and operate the Facility for its Intended Use.

(c) Each License, and the name of the Person in whose name each License is issued, if other than Borrower, is identified on Exhibit J, and a copy of each License is attached as Exhibit J.

(d) As of the Closing Date, the Licenses attached as Exhibit J are true and complete copies, the Licenses are current, and Borrower has not received any notice of pending violations or investigations that have not been brought to Lender’s attention in writing.

(e) Other than the Licenses attached as Exhibit J, as of the Closing Date, no other Licenses are required to operate the Facility as it is currently being operated and for its Intended Use.

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

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

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

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

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5.13 Illegal Activity. No portion of the Mortgaged Property has been or will be purchased with the proceeds of any illegal activity and Borrower will not permit any portion of the Mortgaged Property to be used for any illegal activity.

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

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

5.16 No Change in Facts or Circumstances.

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

(b) There has been no Material Adverse Change since the Loan Application was submitted to Lender in any fact or circumstance that would make any information submitted as part of the Loan Application incomplete or inaccurate.

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

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

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5.18 ERISA – Borrower Status. Borrower is not one of the following:

(a) An “investment company,” or a company under the Control of an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

(b) An “employee benefit plan,” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA and the assets of Borrower do not constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101.

5.19 No Fraudulent Transfer or Preference. No Borrower or Borrower Principal (a) has made, or is making in connection with and as security for the Loan, a transfer of an interest in property of the Borrower or Borrower Principal to or for the benefit of Lender or otherwise as security for any of the obligations under the Loan Documents which is or could constitute a voidable preference under federal bankruptcy, state insolvency or similar applicable creditors’ rights laws or (b) has made, or is making in connection with the Loan, a transfer (including any transfer to or for the benefit of an insider under an employment contract) of an interest of Borrower or any Borrower Principal in property, or (c) has incurred, or is incurring in connection with the Loan, any obligation (including any obligation to or for the benefit of an insider under an employment contract) within 2 years of the date of this Loan Agreement which is or could constitute a fraudulent transfer under federal bankruptcy, state insolvency, or similar applicable creditors’ rights laws.

5.20 No Insolvency or Judgment.

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

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

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

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5.22 Cap Collateral. Reserved.

5.23 Ground Lease. Reserved.

5.24 Purpose of Loan. The purpose of the Loan is as indicated by the checked box(es) below:

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

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

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

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

made previously by Borrower and/or Borrower’s Affiliates

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

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

1.      Independent Living Units	0	%
	0	units
2.      Assisted Living Residences	100	%
	26	units
	35	beds

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3.      Assisted Living Residences devoted to Alzheimer’s care, dementia care and/or memory care	0	%
	0	units
	0	beds
4.      Skilled Nursing Beds	0	%
	0	units
	0	beds
5.      Continuing Care Retirement Community with the following percentages of use:	N/A	%
a.      Seniors Apartments	N/A	units
b.      Independent Living Units	N/A	%
	N/A	units
c.      Assisted Living Residences	N/A	%
	N/A	units
	N/A	beds
d.      Skilled Nursing Beds	N/A	%
	N/A	units
	N/A	beds

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

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

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

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5.29 Contracts.

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

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

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

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

5.30 Material Contracts.

(a) Exhibit M lists all Material Contracts in effect as of the date of this Loan Agreement.

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

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

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

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

5.32 Compliance with Medicare and Medicaid Requirements. The Facility is in compliance with all requirements for participation in Medicare and Medicaid, including without limitation, the Medicare and Medicaid Patient and Program Protection Act of 1987. The Facility is in conformance in all material respects with all insurance, reimbursement and cost reporting requirements and has a current provider agreement that is in full force and effect under Medicare and Medicaid, as applicable. As of the date of this Loan Agreement, neither Borrower nor any operator of the Facility has received any notice from any Governmental Authority of any overbilling of Medicare, Medicaid, TRICARE (or any so-called “waiver program” associated therewith) or any other Governmental Authority payor for similar goods or services with respect to the Facility and there are no current or pending Medicare, Medicaid, TRICARE or similar governmental payor program recoupment efforts at the Facility, and there are no current, pending or outstanding audits or appeals with respect thereto (or which remain open to audit with respect thereto).

5.33 Third-Party Payor Programs and Private Commercial Insurance Managed Care and Employee Assistance Programs. There is no threatened or pending revocation, suspension, termination, probation, restriction, limitation or nonrenewal affecting Borrower or operator of the Facility, of any participation or provider agreement with any third-party payor, including Medicare, Medicaid, TRICARE, and any private commercial insurance managed care and employee assistance program to which Borrower or operator of the Facility is subject. All Medicare, Medicaid, TRICARE and private insurance cost reports and financial reports submitted by Borrower or operator of the Facility are and will be materially accurate and complete and have not been and will not be misleading in any material respects. No cost reports for the Facility remain “open” or unsettled.

5.34 No Transfer or Pledge of Licenses. The Licenses, including, without limitation, the certificate of need, may not be, and have not been, transferred to any location other than the Facility, have not been pledged as collateral security for any other loan or indebtedness, and are held free from restrictions or known conflicts that would materially impair the use or operation of the Facility for its Intended Use, and are not provisional, probationary, or restricted in any way.

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

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

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

5.38 No Facility Deficiencies, Enforcement Actions or Violations.

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

(b) [RESERVED]

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

ARTICLE VI        BORROWER COVENANTS.

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

6.02 Compliance with Organizational Documents. Borrower will at all times comply with all laws, regulations and requirements of any Governmental Authority relating to Borrower’s

Seniors Housing Loan and Security Agreement (CME) Page 18

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

6.03 Use of Mortgaged Property.

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

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

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

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

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

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

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

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

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

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

6.04 Non-Residential Leases.

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

(b) Reserved.

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

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

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

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

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

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

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

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

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

6.06 Inspection.

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

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

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

Borrower has not received any written complaint, notice, letter or other written communication from any tenant, Property Manager, operator of the Facility or governmental authority regarding mold, fungus, microbial contamination or pathogenic organisms (“Mold”) or any activity,

Seniors Housing Loan and Security Agreement (CME) Page 21

condition, event or omission that causes or facilitates the growth of Mold on or in any part of the Mortgaged Property or, if Borrower has received any such written complaint, notice, letter or other written communication, that Borrower has investigated and determined that no Mold activity, condition or event exists or alternatively has fully and properly remediated such activity, condition, event or omission in compliance with the Moisture Management Plan for the Mortgaged Property.

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

6.07 Books and Records; Financial Reporting.

(a) Delivery of Books and Records. Borrower will keep and maintain at all times at the Mortgaged Property or the Property Manager’s or operator of the Facility’s office, and upon Lender’s request will make available at the Mortgaged Property (or, at Borrower’s option, at the Property Manager’s or operator of the Facility’s office), complete and accurate books of account and records (including copies of supporting bills and invoices) adequate to reflect correctly the operation of the Mortgaged Property, in accordance with GAAP consistently applied (or such other method which is reasonably acceptable to Lender), and copies of all written contracts, Leases, and other instruments which affect the Mortgaged Property. The books, records, contracts, Leases and other instruments will be subject to examination and inspection by Lender at any reasonable time.

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

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

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

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

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

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

Seniors Housing Loan and Security Agreement (CME) Page 22

(C) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal quarter.

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

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

(B) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal year.

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

(D) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.

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

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

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

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

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

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

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

(e) Failure to Timely Provide Financial Statements. If Borrower fails to provide in a timely manner the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f), Lender will give Notice to Borrower specifying the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) that Borrower has failed to provide. If Borrower has not provided the required statements, schedules and reports within 10 Business Days following such Notice, then (i) Borrower will pay a late fee of $500 for each late statement, schedule or report, plus an additional $500 per month that any such statement, schedule or report continues to be late, and (ii) Lender will have the right to have Borrower’s books and records audited, at Borrower’s expense, by independent certified public accountants selected by Lender in order to obtain such statements, schedules and reports, and all related costs and expenses of Lender will become

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immediately due and payable and will become an additional part of the Indebtedness as provided in Section 9.02. Notice to Borrower of Lender’s exercise of its rights to require an audit will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

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

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

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

6.08 Taxes; Operating Expenses; Ground Rents.

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

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

(c) Payment of Impositions and Reserve Funds. If Lender is collecting Imposition Reserve Deposits pursuant to Article IV, then so long as no Event of Default

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

(d) Right to Contest. Borrower, at its own expense, may contest by appropriate legal proceedings, conducted diligently and in good faith, the amount or validity of any Imposition other than Insurance premiums and Ground Rent (if applicable), if (i) Borrower notifies Lender of the commencement or expected commencement of such proceedings, (ii) the Mortgaged Property is not in danger of being sold or forfeited, (iii) if Borrower has not already paid the Imposition, Borrower deposits with Lender reserves sufficient to pay the contested Imposition, if requested by Lender, and (iv) Borrower furnishes whatever additional security is required in the proceedings or is reasonably requested by Lender, which may include the delivery to Lender of reserves established by Borrower to pay the contested Imposition.

6.09 Preservation, Management and Maintenance of Mortgaged Property.

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

(b) Abandonment of Mortgaged Property. Borrower will not abandon the Mortgaged Property.

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

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(d) Property Management. Borrower will provide for professional management of the Mortgaged Property by the Property Manager at all times under a property management agreement approved by Lender in writing. Borrower will not surrender, terminate, cancel, modify, renew or extend its property management agreement, or enter into any other agreement relating to the management or operation of the Property with Property Manager or any other Person, or consent to the assignment by the Property Manager of its interest under such property management agreement, in each case without the consent of Lender, which consent will not be unreasonably withheld. If at any time Lender consents to the appointment of a new Property Manager, such new Property Manager and Borrower will, as a condition of Lender’s consent, execute an Assignment of Management Agreement in a form acceptable to Lender. If any such replacement Property Manager is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered on the Closing Date, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to the Rating Agencies (unless waived by the Rating Agencies) with regard to nonconsolidation.

(e) Alteration of Mortgaged Property. Borrower will give Notice to Lender of and, unless otherwise directed in writing by Lender, will appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement. Borrower will not (and will not permit any tenant or other Person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property, including any removal, demolition or alteration occurring in connection with a rehabilitation of all or part of the Mortgaged Property, except (i) Repairs or Capital Replacements pursuant to the terms of Sections 4.03 or 4.04, (ii) in connection with the replacement of tangible Personalty, (iii) if Borrower is a cooperative housing corporation or association, to the extent permitted with respect to individual dwelling units under the form of a proprietary lease or occupancy agreement, (iv) Repairs and Capital Replacements in connection with making an individual unit ready for a new occupant or pursuant to the terms of Sections 6.09(a) and (c), and (v) Repairs made in connection with and pursuant to the Repair Schedule of Work, if applicable.

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

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

6.10 Property and Liability Insurance.

(a) Hazard and Other Insurance. At all times during the term of this Loan Agreement, Borrower will maintain, at its sole cost and expense, for the mutual benefit of Borrower and Lender, the following Insurance coverages:

(i) All-Risks of Physical Loss. Insurance against any peril included within the classification “All Risks of Physical Loss” in amounts not less than the Replacement Cost of the Mortgaged Property. In all cases where any of the Improvements or the use of the Mortgaged Property will at any time constitute legal non-conforming structures or uses under applicable legal requirements of any Governmental Authority, the policy referred to in this Section 6.10 will include “Ordinance and Law Coverage,” with “Loss to the Undamaged Portion of the Building,” “Demolition Cost” and “Increased Cost of Construction” endorsements, in the amount of coverage required by Lender and will either include a “Time Element” endorsement or the business income/rental value Insurance for the Mortgaged Property will be endorsed to cover income/rent loss arising out of any increased time necessary to repair or rebuild the Mortgaged Property due to the enforcement of any zoning laws.

(ii) Commercial General Liability. Commercial general liability Insurance on an occurrence-based policy form that insures against legal liability resulting from bodily injury, property damage, personal injury and advertising injury, and includes contractual liability coverage and any and all claims, including all legal liability (to the extent insurable) imposed upon Borrower and all Attorneys’ Fees and Costs arising out of or connected with the possession, use, leasing, operation, maintenance or condition of the Mortgaged Property with a combined limit of not less than $2,000,000 in the aggregate and $1,000,000 per occurrence; umbrella or excess liability coverage with minimum limits in the aggregate and per occurrence of $1,000,000 in coverage for each story of the Improvements with a maximum required coverage of $8,000,000 (provided, however, that if the Indebtedness is $3,000,000 or less and the Improvements have 3 stories or fewer, then no umbrella or excess liability coverage is required); and if the Borrower owns, leases, hires, rents, borrows, uses, or has another use on its behalf a vehicle in conjunction with the operation of the Mortgaged Property, vehicle liability Insurance of not less than $1,000,000 per occurrence. The maximum per occurrence deductible or self-insured retention, or combined deductible or self-insured retention, for all coverage required under this Section 6.10(a)(ii), will not exceed $35,000.

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(iii) Business Income/Rental Value. Business income/rental value Insurance for the Mortgaged Property in an amount equal to at least the estimated gross Rents attributable to the Mortgaged Property for 12 months (18 months when (A) the Improvements have 5 or more stories, or (B) at all times during which the Indebtedness is equal to or greater than $50,000,000) based on gross Rents for the immediately preceding year and otherwise sufficient to avoid any co-insurance penalty; coverage will include a 90-day extended period of indemnity if (X) the Improvements have 5 or more stories, or (Y) the Indebtedness is equal to or greater than $25,000,000. The waiting period for this coverage will not exceed 72 hours.

(iv) Flood. If any portion of the Improvements is located within an area identified by the Federal Emergency Management Agency (or any successor) as a special flood hazard area (“SFHA”), flood Insurance in an amount equal to the greater of the following:

(A) The maximum flood Insurance available under the National Flood Insurance Program (“NFIP”) for each building within a SFHA.

(B) The sum of the following for each building within a SFHA being insured:

(1) The Replacement Cost of all areas of the Improvements below grade.

(2) The Replacement Cost of the bottom two stories (above grade) of the Improvements.

(3) Any additional coverage dictated by the nature of the Mortgaged Property as determined by Lender in Lender’s Discretion.

Such coverage may be purchased through excess carriers if the required coverage exceeds the maximum Insurance available under the NFIP.

(v) Boiler and Machinery. If the Mortgaged Property contains a central heating, ventilation and cooling system (“HVAC System”) where steam boilers and/or other pressurized systems are in operation and are regulated by the Property Jurisdiction, Insurance providing coverage for damage to the HVAC System or other portions of the Mortgaged Property, if the damage is the result of an explosion of steam boilers, pressure vessels or similar apparatus now or hereafter installed at the Mortgaged Property, with minimum limits at least equal to the Replacement Cost of the building housing the HVAC System, including the Replacement Cost of the HVAC System.

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(vi) Terrorism. Insurance coverage required under Section 6.10(a)(i) through (iii) will cover perils of terrorism and acts of terrorism. Such coverage may be provided through one or more separate policies, which will be on terms (including amounts) consistent with those required under Section 6.10(a)(i) through (iii).

(vii) Builder’s All Risk. During any period of Restoration, builder’s “All Risk” Insurance (including fire and other perils within the scope of a policy known as a “Causes of Less – Special Form” or “All Risk” policy) in an amount at least equal to 100% of the sum of the contract or contracts and all materials to complete the Restoration (as determined by Lender in Lender’s Discretion).

(viii) Earthquake. If Lender requires earthquake Insurance, the amount of coverage will be equal to the greater of the following:

(A) $1,000,000.

(B) 150% of the difference between the following items:

(1) The Replacement Cost of the Mortgaged Property multiplied by the probable maximum loss for the Mortgaged Property, as determined by a Site Specific Seismic Report.

(2) The Replacement Cost of the Mortgaged Property multiplied by the projected loss with a 20% probable maximum loss.

Lender will not require earthquake Insurance if the probable maximum loss for the Mortgaged Property is less than 20%. If any updated reports or other documentation are reasonably required by Lender in order to determine whether such additional Insurance is necessary or prudent, Borrower will pay for all such documentation at its sole cost and expense.

(ix) Windstorm. If windstorm and/or windstorm related perils and/or “named storms” (“Windstorm Coverage”) are excluded from the “All Risks” policy required under Section 6.10(a)(i), Borrower will obtain separate coverage for such risks, either through an endorsement or a separate policy. Windstorm Coverage will be written in an amount equal to 100% of the Replacement Cost. Business income/rental value Insurance required under Section 6.10(a)(iii) will be in force for all losses covered by Windstorm Coverage.

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(x) Other. Such other Insurance against loss or damage with respect to the Improvements and Personalty located on the Mortgaged Property as required by Lender (including liquor/dramshop and Mold Insurance) provided such Insurance is of the kind for risks from time to time customarily insured against and in such minimum coverage amounts and maximum deductibles as are generally required by institutional lenders for properties comparable to the Mortgaged Property or which Lender may deem necessary in Lender’s Discretion.

All Insurance required pursuant to Section 6.10(a)(i) and Section 6.10(a)(iii) through (x) will be referred to as “Hazard Insurance.”

(b) Deductibles. The Insurance required pursuant to Section 6.10(a)(i), (iv), (v), (vi), (vii) and (ix) will have a per occurrence deductible meeting the following requirements:

(i) The deductible will not exceed $50,000 if the Replacement Cost of the Mortgaged Property is less than $10,000,000.

(ii) The deductible will not exceed $75,000 if the Replacement Cost of the Mortgaged Property is equal to or greater than $10,000,000.

(iii) For Windstorm Coverage the deductible will not exceed 5% of the Replacement Cost if the Mortgaged Property is located (1) in Florida, or (2) within 50 miles of the coast of any East Coast or Gulf Coast state.

(iv) For flood insurance provided under the NFIP, the deductible will comply with the NFIP deductible for the type of improvement insured.

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

(d) Policy Requirements. All policies will be in a form approved by Lender. All policies of Hazard Insurance will include a standard non-contributing, non-reporting mortgagee clause in favor of, and in a form approved by, Lender. All policies for general liability Insurance will contain a standard additional insured provision, in favor of, and in a form approved by Lender. If any policy referred to in this Section 6.10 contains a coinsurance clause, such coinsurance clause will be offset by an agreed amount endorsement in an amount not less than the Replacement Cost. All Insurance policies and renewals of Insurance policies required by this Section 6.10 will be for such periods as Lender may from time to time require. Unless required otherwise by state law, all policies of Hazard Insurance will provide that the insurer will notify the named mortgagee in writing at least 10 days before the cancelation of the policy for nonpayment of the premium or nonrenewal and at least 30 days before cancelation for any other reason.

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(e) Evidence of Insurance; Renewals. Borrower will deliver to Lender a legible copy of each Insurance policy (or duplicate original), and Borrower will promptly deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies. Borrower will ensure that the Mortgaged Property is continuously covered by the required Insurance policies and will deliver to Lender evidence acceptable to Lender in Lender’s Discretion that each policy has been renewed at least 15 days prior to the expiration date of such Insurance policy. If the evidence of a renewal does not include a legible copy of the renewal policy (or duplicate original), Borrower will deliver a legible copy of such renewal policy (or duplicate original) in a form satisfactory to Lender in Lender’s Discretion prior to the earlier of (i) 60 days after the expiration date of the original policy, or (ii) the date of any Notice to Lender under Section 6.10(i).

(f) Insurance Company Rating Requirements. Borrower will maintain the Insurance coverage described in this Section 6.10 with companies acceptable to Lender having the following ratings:

(i) A rated claims paying ability rating of at least “A-” for financial strength or its equivalent by A.M. Best Company.

(ii) A financial size rating or its equivalent by A.M. Best Company of at least one of the following:

(A) “VII” for companies with an Aggregate Carrier Exposure of $5,000,000 or less.

(B) “VIII” for companies with an Aggregate Carrier Exposure greater than $5,000,000 and less than or equal to $25,000,000.

(C) “IX” for companies with an Aggregate Carrier Exposure greater than $25,000,000 and a rated claims paying ability of at least one of the following:

(1) “A-” or its equivalent by Fitch, Inc.

(2) “A-” or its equivalent by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

(3) “A3” or its equivalent by Moody’s Investors Service, Inc.

All insurers providing Insurance required by this Loan Agreement will be authorized to issue Insurance in the Property Jurisdiction.

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

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(h) Blanket Insurance; Master Program. Borrower may provide Insurance coverage described in this Section 6.10 under a blanket insurance policy or master program which provides one “per occurrence” (per peril) limit of coverage for two or more properties (“Blanket Insurance Policy”) provided that each of the following conditions is met:

(i) The Blanket Insurance Policy is acceptable to Lender in Lender’s Discretion.

(ii) The coverages under the Blanket Insurance Policy meet the requirements of this Section 6.10.

(iii) Borrower will provide evidence acceptable to Lender in Lender’s Discretion that the per occurrence limit of the Insurance coverages provided by the Blanket Insurance Policy will be no less than the Replacement Cost of the property with the largest replacement cost exposure covered by the Blanket Insurance Policy unless a higher amount is required by Lender in Lender’s Discretion.

(iv) The maximum per occurrence deductible for the Blanket Insurance Policy providing property damage coverage and/or Windstorm Coverage is as follows:

Aggregate Replacement Cost of the covered properties	Maximum per occurrence deductible
$5,000,000 or less	$50,000
Greater than $5,000,000 but less than or equal to $7,500,000	$75,000
Greater than $7,500,000	1% of the Replacement Cost of the covered properties (to a maximum of $250,000)

However, if the Blanket Insurance Policy provides Windstorm Coverage and the Mortgaged Property is located (A) in Florida, or (B) within 50 miles of the coast of any East Coast or Gulf Coast state, then the maximum per occurrence deductible for Windstorm Coverage will not exceed 5% of the aggregate Replacement Cost of the covered properties.

(v) The minimum umbrella or excess liability coverage required if the Blanket Insurance Policy provides commercial general liability Insurance is as follows:

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Number of properties covered by the policy	Number of stories in any of the covered properties	Minimum umbrella or excess liability
2 to 3	3 or fewer	$3,000,000
2 to 3	More than 3	$10,000,000
4 to 5	3 or fewer	$5,000,000
4 to 5	More than 3	$12,000,000
6 to 10	3 or fewer	$7,000,000
6 to 10	More than 3	$15,000,000
11 to 19	3 or fewer	$9,000,000
11 to 19	More than 3	$20,000,000
20 or more	3 or fewer	$15,000,000
20 or more	More than 3	$30,000,000

(i) Obligations Upon Casualty; Proof of Loss.

(i) In the event of loss, Borrower will give immediate written notice to the Insurance carrier and to Lender.

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

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

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

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(iii) Subject to Section 6.10(j), Borrower may take the following actions:

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

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

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

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

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

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

(iv) The Restoration will not be completed by the earlier of (A) at least one year before the Maturity Date (or 6 months before the Maturity Date if re-leasing of the Mortgaged Property will be completed within such 6 month period) or (B) the expiration of the business interruption coverage.

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

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

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

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

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

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

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

6.11 Condemnation.

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

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

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

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

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

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

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

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

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(v) Lender determines that the Restoration will not be completed within one year after the date of the Condemnation.

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

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

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

(e) Right to Apply Condemnation Proceeds in Connection with a Partial Release. Notwithstanding anything to the contrary set forth in this Loan Agreement, including but not limited to this Section 6.11, for so long as the Loan or any portion thereof is included in a Securitization, if any portion of the Mortgaged Property is released from the Lien of the Loan in connection with a Condemnation and if the ratio of (i) the unpaid principal balance of the Loan to (ii) the value of the Mortgaged Property (taking into account only the related land and buildings and not any personal property or going-concern value), as determined by Lender in its sole and absolute discretion based on a commercially reasonable valuation method permitted in connection with a Securitization, is greater than 125% immediately after such Condemnation and before any Restoration or repair of the Mortgaged Property (but taking into account any planned Restoration or repair of the Mortgaged Property as if such planned Restoration or repair were completed) Lender will apply any net proceeds or awards from such Condemnation, in full, to the payment of the principal of the Indebtedness whether or not then due and payable, unless Lender will have received an opinion of counsel that a different application of such net proceeds or awards will not cause such Securitization to fail to meet applicable federal income tax qualification requirements or subject such Securitization to any tax.

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

6.12 Environmental Hazards.

(a) Prohibited Activities and Conditions. Except for matters described in this Section 6.12, Borrower will not cause or permit Prohibited Activities or Conditions.

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Borrower will comply with all Hazardous Materials Laws applicable to the Mortgaged Property. Without limiting the generality of the previous sentence, Borrower will (i) obtain and maintain all Environmental Permits required by Hazardous Materials Laws and comply with all conditions of such Environmental Permits, (ii) cooperate with any inquiry by any Governmental Authority, and (iii) comply with any governmental or judicial order that arises from any alleged Prohibited Activity or Condition.

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

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

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

(i) Borrower’s discovery of any Prohibited Activity or Condition.

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

(iii) Borrower’s breach of any of its obligations under this Section 6.12. Any such Notice given by Borrower will not relieve Borrower of, or result in a waiver of, any obligation under this Loan Agreement, the Note or any other Loan Document.

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

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

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complete the work by the time required by applicable Hazardous Materials Law. If Borrower fails to begin on a timely basis or diligently prosecute any required Remedial Work, Lender may, at its option, cause the Remedial Work to be completed, in which case Borrower will reimburse Lender on demand for the cost of doing so. Any reimbursement due from Borrower to Lender will become part of the Indebtedness as provided in Section 9.02.

6.13 Single Purpose Entity Requirements.

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

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

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

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

(iv) It will not merge or consolidate with any other Person.

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

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

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

(B) Institute proceedings under any applicable insolvency law.

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

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

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

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

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

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

(I) Take action in furtherance of any of the foregoing.

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

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

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

(x) It will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than, (A) the Indebtedness (and any further indebtedness as described in Section 12.11 with regard to Supplemental Instruments) and (B) customary unsecured trade payables incurred in the ordinary course of owning and operating the Mortgaged Property provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of 2% of the original principal amount of the Indebtedness and are paid within 60 days of the date incurred.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(A) Be formed and organized under Delaware law.

(B) Have either one springing member that is a corporation whose stock is 100% owned by the sole member of Borrower and that satisfies the requirements for a corporate springing member set forth below in this Section or two springing members who are natural persons.

(C) Otherwise comply with all Rating Agencies criteria for single member limited liability companies (including the delivery of Delaware single member limited liability company opinions acceptable in all respects to Lender and to the Rating Agencies). If the springing member is a corporation, such springing member will at all times comply, and will cause Borrower or SPE Equity Owner (as applicable) to comply, with each of the representations, warranties and covenants contained in Section 6.13 as if such representation, warranty or covenant were made directly by such corporation. If there is more than one springing member, only one springing member will be the sole member of Borrower or SPE Equity Owner (as applicable) at any one time, and the second springing member will become the sole member only upon the first springing member ceasing to be a member.

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

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

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

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

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

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

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

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

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

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

6.14 Repairs and Capital Replacements.

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

(b) Purchases. Without the prior written consent of Lender, no materials, machinery, equipment, fixtures or any other part of the Repairs or Capital Replacements will be purchased or installed under conditional sale contracts or lease agreements, or any other arrangement wherein title to such Repairs or Capital Replacements is retained or subjected to a purchase money security interest, or the right is reserved or accrues to anyone to remove or repossess any such Repairs or Capital Replacements, or to consider them as personal property.

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

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

6.15 Residential Leases Affecting the Mortgaged Property.

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

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

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

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

6.16 Litigation; Government Proceedings. Borrower will give prompt Notice to Lender of any litigation or governmental proceedings pending or, to the best of Borrower’s knowledge, threatened in writing against Borrower which might have a Material Adverse Effect.

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

(a) Deliver to Lender a written statement, signed and acknowledged by Borrower, certifying to Lender or any Person designated by Lender, as of the date of such

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

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

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

6.18 Cap Collateral. Reserved.

6.19 Ground Lease. Reserved.

6.20 ERISA Requirements.

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

(b) Borrower will deliver to Lender such certifications or other evidence from time to time throughout the term of this Loan Agreement, as requested by Lender in Lender’s Discretion, that (i) Borrower is not an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA, (ii) Borrower is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans, and (iii) one or more of the following circumstances is true:

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

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

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

6.21 Operation of the Facility.

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

(b) Borrower will, or will cause any operator of the Facility to, operate the Facility in a manner such that all applicable Licenses now or hereafter in effect will remain in full force and effect. Borrower will not, and will not allow any operator of the Facility to, (i) transfer any License (or any rights thereunder) to any location other than the Facility, (ii) pledge any License (or any rights thereunder) as collateral security for any other loan or indebtedness, (iii) terminate any License or permit any License not to be renewed or reissued as applicable, (iv) rescind, withdraw, revoke, amend, supplement, modify or otherwise alter the nature, tenor or scope of any License, or (v) permit any License to become the subject of any Downgrade, revocation, suspension, restriction, condition or probation (including without limitation any restriction on new admissions or residents).

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

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6.22 Facility Reporting.

(a) Borrower will, or will cause any operator of the Facility to, furnish to Lender, within 10 days after receipt by Borrower or any operator of the Facility, any and all written notices from any Governmental Authority that (i) any License is being Downgraded, revoked, terminated, suspended, restricted or conditioned or may not be renewed or reissued or that action is pending or being considered to Downgrade, revoke, terminate, suspend, restrict or condition (or not renew or reissue) any such License, (ii) any violation, fine, finding, investigation or corrective action concerning any License is pending or being considered, rendered or adopted, or (iii) any Healthcare Law or any health or safety code or building code violation or other deficiency at the Mortgaged Property has been identified, but in each case only if the subject matter of such written notice (A) could materially impact the operation or value of the Facility, or (B) requires additional formal or informal action by Borrower or operator of the Facility that is more than development or implementation of a routine plan of correction, including, without limitation, participation in hearings concerning continued licensing or Medicare or Medicaid participation, entering into consent orders affecting licensing affecting the Facility, or engaging in oversight management.

(b) Borrower will, or will cause any operator of the Facility to, furnish to Lender, within 10 days after receipt by Borrower or any operator of the Facility, a copy of any survey, report or statement of deficiencies by any Governmental Authority, but only if the subject matter of such survey, report or statement of deficiencies (i) could materially impact the operation or value of the Facility, or (ii) requires additional formal or informal action by Borrower or operator of the Facility that is more than development or implementation of a routine plan of correction, including, without limitation, participation in hearings concerning continued licensing or Medicare or Medicaid participation, entering into consent orders affecting licensing affecting the Facility, or engaging in oversight management. Within the time period specified by the Governmental Authority for furnishing a plan of correction, the Borrower, or if applicable, an operator of the Facility, will do so and will furnish or will cause to be furnished to Lender a copy of the plan of correction concurrently therewith. Borrower will correct or will cause to be corrected in a timely manner (and in all events by the date required by the Governmental Authority) any deficiency if the failure to do so could cause any License to be Downgraded, revoked, suspended, restricted, conditioned or not renewed or reissued.

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

(d) Borrower will provide Lender with a copy of any License issued or renewed in the future by a Governmental Authority within 30 days after its issuance or renewal. To the extent that any such License is assignable, Borrower will assign it to Lender as additional security for the Indebtedness, using a form of assignment

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acceptable to Lender in its discretion. If any License is issued to an operator of the Facility, to the extent such License is assignable, Borrower will cause such operator or management agent to assign the License to Lender as additional security for the Indebtedness, using a form of assignment acceptable to Lender in its discretion.

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

6.23 Covenants Regarding Material Contracts.

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

(b) Borrower will (or if Borrower is not a party thereto, will cause an operator of the Facility to) fully perform all of its obligations under each Contract, and Borrower will not (and Borrower will not permit an operator of the Facility to) enter into, terminate or amend, modify, assign or otherwise encumber its interest in any Material Contract without the prior written approval of Lender. If Borrower or an operator of the Facility enters into any Material Contract in the future (with Lender’s consent thereto), Borrower will (or will cause the operator to), simultaneously with entering into the Material Contract, if requested by Lender (i) assign its rights under and interest in the Material Contract to Lender as additional security for the Indebtedness and (ii) obtain and provide to Lender a consent to that assignment by the other party(ies) to the Material Contract. Both the assignment and the consent shall be in a form acceptable to Lender in its discretion.

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

6.25 Property Manager and Operator of the Facility. Borrower will not surrender, terminate, cancel, modify, renew or extend its property management agreement or any operating lease; permit the change of the Property Manager or any operator of the Facility; enter into any other agreement relating to the management or operation of the Facility with Property

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

6.26 Residential Leases and Agreements.

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

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

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

6.28 Governmental Payer Programs. If Borrower or any operator of the Facility participates in Medicare, Medicaid, TRICARE

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or any similar governmental payor program with respect to the Facility, then (i) Borrower will not and will not permit any breach or violation of any Healthcare Laws pertaining thereto, including without limitation, any Healthcare Laws pertaining to billing for goods or services by Borrower or any operator of the Facility and (ii) Borrower will not and will not permit any circumstance to occur which would (A) cause Borrower, an operator of the Facility or the Facility to be disqualified for participation in any such program or (B) which would cause the non renewal or termination of participation in any such program by Borrower, an operator of the Facility or the Facility, as applicable. Neither Borrower, nor any operator of the Facility will, other than in the normal course of business, change the terms of any governmental payor program or its normal billing, payment or reimbursement policies and procedures with respect thereto, including without limitation, the amount and timing of finance charges, fees and write-offs.

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

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

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

(a) A Transfer to which Lender has consented in Lender’s sole discretion (without limiting Lender’s sole discretion, Lender will not consent to a Transfer while an Event of Default exists) so long as Lender has received (i) a $5,000 review fee as a condition of Lender’s considering any proposed Transfer, (ii) a transfer fee in an amount equal to 1% of the unpaid principal balance of the Indebtedness immediately before the Transfer as a condition of Lender’s consent to the proposed Transfer, (iii) reimbursement for all of Lender’s out-of-pocket costs (including reasonable Attorney’s Fees and Costs) incurred in reviewing the Transfer request and any fees charged by the Rating Agencies, (iv) if any certificates evidencing the Securitization remain outstanding, a Rating Confirmation, (v) evidence satisfactory to Lender that the transferee and any SPE Equity Owner of such transferee meet the requirements of Section 6.13, and (vi) such legal opinions from the transferee’s counsel as Lender deems necessary, including an opinion that the transferee and any SPE Equity Owner is in compliance with Section 6.13, a nonconsolidation opinion (if a nonconsolidation opinion was delivered at origination of the Loan and if required by Lender), an opinion that the assignment and assumption of the Loan Documents has been duly authorized, executed, and delivered and that the assignment documents and the Loan Documents are enforceable as the obligation of the transferee.

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

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

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

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

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

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

(h) A Supplemental Instrument that complies with Section 12.11 or Defeasance that complies with Section 12.12.

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

(a) A Transfer of all or any part of the Mortgaged Property or any interest in the Mortgaged Property.

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

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

(d) A Transfer of any general partnership interest in a partnership or any manager interest (whether a member manager or nonmember manager) in a limited liability company that is a Borrower or a Designated Entity for Transfers.

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

(f) The grant, creation or existence of any Lien, whether voluntary, involuntary or by operation of law, and whether or not such Lien has priority over the Lien of the Security Instrument, on either of the following:

(i) The Mortgaged Property (other than the Lien of the Security Instrument or, if this Loan Agreement is entered into in connection with a Supplemental Loan, the Lien of the Senior Instrument, or any other Lien to which Lender has consented).

(ii) The ownership interests in Borrower or any Designated Entity for Transfers.

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

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

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

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

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

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

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

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

(A) Borrower reaffirms the representations and warranties under Article V.

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

(v) Borrower or Beneficiary causes to be delivered to Lender such legal opinions as Lender deems necessary, in Lender’s Discretion, including an opinion that the Beneficiary and any SPE Equity Owner of Beneficiary is in compliance with Section 6.13 (if applicable), a nonconsolidation opinion (if a nonconsolidation opinion was delivered on the Closing Date and if required by Lender), an opinion that the ratification of the Loan Documents and Guaranty (if applicable) have been duly authorized, executed, and delivered and that the ratification documents and Guaranty (if applicable) are enforceable as the obligations of Borrower, Beneficiary or Guarantor, as applicable.

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

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

(i) Borrower provides Lender with at least 30 days prior Notice of the proposed grant and pays the Transfer Review Fee to Lender.

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

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

(iv) If the Note is held by a REMIC trust, if required by Lender, Borrower provides an opinion of counsel for Borrower, in form and substance satisfactory to Lender in its sole and absolute discretion, confirming each of the following:

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

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

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

(c) Publicly-Held Fund or Real Estate Investment Trust. If a Designated Entity for Transfers is a publicly-held fund or real estate investment trust, the public issuance of common stock, convertible debt, equity or other similar securities (“Public Fund/REIT Securities”) and the subsequent Transfer of such Public Fund/REIT Securities; provided, however, that no Public Fund/REIT Securities holder may acquire an ownership percentage of 10% or more unless otherwise approved by Lender.

(d) Reserved.

7.04 Preapproved Intrafamily Transfers. Not applicable.

7.05 Lender’s Consent to Prohibited Transfers. Not applicable.

ARTICLE VIII         SUBROGATION.

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

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ARTICLE IX        EVENTS OF DEFAULT AND REMEDIES.

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

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

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

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

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

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

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

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

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

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

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

(k) Any of the following occurs:

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

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

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

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

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

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

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(n) If the Loan is a Supplemental Loan, any Event of Default occurs under (i) the Senior Note, the Senior Instrument or any other Senior Loan Document, or (ii) any loan document related to another loan in connection with the Mortgaged Property, regardless of whether Borrower has obtained Supplemental Lender’s approval of the placement of such Lien on the Mortgaged Property. In addition, if the Loan is a Supplemental Loan, as Borrower under both the Supplemental Instrument and the Senior Instrument, Borrower acknowledges and agrees that if there is an Event of Default under the Supplemental Note, the Supplemental Instrument or any other Supplemental Loan Document, such Event of Default will be an Event of Default under the terms of the Senior Instrument and will entitle Senior Lender to invoke any and all remedies permitted to Senior Lender by applicable law, the Senior Note, the Senior Instrument or any of the other Senior Loan Documents.

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

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

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

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

(iii) If Lender approves a replacement Guarantor, Borrower pays the Transfer Review Fee to Lender.

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

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

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

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

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

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

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

(t) Any continuing representation or warranty made by Borrower in this Loan Agreement or any other Loan Document becomes false or misleading in any material respect.

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

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

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

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

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

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

9.03 Remedies.

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

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

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

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

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

9.04 Forbearance.

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

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

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

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

(iv) Accept a renewal of the Note.

(v) Modify the terms and time of payment of the Indebtedness.

(vi) Join in any extension or subordination agreement.

(vii) Release any portion of the Mortgaged Property.

(viii) Take or release other or additional security.

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

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

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

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

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

ARTICLE X        RELEASE; INDEMNITY.

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

10.02 Indemnity.

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

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

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

(i) Any breach of any representation or warranty of Borrower in Section 5.05 (Environmental).

(ii) Any failure by Borrower to perform any of its obligations under Section 6.12 (Environmental Hazards).

(iii) The existence or alleged existence of any Prohibited Activity or Condition.

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

(v) The actual or alleged violation of any Hazardous Materials Law.

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

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(d) Securitization Indemnification.

(i) Borrower and each Guarantor agree to provide in connection with each Disclosure Document, an indemnification certificate, as set forth in Section 10.02(d)(ii), indemnifying Lender, any Issuer Person, the Issuer Group and/or the Underwriter Group (as those terms are defined in Section 10.02(d)(vii)) (each, an “Indemnified Party,” and collectively “Indemnified Parties”) for any losses to which any Indemnified Party may become subject under the conditions set forth in this Section.

(ii) The indemnification certificate will provide that

(A) Borrower and each Guarantor have carefully examined those sections of the Disclosure Documents relating to the following:

(1) Borrower, any SPE Equity Owner, any operator of the Facility, any Guarantor, any Property Manager, their respective Affiliates, the Loan and the Mortgaged Property (“Borrower Information”).

(2) The sections entitled “Special Considerations,” and/or “Risk Factors,” and “Certain Legal Aspects of the Mortgage Loan,” or similar sections but only to the extent such sections specifically refer to Borrower Information (“Borrower Information Sections”).

(B) To the best of Borrower’s and each Guarantor’s knowledge with regard to Borrower Information, the Borrower Information Sections 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.

Notwithstanding the foregoing, any indemnification certificate may expressly exclude any information contained in third party reports prepared by parties that are not Affiliates of Borrower or of any Guarantor (“Third Party Information”), and the obligations and liability of Borrower and any Guarantor pursuant to this Section will not extend to the Third Party Information.

(iii) Borrower’s and each Guarantor’s agreement to indemnify the Indemnified Parties for any losses to which any Indemnified Party may become subject will extend only to such losses that arise out of or are based upon any untrue statement of any material fact contained in the Borrower Information or the Borrower Information Sections of the Disclosure Documents or arise out of or are based upon the omission to state in the Borrower Information or the Borrower Information Sections of the Disclosure Documents a material fact required to be stated in such sections necessary in order to make the statements in such sections or in light of the circumstances under which they were made, not misleading (collectively, “Securities Liabilities”).

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(iv) Borrower and each Guarantor agrees to reimburse any Indemnified Party for any legal or other expenses reasonably incurred by such Indemnified Party in investigating or defending the Securities Liabilities.

(v) The indemnitors will be liable under Section 10.02(d) (ii), (iii) or (iv) only to the extent that such Securities Liabilities arise out of, or are based upon, any such untrue statement or omission made in the Disclosure Documents in reliance upon, and in conformity with, Borrower Information furnished to any Indemnified Party by or on behalf of Borrower or a Guarantor in connection with the preparation of the Disclosure Documents or in connection with the underwriting of the Loan, including financial statements of Borrower, any SPE Equity Owner, any Guarantor or any operator of the Facility, and operating statements and rent rolls with respect to the Mortgaged Property.

(vi) This indemnity is in addition to any liability which Borrower may otherwise have and will be effective whether or not an indemnification certificate described in this Section 10.02(d) is provided and will be applicable based on information previously provided by or on behalf of Borrower or a Guarantor if the indemnification certificate is not provided.

(vii) For purposes of this Section 10.02(d):

(A) The term “Lender” will include its officers and directors.

(B) An “Issuer Person” will include all of the following:

(1) Any Affiliate of Lender that has filed the registration statement, if any, relating to the Securitization.

(2) Any Affiliate of Lender which is acting as issuer, depositor, sponsor and/or in a similar capacity with respect to the Securitization.

(C) The “Issuer Group” will include all of the following:

(1) Each director and officer of any Issuer Person.

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

(D) The “Underwriter Group” will include all of the following:

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

(2) Each of its directors and officers.

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

(4) The directors and officers of such entity described in Section 10.02(d)(vii)(D)(1).

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

(f) Settlement or Compromise of Claims. Borrower will not, without the prior written consent of those Indemnitees who are named as parties to a claim or legal or administrative proceeding (“Claim”), settle or compromise the Claim if the settlement (i) results in the entry of any judgment that does not include as an unconditional term the delivery by the claimant or plaintiff to Lender of a written release of those Indemnitees, satisfactory in form and substance to Lender or (ii) may materially and adversely affect Lender, as determined by Lender in Lender’s Discretion.

(g) Effect of Changes to Loan on Indemnification Obligations. Borrower’s obligation to indemnify the Indemnitees will not be limited or impaired by any of the following, or by any failure of Borrower or any Guarantor to receive notice of or consideration for any of the following:

(i) Any amendment or modification of any Loan Document.

(ii) Any extensions of time for performance required by any Loan Document.

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(iii) Any provision in any of the Loan Documents limiting Lender’s recourse to property securing the Indebtedness, or limiting the personal liability of Borrower or any other party for payment of all or any part of the Indebtedness.

(iv) The accuracy or inaccuracy of any representations and warranties made by Borrower under this Loan Agreement or any other Loan Document.

(v) The release of Borrower or any other Person, by Lender or by operation of law, from performance of any obligation under any Loan Document.

(vi) The release or substitution in whole or in part of any security for the Indebtedness.

(vii) Lender’s failure to properly perfect any Lien or security interest given as security for the Indebtedness.

(h) Payments by Borrower. Borrower will, at its own cost and expense, do all of the following:

(i) Pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Article X.

(ii) Reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Article X.

(iii) Reimburse Indemnitees for any and all expenses, including Attorneys’ Fees and Costs, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Article X, or in monitoring and participating in any legal or administrative proceeding.

(i) Other Obligations. The provisions of this Article X will be in addition to any and all other obligations and liabilities that Borrower may have under applicable law or under other Loan Documents, and each Indemnitee will be entitled to indemnification under this Article X without regard to whether Lender or that Indemnitee has exercised any rights against the Mortgaged Property or any other security, pursued any rights against any Guarantor, or pursued any other rights available under the Loan Documents or applicable law. If Borrower consists of more than one Person, the obligation of those Persons to indemnify the Indemnitees under this Article X will be joint and several. The obligation of Borrower to indemnify the Indemnitees under this Article X will survive any repayment or discharge of the Indebtedness, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Lien of the Security Instrument. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of, or held title to, the Mortgaged Property, Borrower will have no obligation to indemnify the Indemnitees under this Article X after the date of the release of record of the Lien of the Security Instrument by payment in full at the Maturity Date or by voluntary prepayment in full.

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ARTICLE XI         SENIORS HOUSING OPERATOR.

Reserved.

ARTICLE XII        MISCELLANEOUS PROVISIONS.

12.01 Waiver of Statute of Limitations, Offsets and Counterclaims. Borrower waives the right to assert any statute of limitations as a bar to the enforcement of this Loan Agreement or the Lien of the Security Instrument or to any action brought to enforce any Loan Document. Borrower waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or otherwise to offset any obligations to make the payments required by the Loan Documents. No failure by Lender to perform any of its obligations under the Loan Documents will be a valid defense to, or result in any offset against, any payments that Borrower is obligated to make under any of the Loan Documents.

12.02 Governing Law; Consent to Jurisdiction and Venue.

(a) This Loan Agreement, and any Loan Document which does not itself expressly identify the law which is to apply to it, will be governed by the laws of the Property Jurisdiction.

(b) Borrower agrees that any controversy arising under or in relation to the Note, the Security Instrument, this Loan Agreement or any other Loan Document may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that may arise under or in relation to the Note, any security for the Indebtedness or any other Loan Document. Borrower irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 12.02 is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Loan Agreement in any court of any other jurisdiction.

12.03 Notice.

(a) All Notices under or concerning this Loan Agreement will be in writing. Each Notice will be deemed given on the earliest to occur of (i) the date when the Notice is received by the addressee, (ii) the first Business Day after the Notice is delivered to a recognized overnight courier service, with arrangements made for payment of charges for next Business Day delivery, or (iii) the third Business Day after the Notice is deposited in the United States mail with postage prepaid, certified mail, return receipt requested. Addresses for Notice are as follows:

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If to Lender:	KeyCorp Real Estate Capital Markets, Inc. 11501 Outlook Street, Suite 300 Overland Park, Kansas 66211 Mailcode: KS-01-11-0501 Attention: Servicing Manager
If to Borrower:	Care GSL Fredericksburg LLC c/o Care Investment Trust Inc. 780 Third Avenue, 21st Floor New York, New York 10017 Attention: Counsel/Greenfield – Freddie Mac

(b) Any party to this Loan Agreement may change the address to which Notices intended for it are to be directed by means of Notice given to the other party in accordance with this Section 12.03. Each party agrees that it will not refuse or reject delivery of any Notice given in accordance with this Section 12.03, that it will acknowledge, in writing, the receipt of any Notice upon request by the other party and that any Notice rejected or refused by it will be deemed for purposes of this Section 12.03 to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service or the courier service.

(c) Any Notice under the Note and any other Loan Document that does not specify how Notices are to be given will be given in accordance with this Section 12.03.

12.04 Successors and Assigns Bound. This Loan Agreement will bind the respective successors and assigns of Borrower and Lender, and the rights granted by this Loan Agreement will inure to Lender’s successors and assigns.

12.05 Joint and Several Liability. If more than one Person signs this Loan Agreement as Borrower, the obligations of such Persons will be joint and several.

12.06 Relationship of Parties; No Third Party Beneficiary.

(a) The relationship between Lender and Borrower will be solely that of creditor and debtor, respectively, and nothing contained in this Loan Agreement will create any other relationship between Lender and Borrower. Nothing contained in this Loan Agreement will constitute Lender as a joint venturer, partner or agent of Borrower, or render Lender liable for any debts, obligations, acts, omissions, representations or contracts of Borrower.

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(b) No creditor of any party to this Loan Agreement and no other Person will be a third party beneficiary of this Loan Agreement or any other Loan Document. Without limiting the generality of the preceding sentence, (i) any arrangement (“Servicing Arrangement”) between Lender and any Loan Servicer for loss sharing or interim advancement of funds will constitute a contractual obligation of such Loan Servicer that is independent of the obligation of Borrower for the payment of the Indebtedness, (ii) Borrower will not be a third party beneficiary of any Servicing Arrangement, and (iii) no payment by the Loan Servicer under any Servicing Arrangement will reduce the amount of the Indebtedness.

12.07 Severability; Amendments.

(a) The invalidity or unenforceability of any provision of this Loan Agreement will not affect the validity or enforceability of any other provision, and all other provisions will remain in full force and effect. This Loan Agreement contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Loan Agreement.

(b) This Loan Agreement may not be amended or modified except by a writing signed by the party against whom enforcement is sought.

12.08 Disclosure of Information. Borrower acknowledges that Lender may provide to third parties with an existing or prospective interest in the servicing, enforcement, evaluation, performance, ownership, purchase, participation or Securitization of the Loan, including, any of the Rating Agencies, any entity maintaining databases on the underwriting and performance of commercial mortgage loans, as well as governmental regulatory agencies having regulatory authority over Lender, any and all information which Lender now has or may hereafter acquire relating to the Loan, the Mortgaged Property, Borrower, any SPE Equity Owner or any Guarantor, as Lender determines necessary or desirable and that such information may be included in disclosure documents in connection with a Securitization or syndication of participation interests, including a prospectus, prospectus supplement, offering memorandum, private placement memorandum or similar document (each, a “Disclosure Document”) and also may be included in any filing with the Securities and Exchange Commission pursuant to the Securities Act or the Securities Exchange Act. To the fullest extent permitted under applicable law, Borrower irrevocably waives all rights, if any, to prohibit such disclosure, including any right of privacy.

12.09 Determinations by Lender. Unless otherwise provided in this Loan Agreement, in any instance where the consent or approval of Lender may be given or is required, or where any determination, judgment or decision is to be rendered by Lender under this Loan Agreement, the granting, withholding or denial of such consent or approval and the rendering of such determination, judgment or decision will be made or exercised by Lender (or its designated representative) at its sole and exclusive option and in its sole and absolute discretion.

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12.10 Sale of Note; Change in Servicer; Loan Servicing. The Note or a partial interest in the Note (together with this Loan Agreement and the other Loan Documents) may be sold one or more times without prior Notice to Borrower. A sale may result in a change of the Loan Servicer. There also may be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given Notice of the change. All actions regarding the servicing of the Loan evidenced by the Note, including the collection of payments, the giving and receipt of Notice, inspections of the Mortgaged Property, inspections of books and records, and the granting of consents and approvals, may be taken by the Loan Servicer unless Borrower receives Notice to the contrary. If Borrower receives conflicting Notices regarding the identity of the Loan Servicer or any other subject, any such Notice from Lender will govern.

12.11 Supplemental Financing.

(a) This Section will apply only if at the time of any application referred to in Section 12.11(b), Freddie Mac has in effect a product described in its Multifamily Seller/Servicer Guide under which it purchases supplemental mortgages on multifamily properties that meet specified criteria (“Supplemental Mortgage Product”).

(b) After the first anniversary of the date of the Senior Indebtedness, Freddie Mac will consider an application from an originating lender that is generally approved by Freddie Mac to sell mortgages to Freddie Mac under the Supplemental Mortgage Product (“Approved Seller/Servicer”) for the purchase by Freddie Mac of a proposed indebtedness of Borrower to the Approved Seller/Servicer to be secured by one or more Supplemental Instruments on the Mortgaged Property. Freddie Mac will purchase each Supplemental Loan secured by the Mortgaged Property if each of the following conditions is satisfied:

(i) At the time of the proposed Supplemental Loan, no Event of Default may have occurred and be continuing and no event or condition may have occurred and be continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(ii) Borrower and the Mortgaged Property must be acceptable to Freddie Mac under its Supplemental Mortgage Product.

(iii) New loan documents must be entered into to reflect each Supplemental Loan, such documents to be acceptable to Freddie Mac in its discretion.

(iv) No Supplemental Loan may cause the combined debt service coverage ratio of the Mortgaged Property after the making of that Supplemental Loan to be less than the Required DSCR. As used in this Section, the term “combined debt service coverage ratio” means, with respect to the Mortgaged Property, the ratio of:

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(A) the annual net operating income from the operations of the Mortgaged Property at the time of the proposed Supplemental Loan,

              to

(B) the aggregate of the annual principal and interest payable on all of the following:

(I) the Indebtedness under this Loan Agreement (using a 30 year amortization schedule),

(II) any “Indebtedness” as defined in any security instruments recorded against the Mortgaged Property (using a 30 year amortization schedule for any Supplemental Loans), and

(III) the proposed “Indebtedness” for any Supplemental Loan (using a 30 year amortization schedule).

As used in this Section, “annual principal and interest” with respect to an adjustable-rate loan will be calculated by Freddie Mac using an interest rate equal to one of the following:

(X) If the loan has an internal interest rate cap, the Capped Interest Rate.

(Y) If the loan has an external interest rate cap, the external interest rate cap.

(Z) If the loan has no interest rate cap, the greater of (I) 7%, or (II) the then-current LIBOR Index Rate plus the Margin plus 300 basis points.

The annual net operating income of the Mortgaged Property will be as determined by Freddie Mac in its discretion considering factors such as income in place at the time of the proposed Supplemental Loan and income during the preceding 12 months, and actual, historical and anticipated operating expenses. Freddie Mac will determine the combined debt service coverage ratio of the Mortgaged Property based on its underwriting. Borrower will provide Freddie Mac such financial statements and other information Freddie Mac may require to make these determinations.

(v) No Supplemental Loan may cause the combined loan to value ratio of the Mortgaged Property after the making of that Supplemental Loan to exceed the Required LTV, as determined by Freddie Mac. As used in this Section, “combined loan to value ratio” means, with respect to the Mortgaged Property, the ratio, expressed as a percentage, of:

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(A) the aggregate outstanding principal balances of all of the following:

(I) the Indebtedness under this Loan Agreement,

(II) any “Indebtedness” as defined in any security instruments recorded against the Mortgaged Property, and

(III) the proposed “Indebtedness” for any Supplemental Loan,

        to

(B) the value of the Mortgaged Property.

Freddie Mac will determine the combined loan to value ratio of the Mortgaged Property based on its underwriting. Borrower will provide Freddie Mac such financial statements and other information Freddie Mac may require to make these determinations. In addition, Freddie Mac, at Borrower’s expense, may obtain MAI appraisals of the Mortgaged Property in order to assist Freddie Mac in making the determinations under this Section. If Freddie Mac requires an appraisal, then the value of the Mortgaged Property that will be used to determine whether the Required LTV has been met will be the lesser of the appraised value set forth in such appraisal or the value of the Mortgaged Property as determined by Freddie Mac.

(vi) Borrower’s organizational documents are amended to permit Borrower to incur additional debt in the form of Supplemental Loans (Lender will consent to such amendment(s)).

(vii) One or more Persons acceptable to Freddie Mac executes and delivers to the Approved Seller/Servicer a Guaranty in a form acceptable to Freddie Mac with respect to the exceptions to non-recourse liability described in Freddie Mac’s form promissory note, unless Freddie Mac has elected to waive its requirement for a Guaranty.

(viii) The loan term of each Supplemental Loan will be coterminous with the Senior Indebtedness or longer than the Senior Indebtedness, including any “Extension Period” described in the Note secured by the Senior Instrument, at Freddie Mac’s discretion.

(ix) The Prepayment Premium Period of each Supplemental Loan will be coterminous with the Prepayment Premium Period or the combined Lockout Period and Defeasance Period, as applicable, of the Senior Indebtedness.

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(x) The interest rate of each Supplemental Loan will be determined by Freddie Mac in its discretion.

(xi) Lender enters into an intercreditor agreement (“Intercreditor Agreement”) acceptable to Freddie Mac and to Lender for each Supplemental Loan.

(xii) Borrower’s payment of fees and other expenses charged by Lender, Freddie Mac, the Approved Seller/Servicer, and the Rating Agencies (including reasonable Attorneys’ Fees and Costs) in connection with reviewing and originating each Supplemental Loan.

(xiii) Notwithstanding anything to the contrary in Article IV, Borrower will make all required deposits under the Senior Indebtedness for the payment of any Impositions, so long as a Supplemental Loan is outstanding, and such deposits will be credited to the payment of any such required Impositions under any Supplemental Loan.

(xiv) All other requirements of the Supplemental Mortgage Product must be met, unless Freddie Mac has elected to waive one or more of its requirements.

(c) No later than 5 Business Days after Lender’s receipt of a written request from Borrower, Lender will provide the following information to an Approved Seller/Servicer upon Borrower’s written request. Lender will only be obligated to provide this information in connection with Borrower’s request for a Supplemental Loan from an Approved Seller/Servicer; provided, however, if Freddie Mac is the owner of the Note, Lender will not be obligated to provide such information:

(i) The then-current outstanding principal balance of the Senior Indebtedness.

(ii) Payment history of the Senior Indebtedness.

(iii) Whether any Reserve Funds are being collected on the Senior Indebtedness and the amount of each such Reserve Fund deposit as of the date of the request.

(iv) Whether any Repairs, Capital Replacements or improvements or rental achievement or burn-off guaranty requirements are existing or outstanding under the terms of the Senior Indebtedness.

(v) A copy of the most recent inspection report for the Mortgaged Property.

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(vi) Whether any modifications or amendments have been made to the Loan Documents for the Senior Indebtedness since origination of the Senior Indebtedness and, if applicable, a copy of such modifications and amendments.

(vii) Whether to Lender’s knowledge any Event of Default exists under the Senior Indebtedness.

(d) Lender will have no obligation to consent to any mortgage or Lien on the Mortgaged Property that secures any indebtedness other than the Indebtedness, except as set forth in this Loan Agreement.

(e) If a Supplemental Loan is made to Borrower, Borrower agrees that the terms of the Intercreditor Agreement will govern with respect to any distributions of excess proceeds by Lender to the Supplemental Lender, and Borrower agrees that Lender may distribute any excess proceeds received by Lender pursuant to the Loan Documents to Supplemental Lender pursuant to the Intercreditor Agreement.

12.12 Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). This Section 12.12 will apply if the Note is assigned to a REMIC trust prior to the Cut-off Date, and, subject to Section 12.12(a) and (c), Borrower will have the right to defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions:

(a) Borrower will not have the right to obtain Defeasance at any of the following times:

(i) If the Loan is not assigned to a REMIC trust.

(ii) During the Lockout Period.

(iii) After the expiration of the Defeasance Period.

(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.

(b) Borrower will give Lender Notice (“Defeasance Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which the Defeasance Notice is received by Lender. Lender will acknowledge receipt of the Defeasance Notice and will state in such receipt whether Lender will designate the Successor Borrower or will permit Borrower to designate the Successor Borrower.

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(c) The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”). If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice will terminate.

  (d) (i)         If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Fee as liquidated damages for Borrower’s default and, except as provided in Section 12.12(d)(ii), Borrower will be released from all further obligations under this Section 12.12. Borrower acknowledges that Lender will incur financing costs in arranging and preparing for the release of the Mortgaged Property from the Lien of the Security Instrument in reliance on the executed Defeasance Notice. Borrower agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Loan Agreement, of the damages Lender will incur by reason of Borrower’s default.   (ii)        If the Defeasance is not consummated on the Defeasance Closing Date for any reason, Borrower agrees to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 12.12(d)(i)) incurred by Lender in reliance on the executed Defeasance Notice, within 5 Business Days after Borrower receives a written demand for payment, accompanied by a statement, in reasonable detail, of Lender’s third party costs and expenses.   (iii)       All payments required to be made by Borrower to Lender pursuant to this Section 12.12 will be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.

(e) No Event of Default has occurred and is continuing.

(f) Each of the following documents must be delivered to Lender on or prior to the Defeasance Closing Date:

(i) An opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that Lender has a valid and perfected Lien and security interest of first priority in the Defeasance Collateral and the proceeds thereof.

(ii) An opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that the Pledge Agreement is duly authorized, executed, delivered and enforceable against Borrower in accordance with the respective terms.

(iii) Unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Transfer and Assumption Agreement is duly authorized, executed, delivered and enforceable against Successor Borrower in accordance with the respective terms.

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(iv) Unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Successor Borrower has been validly created.

(v) If Borrower designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation of the assets of the Successor Borrower with those of its Affiliates by a bankruptcy court.

(vi) Unless waived by Lender, an opinion of counsel for Borrower, in form and substance satisfactory to Lender, confirming each of the following:

(A) If, as of the Defeasance Closing Date, the Note is held by a REMIC trust, (1) the Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time), (2) the qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Defeasance, and (3) the REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of the Defeasance.

(B) The Defeasance will not result in a “sale or exchange” of the Note within the meaning of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder.

(vii) Unless waived by Lender, a written certificate from an independent certified public accounting firm (reasonably acceptable to Lender), confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they fall due under the Note, including full payment due on the Note on the Maturity Date.

(viii) Lender’s form of a pledge and security agreement (“Pledge Agreement”) and financing statements which pledge and create a first priority security interest in the Defeasance Collateral in favor of Lender.

(ix) Lender’s form of a transfer and assumption agreement (“Transfer and Assumption Agreement”), whereupon Borrower and any Guarantor (in each case, subject to satisfaction of all requirements under this Loan Agreement) will be relieved from liability in connection with the Loan (other than any liability under Sections 6.12 and 10.02 for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance Closing Date) and Successor Borrower will assume all remaining obligations.

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(x) Forms of all documents necessary to release the Mortgaged Property from the Liens created by the Security Instrument and related UCC financing statements (collectively, “Release Instruments”), each in appropriate form required by the state in which the Property is located.

(xi) Such other opinions, certificates, documents or instruments as Lender may reasonably request.

(g) Borrower will deliver to Lender on or prior to the Defeasance Closing Date each of the following:

(i) The Defeasance Collateral, which meets all of the following requirements:

(A) It is owned by Borrower, free and clear of all Liens and claims of third-parties.

(B) It is in an amount to provide for (A) redemption payments to occur prior, but as close as possible, to all successive Installment Due Dates occurring under the Note after the Defeasance Closing Date, and (B) deliver redemption proceeds at least equal to the amount of principal and interest due on the Note on each Installment Due Date including full payment due on the Note on the Maturity Date (“Scheduled Debt Payments”).

(C) It is arranged such that redemption payments received from the Defeasance Collateral are paid directly to Lender to be applied on account of the Scheduled Debt Payments.

(D) Unless otherwise agreed in writing by Lender, the pledge of the Defeasance Collateral will be effected through the book-entry facilities of a qualified securities intermediary designated by Lender in conformity with all applicable laws.

(ii) All accrued and unpaid interest and all other sums due under the Note, this Loan Agreement and under the other Loan Documents, including all amounts due under Section 12.12(i), up to the Defeasance Closing Date.

(h) If Lender permits Borrower to designate the Successor Borrower, then Borrower will, at Borrower’s expense, designate or establish an accommodation borrower (“Successor Borrower”) satisfactory to Lender (or Lender, at its option, may designate the Successor Borrower) which satisfies Lender’s then current requirements for a “Single Purpose Entity” to assume at the time of Defeasance ownership of the Defeasance Collateral and liability for all of Borrower’s obligations under the Pledge Agreement and the Loan Documents (to the extent that liability thereunder survives release of the Lien of the Security Instrument).

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Borrower will pay to Successor Borrower a fee of $1,000.00 as consideration of Successor Borrower’s assumption of Borrower’s obligations under the Loan Documents. Notwithstanding any contrary provision in this Loan Agreement, no Transfer Fee is payable to Lender upon a Transfer of the Loan in accordance with this Section.

(i) Borrower will pay all reasonable costs and expenses incurred by Lender in connection with the Defeasance in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments and whether or not Defeasance is completed. Such expenses include the following:

(A) All fees, costs and expenses incurred by Lender and its agents in connection with the Defeasance (including reasonable Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described in this Loan Agreement and any related documentation, and any servicing fees, Rating Agencies’ fees or other costs related to the Defeasance).

(B) Reasonable Attorneys’ Fees and Costs.

(C) A processing fee to cover Lender’s administrative costs to process Borrower’s Defeasance request.

Lender reserves the right to require that Borrower post a deposit to cover costs which Lender reasonably anticipates will be incurred.

12.13 Lender’s Rights to Sell or Securitize. Borrower acknowledges that Lender, and each successor to Lender’s interest, may (without prior Notice to Borrower or Borrower’s prior consent), sell or grant participations in the Loan (or any part of the Loan), sell or subcontract the servicing rights related to the Loan, securitize the Loan or include the Loan as part of a trust. Borrower, at its expense, agrees to cooperate with all reasonable requests of Lender in connection with any of the foregoing including executing or causing to be executed any financing statements or other documents deemed necessary by Lender or its transferee to create, perfect or preserve the rights and interest to be acquired by such transferee, providing any updated financial information with appropriate verification through auditors letters, delivering revised organizational documents and counsel opinions satisfactory to the Rating Agencies, executed amendments to the Loan Documents, and review information contained in a preliminary or final private placement memorandum, prospectus, prospectus supplements or other Disclosure Document, and providing a mortgagor estoppel certificate and such other information about Borrower, any SPE Equity Owner, any Guarantor, any operator of the Facility, any Property Manager or the Mortgaged Property as Lender may require for Lender’s offering materials.

12.14 Cooperation with Rating Agencies and Investors. Borrower covenants and agrees that if

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Lender decides to include the Loan as an asset of a Secondary Market Transaction, Borrower will (a) at Lender’s request, meet with representatives of the Rating Agencies and/or investors to discuss the business and operations of the Mortgaged Property, and (b) permit Lender or its representatives to provide related information to the Rating Agencies and/or investors, and (c) cooperate with the reasonable requests of the Rating Agencies and/or investors in connection with all of the foregoing.

12.15 Time is of the Essence. Time is of the essence with respect to each covenant of this Loan Agreement.

ARTICLE XIII        DEFINITIONS.

The following terms, when used in this Loan Agreement (including when used in the recitals), will have the following meanings:

“Activities of Daily Living” means personal care services that provide the frail elderly with assistance in eating, dressing, bathing, incontinence care and assistance in moving from one place to another (such as from a bed to a wheelchair).

“Affiliate” of any Person means (i) any other Person which, directly or indirectly, is in Control of, is under the Control of, or is under common Control with, such Person; (ii) any other Person who is a director or officer of (A) such Person, (B) any subsidiary of such Person, or (C) any Person described in clause (i) of this definition; or (iii) any corporation, limited liability company or partnership which has as a director any Person described in Section (ii) of this definition.

“Aggregate Carrier Exposure” means:

(i) For each individual carrier providing Hazard Insurance, one of the following:

(A) The sum of the required building coverage limits and required business income/rental value Insurance if such coverage is provided by specific Insurance or a policy covering only the Mortgaged Property.

(B) The blanket Insurance or master program limit if such coverage is provided by a Blanket Insurance Policy or master program from a single carrier.

(C) The total limit provided by the carrier in all layers in which the carrier participates if such coverage is provided by a Blanket Insurance Policy or master program with more than one carrier participating with layered limits.

(ii) For each individual carrier providing liability Insurance pursuant to Section 6.10(a)(ii) or as otherwise required by Lender, one of the following:

(A) The total aggregate limits (general liability plus excess/umbrella) if such coverage is provided by specific Insurance or a policy covering only the Mortgaged Property.

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(B) The total aggregate limits (general liability plus excess/umbrella) if such coverage is provided by liability Insurance for multiple properties or a master program from a single carrier.

(C) The total limit provided by the carrier in all layers in which the carrier participates if such coverage is provided by an individual policy, liability Insurance policy for multiple properties or a master program with more than one carrier participating with layered limits Blanket Insurance Policy or master program with more than one carrier participating with layered limits.

“Approved Seller/Servicer” is defined in Section 12.11(b).

“Assignment of Management Agreement” means the Collateral Assignment of Management Agreement and Subordination of Management Fees of even date herewith among Borrower, Lender and Property Manager, including all schedules, riders, allonges and addenda, as such Assignment of Management Agreement may be amended from time to time.

“Assisted Living Residences” means residences that are designed to accommodate and provide 24-hour protective oversight and assistance for natural persons with functional limitations, including meals in a central location and assistance with Activities of Daily Living and Alzheimer’s care.

“Attorneys’ Fees and Costs” means (i) fees and out of pocket costs of Lender’s and Loan Servicer’s attorneys, as applicable, including costs of Lender’s and Loan Servicer’s in-house counsel, support staff costs, costs of preparing for litigation, computerized research, telephone and facsimile transmission expenses, mileage, deposition costs, postage, duplicating, process service, videotaping and similar costs and expenses; (ii) costs and fees of expert witnesses, including appraisers; (iii) investigatory fees; and (iv) costs for any opinion required by Lender pursuant to the terms of the Loan Documents.

“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq., as amended from time to time.

“Blanket Insurance Policy” is defined in Section 6.10(h).

“Borrower” means all Persons identified as “Borrower” in the first paragraph of this Loan Agreement, together with their successors and assigns.

“Borrower Information” is defined in Section 10.02(d).

“Borrower Information Sections” is defined in Section 10.02(d).

“Borrower Principal” means any of the following:

(i) Any general partner of Borrower (if Borrower is a partnership).

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(ii) Any manager or managing member of Borrower (if Borrower is a limited liability company).

(iii) Any Person (limited partner, member or shareholder) with a collective direct or indirect equity interest in Borrower equal to or greater than 25%.

(iv) Any Guarantor of all or any portion of the Loan or of any obligations of Borrower under the Loan Documents.

“Borrower Proof of Loss Threshold” means the amount that is the greater of (i) $50,000, or (ii) $18,000.00.

“Borrower Proof of Loss Maximum” means $72,000.00.

“Business Day” means any day other than a Saturday, a Sunday, or any other day on which Lender or the national banking associations are not open for business.

“Capital Replacement” means the replacement of those items listed on Exhibit F and such other replacements of equipment, major components or capital systems related to the Improvements as may be approved in writing or required by Lender.

“Capped Interest Rate” is defined in the Note.

“Claim” is defined in Section 10.02(f).

“Closing Date” means the date on which Lender disburses the proceeds of the Loan to or for the account of Borrower.

“Commitment Letter” means the commitment letter or early rate lock application dated April 17, 2012, from Lender to Borrower, as it may have thereafter been modified, amended or extended.

“Completion Date” means N/A , 2012, or such other date(s) as may be specified for particular Repairs in Exhibit C, as such date may be extended.

“Condemnation” is defined in Section 6.11(a).

“Continuing Care Retirement Community” or “CCRC” means a property designed to provide a continuum of care within a single community. The living accommodations and care provided within a CCRC are a combination of the accommodations and services provided by Seniors Apartments, Independent Living Units, Assisted Living Residences and Skilled Nursing Beds.

“Contract” means any present or future contract for the provision of goods or services (or with respect to payment therefore), together with all modifications, extensions and renewals, in connection with the operation or management of the Facility (other than Leases), including without limitation (i) those with Borrower or an operator of the Facility and (ii) Third Party Provider Agreements, together with all modifications, extensions or renewals.

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“Control” means to possess, directly or indirectly, the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, including the power to elect a majority of the directors or trustees of a corporation or trust, as the case may be.

“Cut-off Date” is defined in the Note.

“Default Rate” is defined in the Note.

“Defeasance” is defined in Section 12.12.

“Defeasance Closing Date” is defined in Section 12.12(b).

“Defeasance Collateral” means (i) a Freddie Mac Debt Security, (ii) a Fannie Mae Debt Security, (iii) U.S. Treasury Obligations, or (iv) FHLB Obligations.

“Defeasance Fee” is defined in Section 12.12(c).

“Defeasance Notice” is defined in Section 12.12(b).

“Defeasance Period” is defined in the Note.

“Designated Entity for Transfers” means each entity so identified in Exhibit I, and that entity’s successors and permitted assigns.

“Disclosure Document” is defined in Section 12.08.

“Downgrade” as it applies to a License, means a License is modified so as to permit a less acute level of care (such as, but not limited to, elimination of skilled nursing or assisted living care or services included therein) by the Governmental Authority responsible for issuing such License.

“Eligible Account” means an identifiable account which is separate from all other funds held by the holding institution that is either (i) an account or accounts maintained with the corporate trust department of a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or (ii) a segregated trust account or accounts maintained with the corporate trust department of a federal or state chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution or trust company is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal and state authority. An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument.

“Eligible Institution” means a federal or state chartered depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations or commercial paper of which are rated at least A-1 by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., P-1 by Moody’s Investors Service, Inc. and F-3 by Fitch, Inc. in the case of accounts in which funds are held for 30 days or less or, in the case of letters of credit or accounts in which funds are held for more than 30 days, the long term

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unsecured debt obligations of which are rated at least “A” by Fitch, Inc. and Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and “A2” by Moody’s Investors Service, Inc. If at any time an Eligible Institution does not meet the required rating, the Loan Servicer must move the Eligible Account within 30 days of such event to an appropriately rated Eligible Institution.

“Environmental Inspections” is defined in Section 6.12(e).

“Environmental Permit” means any permit, license, or other authorization issued under any Hazardous Materials Law with respect to any activities or businesses conducted on or in relation to the Mortgaged Property.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Event of Default” means the occurrence of any event listed in Section 9.01.

“External Cap Agreement Reserve Fund” means the account established pursuant to Section 4.07, if applicable, to pay for the cost of a Replacement Cap Agreement.

“Facility” means the senior housing facility located on the Land, and including the Land and Improvements thereon.

“Fannie Mae Debt Security” means any non-callable bond, debenture, note, or other similar debt obligation issued by the Federal National Mortgage Association.

“FHLB Obligations” mean direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by the Federal Home Loan Bank.

“Fixtures” means all property owned by Borrower which is attached to the Land or the Improvements so as to constitute a fixture under applicable law, including: machinery, equipment, engines, boilers, incinerators and installed building materials; systems and equipment for the purpose of supplying or distributing heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring and conduits used in connection with radio, television, security, fire prevention or fire detection or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances; light fixtures, awnings, storm windows and storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors; cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants; swimming pools; and exercise equipment.

“Freddie Mac” means the Federal Home Loan Mortgage Corporation.

“Freddie Mac Debt Security” means any non-callable bond, debenture, note, or other similar debt obligation issued by Freddie Mac.

“Freddie Mac Web Site” means the web site of Freddie Mac, located at www.freddiemac.com.

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“GAAP” means generally accepted accounting principles.

“Governmental Authority” means any board, commission, department, agency or body of any municipal, county, state or federal governmental unit, or any subdivision of any of them, that has or acquires jurisdiction over the Mortgaged Property, or the use, operation or improvement of the Mortgaged Property, or over Borrower including, without limitation, all applicable licensing or accreditation bodies or agencies (whether federal, state, county, district, municipal, city or otherwise, whether now or hereafter in existence, including without limitation, applicable non-governmental organizations, such as the Joint Commission on the Accreditation of Healthcare Organizations) that have or acquire jurisdiction over Borrower, an operator of the Facility (as pertains to the Facility), the Facility or the use, operation, improvement, accreditation, licensing or permitting of the Facility or the operations thereof.

“Guarantor” means the Person(s) required by Lender to guaranty all or a portion of Borrower’s obligations under the Loan Documents, as set forth in the Guaranty: The required Guarantors are set forth in Exhibit I.

“Guaranty” means the Guaranty executed by Guarantor and/or any replacement or supplemental guaranty executed pursuant to the terms of this Loan Agreement.

“Hazard Insurance” is defined in Section 6.10(a).

“Hazardous Materials” means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives; flammable materials; radioactive materials; polychlorinated biphenyls (PCBs) and compounds containing them; lead and lead-based paint; asbestos or asbestos containing materials in any form that is or could become friable; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which on the Mortgaged Property is prohibited by any Governmental Authority; any medical products or devices, including, those materials defined as “medical waste” or “biological waste” under relevant statutes, ordinances or regulations pertaining to Hazardous Materials Law; any substance that requires special handling and any other material or substance now or in the future that (i) is defined as a “hazardous substance,” “hazardous material,” “hazardous waste,” “toxic substance,” “toxic pollutant,” “contaminant,” or “pollutant” by or within the meaning of any Hazardous Materials Law, or (ii) is regulated in any way by or within the meaning of any Hazardous Materials Law.

“Hazardous Materials Law” and “Hazardous Materials Laws” means any and all federal, state and local laws, ordinances, regulations and standards, rules, policies and other governmental requirements, administrative rulings and court judgments and decrees in effect now or in the future, including all amendments, that relate to Hazardous Materials or the protection of human health or the environment and apply to Borrower or to the Mortgaged Property. Hazardous Materials Laws include the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101 et seq., and their state analogs.

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“Healthcare Laws” means all federal, state, municipal or other Governmental Authority laws, codes and statutes and all regulations and rules promulgated thereunder and all Governmental Authority interpretations thereof, applicable or pertaining to the ownership, leasing, operation or management of medical or senior housing facilities (including without limitation, Independent Living Units, adult care facilities, Assisted Living Residences, skilled nursing care, rehabilitation services, CCRC’s, and dementia and/or memory care facilities), including without limitation those pertaining to Licenses necessary to operate or manage any such facility, those pertaining to billing Medicare, Medicaid or TRICARE (or any so-called “waiver program” associated therewith) or any other Governmental Authority payor for similar goods or services or providing goods or services to natural persons receiving benefits under Medicare, Medicaid or TRICARE or other Governmental Authority programs, those pertaining to patient care and Privacy Laws, quality and safety standards, accepted professional standards, and principles that apply to professionals providing services to the Facility, accreditation standards, and requirements of the applicable state department of health and all other Governmental Authorities including, without limitation, those requirements relating to the Facility’s physical structure and environment, licensing, quality and adequacy of medical care, distribution of pharmaceuticals, rate setting, equipment, personnel, operating policies, additions to facilities and services and fee splitting.

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended from time to time, together with all rules and regulations promulgated thereunder from time to time.

“HVAC System” is defined in Section 6.10(a)(v).

“Immediate Family Members” means a Person’s spouse, parent, child (including stepchild), grandchild (including step-grandchild) or sibling.

“Imposition Reserve Deposits” is defined in Section 4.02(a).

“Impositions” is defined in Section 4.02(a).

“Improvements” means the buildings, structures and improvements now constructed or at any time in the future constructed or placed upon the Land, including any future alterations, replacements and additions.

“Indebtedness” means the principal of, interest at the fixed or variable rate set forth in the Note on, and all other amounts due at any time under, the Note, this Loan Agreement or any other Loan Document, including prepayment premiums, late charges, default interest, and advances as provided in Section 9.02 to protect the security of the Security Instrument.

“Indemnified Party/ies” is defined in Section 10.02(d)(i).

“Indemnitees” is defined in Section 10.02(a).

“Independent Living Units” means residential units that are accompanied by optional services designed to aid the residents’ independence, including, but not limited to, building security, optional meals, housekeeping, laundry, and at least some incidental services and activities not related to personal care, such as valet shopping, financial planning, unscheduled transportation, beautician services, recreational and social activities and 24-hour staff presence.

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“Inspection Fee” means a fee payable to Lender or Loan Servicer for performing any inspection required by this Agreement in an amount not to exceed $750.00 per inspection.

“Insurance” means Hazard Insurance, liability insurance and all other insurance that Lender requires Borrower to maintain pursuant to this Loan Agreement.

“Intended Use” is defined in Section 5.25.

“Intercreditor Agreement” is defined in Section 12.11(b)(xi).

“Investment Fee” means a one time fee for establishing the (i) Replacement Reserve Fund in the amount of $500.00 and (ii) Repair Reserve Fund in the amount of $1,000.00.

“Issuer Group” is defined in Section 10.02(d).

“Issuer Person” is defined in Section 10.02(d).

“Land” means the land described in Exhibit A.

“Leases” means all present and future leases, subleases, occupancy agreements pertaining to occupants of the Facility, including both residential and commercial agreements and patient admission or resident care agreements, licenses, concessions or grants or other possessory interests now or hereafter in force, whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals.

“Lender” means the entity identified as “Lender” in the first paragraph of this Loan Agreement, or any subsequent holder of the Note.

“Lender’s Discretion” means Lender’s reasonable discretion unless otherwise set forth in this Loan Agreement.

“Letter of Credit” means any letter of credit required under the terms of this Loan Agreement.

“LIBOR Index Rate” is defined in the Note.

“License” means any license, permit, regulatory agreement, certificate, approval, certificate of need or similar certificate, authorization, accreditation, approved provider status in any approved provider payment program, or approval issued by an applicable state department of health (or any subdivision thereof) or state licensing agency, as applicable, in each instance whether issued by a Governmental Authority or otherwise, used in connection with, or necessary or desirable to use, occupy or operate the Facility for its Intended Use, including without limitation, the provision of all goods and services to be provided by Borrower or the operator of the Facility to the residents of the Facility.

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“Lien” means any mortgage, deed of trust, deed to secure debt, security interest or other lien or encumbrance on the Mortgaged Property.

“Loan” is defined on Page 1 of this Loan Agreement.

“Loan Agreement” means this Seniors Housing Loan and Security Agreement.

“Loan Application” is defined in Section 5.16(a).

“Loan Documents” means the Note, the Security Instrument, this Loan Agreement, all guaranties, all indemnity agreements, all collateral agreements, UCC filings, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any Guarantor or any other Person in connection with the Loan evidenced by the Note, as such documents may be amended from time to time.

“Loan Servicer” means the entity that from time to time is designated by Lender to collect payments and deposits and receive Notices under the Note, the Security Instrument, this Loan Agreement and any other Loan Document, and otherwise to service the Loan evidenced by the Note for the benefit of Lender. Unless Borrower receives Notice to the contrary, the Loan Servicer is the entity identified as “Lender” in the first paragraph of this Loan Agreement.

“Lockout Period” is defined in the Note.

“Manager” or “Managers” means a Person who is named or designated as a manager or managing member or otherwise acts in the capacity of a manager or managing member of a limited liability company in a limited liability company agreement or similar instrument under which the limited liability company is formed or operated.

“Margin” is defined in the Note.

“Material Adverse Change” means any set of circumstances or events which, in Lender’s Discretion would have or is then reasonably expected to have a Material Adverse Effect on (i) the validity or enforceability of this Loan Agreement or the other Loan Documents taken as a whole, (ii) the ability of Borrower to duly and punctually pay the Indebtedness or perform its obligations, (iii) the ability of Lender to enforce its legal remedies pursuant to this Loan Agreement or the other Loan Documents taken as a whole, including by realizing upon any collateral or any guaranty, (iv) the business prospects or financial condition of Borrower or any Guarantor, (v) the financial performance or market value of the Mortgaged Property, or (vi) the compliance of the Mortgaged Property with any law dealing with the use, ownership or operation of the Mortgaged Property or any law, the noncompliance with which could reasonably be expected to have a Material Adverse Effect on the financial performance or market value of the Mortgaged Property.

“Material Adverse Effect” means a significant detrimental effect on (i) the Mortgaged Property (including, without limitation, the Facility), (ii) the business, prospects, profits, operations or condition (financial or otherwise) of Borrower or any operator of the Facility, (iii) the enforceability, validity, perfection or priority of the Lien of any Loan Document, (iv) the ability of Borrower or any operator of the Facility to perform any obligations under any Loan Document or (v) Borrower’s or any operator of the Facility’s interest in the Facility including, without limitation, a Downgrade, termination, revocation or suspension of, or refusal to renew or reissue, any applicable License, or a ban on new resident admissions.

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“Material Contract” means Contracts:

(i) for preparing or serving food (but do not include food supply Contracts);

(ii) for medical services or healthcare provider agreements;

(iii) the average annual consideration of which, directly or indirectly, is at least $20,000;

(iv) having a term of more than one year unless subject to termination by Borrower or if Borrower is not a party to the Contract, the operator of the Facility, and their respective successors and assigns, upon not more than thirty days notice, without cause and without payment of any termination fee, penalty or extra charge; or

(v) determined by Lender to be material to the operation of the Facility.

“Maturity Date” means the Scheduled Maturity Date, as defined in the Note.

“MMP” means a moisture management plan to control water intrusion and prevent the development of Mold or moisture at the Mortgaged Property throughout the term of this Loan Agreement.

“Modified Non-Residential Lease” means an extension or modification of any Non-Residential Lease, which Non-Residential Lease was in existence as of the date of this Loan Agreement.

“Mold” means mold, fungus, microbial contamination or pathogenic organisms.

“Mortgaged Property” means all of Borrower’s present and future right, title and interest in and to all of the following:

(i) The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease, the Ground Lease and the Leasehold Estate.

(ii) The Improvements (including, without limitation, the Facility).

(iii) The Fixtures.

(iv) The Personalty.

(v) All current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights of way, strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses and appurtenances related to or benefiting the Land or the Improvements, or both, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated.

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(vi) All proceeds paid or to be paid by any insurer of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, whether or not Borrower obtained the Insurance pursuant to Lender’s requirement.

(vii) All awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Land or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, including any awards or settlements resulting from Condemnation proceedings or the total or partial taking of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property under the power of eminent domain or otherwise and including any conveyance in lieu thereof.

(viii) All contracts, options and other agreements for the sale of the Land, or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations.

(ix) All proceeds from the conversion, voluntary or involuntary, of any of the items described in items (i) through (viii) of this definition, into cash or liquidated claims, and the right to collect such proceeds.

(x) All Rents and Leases.

(xi) All earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed proceeds of the Loan.

(xii) All Imposition Reserve Deposits.

(xiii) All refunds or rebates of Impositions by any Governmental Authority or insurance company (other than refunds applicable to periods before the real property tax year in which this Loan Agreement is dated).

(xiv) All tenant security deposits which have not been forfeited by any tenant under any Lease and any bond or other security in lieu of such deposits.

(xv) All names under or by which any of the Mortgaged Property may be operated or known, and all trademarks, trade names and goodwill relating to any of the Mortgaged Property.

(xvi) If required by the terms of Section 4.05, all rights under the Letter of Credit and the Proceeds, as such Proceeds may increase or decrease from time to time.

(xvii) All payments received and all rights to receive payments from any source, which payments (or rights thereto) arise from operation of or at the Facility, including, without limitation, entrance fees, application fees, processing fees, community

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fees and any other amounts or fees deposited or to be deposited by any resident or tenant, payments received and the right to receive payments of second party charges added to base rental income, base and additional meal sales, payments received and rights to receive payments from commercial operations located at or on the Facility or provided as a service to the occupants of the Facility, rental from guest suites, seasonal lease charges, rental payments under furniture leases, income from laundry service, and income and fees from any and all other services provided to residents of the Facility.

(xviii) All rights to payments from Medicare, Medicaid or TRICARE programs or similar federal, state or local programs or agencies and rights to payment from private insurers, arising from the operation of the Facility.

(xix) All Licenses.

(xx) All Contracts, including without limitation, operating contracts, franchises, licensing agreements, healthcare services contracts, food service contracts and other contracts for services related to the operation of the Facility.

(xxi) All utility deposits.

(xxii) If the Note provides for interest to accrue at an adjustable or variable rate and there is a Cap Agreement, the Cap Collateral.

(xxiii) Without duplication of the foregoing or the inclusions in Mortgaged Property set forth elsewhere in this Loan Agreement, all of the real and personal property, both tangible and intangible, described on Exhibit N.

“NFIP” is defined in Section 6.10(a)(iv).

“Non-Residential Lease” is a Lease of a portion of the Mortgaged Property to be used for non-residential purposes.

“New Non-Residential Lease” is any Non-Residential Lease not in existence as of the date of this Loan Agreement.

“Note” means the Multifamily Note (including any Amended and Restated Note, Consolidated, Amended and Restated Note, or Extended and Restated Note) executed by Borrower in favor of Lender and dated as of the date of this Loan Agreement, including all schedules, riders, allonges and addenda, as such Multifamily Note may be amended, modified and/or restated from time to time.

“Notice” or “Notices” means all notices, demands and other communication required under the Loan Documents, provided in accordance with the requirements of Section 12.03.

“O&M Program” is defined in Section 6.12(c) and consists of the following: Asbestos O&M Program as set forth in that environmental report dated October 12, 2011 prepared by EMG Corporation.

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“Operator of the Facility” means any tenant (an “Operating Tenant”) under a lease with Borrower (as landlord) of all or substantially all of the Facility, as well as any manager or operator of the Facility pursuant to a Contract with Borrower or with an Operating Tenant.

“Person” means any natural person, sole proprietorship, corporation, general partnership, limited partnership, limited liability company, limited liability partnership, limited liability limited partnership, joint venture, association, joint stock company, bank, trust, estate, unincorporated organization, any federal, state, county or municipal government (or any agency or political subdivision thereof), endowment fund or any other form of entity.

“Personalty” means all of the following:

(i) Accounts (including deposit accounts) of Borrower related to the Mortgaged Property.

(ii) Equipment and inventory owned by Borrower, which are used now or in the future in connection with the ownership, management or operation of the Land or Improvements or are located on the Land or Improvements, including furniture, furnishings, machinery, building materials, goods, supplies, tools, books, records (whether in written or electronic form) and computer equipment (hardware and software).

(iii) Other tangible personal property owned by Borrower which is used now or in the future in connection with the ownership, management or operation of the Land or Improvements or is located on the Land or in the Improvements, including ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances (other than Fixtures).

(iv) Any operating agreements relating to the Land or the Improvements.

(v) Any surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements.

(vi) All other intangible property, general intangibles and rights relating to the operation of, or used in connection with, the Land or the Improvements, including all governmental permits relating to any activities on the Land and including subsidy or similar payments received from any sources, including a Governmental Authority.

(vii) Any rights of Borrower in or under any Letter of Credit.

“Pledge Agreement” is defined in Section 12.12(f)(viii).

“Prepayment Premium Period” is defined in the Note.

“Prior Lien” means a pre-existing mortgage, deed of trust or other Lien encumbering the Mortgaged Property.

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“Privacy Laws” means all federal, state, municipal or other Governmental Authority laws, codes and statutes and all regulations and rules promulgated thereunder and all Governmental Authority interpretations thereof, applicable or pertaining to resident, tenant and patient privacy. Privacy Laws include, but are not limited to, HIPAA.

“Proceeding” means, whether voluntary or involuntary, any case, proceeding or other action against Borrower or any SPE Equity Owner under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors.

“Proceeds” means the cash obtained by a draw on a Letter of Credit.

“Prohibited Activity or Condition” means each of the following:

(i) The presence, use, generation, release, treatment, processing, storage (including storage in above-ground and underground storage tanks), handling or disposal of any Hazardous Materials on or under the Mortgaged Property.

(ii) The transportation of any Hazardous Materials to, from or across the Mortgaged Property.

(iii) Any occurrence or condition on the Mortgaged Property, which occurrence or condition is or may be in violation of Hazardous Materials Laws.

(iv) Any violation of or noncompliance with the terms of any Environmental Permit with respect to the Mortgaged Property.

(v) Any violation or noncompliance with the terms of any O&M Program.

However, the term “Prohibited Activity or Condition” expressly excludes lawful conditions permitted by an O&M Program or the safe and lawful use and storage of quantities of (i) medical products or devices or medical waste, (ii) pre-packaged supplies, cleaning materials and petroleum products customarily used in the operation and maintenance of comparable multifamily properties, (iii) cleaning materials, personal grooming items and other items sold in pre-packaged containers for consumer use and used by tenants and occupants of residential dwelling units in the Mortgaged Property, and (iv) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Mortgaged Property’s parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance with Hazardous Materials Laws.

“Property Jurisdiction” means the jurisdiction in which the Land is located.

“Property Manager” means Greenfield Management, L.L.C., a Virginia limited liability company, or such other residential rental property manager approved by Lender in writing.

“Property Seller” is defined in Section 5.24.

“Public Fund/REIT Securities” is defined in Section 7.03(c).

Seniors Housing Loan and Security Agreement (CME) Page 95

“Rating Agencies” means Fitch, Inc., Moody’s Investors Service, Inc., or Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor entity of the foregoing, or any other nationally recognized statistical rating organization.

“Release Instruments” is defined in Section 12.12(f)(x).

“Remedial Work” is defined in Section 6.12(f).

“Rent(s)” means all rents (whether from residential or non-residential space), revenues and other income of the Land or the Improvements, parking fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property, whether now due, past due or to become due, and deposits forfeited by tenants, and, if Borrower is a cooperative housing corporation or association, maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements, whether now due, past due or to become due.

“Rent Schedule” means a written schedule for the Mortgaged Property showing the name of each tenant, and for each tenant, the space occupied, the lease expiration date, the rent payable for the current month, the date through which rent has been paid, and any related information requested by Lender.

“Repairs” means the repairs to be made to the Mortgaged Property, as described on the Repair Schedule of Work or as otherwise required by Lender in accordance with this Loan Agreement.

“Replacement Cost” means the estimated replacement cost of the Improvements, Fixtures, and Personalty (or, when used in reference to a property that is not the Mortgaged Property, all improvements, fixtures, and personalty located on such property), excluding any deduction for depreciation, all as determined annually by Borrower using customary methodology and sources of information acceptable to Lender in Lender’s Discretion. Replacement Cost will not include the cost to reconstruct foundations or site improvements, such as driveways, parking lots, sidewalks, and landscaping.

“Required DSCR” means, with respect to a Supplemental Loan, (i) if the Senior Indebtedness bears interest at a fixed rate, then (A) 1.30:1 for Mortgaged Properties classified by Lender as Independent Living and (B) 1.40:1 for Mortgaged Properties classified by Lender as Assisted Living, or (ii) if the Senior Indebtedness bears interest at an adjustable rate, then (A) 1.15:1 for Mortgaged Properties classified by Lender as Independent Living and (B) 1.20:1 for Mortgaged Properties classified by Lender as Assisted Living.

“Required LTV” means 71%.

“Reserve Fund” means each account established for Imposition Reserve Deposits, the Replacement Reserve Fund, the Repair Reserve Fund (if any), the External Cap Agreement Reserve Fund (if any), the Rental Achievement Fund (if any), and any other account established pursuant to Article IV of this Loan Agreement.

“Restoration” is defined in Section 6.10(i).

Seniors Housing Loan and Security Agreement (CME) Page 96

“Scheduled Debt Payments” is defined in Section 12.12(g)(ii).

“Secondary Market Transaction” means (i) any sale or assignment of this Loan Agreement, the Note and the other Loan Documents to one or more investors as a whole loan, (ii) a participation of the Loan to one or more investors, (iii) any deposit of this Loan Agreement, the Note and the other Loan Documents with a trust or other entity which may sell certificates or other instruments to investors evidencing an ownership interest in the assets of such trust or other entity, or (iv) any other sale, assignment or transfer of the Loan or any interest in the Loan to one or more investors.

“Securities Liabilities” is defined in Section 10.02(d).

“Securitization” means when the Note or any portion of the Note is assigned to a REMIC trust.

“Security Instrument” means the mortgage, deed of trust, deed to secure debt or other similar security instrument encumbering the Mortgaged Property and securing Borrower’s performance of its Loan obligations, including Borrower’s obligations under the Note and this Loan Agreement (including any Amended and Restated Security Instrument, Consolidation, Modification and Extension Agreement, Extension and Modification Agreement or similar agreement or instrument amending and restating existing security instruments).

“Senior Indebtedness” means, for a Supplemental Loan, if any, the Indebtedness evidenced by the Senior Note and secured by the Senior Instrument for the benefit of Senior Lender.

“Senior Instrument” – Not applicable.

“Senior Lender” means the holder of the Senior Note.

“Senior Loan Documents” means, for a Supplemental Loan, if any, all documents relating to the loan evidenced by the Senior Note.

“Senior Note” means, for a Supplemental Loan, if any, the Multifamily Note secured by the Senior Instrument.

“Seniors Apartments” means age-restricted apartments for senior residents who are able to function independently. These residences are typically restricted to residents 55 and older (or 62 and older). Seniors Apartments do not provide healthcare services, medication assistance, meal services or other third-party contract services

“Servicing Arrangement” is defined in Section 12.06(b).

“SFHA” is defined in Section 6.10(a)(iv).

“Single Purpose Entity” is defined in Section 6.13(a).

“Skilled Nursing Beds” means a portion of a property that provides licensed skilled nursing care and related services for patients who require medical, nursing or rehabilitative services, including Alzheimer’s care.

Seniors Housing Loan and Security Agreement (CME) Page 97

“SPE Equity Owner” is not applicable. Borrower will not be required to maintain an SPE Equity Owner in its organizational structure during the term of the Loan and all references to SPE Equity Owner in this Loan Agreement and in the Note will be of no force or effect.

“Successor Borrower” is defined in Section 12.12(h).

“Supplemental Indebtedness” the Indebtedness evidenced by the Supplemental Note and secured by the Supplemental Instrument for the benefit of Supplemental Lender, if any.

“Supplemental Instrument” means, for a Supplemental Loan, if any, the Security Instrument executed to secure the Supplemental Note.

“Supplemental Lender” means, for a Supplemental Loan, if any, the Approved Seller/Servicer named in the Supplemental Instrument and its successors and/or assigns.

“Supplemental Loan” means a loan that is subordinate to the Senior Indebtedness.

“Supplemental Loan Documents” means, for a Supplemental Loan, if any, all documents relating to the loan evidenced by the Supplemental Note.

“Supplemental Mortgage Product” is defined in Section 12.11(a).

“Supplemental Note” means, for a Supplemental Loan, if any, the Multifamily Note secured by the Supplemental Instrument.

“Tax Code” means the Internal Revenue Code of the United States, 26 U.S.C. Section 1 et seq., as amended from time to time.

“Taxes” means all taxes, assessments, vault rentals and other charges, if any, whether general, special or otherwise, including all assessments for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority or quasi-public authority, and which, if not paid, will become a Lien on the Land or the Improvements.

“Third Party Information” is defined in Section 10.02(d).

“Third Party Provider Agreements” means any contract pursuant to which payments arising from operation of or at the Facility are to be made by or pursuant to Medicare, Medicaid or TRICARE programs or similar federal, state or local programs or agencies or private insurers.

“Transfer” means any of the following:

(i) A sale, assignment, transfer or other disposition or divestment of any interest in Borrower or the Mortgaged Property (whether voluntary, involuntary or by operation of law).

(ii) The granting, creating or attachment of a Lien, encumbrance or security interest (whether voluntary, involuntary or by operation of law).

Seniors Housing Loan and Security Agreement (CME) Page 98

(iii) The issuance or other creation of an ownership interest in a legal entity, including a partnership interest, interest in a limited liability company or corporate stock.

(iv) The withdrawal, retirement, removal or involuntary resignation of a partner in a partnership or a member or Manager in a limited liability company.

(v) The merger, dissolution, liquidation, or consolidation of a legal entity or the reconstitution of one type of legal entity into another type of legal entity.

(vi) A change of the Guarantor.

For purposes of defining the term “Transfer,” the term “partnership” means a general partnership or a limited partnership, and the term “partner” means a general partner or a limited partner.

“Transfer” does not include any of the following:

(i) A conveyance of the Mortgaged Property at a judicial or non-judicial foreclosure sale under the Security Instrument.

(ii) The Mortgaged Property becoming part of a bankruptcy estate by operation of law under the Bankruptcy Code.

(iii) The filing or recording of a Lien against the Mortgaged Property for local taxes and/or assessments not then due and payable.

“Transfer and Assumption Agreement” is defined in Section 12.12(f)(ix).

“Transfer Fee” means a fee paid when the Transfer is completed. Unless otherwise specified, the Transfer Fee will be equal to 1% of the outstanding principal balance of the Indebtedness as of the date of the Transfer. Notwithstanding anything set forth in Article VII to the contrary, the Transfer Fee will not exceed 1% of the outstanding principal balance of the Loan.

“Transfer Review Fee” means a nonrefundable fee of $5,000 for Lender’s review of a proposed Transfer.

“U.S. Treasury Obligations” means direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by the United States of America.

“UCC Collateral” is defined in Section 3.03.

“Underwriter Group” is defined in Section 10.02(d).

“Uniform Commercial Code” means the Uniform Commercial Code as promulgated in the applicable jurisdiction.

“Windstorm Coverage” is defined in Section 6.10(a)(ix).

Seniors Housing Loan and Security Agreement (CME) Page 99

ARTICLE XIV INCORPORATION OF ATTACHED RIDERS.

The following Riders are attached to this Loan Agreement:

Name of Rider	Date Revised
Seniors Housing Operator		9/1/2011
Recycled Borrower		9/1/2011
Replacement Reserve Fund – Immediate Deposits		9/1/2011
Entity Guarantor		9/1/2011
Month to Month Leases		1/11/2012
Affiliate Transfer		9/1/2011
Cash Management Agreement		9/1/2011
Trade Names		1/11/2011

ARTICLE XV INCORPORATION OF ATTACHED EXHIBITS.

The following Exhibits, if marked with an “X” in the space provided, are attached to this Loan Agreement:

x	Exhibit A	Description of the Land (required)
x	Exhibit B	Modifications to Seniors Housing Loan and Security Agreement
¨	Exhibit C	Repair Schedule of Work
¨	Exhibit D	Repair Disbursement Request
¨	Exhibit E	Work Commenced at Mortgaged Property
x	Exhibit F	Capital Replacements (required)
¨	Exhibit G	Description of Ground Lease
x	Exhibit H	Organizational Chart of Borrower as of the Closing Date (required)
x	Exhibit I	Designated Entities for Transfers and Guarantor(s) (required)
x	Exhibit J	Licenses (required)
x	Exhibit K	Furniture, Fixtures, Equipment and Motor Vehicles (required)

Seniors Housing Loan and Security Agreement (CME) Page 100

x	Exhibit L	Contracts (required)
x	Exhibit M	Material Contracts (required)
x	Exhibit N	Additional Mortgaged Property (required)

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURES ON FOLLOWING PAGES

Seniors Housing Loan and Security Agreement (CME) Page 101

BORROWER: CARE GSL FREDERICKSBURG LLC, a Delaware limited liability company
By:	/s/ Salvatore (Torey) V. Riso, Jr.
Name:	Salvatore (Torey) V. Riso, Jr.
Title:	President and Chief Executive Officer

SIGNATURES CONTINUE ON FOLLOWING PAGE

Seniors Housing Loan and Security Agreement (CME) Page 102

LENDER: KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation
By:	/s/ Crystal L. Williams
Name:	Crystal L. Williams
Title:	Vice President

Seniors Housing Loan and Security Agreement (CME) Page 103

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME)

SENIORS HOUSING OPERATOR

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Article XI is deleted and replaced with the following:

  ARTICLE XI SENIORS HOUSING OPERATOR.

11.01 Additions to Definitions. The following terms, when used in this Loan Agreement, will have the following meanings or will add to the definitions in Article XIII, as applicable:

(a) The term “Lease” includes any master lease agreement or operating lease under which control of the use or operation of part or all of the Mortgaged Property has been granted to another entity.

(b) “Operating Lease” or “operating lease” means that Lease, dated as of September 20, 2011, entered into by and between Borrower, as landlord, and Operator, as tenant, leasing the Land and Improvements, together with certain personal property used in connection therewith, as described in said Lease, and all modifications, extensions or renewals.

(c) “Operator” or “operator” means Greenfield Assisted Living of Fredericksburg, L.L.C., a Virginia limited liability company, the tenant of the Land and Improvements under the Operating Lease, together with its permitted successors and assigns.

11.02 Additional Covenants. In addition to those covenants contained in Article VI, Borrower covenants to Lender as follows:

(a) Borrower will furnish to Lender (i) within 5 days after the receipt by Borrower from Operator, copies of any and all notices of Borrower’s default or failure to pay or perform an obligation under the Operating Lease, and/or (ii) immediately upon the issuance by Borrower to Operator, copies of any and all notices of Operator’s default or failure to pay or perform an obligation under the Operating Lease.

(b) Borrower will not surrender, terminate, cancel, modify, renew or extend the Operating Lease; permit the change of the Operator; enter into any other agreement relating to the operation of the Facility with the Operator or any other Person; or consent to the assignment by the Operator of its

Rider to Seniors Housing Loan and Security Agreement (CME)

Seniors Housing Operator

interest under the Operating Lease or similar agreement, as applicable, in each case without the prior written approval of Lender, and in each such instance the approval by Lender of the Operating Lease; provided, however, with respect to a new operator, such consent may be conditioned upon Borrower delivering a Rating Confirmation as to such new operator. If at any time Lender consents to the appointment of a new operator of the Facility, such new operator and Borrower will, as a condition of Lender’s consent, execute an assignment of operating agreement, in a form acceptable to Lender in its discretion. If any such replacement operator is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered at the origination of the Loan, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to the Rating Agencies (unless waived by the Rating Agencies) with regard to nonconsolidation.

11.03 Additional Representations and Warranties. In addition to those representations and warranties contained in Article V, Borrower represents and warrants to Lender as follows:

(a) Any management or similar agreement or Operating Lease between Borrower and Operator or between Operator and any management agent or operator of the Facility are in full force and effect and there is no default, breach or violation existing under any management or similar agreement or Operating Lease by any party thereto and no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach or violation by any party under any management or similar agreement or Operating Lease.

11.04 Additional Events of Default. In addition to the Events of Default listed in Article IX, each of the following will also constitute an Event of Default:

(a) With regard to the Operating Lease, (i) if the Operating Lease is terminated for any reason prior to the stated term of the Operating Lease or during any renewal period of the Operating Lease, or (ii) if Operator fails to exercise any or all renewal options contained in the Operating Lease or (iii) if Borrower and Operator amend, modify or revise in any way the Operating Lease without the prior written consent of Lender, which consent will be given in Lender’s sole and exclusive discretion or (iv) if a default occurs under the Operating Lease. Notwithstanding the foregoing, it will not be an Event of Default upon the occurrence of any of (i), (ii) or (iv), if Borrower has entered into a new operating lease for the Facility with a term commencing upon the termination of the existing Operating Lease (or as to circumstances described in clause (iv), commencing upon the termination of the existing Operating Lease, which will be on a date agreed to by Lender, in Lender’s sole and exclusive discretion), containing the same terms and conditions as such existing

Rider to Seniors Housing Loan and Security Agreement (CME)

Seniors Housing Operator

Operating Lease or including such other terms and conditions as Lender may have approved in writing, with a new operator for the Facility which Lender has approved in writing prior to the execution of the new operating lease, which approval will be given in Lender’s sole and exclusive discretion in accordance with the terms of Section 11.02(b).

(b) Any change of the operator of the Facility or of any management agent of the Facility as of the date of this Instrument without Lender’s prior written consent, which consent will be given in Lender’s sole and exclusive discretion in accordance with the terms of Section 11.02(b); provided, however, that Sections 7.02(b) through 7.02(e) and the definition of “Controlling Entity” will apply to the Operator as modified solely for purposes of this subsection as follows: the word “Borrower” used in these subsections will be deleted and replaced with “Operator”.

(c) Any failure by Operator to perform any of its obligations as and when required under any Loan Document which continues beyond the applicable cure period, if any, specified in that Loan Document.

11.05 Financial Reporting

(a) Sections 6.07(d) and (e) are deleted and replaced with the following:

(d) Form of Statements; Audited Financials. A natural person having authority to bind Borrower (or the SPE Equity Owner, Operator or guarantor, as applicable) will certify each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b) to be complete and accurate. Each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c)(i) and (iii), 6.07(f) and 11.05(b) will be in such form and contain such detail as Lender may reasonably require. Lender also may require that any of the statements, schedules or reports listed in Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b) be audited at Borrower’s expense by independent certified public accountants acceptable to Lender, at any time when an Event of Default has occurred and is continuing or at any time that Lender, in its reasonable judgment, determines that audited financial statements are required for an accurate assessment of the financial condition of Borrower or of the Mortgaged Property.

(e) Failure to Timely Provide Financial Statements. If Borrower fails to provide, or cause to be provided, in a timely manner the statements, schedules and reports required by Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b), Lender will give Borrower Notice specifying the statements, schedules and reports required by Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b) that Borrower has failed to provide or cause to be provided. If Borrower has not provided or caused to be provided the required statements, schedules and reports within 10 Business Days following such Notice, then (i) Borrower will pay a late fee of $500 for each late

Rider to Seniors Housing Loan and Security Agreement (CME)

Seniors Housing Operator

statement, schedule or report, plus an additional $500 per month that any such statement, schedule or report continues to be late, and (ii) Lender will have the right to have the books and records relating to the Mortgaged Property audited, at Borrower’s expense, by independent certified public accountants selected by Lender in order to obtain such statements, schedules and reports, and all related costs and expenses of Lender will become immediately due and payable and will become an additional part of the Indebtedness as provided in Section 9.02. Notice to Borrower of Lender’s exercise of its rights to require an audit will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

(b) In addition to those financial reporting covenants in Section 6.07, Borrower will cause Operator to furnish to Lender each of the following:

(i) If, in connection with this Loan, the Borrower purchased the Mortgaged Property, then a statement of income and expenses for Operator’s operation of the Mortgaged Property from the origination date to the end of the first full calendar quarter following such origination date, such statement to be provided within 25 days after the end of such quarter; or, for all other cases (for example, a refinance of a loan, a purchase of partnership or other interests, or new debt being placed on the Mortgaged Property), a statement of income and expenses for Operator’s operation of the Mortgaged Property for the trailing 6 months, such statement to be provided within 25 days after the end of such quarter.

(ii) After Borrower has caused Operator to furnish such statements required by Section 11.05(b)(i) above, within 25 days after the end of each subsequent calendar quarter of Operator, the following:

(A) A Rent Schedule.

(B) A statement of income and expenses for Operator’s operation of the Mortgaged Property for that calendar quarter.

(iii) Within 25 days after the end of each fiscal quarter of Operator, Borrower will cause Operator to furnish to Lender a statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Operator relating to the Mortgaged Property as of the end of that fiscal quarter.

(iv) Within 90 days after the end of each fiscal year of Operator, Borrower will cause Operator to furnish to Lender each of the following:

(A) An annual statement of income and expenses for Operator’s operation of the Mortgaged Property for that fiscal year.

Rider to Seniors Housing Loan and Security Agreement (CME)

Seniors Housing Operator

(B) A statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal year.

(C) A balance sheet showing all assets and liabilities of Operator relating to the Mortgaged Property as of the end of that fiscal year and a profit and loss statement for Operator.

(D) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.

(v) Borrower will cause Operator to furnish to Lender each of the following:

(A) Prior to a Securitization, and thereafter upon Lender’s reasonable request, a monthly Rent Schedule and a monthly statement of income and expenses for Operator’s operation of the Mortgaged Property.

(B) Such other financial information or property management information (including, without limitation, information on tenants under Leases to the extent such information is available to Operator, copies of bank account statements from financial institutions where funds owned or controlled by Operator are maintained, and an accounting of security deposits) as may be required by Lender from time to time.

Rider to Seniors Housing Loan and Security Agreement (CME)

Seniors Housing Operator

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME)

RECYCLED BORROWER

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. The following is added as a new Section to Article V:

  Recycled Borrower.

5.40 (a) Underwriting Representations. Borrower hereby represents that from the date of its formation, each of the following is true:

(i) Borrower is and always has been duly formed, validly existing, and in good standing in the state of its formation and in all other jurisdictions where it is qualified to do business.

(ii) Borrower has no judgments or liens of any nature against it except for tax liens not yet due.

(iii) Borrower is in compliance with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Loan Agreement, has received all permits necessary for it to operate.

(iv) Borrower is not involved in any dispute with any taxing authority.

(v) Borrower has paid all taxes which it owes.

(vi) Borrower has never owned any real property other than the Mortgaged Property and personal property necessary or incidental to its ownership or operation of the Mortgaged Property and has never engaged in any business other than the ownership and operation of the Mortgaged Property.

(vii) Borrower is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending or that resulted in a judgment against it that has not been paid in full.

(viii) Borrower has provided Lender with complete financial statements that reflect a fair and accurate view of the entity’s financial condition.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

(ix) Borrower has obtained a current Phase I environmental site assessment (“ESA”) for the Mortgaged Property prepared consistent with ASTM Practice E 1527 and the ESA has not identified any recognized environmental conditions that require further investigation or remediation.

(x) Borrower has no material contingent or actual obligations not related to the Mortgaged Property.

(xi) Each amendment and restatement of Borrower’s organizational documents has been accomplished in accordance with, and was permitted by, the relevant provisions of said documents prior to its amendment or restatement from time to time.

(b) Separateness Representations. Borrower hereby represents that from the date of its formation, each of the following is true:

(i) Borrower has not entered into any contract or agreement with any Related Party Affiliate, except upon terms and conditions that are commercially reasonable and substantially similar to those available in an arm’s-length transaction with an unrelated party.

(ii) Borrower has paid all of its debts and liabilities from its assets.

(iii) Borrower has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence.

(iv) Borrower has maintained all of its books, records, financial statements and bank accounts separate from those of any other Person.

(v) Borrower has not had its assets listed as assets on the financial statement of any other Person.

(vi) Borrower has filed its own tax returns (except to the extent that it has been a tax-disregarded entity not required to file tax returns under applicable law) and, if it is a corporation, has not filed a consolidated federal income tax return with any other Person.

(vii) Borrower has been, and at all times has held itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate or other Related Party Affiliate);

(viii) Borrower has corrected any known misunderstanding regarding its status as a separate entity.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

(ix) Borrower has conducted all of its business and held all of its assets in its own name.

(x) Borrower has not identified itself or any of its affiliates as a division or part of the other.

(xi) Borrower has maintained and utilized separate stationery, invoices and checks bearing its own name.

(xii) Borrower has not commingled its assets with those of any other Person and has held all of its assets in its own name.

(xiii) Borrower has not guaranteed or become obligated for the debts of any other Person.

(xiv) Borrower has not held itself out as being responsible for the debts or obligations of any other Person.

(xv) Borrower has allocated fairly and reasonably any overhead expenses that have been shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Party Affiliate.

(xvi) Borrower has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the Loan.

(xvii) Borrower has maintained adequate capital in light of its contemplated business operations.

(xviii) Borrower has maintained a sufficient number of employees in light of its contemplated business operations and has paid the salaries of its own employees from its own funds.

(xix) Borrower has not owned any subsidiary or any equity interest in any other entity.

(xx) Borrower has not incurred any indebtedness that is still outstanding other than Indebtedness that is permitted under the Loan Documents.

(xxi) Borrower has not had any of its obligations guaranteed by an Affiliate or other Related Party Affiliate, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the Loan) or guarantees that are expressly contemplated by the Loan Documents.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

(xxii) None of the tenants holding leasehold interests with respect to the Mortgaged Property are an Affiliate of Borrower or other Related Party Affiliate.

B. The following definition is added to Article XII:

“Related Party Affiliate” means any of the Borrower’s Affiliates, constituents, or owners, or any guarantors of any of the Borrower’s obligations or any Affiliate of any of the foregoing.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

REPLACEMENT RESERVE FUND – IMMEDIATE DEPOSITS

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 4.04 is deleted and replaced with the following:

4.04 Replacement Reserve Fund.

(a) Deposits to Replacement Reserve Fund. On the Closing Date, the parties will establish the Replacement Reserve Fund and Borrower will pay the Initial Deposit to Lender for deposit into the Replacement Reserve Fund. Commencing on the date the first installment of principal and/or interest is due under the Note and continuing on the same day of each successive month until the Loan is paid in full, Borrower will pay the Monthly Deposit to Lender for deposit into the Replacement Reserve Fund, together with its regular monthly payments of principal and/or interest as required by the Note. A transfer of funds into the Replacement Reserve Fund from the Repair Reserve Fund, pursuant to the terms of Section 4.03(e), if applicable, will not alter or reduce the amount of any deposits to the Replacement Reserve Fund.

(b) Fees Deducted From Replacement Reserve Fund. Lender will be entitled to deduct from the Replacement Reserve Fund (i) the Investment Fee for establishing the Replacement Reserve Fund and (ii) the Inspection Fee for any inspection required pursuant to this Section 4.04. If Lender, in its discretion, retains a professional inspection engineer or other qualified third party to inspect any Capital Replacements pursuant to the terms of Section 6.06, Lender also will be entitled to deduct from the Replacement Reserve Fund an amount sufficient to pay all reasonable fees and expenses charged by such third party inspector.

(c) Adjustments to Replacement Reserve Fund. Lender reserves the right to adjust the amount of the Monthly Deposit based on Lender’s assessment of the physical condition of the Mortgaged Property. Unless the Loan has an initial term of greater than 120 months, Lender will not make such an adjustment prior to the date that is 120 months after the first installment due date, nor more frequently than every 10 years thereafter during the term of the Loan. Upon Notice from Lender or Loan Servicer, Borrower will begin paying the Revised Monthly Deposit on the first monthly payment date that is at least 30 days after the date of Lender’s or Loan Servicer’s Notice. If Lender or Loan Servicer does not provide Borrower with Notice of a Revised Monthly Deposit, Borrower will continue to pay the Monthly Deposit or the Revised Monthly Deposit then in effect.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

(d) Insufficient Amount in Replacement Reserve Fund. If Borrower requests disbursement from the Replacement Reserve Fund for a Capital Replacement in accordance with this Loan Agreement in an amount which exceeds the amount on deposit in the Replacement Reserve Fund, Lender will disburse to Borrower only the amount on deposit in the Replacement Reserve Fund. Borrower will pay all additional amounts required in connection with any such Capital Replacement from Borrower’s own funds.

(e) INTENTIONALLY OMITTED.

(f) INTENTIONALLY OMITTED.

(g) Disbursements from Replacement Reserve Fund.

(i) Requests for Disbursement. Lender will disburse funds from the Replacement Reserve Fund as follows:

(A) Borrower’s Request. If Borrower determines, at any time or from time to time, that a Capital Replacement is necessary or desirable, Borrower will perform such Capital Replacement and request from Lender, in writing, reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed description of the Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital Replacement has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor or materials for such Capital Replacement.

(B) Lender’s Request. If Lender reasonably determines at any time or from time to time, that a Capital Replacement is necessary for the proper maintenance of the Mortgaged Property, it will so notify Borrower, in writing, requesting that Borrower obtain and submit to Lender bids for all labor and materials required in connection with such Capital Replacement. Borrower will submit such bids and a time schedule for completing each Capital Replacement to Lender within 30 days after Borrower’s receipt of Lender’s Notice. Borrower will perform such Capital Replacement and request from Lender, in writing, reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed description of the

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital Replacement has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor or materials for such Capital Replacement.

(C) Borrower’s Requests for Incremental Disbursements. Notwithstanding the provisions of Sections 4.04(g)(i)(A) and (B) above, Borrower shall have the right to request reimbursement for a portion of the cost of any Capital Replacement performed under this Agreement (each, a “Partial Payment”) prior to the completion of such Capital Replacement provided that each of the following conditions are satisfied:

(1) the cost of such Capital Replacement shall exceed $50,000;

(2) prior to the commencement of such Capital Replacement, Lender shall receive the following, all of which shall be acceptable to Lender in its discretion: (a) the agreement(s) of each contractor and material supplier providing labor or materials for such Capital Replacement, and (b) a proposed schedule of disbursements for such Capital Replacement that sets forth the amount and timing of each proposed Partial Payment and that specifies what portion of the Capital Replacement shall be completed prior to the disbursement of each Partial Payment (such schedule, as approved by Lender, the “Schedule of Disbursement”);

(3) prior to the disbursement of each such Partial Payment, Lender receives the following: (a) evidence satisfactory to Lender that all work required under the Schedule of Disbursement to be completed prior to such Partial Payment has been completed, (b) evidence satisfactory to Lender that the amount of such Partial Payment has been paid (or, subject to the requirements of this paragraph, will be paid from such disbursement) and does not exceed the amount contemplated in the Schedule of Disbursement, and (c) if required by Lender, partial lien waivers from any contractor and/or material

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

supplier providing labor or materials for such Capital Replacement. Upon Borrower’s request, Lender may in its discretion agree that such Partial Payment may be used to pay amounts owed to any contractor and/or material supplier providing labor or materials for such Capital Replacement rather than to reimburse Borrower for such payment, in which event such disbursements shall be made by Lender either directly to such contractor or supplier on behalf of Borrower or by joint check to Borrower and such contractor or supplier, as Lender shall elect at its sole option.

(ii) Conditions Precedent. Disbursement from the Replacement Reserve Fund will be made no more frequently than once every Replacement Reserve Disbursement Period and, except for the final disbursement, no disbursement will be made in an amount less than the Minimum Replacement Disbursement Request Amount. Disbursements (including any disbursements for Partial Payments) will be made only if the following conditions precedent have been satisfied, as reasonably determined by Lender in Lender’s Discretion:

(A) Each Capital Replacement has been performed and/or installed on the Mortgaged Property in a good and workmanlike manner with suitable materials (or in the case of a partial disbursement, performed and/or installed on the Mortgaged Property to an acceptable stage), in accordance with good building practices and all applicable laws, ordinances, rules and regulations, building setback lines and restrictions applicable to the Mortgaged Property, and has been paid for by Borrower as evidenced by copies of all applicable paid invoices or bills submitted to Lender by Borrower at the time Borrower requests disbursement from the Replacement Reserve Fund.

(B) There is no condition, event or act that would constitute a default (with or without Notice and/or lapse of time).

(C) No Lien or claim based on furnishing labor or materials has been recorded, filed or asserted against the Mortgaged Property, unless Borrower has properly provided a bond or other security against loss in accordance with applicable law.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

(D) All licenses, permits and approvals of any Governmental Authority required for the Capital Replacement as completed to the applicable stage have been obtained and submitted to Lender upon Lender’s request.

(h) Right to Complete Capital Replacements. If Borrower abandons or fails to proceed diligently with any Capital Replacement in a timely fashion or an Event of Default occurs and continues under this Loan Agreement for 30 days after Notice of such failure by Lender to Borrower, Lender will have the right (but not the obligation) to enter upon the Mortgaged Property and take over and cause the completion of such Capital Replacement. However, no such Notice or cure period will apply in the case of such failure which could, in Lender’s sole and absolute judgment, absent immediate exercise by Lender of a right or remedy under this Loan Agreement, result in harm to Lender, tenants or third parties or impairment of the security given under this Loan Agreement, the Security Instrument or any other Loan Document. Any contracts entered into or indebtedness incurred upon the exercise of such right may be in the name of Borrower, and Lender is irrevocably appointed the attorney in fact for Borrower, such appointment being coupled with an interest, to enter into such contracts, incur such obligations, enforce any contracts or agreements made by or on behalf of Borrower (including the prosecution and defense of all actions and proceedings in connection with the Capital Replacement and the payment, settlement or compromise of all bills and claims for materials and work performed in connection with the Capital Replacement) and do any and all things necessary or proper to complete any Capital Replacement, including signing Borrower’s name to any contracts and documents as may be deemed necessary by Lender. In no event will Lender be required to expend its own funds to complete any Capital Replacement, but Lender may, in Lender’s Discretion, advance such funds. Any funds advanced will be added to the Indebtedness, secured by the Security Instrument and payable to Lender by Borrower in accordance with the provisions of the Note, this Loan Agreement, the Security Instrument and any other Loan Document pertaining to the protection of Lender’s security and advances made by Lender.

(i) Completion of Capital Replacements. Lender’s disbursement of monies from the Replacement Reserve Fund or other acknowledgment of completion of any Capital Replacement in a manner satisfactory to Lender in Lender’s Discretion will not be deemed a certification by Lender that the Capital Replacement has been completed in accordance with applicable building, zoning or other codes, ordinances, statutes, laws, regulations or requirements of any Governmental Authority. Borrower will at all times have the sole responsibility for ensuring that all Capital Replacements are completed in accordance with all such requirements of any Governmental Authority.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

B. The following definitions are added to Article XIII:

“Initial Deposit” means $0.

“Minimum Replacement Disbursement Request Amount” means $5,000.00

“Monthly Deposit” means $754.00.

“Replacement Reserve Deposit” means the Initial Deposit, the Monthly Deposit and/or the Revised Monthly Deposit, as appropriate.

“Replacement Reserve Disbursement Period” means the interval between disbursements from the Replacement Reserve Fund, which interval will be no shorter than once a month.

“Replacement Reserve Fund” means the account established pursuant to this Loan Agreement to defray the costs of Capital Replacements.

“Revised Monthly Deposit” means the adjusted amount per month that Lender determines Borrower must deposit in the Replacement Reserve Fund following any adjustment determination by Lender pursuant to Section 4.04(c).

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

ENTITY GUARANTOR

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. The following is added as a new subsection to Section 9.01:

(w) Guarantor fails to comply with the provisions of the Section of the Guaranty entitled “Material Adverse Change” or “Minimum Net Worth/Liquidity Requirements”, as applicable.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Entity Guarantor

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

MONTH TO MONTH LEASES

(Revised 1-11-2012)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 5.11 is deleted and replaced with the following:

5.11 Term of Leases. Unless otherwise approved in writing by Lender, all Leases for residential dwelling units with respect to the Mortgaged Property are on forms acceptable to Lender, are for initial terms of at least 6 months and not more than 2 years, and do not include options to purchase; provided, however, that up to 100% of all Leases may be for an initial term of less than 6 months, but not less than 1 month.

B. Section 6.15(a) is deleted and replaced with the following:

(a) Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect. All Leases for residential dwelling units will be on forms acceptable to Lender, will be for initial terms of at least 6 months and not more than 2 years, and will not include options to purchase; provided, however, that up to 100% of all Leases may be for an initial term of less than 6 months, but not less than 1 month.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Month to Month Leases

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME)

AFFILIATE TRANSFER

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 7.03(d) is deleted and replaced with the following:

(d) Affiliate Transfer. A Transfer of any direct or indirect interests in Borrower held by an entity wholly-owned and controlled by Care Investment Trust Inc., a Maryland corporation, to one or more of its Affiliates (“Affiliate Transfer”) provided that each of the following conditions is satisfied:

(i) Borrower provides Lender with at least 30 days prior Notice of the proposed Affiliate Transfer and pays to Lender the Transfer Review Fee.

(ii) At the time of the proposed Affiliate Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(iii) Lender determines, in Lender’s Discretion, that the Affiliate meets Lender’s eligibility, credit, management and other standards for seniors housing properties.

(iv) After the Affiliate Transfer, Control and management of the day-to-day operations of Borrower and the Facility continue to be held by the Person exercising such Control and management immediately prior to the Affiliate Transfer and there is no change in the Guarantor, if applicable.

(v) Lender receives organizational charts reflecting the structure of Borrower prior to and after the Affiliate Transfer.

(vi) Borrower pays or reimburses Lender, upon demand, for all costs and expenses including all Attorneys’ Fees and Costs, incurred by Lender in connection with the Affiliate Transfer.

(vii) At the time of the Affiliate Transfer, Borrower pays a $25,000 Transfer Fee to Lender.

(viii) If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to the Affiliate Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a 50% direct or

Rider to Multifamily Loan and Security Agreement (CME)

Affiliate Transfer

indirect interest in Borrower as of the Closing Date, Borrower delivers to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation.

(ix) If required by Lender, Lender receives confirmation acceptable to Lender that the requirements of Section 6.13 continue to be satisfied.

(x) Borrower delivers to Lender a search confirming that the Affiliate is not on the list of Specially Designated Nationals or other blocked persons published by the U.S. Office of Foreign Assets Control, or on the list of persons or entities prohibited from doing business with the Department of Housing and Urban Development.

B. The following definition is added to Article XIII:

“Affiliate Transfer” is defined in Section 7.03(d).

Rider to Multifamily Loan and Security Agreement (CME)

Affiliate Transfer

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME)

CASH MANAGEMENT AGREEMENT

(Revised 9-1-2011)

The following modifications are made to the Loan Agreement which precedes this Rider:

A. The definition of Collateral Agreement in Article XII is deleted and replaced with the following:

“Loan Documents” means the Note, the Security Instrument, this Loan Agreement, all guaranties, all indemnity agreements, all collateral agreements (including the Clearing Account Agreement and the Cash Management Agreement), UCC filings, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any Guarantor or any other Person in connection with the Loan evidenced by the Note, as such documents may be amended from time to time.

B. The following definitions are added to Article XII:

“Cash Management Agreement” means that certain cash management agreement dated the same date as this Loan Agreement among Borrower, Lender and Property Manager.

“Clearing Account Agreement” means that certain clearing account agreement dated the same date as this Loan Agreement among Borrower, Lender and Clearing Bank.

“Clearing Bank” is defined in the Clearing Account Agreement.

Rider to Multifamily Loan and Security Agreement (CME)

Affiliate Transfer

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

TRADE NAMES

(Revised 1-11-2012)

The following changes are made to the Loan Agreement which precedes this Rider:

A. The following new subsection is added to Section 6.29 as follows:

—. Lender’s Right To Use Trade Name. Notwithstanding anything contained in this Loan Agreement, Borrower agrees that Lender will have an irrevocable license, coupled with an interest and for which consideration has been paid and received, to use the name “Greenfield Assisted Living of Fredericksburg” and/or associated trademark rights and trade names relating to any of the Mortgaged Property for a period not to exceed 120 days after the date Lender acquires the Mortgaged Property by foreclosure or deed-in-lieu of foreclosure.

ARTICLE XVI B. SUBSECTION “(XV)” OF THE DEFINITION OF “MORTGAGED PROPERTY” IN ARTICLE XIII IS DELETED AND REPLACED WITH THE FOLLOWING:

(xv) all names under or by which any of the Mortgaged Property may be operated or known, and all trademarks, trade names and goodwill relating to any of the Mortgaged Property; provided however, that the name “Greenfield Assisted Living of Fredericksburg” and/or associated trademark rights are not assigned to Lender, subject to Section 6.29 of this Loan Agreement.

Rider to Multifamily Loan and Security Agreement (CME)

Affiliate Transfer

EXHIBIT A

DESCRIPTION OF THE LAND

ALL that certain piece, parcel or tract of land situate, lying and being in County of Stafford, Commonwealth of Virginia, being known and designated as Lot 1, Section One, Golden Rose, according to a plat of survey recorded in the Clerk’s Office, of the Circuit Court of Stafford County, Virginia, in Plat Book 23, at pages 134 and 135, and containing 4.985 acres according to a more recent plat of survey entitled “1001 North Side Drive, Stafford County, Fredericksburg, Virginia”, dated August 11, 2011, by Site Design, Inc., and according to said plat, having the following metes and bounds to wit:

BEGINNING at an old  ¹/2” rebar iron pin located on the Eastern right of way of Northside Drive (SR1107) at the joint corner of Corporation of the Presiding Bishop of the Church of Jesus Christ of the Latter Day Saints property (Lot 2, Section One, Golden Rose), now or formerly, said iron pin also being 55.8± feet North of the Northern right of way of White Oak Road (SR 218); thence running along the Eastern right of way of North Side Drive (SR 1107) N 30°48’10” W 625.59 feet to an old  ¹/2” rebar iron pin; thence N 31°57’14” W 313.60 feet to an old  ¹/2” rebar iron pin: thence turning and running still with said right of way and also with the common line of Donya Currie Property, now or formerly, N 65°35’41” E 100.32 feet to an old  ¹/2” rebar iron pin at the joint corner of Robert J. & Virginia B. Grogan Property, now or formerly, crossing over an old  ¹/2” rebar iron pin at 19.36 feet located on said Eastern right of way of Northside Drive (SR1107) and at the joint corner of said Currie Property; thence turning and running along the common line of the Grogan property S 74°40’52” E 481.77 feet to an old  ³/4” open top iron pin on the common line of Star Broadcasting Corporation property, now or formerly; thence turning and running along the common line of the Star Broadcast Corporation property S 04°29’46” W 177.97 feet to an old  ¹/2” rebar iron pin at the joint corner of Corporation of the Presiding Bishop of the Church of Jesus Christ of the Latter Day Saints property (Lot 2, Section One, Golden Rose), now or formerly; thence turning and running along the common line of Lot 2, Section One, Golden Rose, S 05°53’28” W 543.04 feet to the point and place of beginning.

BEING the same real estate conveyed to Care GSL Fredericksburg LLC from Greenfield Assisted Living of Fredericksburg, L.L.C. by Deed dated September 20, 2011, recorded in the Clerk’s Office, Circuit Court, Stafford County, Virginia in Instrument No. LR110016244.

Seniors Housing Loan and Security Agreement (CME) Page A-1

EXHIBIT B

MODIFICATIONS TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

1. Section 5.04(b) of the Loan Agreement is deleted and the following is inserted in lieu thereof:

“(b) Without limiting the generality of subsection (a) above, neither Borrower, to the best of Borrower’s knowledge after due inquiry and investigation, any operator of the Facility, nor the Facility are subject to any proceeding, suit or investigation by any Governmental Authority and neither Borrower nor to the best of Borrower’s knowledge after due inquiry and investigation, any operator of the Facility has received any notice from any Governmental Authority which may, directly or indirectly, or with the passage of time, result in the imposition of a fine, or interim or final sanction, or would (i) have a Material Adverse Effect, (ii) result in the appointment of a receiver or trustee, (iii) affect Borrower’s or any operator of the Facility’s ability to accept and retain residents, (iv) result in the Downgrade, revocation, transfer, surrender or suspension, or non-renewal or reissuance or other impairment of any License, or (v) affect Borrower’s or operator’s continued participation in any Governmental Payor Program, or any successor programs thereto, at current rate certifications.”

2. Sections 5.07(b) and (c) are deleted and the following are inserted in lieu thereof:

“(b) Without limiting the generality of subsection (a) above, Borrower, any operator of the Facility, and the Facility (and its operation) and all residential care agreements and residential Leases are in compliance with the applicable provisions of all laws, regulations, ordinances, orders or standards of any Governmental Authority having jurisdiction over the operation of the Facility (including any Governmental Payor Program requirements and disclosure of ownership and related information requirements), including without limitation: (i) Healthcare Laws, Privacy Laws, fire and safety codes and building codes (and no waivers of such requirements exist at the Facility); (ii) laws, rules, regulations and published interpretations thereof regulating the preparation and serving of food; (iii) laws, rules, regulations and published interpretations thereof regulating the handling and disposal of medical or biological waste; (iv) the applicable provisions of all laws, rules, regulations and published interpretations thereof to which Borrower or the Facility is subject by virtue of its Intended Use; and (v) all criteria established to classify the Facility as housing for older persons under the Fair Housing Amendments Act of 1988.

(c) Borrower has received no written notice of, and is not aware of, any violation of applicable antitrust laws or securities laws relating to the Facility, the Borrower, or any operator of the Facility.”

Seniors Housing Loan and Security Agreement (CME) Page B-1

3. Section 5.09(f) is deleted and the following is inserted in lieu thereof:

“(f) Neither the execution and delivery of the Note, this Loan Agreement, the Security Instrument nor any other Loan Document, Borrower’s performance under the Loan Documents, nor the recordation of the Security Instrument, nor the exercise of any remedies by Lender pursuant to the Loan Documents, at law or in equity, will adversely affect the Licenses. Notwithstanding anything to the contrary contained in this subsection, the exercise of certain remedies by Lender against the Operator pursuant to the Subordination, Non-Disturbance and Attornment Agreement which results in the termination of the Master Lease or the operation of the Property directly by Lender may adversely affect the Licenses.”

4. Section 5.14 is deleted and the following is inserted in lieu thereof:

“5.14 Taxes Paid. Borrower has filed all federal, state, county and municipal tax returns required to have been filed by Borrower, and has paid all Taxes prior to delinquency which have become due pursuant to such returns or to any notice of assessment received by Borrower, and Borrower has no knowledge of any basis for additional assessment with respect to such taxes. To the best of Borrower’s knowledge after due inquiry and investigation, there are not presently pending any special assessments against the Mortgaged Property or any part of the Mortgaged Property.”

5. Section 5.32 of the Loan Agreement must be deleted and replaced with the following:

“Medicare and Medicaid. Borrower represents and warrants that neither Borrower nor any management agent for the Mortgaged Property or any operator of the Mortgaged Property currently participates in any Governmental Payor Program in connection with the operation of the Mortgaged Property.”

6. Section 5.34 is deleted and the following is inserted in lieu thereof:

“5.34 No Transfer or Pledge of Licenses. The Licenses, including, without limitation, the certificate of need, may not be, and have not been, transferred to any location other than the Facility, have not been pledged as collateral security for any other loan or indebtedness (other than existing debt being refinanced by this Loan, the liens for which have been released), and are held free from restrictions or known conflicts that would materially impair the use or operation of the Facility for its Intended Use, and are not provisional, probationary, or restricted in any way.”

7. Section 5.35 is deleted and the following is inserted in lieu thereof:

“5.35 No Pledge of Receivables. Neither Borrower nor the operator of the Facility has pledged its receivables as collateral security for any other loan or indebtedness (other than existing debt being refinanced by this Loan, the liens for which have been released).”

Seniors Housing Loan and Security Agreement (CME) Page B-2

8. Section 5.38 is deleted and the following is inserted in lieu thereof:

“5.38 No Facility Deficiencies, Enforcement Actions or Violations.

(a) The Facility has not received a statement of charges or deficiencies (other than with respect to non-material deficiencies that have been noted during routine licensure surveys and that have been cured) and no penalty enforcement actions have been undertaken against the Facility, the operator of the Facility or Borrower or against any officer, director or stockholder thereof, by any Governmental Agency during the last three calendar years, and there have been no violations over the past three years that have threatened the Facility’s or the operator of the Facility’s or Borrower’s certification for participation in any third-party payor programs.”

(b) [RESERVED]”

9. Section 6.01 is deleted and the following is inserted in lieu thereof:

“6.01 Compliance with Laws. Borrower will comply with all laws, ordinances, rules, regulations and requirements of any Governmental Authority having jurisdiction over the Mortgaged Property and all recorded covenants and agreements relating to or affecting the Mortgaged Property, including all laws, ordinances, regulations, requirements and covenants pertaining to health and safety, construction of improvements on the Mortgaged Property, Repairs, Capital Replacements, fair housing, disability accommodation, zoning and land use, applicable building codes, special use permits and environmental regulations, Leases and the maintenance and disposition of tenant security deposits. Borrower will take appropriate measures to prevent, and will not engage in or knowingly permit, any illegal activities at the Mortgaged Property, including those that could endanger tenants or visitors, result in damage to the Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise materially impair the Lien created by the Security Instrument or Lender’s interest in the Mortgaged Property. Borrower will at all times maintain or cause to be maintained records sufficient to demonstrate compliance with the provisions of this Section 6.01.”

10. Section 6.04(a) is deleted and the following is inserted in lieu thereof:

“(a) Prohibited New Non-Residential Leases or Modified Non-Residential Leases. Borrower will not enter into any New Non-Residential Lease, enter into any Modified Non-Residential Lease or terminate any Non-Residential Lease (but not including any Non-Residential Lease in existence on the date of this Loan Agreement which may be terminated at Borrower’s option so long as Borrower provides notice of such termination to Lender promptly thereafter) without the prior written consent of Lender; provided, however, that Lender’s prior written consent and prior written approval shall not be required with respect to Non-Residential Leases covering floor space not exceeding 2,000 square feet and further providing that no residential units are converted to commercial leased space.”

Seniors Housing Loan and Security Agreement (CME) Page B-3

11. Section 6.04(d) is deleted and the following is inserted in lieu thereof:

“(d) Subordination and Attornment Requirements. All new Non-Residential Leases and Modified Non-Residential Leases will specifically include the following provisions:

(i) The Lease is subordinate to the Lien of the Security Instrument, with such subordination to be self-executing.

(ii) The tenant will attorn to Lender and any purchaser at a foreclosure sale, such attornment to be self-executing and effective upon acquisition of title to the Mortgaged Property by any purchaser at a foreclosure sale or by Lender in any manner.

(iii) The tenant agrees to execute such further evidences of attornment as Lender or any purchaser at a foreclosure sale may from time to time request.

(iv) The tenant will, upon receipt of a written request from Lender following the occurrence of and during the continuance of an Event of Default, pay all Rents payable under the Lease to Lender.

(v) If Lender or a purchaser at a foreclosure sale so elects, the Lease shall not be terminated by foreclosure or any other transfer of the Mortgaged Property.

(vi) After a foreclosure sale of the Mortgaged Property, Lender or any other purchaser at such foreclosure sale may, at Lender’s or such purchaser’s option, accept or terminate such Lease without payment of any fee or penalty.”

12. Section 6.07(b) is deleted and the following is inserted in lieu thereof:

“(b) Delivery of Statement of Income and Expenses; Rent Schedule and Other Statements. Borrower will furnish to Lender each of the following:

(i) Within 25 days after the end of each calendar quarter prior to Securitization and within 35 days after each calendar quarter after Securitization (provided however that the statement of changes and other information set forth in Section 6.07(b)(i)(C) may be provided within 45 days after each calendar quarter after Securitization), each of the following:

Seniors Housing Loan and Security Agreement (CME) Page B-4

(A) A Rent Schedule dated no earlier than the date that is 5 days prior to the end of such quarter.

(B) A statement of income and expenses for Borrower’s operation of the Mortgaged Property that is either of the following:

(a) For the 12 month period ending on the last day of such quarter.

(b) If at the end of such quarter Borrower or any Affiliate of Borrower has owned the Mortgaged Property for less than 12 months, for the period commencing with the acquisition of the Mortgaged Property by Borrower or its Affiliate, and ending on the last day of such quarter.

(C) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal quarter.

(ii) Within 120 days after the end of each fiscal year of Borrower, each of the following:

(1) An annual statement of income and expenses for Borrower’s operation of the Mortgaged Property for that fiscal year.

(2) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal year.

(3) A balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal year and a profit and loss statement for Borrower.

(4) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.

(iii) Within 30 days after the date of filing, copies of all tax returns filed by Borrower.”

13. Section 6.07(c) is deleted and the following is inserted in lieu thereof:

“(c) Delivery of Borrower Financial Statements Upon Request. Borrower will furnish or cause to be furnished to Lender each of the following:

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(i) Upon Lender’s request, in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a monthly Rent Schedule and a monthly statement of income and expenses for Borrower’s operation of the Mortgaged Property, in each case within 25 days after the end of each month.

(ii) Upon Lender’s request in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a statement that identifies all owners of any interest in Borrower and any Designated Entity for Transfers and the interest held by each (unless Borrower or any Designated Entity for Transfers is a publicly-traded entity in which case such statement of ownership will not be required), and if Borrower or a Designated Entity for Transfers is a corporation then all officers and directors of Borrower and the Designated Entity for Transfers, and if Borrower or a Designated Entity for Transfers is a limited liability company then all Managers who are not members, in each case within 10 business days after such request.

(iii) Upon Lender’s request in Lender’s Discretion, such other financial information or property management information (including information on tenants under Leases to the extent such information is available to Borrower, copies of bank account statements from financial institutions where funds owned or controlled by Borrower are maintained, and an accounting of security deposits) as may be required by Lender from time to time, in each case within 30 days after such request.

(iv) Upon Lender’s request in Lender’s Discretion, a monthly property management report for the Mortgaged Property, showing the number of inquiries made and rental applications received from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender within 45 days after such request. However, Lender will not require the foregoing more frequently than quarterly except when there has been an Event of Default and such Event of Default is continuing, in which case Lender may require Borrower to furnish the foregoing more frequently.”

14. Section 6.07(f) is deleted and the following is inserted in lieu thereof:

“(f) Delivery of Guarantor and SPE Equity Owner Financial Statements Upon Request. Borrower will cause each Guarantor and, at Lender’s request in Lender’s Discretion, any SPE Equity Owner, to provide to Lender (i) within 120 days after the close of such party’s fiscal year, such party’s balance sheet and profit and loss statement (or if such party is a natural person, within 120 days after the close of each calendar year, such party’s personal financial statements) in form reasonably satisfactory to Lender and certified by such party to be accurate and complete; and (ii) such additional financial information (including copies of state and federal tax returns with respect to any SPE Equity

Seniors Housing Loan and Security Agreement (CME) Page B-6

Owner but Lender will only require copies of such tax returns with respect to each Guarantor if an Event of Default has occurred and is continuing) as Lender may reasonably require from time to time and in such detail as reasonably required by Lender. Provided no Event of Default has occurred and is continuing and so long as Guarantor is publicly traded on a nationally recognized stock exchange and so long as the Guarantor certifies to Lender that such filings are true, correct and complete, the filings required to be made by the applicable statutes and regulations will fulfill the requirements of sub-section (i) hereof.”

15. Section 6.08(b) is deleted and the following is inserted in lieu thereof:

“(b) Payment of Operating Expenses. Subject to the provisions of Section 6.08(c), Borrower will (i) pay the expenses of operating, managing, maintaining and repairing the Mortgaged Property (including utilities, Repairs and Capital Replacements) before the last date upon which each such payment may be made without any penalty or interest charge being added, and (ii) pay Insurance premiums, within the time periods set forth in Section 6.10(e) prior to the expiration date of each policy of Insurance, unless applicable law specifies some lesser period.”

16. Section 6.09(c) is deleted and the following is inserted in lieu thereof:

“(c) Preservation of Mortgaged Property. Borrower will restore or repair promptly, in a good and workmanlike manner, any damaged part of the Mortgaged Property to the equivalent of its original condition, or such other condition as Lender may approve in writing, whether or not Insurance proceeds or Condemnation awards are available to cover any costs of such Restoration or repair; provided, however, that Borrower will not be obligated to perform such Restoration or repair if (i) no Event of Default has occurred and is continuing, and (ii) Lender has elected to apply any available Insurance proceeds and/or Condemnation awards to the payment of Indebtedness pursuant to Section 6.10(j) or Section 6.11(d). For the purposes hereof, the term “original condition” shall mean the condition of the Mortgaged Property as of the date of this Agreement, as enhanced or improved by (i) any repairs or replacements required under the terms of this Agreement or any other Loan Document to be completed prior to the date of such damage or destruction, and (ii) any repairs or replacements otherwise completed prior to the date of such damage or destruction to the extent the same were completed in accordance with the applicable terms and conditions of this Agreement and the other Loan Documents.”

17. Section 6.09(d) is deleted and the following is inserted in lieu thereof:

“(d) Property Management. Borrower will or will cause the Operator to provide for professional management of the Mortgaged Property by the Property Manager at all times under a property management agreement approved by Lender in writing. Borrower will not and will cause the Operator not to surrender, terminate,

Seniors Housing Loan and Security Agreement (CME) Page B-7

cancel, modify, renew or extend its property management agreement, or enter into any other agreement relating to the overall management or operation of the Property with Property Manager or any other Person, or consent to the assignment by the Property Manager of its interest under such property management agreement, in each case without the consent of Lender, which consent will not be unreasonably withheld. If at any time Lender consents to the appointment of a new Property Manager, such new Property Manager and Borrower will, as a condition of Lender’s consent, execute an Assignment of Management Agreement in a form acceptable to Lender. If any such replacement Property Manager is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered on the Closing Date, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to the Rating Agencies (unless waived by the Rating Agencies) with regard to nonconsolidation.”

18. Section 6.09(e) is deleted and the following is inserted in lieu thereof:

“(e) Alteration of Mortgaged Property. Borrower will give Notice to Lender of and, unless otherwise directed in writing by Lender, will appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement. Borrower will not (and will not permit any tenant or other Person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property, including any removal, demolition or alteration occurring in connection with a rehabilitation of all or part of the Mortgaged Property, except (i) Repairs or Capital Replacements pursuant to the terms of Sections 4.03 or 4.04, (ii) in connection with the replacement of tangible Personalty, (iii) if Borrower is a cooperative housing corporation or association, to the extent permitted with respect to individual dwelling units under the form of a proprietary lease or occupancy agreement, (iv) Repairs and Capital Replacements in connection with making an individual unit ready for a new occupant or pursuant to the terms of Sections 6.09(a) and (c), and (v) Repairs made in connection with and pursuant to the Repair Schedule of Work, if applicable. Notwithstanding any provisions to the contrary in this Section 6.9(e), as long as no Event of Default, or any event which, with the service of notice, passage of time, or both, if incurred, would constitute an Event of Default hereunder has occurred and is continuing, Borrower shall be entitled to make improvements or alterations to the Improvements on the Mortgaged Property from time to time, subject to the following restrictions: (i) such alterations and additions are completed in a lien free and good and workmanlike manner in accordance with applicable laws and the provisions of this Loan Agreement, (ii) neither the performance nor completion of the alterations or additions (A) adversely affects the structural integrity of the Improvements or the occupancy of the Improvements, (B) changes unit configurations, or (C) reduces the total number of units, and (iii) the aggregate costs of all such alterations and additions does not exceed $100,000 per year.”

19. Section 6.10(a)(ii) is deleted and the following is inserted in lieu thereof:

Seniors Housing Loan and Security Agreement (CME) Page B-8

“(ii) Commercial General Liability. Commercial general liability Insurance on a claims made and/or occurrence-based policy form that insures against legal liability resulting from bodily injury, property damage, personal injury and advertising injury, and includes contractual liability coverage and any and all claims, including all legal liability (to the extent insurable) imposed upon Borrower and all Attorneys’ Fees and Costs arising out of or connected with the possession, use, leasing, operation, maintenance or condition of the Mortgaged Property with a combined limit of not less than $2,000,000 in the aggregate and $1,000,000 per occurrence; umbrella or excess liability coverage with minimum limits in the aggregate and per occurrence of $1,000,000 in coverage for each story of the Improvements with a maximum required coverage of $8,000,000 (provided, however, that if the Indebtedness is $3,000,000 or less and the Improvements have 3 stories or fewer, then no umbrella or excess liability coverage is required); and if the Borrower owns, leases, hires, rents, borrowers, uses, or has another use on its behalf a vehicle in conjunction with the operation of the Mortgaged Property, vehicle liability Insurance of not less than $1,000,000 per occurrence. The maximum per occurrence deductible or self-insured retention, or combined deductible or self-insured retention, for all coverage required under this Section 6.10(a)(ii), will not exceed $35,000.”

20. Section 6.10(a)(x) is deleted and the following is inserted in lieu thereof:

“(x) Other. Such other Insurance against loss or damage with respect to the Improvements and Personalty located on the Mortgaged Property as required by Lender to the extent available (including liquor/dramshop and Mold Insurance) provided such Insurance is of the kind for risks from time to time customarily insured against and in such minimum coverage amounts and maximum deductibles as are generally required by institutional lenders for properties comparable to the Mortgaged Property or which Lender may deem necessary in Lender’s Discretion.”

21. Section 6.10(e) is deleted and the following is inserted in lieu thereof:

“(e) Evidence of Insurance; Renewals. Borrower will deliver to Lender a legible copy of each Insurance policy (or duplicate original), and Borrower will promptly deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies. Borrower will ensure that the Mortgaged Property is continuously covered by the required Insurance policies and will deliver to Lender evidence acceptable to Lender in Lender’s Discretion that each policy has been renewed at least 15 10 days prior to the expiration date of such Insurance policy provided, however, that such evidence that the policy has been renewed may be provided to Lender at least 5 days prior to the expiration date if and only if the policy contains a “Lenders Endorsement” stating that the Lender’s coverage will not be terminated in the event the policy is not renewed prior to expiration. If the evidence of a renewal does not include a

Seniors Housing Loan and Security Agreement (CME) Page B-9

legible copy of the renewal policy (or duplicate original), Borrower will deliver a legible copy of such renewal policy (or duplicate original) in a form satisfactory to Lender in Lender’s Discretion prior to the earlier of (i) 60 days after the expiration date of the original policy, or (ii) the date of any Notice to Lender under Section 6.10(i).”

22. Section 6.10(i)(i) is deleted and the following is inserted in lieu thereof:

“(i) Obligations Upon Casualty; Proof of Loss.

(i) In the event of loss for which the total cost of repair is equal to $25,000 or greater, Borrower will give immediate written notice to the Insurance carrier and to Lender.”

23. Section 6.10(i)(ii)(A) is deleted and the following is inserted in lieu thereof:

“(A) Require a “repair or replacement” settlement, in which case the proceeds will be used to reimburse Borrower for the cost of restoring and repairing the Mortgaged Property to the equivalent to its original condition, or to a condition approved by Lender (“Restoration”). If Lender determines to require a repair or replacement settlement and to apply Insurance proceeds to Restoration, Lender will apply the proceeds in accordance with Lender’s then-current policies relating to the Restoration of casualty damage on similar multifamily properties. For the purposes hereof, the term “original condition” shall mean the condition of the Mortgaged Property as of the date of this Agreement, as enhanced or improved by (i) any repairs or replacements required under the terms of this Agreement or any other Loan Document to be completed prior to the date of such damage or destruction, and (ii) any repairs or replacements otherwise completed prior to the date of such damage or destruction to the extent the same were completed in accordance with the applicable terms and conditions of this Agreement and the other Loan Documents.”

24. Section 6.13(a)(i) is deleted and the following is inserted in lieu thereof:

“(i) It will not engage in any business or activity, other than the ownership, operation, leasing and maintenance of the Mortgaged Property and activities incidental thereto.”

25. Section 6.13(a)(v) is deleted and the following is inserted in lieu thereof:

“(v) It will not take any action to dissolve, wind-up, terminate or liquidate in whole or in part; to sell, transfer or otherwise dispose of all or substantially all of its assets; to change its legal structure; transfer or permit the direct or indirect transfer of any partnership, membership or other equity interests, as applicable, other than Transfers permitted under this Loan Agreement; issue additional partnership, membership or other equity interests, as applicable, or seek to accomplish any of

Seniors Housing Loan and Security Agreement (CME) Page B-10

the foregoing. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof Borrower admitted Care Investment Trust Inc. as a second member of Borrower, and that such admission shall not be deemed a violation of this Section.”

26. Section 6.13(a)(ix) is deleted and the following is inserted in lieu thereof:

“(ix) It will not commingle its assets with the assets of any other Person and will hold all of its assets in its own name, except as required under the terms of the Cash Management Agreement – Seniors (CME), and the Clearing Account Agreement – Seniors (CME) each dated of even date herewith.”

27. Section 6.13(a)(xi) is deleted and the following is inserted in lieu thereof:

“(xi) It will maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person and will not list its assets as assets on the financial statement of any other Person, except as required under the terms of the Cash Management Agreement – Seniors (CME) and the Clearing Account Agreement – Seniors (CME) each dated of even date herewith; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (A) appropriate notation will be made on such consolidated financial statements to indicate the separateness of Borrower from such Affiliate and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (B) such assets will also be listed on Borrower’s own separate balance sheet. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof, Borrower maintained joint bank accounts with Related Borrowers and Care Investment Trust, Inc., and that such previously existing joint accounts shall not be a violation of this section.”

28. Section 6.13(a)(xii) is deleted and the following is inserted in lieu thereof:

“(xii) Except for (a) capital contributions or capital distributions permitted under the terms and conditions of its organizational documents, (b) the Master Lease and (c) the Contribution Agreement, it will only enter into any contract or agreement with any general partner, member, shareholder, principal or Affiliate of Borrower or any Guarantor, or any general partner, member, principal or Affiliate thereof, upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties.”

29. Section 6.13(a)(xiii) is deleted and the following is inserted in lieu thereof:

“(xiii) It will not maintain its assets in such a manner that will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other person, except as required under the terms of the Cash Management Agreement Seniors (CME) and the Clearing Account Agreement – Seniors (CME) each dated of even date herewith.”

Seniors Housing Loan and Security Agreement (CME) Page B-11

30. Section 6.13(a)(xiv) is deleted and the following is inserted in lieu thereof:

“(xiv) It will not assume or guaranty (excluding any guaranty that has been executed and delivered in connection with the Note) the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person (other than in connection with the Loan and the Cross-Collateralization Agreement), or hold out its credit as being available to satisfy the obligations of any other Person except as set forth in the Contribution Agreement.”

31. Section 6.13(a)(xviii) is deleted and the following is inserted in lieu thereof:

“(xviii)   It will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and will pay its debts and liabilities from its own assets as the same become due. provided, however, that compliance with this subsection shall not require the members of the Borrower to make additional capital contributions.”

32. Section 6.13(a)(xx) is deleted and the following is inserted in lieu thereof:

“(xx) It will pay (or cause the Property Manager or any operator of the Facility to pay on behalf of Borrower from Borrower’s funds) its own liabilities (including salaries of its own employees) from Borrower’s own funds, provided, however, that compliance with this subsection shall not require the members of the Borrower to make additional capital contributions.”

33. Section 6.13(a)(xxiii) is deleted and the following is inserted in lieu thereof:

“(xxiii)   It will maintain a sufficient number of employees (if any) in light of its contemplated business operations and pay the salaries of its own employees, if any, only from its own funds, provided, however, that compliance with this subsection shall not require the members of the Borrower to make additional capital contributions.”

34. The final paragraph of Section 6.17 is deleted and the following is inserted in lieu thereof:

“Borrower acknowledges and agrees that, in connection with each request by Borrower under this Loan Agreement or any Loan Document, Borrower will pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender and Loan Servicer, including any fees charged by the Rating Agencies, regardless of whether the matter is approved, denied or withdrawn. Any amounts payable by Borrower under this Loan Agreement will be deemed a part of the Indebtedness, will be secured by the Security Instrument and will bear interest at the Default Rate if not fully paid within 10 days of written demand for payment.”

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35. Section 6.22(a) is deleted and the following is inserted in lieu thereof:

“(a) Borrower will, or will cause any operator of the Facility to, furnish to Lender, within 10 days after receipt by Borrower or any operator of the Facility, any and all written notices from any Governmental Authority that (i) any License is being Downgraded, revoked, terminated, suspended, restricted or conditioned or may not be renewed or reissued or that action is pending or being considered to Downgrade, revoke, terminate, suspend, restrict or condition (or not renew or reissue) any such License, (ii) any violation, fine, finding, investigation or corrective action concerning any License is pending or being considered, rendered or adopted, or (iii) any Healthcare Law or any health or safety code or building code violation or other deficiency at the Mortgaged Property has been identified, but in each case only if the subject matter of such written notice (A) could materially adversely impact the operation or value of the Facility, or (B) requires additional formal or informal action by Borrower or operator of the Facility that is more than development or implementation of a routine plan of correction, including, without limitation, participation in hearings concerning continued licensing or Medicare or Medicaid participation, entering into consent orders affecting licensing affecting the Facility, or engaging in oversight management.”

36. Section 6.22(d) is deleted and the following is inserted in lieu thereof:

“(d) Borrower will provide Lender with a copy of any License issued or renewed in the future by a Governmental Authority within 30 days after receipt of written evidence of its issuance or renewal. To the extent that any such License is assignable, Borrower will assign it to Lender as additional security for the Indebtedness, using a form of assignment acceptable to Lender in its discretion. If any License is issued to an operator of the Facility, to the extent such License is assignable, Borrower will cause such operator or management agent to assign the License to Lender as additional security for the Indebtedness, using a form of assignment acceptable to Lender in its discretion.”

37. Section 6.28 of the Loan Agreement must be deleted and replaced with the following:

“6.28 Medicare and Medicaid.

(a) Without the prior written consent of Lender, which may be granted or withheld in Lender’s discretion, Borrower will not, and will not permit any management agent for the Mortgaged Property or any operator of the Mortgaged Property to, participate in any Governmental Payor Program, or any provider agreement under any Governmental Payor Program, or accept any resident whose ability to reside in the Mortgaged Property requires that Borrower, the Mortgaged Property or any management agent for the Mortgaged Property or any operator of the Mortgaged Property participate in any Governmental Payor Program.

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(b) In addition to the Events of Default listed in Section 9.01, it also will constitute an Event of Default if Borrower participates, or permits any management agent for the Mortgaged Property or operator of the Mortgaged Property to participate, in any Governmental Payor Program.”

38. Section 7.03(c) is deleted and the following is inserted in lieu thereof:

“(c) Publicly-Held Fund or Real Estate Investment Trust. If a Designated Entity for Transfers is a publicly held fund or real estate investment trust, the public issuance of common stock, convertible debt, equity or other similar securities (“Public Fund/REIT Securities”) and the subsequent Transfer of such Public Fund/REIT Securities; provided that each of the following conditions is satisfied:

(i) If any Public Fund/REIT Securities holder acquires and ownership percentage of more than 10% (“10% Transfer”), the Designated Entity for Transfers provides Lender with Notice of the 10% Transfer within 30 days after the Transfer along with a copy of the Securities and Exchange Commission Form 4.

(ii) Lender receives confirmation that after the 10% Transfer, there will not be a change of Control of the Borrower, if applicable.

(iii) If there is a change of Control of the Borrower such that the Guarantor, if applicable, no longer Controls the Borrower, Borrower provides Lender with a substitute Guarantor or other collateral acceptable to Lender (“Substitute Collateral”). If the Substitute Collateral is a letter of credit or cash, the amount of the Substitute Collateral will be 10% of the outstanding principal balance of the Mortgage.”

39. Section 7.03 is amended by the addition of the following new subsection 7.03(e) at the end thereof:

“(e) Any Condemnation, provided that Borrower has complied with the obligations under the applicable provisions of the Loan Documents, including, without limitation, Section 6.11 of the Loan Agreement, with respect thereto.”

40. Section 12.03 is amended by the addition of the following new subsection (d):

“(d) Lender shall endeavor to give the individuals or entities listed below courtesy copies of any notice given to Borrower and Borrower by Lender, at the addresses set forth below; provided, however, that failure to provide such courtesy copies of notices shall not affect the validity or sufficiency of any notice to Borrower or Borrower, shall not affect Lender’s rights and remedies hereunder or under any other Loan Documents, nor subject Lender to any claims by or liability to Borrower or any other individual or entity, it being acknowledged and agreed that no individual or entity listed below is a third-party beneficiary to any of the Loan Documents.

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Bass, Berry & Sims, PLC

150 3^rd Avenue South, Suite 2800

Nashville, TN 37212

Attn: Susan W. Foxman”

41. The following must be added as a new subsection to 12.11(b):

“(xv) If any covenants, conditions and restrictions affecting the Mortgaged Property provide for a lien for any assessments or other unpaid amounts, Borrower will provide satisfactory evidence that such lien will be subordinate to the lien of the Supplemental Instrument.”

42. Section 12.13 is amended by adding the following at the end thereof:

“provided, however, that Borrower will not be required to modify or amend any Loan Document if such modification or amendment would (i) change the interest rate, the stated maturity or the amortization of principal set forth in the Note, or (ii) modify or amend any other material economic term of the Loan.”

43. The following definitions are added to Article XIII:

“Contribution Agreement” means that certain Contribution Agreement dated of even date herewith by and between Borrower and Related Borrowers.

“Governmental Payor Program” means any Medicare, Medicaid, TRICARE programs or similar federal, state, local or any other third party payors’ programs or other similar provider payment programs.

“Master Lease” means that certain Master Lease dated September 20, 2011, by and between Borrower and Related Borrowers, as Lessors, and Operator and Related Operators as Lessees.

“Operator” means Greenfield Assisted Living of Fredericksburg, L.L.C.

“Related Borrowers” means Care GSL Stafford LLC, a Delaware limited liability company, and Care GSL Berryville LLC, a Delaware limited liability company

“Related Operators” means Greenfield Assisted Living of Stafford, L.L.C. and Greenfield Assisted Living of Berryville, LLC.

44. The definition of “Material Contracts” is deleted from Article XIII and the following is inserted in lieu thereof:

““Material Contract” means Contracts:

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(i) for preparing or serving food (but do not include food supply Contracts);

(ii) for medical services or healthcare provider agreements but not including the following:

Agreement to Provide Consultant Services dated October 11, 2010 (Re: registered dietitian)*	Greenfield of Fredericksburg; Donna Howard
Agreement for Mental Health Services dated October 8, 2010	Greenfield of Fredericksburg; Donna J. Vannata, PhD
Vendor Pharmacy Retainer Agreement, last executed October 13, 2010	Greenfield Senior Living of Fredericksburg; Mast Long Term Care

(iii) the average annual consideration of which, directly or indirectly, is at least $50,000;

(iv) having a term of more than one year and the aggregate amount payable over the life of such contract is equal to or greater than $125,000.00 unless such contract is subject to termination by Borrower or if Borrower is not a party to the Contract, the operator of the Facility, and their respective successors and assigns, upon not more than thirty days notice, without cause and without payment of any termination fee, penalty or extra charge; or

(v) determined by Lender to be material to the operation of the Facility.”

45. The definition of “Prohibited Activity or Condition” is deleted from Article XIII and the following is inserted in lieu thereof:

““Prohibited Activity or Condition” means each of the following:

  (i) The presence, use, generation, release, treatment, processing, storage (including storage in above-ground and underground storage tanks), handling or disposal of any Hazardous Materials on or under the Mortgaged Property.

  (ii) The transportation of any Hazardous Materials to, from or across the Mortgaged Property.

  (iii) Any occurrence or condition on the Mortgaged Property, which occurrence or condition is or may be in violation of Hazardous Materials Laws.

  (iv) Any violation of or noncompliance with the terms of any Environmental Permit with respect to the Mortgaged Property.

  (v) Any violation or noncompliance with the terms of any O&M Program.

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However, the term “Prohibited Activity or Condition” expressly excludes lawful conditions permitted by an O&M Program or the safe and lawful use and storage of quantities of (i) medical products or devices or medical waste, (ii) pre-packaged supplies, cleaning materials and petroleum products customarily used in the operation and maintenance of comparable senior housing properties, (iii) cleaning materials, personal grooming items and other items sold in pre-packaged containers for consumer use and used by tenants and occupants of residential dwelling units in the Mortgaged Property, and (iv) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Mortgaged Property’s parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance with Hazardous Materials Laws.”

46. Sections 11.05(b)(iii) and (iv) of the Rider to Seniors Housing Loan and Security Agreement (CME) Seniors Housing Operators are deleted and the following are inserted in lieu thereof:

“(iii) Within 25 days after the end of each fiscal quarter of Operator, Borrower will cause Operator to furnish to Lender a statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Operator relating to the Mortgaged Property as of the end of that fiscal quarter, provided however, that after Securitization, such information shall be furnished within 45 days after the end of each fiscal quarter.

(iv) Within 120 days after the end of each fiscal year of Operator, Borrower will cause Operator to furnish to Lender each of the following:

(A) An annual statement of income and expenses for Operator’s operation of the Mortgaged Property for that fiscal year.

(B) A statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal year.

(C) A balance sheet showing all assets and liabilities of Operator relating to the Mortgaged Property as of the end of that fiscal year and a profit and loss statement for Operator.

(D) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.”

47. Section A(a)(v) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

“(v) Borrower has paid all taxes which it owes prior to delinquency.”

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48. Section A(b)(iv) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

“(iv) Borrower has maintained all of its books, records, financial statements and bank accounts separate from those of any other person or entity. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof, Borrower maintained joint bank accounts with Related Borrowers and Care Investment Trust, Inc., and that such previously existing joint accounts shall not be a violation of this section.”

49. Section A(b)(xii) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

“(xii) Borrower has not commingled its assets with those of any other person or entity and has held all of its assets in its own name. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof, Borrower maintained joint bank accounts with Related Borrowers and Care Investment Trust, Inc., and that such previously existing joint accounts shall not be a violation of this section.”

50. Section A(b)(xvi) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

“(xvi) Borrower has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the loan being refinanced, which pledge has been satisfied and released, and the Loan.”

51. The Replacement Reserve Fund Rider – Immediate Deposits is modified as shown by the blacklined changes on said Rider attached hereto.

Seniors Housing Loan and Security Agreement (CME) Page B-18

EXHIBIT C

REPAIR SCHEDULE OF WORK

Not Applicable

Seniors Housing Loan and Security Agreement (CME) Page C-1

EXHIBIT D

REPAIR DISBURSEMENT REQUEST

The undersigned hereby requests from                     (“Lender”) the disbursement of funds in the amount of $                    (“Disbursement Request”) from the Repair Reserve Fund established pursuant to the Multifamily Loan and Security Agreement dated                     , 20     by and between Lender and the undersigned (the “Loan Agreement”) to pay for repairs to the multifamily apartment project known as                     and located in                     .

The undersigned hereby represents and warrants to Lender that the following information and certifications provided in connection with this Disbursement Request are true and correct as of the date hereof:

1. Purpose for which disbursement is requested:

2. To whom the disbursement will be made (may be the undersigned in the case of reimbursement for advances and payments made or cost incurred for work done by the undersigned):

3. Estimated costs of completing the uncompleted Repairs as of the date of this Disbursement Request:

4. The undersigned certifies that each of the following is true:

(a) The disbursement requested pursuant to this Disbursement Request will be used solely to pay a cost or costs allowable under the Loan Agreement.

(b) None of the items for which disbursement is requested pursuant to this Disbursement Request has formed the basis for any disbursement previously made from the Repair Reserve Fund.

(c) All labor and materials for which disbursements have been requested have been incorporated into the Improvements or suitably stored upon the Property in accordance with reasonable and standard building practices, the Loan Agreement and all applicable laws, ordinances, rules and regulations of any governmental authority having jurisdiction over the Property.

(d) The materials, supplies and equipment furnished or installed for the Repairs are not subject to any Lien or security interest or that the funds to be disbursed pursuant to this Disbursement Request are to be used to satisfy any such Lien or security interest.

Seniors Housing Loan and Security Agreement (CME) Page D-1

5. All capitalized terms used in this Disbursement Request without definition will have the meanings ascribed to them in the Loan Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Disbursement Request as of the day and date first above written.

	BORROWER:
Date:	CARE GSL FREDERICKSBURG LLC, a Delaware limited liability company
	By:
	Name:
	Title:

Seniors Housing Loan and Security Agreement (CME) Page D-2

EXHIBIT E

WORK COMMENCED AT MORTGAGED PROPERTY

None

Seniors Housing Loan and Security Agreement (CME) Page E-1

EXHIBIT F

CAPITAL REPLACEMENTS

• Carpet/vinyl flooring

• Window treatments

• Roofs

• Furnaces/boilers

• Air conditioners

• Ovens/ranges

• Refrigerators

• Dishwashers

• Water heaters

• Garbage disposals

The following additional items may also be funded from the Replacement Reserve Fund:

Roadways and parking, seal coat asphalt, pedestrian concrete paving, common area walls and ceilings, commercial kitchen equipment, commercial washers

Seniors Housing Loan and Security Agreement (CME) Page F-1

EXHIBIT G

DESCRIPTION OF GROUND LEASE

Not Applicable

Seniors Housing Loan and Security Agreement (CME) Page G-1

EXHIBIT H

ORGANIZATIONAL CHART OF BORROWER AS OF THE CLOSING DATE

FINAL ORGANIZATIONAL CHART OF BORROWER

Seniors Housing Loan and Security Agreement (CME) Page H-1

EXHIBIT I

DESIGNATED ENTITIES FOR TRANSFERS AND GUARANTOR(S)

Designated Entities for Transfers

Care GSL Holdings LLC

Care Investment Trust Inc.

Guarantor(s)

Care Investment Trust Inc.

Seniors Housing Loan and Security Agreement (CME) Page I-1

EXHIBIT J

LICENSES

LICENSE	HOLDER
Commonwealth of Virginia Department of Social Services Assisted Living Facility License – Residential and Assisted Living Care (license number ALF -1095467) dated October 18, 2011	Greenfield Senior Living of Fredericksburg (Operated by: Greenfield Assisted Living of Fredericksburg, LLC)
Commonwealth of Virginia Department of Health Food Establishment / Adult Care Home Food Service Permit	Greenfield Assisted Living of Fredericksburg, LLC
Commonwealth of Virginia Department of Health Professions Assisted Living Facility Administrator License (license number 1706000356) dated January 6, 2009	Karen C. Bland
Commonwealth of Virginia Department of Professional and Occupational Regulation Cosmetologist License (license number 1201015833)	Verne E. Horton

Seniors Housing Loan and Security Agreement (CME) Page J-1

EXHIBIT K

FF&E AND MOTOR VEHICLES

All of the following is owned by the Borrower and leased to Greenfield Assisted Living of Fredericksburg, L.L.C. pursuant to the Master Lease:

	QTY		Item
Common Areas:
Foyer Entrance
		2	Large Chair
		2	Tables
		2	Couches
		2	Ceramic Plant Stands
		1	Antique Mirror - Large
		1	Chandelier - Large
		2	Hall side tables
		3	Paintings - Large
	QTY		Item
Activities Room
		2	Love Seats
		1	Recliner
		2	Footstools
		2	Bookcases
		1	Flat Screen TV
		1	TV Stand
		8	Living Room Chairs
		2	Large Settee Chairs
		1	Small Antique Table
		3	Activity Tables
		1	Stereo Small
		3	Chandelier - Small
	QTY		Item
Resident Resource Room
		1	Bookcase
		1	Table-Small
		1	Office Chair
	QTY		Item
Office Areas:
Foyer Entrance
		4	Office Chairs
		4	Straight back chairs
		4	CPU & Monitors
		5	Printers (3 Inkjet & 2 BW Laser)

Seniors Housing Loan and Security Agreement (CME) Page K-1

	4		Desks
		4	Office Cabinets
		2	Paper Shredders
		2	Cane Bottom Resin Chairs
		3	Bookcases
	QTY		Item
Resident Rooms
Residents Provide Their own furniture
Respite Room & Show Rooms
		3	Twin Beds
		4	Dressers
	QTY		Item
Dining & Kitchen
Kitchen Area
		1	Gas Stove
		1	Outdoor Grill - Gas
		1	Standup Freezer
		1	Microwave
		1	Double door Refrigerator
		1	Single door Refrigerator
		1	Steam Table
		1	Regular Refrigerator
Dining Room Area
		1	China Hutch
		9	Dining Room Tables
		40	Dining Room Chairs
		8	Umbrellas
		1	Wooden Table
		3	Carts
	QTY		Item
Other Equipment
Other
		1	Home Free System- Wander System

The following is owned by third parties and leased to Greenfield Assisted Living of Fredericksburg, L.L.C.:

- 1 Dishmachine Model PA1 and related parts and equipment pursuant to Clean Force Dishmachine Lease dated January 18, 2007 between Greenfield of Fredericksburg and U.S. Foodservice, Inc.

- 1 Top Load Commercial Washer (Model MAT13MNDAW) and 1 Stack Gas Dryer (Model MLG23MNFWW) and related ancillary equipment pursuant to Total Laundry Care Agreement dated July 30, 2007 between Greenfield Assisted Living of Fredericksburg, LLC and Caldwell & Gregory, Inc.

Seniors Housing Loan and Security Agreement (CME) Page L-2

EXHIBIT L

CONTRACTS

CONTRACTS	PARTIES
Maintenance Agreement Contract dated January 26, 2011 (Re: copier maintenance)*	Greenfield Assisted Living; L & J Copier Clinic
Advertising Agreement dated November 1, 2005	Greenfield Assisted Living of Fredericksburg; Guide to Retirement Living
Advertising Agreement dated May 6, 2010*	Greenfield of Fredericksburg; Idearc Media LLC
Clean Force Dishmachine Lease, last executed January 18, 2007*	Greenfield of Fredericksburg; U.S. Foodservice, Inc.; Puritan Services, Inc.
Illustratus Group Newsletter Service Agreement, last executed October 30, 2007 (Re: design and printing of monthly community newsletters)	Greenfield Senior Living; Uhlig LLC
Eldercare Information Service Agreement dated December 4, 2007 (Re: referral services)	Greenfield Senior Living; A Place for Mom, Inc.
Assisted / Independent Living Referral Agreement dated September 1, 2009*	Greenfield; Senior-Living.com, Inc.
Total Laundry Care Agreement dated July 30, 2007 (Re: lease of laundry equipment) *	Greenfield Assisted Living of Fredericksburg LLC; Caldwell & Gregory, Inc.
Service Agreement dated June 10, 2003 (Re: medical waste disposal)*	Greenfield Assisted Living; Stericycle, Inc.
Service Agreement dated March 7, 2007 (Re: waste removal)*	Greenfield Assisted Living; BFI Waste Services LLC d/b/a Allied Waste Services of Fredericksburg
Agreement to Provide Consultant Services dated October 11, 2010 (Re: Registered Dietitian)*	Greenfield of Fredericksburg; Donna Howard
Agreement for Mental Health Services dated October 8, 2010	Greenfield of Fredericksburg; Donna J. Vannata, PhD
Vendor Pharmacy Retainer Agreement, last executed October 13, 2010	Greenfield Senior Living of Fredericksburg; Mast Long Term Care
Greenfield Management Agreement dated April 18, 2002, as amended by Amendment to Management Agreement of even date herewith	Greenfield Assisted Living of Fredericksburg, L.L.C.; Greenfield Management, L.L.C.

* Does not provide that it is terminable by Borrower or the operator of the Facility upon not more than 30 days notice without the necessity of establishing cause and without payment of a penalty or termination fee by Borrower or the operator of the Facility or their respective successors or assigns.

Seniors Housing Loan and Security Agreement (CME) Page L-1

EXHIBIT M

MATERIAL CONTRACTS

CONTRACTS	PARTIES
Greenfield Management Agreement dated April 18, 2002, as amended by Amendment to Management Agreement of even date herewith	Greenfield Assisted Living of Fredericksburg, L.L.C.; Greenfield Management, L.L.C.

Seniors Housing Loan and Security Agreement (CME) Page M-1

EXHIBIT N

ADDITIONAL MORTGAGED PROPERTY

1. All of Borrower’s present and future right, title and interest in and to all of the following that are used now or in the future in connection with the ownership, management or operation of the Land and/or the Improvements on such Land (“Property”), including without limitation, the Facility: machinery, equipment, engines, boilers, incinerators, installed building materials; systems and equipment for the purpose of supplying or distributing heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring and conduits used in connection with radio, television, security, fire prevention or fire detection or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposals, washers, dryers, and other appliances; light fixtures, awnings, storm windows and storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors, cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants; swimming pools; and exercise equipment (any of the foregoing that are so attached to the Property as to constitute fixtures under applicable law are referred to below as “Facility Fixtures”).

2. All furniture, furnishings, equipment, machinery, building materials, appliances, goods, supplies, tools, books, records (whether in written or electronic form), computer equipment (hardware and software) healthcare equipment, recreational equipment, pool equipment, dishes, silverware, glassware, kitchen equipment and other tangible personal property (other than Facility Fixtures) that are used now or in the future in connection with the ownership, management or operation of the Property or are located on the Property, and any operating leases relating to the Property, and any surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Property and all other intangible property and rights relating to the operation of, or used in connection with, the Property, including all governmental permits relating to any activities on the Property (“Facility Personalty”).

3. All current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights-of-way, strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses, and appurtenances related to or benefiting the Property, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated.

4. All proceeds paid or to be paid by any insurer of the Property, the Facility Fixtures, the Personalty or any other item listed in this Schedule 1.

5. All awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Property, the Facility Fixtures, the Facility Personalty or any other item listed in this Schedule 1, including any awards or settlements resulting from condemnation proceedings or the total or partial taking of the

Seniors Housing Loan and Security Agreement (CME) Page N-1

Property, the Facility Fixtures, the Facility Personalty or any other item listed in this Schedule 1 under the power of eminent domain or otherwise and including any conveyance in lieu thereof.

6. All contracts, options and other agreements for the sale of the Property, the Facility Fixtures, the Facility Personalty or any other item listed in this Schedule 1 entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations; and all other contracts and agreements pertaining to the ownership, leasing, operation or management of the Property, including without limitation, management and similar agreements, utility contracts and agreements for the provision of goods or services (or payment therefor) at the Facility (whether to Borrower, Operator or the residents of the Facility), including without limitation Third Party Provider Agreements.

7. All present and future leases, subleases, licenses, concessions or grants or other possessory interests, including master leases or operating leases and agreements, now or hereafter in force, whether oral or written, covering or affecting the Property or its operation, or any portion of the Property (including proprietary leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals; and all occupancy agreements (including both residential and commercial agreements), patient admissions or resident care agreements (“Facility Leases”).

8. All earnings, royalties, accounts receivable (including accounts receivable for all rents, revenues and other income of the Property), including parking fees, issues and profits from the Property or its operation, or any other item listed in this Schedule 1, and all undisbursed proceeds of the loan secured by the security interests to which this financing statement relates and, if Borrower is a cooperative housing corporation, maintenance charges or assessments payable by shareholders or residents.

9. All refunds or rebates of (a) water and sewer charges, (b) premiums for fire and other hazard insurance, rent loss insurance and any other insurance required by Lender, (c) taxes, assessments, vault rentals, and (d) other charges or expenses required by Lender to protect the Property, to prevent the imposition of liens on the Property, or otherwise to protect Lender’s interests by any municipal, state or federal authority or insurance company; and all refunds of utility deposits.

10. All tenant security deposits which have not been forfeited by any tenant under any Lease.

11. Subject to the terms of this Loan Agreement, all names under or by which the Property or any part of it may be operated or known, and all trademarks, trade names, and goodwill relating to any of the Property or any part of it.

12. All payments received and all rights to receive payments from any source, which payments (or rights thereto) arise from operation of or at the Property, including without limitation, entrance fees, application fees, processing fees, community fees and any other amounts or fees deposited or to be deposited by any resident or tenant, payments received

Seniors Housing Loan and Security Agreement (CME) Page N-2

and the right to receive payments of second party charges added to base rental income, base and additional meal sales, payments received and the right to receive payments from commercial operations located on the Property or provided as a service to the occupants of the Facility, rental from guest suites, seasonal lease charges, rental payments under furniture leases, income from healthcare services, income from laundry service, income from vending machines and income and fees from any and all other services provided to residents of the Property.

13. All rights to payments from Medicare, Medicaid or TRICARE programs or similar federal, state or local programs or agencies and rights to payment from private insurers.

14. All Licenses, approvals, permits, accreditations, determinations of need, certificates of need, and other certificates.

15. All operating contracts, franchises, license agreements, healthcare services contracts, food service contracts and other contracts for services related to the Property.

16. All utility deposits.

17. All proceeds from the conversion, voluntary or involuntary, of any of the above into cash or liquidated claims, and the right to collect such proceeds and any supporting obligations of any of the above.

Seniors Housing Loan and Security Agreement (CME) Page N-3

EX-10.5

Exhibit 10.5

Freddie Mac Loan Number: 504183362

Property Name: Greenfield Assisted Living of Fredericksburg

MULTIFAMILY NOTE

(CME)

MULTISTATE – FIXED RATE

DEFEASANCE

(Revised 2-2-2012)

US $3,591,000.00 Effective Date: April 24, 2012

FOR VALUE RECEIVED, CARE GSL FREDERICKSBURG LLC, a Delaware limited liability company (together with such party’s or parties’ successors and assigns, “Borrower”) jointly and severally (if more than one) promises to pay to the order of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation, the principal sum of Three Million Five Hundred Ninety-One Thousand and No/100 Dollars ($3,591,000.00), with interest on the unpaid principal balance, as hereinafter provided.

1. Defined Terms.

(a) As used in this Note:

“Base Recourse” means a portion of the Indebtedness equal to 0% of the original principal balance of this Note.

“Business Day” means any day other than a Saturday, a Sunday or any other day on which Lender or the national banking associations are not open for business.

“Cut-off Date” means the 12^th Installment Due Date.

“Defeasance Date” means the 2^nd anniversary of the “startup date” of the last REMIC within the meaning of Section 860G(a)(9) of the Tax Code which holds all or any portion of the Loan.

“Default Rate” means an annual interest rate equal to 4 percentage points above the Fixed Interest Rate. However, at no time will the Default Rate exceed the Maximum Interest Rate.

“Defeasance Period” is the period beginning the day after the Defeasance Date until but not including the first day of the Window Period. The Defeasance Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.

Multifamily Multistate Fixed Rate Note (CME)

Defeasance

“Fixed Interest Rate” means the annual interest rate of 4.76%.

“Installment Due Date” means, for any monthly installment of interest-only or principal and interest, the date on which such monthly installment is due and payable pursuant to Section 3 of this Note. The “First Installment Due Date” under this Note is June 1, 2012.

“Lender” means the holder from time to time of this Note.

“Loan” means the loan evidenced by this Note.

“Loan Agreement” means the Multifamily Loan and Security Agreement entered into by and between Borrower and Lender, effective as of the effective date of this Note, as amended, modified or supplemented from time to time.

“Lockout Period” means the period beginning on the day that this Note is assigned to a REMIC trust until and including the Defeasance Date. The Lockout Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.

“Maturity Date” means the earlier of (i) May 1, 2022 (“Scheduled Maturity Date”), or (ii) the date on which the unpaid principal balance of this Note becomes due and payable by acceleration or otherwise pursuant to the Loan Documents or the exercise by Lender of any right or remedy under any Loan Document; provided, however, that if the unpaid principal balance of this Note becomes due and payable by acceleration but such acceleration is rendered null and void and of no further force and effect by operation of law or agreement by Lender, such acceleration will have no effect on the Maturity Date.

“Maximum Interest Rate” means the rate of interest which results in the maximum amount of interest allowed by applicable law.

“Prepayment Premium Period” means the period during which, if a prepayment of principal occurs, a prepayment premium will be payable by Borrower to Lender. The Prepayment Premium Period is the period from and including the date of this Note until but not including (i) the day that this Note is assigned to a REMIC trust, if this Note is assigned to a REMIC trust prior to the Cut-off Date, or (ii) the first day of the Window Period, if this Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date.

“Security Instrument” means the multifamily mortgage, deed to secure debt or deed of trust effective as of the effective date of this Note, from Borrower to or for the benefit of Lender and securing this Note, as amended, modified or supplemented from time to time.

Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page 2

“Window Period” means the 3 consecutive calendar month period prior to the Scheduled Maturity Date.

“Yield Maintenance Expiration Date” means November 1, 2021.

“Yield Maintenance Period” means the period from and including the date of this Note until but not including (i) the day that this Note is assigned to a REMIC trust, if this Note is assigned to a REMIC trust prior to the Cut-off Date, or (ii) the Yield Maintenance Expiration Date, if this Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date.

(b) Other capitalized terms used but not defined in this Note will have the meanings given to such terms in the Loan Agreement.

2. Address for Payment. All payments due under this Note will be payable at P.O. Box 145404, Cincinnati, Ohio 45250, or such other place as may be designated by Notice to Borrower from or on behalf of Lender.

3. Payments.

(a) Interest will accrue on the outstanding principal balance of this Note at the Fixed Interest Rate, subject to the provisions of Section 8 of this Note.

(b) Interest under this Note will be computed, payable and allocated on the basis of an actual/360 interest calculation schedule (interest is payable for the actual number of days in each month, and each month’s interest is calculated by multiplying the unpaid principal amount of this Note as of the first day of the month for which interest is being calculated by the Fixed Interest Rate, dividing the product by 360, and multiplying the quotient by the number of days in the month for which interest is being calculated). The portion of the monthly installment of principal and interest under this Note attributable to principal and the portion attributable to interest will vary based upon the number of days in the month for which such installment is paid. Each monthly payment of principal and interest will first be applied to pay in full interest due, and the balance of the monthly installment payment paid by Borrower will be credited to principal.

(c) Unless disbursement of principal is made by Lender to Borrower on the first day of a calendar month, interest for the period beginning on the date of disbursement and ending on and including the last day of such calendar month will be payable by Borrower simultaneously with the execution of this Note. If disbursement of principal is made by Lender to Borrower on the first day of a calendar month, then no payment will be due from Borrower at the time of the execution of this Note. The Installment Due Date for the first monthly installment payment under

Multifamily Multistate Fixed Rate Note (CME)
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Section 3(d) of interest-only or principal and interest, as applicable, will be the First Installment Due Date set forth in Section 1(a) of this Note. Except as provided in this Section 3(c), Section 10 and in Section 11, accrued interest will be payable in arrears.

(d) Beginning on the First Installment Due Date, and continuing until and including the monthly installment due on the Maturity Date, principal and accrued interest will be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar month. The amount of the monthly installment of principal and interest payable pursuant to this Section 3(d) on an Installment Due Date will be $18,754.01.

(e) All remaining Indebtedness, including all principal and interest, will be due and payable by Borrower on the Maturity Date.

(f) All payments under this Note must be made in immediately available U.S. funds.

(g) Any regularly scheduled monthly installment of interest-only or principal and interest payable pursuant to this Section 3 that is received by Lender before the date it is due will be deemed to have been received on the due date for the purpose of calculating interest due.

(h) Any accrued interest remaining past due for 30 days or more, at Lender’s discretion, may be added to and become part of the unpaid principal balance of this Note and any reference to “accrued interest” will refer to accrued interest which has not become part of the unpaid principal balance. Any amount added to principal pursuant to the Loan Documents will bear interest at the applicable rate or rates specified in this Note and will be payable with such interest upon demand by Lender and absent such demand, as provided in this Note for the payment of principal and interest.

4. Application of Partial Payments. If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, Lender may apply the amount received to amounts then due and payable in any manner and in any order determined by Lender, in Lender’s discretion. Borrower agrees that neither Lender’s acceptance of a payment from Borrower in an amount that is less than all amounts then due and payable nor Lender’s application of such payment will constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction.

5. Security. The Indebtedness is secured by, among other things, the Security Instrument and reference is made to the Security Instrument and Loan Agreement for other rights of Lender as to collateral for the Indebtedness.

6. Acceleration. If an Event of Default has occurred and is continuing, the entire unpaid principal balance, any accrued interest, any prepayment premium payable under

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Defeasance	Page 4

Section 10 and Section 11, and all other amounts payable under this Note and any other Loan Document, will at once become due and payable, at the option of Lender, without any prior Notice to Borrower (except if notice is required by applicable law, then after such notice). Lender may exercise this option to accelerate regardless of any prior forbearance. For purposes of exercising such option, Lender will calculate the prepayment premium as if prepayment occurred on the date of acceleration. If prepayment occurs thereafter, Lender will recalculate the prepayment premium as of the actual prepayment date.

7. Late Charge.

(a) If any monthly installment of interest or principal and interest or other amount payable under this Note or under the Loan Agreement or any other Loan Document is not received in full by Lender within 10 days after the installment or other amount is due, counting from and including the date such installment or other amount is due (unless applicable law requires a longer period of time before a late charge may be imposed, in which event such longer period will be substituted), Borrower must pay to Lender, immediately and without demand by Lender, a late charge equal to 5% of such installment or other amount due (unless applicable law requires a lesser amount be charged, in which event such lesser amount will be substituted). If the Loan is not fully amortizing, the late charge will not be due on the final payment of principal owed on the Maturity Date if such payment is not timely made.

(b) Borrower acknowledges that its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan and that it is extremely difficult and impractical to determine those additional expenses. Borrower agrees that the late charge payable pursuant to this Section represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional expenses Lender will incur by reason of such late payment. The late charge is payable in addition to, and not in lieu of, any interest payable at the Default Rate pursuant to Section 8.

8. Default Rate.

(a) So long as (i) any monthly installment under this Note remains past due for 30 days or more or (ii) any other Event of Default has occurred and is continuing, then notwithstanding anything in Section 3 of this Note to the contrary, interest under this Note will accrue on the unpaid principal balance from the Installment Due Date of the first such unpaid monthly installment or the occurrence of such other Event of Default, as applicable, at the Default Rate.

(b) From and after the Maturity Date, the unpaid principal balance will continue to bear interest at the Default Rate until and including the date on which the entire principal balance is paid in full.

Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page 5

(c) Borrower acknowledges that (i) its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan, (ii) during the time that any monthly installment under this Note is delinquent for 30 days or more, Lender will incur additional costs and expenses arising from its loss of the use of the money due and from the adverse impact on Lender’s ability to meet its other obligations and to take advantage of other investment opportunities, and (iii) it is extremely difficult and impractical to determine those additional costs and expenses. Borrower also acknowledges that, during the time that any monthly installment under this Note is delinquent for 30 days or more or any other Event of Default has occurred and is continuing, Lender’s risk of nonpayment of this Note will be materially increased and Lender is entitled to be compensated for such increased risk. Borrower agrees that the increase in the rate of interest payable under this Note to the Default Rate represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional costs and expenses Lender will incur by reason of the Borrower’s delinquent payment and the additional compensation Lender is entitled to receive for the increased risks of nonpayment associated with a delinquent loan.

9. Limits on Personal Liability.

(a) Except as otherwise provided in this Section 9, Borrower will have no personal liability under this Note, the Loan Agreement or any other Loan Document for the repayment of the Indebtedness or for the performance of or compliance with any other obligations of Borrower under the Loan Documents and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and remedies with respect to the Mortgaged Property and to any other collateral held by Lender as security for the Indebtedness. This limitation on Borrower’s liability will not limit or impair Lender’s enforcement of its rights against any Guarantor of the Indebtedness or any Guarantor of any other obligations of Borrower.

(b) Borrower will be personally liable to Lender for the amount of the Base Recourse, plus any other amounts for which Borrower has personal liability under this Section 9.

(c) In addition to the Base Recourse, Borrower will be personally liable to Lender for the repayment of a further portion of the Indebtedness equal to any loss or damage suffered by Lender as a result of the occurrence of any of the following events:

(i) Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender is entitled under Section 3 of the Security Instrument and the amount of all security deposits collected by Borrower from tenants then in residence. However, Borrower will not be personally liable for any failure described in this Section 9(c)(i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

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(ii) Borrower fails to apply all Insurance proceeds and Condemnation proceeds as required by the Loan Agreement. However, Borrower will not be personally liable for any failure described in this Section 9(c)(ii) if Borrower is unable to apply Insurance or Condemnation proceeds as required by the Loan Agreement because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

(iii) Either of the following occurs:

(A) Borrower fails to deliver the statements, schedules and reports required by Section 6.07 of the Loan Agreement and Lender exercises its right to audit those statements, schedules and reports.

(B) If an Event of Default has occurred and is continuing, Borrower fails to deliver all books and records relating to the Mortgaged Property or its operation in accordance with the provisions of Section 6.07 of the Loan Agreement.

(iv) Borrower fails to pay when due in accordance with the terms of the Loan Agreement the amount of any item below marked “Deferred”; provided however, that if no item is marked “Deferred”, this Section 9(c)(iv) will be of no force or effect.

[Deferred] Hazard Insurance premiums or other Insurance premiums

[Collect] Taxes or payments in lieu of taxes (PILOT)

[Deferred] water and sewer charges (that could become a lien on the Mortgaged Property)

[N/A] Ground Rents

[Deferred] assessments or other charges (that could become a lien on the Mortgaged Property)

(v) Borrower engages in any willful act of material waste of the Mortgaged Property.

(vi) Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v) of the Loan Agreement (subject to possible full recourse liability as set forth in Section 9(f)(ii)).

(vii) Any of the following Transfers occurs:

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(A) Any Person that is not an Affiliate creates a mechanic’s lien or other involuntary lien or encumbrance against the Mortgaged Property and Borrower has not complied with the provisions of the Loan Agreement.

(B) A Transfer of property by devise, descent or operation of law occurs upon the death of a natural person and such Transfer does not meet the requirements set forth in the Loan Agreement.

(C) Borrower grants an easement that does not meet the requirements set forth in the Loan Agreement.

(D) Borrower executes a Lease that does not meet the requirements set forth in the Loan Agreement.

(d) In addition to the Base Recourse, Borrower will be personally liable to Lender for all of the following:

(i) Borrower will be personally liable for the performance of and compliance with all of Borrower’s obligations under Sections 6.12 and 10.02(b) of the Loan Agreement (relating to environmental matters).

(ii) Borrower will be personally liable for the costs of any audit under Section 6.07 of the Loan Agreement.

(iii) Borrower will be personally liable for any costs and expenses incurred by Lender in connection with the collection of any amount for which Borrower is personally liable under this Section 9, including Attorneys’ Fees and Costs and the costs of conducting any independent audit of Borrower’s books and records to determine the amount for which Borrower has personal liability.

(e) All payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Loan Agreement and the other Loan Documents will be applied first to the portion of the Indebtedness for which Borrower has no personal liability.

(f) Notwithstanding the Base Recourse, Borrower will become personally liable to Lender for the repayment of all of the Indebtedness upon the occurrence of any of the following Events of Default:

(i) Borrower fails to comply with Section 6.13(a)(i) or (ii) of the Loan Agreement or any SPE Equity Owner fails to comply with Section 6.13(b)(i) or (ii) of the Loan Agreement.

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(ii) Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v) of the Loan Agreement and a court of competent jurisdiction holds or determines that such failure or combination of failures is the basis, in whole or in part, for the substantive consolidation of the assets and liabilities of Borrower or any SPE Equity Owner with the assets and liabilities of a debtor pursuant to Title 11 of the Bankruptcy Code.

(iii) A Transfer that is an Event of Default under Section 7.02 of the Loan Agreement occurs other than a Transfer set forth in Section 9(c)(vii) above (for which Borrower will have personal liability for Lender’s loss or damage); provided, however, that Borrower will not have any personal liability for a Transfer consisting solely of the involuntary removal or involuntary withdrawal of a general partner in a limited partnership or a manager in a limited liability company).

(iv) There was fraud or written material misrepresentation by Borrower or any officer, director, partner, member or employee of Borrower in connection with the application for or creation of the Indebtedness or there is fraud in connection with any request for any action or consent by Lender.

(v) Borrower or any SPE Equity Owner voluntarily files for bankruptcy protection under the Bankruptcy Code.

(vi) Borrower or any SPE Equity Owner voluntarily becomes subject to any reorganization, receivership, insolvency proceeding, or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights.

(vii) The Mortgaged Property or any part of the Mortgaged Property becomes an asset in a voluntary bankruptcy or becomes subject to any voluntary reorganization, receivership, insolvency proceeding, or other similar voluntary proceeding pursuant to any other federal or state law affecting debtor and creditor rights.

(viii) An order of relief is entered against Borrower or any SPE Equity Owner pursuant to the Bankruptcy Code or other federal or state law affecting debtor and creditor rights in any involuntary bankruptcy proceeding initiated or joined in by a Related Party.

(ix) An involuntary bankruptcy or other involuntary insolvency proceeding is commenced against Borrower or any SPE Equity Owner (by a party other than Lender) but only if Borrower or such SPE Equity Owner has failed to use commercially reasonable efforts to dismiss such proceeding or has consented to such proceeding. “Commercially reasonable efforts” will not require any direct or indirect interest holders in Borrower or any SPE Equity Owner to contribute or cause the contribution of additional capital to Borrower or any SPE Equity Owner.

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(g) For purposes of Section 9(f) the term “Related Party” will include all of the following:

(i) Borrower, any Guarantor or any SPE Equity Owner.

(ii) Any Person that holds, directly or indirectly, any ownership interest (including any shareholder, member or partner) in Borrower, any Guarantor or any SPE Equity Owner or any Person that has a right to manage Borrower, any Guarantor or any SPE Equity Owner.

(iii) Any Person in which Borrower, any Guarantor or any SPE Equity Owner has any ownership interest (direct or indirect) or right to manage.

(iv) Any Person in which any partner, shareholder or member of Borrower, any Guarantor or any SPE equity Owner has an ownership interest or right to manage.

(v) Any Person in which any Person holding an interest in Borrower, any Guarantor or any SPE Equity Owner also has any ownership interest.

(vi) Any creditor of Borrower that is related by blood, marriage or adoption to Borrower, any Guarantor or any SPE Equity Owner.

(vii) Any creditor of Borrower that is related to any partner, shareholder or member of, or any other Person holding an interest in, Borrower, any Guarantor or any SPE Equity Owner.

(h) If Borrower, any Guarantor, any SPE Equity Owner or any Related Party has solicited creditors to initiate or participate in any proceeding referred to in Section 9(f), regardless of whether any of the creditors solicited actually initiates or participates in the proceeding, then such proceeding will be considered as having been initiated by a Related Party.

(i) To the extent that Borrower has personal liability under this Section 9, Lender may, to the fullest extent permitted by applicable law, exercise its rights against Borrower personally without regard to whether Lender has exercised any rights against the Mortgaged Property or any other security, or pursued any rights against any Guarantor, or pursued any other rights available to Lender under this Note, the Loan Agreement, any other Loan Document or applicable law. To the fullest extent permitted by applicable law, in any action to enforce Borrower’s personal liability under this Section 9, Borrower waives any right to set off the value of the Mortgaged Property against such personal liability.

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10. Voluntary and Involuntary Prepayments During the Prepayment Premium Period (Section Applies unless and until Loan is Assigned to REMIC Trust Prior to the Cut-off Date).

(a) This Section 10 will apply unless and until this Note is assigned to a REMIC trust prior to the Cut-off Date.

(b) Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment under this Note.

(c) During the Prepayment Premium Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. Unless Lender has previously notified Borrower of the expiration of the Prepayment Premium Period, upon receipt of such Notice from Borrower, Lender will notify Borrower if the Note has been assigned to a REMIC trust prior to the Cut-off Date and the Prepayment Premium Period has expired. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this Section 10 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled Installment Due Date.

(d) Notwithstanding Section 10(c), Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 10(c) above and meets the other requirements set forth in this Section 10(d). Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a Business Day other than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower will be responsible for all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment.

(e) Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all of the principal of this Note, Borrower must pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment, plus (iii) any prepayment premium calculated pursuant to Section 10(f).

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(f) Except as provided in Section 10(g), a prepayment premium will be due and payable by Borrower in connection with any prepayment of principal under this Note during the Prepayment Premium Period. The prepayment premium will be computed as follows:

(i) For any prepayment made during the Yield Maintenance Period, the prepayment premium will be whichever is the greater of subsections (A) and (B) below:

(A) 1.0% of the amount of principal being prepaid; or

(B) the product obtained by multiplying:

(1) the amount of principal being prepaid or accelerated,

by

(2) the excess (if any) of the Monthly Note Rate over the Assumed Reinvestment Rate,

by

(3) the Present Value Factor.

For purposes of Section 10(f)(i)(B), the following definitions will apply:

Monthly Note Rate: 1/12 of the Fixed Interest Rate, expressed as a decimal calculated to 5 digits.

Prepayment Date: in the case of a voluntary prepayment, the date on which the prepayment is made; in the case of the application by Lender of collateral or security to a portion of the principal balance, the date of such application.

Assumed Reinvestment Rate: 1/12 of the yield rate expressed as a decimal to 2 digits, as of the close of the trading session which is 5 Business Days before the Prepayment Date, found among the Daily Treasury Yield Curve Rates, commonly known as Constant Maturity Treasury (“CMT”) rates, with a maturity equal to the remaining Yield Maintenance Period, as reported on the U.S. Department of the Treasury website. If no published CMT maturity matches the remaining Yield Maintenance Period, Lender will interpolate as a decimal to 2 digits the yield rate between (a) the CMT with a maturity closest to, but shorter than, the remaining Yield Maintenance Period, and (b) the CMT with a maturity closest to, but longer than, the remaining Yield Maintenance Period, as follows:

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A = yield rate for the CMT with a maturity shorter than the remaining Yield Maintenance Period

B = yield rate for the CMT with a maturity longer than the remaining Yield Maintenance Period

C = number of months to maturity for the CMT maturity shorter than the remaining Yield Maintenance Period

D = number of months to maturity for the CMT maturity longer than the remaining Yield Maintenance Period

E = number of months remaining in the Yield Maintenance Period

In the event the U.S. Department of the Treasury ceases publication of the CMT rates, the Assumed Reinvestment Rate will equal the yield rate on the first U.S. Treasury security which is not callable or indexed to inflation and which matures after the expiration of the Yield Maintenance Period.

The Assumed Reinvestment Rate may be a positive number, a negative number or zero.

If the Assumed Reinvestment Rate is a positive number or a negative number, Lender will calculate the prepayment premium using such positive number or negative number, as appropriate, as the Assumed Reinvestment Rate in 10(f)(i)(B)(2) and in the calculation of the Present Value Factor.

If the Assumed Reinvestment Rate is zero, Lender will calculate the prepayment premium twice as set forth in (I) and (II) below and will average the results to determine the actual prepayment premium.

(I) Lender will calculate the prepayment premium using an Assumed Reinvestment Rate of one basis point (+0.01%) in Section 10(f)(i)(B)(2) and in the calculation of the Present Value Factor.

(II) Lender will calculate the prepayment premium using an Assumed Reinvestment Rate of negative one basis point (-0.01%) in Section 10(f)(i)(B)(2) and in the calculation of the Present Value Factor.

Present Value Factor: the factor that discounts to present value the costs resulting to Lender from the difference in interest rates during the months remaining in the Yield Maintenance Period, using the Assumed Reinvestment Rate as the discount rate, with monthly compounding, expressed numerically as follows:

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n = the number of months remaining in Yield Maintenance Period; provided, however, if a prepayment occurs on an Installment Due Date, then the number of months remaining in the Yield Maintenance Period will be calculated beginning with the month in which such prepayment occurs and if such prepayment occurs on a Business Day other than an Installment Due Date, then the number of months remaining in the Yield Maintenance Period will be calculated beginning with the month immediately following the date of such prepayment.

ARR = Assumed Reinvestment Rate

(ii) For any prepayment made after the expiration of the Yield Maintenance Period but during the remainder of the Prepayment Premium Period, the prepayment premium will be 1.0% of the amount of principal being prepaid.

(g) Notwithstanding any other provision of this Section 10, no prepayment premium will be payable with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award under the Loan Agreement.

(h) Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the unpaid principal balance of this Note will not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments.

(i) Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth in this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that the prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions.

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11. Voluntary and Involuntary Prepayments During the Lockout Period and During the Defeasance Period (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date).

(a) This Section 11 will apply in the event this Note is assigned to a REMIC trust prior to the Cut-off Date. This Section 11 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date or if this Note is not assigned to a REMIC trust.

(b) Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment under this Note.

(c) Borrower may not voluntarily prepay any portion of the principal balance of this Note during the Lockout Period or during the Defeasance Period; provided, however, any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award under the Loan Agreement will be permitted during the Lockout Period and during the Defeasance Period. If any portion of the principal balance of this Note is prepaid during the Lockout Period or during the Defeasance Period by reason of the application by Lender of any proceeds of collateral or other security to any portion of the unpaid principal balance of this Note or following a determination that the prohibition on voluntary prepayments during the Lockout Period or during the Defeasance Period is in contravention of applicable law, then Borrower must also pay to Lender upon demand by Lender, a prepayment premium equal to 5.0% of the amount of principal being prepaid.

(d) Notwithstanding any other provision of this Section 11, no prepayment premium will be payable with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award under the Loan Agreement.

(e) After the expiration of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this Section 11 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled Installment Due Date.

(f) Notwithstanding Section 11(e) above, following the end of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of the unpaid

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principal balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 11(e) and meets the other requirements set forth in this Section 11(f). Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a Business Day other than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower will be responsible for all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment.

(g) Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all of the principal of this Note, Borrower must also pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment.

(h) Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the unpaid principal balance of this Note will not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments.

(i) Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth in Section 11(c) of this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that the lockout and prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions.

(j) If, after the expiration of the Lockout Period, Borrower defeases the Loan as described in Section 11.12 of the Loan Agreement during the Defeasance Period, Borrower will not have the right to voluntarily prepay any of the principal of this Note at any time.

12. Defeasance (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date).

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(a) This Section 12 will apply in the event this Note is assigned to a REMIC trust prior to the Cut-off Date. This Section 12 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date or if this Note is not assigned to a REMIC trust.

(b) Section 5 of this Note is amended by adding a new paragraph at the end of the Section as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, the Indebtedness will be secured by the Pledge Agreement and reference will be made to the Pledge Agreement for other rights of Lender as to collateral for the Indebtedness.

(c) Section 9 of this Note is amended by adding a new paragraph at the end thereof as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, Borrower will have no personal liability under this Note or the Pledge Agreement for the repayment of the Indebtedness or for the performance of any other obligations of Borrower under this Note or the Pledge Agreement (other than any liability under Section 6.12 or Section 10.02 of the Loan Agreement for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance Closing Date), and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and remedies with respect to the collateral held by Lender under the Pledge Agreement as security for the Indebtedness.

(d) Section 21(a) of this Note is amended by adding a new paragraph at the end of that subsection as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, all Notices, demands and other communications required or permitted to be given pursuant to this Note will be given in accordance with the Pledge Agreement.

13. Costs and Expenses. To the fullest extent allowed by applicable law, Borrower must pay all expenses and costs, including Attorneys’ Fees and Costs incurred by Lender as a result of any default under this Note or in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure proceeding. Borrower acknowledges and agrees that, in connection with each request by Borrower under this Note or any Loan Document, Borrower must pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees charged by the Rating Agencies, regardless of whether the matter is approved, denied or withdrawn.

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14. Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note, the Loan Agreement, or any other Loan Document or otherwise afforded by applicable law, will not be a waiver of or preclude the exercise of that or any other right or remedy. The acceptance by Lender of any payment after the due date of such payment, or in an amount which is less than the required payment, will not be a waiver of Lender’s right to require prompt payment when due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment. Enforcement by Lender of any security for Borrower’s obligations under this Note will not constitute an election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender.

15. Waivers. Borrower and all endorsers and Guarantors of this Note and all other third party obligors waive presentment, demand, notice of dishonor, protest, notice of acceleration, notice of intent to demand or accelerate payment or maturity, presentment for payment, notice of nonpayment, grace, and diligence in collecting the Indebtedness.

16. Loan Charges. Neither this Note nor any of the other Loan Documents will be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate greater than the Maximum Interest Rate. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower in connection with the Loan is interpreted so that any interest or other charge provided for in any Loan Document, whether considered separately or together with other charges provided for in any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate that violation. The amounts, if any, previously paid to Lender in excess of the permitted amounts will be applied by Lender to reduce the unpaid principal balance of this Note. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, will be deemed to be allocated and spread ratably over the stated term of this Note. Unless otherwise required by applicable law, such allocation and spreading will be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of this Note.

17. Commercial Purpose. Borrower represents that Borrower is incurring the Indebtedness solely for the purpose of carrying on a business or commercial enterprise, and not for personal, family, household, or agricultural purposes.

18. Counting of Days. Any reference in this Note to a period of “days” means calendar days, not Business Days except where otherwise specifically provided.

19. Governing Law. This Note will be governed by the law of the Property Jurisdiction.

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20. Captions. The captions of the Sections of this Note are for convenience only and will be disregarded in construing this Note.

21. Notices; Written Modifications.

(a) All Notices, demands and other communications required or permitted to be given pursuant to this Note will be given in accordance with Section 11.03 of the Loan Agreement.

(b) Any modification or amendment to this Note will be ineffective unless in writing and signed by the party sought to be charged with such modification or amendment; provided, however, in the event of a Transfer under the terms of the Loan Agreement that requires Lender’s consent, any or some or all of the Modifications to Multifamily Note set forth in Exhibit A to this Note may be modified or rendered void by Lender at Lender’s option, by Notice to Borrower and the transferee, as a condition of Lender’s consent.

22. Consent to Jurisdiction and Venue. Borrower agrees that any controversy arising under or in relation to this Note may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that will arise under or in relation to this Note. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Note is intended to limit any right that Lender may have to bring any suit, action or proceeding relating to matters arising under this Note in any court of any other jurisdiction.

23. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (a) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (b) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

24. State-Specific Provisions. N/A

25. Attached Riders. The following Riders are attached to this Note:

Seniors Housing

Recycled Borrower and/or Recycled SPE Equity Owner

26. Attached Exhibit. The following Exhibit, if marked with an “X” in the space provided, is attached to this Note:

x Exhibit A     Modifications to Multifamily Note

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IN WITNESS WHEREOF, and in consideration of the Lender’s agreement to lend Borrower the principal amount set forth above, Borrower has signed and delivered this Note under seal or has caused this Note to be signed and delivered under seal by its duly authorized representative. Borrower intends that this Note will be deemed to be signed and delivered as a sealed instrument.

CARE GSL FREDERICKSBURG LLC,
a Delaware limited liability company
By:	/s/ Salvatore (Torey) V. Riso, Jr.
Name: Salvatore (Torey) V. Riso, Jr.
Title: President and Chief Executive Officer

45-3274287

Borrower’s Employer ID Number

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PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE CORPORATION WITHOUT RECOURSE.

KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation
By:	/s/ Crystal L. Williams
Name: Crystal L. Williams
Title: Vice President
Date: April 24, 2012

Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page 21

RIDER TO MULTIFAMILY NOTE

(CME AND PORTFOLIO)

SENIORS HOUSING

(Revised 3-20-2012)

The following changes are made to the Note which precedes this Rider:

A. The following new subsections are added to Section 9(c):

(viii) Borrower fails to cause the renewal, continuation, extension or maintenance of all Licenses required to legally operate the Mortgaged Property as a seniors housing Facility.

(ix) Borrower fails upon an Event of Default to cooperate, or Borrower otherwise intentionally interferes with, hinders or delays Lender (or its nominee or designee), in connection with the timely and orderly transfer of any and all Licenses.

B. In Sections 11(j), 12(b), 12(c) and 12(d), all references to “Section 11.12” are modified to refer to “Section 12.12”.

Multifamily Multistate Fixed Rate Note (CME)

Defeasance

RIDER TO MULTIFAMILY NOTE

(CME)

RECYCLED BORROWER AND/OR RECYCLED SPE EQUITY OWNER

(Revised 9-1-2011)

The following changes are made to the Note which precedes this Rider:

A. The following is added as a new subsection to Section 9(c):

(x) Any of the Underwriting Representations set forth in Section 5.40(a) of the Loan Agreement or any of the Separateness Representations set forth in Section 5.40(b) of the Loan Agreement are false or misleading in any material respect.

Rider to Multifamily Note (CME)

Recycled Borrower and/or Recycled SPE Equity Owner

EXHIBIT A

MODIFICATIONS TO MULTIFAMILY NOTE

The following modifications are made to the text of the Note that precedes this Exhibit.

1. The word “Multifamily” is deleted and the phrase “Seniors Housing” is inserted in the first line of the definition of the Loan Agreement in Section 1 of the Note.

2. Section 9(c)(i) is deleted and the following is inserted in lieu thereof:

“(i) Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender is entitled under Section 3 of the Security Instrument and the amount of all security deposits collected by Borrower from tenants then in residence and not applied pursuant to the terms of the tenant’s lease. However, Borrower will not be personally liable for any failure described in this Section 9(c)(i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.”

3. Section 9(c) of the Note is modified by adding the following new subsection:

“(xi) the avoidance, in whole or in part, of the transfer creating the lien of the Security Instrument, or a court order providing an alternative remedy to that avoidance, because of the occurrence on or before the date that the Security Instrument was recorded of a fraudulent transfer or a preference under federal bankruptcy, state insolvency, or similar creditors’ rights laws.”

4. The following is added as Section 9(d)(iv):

“(iv) Borrower will be personally liable for the amount of, and any loss or damage suffered by Lender by reason of any failure to fully and timely pay, all recordation, transfer, or similar taxes, if any, imposed in connection with the Loan or any advances thereof, any indebtedness or obligation refinanced in whole or in part by the Loan, any mortgage or deed of trust that secured any such indebtedness or obligation, this Note, the Security Instrument, any default under any Loan Document, or any other transaction relating to or arising out of the Loan, plus all interest, penalties and fines that may be or may become due.”

Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page A-1

EX-10.6

Exhibit 10.6

Freddie Mac Loan Number: 504183362

Property Name: Greenfield Assisted Living of Fredericksburg

GUARANTY

(CME AND PORTFOLIO)

MULTISTATE

(Revised 10-18-2011)

THIS GUARANTY (“Guaranty”) is entered into to be effective as of April 24, 2012, by CARE INVESTMENT TRUST INC., a Maryland corporation, (“Guarantor”, collectively if more than one), for the benefit of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation (“Lender”).

RECITALS

A. Pursuant to the terms of a Multifamily Loan and Security Agreement dated the same date as this Guaranty (as amended, modified or supplemented from time to time, the “Loan Agreement”), CARE GSL FREDERICKSBURG LLC, a Delaware limited liability company (“Borrower”) has requested that Lender make a loan to Borrower in the amount of Three Million Five Hundred Ninety-One Thousand and No/100 Dollars ($3,591,000.00) (“Loan”). The Loan will be evidenced by a Multifamily Note from Borrower to Lender dated effective as of the effective date of this Guaranty (as amended, modified or supplemented from time to time, the “Note”). The Note will be secured by a Multifamily Mortgage, Deed of Trust, or Deed to Secure Debt dated effective as of the effective date of the Note (as amended, modified or supplemented from time to time, the “Security Instrument”), encumbering the Mortgaged Property described in the Loan Agreement.

B. As a condition to making the Loan to Borrower, Lender requires that Guarantor execute this Guaranty.

C. Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material benefit from the making of the Loan.

AGREEMENT

NOW, THEREFORE, in order to induce Lender to make the Loan to Borrower, and in consideration thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

1. Defined Terms. The terms “Indebtedness”, “Loan Documents”, and “Property Jurisdiction”, and other capitalized terms used but not defined in this Guaranty, will have the meanings assigned to them in the Loan Agreement.

Guaranty - Multistate (CME and Portfolio)

2. Scope of Guaranty.

(a) Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender each of the following:

(i) Guarantor guarantees the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, of each of the following:

(A) Guarantor guarantees a portion of the Indebtedness equal to 0% of the original principal balance of the Note (“Base Guaranty”).

(B) In addition to the Base Guaranty, Guarantor guarantees all other amounts for which Borrower is personally liable under Sections 9(c), 9(d) and 9(f) of the Note (provided, however, that Guarantor will have no liability for failure of Borrower or SPE Equity Owner to comply with (I) Section 6.13(a)(xviii) of the Loan Agreement, and (II) the requirement in Section 6.13(a)(x)(B) of the Loan Agreement as to payment of trade payables within 60 days of the date incurred). (CME loans only)

(C) Guarantor guarantees all costs and expenses, including reasonable Attorneys’ Fees and Costs incurred by Lender in enforcing its rights under this Guaranty.

(ii) Guarantor guarantees the full and prompt payment and performance of and/or compliance with all of Borrower’s obligations relating to environmental matters under Sections 6.12 and 10.02 of the Loan Agreement when due and the accuracy of Borrower’s representations and warranties under Section 5.05 of the Loan Agreement.

(b) If the Base Guaranty stated in Section 2(a)(i)(A) is 100% of the original principal balance of the Note, then the following will be applicable:

(i) The Base Guaranty will mean and include, and Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender, the full and complete prompt payment of the entire Indebtedness, the performance of and/or compliance with all of Borrower’s obligations under the Loan Documents when due, and the accuracy of Borrower’s representations and warranties contained in the Loan Documents.

Guaranty - Multistate (CME and Portfolio) Page 2

(ii) For so long as the Base Guaranty remains in effect (there being no limit to the duration of the Base Guaranty unless otherwise expressly provided in this Guaranty), the obligations guaranteed pursuant to Sections 2(a)(i)(B) and
2(a)(i)(C) will be part of, and not in addition to or in limitation of, the Base Guaranty.

(c) If the Base Guaranty stated in Section 2(a)(i)(A) is less than 100% of the original principal balance of the Note, then Section 2(b) will be completely inapplicable.

(d) If Guarantor is not liable for the entire Indebtedness, then all payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Loan Agreement and the other Loan Documents (except this Guaranty) will be applied first to the portion of the Indebtedness for which neither Borrower nor Guarantor has personal liability.

3. Guarantor’s Obligations Survive Foreclosure. The obligations of Guarantor under this Guaranty will survive any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Security Instrument, and, in addition, the obligations of Guarantor relating to Borrower’s representations and warranties under Section 5.05 of the Loan Agreement and Borrower’s obligations relating to environmental matters under Sections 6.12 and 10.02 of the Loan Agreement will survive any repayment or discharge of the Indebtedness. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of or held title to the Mortgaged Property, Guarantor will have no obligation under this Guaranty relating to Borrower’s representations and warranties under Section 5.05 of the Loan Agreement or Borrower’s obligations relating to environmental matters under Sections 6.12 and 10.02 of the Loan Agreement after the date of the release of record of the lien of the Security Instrument as a result of the payment in full of the Indebtedness on the Maturity Date or by voluntary prepayment in full.

4. Guaranty of Payment and Performance. Guarantor’s obligations under this Guaranty constitute an unconditional guaranty of payment and performance and not merely a guaranty of collection.

5. No Demand by Lender Necessary; Waivers by Guarantor – All States Except California. The obligations of Guarantor under this Guaranty must be performed without demand by Lender and will be unconditional regardless of the genuineness, validity, regularity or enforceability of the Note, the Loan Agreement, or any other Loan Document, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor. Guarantor hereby waives, to the fullest extent permitted by applicable law, all of the following:

(a) The benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty and agrees that Guarantor’s obligations will not be affected by any circumstances, whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor.

Guaranty - Multistate (CME and Portfolio) Page 3

(b) The benefits of any right of discharge under any and all statutes or other laws relating to a guarantor, a surety, a borrower or a mortgagor, and any other rights of a surety, a guarantor, a borrower or a mortgagor under such statutes or laws.

(c) Diligence in collecting the Indebtedness, presentment, demand for payment, protest, all notices with respect to the Note and this Guaranty which may be required by statute, rule of law or otherwise to preserve Lender’s rights against Guarantor under this Guaranty, including notice of acceptance, notice of any amendment of the Loan Documents, notice of the occurrence of any default or Event of Default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by Borrower of any obligation or indebtedness.

(d) All rights to cause a marshalling of the Borrower’s assets or to require Lender to do any of the following:

(i) Proceed against Borrower or any other guarantor of Borrower’s payment or performance under the Loan Documents (an “Other Guarantor”).

(ii) Proceed against any general partner of Borrower or any Other Guarantor if Borrower or any Other Guarantor is a partnership.

(iii) Proceed against or exhaust any collateral held by Lender to secure the repayment of the Indebtedness.

(iv) Pursue any other remedy it may now or hereafter have against Borrower, or, if Borrower is a partnership, any general partner of Borrower.

(e) Any right to object to the timing, manner or conduct of Lender’s enforcement of its rights under any of the Loan Documents.

(f) Any right to revoke this Guaranty as to any future advances by Lender under the terms of the Loan Agreement to protect Lender’s interest in the Mortgaged Property.

6. Modification of Loan Documents. At any time or from time to time and any number of times, without notice to Guarantor and without affecting the liability of Guarantor, all of the following will apply:

(a) Lender may extend the time for payment of the principal of or interest on the Indebtedness or renew the Indebtedness in whole or in part.

Guaranty - Multistate (CME and Portfolio) Page 4

(b) Lender may extend the time for Borrower’s performance of or compliance with any covenant or agreement contained in the Note, the Loan Agreement or any other Loan Document, whether presently existing or in this Guaranty after entered into, or waive such performance or compliance.

(c) Lender may accelerate the Maturity Date of the Indebtedness as provided in the Note, the Loan Agreement, or any other Loan Document.

(d) Lender and Borrower may modify or amend the Note, the Loan Agreement, or any other Loan Document in any respect, including an increase in the principal amount.

(e) Lender may modify, exchange, surrender or otherwise deal with any security for the Indebtedness or accept additional security that is pledged or mortgaged for the Indebtedness.

7. Joint and Several Liability. The obligations of Guarantor (and each party named as a Guarantor in this Guaranty) and any Other Guarantor will be joint and several. Lender, in its sole and absolute discretion, may take any of the following actions:

(a) Lender may bring suit against Guarantor, or any one or more of the parties named as a Guarantor in this Guaranty, and any Other Guarantor, jointly and severally, or against any one or more of them.

(b) Lender may compromise or settle with Guarantor, any one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, for such consideration as Lender may deem proper.

(c) Lender may release one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, from liability.

(d) Lender may otherwise deal with Guarantor and any Other Guarantor, or any one or more of them, in any manner.

No action of Lender described in this Section 7 will affect or impair the rights of Lender to collect from any one or more of the parties named as a Guarantor under this Guaranty any amount guaranteed by Guarantor under this Guaranty.

8. Subordination of Borrower’s Indebtedness to Guarantor. Any indebtedness of Borrower held by Guarantor now or in the future is and will be subordinated to the Indebtedness and Guarantor will collect, enforce and receive any such indebtedness of Borrower as trustee for Lender, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.

Guaranty - Multistate (CME and Portfolio) Page 5

9. Waiver of Subrogation. Guarantor will have no right of, and hereby waives any claim for, subrogation or reimbursement against Borrower or any general partner of Borrower by reason of any payment by Guarantor under this Guaranty, whether such right or claim arises at law or in equity or under any contract or statute, until the Indebtedness has been paid in full and there has expired the maximum possible period thereafter during which any payment made by Borrower to Lender with respect to the Indebtedness could be deemed a preference under the United States Bankruptcy Code.

10. Preference. If any payment by Borrower is held to constitute a preference under any applicable bankruptcy, insolvency, or similar laws, or if for any other reason Lender is required to refund any sums to Borrower, such refund will not constitute a release of any liability of Guarantor under this Guaranty. It is the intention of Lender and Guarantor that Guarantor’s obligations under this Guaranty will not be discharged except by Guarantor’s performance of such obligations and then only to the extent of such performance.

11. Financial Information. Guarantor, from time to time upon written request by Lender, will deliver to Lender such financial statements as Lender may reasonably require. If an Event of Default has occurred and is continuing, Guarantor will deliver to Lender upon written request copies of its state and federal tax returns.

12. Assignment. Lender may assign its rights under this Guaranty in whole or in part and upon any such assignment, all the terms and provisions of this Guaranty will inure to the benefit of such assignee to the extent so assigned. The terms used to designate any of the parties in this Guaranty will be deemed to include the heirs, legal representatives, successors and assigns of such parties, and the term “Lender” will also include any lawful owner, holder or pledgee of the Note.

13. Complete and Final Agreement. This Guaranty and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements. There are no unwritten oral agreements between the parties. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this Guaranty and the other Loan Documents. Guarantor acknowledges that Guarantor has received a copy of the Note and all other Loan Documents. Neither this Guaranty nor any of its provisions may be waived, modified, amended, discharged, or terminated except by a writing signed by the party against which the enforcement of the waiver, modification, amendment, discharge, or termination is sought, and then only to the extent set forth in that writing.

14. Governing Law. This Guaranty will be governed by and enforced in accordance with the laws of the Property Jurisdiction, without giving effect to the choice of law principles of the Property Jurisdiction that would require the application of the laws of a jurisdiction other than the Property Jurisdiction.

15. Jurisdiction; Venue. Guarantor agrees that any controversy arising under or in relation to this Guaranty may be litigated in the Property Jurisdiction, and that the state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies which will arise under or in relation to this Guaranty. Guarantor irrevocably consents to service, jurisdiction and venue of such courts for any

Guaranty - Multistate (CME and Portfolio) Page 6

such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Guaranty is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters arising under this Guaranty against Guarantor or any of Guarantor’s assets in any court of any other jurisdiction.

16. Guarantor’s Interest in Borrower. Guarantor represents to Lender that Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material financial benefit from the making of the Loan.

17. State-Specific Provisions.

Guarantor waives the benefit of the provisions of Sections 49-25 and 49-26 of the Code of Virginia (1950), as amended.

18. Community Property Provision.

Not applicable.

19. WAIVER OF TRIAL BY JURY.

(a) GUARANTOR AND LENDER EACH COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY.

(b) GUARANTOR AND LENDER EACH WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

20. Attached Riders. The following Riders, if marked with an “X” in the space provided, are attached to this Guaranty:

¨ None

¨ Material Adverse Change Rider

x Minimum Net Worth/Liquidity Requirements Rider

¨ Other             

Guaranty - Multistate (CME and Portfolio) Page 7

21. Attached Exhibit. The following Exhibit, if marked with an “X” in the space provided, is attached to this Guaranty:

x Exhibit A             Modifications to Guaranty

(Remainder of page intentionally left blank; signature pages follow.)

Guaranty - Multistate (CME and Portfolio) Page 8

IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal or has caused this Guaranty to be signed and delivered under seal by its duly authorized representative. Guarantor intends that this Guaranty will be deemed to be signed and delivered as a sealed instrument.

CARE INVESTMENT TRUST INC., a Maryland corporation
By:	/s/ Salvatore (Torey) V. Riso, Jr.
Name: Salvatore (Torey) V. Riso, Jr. Title:   President and Chief Executive Officer

STATE OF NEW YORK

COUNTY OF NEW YORK

The foregoing instrument was acknowledged before me this 13th day of April, 2012 by Salvatore (Torey) V. Riso, Jr., President and Chief Executive Officer of CARE INVESTMENT TRUST INC., a Maryland corporation, on behalf of the corporation.

/s/ Danielle M. DePalma

Notary Public

Printed Name: Danielle M. DePalma

My Commission Expires: January 10, 2015

Guaranty - Multistate (CME and Portfolio) Page 9

(a) Name and Address of Guarantor

Name: Care Investment Trust Inc.

Address: 780 Third Avenue, 21^st Floor

New York, New York 10017

Attention: Counsel/Greenfield – Freddie Mac

(b) Guarantor represents and warrants that Guarantor is:

¨ single

¨ married

x an entity

(c) Guarantor represents and warrants that Guarantor’s state of residence is N/A.

GUARANTOR CARE INVESTMENT TRUST INC., a Maryland corporation
By:	/s/ Salvatore (Torey) V. Riso, Jr.
Name: Salvatore (Torey) V. Riso, Jr. Title:   President and Chief Executive Officer

Guaranty - Multistate (CME and Portfolio) Page 10

RIDER TO GUARANTY

(CME AND PORTFOLIO)

MINIMUM NET WORTH/LIQUIDITY

(Revised 9-1-2011)

The following changes are made to the Guaranty which precedes this Rider:

A. The following is added as a new Section:

22. Minimum Net Worth/Liquidity Requirements.

(a) Guarantor must maintain a minimum net worth of $5,000,000.00 with liquid assets of at least $359,100.00 (collectively, “Minimum Net Worth Requirement”).

(b) In addition to the financial information that Guarantor is required to provide pursuant to Section 11 of this Guaranty, annually within 120 days after the end of each fiscal year of Guarantor, Guarantor must provide Lender with a written certification (“Guarantor Certification”) of the net worth and liquid assets of Guarantor, as of the end of such fiscal year derived in accordance with customarily acceptable accounting practices. The Guarantor must certify the Guarantor Certification under penalty of perjury as true and complete. So long as no Event of Default has occurred and is continuing, and so long as Guarantor is publically traded on a nationally recognized stock exchange and so long as such filings are certified by Guarantor to Lender to be true, correct and complete, the filings required to be made by the applicable statutes and regulations will fulfill the requirements of this sub-section.

(c) Within 30 days of receipt of Notice from Lender that Guarantor has failed to maintain the Minimum Net Worth Requirement, Guarantor must either:

(i) cause one or more natural persons or entities who individually or collectively, as applicable, meet the Minimum Net Worth Requirement and is/are acceptable to Lender, in its sole discretion, to execute and deliver to Lender a guaranty in the same form as this Guaranty, without any cost or expense to Lender; or

(ii) deliver to Lender a letter of credit or other collateral acceptable to Lender in its discretion meeting the following conditions, as applicable:

(A) If Guarantor supplies a letter of credit, the letter of credit must be in the form found on Freddie Mac’s website at: http://www.freddiemac.com/multifamily/cme_documents.html

Rider to Guaranty (CME and Portfolio)

The letter of credit must name Lender as the sole beneficiary, have an initial term of not less than 12 months and be issued by a bank acceptable to Lender in its sole discretion.

(B) The letter of credit or other collateral must be in an amount equal to the greatest of:

(X) the positive difference, if any, obtained by subtracting the net worth identified in the Guarantor Certification from the minimum net worth required under the Minimum Net Worth Requirement,

(Y) the positive difference, if any, obtained by subtracting the liquid assets identified in the Guarantor Certification from the minimum liquid assets required under the Minimum Net Worth Requirement, and

(Z) $100,000.

(C) If Guarantor supplies cash, the cash deposited with Lender shall be credited to Guarantor’s net worth and liquid assets in determining compliance with the Minimum Net Worth Requirement subsequent to such delivery for the purpose of determining whether or not additional collateral will be required, but not for the purposes of determining whether or not the collateral will be released.

(d) Provided no Event of Default then exists, Guarantor will be entitled to request at any time after ninety (90) days after the Letter of Credit or other collateral, as applicable, is delivered to Lender, but in no event more often than once every three (3) months, a return of the unused portion, if any, of the letter of credit or other collateral in the event it delivers to Lender evidence in form and substance satisfactory to Lender, including a Guarantor Certification prepared as of the date of such delivery, that Guarantor has satisfied the Minimum Net Worth Requirement. Provided no Event of Default then exists, Lender will, within a reasonable period of time following Guarantor’s request, return the unused portion, if any, of the letter of credit or other collateral.

(e) Guarantor conveys, pledges, transfers and grants to Lender a security interest pursuant to the Uniform Commercial Code of the Property Jurisdiction or any other applicable law in and to the Letter of Credit and/or any other collateral, including cash, delivered to Lender in accordance with this Section, as the same may increase or decrease from time to time, to secure the Indebtedness and/or Guarantor’s obligations pursuant to the terms of this Guaranty and the other Loan Documents.

Rider to Guaranty (CME and Portfolio)

EXHIBIT A

MODIFICATIONS TO GUARANTY

The following modifications are made to the text of the Guaranty that precedes this Exhibit.

1. The word “Multifamily” is deleted and the phrase “Seniors Housing” is inserted in lieu thereof in the first line of Recital A.

2. Section 11 is deleted and the following is inserted in lieu thereof:

“Financial Information. Guarantor, from time to time upon written request by Lender, will deliver to Lender such financial statements as Lender may reasonably require. If an Event of Default has occurred and is continuing, Guarantor will deliver to Lender upon written request copies of its state and federal tax returns. So long as no Event of Default has occurred and is continuing, and so long as Guarantor is publically traded on a nationally recognized stock exchange, and so long as such filings are certified by Guarantor to Lender to be true, correct and complete, the filings required to be made by the applicable statutes and regulations will fulfill the requirements of this Section.”

3. A new Section 23 is added, reading as follows:

“23. The obligations of Guarantor shall not be impaired or in any way limited by (i) any action taken by Lender to enforce its rights under or realize upon collateral for any of the “Related Loans” as defined in the Cross-Collateralization Agreement and Amendment to Security Instrument dated the same date as this Guaranty between Lender and Borrower (the “Cross-Collateralization Agreement”), (ii) the fact that Lender may be seeking to realize upon some but not all of the collateral for the “Loans” as defined in the Cross-Collateralization Agreement, or (iii) the exercise or not, concurrently, consecutively or otherwise, of any of the rights or remedies available to Lender under the Cross-Collateralization Agreement or applicable law.”

4. The Rider to Guaranty, Minimum Net Worth/Liquidity is modified as shown by the blacklined changes on said Rider attached hereto.

Exhibit A to Guaranty (CME and Portfolio)

EX-10.7

Exhibit 10.7

Freddie Mac Loan Number: 504183346

Property Name: Greenfield Assisted Living of Berryville

SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME)

(Revised 9-1-2011)

Borrower:	CARE GSL BERRYVILLE LLC, a Delaware limited liability company
Lender:	KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation
Date:	April 24, 2012

Reserve Fund Information

(See Article IV)

Imposition Reserves	Deferred Insurance	Collect Taxes	Deferred water/sewer
	N/A Ground Rents	Deferred assessments/other charges

Repair Reserve	Repairs required?	¨ Yes	x No
	If Yes, is a Reserve required?	¨ Yes	¨ No
If Yes to Repairs, but No Reserve, is a Letter of Credit required?		¨ Yes	¨ No

Replacement Reserve	x Yes	If Yes: x Funded	¨ Deferred
	¨ No
Rental Achievement Reserve	¨ Yes If Yes:	¨ Cash	¨ Letter of Credit
	x No

External Rate Cap Reserve	¨ Yes                         x No
Other Reserve(s)	¨ Yes                         x No

If Yes, specify:

TABLE OF CONTENTS

		Page
ARTICLE I DEFINED TERMS; CONSTRUCTION			1
1.01	Defined Terms		1
1.02	Construction		1
ARTICLE II LOAN			2
2.01	Loan Terms		2
2.02	Prepayment Premium		2
2.03	Exculpation		2
2.04	Application of Payments		2
2.05	Usury Savings		2
2.06	Adjustable Rate Mortgage – Third Party Cap Agreement		2
ARTICLE III LOAN SECURITY AND GUARANTY			3
3.01	Security Instrument		3
3.02	Reserve Funds		3
3.03	Uniform Commercial Code Security Agreement		4
3.04	Cap Collateral		4
3.05	Guaranty		4
3.06	Collateral Assignment of Licenses, Certificates and Permits		4
ARTICLE IV RESERVE FUNDS AND REQUIREMENTS			4
4.01	Reserves Generally		4
4.02	Reserves for Taxes, Insurance and Other Charges		5
4.03	Repairs; Repair Reserve Fund		6
4.04	Replacement Reserve Fund		7
4.05	Rental Achievement Provisions		7
4.06	Reserved		7
4.07	External Cap Agreement Reserve Fund		7
ARTICLE V REPRESENTATIONS AND WARRANTIES			7
5.01	Review of Documents		7
5.02	Condition of Mortgaged Property		7
5.03	No Condemnation		7
5.04	Actions; Suits; Proceedings		7
5.05	Environmental		8
5.06	Commencement of Work; No Labor or Materialmen’s Claims		9
5.07	Compliance with Applicable Laws and Regulations		9
5.08	Access; Utilities; Tax Parcels		10
5.09	Licenses and Permits		10
5.10	No Other Interests		11
5.11	Term of Leases		11
5.12	No Prior Assignment; Prepayment of Rents		11

Seniors Housing Loan and Security Agreement (CME) Page i

5.13	Illegal Activity	12
5.14	Taxes Paid	12
5.15	Title Exceptions	12
5.16	No Change in Facts or Circumstances	12
5.17	Financial Statements	12
5.18	ERISA – Borrower Status	13
5.19	No Fraudulent Transfer or Preference	13
5.20	No Insolvency or Judgment	13
5.21	Working Capital	13
5.22	Cap Collateral	14
5.23	Ground Lease	14
5.24	Purpose of Loan	14
5.25	Intended Use	14
5.26	Furniture, Fixtures, Equipment and Motor Vehicles	15
5.27	Participant in Federal Programs	15
5.28	Certificate of Need	15
5.29	Contracts	16
5.30	Material Contracts	16
5.31	No Financing Statements	17
5.32	Compliance with Medicare and Medicaid Requirements	17
5.33	Third-Party Payer Programs and Private Commercial Insurance Managed Care and Employee Assistance Programs	17
5.34	No Transfer or Pledge of Licenses	17
5.35	No Pledge of Receivables	18
5.36	Patient and Resident Care Agreements	18
5.37	Patient and Resident Records	18
5.38	No Facility Deficiencies, Enforcement Actions or Violations	18
5.39	Survival	18
ARTICLE VI BORROWER COVENANTS		18
6.01	Compliance with Laws	18
6.02	Compliance with Organizational Documents	19
6.03	Use of Mortgaged Property	19
6.04	Non-Residential Leases	20
6.05	Prepayment of Rents	21
6.06	Inspection	21
6.07	Books and Records; Financial Reporting	22
6.08	Taxes; Operating Expenses; Ground Rents	25
6.09	Preservation, Management and Maintenance of Mortgaged Property	26
6.10	Property and Liability Insurance	28
6.11	Condemnation	36
6.12	Environmental Hazards	38
6.13	Single Purpose Entity Requirements	41
6.14	Repairs and Capital Replacements	46
6.15	Residential Leases Affecting the Mortgaged Property	47
6.16	Litigation; Government Proceedings	47

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6.17	Further Assurances and Estoppel Certificates; Lender’s Expenses	47
6.18	Cap Collateral	48
6.19	Ground Lease	48
6.20	ERISA Requirements	48
6.21	Operation of the Facility	49
6.22	Facility Reporting	49
6.23	Covenants Regarding Material Contracts	51
6.24	Pledge of Receivables	51
6.25	Property Manager and Operator of the Facility	51
6.26	Residential Leases and Agreements	52
6.27	Performance Under Leases	52
6.28	Governmental Payer Programs	52
ARTICLE VII TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER		53
7.01	Permitted Transfers	53
7.02	Prohibited Transfers	54
7.03	Conditionally Permitted Transfers	55
7.04	Preapproved Intrafamily Transfers	57
7.05	Lender’s Consent to Prohibited Transfers	57
ARTICLE VIII SUBROGATION		57
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES		58
9.01	Events of Default	58
9.02	Protection of Lender’s Security; Security Instrument Secures Future Advances	61
9.03	Remedies	62
9.04	Forbearance	63
9.05	Waiver of Marshalling	64
ARTICLE X RELEASE; INDEMNITY		64
10.01	Release	64
10.02	Indemnity	64
ARTICLE XI SENIORS HOUSING OPERATOR		69
ARTICLE XII MISCELLANEOUS PROVISIONS		70
12.01	Waiver of Statute of Limitations, Offsets and Counterclaims	70
12.02	Governing Law; Consent to Jurisdiction and Venue	70
12.03	Notice	70
12.04	Successors and Assigns Bound	71
12.05	Joint and Several Liability	71
12.06	Relationship of Parties; No Third Party Beneficiary	71
12.07	Severability; Amendments	72
12.08	Disclosure of Information	72
12.09	Determinations by Lender	72

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12.10	Sale of Note; Change in Servicer; Loan Servicing	73
12.11	Supplemental Financing	73
12.12	Defeasance	77
12.13	Lender’s Rights to Sell or Securitize	81
12.14	Cooperation with Rating Agencies and Investors	81
12.15	Time is of the Essence	82
ARTICLE XIII DEFINITIONS		82
ARTICLE XIV INCORPORATION OF ATTACHED RIDERS		100
ARTICLE XV INCORPORATION OF ATTACHED EXHIBITS		100

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Exhibit 10.7

SENIORS HOUSING LOAN AND SECURITY AGREEMENT

THIS SENIORS HOUSING LOAN AND SECURITY AGREEMENT (“Loan Agreement”) is dated as of the 24^th day of April, 2012 and is made by and between CARE GSL BERRYVILLE LLC, a Delaware limited liability company (“Borrower”), and KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation (together with its successors and assigns, “Lender”).

RECITAL

Lender has agreed to make and Borrower has agreed to accept a loan in the original principal amount of Five Million Six Hundred Sixty-Five Thousand and No/100 Dollars ($5,665,000.00) (“Loan”). Lender is willing to make the Loan to Borrower upon the terms and subject to the conditions set forth in this Loan Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of these promises, the mutual covenants contained in this Loan Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

ARTICLE I DEFINITIONS; CONSTRUCTION.

1.01 Defined Terms. Each defined term in this Loan Agreement will have the meaning ascribed to that term in Article XIII unless otherwise defined in this Loan Agreement.

1.02 Construction. The captions and headings of the Articles and Sections of this Loan Agreement are for convenience only and will be disregarded in construing this Loan Agreement. Any reference in this Loan Agreement to an “Exhibit,” an “Article” or a “Section” will, unless otherwise explicitly provided, be construed as referring, respectively, to an Exhibit attached to this Loan Agreement or to an Article or Section of this Loan Agreement. All Exhibits and Riders attached to or referred to in this Loan Agreement are incorporated by reference in this Loan Agreement. Any reference in this Loan Agreement to a statute or regulation will be construed as referring to that statute or regulation as amended from time to time. Use of the singular in this Loan Agreement includes the plural and use of the plural includes the singular. As used in this Loan Agreement, the term “including” means “including, but not limited to” and the term “includes” means “includes without limitation.” The use of one gender includes the other gender, as the context may require. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document in this Loan Agreement will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth in this Loan Agreement), and (b) any reference in this Loan Agreement to any Person will be construed to include such Person’s successors and assigns.

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ARTICLE II LOAN.

2.01 Loan Terms. The Loan will be evidenced by the Note and will bear interest and be paid in accordance with the payment terms set forth in the Note.

2.02 Prepayment Premium. Borrower will be required to pay a prepayment premium in connection with certain prepayments of the Indebtedness, including a payment made after Lender’s exercise of any right of acceleration of the Indebtedness, as provided in the Note.

2.03 Exculpation. Borrower’s personal liability for payment of the Indebtedness and for performance of the other obligations to be performed by it under this Loan Agreement is limited in the manner, and to the extent, provided in the Note.

2.04 Application of Payments. If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, then Lender may apply that payment to amounts then due and payable in any manner and in any order determined by Lender (unless otherwise required by applicable law), in Lender’s sole and absolute discretion. Neither Lender’s acceptance of an amount that is less than all amounts then due and payable, nor Lender’s application of such payment in the manner authorized, will constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction. Notwithstanding the application of any such amount to the Indebtedness, Borrower’s obligations under this Loan Agreement, the Note and all other Loan Documents will remain unchanged.

2.05 Usury Savings. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower is interpreted so that any charge provided for in any Loan Document, whether considered separately or together with other charges levied in connection with any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that charge is hereby reduced to the extent necessary to eliminate that violation. The amounts, if any, previously paid to Lender in excess of the permitted amounts will be applied by Lender to reduce the principal amount of the Indebtedness. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness which constitutes interest, as well as all other charges levied in connection with the Indebtedness which constitute interest, will be deemed to be allocated and spread ratably over the stated term of the Note. Unless otherwise required by applicable law, such allocation and spreading will be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Note.

2.06 Adjustable Rate Mortgage – Third Party Cap Agreement. If (a) the Note does not provide for interest to accrue at an adjustable or variable interest rate, and (b) a third party Cap Agreement is not required, then this Section 2.06 and Section 3.04 will be of no force or effect.

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(a) So long as there is no Event of Default, Lender or Loan Servicer will remit to Borrower each Cap Payment received by Lender or Loan Servicer with respect to any month for which Borrower has paid in full the monthly installment of principal and interest or interest only, as applicable, due under the Note. Alternatively, at Lender’s option, so long as there is no Event of Default, Lender may apply a Cap Payment received by Lender or Loan Servicer with respect to any month to the applicable monthly payment of accrued interest due under the Note if Borrower has paid in full the remaining portion of such monthly payment of principal and interest or interest only, as applicable.

(b) Neither the existence of a Cap Agreement nor anything in this Loan Agreement will relieve Borrower of its primary obligation to timely pay in full all amounts due under the Note and otherwise due on account of the Indebtedness.

ARTICLE III LOAN SECURITY AND GUARANTY.

3.01 Security Instrument. Borrower will execute the Security Instrument dated of even date with this Loan Agreement. The Security Instrument will be recorded in the applicable land records in the Property Jurisdiction.

3.02 Reserve Funds.

(a) Security Interest. To secure Borrower’s obligations under this Loan Agreement and to further secure Borrower’s obligations under the Note and the other Loan Documents, Borrower conveys, pledges, transfers and grants to Lender a security interest pursuant to the Uniform Commercial Code of the Property Jurisdiction or any other applicable law in and to all money in the Reserve Funds, as the same may increase or decrease from time to time, all interest and dividends thereon and all proceeds thereof.

(b) Supplemental Loan. If this Loan Agreement is entered into in connection with a Supplemental Loan and if the same Person is or becomes both Senior Lender and Supplemental Lender, then:

(i) Borrower assigns and grants to Supplemental Lender a security interest in the Reserve Funds established in connection with the Senior Indebtedness as additional security for all of Borrower’s obligations under the Supplemental Note.

(ii) In addition, Borrower assigns and grants to Senior Lender a security interest in the Reserve Funds established in connection with the Supplemental Indebtedness as additional security for all of Borrower’s obligations under the Senior Note.

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(iii) It is the intention of Borrower that all amounts deposited by Borrower in connection with either the Senior Loan Documents, the Supplemental Loan Documents, or both, constitute collateral for the Supplemental Indebtedness secured by the Supplemental Instrument and the Senior Indebtedness secured by the Senior Instrument, with the application of such amounts to such Senior Indebtedness or Supplemental Indebtedness to be at the discretion of Senior Lender and Supplemental Lender.

3.03 Uniform Commercial Code Security Agreement. This Loan Agreement is also a security agreement under the Uniform Commercial Code for any of the Mortgaged Property which, under applicable law, may be subjected to a security interest under the Uniform Commercial Code, for the purpose of securing Borrower’s obligations under this Loan Agreement and to further secure Borrower’s obligations under the Note, Security Instrument and other Loan Documents, whether such Mortgaged Property is owned now or acquired in the future, and all products and cash and non-cash proceeds thereof (collectively, “UCC Collateral”), and by this Loan Agreement, Borrower grants to Lender a security interest in the UCC Collateral.

3.04 Cap Collateral. Reserved.

3.05 Guaranty. Borrower will cause each Guarantor (if any) to execute a Guaranty of all or a portion of Borrower’s obligations under the Loan Documents effective as of the date of this Loan Agreement.

3.06 Collateral Assignment of Licenses, Certificates and Permits. Reserved.

ARTICLE IV RESERVE FUNDS AND REQUIREMENTS.

4.01 Reserves Generally.

(a) Establishment of Reserve Funds; Investment of Deposits. Unless otherwise provided in Section 4.04, each Reserve Fund will be established on the date of this Loan Agreement and all Reserve Funds will be deposited in an Eligible Account at an Eligible Institution or invested in “permitted investments” as then defined and required by the Rating Agencies. Lender will not be obligated to open additional accounts or deposit Reserve Funds in additional institutions when the amount of any Reserve Fund exceeds the maximum amount of the federal deposit insurance or guaranty. Borrower acknowledges and agrees that it will not have the right to direct Lender as to any specific investment of monies in any Reserve Fund. Lender will not be responsible for any losses resulting from investment of monies in any Reserve Fund or for obtaining any specific level or percentage of earnings on such investment.

(b) Interest on Reserve Funds; Trust Funds. Unless applicable law requires, Lender will not be required to pay Borrower any interest, earnings or profits on the Reserve Funds. Any amounts deposited with Lender under this Article IV will not be trust funds, nor will they operate to reduce the Indebtedness, unless applied by Lender for that purpose pursuant to the terms of this Loan Agreement.

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(c) Use of Reserve Funds. Each Reserve Fund will, except as otherwise provided in this Loan Agreement, be used for the sole purpose of paying, or reimbursing Borrower for payment of, the item(s) for which the applicable Reserve Fund was established. Borrower acknowledges and agrees that, except as specified in this Loan Agreement, monies in one Reserve Fund will not be used to pay, or reimburse Borrower for, matters for which another Reserve Fund has been established.

(d) Termination of Reserve Funds. Upon the payment in full of the Indebtedness, Lender will pay to Borrower all funds remaining in any Reserve Funds.

4.02 Reserves for Taxes, Insurance and Other Charges.

(a) Deposits to Imposition Reserve Deposits. Borrower will deposit with Lender on the day monthly installments of principal or interest, or both, are due under the Note (or on another day designated in writing by Lender), until the Indebtedness is paid in full, an additional amount sufficient to accumulate with Lender the entire sum required to pay, when due, the items marked “Collect” below. Except as provided in Section 4.02(e), Lender will not require Borrower to make Imposition Reserve Deposits with respect to the items marked “Deferred” below.

[	Deferred	]	Hazard Insurance premiums or premiums for other Insurance required by Lender under Section 6.10
[	Collect	]	Taxes and payments in lieu of taxes
[	Deferred	]	water and sewer charges that could become a Lien on the Mortgaged Property
[	N/A	]	Ground Rents
[	Deferred	]	assessments or other charges that could become a Lien on the Mortgaged Property

The amounts deposited pursuant to this Section 4.02(a) are collectively referred to in this Loan Agreement as the “Imposition Reserve Deposits.” The obligations of Borrower for which the Imposition Reserve Deposits are required are collectively referred to in this Loan Agreement as “Impositions.” The amount of the Imposition Reserve Deposits must be sufficient to enable Lender to pay each Imposition before the last date upon which such payment may be made without any penalty or interest charge being added. Lender will maintain records

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indicating how much of the monthly Imposition Reserve Deposits and how much of the aggregate Imposition Reserve Deposits held by Lender are held for the purpose of paying Taxes, Insurance premiums, Ground Rent (if applicable) and each other Imposition.

(b) Disbursement of Imposition Reserve Deposits. Lender will apply the Imposition Reserve Deposits to pay Impositions so long as no Event of Default has occurred and is continuing. Lender will pay all Impositions from the Imposition Reserve Deposits held by Lender upon Lender’s receipt of a bill or invoice for an Imposition. If Borrower holds a ground lessee interest in the Mortgaged Property and Imposition Reserve Deposits are collected for Ground Rent, then Lender will pay the monthly or other periodic installments of Ground Rent from the Imposition Reserve Deposits, whether or not Lender receives a bill or invoice for such installments. Lender will have no obligation to pay any Imposition to the extent it exceeds the amount of the Imposition Reserve Deposits then held by Lender. Lender may pay an Imposition according to any bill, statement or estimate from the appropriate public office, Ground Lessor (if applicable) or insurance company without inquiring into the accuracy of the bill, statement or estimate or into the validity of the Imposition.

(c) Excess or Deficiency of Imposition Reserve Deposits. If at any time the amount of the Imposition Reserve Deposits held by Lender for payment of a specific Imposition exceeds the amount reasonably deemed necessary by Lender, the excess will be credited against future installments of Imposition Reserve Deposits. If at any time the amount of the Imposition Reserve Deposits held by Lender for payment of a specific Imposition is less than the amount reasonably estimated by Lender to be necessary, Borrower will pay to Lender the amount of the deficiency within 15 days after Notice from Lender.

(d) Delivery of Invoices. Borrower will promptly deliver to Lender a copy of all notices of, and invoices for, Impositions.

(e) Deferral of Collection of Any Imposition Reserve Deposits; Delivery of Receipts. If Lender does not collect an Imposition Reserve Deposit with respect to an Imposition either marked “Deferred” in Section 4.02(a) or pursuant to a separate written deferral by Lender, then on or before the date each such Imposition is due, or on the date this Loan Agreement requires each such Imposition to be paid, Borrower will provide Lender with proof of payment of each such Imposition. Upon Notice to Borrower, Lender may revoke its deferral and require Borrower to deposit with Lender any or all of the Imposition Reserve Deposits listed in Section 4.02(a), regardless of whether any such item is marked “Deferred” (i) if Borrower does not timely pay any of the Impositions, (ii) if Borrower fails to provide timely proof to Lender of such payment, or (iii) at any time during the existence of an Event of Default.

4.03 Repairs; Repair Reserve Fund. Reserved.

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4.04 Replacement Reserve Fund. See Rider.

4.05 Rental Achievement Provisions. Reserved.

4.06 Reserved.

4.07 External Cap Agreement Reserve Fund. Reserved.

ARTICLE V REPRESENTATIONS AND WARRANTIES.

Borrower represents and warrants to Lender as follows as of the date of this Loan Agreement:

5.01 Review of Documents. Borrower has reviewed (a) the Note, (b) the Security Instrument, (c) the Commitment Letter, and (d) all other Loan Documents.

5.02 Condition of Mortgaged Property. Except as Borrower may have disclosed to Lender in writing in connection with the issuance of the Commitment Letter, the Mortgaged Property has not been damaged by fire, water, wind or other cause of loss, or any previous damage to the Mortgaged Property has been fully restored.

5.03 No Condemnation. No part of the Mortgaged Property has been taken in Condemnation or other like proceeding, and, to the best of Borrower’s knowledge after due inquiry and investigation, no such proceeding is pending or threatened for the partial or total Condemnation or other taking of the Mortgaged Property.

5.04 Actions; Suits; Proceedings.

(a) There are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or, to the best of Borrower’s knowledge, threatened in writing against or affecting Borrower (and, if Borrower is a limited partnership, any of its general partners or if Borrower is a limited liability company, any member of Borrower) or the Mortgaged Property which, if adversely determined, would have a Material Adverse Effect.

(b) Without limiting the generality of subsection (a) above, neither Borrower, any operator of the Facility, nor the Facility are subject to any proceeding, suit or investigation by any Governmental Authority and neither Borrower nor any operator of the Facility has received any notice from any Governmental Authority which may, directly or indirectly, or with the passage of time, result in the imposition of a fine, or interim or final sanction, or would (i) have a Material

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Adverse Effect, (ii) result in the appointment of a receiver or trustee, (iii) affect Borrower’s or any operator of the Facility’s ability to accept and retain residents, (iv) result in the Downgrade, revocation, transfer, surrender or suspension, or non-renewal or reissuance or other impairment of any License, or (v) affect Borrower’s or operator’s continued participation in Medicare, Medicaid, TRICARE, or any similar governmental payor program, as applicable, or any successor programs thereto, at current rate certifications.

5.05 Environmental. Except as previously disclosed by Borrower to Lender in writing (which written disclosure may be in certain environmental assessments and other written reports accepted by Lender in connection with the funding of the Indebtedness and dated prior to the date of this Loan Agreement), each of the following is true:

(a) Borrower has not at any time engaged in, caused or permitted any Prohibited Activities or Conditions on the Mortgaged Property.

(b) To the best of Borrower’s knowledge after due inquiry and investigation, no Prohibited Activities or Conditions exist or have existed on the Mortgaged Property.

(c) The Mortgaged Property does not now contain any underground storage tanks, and, to the best of Borrower’s knowledge after due inquiry and investigation, the Mortgaged Property has not contained any underground storage tanks in the past. If there is an underground storage tank located on the Mortgaged Property that has been previously disclosed by Borrower to Lender in writing, that tank complies with all requirements of Hazardous Materials Laws.

(d) To the best of Borrower’s knowledge after due inquiry and investigation, Borrower has complied with all Hazardous Materials Laws, including all requirements for notification regarding releases of Hazardous Materials. Without limiting the generality of the foregoing, all Environmental Permits required for the operation of the Mortgaged Property in accordance with Hazardous Materials Laws now in effect have been obtained and all such Environmental Permits are in full force and effect.

(e) To the best of Borrower’s knowledge after due inquiry and investigation, no event has occurred with respect to the Mortgaged Property that constitutes, or with the passage of time or the giving of notice, or both, would constitute, noncompliance with the terms of any Environmental Permit.

(f) There are no actions, suits, claims or proceedings pending or, to the best of Borrower’s knowledge after due inquiry and investigation, threatened in writing, that involve the Mortgaged Property and allege, arise out of, or relate to any Prohibited Activity or Condition.

(g) Borrower has received no actual or constructive notice of any written complaint, order, notice of violation or other communication from any Governmental Authority with regard to air emissions, water discharges, noise emissions or Hazardous Materials, or any other environmental, health or safety matters affecting the Mortgaged Property or any property that is adjacent to the Mortgaged Property.

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5.06 Commencement of Work; No Labor or Materialmen’s Claims. Except as set forth on Exhibit E, prior to the recordation of the Security Instrument, no work of any kind has been or will be commenced or performed upon the Mortgaged Property, and no materials or equipment have been or will be delivered to or upon the Mortgaged Property, for which the contractor, subcontractor or vendor continues to have any rights including the existence of or right to assert or file a mechanic’s or materialman’s Lien. If any such work of any kind has been commenced or performed upon the Mortgaged Property, or if any such materials or equipment have been ordered or delivered to or upon the Mortgaged Property, then prior to the execution of the Security Instrument, Borrower has satisfied each of the following conditions:

(a) Borrower has fully disclosed in writing to the title insurance company issuing the mortgagee title insurance policy insuring the Lien of the Security Instrument that work has been commenced or performed on the Mortgaged Property, or materials or equipment have been ordered or delivered to or upon the Mortgaged Property.

(b) Borrower has obtained and delivered to Lender and the title company issuing the mortgagee title insurance policy insuring the Lien of the Security Instrument Lien waivers from all contractors, subcontractors, suppliers or any other applicable party, pertaining to all work commenced or performed on the Mortgaged Property, or materials or equipment ordered or delivered to or upon the Mortgaged Property.

Borrower represents and warrants that all parties furnishing labor and materials for which a Lien or claim of Lien may be filed against the Mortgaged Property have been paid in full and, except for such Liens or claims insured against by the policy of title insurance to be issued in connection with the Loan, there are no mechanics’, laborers’ or materialmen’s Liens or claims outstanding for work, labor or materials affecting the Mortgaged Property, whether prior to, equal with or subordinate to the Lien of the Security Instrument.

5.07 Compliance with Applicable Laws and Regulations.

(a) To the best of Borrower’s knowledge after due inquiry and investigation, (i) all Improvements and the use of the Mortgaged Property comply with all applicable statutes, rules and regulations, including all applicable statutes, rules and regulations pertaining to requirements for equal opportunity, anti-discrimination, fair housing, environmental protection, zoning and land use (“legal, non-conforming” status with respect to uses or structures will be considered to comply with zoning and land use requirements for the purposes of this representation), (ii) the Improvements comply with applicable health, fire, and building codes, and (iii) there is no evidence of any illegal activities relating to controlled substances on the Mortgaged Property.

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(b) Without limiting the generality of subsection (a) above, Borrower, any operator of the Facility, and the Facility (and its operation) and all residential care agreements and residential Leases are in compliance with the applicable provisions of all laws, regulations, ordinances, orders or standards of any Governmental Authority having jurisdiction over the operation of the Facility (including any governmental payor program requirements and disclosure of ownership and related information requirements), including without limitation: (i) Healthcare Laws, Privacy Laws, fire and safety codes and building codes (and no waivers of such requirements exist at the Facility); (ii) laws, rules, regulations and published interpretations thereof regulating the preparation and serving of food; (iii) laws, rules, regulations and published interpretations thereof regulating the handling and disposal of medical or biological waste; (iv) the applicable provisions of all laws, rules, regulations and published interpretations thereof to which Borrower or the Facility is subject by virtue of its Intended Use; and (v) all criteria established to classify the Facility as housing for older persons under the Fair Housing Amendments Act of 1988.

(c) Borrower has received no notice of, and is not aware of, any violation of applicable antitrust laws or securities laws relating to the Facility, the Borrower, or any operator of the Facility.

5.08 Access; Utilities; Tax Parcels. The Mortgaged Property (a) has ingress and egress via a publicly dedicated right of way or via an irrevocable easement permitting ingress and egress, (b) is served by public utilities and services generally available in the surrounding community or otherwise appropriate for the use in which the Mortgaged Property is currently being utilized, and (c) constitutes one or more separate tax parcels.

5.09 Licenses and Permits.

(a) Borrower, any commercial tenant of the Mortgaged Property and/or any operator of the Mortgaged Property (i) is in possession of all material licenses, permits and authorizations required for use of the Mortgaged Property, which are valid and in full force and effect as of the date of this Loan Agreement, and (ii) will remain in material compliance with all material licenses, permits and other legal requirements necessary and required to conduct its business.

(b) Without limiting the generality of subsection (a) above, Borrower has obtained or has caused any operator of the Facility to obtain all Licenses necessary to use, occupy or operate the Facility for its Intended Use (such Licenses being in its own name or in the name of an operator of the Facility, if any, and in any event in the names of the Persons required by the applicable Governmental Authorities), and all such Licenses are in full force and effect. Borrower has provided Lender with

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complete and accurate copies of all Licenses. The Intended Use of the Facility is in conformity with all certificates of occupancy and Licenses and any other restrictions or covenants affecting the Facility. The Facility has all equipment, staff and supplies necessary to use and operate the Facility for its Intended Use.

(c) Each License, and the name of the Person in whose name each License is issued, if other than Borrower, is identified on Exhibit J, and a copy of each License is attached as Exhibit J.

(d) As of the Closing Date, the Licenses attached as Exhibit J are true and complete copies, the Licenses are current, and Borrower has not received any notice of pending violations or investigations that have not been brought to Lender’s attention in writing.

(e) Other than the Licenses attached as Exhibit J, as of the Closing Date, no other Licenses are required to operate the Facility as it is currently being operated and for its Intended Use.

(f) Neither the execution and delivery of the Note, this Loan Agreement, the Security Instrument nor any other Loan Document, Borrower’s performance under the Loan Documents, nor the recordation of the Security Instrument, nor the exercise of any remedies by Lender pursuant to the Loan Documents, at law or in equity, will adversely affect the Licenses.

5.10 No Other Interests. No Person has (a) any possessory interest in the Mortgaged Property or right to occupy the Mortgaged Property except under and pursuant to the provisions of existing Leases by and between tenants and Borrower (a form of residential lease having been previously provided to Lender together with the material terms of any and all Non-Residential Leases at the Mortgaged Property), or (b) an option to purchase the Mortgaged Property or an interest in the Mortgaged Property, except as has been disclosed to and approved in writing by Lender.

5.11 Term of Leases. All Leases for residential dwelling units with respect to the Mortgaged Property are on forms acceptable to Lender, are for initial terms of at least 6 months and not more than 2 years (unless otherwise approved in writing by Lender), and do not include options to purchase.

5.12 No Prior Assignment; Prepayment of Rents. Borrower has (a) not executed any prior assignment of Rents (other than an assignment of Rents securing any prior indebtedness that is being assigned to Lender, or paid off and discharged with the proceeds of the Loan evidenced by the Note or, if this Loan Agreement is entered into in connection with a Supplemental Loan, other than an assignment of Rents securing any Senior Indebtedness), and (b) not performed any acts and has not executed, and will not execute, any instrument which would prevent Lender from exercising its rights under any Loan Document. At the time of execution of this Loan Agreement, unless otherwise approved by Lender in writing, there has been no prepayment of any Rents for more than 2 months prior to the due dates of such Rents.

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5.13 Illegal Activity. No portion of the Mortgaged Property has been or will be purchased with the proceeds of any illegal activity and Borrower will not permit any portion of the Mortgaged Property to be used for any illegal activity.

5.14 Taxes Paid. Borrower has filed all federal, state, county and municipal tax returns required to have been filed by Borrower, and has paid all Taxes which have become due pursuant to such returns or to any notice of assessment received by Borrower, and Borrower has no knowledge of any basis for additional assessment with respect to such taxes. To the best of Borrower’s knowledge after due inquiry and investigation, there are not presently pending any special assessments against the Mortgaged Property or any part of the Mortgaged Property.

5.15 Title Exceptions. To the best of Borrower’s knowledge after due inquiry and investigation, none of the items shown in the schedule of exceptions to coverage in the title policy issued to and accepted by Lender contemporaneously with the execution of this Loan Agreement and insuring Lender’s interest in the Mortgaged Property will have a Material Adverse Effect on the (a) ability of Borrower to pay the Loan in full, (b) ability of Borrower to use all or any part of the Mortgaged Property in the manner in which the Mortgaged Property is being used on the Closing Date, except as set forth in Section 6.03, (c) operation of the Mortgaged Property, or (d) value of the Mortgaged Property.

5.16 No Change in Facts or Circumstances.

(a) All information in the application for the Loan submitted to Lender, including all financial statements for the Mortgaged Property, Borrower and any Borrower Principal, and all Rent Schedules, reports, certificates, and any other documents submitted in connection with the application (collectively, “Loan Application”) is complete and accurate in all material respects as of the date such information was submitted to Lender.

(b) There has been no Material Adverse Change since the Loan Application was submitted to Lender in any fact or circumstance that would make any information submitted as part of the Loan Application incomplete or inaccurate.

(c) The organizational structure of Borrower is as set forth in Exhibit H.

5.17 Financial Statements. The financial statements of Borrower and each Borrower Principal furnished to Lender as part of the Loan Application reflect in each case a positive net worth as of the date of the applicable financial statement.

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5.18 ERISA – Borrower Status. Borrower is not one of the following:

(a) An “investment company,” or a company under the Control of an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

(b) An “employee benefit plan,” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA and the assets of Borrower do not constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101.

5.19 No Fraudulent Transfer or Preference. No Borrower or Borrower Principal (a) has made, or is making in connection with and as security for the Loan, a transfer of an interest in property of the Borrower or Borrower Principal to or for the benefit of Lender or otherwise as security for any of the obligations under the Loan Documents which is or could constitute a voidable preference under federal bankruptcy, state insolvency or similar applicable creditors’ rights laws or (b) has made, or is making in connection with the Loan, a transfer (including any transfer to or for the benefit of an insider under an employment contract) of an interest of Borrower or any Borrower Principal in property, or (c) has incurred, or is incurring in connection with the Loan, any obligation (including any obligation to or for the benefit of an insider under an employment contract) within 2 years of the date of this Loan Agreement which is or could constitute a fraudulent transfer under federal bankruptcy, state insolvency, or similar applicable creditors’ rights laws.

5.20 No Insolvency or Judgment.

(a) No Pending Proceedings or Judgments. No Borrower or Borrower Principal is (i) the subject of or a party to (other than as a creditor) any completed or pending bankruptcy, reorganization or insolvency proceeding; or (ii) the subject of any judgment unsatisfied of record or docketed in any court located in the United States.

(b) Insolvency. Borrower is not presently insolvent, and the Loan will not render Borrower insolvent. As used in this Section, the term “insolvent” means that the total of all of a Person’s liabilities (whether secured or unsecured, contingent or fixed, or liquidated or unliquidated) is in excess of the value of all of the assets of the Person that are available to satisfy claims of creditors.

5.21 Working Capital. After the Loan is made, Borrower intends to have sufficient working capital, including cash flow from the Mortgaged Property or other sources, not only to adequately maintain the Mortgaged Property, but also to pay all of Borrower’s outstanding debts as they come due (other than any balloon payment due upon the maturity of the Loan). Lender acknowledges that no members or partners of Borrower or any Borrower Principal will be obligated to contribute equity to Borrower for purposes of providing working capital to maintain the Mortgaged Property or to pay Borrower’s outstanding debts except as may otherwise be required under their organizational documents.

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5.22 Cap Collateral. Reserved.

5.23 Ground Lease. Reserved.

5.24 Purpose of Loan. The purpose of the Loan is as indicated by the checked box(es) below:

x Refinance Loan: The Loan is a refinancing of existing indebtedness and, except to the extent specifically required by Lender, there is to be no change in the ownership of either the Mortgaged Property or Borrower Principals. The intended use of any cash received by Borrower from Lender, to the extent applicable, in connection with the refinancing has been fully disclosed to Lender.

¨ Acquisition Loan: All of the consideration given or received or to be given or received in connection with the acquisition of the Mortgaged Property has been fully disclosed to Lender. The Mortgaged Property was or will be purchased from                     (“Property Seller”). No Borrower or Borrower Principal has or had, directly or indirectly (through a family member or otherwise), any interest in the Property Seller and the acquisition of the Mortgaged Property is an arm’s-length transaction. To the best of Borrower’s knowledge after due inquiry and investigation, the purchase price of the Mortgaged Property represents the fair market value of the Mortgaged Property and Property Seller is not or will not be insolvent subsequent to the sale of the Mortgaged Property.

x Cross-Collateralized/Cross-Defaulted Loan Pool: The Loan is part of a cross-collateralized/cross-defaulted pool of loans described as follows:

x being simultaneously made to Borrower and/or Borrower’s Affiliates

¨ made previously by Borrower and/or Borrower’s Affiliates

The intended use of any cash received by Borrower from Lender, to the extent applicable, in connection with the Loan and the other loans comprising the cross-collateralized/cross-defaulted loan pool has been fully disclosed to Lender.

5.25 Intended Use. The residential units in the Facility are allocated as follows (“Intended Use”):

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1.        Independent Living Units	0%
	0 units
2.        Assisted Living Residences	77%
	37 units
	49 beds
3.        Assisted Living Residences devoted to Alzheimer’s care, dementia care and/or memory care	33%
	11 units
	17 beds
4.        Skilled Nursing Beds	0%
	0 units
	0 beds
5.        Continuing Care Retirement Community with the following percentages of use:	N/A
a.         Seniors Apartments	N/A
b.        Independent Living Units	N/A
	N/A
c.         Assisted Living Residences	N/A
	N/A
	N/A
d.        Skilled Nursing Beds	N/A
	N/A
	N/A

5.26 Furniture, Fixtures, Equipment and Motor Vehicles. As of the Closing Date, all FF&E and motor vehicles located on or used in connection with the Mortgaged Property, and the name of the Person that owns and/or leases each item, if other than Borrower, is listed on Exhibit K, and such list is true and complete.

5.27 Participant in Federal Programs. Neither Borrower nor any operator of the Facility is a participant in any federal program under which any Governmental Authority may have the right to recover funds by reason of the advance of federal funds.

5.28 Certificate of Need. Under applicable laws and regulations as in effect on the date of this Loan Agreement, if any existing management agreement or operating lease is terminated or Lender acquires the Facility through foreclosure or otherwise, none of Borrower, Lender, any subsequent operator or management agent, or any subsequent purchaser (through foreclosure or otherwise) must obtain a certificate of need from any Governmental Authority (other than giving of any notice required under the applicable state law or regulation) prior to applying for any License, so long as neither the type of service nor any unit complement is changed.

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5.29 Contracts.

(a) Exhibit L lists all Contracts in effect as of the date of this Loan Agreement, the names of the parties to such Contracts and the dates of such Contracts.

(b) With regard to each Contract listed in Exhibit L, (i) the Contract is in full force and effect in accordance with its terms, and (ii) there is no default by any party under the Contract.

(c) Borrower has delivered to Lender a copy of each Contract, together with all amendments, modifications, supplements and renewals thereto in effect as of the date of this Loan Agreement.

(d) Except as set forth on Exhibit L, each Contract listed in Exhibit L provides that it is terminable by Borrower or any operator of the Facility upon not more than 30 days notice without the necessity of establishing cause and without payment of a penalty or termination fee by Borrower or any operator of the Facility or their respective successors or assigns, except only Third Party Provider Agreements.

5.30 Material Contracts.

(a) Exhibit M lists all Material Contracts in effect as of the date of this Loan Agreement.

(b) With regard to each Material Contract listed in Exhibit M, (i) the Material Contract is assignable by Borrower, or if Borrower is not a party thereto, by an operator of the Facility, without the consent of the other party thereto (or Borrower and any operator of the Facility, as applicable, has obtained express written consent to the assignment from the other party thereto), except only Third Party Provider Agreements; (ii) no previous assignment of Borrower’s or any operator of the Facility’s interest in the Material Contract has been made except such assignments that have been properly terminated prior to or concurrently with the execution and delivery of this Loan Agreement; (iii) the Material Contract is in full force and effect in accordance with its terms; and (iv) there is no default by any party under the Material Contract.

(c) Borrower has delivered to Lender a copy of each Material Contract, together with all amendments, modifications, supplements and renewals thereto in effect as of the date of this Loan Agreement.

(d) Each Material Contract listed in Exhibit M provides that it is terminable upon not more than 30 days notice without the necessity of establishing cause and without payment of a penalty or termination fee by Borrower or any operator of the Facility or their respective successors or assigns, except only Third Party Provider Agreements.

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5.31 No Financing Statements. Except for termination statements and continuation statements, during the 45-day period prior to the date of this Loan Agreement, there have been no UCC financing statements filed with respect to any of the UCC Collateral listing as debtor Borrower, any operator of the Facility, or the Facility’s common name.

5.32 Compliance with Medicare and Medicaid Requirements. The Facility is in compliance with all requirements for participation in Medicare and Medicaid, including without limitation, the Medicare and Medicaid Patient and Program Protection Act of 1987. The Facility is in conformance in all material respects with all insurance, reimbursement and cost reporting requirements and has a current provider agreement that is in full force and effect under Medicare and Medicaid, as applicable. As of the date of this Loan Agreement, neither Borrower nor any operator of the Facility has received any notice from any Governmental Authority of any overbilling of Medicare, Medicaid, TRICARE (or any so-called “waiver program” associated therewith) or any other Governmental Authority payor for similar goods or services with respect to the Facility and there are no current or pending Medicare, Medicaid, TRICARE or similar governmental payor program recoupment efforts at the Facility, and there are no current, pending or outstanding audits or appeals with respect thereto (or which remain open to audit with respect thereto).

5.33 Third-Party Payor Programs and Private Commercial Insurance Managed Care and Employee Assistance Programs. There is no threatened or pending revocation, suspension, termination, probation, restriction, limitation or nonrenewal affecting Borrower or operator of the Facility, of any participation or provider agreement with any third-party payor, including Medicare, Medicaid, TRICARE, and any private commercial insurance managed care and employee assistance program to which Borrower or operator of the Facility is subject. All Medicare, Medicaid, TRICARE and private insurance cost reports and financial reports submitted by Borrower or operator of the Facility are and will be materially accurate and complete and have not been and will not be misleading in any material respects. No cost reports for the Facility remain “open” or unsettled.

5.34 No Transfer or Pledge of Licenses. The Licenses, including, without limitation, the certificate of need, may not be, and have not been, transferred to any location other than the Facility, have not been pledged as collateral security for any other loan or indebtedness, and are held free from restrictions or known conflicts that would materially impair the use or operation of the Facility for its Intended Use, and are not provisional, probationary, or restricted in any way.

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5.35 No Pledge of Receivables. Neither Borrower nor the operator of the Facility has pledged its receivables as collateral security for any other loan or indebtedness.

5.36 Patient and Resident Care Agreements. There are no patient or resident care agreements with patients or residents or with any other persons that deviate in any material adverse respect from the standard form customarily used at the Facility.

5.37 Patient and Resident Records. All patient or resident records at the Facility, including patient or resident trust fund accounts, are true and correct in all material respects.

5.38 No Facility Deficiencies, Enforcement Actions or Violations.

(a) The Facility has not received a statement of charges or deficiencies and no penalty enforcement actions have been undertaken against the Facility, the operator of the Facility or Borrower or against any officer, director or stockholder thereof, by any Governmental Agency during the last three calendar years, and there have been no violations over the past three years that have threatened the Facility’s or the operator of the Facility’s or Borrower’s certification for participation in any third-party payor programs.

(b) [RESERVED]

5.39 Survival. The representations and warranties set forth in this Loan Agreement will survive until the Indebtedness is paid in full; however, the representations and warranties set forth in Section 5.05 will survive beyond repayment of the entire Indebtedness, to the extent provided in Section 10.02(b).

ARTICLE VI BORROWER COVENANTS.

6.01 Compliance with Laws. Borrower will comply with all laws, ordinances, rules, regulations and requirements of any Governmental Authority having jurisdiction over the Mortgaged Property and all recorded covenants and agreements relating to or affecting the Mortgaged Property, including all laws, ordinances, regulations, requirements and covenants pertaining to health and safety, construction of improvements on the Mortgaged Property, Repairs, Capital Replacements, fair housing, disability accommodation, zoning and land use, applicable building codes, special use permits and environmental regulations, Leases and the maintenance and disposition of tenant security deposits. Borrower will take appropriate measures to prevent, and will not engage in or knowingly permit, any illegal activities at the Mortgaged Property, including those that could endanger tenants or visitors, result in damage to the Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise materially impair the Lien created by the Security Instrument or Lender’s interest in the Mortgaged Property. Borrower will at all times maintain records sufficient to demonstrate compliance with the provisions of this Section 6.01.

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6.02 Compliance with Organizational Documents. Borrower will at all times comply with all laws, regulations and requirements of any Governmental Authority relating to Borrower’s formation, continued existence and good standing in its state of formation and, if different, in the Property Jurisdiction. Borrower will at all times comply with its organizational documents, including its partnership agreement (if Borrower is a partnership), its by-laws (if Borrower is a corporation or housing cooperative corporation or association) or its operating agreement (if Borrower is a limited liability company or tenancy-in-common). If Borrower is a housing cooperative corporation or association, Borrower will at all times maintain its status as a “cooperative housing corporation” as such term is defined in Section 216(b) of the Internal Revenue Code of 1986, as amended, or any successor statute thereto.

6.03 Use of Mortgaged Property.

(a) Unless required by applicable law, without the prior written consent of Lender, Borrower will not, and will not permit any operator of the Facility to, take any of the following actions:

(i) Allow changes in the use for which all or any part of the Mortgaged Property is being used at the time this Loan Agreement is executed.

(ii) Convert any individual dwelling units or common areas to commercial use.

(iii) Initiate a change in the zoning classification of the Mortgaged Property or acquiesce to a change in the zoning classification of the Mortgaged Property.

(iv) Establish any condominium or cooperative regime with respect to the Mortgaged Property beyond any which may be in existence on the date of this Loan Agreement.

(v) Combine all or any part of the Mortgaged Property with all or any part of a tax parcel which is not part of the Mortgaged Property.

(vi) Subdivide or otherwise split any tax parcel constituting all or any part of the Mortgaged Property.

(vii) Add to or change any location at which any of the Mortgaged Property is stored, held or located unless Borrower (A) gives Notice to Lender within 30 days after the occurrence of such addition or change, (B) executes and delivers to Lender any modifications of or supplements to this Loan Agreement that Lender may require, and (C) authorizes the filing of any financing statement which may be filed in connection with this Loan Agreement, as Lender may require.

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(b) Notwithstanding anything contained in this Section to the contrary, if Borrower is a housing cooperative corporation or association, Lender acknowledges and consents to Borrower’s use of the Mortgaged Property as a housing cooperative.

(c) Without the prior written consent of Lender, which may be granted or withheld in Lender’s discretion, Borrower will not, and will not permit any operator of the Facility to, provide or contract for skilled nursing care, assisted living care, Alzheimer’s care, memory care or dementia care for any of the residents other than that level of care which both (i) is consistent with the Intended Use and (ii) is permissible for Borrower or the operator of the Facility to provide at the Facility under (A) applicable Healthcare Laws, and (B) applicable Licenses.

6.04 Non-Residential Leases.

(a) Prohibited New Non-Residential Leases or Modified Non-Residential Leases. Borrower will not enter into any New Non-Residential Lease, enter into any Modified Non-Residential Lease or terminate any Non-Residential Lease (including any Non-Residential Lease in existence on the date of this Loan Agreement) without the prior written consent of Lender.

(b) Reserved.

(c) Executed Copies of Non-Residential Leases. Borrower will, without request by Lender, deliver a fully executed copy of each Non-Residential Lease to Lender promptly after such Non-Residential Lease is signed.

(d) Subordination and Attornment Requirements. All Non-Residential Leases will specifically include the following provisions:

(i) The Lease is subordinate to the Lien of the Security Instrument, with such subordination to be self-executing.

(ii) The tenant will attorn to Lender and any purchaser at a foreclosure sale, such attornment to be self-executing and effective upon acquisition of title to the Mortgaged Property by any purchaser at a foreclosure sale or by Lender in any manner.

(iii) The tenant agrees to execute such further evidences of attornment as Lender or any purchaser at a foreclosure sale may from time to time request.

(iv) The tenant will, upon receipt of a written request from Lender following the occurrence of and during the continuance of an Event of Default, pay all Rents payable under the Lease to Lender.

(v) If Lender or a purchaser at a foreclosure sale so elects, the Lease shall not be terminated by foreclosure or any other transfer of the Mortgaged Property.

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(vi) After a foreclosure sale of the Mortgaged Property, Lender or any other purchaser at such foreclosure sale may, at Lender’s or such purchaser’s option, accept or terminate such Lease without payment of any fee or penalty.

6.05 Prepayment of Rents. Borrower will not receive or accept Rent under any Lease (whether a residential Lease or a Non-Residential Lease) for more than 2 months in advance.

6.06 Inspection.

(a) Right of Entry. Borrower will permit Lender, its agents, representatives and designees and any interested Governmental Authority to make or cause to be made entries upon and inspections of the Mortgaged Property to inspect, among other things (i) Repairs, (ii) Capital Replacements, in process and upon completion, and (iii) Improvements (including environmental inspections and tests performed by professional inspection engineers) during normal business hours, or at any other reasonable time, upon reasonable Notice to Borrower if the inspection is to include occupied residential units (which Notice need not be in writing). During normal business hours, or at any other reasonable time, Borrower will also permit Lender to examine all books and records and contracts and bills pertaining to the foregoing. Notice to Borrower will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

(b) Inspection of Mold. If Lender determines that Mold has or may have developed as a result of a water intrusion event or leak, Lender, at Lender’s Discretion, may require that a professional inspector inspect the Mortgaged Property to confirm whether Mold has developed and, if so, thereafter as frequently as Lender determines is necessary until any issue with Mold and its cause(s) are resolved to Lender’s satisfaction. Such inspection will be limited to a visual and olfactory inspection of the area that has experienced the Mold, water intrusion event or leak. Borrower will be responsible for the cost of each such professional inspection and any remediation deemed to be necessary as a result of the professional inspection. After any issue with Mold is remedied to Lender’s satisfaction, Lender will not require a professional inspection any more frequently than once every 3 years unless Lender otherwise becomes aware of Mold as a result of a subsequent water intrusion event or leak.

(c) Certification in Lieu of Inspection. If Lender or Loan Servicer determines not to conduct an annual inspection of the Mortgaged Property, and in lieu thereof Lender requests a certification, Borrower will provide to Lender a factually correct certification each year that the annual inspection is waived to the following effect:

Borrower has not received any written complaint, notice, letter or other written communication from any tenant, Property Manager, operator of

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the Facility or governmental authority regarding mold, fungus, microbial contamination or pathogenic organisms (“Mold”) or any activity, condition, event or omission that causes or facilitates the growth of Mold on or in any part of the Mortgaged Property or, if Borrower has received any such written complaint, notice, letter or other written communication, that Borrower has investigated and determined that no Mold activity, condition or event exists or alternatively has fully and properly remediated such activity, condition, event or omission in compliance with the Moisture Management Plan for the Mortgaged Property.

If Borrower is unwilling or unable to provide such certification, Lender may require a professional inspection of the Mortgaged Property at Borrower’s expense.

6.07 Books and Records; Financial Reporting.

(a) Delivery of Books and Records. Borrower will keep and maintain at all times at the Mortgaged Property or the Property Manager’s or operator of the Facility’s office, and upon Lender’s request will make available at the Mortgaged Property (or, at Borrower’s option, at the Property Manager’s or operator of the Facility’s office), complete and accurate books of account and records (including copies of supporting bills and invoices) adequate to reflect correctly the operation of the Mortgaged Property, in accordance with GAAP consistently applied (or such other method which is reasonably acceptable to Lender), and copies of all written contracts, Leases, and other instruments which affect the Mortgaged Property. The books, records, contracts, Leases and other instruments will be subject to examination and inspection by Lender at any reasonable time.

(b) Delivery of Statement of Income and Expenses; Rent Schedule and Other Statements. Borrower will furnish to Lender each of the following:

(i) Within 25 days after the end of each calendar quarter prior to Securitization and within 35 days after each calendar quarter after Securitization, each of the following:

(A) A Rent Schedule dated no earlier than the date that is 5 days prior to the end of such quarter.

(B) A statement of income and expenses for Borrower’s operation of the Mortgaged Property that is either of the following:

(1) For the 12 month period ending on the last day of such quarter.

(2) If at the end of such quarter Borrower or any Affiliate of Borrower has owned the Mortgaged Property for less than 12 months, for the period commencing with the acquisition of the Mortgaged Property by Borrower or its Affiliate, and ending on the last day of such quarter.

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(C) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal quarter.

(ii) Within 90 days after the end of each fiscal year of Borrower, each of the following:

(A) An annual statement of income and expenses for Borrower’s operation of the Mortgaged Property for that fiscal year.

(B) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal year.

(C) A balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal year and a profit and loss statement for Borrower.

(D) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.

(iii) Within 30 days after the date of filing, copies of all tax returns filed by Borrower.

(c) Delivery of Borrower Financial Statements Upon Request. Borrower will furnish to Lender each of the following:

(i) Upon Lender’s request, in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a monthly Rent Schedule and a monthly statement of income and expenses for Borrower’s operation of the Mortgaged Property, in each case within 25 days after the end of each month.

(ii) Upon Lender’s request in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a statement that identifies all owners of any interest in Borrower and any Designated Entity for Transfers and the interest held by each (unless Borrower or any Designated Entity for Transfers is a publicly-traded entity in which case such statement of ownership will not

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be required), and if Borrower or a Designated Entity for Transfers is a corporation then all officers and directors of Borrower and the Designated Entity for Transfers, and if Borrower or a Designated Entity for Transfers is a limited liability company then all Managers who are not members, in each case within 10 days after such request.

(iii) Upon Lender’s request in Lender’s Discretion, such other financial information or property management information (including information on tenants under Leases to the extent such information is available to Borrower, copies of bank account statements from financial institutions where funds owned or controlled by Borrower are maintained, and an accounting of security deposits) as may be required by Lender from time to time, in each case within 30 days after such request.

(iv) Upon Lender’s request in Lender’s Discretion, a monthly property management report for the Mortgaged Property, showing the number of inquiries made and rental applications received from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender within 30 days after such request. However, Lender will not require the foregoing more frequently than quarterly except when there has been an Event of Default and such Event of Default is continuing, in which case Lender may require Borrower to furnish the foregoing more frequently.

(d) Form of Statements; Audited Financials. A natural person having authority to bind Borrower (or the SPE Equity Owner or Guarantor, as applicable) will certify each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) to be complete and accurate. Each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c)(i) and (iii) and 6.07(f) will be in such form and contain such detail as Lender may reasonably require. Lender also may require that any of the statements, schedules or reports listed in Sections 6.07(b), 6.07(c) and 6.07(f) be audited at Borrower’s expense by independent certified public accountants acceptable to Lender, at any time when an Event of Default has occurred and is continuing or at any time that Lender, in its reasonable judgment, determines that audited financial statements are required for an accurate assessment of the financial condition of Borrower or of the Mortgaged Property.

(e) Failure to Timely Provide Financial Statements. If Borrower fails to provide in a timely manner the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f), Lender will give Notice to Borrower specifying the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) that Borrower has failed to provide. If Borrower has not provided the required statements, schedules and reports within 10 Business Days following such Notice, then (i) Borrower will pay a late fee of $500 for each late statement, schedule or report, plus an additional $500 per month that any such statement, schedule or report continues to be late, and (ii) Lender will have the right to have

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Borrower’s books and records audited, at Borrower’s expense, by independent certified public accountants selected by Lender in order to obtain such statements, schedules and reports, and all related costs and expenses of Lender will become immediately due and payable and will become an additional part of the Indebtedness as provided in Section 9.02. Notice to Borrower of Lender’s exercise of its rights to require an audit will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

(f) Delivery of Guarantor and SPE Equity Owner Financial Statements Upon Request. Borrower will cause each Guarantor and, at Lender’s request in Lender’s Discretion, any SPE Equity Owner, to provide to Lender (i) within 90 days after the close of such party’s fiscal year, such party’s balance sheet and profit and loss statement (or if such party is a natural person, within 90 days after the close of each calendar year, such party’s personal financial statements) in form reasonably satisfactory to Lender and certified by such party to be accurate and complete; and (ii) such additional financial information (including copies of state and federal tax returns with respect to any SPE Equity Owner but Lender will only require copies of such tax returns with respect to each Guarantor if an Event of Default has occurred and is continuing) as Lender may reasonably require from time to time and in such detail as reasonably required by Lender.

(g) Reporting Upon Event of Default. If an Event of Default has occurred and is continuing, Borrower will deliver to Lender upon written demand all books and records relating to the Mortgaged Property or its operation.

(h) Credit Reports. Borrower authorizes Lender to obtain a credit report on Borrower at any time.

6.08 Taxes; Operating Expenses; Ground Rents.

(a) Payment of Taxes and Ground Rent. Subject to the provisions of Sections 6.08(c) and (d), Borrower will pay or cause to be paid (i) all Taxes when due and before the addition of any interest, fine, penalty or cost for nonpayment, and (ii) if Borrower’s interest in the Mortgaged Property is as a Ground Lessee, then the monthly or other periodic installments of Ground Rent before the last date upon which each such installment may be made without penalty or interest charges being added.

(b) Payment of Operating Expenses. Subject to the provisions of Section 6.08(c), Borrower will (i) pay the expenses of operating, managing, maintaining and repairing the Mortgaged Property (including utilities, Repairs and Capital Replacements) before the last date upon which each such payment may be made without any penalty or interest charge being added, and (ii) pay Insurance premiums at least 30 days prior to the expiration date of each policy of Insurance, unless applicable law specifies some lesser period.

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(c) Payment of Impositions and Reserve Funds. If Lender is collecting Imposition Reserve Deposits pursuant to Article IV, then so long as no Event of Default exists, Borrower will not be obligated to pay any Imposition for which Imposition Reserve Deposits are being collected, whether Taxes, Insurance premiums, Ground Rent (if applicable) or any other individual Impositions, but only to the extent that sufficient Imposition Reserve Deposits are held by Lender for the purpose of paying that specific Imposition and Borrower has timely delivered to Lender any bills or premium notices that it has received with respect to that specific Imposition (other than Ground Rent). Lender will have no liability to Borrower for failing to pay any Impositions to the extent that (i) any Event of Default has occurred and is continuing, (ii) insufficient Imposition Reserve Deposits are held by Lender at the time an Imposition becomes due and payable, or (iii) Borrower has failed to provide Lender with bills and premium notices as provided in this Section.

(d) Right to Contest. Borrower, at its own expense, may contest by appropriate legal proceedings, conducted diligently and in good faith, the amount or validity of any Imposition other than Insurance premiums and Ground Rent (if applicable), if (i) Borrower notifies Lender of the commencement or expected commencement of such proceedings, (ii) the Mortgaged Property is not in danger of being sold or forfeited, (iii) if Borrower has not already paid the Imposition, Borrower deposits with Lender reserves sufficient to pay the contested Imposition, if requested by Lender, and (iv) Borrower furnishes whatever additional security is required in the proceedings or is reasonably requested by Lender, which may include the delivery to Lender of reserves established by Borrower to pay the contested Imposition.

6.09 Preservation, Management and Maintenance of Mortgaged Property.

(a) Maintenance of Mortgaged Property; No Waste. Borrower will keep the Mortgaged Property in good repair, including the replacement of Personalty and Fixtures with items of equal or better function and quality. Borrower will not commit waste or permit impairment or deterioration of the Mortgaged Property.

(b) Abandonment of Mortgaged Property. Borrower will not abandon the Mortgaged Property.

(c) Preservation of Mortgaged Property. Borrower will restore or repair promptly, in a good and workmanlike manner, any damaged part of the Mortgaged Property to the equivalent of its original condition, or such other condition as Lender may approve in writing, whether or not Insurance proceeds or Condemnation awards are available to cover any costs of such Restoration or repair; provided, however, that Borrower will not be obligated to perform such Restoration or repair if (i) no Event of Default has occurred and is continuing, and (ii) Lender has elected to apply any available Insurance proceeds and/or Condemnation awards to the payment of Indebtedness pursuant to Section 6.10(j) or Section 6.11(d).

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(d) Property Management. Borrower will provide for professional management of the Mortgaged Property by the Property Manager at all times under a property management agreement approved by Lender in writing. Borrower will not surrender, terminate, cancel, modify, renew or extend its property management agreement, or enter into any other agreement relating to the management or operation of the Property with Property Manager or any other Person, or consent to the assignment by the Property Manager of its interest under such property management agreement, in each case without the consent of Lender, which consent will not be unreasonably withheld. If at any time Lender consents to the appointment of a new Property Manager, such new Property Manager and Borrower will, as a condition of Lender’s consent, execute an Assignment of Management Agreement in a form acceptable to Lender. If any such replacement Property Manager is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered on the Closing Date, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to the Rating Agencies (unless waived by the Rating Agencies) with regard to nonconsolidation.

(e) Alteration of Mortgaged Property. Borrower will give Notice to Lender of and, unless otherwise directed in writing by Lender, will appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement. Borrower will not (and will not permit any tenant or other Person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property, including any removal, demolition or alteration occurring in connection with a rehabilitation of all or part of the Mortgaged Property, except (i) Repairs or Capital Replacements pursuant to the terms of Sections 4.03 or 4.04, (ii) in connection with the replacement of tangible Personalty, (iii) if Borrower is a cooperative housing corporation or association, to the extent permitted with respect to individual dwelling units under the form of a proprietary lease or occupancy agreement, (iv) Repairs and Capital Replacements in connection with making an individual unit ready for a new occupant or pursuant to the terms of Sections 6.09(a) and (c), and (v) Repairs made in connection with and pursuant to the Repair Schedule of Work, if applicable.

(f) Establishment of MMP. Unless otherwise waived by Lender in writing, Borrower will have or will establish and will adhere to the MMP. If Borrower is required to have an MMP, Borrower will keep all MMP documentation at the Mortgaged Property or at the Property Manager’s or the operator of the Facility’s office and available for review by Lender or the Loan Servicer during any annual assessment or other inspection of the Mortgaged Property that is required by Lender. At a minimum, the MMP must contain a provision for (i) staff training, (ii) information to be provided to tenants, (iii) documentation of the plan, (iv) the appropriate protocol for incident response and remediation, and (v) routine, scheduled inspections of common space and unit interiors.

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(g) No Reduction of Housing Cooperative Charges. If Borrower is a housing cooperative corporation or association, until the Indebtedness is paid in full, Borrower will not reduce the maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements below a level which is sufficient to pay all expenses of Borrower, including all operating and other expenses for the Mortgaged Property and all payments due pursuant to the terms of the Note and any Loan Documents.

6.10 Property and Liability Insurance.

(a) Hazard and Other Insurance. At all times during the term of this Loan Agreement, Borrower will maintain, at its sole cost and expense, for the mutual benefit of Borrower and Lender, the following Insurance coverages:

(i) All-Risks of Physical Loss. Insurance against any peril included within the classification “All Risks of Physical Loss” in amounts not less than the Replacement Cost of the Mortgaged Property. In all cases where any of the Improvements or the use of the Mortgaged Property will at any time constitute legal non-conforming structures or uses under applicable legal requirements of any Governmental Authority, the policy referred to in this Section 6.10 will include “Ordinance and Law Coverage,” with “Loss to the Undamaged Portion of the Building,” “Demolition Cost” and “Increased Cost of Construction” endorsements, in the amount of coverage required by Lender and will either include a “Time Element” endorsement or the business income/rental value Insurance for the Mortgaged Property will be endorsed to cover income/rent loss arising out of any increased time necessary to repair or rebuild the Mortgaged Property due to the enforcement of any zoning laws.

(ii) Commercial General Liability. Commercial general liability Insurance on an occurrence-based policy form that insures against legal liability resulting from bodily injury, property damage, personal injury and advertising injury, and includes contractual liability coverage and any and all claims, including all legal liability (to the extent insurable) imposed upon Borrower and all Attorneys’ Fees and Costs arising out of or connected with the possession, use, leasing, operation, maintenance or condition of the Mortgaged Property with a combined limit of not less than $2,000,000 in the aggregate and $1,000,000 per occurrence; umbrella or excess liability coverage with minimum limits in the aggregate and per occurrence of $1,000,000 in coverage for each story of the Improvements with a maximum required coverage of $8,000,000 (provided, however, that if the Indebtedness is $3,000,000 or less and the Improvements have 3 stories or fewer, then no umbrella or excess liability coverage is required); and if the Borrower owns, leases, hires, rents, borrows, uses, or has another use on its behalf a vehicle in conjunction with the operation of the Mortgaged Property, vehicle liability Insurance of not less than

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$1,000,000 per occurrence. The maximum per occurrence deductible or self-insured retention, or combined deductible or self-insured retention, for all coverage required under this Section 6.10(a)(ii), will not exceed $35,000.

(iii) Business Income/Rental Value. Business income/rental value Insurance for the Mortgaged Property in an amount equal to at least the estimated gross Rents attributable to the Mortgaged Property for 12 months (18 months when (A) the Improvements have 5 or more stories, or (B) at all times during which the Indebtedness is equal to or greater than $50,000,000) based on gross Rents for the immediately preceding year and otherwise sufficient to avoid any co-insurance penalty; coverage will include a 90-day extended period of indemnity if (X) the Improvements have 5 or more stories, or (Y) the Indebtedness is equal to or greater than $25,000,000. The waiting period for this coverage will not exceed 72 hours.

(iv) Flood. If any portion of the Improvements is located within an area identified by the Federal Emergency Management Agency (or any successor) as a special flood hazard area (“SFHA”), flood Insurance in an amount equal to the greater of the following:

(A) The maximum flood Insurance available under the National Flood Insurance Program (“NFIP”) for each building within a SFHA.

(B) The sum of the following for each building within a SFHA being insured:

(1) The Replacement Cost of all areas of the Improvements below grade.

(2) The Replacement Cost of the bottom two stories (above grade) of the Improvements.

(3) Any additional coverage dictated by the nature of the Mortgaged Property as determined by Lender in Lender’s Discretion.

Such coverage may be purchased through excess carriers if the required coverage exceeds the maximum Insurance available under the NFIP.

(v) Boiler and Machinery. If the Mortgaged Property contains a central heating, ventilation and cooling system (“HVAC System”) where steam boilers and/or other pressurized systems are in operation and are regulated by the Property Jurisdiction, Insurance providing coverage for damage to the HVAC System or other portions of the Mortgaged Property, if the damage is the result of an explosion of steam boilers, pressure vessels or similar apparatus now or hereafter installed at the Mortgaged Property, with minimum limits at least equal to the Replacement Cost of the building housing the HVAC System, including the Replacement Cost of the HVAC System.

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(vi) Terrorism. Insurance coverage required under Section 6.10(a)(i) through (iii) will cover perils of terrorism and acts of terrorism. Such coverage may be provided through one or more separate policies, which will be on terms (including amounts) consistent with those required under Section 6.10(a)(i) through (iii).

(vii) Builder’s All Risk. During any period of Restoration, builder’s “All Risk” Insurance (including fire and other perils within the scope of a policy known as a “Causes of Less – Special Form” or “All Risk” policy) in an amount at least equal to 100% of the sum of the contract or contracts and all materials to complete the Restoration (as determined by Lender in Lender’s Discretion).

(viii) Earthquake. If Lender requires earthquake Insurance, the amount of coverage will be equal to the greater of the following:

(A) $1,000,000.

(B) 150% of the difference between the following items:

(1) The Replacement Cost of the Mortgaged Property multiplied by the probable maximum loss for the Mortgaged Property, as determined by a Site Specific Seismic Report.

(2) The Replacement Cost of the Mortgaged Property multiplied by the projected loss with a 20% probable maximum loss.

Lender will not require earthquake Insurance if the probable maximum loss for the Mortgaged Property is less than 20%. If any updated reports or other documentation are reasonably required by Lender in order to determine whether such additional Insurance is necessary or prudent, Borrower will pay for all such documentation at its sole cost and expense.

(ix) Windstorm. If windstorm and/or windstorm related perils and/or “named storms” (“Windstorm Coverage”) are excluded from the “All Risks” policy required under Section 6.10(a)(i), Borrower will obtain separate coverage for such risks, either through an endorsement or a separate policy. Windstorm Coverage will be written in an amount equal to 100% of the Replacement Cost. Business income/rental value Insurance required under Section 6.10(a)(iii) will be in force for all losses covered by Windstorm Coverage.

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(x) Other. Such other Insurance against loss or damage with respect to the Improvements and Personalty located on the Mortgaged Property as required by Lender (including liquor/dramshop and Mold Insurance) provided such Insurance is of the kind for risks from time to time customarily insured against and in such minimum coverage amounts and maximum deductibles as are generally required by institutional lenders for properties comparable to the Mortgaged Property or which Lender may deem necessary in Lender’s Discretion.

All Insurance required pursuant to Section 6.10(a)(i) and Section 6.10(a)(iii) through (x) will be referred to as “Hazard Insurance.”

(b) Deductibles. The Insurance required pursuant to Section 6.10(a)(i), (iv), (v), (vi), (vii) and (ix) will have a per occurrence deductible meeting the following requirements:

(i) The deductible will not exceed $50,000 if the Replacement Cost of the Mortgaged Property is less than $10,000,000.

(ii) The deductible will not exceed $75,000 if the Replacement Cost of the Mortgaged Property is equal to or greater than $10,000,000.

(iii) For Windstorm Coverage the deductible will not exceed 5% of the Replacement Cost if the Mortgaged Property is located (1) in Florida, or (2) within 50 miles of the coast of any East Coast or Gulf Coast state.

(iv) For flood insurance provided under the NFIP, the deductible will comply with the NFIP deductible for the type of improvement insured.

(c) Payment of Premiums. All Hazard Insurance premiums and premiums for other Insurance required under this Section 6.10 will be paid in the manner provided in Article IV, unless Lender has designated in writing another method of payment.

(d) Policy Requirements. All policies will be in a form approved by Lender. All policies of Hazard Insurance will include a standard non-contributing, non-reporting mortgagee clause in favor of, and in a form approved by, Lender. All policies for general liability Insurance will contain a standard additional insured provision, in favor of, and in a form approved by Lender. If any policy referred to in this Section 6.10 contains a coinsurance clause, such coinsurance clause will be offset by an agreed amount endorsement in an amount not less than the Replacement Cost. All Insurance policies and renewals of Insurance policies required by this Section 6.10 will be for such periods as Lender may from time to time require. Unless required otherwise by state law, all policies of Hazard Insurance will provide that the insurer will notify the named mortgagee in writing at least 10 days before the cancelation of the policy for nonpayment of the premium or nonrenewal and at least 30 days before cancelation for any other reason.

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(e) Evidence of Insurance; Renewals. Borrower will deliver to Lender a legible copy of each Insurance policy (or duplicate original), and Borrower will promptly deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies. Borrower will ensure that the Mortgaged Property is continuously covered by the required Insurance policies and will deliver to Lender evidence acceptable to Lender in Lender’s Discretion that each policy has been renewed at least 15 days prior to the expiration date of such Insurance policy. If the evidence of a renewal does not include a legible copy of the renewal policy (or duplicate original), Borrower will deliver a legible copy of such renewal policy (or duplicate original) in a form satisfactory to Lender in Lender’s Discretion prior to the earlier of (i) 60 days after the expiration date of the original policy, or (ii) the date of any Notice to Lender under Section 6.10(i).

(f) Insurance Company Rating Requirements. Borrower will maintain the Insurance coverage described in this Section 6.10 with companies acceptable to Lender having the following ratings:

(i) A rated claims paying ability rating of at least “A-” for financial strength or its equivalent by A.M. Best Company.

(ii) A financial size rating or its equivalent by A.M. Best Company of at least one of the following:

(A) “VII” for companies with an Aggregate Carrier Exposure of $5,000,000 or less.

(B) “VIII” for companies with an Aggregate Carrier Exposure greater than $5,000,000 and less than or equal to $25,000,000.

(C) “IX” for companies with an Aggregate Carrier Exposure greater than $25,000,000 and a rated claims paying ability of at least one of the following:

(1) “A-” or its equivalent by Fitch, Inc.

(2) “A-” or its equivalent by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

(3) “A3” or its equivalent by Moody’s Investors Service, Inc.

All insurers providing Insurance required by this Loan Agreement will be authorized to issue Insurance in the Property Jurisdiction.

(g) Compliance With Insurance Requirements. Borrower will comply with all Insurance requirements and will not permit any condition to exist on the Mortgaged Property that would invalidate any part of any Insurance coverage required under this Loan Agreement.

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(h) Blanket Insurance; Master Program. Borrower may provide Insurance coverage described in this Section 6.10 under a blanket insurance policy or master program which provides one “per occurrence” (per peril) limit of coverage for two or more properties (“Blanket Insurance Policy”) provided that each of the following conditions is met:

(i) The Blanket Insurance Policy is acceptable to Lender in Lender’s Discretion.

(ii) The coverages under the Blanket Insurance Policy meet the requirements of this Section 6.10.

(iii) Borrower will provide evidence acceptable to Lender in Lender’s Discretion that the per occurrence limit of the Insurance coverages provided by the Blanket Insurance Policy will be no less than the Replacement Cost of the property with the largest replacement cost exposure covered by the Blanket Insurance Policy unless a higher amount is required by Lender in Lender’s Discretion.

(iv) The maximum per occurrence deductible for the Blanket Insurance Policy providing property damage coverage and/or Windstorm Coverage is as follows:

Aggregate Replacement Cost of the covered properties	Maximum per occurrence deductible
$5,000,000 or less	$50,000
Greater than $5,000,000 but less than or equal to $7,500,000	$75,000
Greater than $7,500,000	1% of the Replacement Cost of the covered properties (to a maximum of $250,000)

However, if the Blanket Insurance Policy provides Windstorm Coverage and the Mortgaged Property is located (A) in Florida, or (B) within 50 miles of the coast of any East Coast or Gulf Coast state, then the maximum per occurrence deductible for Windstorm Coverage will not exceed 5% of the aggregate Replacement Cost of the covered properties.

(v) The minimum umbrella or excess liability coverage required if the Blanket Insurance Policy provides commercial general liability Insurance is as follows:

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Number of properties covered by the policy	Number of stories in any of the covered properties	Minimum umbrella or excess liability
2 to 3	3 or fewer	$3,000,000
2 to 3	More than 3	$10,000,000
4 to 5	3 or fewer	$5,000,000
4 to 5	More than 3	$12,000,000
6 to 10	3 or fewer	$7,000,000
6 to 10	More than 3	$15,000,000
11 to 19	3 or fewer	$9,000,000
11 to 19	More than 3	$20,000,000
20 or more	3 or fewer	$15,000,000
20 or more	More than 3	$30,000,000

(i) Obligations Upon Casualty; Proof of Loss.

(i) In the event of loss, Borrower will give immediate written notice to the Insurance carrier and to Lender.

(ii) Borrower authorizes and appoints Lender as attorney in fact for Borrower to make proof of loss, to adjust and compromise any claims under policies of Hazard Insurance, to appear in and prosecute any action arising from such Hazard Insurance policies, to collect and receive the proceeds of Hazard Insurance, to hold the proceeds of Hazard Insurance, and to deduct from such proceeds Lender’s expenses incurred in the collection of such proceeds. This power of attorney is coupled with an interest and therefore is irrevocable. However, nothing contained in this Section 6.10 will require Lender to incur any expense or take any action. Lender may, at Lender’s option, take one of the following actions:

(A) Require a “repair or replacement” settlement, in which case the proceeds will be used to reimburse Borrower for the cost of restoring and repairing the Mortgaged Property to the equivalent of its original condition or to a condition approved by Lender (“Restoration”). If Lender determines to require a repair or replacement settlement and to apply Insurance proceeds to Restoration, Lender will apply the proceeds in accordance with Lender’s then-current policies relating to the Restoration of casualty damage on similar multifamily properties.

(B) Require an “actual cash value” settlement in which case the proceeds may be applied to the payment of the Indebtedness, whether or not then due.

(iii) Subject to Section 6.10(j), Borrower may take the following actions:

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(A) If a casualty results in damage to the Mortgaged Property for which the cost of Repairs will be less than the Borrower Proof of Loss Threshold, Borrower will have the sole right to make proof of loss, adjust and compromise the claim and collect and receive any proceeds directly without the approval or prior consent of Lender so long as the Insurance proceeds are used solely for the Restoration of the Mortgaged Property.

(B) If a casualty results in damage to the Mortgaged Property for which the cost of Repairs will be more than the Borrower Proof of Loss Threshold, but less than the Borrower Proof of Loss Maximum, Borrower is authorized to make proof of loss and adjust and compromise the claim without the prior consent of Lender, and Lender will hold the applicable Insurance proceeds to be used to reimburse Borrower for the cost of Restoration of the Mortgaged Property and will not apply such proceeds to the payment of the Indebtedness.

(j) Right to Apply Insurance Proceeds to Indebtedness. Lender will have the right to apply Insurance proceeds to the payment of the Indebtedness if Lender determines, in Lender’s Discretion, that any of the following conditions are met:

(i) An Event of Default (or any event, which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default) has occurred and is continuing.

(ii) There will not be sufficient funds from Insurance proceeds, anticipated contributions of Borrower of its own funds or other sources acceptable to Lender to complete the Restoration.

(iii) The rental income from the Mortgaged Property after completion of the Restoration will not be sufficient to meet all operating costs and other expenses, deposits to Reserve Funds and Loan repayment obligations relating to the Mortgaged Property.

(iv) The Restoration will not be completed by the earlier of (A) at least one year before the Maturity Date (or 6 months before the Maturity Date if re-leasing of the Mortgaged Property will be completed within such 6 month period) or (B) the expiration of the business interruption coverage.

(v) The Restoration will not be completed within one year after the date of the loss or casualty.

(vi) The casualty involved an actual or constructive loss of more than 30% of the fair market value of the Mortgaged Property, and rendered untenantable more than 30% of the residential units of the Mortgaged Property.

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(vii) After completion of the Restoration the fair market value of the Mortgaged Property is expected to be less than the fair market value of the Mortgaged Property immediately prior to such casualty (assuming the affected portion of the Mortgaged Property is relet within a reasonable period after the date of such casualty).

(viii) Leases covering less than 35% of the residential units of the Mortgaged Property will remain in full force and effect during and after the completion of Restoration.

(k) Succession to Insurance Policies. If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender will automatically succeed to all rights of Borrower in and to any Insurance policies and unearned Insurance premiums and in and to the proceeds resulting from any damage to the Mortgaged Property prior to such sale or acquisition.

(l) Payment of Premiums After Application of Insurance Proceeds. Unless Lender otherwise agrees in writing, any application of any Insurance proceeds to the Indebtedness will not extend or postpone the due date of any monthly installments referred to in the Note, Article IV of this Loan Agreement or change the amount of such installments.

(m) Assignment of Insurance Proceeds. Borrower agrees to execute such further evidence of assignment of any Insurance proceeds as Lender may require.

6.11 Condemnation.

(a) Rights Generally. Borrower will promptly notify Lender in writing of any action or proceeding or notice relating to any proposed or actual condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect (“Condemnation”). Borrower will appear in and prosecute or defend any action or proceeding relating to any Condemnation unless otherwise directed by Lender in writing. Borrower authorizes and appoints Lender as attorney in fact for Borrower to commence, appear in and prosecute, in Lender’s or Borrower’s name, any action or proceeding relating to any Condemnation and to settle or compromise any claim in connection with any Condemnation, after consultation with Borrower and consistent with commercially reasonable standards of a prudent lender. This power of attorney is coupled with an interest and therefore is irrevocable. However, nothing contained in this Section 6.11(a) will require Lender to incur any expense or take any action. Borrower transfers and assigns to Lender all right, title and interest of Borrower in and to any award or payment with respect to (i) any Condemnation, or any conveyance in lieu of Condemnation, and (ii) any damage to the Mortgaged Property caused by governmental action that does not result in a Condemnation.

(b) Application of Award. Lender may hold such awards or proceeds and apply such awards or proceeds, after the deduction of Lender’s expenses incurred in the

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collection of such amounts (including Attorneys’ Fees and Costs) at Lender’s option, to the Restoration or repair of the Mortgaged Property or to the payment of the Indebtedness, with the balance, if any, to Borrower. Unless Lender otherwise agrees in writing, any application of any awards or proceeds to the Indebtedness will not extend or postpone the due date of any monthly installments referred to in the Note or Article IV of this Loan Agreement, or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any Condemnation awards or proceeds as Lender may require.

(c) Borrower’s Right to Condemnation Proceeds. Notwithstanding any provision to the contrary in this Section 6.11, but subject to Section 6.11(e), in the event of a partial Condemnation of the Mortgaged Property, as long as no Event of Default, or any event which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default, has occurred and is continuing, in the event of a partial Condemnation resulting in proceeds or awards in the amount of less than $100,000, Borrower will have the sole right to make proof of loss, adjust and compromise the claim and collect and receive any proceeds directly without the approval or prior consent of Lender so long as the proceeds or awards are used solely for the Restoration of the Mortgaged Property.

(d) Right to Apply Condemnation Proceeds to Indebtedness. In the event of a partial Condemnation of the Mortgaged Property resulting in proceeds or awards in the amount of $100,000 or more and subject to Section 6.11(e), Lender will have the right to exercise its option to apply Condemnation proceeds to the payment of the Indebtedness only if Lender, in Lender’s Discretion, determines that at least one of the following conditions is met:

(i) An Event of Default (or any event, which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default) has occurred and is continuing.

(ii) There will not be sufficient funds from Condemnation proceeds, anticipated contributions of Borrower of its own funds or other sources acceptable to Lender to complete the Restoration.

(iii) The rental income from the Mortgaged Property after completion of the Restoration will not be sufficient to meet all operating costs and other expenses, deposits to Reserve Funds and Loan repayment obligations relating to the Mortgaged Property.

(iv) The Restoration will not be completed at least one year before the Maturity Date (or 6 months before the Maturity Date if re-leasing of the Mortgaged Property will be completed within such 6 month period).

(v) Lender determines that the Restoration will not be completed within one year after the date of the Condemnation.

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(vi) The Condemnation involved an actual or constructive loss of more than 15% of the fair market value of the Mortgaged Property, and rendered untenantable more than 25% of the residential units of the Mortgaged Property.

(vii) After Restoration the fair market value of the Mortgaged Property is expected to be less than the fair market value of the Mortgaged Property immediately prior to the Condemnation (assuming the affected portion of the Mortgaged Property is relet within a reasonable period after the date of the Condemnation).

(viii) Leases covering less than 35% of residential units of the Mortgaged Property will remain in full force and effect during and after the completion of Restoration.

(e) Right to Apply Condemnation Proceeds in Connection with a Partial Release. Notwithstanding anything to the contrary set forth in this Loan Agreement, including but not limited to this Section 6.11, for so long as the Loan or any portion thereof is included in a Securitization, if any portion of the Mortgaged Property is released from the Lien of the Loan in connection with a Condemnation and if the ratio of (i) the unpaid principal balance of the Loan to (ii) the value of the Mortgaged Property (taking into account only the related land and buildings and not any personal property or going-concern value), as determined by Lender in its sole and absolute discretion based on a commercially reasonable valuation method permitted in connection with a Securitization, is greater than 125% immediately after such Condemnation and before any Restoration or repair of the Mortgaged Property (but taking into account any planned Restoration or repair of the Mortgaged Property as if such planned Restoration or repair were completed) Lender will apply any net proceeds or awards from such Condemnation, in full, to the payment of the principal of the Indebtedness whether or not then due and payable, unless Lender will have received an opinion of counsel that a different application of such net proceeds or awards will not cause such Securitization to fail to meet applicable federal income tax qualification requirements or subject such Securitization to any tax.

(f) Succession to Condemnation Proceeds. If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender will automatically succeed to all rights of Borrower in and to any Condemnation proceeds and awards prior to such sale or acquisition.

6.12 Environmental Hazards.

(a) Prohibited Activities and Conditions. Except for matters described in this Section 6.12, Borrower will not cause or permit Prohibited Activities or Conditions. Borrower will comply with all Hazardous Materials Laws applicable to the Mortgaged Property. Without limiting the generality of the previous sentence, Borrower will (i) obtain and maintain all Environmental Permits required by

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Hazardous Materials Laws and comply with all conditions of such Environmental Permits, (ii) cooperate with any inquiry by any Governmental Authority, and (iii) comply with any governmental or judicial order that arises from any alleged Prohibited Activity or Condition.

(b) Employees, Tenants and Contractors. Borrower will take all commercially reasonable actions (including the inclusion of appropriate provisions in any Leases executed after the date of this Loan Agreement) to prevent its employees, agents and contractors, and all tenants and other occupants from causing or permitting any Prohibited Activities or Conditions. Borrower will not lease or allow the sublease or use of all or any portion of the Mortgaged Property to any tenant or subtenant for nonresidential use by any user that, in the ordinary course of its business, would cause or permit any Prohibited Activity or Condition.

(c) O&M Programs. As required by Lender, Borrower will also have established a written operations and maintenance program with respect to certain Hazardous Materials. Each such operations and maintenance program and any additional or revised operations and maintenance programs established for the Mortgaged Property pursuant to this Section 6.12 must be approved by Lender and will be referred to in this Loan Agreement as an “O&M Program.” Borrower will comply in a timely manner with, and cause all employees, agents, and contractors of Borrower and any other Persons present on the Mortgaged Property to comply with each O&M Program. Borrower will pay all costs of performance of Borrower’s obligations under any O&M Program, and Lender’s out of pocket costs incurred in connection with the monitoring and review of each O&M Program must be paid by Borrower upon demand by Lender. Any such out-of-pocket costs of Lender that Borrower fails to pay promptly will become an additional part of the Indebtedness as provided in Section 9.02.

(d) Notice to Lender. Borrower will promptly give Notice to Lender upon the occurrence of any of the following events:

(i) Borrower’s discovery of any Prohibited Activity or Condition.

(ii) Borrower’s receipt of or knowledge of any written complaint, order, notice of violation or other communication from any tenant, Property Manager, operator of the Facility, Governmental Authority or other Person with regard to present or future alleged Prohibited Activities or Conditions, or any other environmental, health or safety matters affecting the Mortgaged Property.

(iii) Borrower’s breach of any of its obligations under this Section 6.12.

Any such Notice given by Borrower will not relieve Borrower of, or result in a waiver of, any obligation under this Loan Agreement, the Note or any other Loan Document.

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(e) Environmental Inspections, Tests and Audits. Borrower will pay promptly the costs of any environmental inspections, tests or audits, a purpose of which is to identify the extent or cause of or potential for a Prohibited Activity or Condition (“Environmental Inspections”), required by Lender in connection with any foreclosure or deed in lieu of foreclosure, or as a condition of Lender’s consent to any Transfer under Article VII, or required by Lender following a reasonable determination by Lender that Prohibited Activities or Conditions may exist. Any such costs incurred by Lender (including Attorneys’ Fees and Costs and the costs of technical consultants whether incurred in connection with any judicial or administrative process or otherwise) that Borrower fails to pay promptly will become an additional part of the Indebtedness as provided in Section 9.02. As long as (i) no Event of Default has occurred and is continuing, (ii) Borrower has actually paid for or reimbursed Lender for all costs of any such Environmental Inspections performed or required by Lender, and (iii) Lender is not prohibited by law, contract or otherwise from doing so, Lender will make available to Borrower, without representation of any kind, copies of Environmental Inspections prepared by third parties and delivered to Lender. Lender reserves the right, and Borrower expressly authorizes Lender, to make available to any party, including any prospective bidder at a foreclosure sale of the Mortgaged Property, the results of any Environmental Inspections made by or for Lender with respect to the Mortgaged Property. Borrower consents to Lender notifying any party (either as part of a notice of sale or otherwise) of the results of any Environmental Inspections made by or for Lender. Borrower acknowledges that Lender cannot control or otherwise ensure the truthfulness or accuracy of the results of any Environmental Inspections and that the release of such results to prospective bidders at a foreclosure sale of the Mortgaged Property may have a material and adverse effect upon the amount that a party may bid at such sale. Borrower agrees that Lender will have no liability whatsoever as a result of delivering the results of any Environmental Inspections made by or for Lender to any third party, and Borrower releases and forever discharges Lender from any and all claims, damages or causes of action arising out of, connected with or incidental to the results of the delivery of any Environmental Inspections made by or for Lender.

(f) Remedial Work. If any investigation, site monitoring, containment, clean-up, Restoration or other remedial work (“Remedial Work”) is necessary to comply with any Hazardous Materials Law or order of any Governmental Authority that has or acquires jurisdiction over the Mortgaged Property or the use, operation or improvement of the Mortgaged Property, or is otherwise required by Lender as a consequence of any Prohibited Activity or Condition or to prevent the occurrence of a Prohibited Activity or Condition, Borrower will, by the earlier of (i) the applicable deadline required by Hazardous Materials Law or (ii) 30 days after Notice from Lender demanding such action, begin performing the Remedial Work, and thereafter diligently prosecute it to completion, and must in any event complete the work by the time required by applicable Hazardous Materials Law. If Borrower fails to begin on a timely basis or diligently prosecute any required Remedial Work, Lender may, at its option, cause the Remedial Work to be completed, in which case Borrower will reimburse Lender on demand for the cost of doing so. Any reimbursement due from Borrower to Lender will become part of the Indebtedness as provided in Section 9.02.

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6.13 Single Purpose Entity Requirements.

(a) Single Purpose Entity Requirements. Until the Indebtedness is paid in full, each Borrower and any SPE Equity Owner will remain a “Single Purpose Entity,” which means a corporation, limited partnership, or limited liability company which, at all times since its formation and thereafter will satisfy each of the following conditions:

(i) It will not engage in any business or activity, other than the ownership, operation and maintenance of the Mortgaged Property and activities incidental thereto.

(ii) It will not acquire, own, hold, lease, operate, manage, maintain, develop or improve any assets other than the Mortgaged Property and such Personalty as may be necessary for the operation of the Mortgaged Property and will conduct and operate its business as presently conducted and operated.

(iii) It will preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its formation or organization and will do all things necessary to observe organizational formalities.

(iv) It will not merge or consolidate with any other Person.

(v) It will not take any action to dissolve, wind-up, terminate or liquidate in whole or in part; to sell, transfer or otherwise dispose of all or substantially all of its assets; to change its legal structure; transfer or permit the direct or indirect transfer of any partnership, membership or other equity interests, as applicable, other than Transfers permitted under this Loan Agreement; issue additional partnership, membership or other equity interests, as applicable, or seek to accomplish any of the foregoing.

(vi) It will not, without the prior unanimous written consent of all of Borrower’s partners, members, or shareholders, as applicable, and, if applicable, the prior unanimous written consent of 100% of the members of the board of directors or of the board of Managers of Borrower or the SPE Equity Owner, take any of the following actions:

(A) File any insolvency, or reorganization case or proceeding, to institute proceedings to have Borrower or any SPE Equity Owner be adjudicated bankrupt or insolvent.

(B) Institute proceedings under any applicable insolvency law.

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(C) Seek any relief under any law relating to relief from debts or the protection of debtors.

(D) Consent to the filing or institution of bankruptcy or insolvency proceedings against Borrower or any SPE Equity Owner.

(E) File a petition seeking, or consent to, reorganization or relief with respect to Borrower or any SPE Equity Owner under any applicable federal or state law relating to bankruptcy or insolvency.

(F) Seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official for Borrower or a substantial part of its property or for any SPE Equity Owner or a substantial part of its property.

(G) Make any assignment for the benefit of creditors of Borrower or any SPE Equity Owner.

(H) Admit in writing Borrower’s or any SPE Equity Owner’s inability to pay its debts generally as they become due.

(I) Take action in furtherance of any of the foregoing.

(vii) It will not amend or restate its organizational documents if such change would cause the provisions set forth in those organizational documents not to comply with the requirements set forth in this Section 6.13.

(viii) It will not own any subsidiary or make any investment in, any other Person.

(ix) It will not commingle its assets with the assets of any other Person and will hold all of its assets in its own name.

(x) It will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than, (A) the Indebtedness (and any further indebtedness as described in Section 12.11 with regard to Supplemental Instruments) and (B) customary unsecured trade payables incurred in the ordinary course of owning and operating the Mortgaged Property provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of 2% of the original principal amount of the Indebtedness and are paid within 60 days of the date incurred.

(xi) It will maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person and will not list its assets as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of

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its Affiliate provided that (A) appropriate notation will be made on such consolidated financial statements to indicate the separateness of Borrower from such Affiliate and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (B) such assets will also be listed on Borrower’s own separate balance sheet.

(xii) Except for capital contributions or capital distributions permitted under the terms and conditions of its organizational documents, it will only enter into any contract or agreement with any general partner, member, shareholder, principal or Affiliate of Borrower or any Guarantor, or any general partner, member, principal or Affiliate thereof, upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties.

(xiii) It will not maintain its assets in such a manner that will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person.

(xiv) It will not assume or guaranty (excluding any guaranty that has been executed and delivered in connection with the Note) the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person.

(xv) It will not make or permit to remain outstanding any loans or advances to any other Person except for those investments permitted under the Loan Documents and will not buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities).

(xvi) It will file its own tax returns separate from those of any other Person, except to the extent that Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and will pay any taxes required to be paid under applicable law.

(xvii) It will hold itself out to the public as a legal entity separate and distinct from any other Person and conduct its business solely in its own name, will correct any known misunderstanding regarding its separate identity and will not identify itself or any of its Affiliates as a division or department of any other Person.

(xviii) It will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and will pay its debts and liabilities from its own assets as the same become due.

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(xix) It will allocate fairly and reasonably shared expenses with Affiliates (including shared office space) and use separate stationery, invoices and checks bearing its own name.

(xx) It will pay (or cause the Property Manager or any operator of the Facility to pay on behalf of Borrower from Borrower’s funds) its own liabilities (including salaries of its own employees) from its own funds.

(xxi) It will not acquire obligations or securities of its partners, members, shareholders, or Affiliates, as applicable.

(xxii) Except as contemplated or permitted by the property management agreement with respect to the Property Manager or any operating lease or operating agreement with respect to any operator of the Facility, it will not permit any Affiliate or constituent party independent access to its bank accounts.

(xxiii) It will maintain a sufficient number of employees (if any) in light of its contemplated business operations and pay the salaries of its own employees, if any, only from its own funds.

(xxiv) If such entity is a single member limited liability company, such entity will satisfy each of the following conditions:

(A) Be formed and organized under Delaware law.

(B) Have either one springing member that is a corporation whose stock is 100% owned by the sole member of Borrower and that satisfies the requirements for a corporate springing member set forth below in this Section or two springing members who are natural persons.

(C) Otherwise comply with all Rating Agencies criteria for single member limited liability companies (including the delivery of Delaware single member limited liability company opinions acceptable in all respects to Lender and to the Rating Agencies). If the springing member is a corporation, such springing member will at all times comply, and will cause Borrower or SPE Equity Owner (as applicable) to comply, with each of the representations, warranties and covenants contained in Section 6.13 as if such representation, warranty or covenant were made directly by such corporation. If there is more than one springing member, only one springing member will be the sole member of Borrower or SPE Equity Owner (as applicable) at any one time, and the second springing member will become the sole member only upon the first springing member ceasing to be a member.

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(D) At all times Borrower or SPE Equity Owner (as applicable) will have one and only one member.

(xxv) If such entity is a single member limited liability company that is board-managed, such entity will have a board of Managers separate from that of Guarantor and any other Person and will cause its board of Managers to keep minutes of board meetings and actions and observe all other Delaware limited liability company required formalities.

(xxvi) If an SPE Equity Owner is required pursuant to this Loan Agreement, if Borrower is (A) a limited liability company with more than one member, then Borrower has and will have at least one member that is an SPE Equity Owner that has satisfied and will satisfy the requirements of Section 6.13(b) and such member is its managing member, or (B) a limited partnership, then all of its general partners are SPE Equity Owners that have satisfied and will satisfy the requirements set forth in Section 6.13(b).

(b) SPE Equity Owner Requirements. The SPE Equity Owner, if applicable, will at all times since its formation and thereafter comply in its own right (subject to the modifications set forth below), and will cause Borrower to comply, with each of the requirements of a Single Purpose Entity. Upon the withdrawal or the disassociation of an SPE Equity Owner from Borrower, Borrower will immediately appoint a new SPE Equity Owner, whose organizational documents are substantially similar to those of the withdrawn or disassociated SPE Equity Owner, and deliver a new nonconsolidation opinion to the Rating Agencies and Lender in form and substance satisfactory to Lender and to the Rating Agencies (unless the opinion is waived by the Rating Agencies), with regard to nonconsolidation by a bankruptcy court of the assets of each of Borrower and SPE Equity Owner with those of its Affiliates.

(i) With respect to Section 6.13(a)(i), the SPE Equity Owner will not engage in any business or activity other than being the sole managing member or general partner, as the case may be, of Borrower and owning at least 0.5% equity interest in Borrower.

(ii) With respect to Section 6.13(a)(ii), the SPE Equity Owner has not and will not acquire or own any assets other than its equity interest in Borrower and personal property related thereto.

(iii) With respect to Section 6.13(a)(viii), the SPE Equity Owner will not own any subsidiary or make any investment in any other Person, except for Borrower.

(iv) With respect to Section 6.13(a)(x), the SPE Equity Owner has not and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) customary unsecured

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payables incurred in the ordinary course of owning Borrower provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of $10,000 and are paid within 60 days of the date incurred and (B) in its capacity as general partner of Borrower (if applicable).

(v) With respect to Section 6.13(a)(xiv), the SPE Equity Owner will not assume or guaranty the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person, except for in its capacity as general partner of Borrower (if applicable).

(c) Effect of Transfer on Special Purpose Entity Requirements. Notwithstanding anything to the contrary in this Loan Agreement, no Transfer will be permitted under Article VII unless the provisions of this Section 6.13 are satisfied at all times.

6.14 Repairs and Capital Replacements.

(a) Completion of Repairs. Borrower will commence any Repairs as soon as practicable after the date of this Loan Agreement and will diligently proceed with and complete such Repairs on or before the Completion Date. All Repairs and Capital Replacements will be completed in a good and workmanlike manner, with suitable materials, and in accordance with good building practices and all applicable laws, ordinances, rules, regulations, building setback lines and restrictions applicable to the Mortgaged Property. Borrower agrees to cause the replacement of any material or work that is defective, unworkmanlike or that does not comply with the requirements of this Loan Agreement, as determined by Lender.

(b) Purchases. Without the prior written consent of Lender, no materials, machinery, equipment, fixtures or any other part of the Repairs or Capital Replacements will be purchased or installed under conditional sale contracts or lease agreements, or any other arrangement wherein title to such Repairs or Capital Replacements is retained or subjected to a purchase money security interest, or the right is reserved or accrues to anyone to remove or repossess any such Repairs or Capital Replacements, or to consider them as personal property.

(c) Lien Protection. Borrower will promptly pay or cause to be paid, when due, all costs, charges and expenses incurred in connection with the construction and completion of the Repairs or Capital Replacements, and will keep the Mortgaged Property free and clear of any and all Liens other than the Lien of the Security Instrument and any other junior Lien to which Lender has consented.

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(d) Adverse Claims. Borrower will promptly advise Lender in writing of any litigation, Liens or claims affecting the Mortgaged Property and of all complaints and charges made by any Governmental Authority that may delay or adversely affect the Repairs or Capital Replacements.

6.15 Residential Leases Affecting the Mortgaged Property.

(a) Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect. All Leases for residential dwelling units will be on forms acceptable to Lender, will be for initial terms of at least 6 months and not more than 2 years, and will not include options to purchase.

(b) If Borrower is a cooperative housing corporation or association, notwithstanding anything to the contrary contained in this Loan Agreement, so long as Borrower remains a cooperative housing corporation or association and is not in breach of any covenant of this Loan Agreement, Lender consents to each of the following:

(i) The execution of Leases for terms in excess of 2 years to a tenant shareholder of Borrower, so long as such Leases, including proprietary Leases, are and will remain subordinate to the Lien of the Security Instrument.

(ii) The surrender or termination of such Leases where the surrendered or terminated Lease is immediately replaced or where Borrower makes its best efforts to secure such immediate replacement by a newly-executed Lease of the same apartment to a tenant shareholder of Borrower. However, no consent is given by Lender to any execution, surrender, termination or assignment of a Lease under terms that would waive or reduce the obligation of the resulting tenant shareholder under such Lease to pay cooperative assessments in full when due or the obligation of the former tenant shareholder to pay any unpaid portion of such assessments.

6.16 Litigation; Government Proceedings. Borrower will give prompt Notice to Lender of any litigation or governmental proceedings pending or, to the best of Borrower’s knowledge, threatened in writing against Borrower which might have a Material Adverse Effect.

6.17 Further Assurances and Estoppel Certificates; Lender’s Expenses. Within 10 days after a request from Lender in Lender’s Discretion, Borrower will take each of the following actions:

(a) Deliver to Lender a written statement, signed and acknowledged by Borrower, certifying to Lender or any Person designated by Lender, as of the date of such statement, (i) that the Loan Documents are unmodified and in full force and effect (or, if there have been modifications, that the Loan Documents are in full force and effect as modified and setting forth such modifications), (ii) the unpaid

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principal balance of the Note, (iii) the date to which interest under the Note has been paid, (iv) that Borrower is not in default in paying the Indebtedness or in performing or observing any of the covenants or agreements contained in this Loan Agreement or any of the other Loan Documents (or, if Borrower is in default, describing such default in reasonable detail), (v) whether there are any then-existing setoffs or defenses known to Borrower against the enforcement of any right or remedy of Lender under the Loan Documents, and (vi) any additional facts requested by Lender.

(b) Execute, acknowledge and/or deliver, at its sole cost and expense, all further acts, deeds, conveyances, assignments, estoppel certificates, financing statements or amendments, transfers and assurances as Lender may require from time to time in order to better assure, grant and convey to Lender the rights intended to be granted, now or in the future, to Lender under this Loan Agreement and the Loan Documents or in connection with Lender’s consent rights under Article VII.

Borrower acknowledges and agrees that, in connection with each request by Borrower under this Loan Agreement or any Loan Document, Borrower will pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees charged by the Rating Agencies, regardless of whether the matter is approved, denied or withdrawn. Any amounts payable by Borrower under this Loan Agreement will be deemed a part of the Indebtedness, will be secured by the Security Instrument and will bear interest at the Default Rate if not fully paid within 10 days of written demand for payment.

6.18 Cap Collateral. Reserved.

6.19 Ground Lease. Reserved.

6.20 ERISA Requirements.

(a) Borrower will not engage in any transaction which would cause an obligation, or action taken or to be taken under this Loan Agreement (or the exercise by Lender of any of its rights under the Note, this Loan Agreement or any of the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA.

(b) Borrower will deliver to Lender such certifications or other evidence from time to time throughout the term of this Loan Agreement, as requested by Lender in Lender’s Discretion, that (i) Borrower is not an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA, (ii) Borrower is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans, and (iii) one or more of the following circumstances is true:

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(A) Equity interests in Borrower are publicly offered securities within the meaning of 29 C.F.R. Section 2510.3-101(b)(2), as amended from time to time or any successor provision.

(B) Less than 25% of each outstanding class of equity interests in Borrower are held by “benefit plan investors” within the meaning of Section 3(42) of ERISA, as amended from time to time or any successor provision.

(C) Borrower qualifies as an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R. Section 2510.3-101(c), as amended from time to time or any successor provision, or within the meaning of 29 C.F.R. Section 2510.3-101(e) as an investment company registered under the Investment Company Act of 1940.

6.21 Operation of the Facility.

(a) Without limiting the generality of Section 6.03, Borrower will, or will cause any operator of the Facility to, operate the Facility for its Intended Use and will, or will cause any operator of the Facility to, provide, to Lender’s reasonable satisfaction, all of the facilities, services, staff, equipment and supplies required or normally associated with a typical high quality property devoted to the Intended Use.

(b) Borrower will, or will cause any operator of the Facility to, operate the Facility in a manner such that all applicable Licenses now or hereafter in effect will remain in full force and effect. Borrower will not, and will not allow any operator of the Facility to, (i) transfer any License (or any rights thereunder) to any location other than the Facility, (ii) pledge any License (or any rights thereunder) as collateral security for any other loan or indebtedness, (iii) terminate any License or permit any License not to be renewed or reissued as applicable, (iv) rescind, withdraw, revoke, amend, supplement, modify or otherwise alter the nature, tenor or scope of any License, or (v) permit any License to become the subject of any Downgrade, revocation, suspension, restriction, condition or probation (including without limitation any restriction on new admissions or residents).

(c) Borrower will, or as applicable, Borrower will cause any operator of the Facility to, maintain and implement all compliance and procedures policies as may be required by any applicable Healthcare Laws or Governmental Authority. Upon request by Lender, Borrower will provide Lender with copies of Borrower’s, and if applicable, each operator of the Facility’s, compliance manuals which evidence such compliance.

6.22 Facility Reporting.

(a) Borrower will, or will cause any operator of the Facility to, furnish to Lender, within 10 days after receipt by Borrower or any operator of the Facility, any and

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all written notices from any Governmental Authority that (i) any License is being Downgraded, revoked, terminated, suspended, restricted or conditioned or may not be renewed or reissued or that action is pending or being considered to Downgrade, revoke, terminate, suspend, restrict or condition (or not renew or reissue) any such License, (ii) any violation, fine, finding, investigation or corrective action concerning any License is pending or being considered, rendered or adopted, or (iii) any Healthcare Law or any health or safety code or building code violation or other deficiency at the Mortgaged Property has been identified, but in each case only if the subject matter of such written notice (A) could materially impact the operation or value of the Facility, or (B) requires additional formal or informal action by Borrower or operator of the Facility that is more than development or implementation of a routine plan of correction, including, without limitation, participation in hearings concerning continued licensing or Medicare or Medicaid participation, entering into consent orders affecting licensing affecting the Facility, or engaging in oversight management.

(b) Borrower will, or will cause any operator of the Facility to, furnish to Lender, within 10 days after receipt by Borrower or any operator of the Facility, a copy of any survey, report or statement of deficiencies by any Governmental Authority, but only if the subject matter of such survey, report or statement of deficiencies (i) could materially impact the operation or value of the Facility, or (ii) requires additional formal or informal action by Borrower or operator of the Facility that is more than development or implementation of a routine plan of correction, including, without limitation, participation in hearings concerning continued licensing or Medicare or Medicaid participation, entering into consent orders affecting licensing affecting the Facility, or engaging in oversight management. Within the time period specified by the Governmental Authority for furnishing a plan of correction, the Borrower, or if applicable, an operator of the Facility, will do so and will furnish or will cause to be furnished to Lender a copy of the plan of correction concurrently therewith. Borrower will correct or will cause to be corrected in a timely manner (and in all events by the date required by the Governmental Authority) any deficiency if the failure to do so could cause any License to be Downgraded, revoked, suspended, restricted, conditioned or not renewed or reissued.

(c) Upon Lender’s request and subject to Privacy Laws, Borrower will, or will cause the operator of the Facility to, furnish to Lender true and correct rent rolls and copies of all Leases.

(d) Borrower will provide Lender with a copy of any License issued or renewed in the future by a Governmental Authority within 30 days after its issuance or renewal. To the extent that any such License is assignable, Borrower will assign it to Lender as additional security for the Indebtedness, using a form of assignment acceptable to Lender in its discretion. If any License is issued to an operator of the Facility, to the extent such License is assignable, Borrower will cause such operator or management agent to assign the License to Lender as additional security for the Indebtedness, using a form of assignment acceptable to Lender in its discretion.

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(e) Subject to Privacy Laws, Borrower will furnish, and will cause any operator of the Facility to furnish, to Lender at Borrower’s expense all evidence, which Lender may from time to time reasonably request as to the continuing accuracy and validity of all representations and warranties made by Borrower in the Loan Documents and the continuing compliance with and satisfaction of all covenants and conditions contained therein.

6.23 Covenants Regarding Material Contracts.

(a) Borrower will not, and will not permit any operator of the Facility to, enter into any Material Contract, unless that Material Contract provides that it is terminable upon not more than 30 days notice by Borrower, or if Borrower is not a party to the Material Contract, the operator of the Facility, and their respective successors and assigns, without the necessity of establishing cause and without payment of a penalty or termination fee or extra charge.

(b) Borrower will (or if Borrower is not a party thereto, will cause an operator of the Facility to) fully perform all of its obligations under each Contract, and Borrower will not (and Borrower will not permit an operator of the Facility to) enter into, terminate or amend, modify, assign or otherwise encumber its interest in any Material Contract without the prior written approval of Lender. If Borrower or an operator of the Facility enters into any Material Contract in the future (with Lender’s consent thereto), Borrower will (or will cause the operator to), simultaneously with entering into the Material Contract, if requested by Lender (i) assign its rights under and interest in the Material Contract to Lender as additional security for the Indebtedness and (ii) obtain and provide to Lender a consent to that assignment by the other party(ies) to the Material Contract. Both the assignment and the consent shall be in a form acceptable to Lender in its discretion.

6.24 Pledge of Receivables. Borrower will not, and will not allow any operator of the Facility to, pledge any receivables arising from the operation of the Facility (or any Leases or Contracts under which such receivables arise) as collateral security for any other loan or indebtedness.

6.25 Property Manager and Operator of the Facility. Borrower will not surrender, terminate, cancel, modify, renew or extend its property management agreement or any operating lease; permit the change of the Property Manager or any operator of the Facility; enter into any other agreement relating to the management or operation of the Facility with Property Manager, the operator of the Facility, or any other Person; or consent to the assignment by the Property Manager or operator of the Facility of its interest under such property management agreement, operating lease or similar agreement, as applicable, in each case

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without the prior written approval of Lender, and in each such instance the approval by Lender of the property management agreement and/or operating lease (or similar) agreement, as applicable; provided, however, with respect to a new Property Manager or operator of the Facility, such consent may be conditioned upon Borrower delivering a Rating Confirmation as to such new Property Manager or operator of the Facility. If at any time Lender consents to the appointment of a new Property Manager or operator of the Facility, such new Property Manager or operator of the Facility and Borrower (or if Borrower is not a party thereto, an operator of the Facility) will, as a condition of Lender’s consent, execute an Assignment of Management Agreement or assignment of operating agreement, as the case may be, in a form acceptable to Lender in its discretion. If any such replacement Property Manager or operator of the Facility is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered at the origination of the Loan, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to the Rating Agencies (unless waived by the Rating Agencies) with regard to nonconsolidation. Without limiting the foregoing, Borrower will not, and will not permit any operator of the Facility to, enter into any New Non-Residential Lease, enter into any Modified Non-Residential Lease or terminate any Non-Residential Lease, or enter into, terminate, extend or amend any Contract to lease, manage or operate the Facility without in each instance Lender providing its prior written consent thereto, which may be conditioned upon Lender receiving an assignment thereof in a form acceptable to Lender.

6.26 Residential Leases and Agreements.

(a) The form of residential Lease and/or residential care agreement or similar resident agreement approved by Lender prior to the date of this Loan Agreement with respect to the Facility will not be revised in any material respect (except as may be required by applicable Healthcare Laws) without Lender’s prior written consent thereto. All Leases and agreements with residents at the Facility will be on forms approved by Lender.

(b) Borrower or any operator of the Facility will maintain all deposits by all residents of the Facility in accordance with all applicable laws and regulations pertaining thereto, and in accordance with the terms of each such resident’s Lease or resident care agreement, and otherwise in accordance with the other provisions of this Loan Agreement and the other Loan Documents.

6.27 Performance Under Leases. Borrower or an operator of the Facility, as applicable, will timely perform all of the obligations of such party under all Leases of the Facility or any Mortgaged Property.

6.28 Governmental Payer Programs. If Borrower or any operator of the Facility participates in Medicare, Medicaid, TRICARE or any similar governmental payor program with respect to the Facility, then (i) Borrower will not and will not permit any breach or violation of any Healthcare Laws pertaining thereto, including without limitation, any Healthcare Laws pertaining to billing for goods

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or services by Borrower or any operator of the Facility and (ii) Borrower will not and will not permit any circumstance to occur which would (A) cause Borrower, an operator of the Facility or the Facility to be disqualified for participation in any such program or (B) which would cause the non renewal or termination of participation in any such program by Borrower, an operator of the Facility or the Facility, as applicable. Neither Borrower, nor any operator of the Facility will, other than in the normal course of business, change the terms of any governmental payor program or its normal billing, payment or reimbursement policies and procedures with respect thereto, including without limitation, the amount and timing of finance charges, fees and write-offs.

ARTICLE VII TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.

Upon the occurrence of a Transfer prohibited by or requiring Lender’s approval (if applicable) under this Article VII, Lender may, in Lender’s Discretion, by Notice to Borrower and the proposed transferee(s), modify or render void, any or all of the negotiated modifications to the Loan Documents (and/or deferral of deposits to Reserve Funds) as a condition to Lender’s consent to the proposed Transfer.

7.01 Permitted Transfers. The occurrence of any of the following Transfers will not constitute an Event of Default under this Loan Agreement, notwithstanding any provision of Section 7.02 to the contrary:

(a) A Transfer to which Lender has consented in Lender’s sole discretion (without limiting Lender’s sole discretion, Lender will not consent to a Transfer while an Event of Default exists) so long as Lender has received (i) a $5,000 review fee as a condition of Lender’s considering any proposed Transfer, (ii) a transfer fee in an amount equal to 1% of the unpaid principal balance of the Indebtedness immediately before the Transfer as a condition of Lender’s consent to the proposed Transfer, (iii) reimbursement for all of Lender’s out-of-pocket costs (including reasonable Attorney’s Fees and Costs) incurred in reviewing the Transfer request and any fees charged by the Rating Agencies, (iv) if any certificates evidencing the Securitization remain outstanding, a Rating Confirmation, (v) evidence satisfactory to Lender that the transferee and any SPE Equity Owner of such transferee meet the requirements of Section 6.13, and (vi) such legal opinions from the transferee’s counsel as Lender deems necessary, including an opinion that the transferee and any SPE Equity Owner is in compliance with Section 6.13, a nonconsolidation opinion (if a nonconsolidation opinion was delivered at origination of the Loan and if required by Lender), an opinion that the assignment and assumption of the Loan Documents has been duly authorized, executed, and delivered and that the assignment documents and the Loan Documents are enforceable as the obligation of the transferee.

(b) A Transfer that is not a prohibited Transfer pursuant to Section 7.02.

(c) A Transfer that is conditionally permitted pursuant to Section 7.03 upon the satisfaction of all applicable conditions.

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(d) The grant of a leasehold interest in an individual dwelling unit for a term of 2 years or less (or longer if approved by Lender in writing) not containing an option to purchase.

(e) A Transfer of obsolete or worn out Personalty or Fixtures that are contemporaneously replaced by items of equal or better function and quality, which are free of Liens, encumbrances and security interests other than those created by the Loan Documents or consented to by Lender.

(f) The creation of a mechanic’s, materialman’s, or judgment Lien against the Mortgaged Property, which is released of record or otherwise remedied to Lender’s satisfaction within 60 days of the date of creation; provided, however, if Borrower is diligently prosecuting such release or other remedy and advises Lender that such release or remedy cannot be consummated within such 60-day period, Borrower will have an additional period of time (not exceeding 120 days from the date of creation or such earlier time as may be required by applicable law in which the lienor must act to enforce the Lien) within which to obtain such release of record or consummate such other remedy.

(g) If Borrower is a housing cooperative corporation or association, the Transfer of the shares in the housing cooperative or the assignment of the occupancy agreements or Leases relating thereto to tenant shareholders of the housing cooperative or association.

(h) A Supplemental Instrument that complies with Section 12.11 or Defeasance that complies with Section 12.12.

7.02 Prohibited Transfers. The occurrence of any of the following Transfers will constitute an Event of Default under this Loan Agreement:

(a) A Transfer of all or any part of the Mortgaged Property or any interest in the Mortgaged Property.

(b) A Transfer or series of Transfers of any legal or equitable interest of any Guarantor which owns a direct or indirect interest in Borrower that result(s) in such Guarantor no longer owning any direct or indirect interest in Borrower.

(c) A Transfer or series of Transfers of any legal or equitable interest since the Closing Date that result(s) in a change of more than 50% of the ownership interests in Borrower or any Designated Entity for Transfers.

(d) A Transfer of any general partnership interest in a partnership or any manager interest (whether a member manager or nonmember manager) in a limited liability company that is a Borrower or a Designated Entity for Transfers.

(e) If Borrower or any Designated Entity for Transfers is a corporation other than a real estate investment trust whose outstanding voting stock is held by 100 or more shareholders, one or more Transfers by a single transferor within a 12-month period affecting an aggregate of 10% or more of that stock.

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(f) The grant, creation or existence of any Lien, whether voluntary, involuntary or by operation of law, and whether or not such Lien has priority over the Lien of the Security Instrument, on either of the following:

(i) The Mortgaged Property (other than the Lien of the Security Instrument or, if this Loan Agreement is entered into in connection with a Supplemental Loan, the Lien of the Senior Instrument, or any other Lien to which Lender has consented).

(ii) The ownership interests in Borrower or any Designated Entity for Transfers.

7.03 Conditionally Permitted Transfers. The occurrence of any of the following Transfers will not constitute a prohibited Transfer under Section 7.02 provided that Borrower has complied with all applicable specified conditions in this Section.

(a) Transfer by Devise, Descent or Operation of Law. Upon the death of a natural person, a Transfer which occurs by devise, descent, or by operation of law to one or more Immediate Family Members of such natural person or to a trust or family conservatorship established for the benefit of such Immediate Family Members (each a “Beneficiary”), provided that each of the following conditions is satisfied:

(i) The Property Manager or operator of the Facility, as applicable, continues to be responsible for the management of the Mortgaged Property, and such Transfer will not result in a change in the day-to-day operations of the Mortgaged Property.

(ii) Lender receives confirmation acceptable to Lender, in Lender’s Discretion, that Borrower continues to satisfy the requirements of Section 6.13.

(iii) Each Guarantor executes such documents and agreements as Lender requires in Lender’s Discretion to evidence and effect the ratification of each Guaranty, or in the event of the death of any Guarantor, Borrower causes one of the following to occur:

(A) One or more Persons acceptable to Lender, in Lender’s Discretion, execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

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(B) The estate of the deceased Guarantor immediately ratifies the Guaranty in writing, and within 6 months after the date of the death of the deceased Guarantor one or more Persons, acceptable to Lender in Lender’s Discretion, execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

(iv) Borrower gives Lender Notice of such Transfer together with copies of all documents effecting such Transfer not more than 30 calendar days after the date of such Transfer, and contemporaneously with the Notice, takes each of the following additional actions:

(A) Borrower reaffirms the representations and warranties under Article V.

(B) Borrower satisfies Lender, in Lender’s Discretion, that the Beneficiary’s organization, credit and experience in the management of similar properties are appropriate to the overall structure and documentation of the existing financing.

(v) Borrower or Beneficiary causes to be delivered to Lender such legal opinions as Lender deems necessary, in Lender’s Discretion, including an opinion that the Beneficiary and any SPE Equity Owner of Beneficiary is in compliance with Section 6.13 (if applicable), a nonconsolidation opinion (if a nonconsolidation opinion was delivered on the Closing Date and if required by Lender), an opinion that the ratification of the Loan Documents and Guaranty (if applicable) have been duly authorized, executed, and delivered and that the ratification documents and Guaranty (if applicable) are enforceable as the obligations of Borrower, Beneficiary or Guarantor, as applicable.

(vi) Borrower (A) pays the Transfer Review Fee to Lender, and (B) pays or reimburses Lender, upon demand, for all costs and expenses including all Attorneys’ Fees and Costs, incurred by Lender in connection with such Transfer; provided, however, that Lender will not be entitled to collect a Transfer Fee.

(b) Easement, Restrictive Covenant or Other Encumbrance. The grant of an easement, restrictive covenant or other encumbrance, provided that each of the following conditions is satisfied:

(i) Borrower provides Lender with at least 30 days prior Notice of the proposed grant and pays the Transfer Review Fee to Lender.

(ii) Prior to the grant, Lender determines, in Lender’s Discretion, that the easement, restrictive covenant or other encumbrance will not materially affect the operation or value of the Mortgaged Property or Lender’s interest in the Mortgaged Property.

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(iii) Borrower pays or reimburses Lender, upon demand, for all costs and expenses, including all Attorneys’ Fees and Costs, incurred by Lender in connection with reviewing Borrower’s request for Lender’s review of such grant of easement, restrictive covenant or other encumbrance; provided, however, that Lender will not be entitled to collect a Transfer Fee.

(iv) If the Note is held by a REMIC trust, if required by Lender, Borrower provides an opinion of counsel for Borrower, in form and substance satisfactory to Lender in its sole and absolute discretion, confirming each of the following:

(A) The grant of such easement has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time).

(B) The qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired as a result of such grant.

(C) The REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of such grant.

(c) Publicly-Held Fund or Real Estate Investment Trust. If a Designated Entity for Transfers is a publicly-held fund or real estate investment trust, the public issuance of common stock, convertible debt, equity or other similar securities (“Public Fund/REIT Securities”) and the subsequent Transfer of such Public Fund/REIT Securities; provided, however, that no Public Fund/REIT Securities holder may acquire an ownership percentage of 10% or more unless otherwise approved by Lender.

(d) Reserved.

7.04 Preapproved Intrafamily Transfers. Not applicable.

7.05 Lender’s Consent to Prohibited Transfers. Not applicable.

ARTICLE VIII   SUBROGATION.

If, and to the extent that, the proceeds of the Loan, or subsequent advances under Section 9.02, are used to pay, satisfy or discharge a Prior Lien, such Loan proceeds or advances will be deemed to have been advanced by Lender at Borrower’s request, and Lender will automatically, and without further action on its part, be subrogated to the rights, including Lien priority, of the owner or holder of the obligation secured by the Prior Lien, whether or not the Prior Lien is released.

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ARTICLE IX EVENTS OF DEFAULT AND REMEDIES.

9.01 Events of Default. The occurrence of any one or more of the following will constitute an Event of Default under this Loan Agreement:

(a) Borrower fails to pay or deposit when due any amount required by the Note, this Loan Agreement or any other Loan Document.

(b) Borrower fails to maintain the Insurance coverage required by Section 6.10.

(c) Borrower or any SPE Equity Owner fails to comply with the provisions of Section 6.13 or if any of the assumptions contained in any nonconsolidation opinions delivered to Lender at any time is or becomes untrue in any material respect.

(d) Borrower or any SPE Equity Owner, any of its officers, directors, trustees, general partners or managers or any Guarantor commits fraud or a material misrepresentation or material omission in connection with (i) the application for or creation of the Indebtedness, (ii) any financial statement, Rent Schedule, or other report or information provided to Lender during the term of the Indebtedness, or (iii) any request for Lender’s consent to any proposed action, including a request for disbursement of funds under this Loan Agreement.

(e) Borrower fails to comply with the Condemnation provisions of Section 6.11.

(f) A Transfer occurs that violates the provisions of Article VII, whether or not any actual impairment of Lender’s security results from such Transfer.

(g) A forfeiture action or proceeding, whether civil or criminal, is commenced which could result in a forfeiture of the Mortgaged Property or otherwise materially impair the Lien created by the Security Instrument or Lender’s interest in the Mortgaged Property.

(h) Borrower fails to perform any of its obligations under this Loan Agreement (other than those specified in Sections 9.01(a) through (g)), as and when required, which failure continues for a period of 30 days after Notice of such failure by Lender to Borrower. However, if Borrower’s failure to perform its obligations as described in this Section 9.01(h) is of the nature that it cannot be cured within the 30 day cure period after such Notice from Lender but reasonably could be cured within 90 days, then Borrower will have additional time as determined by Lender in Lender’s Discretion, not to exceed an additional 60 days, in which to cure such default, provided that Borrower has diligently commenced to cure such default during the initial 30 day cure period and diligently pursues the cure of such default. However, no such Notice or cure periods will apply in the case of any such failure which could, in Lender’s judgment, absent immediate exercise by Lender of a right or remedy under this Loan Agreement, result in harm to Lender, danger to tenants or third parties, or impairment of the Note, the Security Instrument or this Loan Agreement or any other security given under any other Loan Document.

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(i) Borrower fails to perform any of its obligations as and when required under any Loan Document other than this Loan Agreement which failure continues beyond the applicable cure period, if any, specified in that Loan Document.

(j) The holder of any other debt instrument secured by a mortgage, deed of trust or deed to secure debt on the Mortgaged Property exercises any right to declare all amounts due under that debt instrument immediately due and payable.

(k) Any of the following occurs:

(i) Borrower or any SPE Equity Owner commences any case, Proceeding or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors (A) seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debt, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets.

(ii) Any party other than Lender commences any case, Proceeding, or other action of a nature referred to in Section 9.01(k)(i) against Borrower or any SPE Equity Owner which (A) results in the entry of an order for relief or any such adjudication or appointment, or (B) has not been dismissed, discharged or bonded for a period of 90 days.

(iii) Any case, Proceeding or other action is commenced against Borrower or any SPE Equity Owner seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of any order by a court of competent jurisdiction for any such relief which is not vacated, discharged, or stayed or bonded pending appeal within 90 days from the entry thereof.

(iv) Borrower or any SPE Equity Owner takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in Section 9.01(k)(i), (ii) or (iii).

(l) Borrower or any SPE Equity Owner has made any representation or warranty in Article V or any other Section of this Loan Agreement that is false or misleading in any material respect.

(m) If the Loan is secured by an interest under a Ground Lease, Borrower fails to comply with the provisions of Section 6.19.

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(n) If the Loan is a Supplemental Loan, any Event of Default occurs under (i) the Senior Note, the Senior Instrument or any other Senior Loan Document, or (ii) any loan document related to another loan in connection with the Mortgaged Property, regardless of whether Borrower has obtained Supplemental Lender’s approval of the placement of such Lien on the Mortgaged Property. In addition, if the Loan is a Supplemental Loan, as Borrower under both the Supplemental Instrument and the Senior Instrument, Borrower acknowledges and agrees that if there is an Event of Default under the Supplemental Note, the Supplemental Instrument or any other Supplemental Loan Document, such Event of Default will be an Event of Default under the terms of the Senior Instrument and will entitle Senior Lender to invoke any and all remedies permitted to Senior Lender by applicable law, the Senior Note, the Senior Instrument or any of the other Senior Loan Documents.

(o) If the Mortgaged Property is subject to any covenants, conditions and/or restrictions, land use restriction agreements or similar agreements, Borrower fails to perform any of its obligations under any such agreement as and when required, and such failure continues beyond any applicable cure period.

(p) A Guarantor files for bankruptcy protection under the Bankruptcy Code or a Guarantor voluntarily becomes subject to any reorganization, receivership, insolvency proceeding or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights, or any creditor (other than Lender) of a Guarantor commences any involuntary case against a Guarantor pursuant to the Bankruptcy Code or other federal or state law affecting debtor and creditor rights, unless each of the following conditions is satisfied:

(i) Borrower or Guarantor provides Notice of such action to Lender within 30 days after the filing of such action.

(ii) Either (A) the case is dismissed or discharged within 90 days after filing, or (B) within 90 days following the date of such filing or commencement, the affected Guarantor is replaced with one or more other Persons acceptable to Lender, in Lender’s Discretion, each of whom executes and delivers to Lender a replacement Guaranty in form and content acceptable to Lender, together with such legal opinions as Lender deems necessary; provided, however, that if Lender determines, in Lender’s Discretion, that any proposed replacement Guarantor is not acceptable, then the action will constitute a prohibited Transfer governed by Section 7.02.

(iii) If Lender approves a replacement Guarantor, Borrower pays the Transfer Review Fee to Lender.

(q) With respect to a Guarantor, either of the following occurs:

(i) The death of any Guarantor who is a natural person, unless within 30 days following the Guarantor’s death, Borrower causes one of the following to occur:

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(A) One or more Persons acceptable to Lender, in Lender’s Discretion, execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

(B) The estate of the deceased Guarantor immediately ratifies the Guaranty in writing, and within 6 months after the date of the death of the deceased Guarantor one or more Persons, acceptable to Lender in Lender’s Discretion, execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

(ii) The dissolution of any Guarantor who is an entity, unless within 30 days following the dissolution of the Guarantor, Borrower causes one or more Persons acceptable to Lender, in Lender’s Discretion, to execute and deliver to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

(r) Borrower or any operator of the Facility fails, within the time deadlines set by any Governmental Authority, to correct any deficiency, which failure could result in an action by such Governmental Authority with respect to the Facility that could have a Material Adverse Effect.

(s) A default under any of the Material Contracts by Borrower or by any operator of the Facility, which continues beyond the expiration of any applicable cure period.

(t) Any continuing representation or warranty made by Borrower in this Loan Agreement or any other Loan Document becomes false or misleading in any material respect.

(u) The Facility is no longer classified as housing for older persons pursuant to the Fair Housing Amendments Act of 1988.

(v) If a Cap Agreement is required, Borrower fails to provide Lender with a Replacement Cap Agreement prior to the expiration of the then-existing Cap Agreement.

9.02 Protection of Lender’s Security; Security Instrument Secures Future Advances.

(a) If Borrower fails to perform any of its obligations under this Loan Agreement or any other Loan Document, or if any action or proceeding is commenced which purports to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement, including eminent domain, insolvency, code

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enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials Laws, fraudulent conveyance or reorganizations or proceedings involving a bankrupt or decedent, then Lender, in Lender’s Discretion, may make such appearances, file such documents, disburse such sums and take such actions as Lender reasonably deems necessary to perform such obligations of Borrower and to protect Lender’s interest, including (i) payment of Attorneys’ Fees and Costs, (ii) payment of fees and out-of-pocket expenses of accountants, inspectors and consultants, (iii) entry upon the Mortgaged Property to make Repairs or secure the Mortgaged Property, (iv) procurement of the Insurance required by Section 6.10, (v) payment of amounts which Borrower has failed to pay under Section 6.08, (vi) performance of Borrower’s obligations under Section 6.09, and (vii) advances made by Lender to pay, satisfy or discharge any obligation of Borrower for the payment of money that is secured by a Prior Lien.

(b) Any amounts disbursed by Lender under this Section 9.02, or under any other provision of this Loan Agreement that treats such disbursement as being made under this Section 9.02, will be secured by the Security Instrument, will be added to, and become part of, the principal component of the Indebtedness, will be immediately due and payable and will bear interest from the date of disbursement until paid at the Default Rate.

(c) Nothing in this Section 9.02 will require Lender to incur any expense or take any action.

9.03 Remedies.

(a) Upon an Event of Default, Lender may exercise any or all of its rights and remedies provided under the Loan Documents and Borrower will pay all costs associated therewith, including Attorneys’ Fees and Costs.

(b) Each right and remedy provided in this Loan Agreement is distinct from all other rights or remedies under this Loan Agreement or any other Loan Document or afforded by applicable law or equity, and each will be cumulative and may be exercised concurrently, independently or successively, in any order. Lender’s exercise of any particular right or remedy will not in any way prevent Lender from exercising any other right or remedy available to Lender. Lender may exercise any such remedies from time to time and as often as Lender chooses.

(c) Lender will have all remedies available to Lender under Revised Article 9 of the Uniform Commercial Code of the Property Jurisdiction, the Loan Documents and under applicable law.

(d) Lender may also retain (i) all money in the Reserve Funds, including interest, and (ii) any Cap Payment, and in Lender’s sole and absolute discretion, may apply such amounts, without restriction and without any specific order of priority, to the payment of any and all Indebtedness.

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(e) If a claim or adjudication is made that Lender has acted unreasonably or unreasonably delayed acting in any case where, by law or under this Loan Agreement or the other Loan Documents, Lender has an obligation to act reasonably or promptly, then Lender will not be liable for any monetary damages, and Borrower’s sole remedy will be limited to commencing an action seeking injunctive relief or declaratory judgment. Any action or proceeding to determine whether Lender has acted reasonably will be determined by an action seeking declaratory judgment.

9.04 Forbearance.

(a) Lender may (but will not be obligated to) agree with Borrower, from time to time, and without giving Notice to, or obtaining the consent of, or having any effect upon the obligations of, any Guarantor or other third party obligor, to take any of the following actions:

(i) Extend the time for payment of all or any part of the Indebtedness.

(ii) Reduce the payments due under this Loan Agreement, the Note or any other Loan Document.

(iii) Release anyone liable for the payment of any amounts under this Loan Agreement, the Note or any other Loan Document.

(iv) Accept a renewal of the Note.

(v) Modify the terms and time of payment of the Indebtedness.

(vi) Join in any extension or subordination agreement.

(vii) Release any portion of the Mortgaged Property.

(viii) Take or release other or additional security.

(ix) Modify the rate of interest or period of amortization of the Note or change the amount of the monthly installments payable under the Note.

(x) Otherwise modify this Loan Agreement, the Note or any other Loan Document.

(b) Any forbearance by Lender in exercising any right or remedy under the Note, this Loan Agreement or any other Loan Document or otherwise afforded by applicable law, will not be a waiver of or preclude the exercise of any other right or remedy, or the subsequent exercise of any right or remedy. The acceptance by Lender of payment of all or any part of the Indebtedness after the due date of such payment, or in an amount which is less than the required payment, will not be a waiver of Lender’s right to require prompt payment when due of all other payments on account of the Indebtedness or to exercise any remedies for any

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failure to make prompt payment. Enforcement by Lender of any security for the Indebtedness will not constitute an election by Lender of remedies so as to preclude the exercise of any other right available to Lender. Lender’s receipt of any awards or proceeds under Sections 6.10 and 6.11 will not operate to cure or waive any Event of Default.

9.05 Waiver of Marshalling.

Notwithstanding the existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender will have the right to determine the order in which any or all of the Mortgaged Property will be subjected to the remedies provided in this Loan Agreement or any other Loan Document or applicable law. Lender will have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies. Borrower and any party who now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of the Security Instrument waives any and all right to require the marshalling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels or as an entirety in connection with the exercise of any of the remedies permitted by applicable law or provided in this Loan Agreement.

ARTICLE X RELEASE; INDEMNITY.

10.01 Release. Borrower covenants and agrees that, in performing any of its duties under this Loan Agreement, none of Lender, Loan Servicer or any of their respective agents or employees will be liable for any losses, claims, damages, liabilities and expenses that may be incurred by any of them as a result of such performance, except that no party will be released from liability for any losses, claims, damages, liabilities or expenses arising out of the willful misconduct or gross negligence of such party.

10.02 Indemnity.

(a) General Indemnity. Borrower agrees to indemnify, hold harmless and defend Lender, including any custodian, trustee and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties, any prior owner or holder of the Note, the Loan Servicer, any prior Loan Servicer, the officers, directors, shareholders, partners, employees and trustees of each of the foregoing, and the heirs, legal representatives, successors and assigns of each of the foregoing (collectively, “Indemnitees”) against any and all losses, claims, damages, liabilities and expenses including Attorneys’ Fees and Costs, which may be imposed or incurred by any of them directly or indirectly arising out of, or in any way relating to, or as a result of (i) any failure of the Mortgaged Property to comply with the laws, regulations, ordinance, code or decree of any Governmental Authority, including those pertaining to the Americans with Disabilities Act, zoning, occupancy and subdivision of real property, (ii) any obligation of Borrower under any Lease, and (iii) any accident, injury or death to any natural person on the Mortgaged Property or any damage to personal property

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located on the Mortgaged Property, except that no such party will be indemnified from liability for any losses, claims, damages, liabilities or expenses arising out of the willful misconduct or gross negligence of such party.

(b) Environmental Indemnity. Borrower agrees to indemnify, hold harmless and defend Indemnitees from and against all proceedings, claims, damages, penalties and costs (whether initiated or sought by Governmental Authorities or private parties), including Attorneys’ Fees and Costs and remediation costs, whether incurred in connection with any judicial or administrative process or otherwise, arising directly or indirectly from any of the following:

(i) Any breach of any representation or warranty of Borrower in Section 5.05 (Environmental).

(ii) Any failure by Borrower to perform any of its obligations under Section 6.12 (Environmental Hazards).

(iii) The existence or alleged existence of any Prohibited Activity or Condition.

(iv) The presence or alleged presence of Hazardous Materials on or under the Mortgaged Property or in any of the Improvements.

(v) The actual or alleged violation of any Hazardous Materials Law.

(c) Indemnification Regarding ERISA Covenants. BORROWER WILL INDEMNIFY LENDER AND DEFEND AND HOLD LENDER HARMLESS FROM AND AGAINST ALL CIVIL PENALTIES, EXCISE TAXES, OR OTHER LOSS, COST, DAMAGE AND EXPENSE (INCLUDING REASONABLE ATTORNEYS’ FEES AND COSTS INCURRED IN THE INVESTIGATION, DEFENSE AND SETTLEMENT OF CLAIMS AND LOSSES INCURRED IN CORRECTING ANY PROHIBITED TRANSACTION OR IN THE SALE OF A PROHIBITED LOAN, AND IN OBTAINING ANY INDIVIDUAL PROHIBITED TRANSACTION EXEMPTION UNDER ERISA THAT MAY BE REQUIRED, IN LENDER’S SOLE AND ABSOLUTE DISCRETION) THAT LENDER MAY INCUR, DIRECTLY OR INDIRECTLY, AS A RESULT OF DEFAULT UNDER SECTION 6.20. THIS INDEMNITY WILL SURVIVE ANY TERMINATION, SATISFACTION OR FORECLOSURE OF THE SECURITY INSTRUMENT.

(d) Securitization Indemnification.

(i) Borrower and each Guarantor agree to provide in connection with each Disclosure Document, an indemnification certificate, as set forth in Section 10.02(d)(ii), indemnifying Lender, any Issuer Person, the Issuer Group and/or the Underwriter Group (as those terms are defined in Section 10.02(d)(vii)) (each, an “Indemnified Party,” and collectively “Indemnified Parties”) for any losses to which any Indemnified Party may become subject under the conditions set forth in this Section.

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(ii) The indemnification certificate will provide that

(A) Borrower and each Guarantor have carefully examined those sections of the Disclosure Documents relating to the following:

(1) Borrower, any SPE Equity Owner, any operator of the Facility, any Guarantor, any Property Manager, their respective Affiliates, the Loan and the Mortgaged Property (“Borrower Information”).

(2) The sections entitled “Special Considerations,” and/or “Risk Factors,” and “Certain Legal Aspects of the Mortgage Loan,” or similar sections but only to the extent such sections specifically refer to Borrower Information (“Borrower Information Sections”).

(B) To the best of Borrower’s and each Guarantor’s knowledge with regard to Borrower Information, the Borrower Information Sections 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.

Notwithstanding the foregoing, any indemnification certificate may expressly exclude any information contained in third party reports prepared by parties that are not Affiliates of Borrower or of any Guarantor (“Third Party Information”), and the obligations and liability of Borrower and any Guarantor pursuant to this Section will not extend to the Third Party Information.

(iii) Borrower’s and each Guarantor’s agreement to indemnify the Indemnified Parties for any losses to which any Indemnified Party may become subject will extend only to such losses that arise out of or are based upon any untrue statement of any material fact contained in the Borrower Information or the Borrower Information Sections of the Disclosure Documents or arise out of or are based upon the omission to state in the Borrower Information or the Borrower Information Sections of the Disclosure Documents a material fact required to be stated in such sections necessary in order to make the statements in such sections or in light of the circumstances under which they were made, not misleading (collectively, “Securities Liabilities”).

(iv) Borrower and each Guarantor agrees to reimburse any Indemnified Party for any legal or other expenses reasonably incurred by such Indemnified Party in investigating or defending the Securities Liabilities.

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(v) The indemnitors will be liable under Section 10.02(d) (ii), (iii) or (iv) only to the extent that such Securities Liabilities arise out of, or are based upon, any such untrue statement or omission made in the Disclosure Documents in reliance upon, and in conformity with, Borrower Information furnished to any Indemnified Party by or on behalf of Borrower or a Guarantor in connection with the preparation of the Disclosure Documents or in connection with the underwriting of the Loan, including financial statements of Borrower, any SPE Equity Owner, any Guarantor or any operator of the Facility, and operating statements and rent rolls with respect to the Mortgaged Property.

(vi) This indemnity is in addition to any liability which Borrower may otherwise have and will be effective whether or not an indemnification certificate described in this Section 10.02(d) is provided and will be applicable based on information previously provided by or on behalf of Borrower or a Guarantor if the indemnification certificate is not provided.

(vii) For purposes of this Section 10.02(d):

(A) The term “Lender” will include its officers and directors.

(B) An “Issuer Person” will include all of the following:

(1) Any Affiliate of Lender that has filed the registration statement, if any, relating to the Securitization.

(2) Any Affiliate of Lender which is acting as issuer, depositor, sponsor and/or in a similar capacity with respect to the Securitization.

(C) The “Issuer Group” will include all of the following:

(1) Each director and officer of any Issuer Person.

(2) Each entity that Controls any Issuer Person within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act.

(D) The “Underwriter Group” will include all of the following:

(1) Each entity which is acting as an underwriter, manager, placement agent, initial purchaser or in a similar capacity with respect to the Securitization.

(2) Each of its directors and officers.

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(3) Each entity that Controls any such entity within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act and is acting as an underwriter, manager, placement agent, initial purchaser or in a similar capacity with respect to the Securitization.

(4) The directors and officers of such entity described in Section 10.02(d)(vii)(D)(1).

(e) Selection and Direction of Counsel. Counsel selected by Borrower to defend Indemnitees will be subject to the approval of those Indemnitees. In any circumstances in which the indemnity under this Article X applies, Lender may employ its own legal counsel and consultants to prosecute, defend or negotiate any claim or legal or administrative proceeding and Lender, with the prior written consent of Borrower (which will not be unreasonably withheld, delayed or conditioned) may settle or compromise any action or legal or administrative proceeding. However, unless an Event of Default has occurred and is continuing, or the interests of Borrower and Lender are in conflict, as determined by Lender in Lender’s Discretion, Lender will permit Borrower to undertake the actions referenced in this Article X so long as Lender approves such action, which approval will not be unreasonably withheld or delayed. Borrower will reimburse Lender upon demand for all costs and expenses incurred by Lender, including all costs of settlements entered into in good faith, consultants’ fees and Attorneys’ Fees and Costs.

(f) Settlement or Compromise of Claims. Borrower will not, without the prior written consent of those Indemnitees who are named as parties to a claim or legal or administrative proceeding (“Claim”), settle or compromise the Claim if the settlement (i) results in the entry of any judgment that does not include as an unconditional term the delivery by the claimant or plaintiff to Lender of a written release of those Indemnitees, satisfactory in form and substance to Lender or (ii) may materially and adversely affect Lender, as determined by Lender in Lender’s Discretion.

(g) Effect of Changes to Loan on Indemnification Obligations. Borrower’s obligation to indemnify the Indemnitees will not be limited or impaired by any of the following, or by any failure of Borrower or any Guarantor to receive notice of or consideration for any of the following:

(i) Any amendment or modification of any Loan Document.

(ii) Any extensions of time for performance required by any Loan Document.

(iii) Any provision in any of the Loan Documents limiting Lender’s recourse to property securing the Indebtedness, or limiting the personal liability of Borrower or any other party for payment of all or any part of the Indebtedness.

(iv) The accuracy or inaccuracy of any representations and warranties made by Borrower under this Loan Agreement or any other Loan Document.

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(v) The release of Borrower or any other Person, by Lender or by operation of law, from performance of any obligation under any Loan Document.

(vi) The release or substitution in whole or in part of any security for the Indebtedness.

(vii) Lender’s failure to properly perfect any Lien or security interest given as security for the Indebtedness.

(h) Payments by Borrower. Borrower will, at its own cost and expense, do all of the following:

(i) Pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Article X.

(ii) Reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Article X.

(iii) Reimburse Indemnitees for any and all expenses, including Attorneys’ Fees and Costs, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Article X, or in monitoring and participating in any legal or administrative proceeding.

(i) Other Obligations. The provisions of this Article X will be in addition to any and all other obligations and liabilities that Borrower may have under applicable law or under other Loan Documents, and each Indemnitee will be entitled to indemnification under this Article X without regard to whether Lender or that Indemnitee has exercised any rights against the Mortgaged Property or any other security, pursued any rights against any Guarantor, or pursued any other rights available under the Loan Documents or applicable law. If Borrower consists of more than one Person, the obligation of those Persons to indemnify the Indemnitees under this Article X will be joint and several. The obligation of Borrower to indemnify the Indemnitees under this Article X will survive any repayment or discharge of the Indebtedness, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Lien of the Security Instrument. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of, or held title to, the Mortgaged Property, Borrower will have no obligation to indemnify the Indemnitees under this Article X after the date of the release of record of the Lien of the Security Instrument by payment in full at the Maturity Date or by voluntary prepayment in full.

ARTICLE XI SENIORS HOUSING OPERATOR.

Reserved.

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ARTICLE XII MISCELLANEOUS PROVISIONS.

12.01 Waiver of Statute of Limitations, Offsets and Counterclaims. Borrower waives the right to assert any statute of limitations as a bar to the enforcement of this Loan Agreement or the Lien of the Security Instrument or to any action brought to enforce any Loan Document. Borrower waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or otherwise to offset any obligations to make the payments required by the Loan Documents. No failure by Lender to perform any of its obligations under the Loan Documents will be a valid defense to, or result in any offset against, any payments that Borrower is obligated to make under any of the Loan Documents.

12.02 Governing Law; Consent to Jurisdiction and Venue.

(a) This Loan Agreement, and any Loan Document which does not itself expressly identify the law which is to apply to it, will be governed by the laws of the Property Jurisdiction.

(b) Borrower agrees that any controversy arising under or in relation to the Note, the Security Instrument, this Loan Agreement or any other Loan Document may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that may arise under or in relation to the Note, any security for the Indebtedness or any other Loan Document. Borrower irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 12.02 is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Loan Agreement in any court of any other jurisdiction.

12.03 Notice.

(a) All Notices under or concerning this Loan Agreement will be in writing. Each Notice will be deemed given on the earliest to occur of (i) the date when the Notice is received by the addressee, (ii) the first Business Day after the Notice is delivered to a recognized overnight courier service, with arrangements made for payment of charges for next Business Day delivery, or (iii) the third Business Day after the Notice is deposited in the United States mail with postage prepaid, certified mail, return receipt requested. Addresses for Notice are as follows:

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If to Lender:	KeyCorp Real Estate Capital Markets, Inc. 11501 Outlook Street, Suite 300 Overland Park, Kansas 66211 Mailcode: KS-01-11-0501 Attention: Servicing Manager
If to Borrower:	Care GSL Berryville LLC c/o Care Investment Trust Inc. 780 Third Avenue, 21st Floor New York, New York 10017 Attention: Counsel/Greenfield – Freddie Mac

(b) Any party to this Loan Agreement may change the address to which Notices intended for it are to be directed by means of Notice given to the other party in accordance with this Section 12.03. Each party agrees that it will not refuse or reject delivery of any Notice given in accordance with this Section 12.03, that it will acknowledge, in writing, the receipt of any Notice upon request by the other party and that any Notice rejected or refused by it will be deemed for purposes of this Section 12.03 to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service or the courier service.

(c) Any Notice under the Note and any other Loan Document that does not specify how Notices are to be given will be given in accordance with this Section 12.03.

12.04 Successors and Assigns Bound. This Loan Agreement will bind the respective successors and assigns of Borrower and Lender, and the rights granted by this Loan Agreement will inure to Lender’s successors and assigns.

12.05 Joint and Several Liability. If more than one Person signs this Loan Agreement as Borrower, the obligations of such Persons will be joint and several.

12.06 Relationship of Parties; No Third Party Beneficiary.

(a) The relationship between Lender and Borrower will be solely that of creditor and debtor, respectively, and nothing contained in this Loan Agreement will create any other relationship between Lender and Borrower. Nothing contained in this Loan Agreement will constitute Lender as a joint venturer, partner or agent of Borrower, or render Lender liable for any debts, obligations, acts, omissions, representations or contracts of Borrower.

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(b) No creditor of any party to this Loan Agreement and no other Person will be a third party beneficiary of this Loan Agreement or any other Loan Document. Without limiting the generality of the preceding sentence, (i) any arrangement (“Servicing Arrangement”) between Lender and any Loan Servicer for loss sharing or interim advancement of funds will constitute a contractual obligation of such Loan Servicer that is independent of the obligation of Borrower for the payment of the Indebtedness, (ii) Borrower will not be a third party beneficiary of any Servicing Arrangement, and (iii) no payment by the Loan Servicer under any Servicing Arrangement will reduce the amount of the Indebtedness.

12.07 Severability; Amendments.

(a) The invalidity or unenforceability of any provision of this Loan Agreement will not affect the validity or enforceability of any other provision, and all other provisions will remain in full force and effect. This Loan Agreement contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Loan Agreement.

(b) This Loan Agreement may not be amended or modified except by a writing signed by the party against whom enforcement is sought.

12.08 Disclosure of Information. Borrower acknowledges that Lender may provide to third parties with an existing or prospective interest in the servicing, enforcement, evaluation, performance, ownership, purchase, participation or Securitization of the Loan, including, any of the Rating Agencies, any entity maintaining databases on the underwriting and performance of commercial mortgage loans, as well as governmental regulatory agencies having regulatory authority over Lender, any and all information which Lender now has or may hereafter acquire relating to the Loan, the Mortgaged Property, Borrower, any SPE Equity Owner or any Guarantor, as Lender determines necessary or desirable and that such information may be included in disclosure documents in connection with a Securitization or syndication of participation interests, including a prospectus, prospectus supplement, offering memorandum, private placement memorandum or similar document (each, a “Disclosure Document”) and also may be included in any filing with the Securities and Exchange Commission pursuant to the Securities Act or the Securities Exchange Act. To the fullest extent permitted under applicable law, Borrower irrevocably waives all rights, if any, to prohibit such disclosure, including any right of privacy.

12.09 Determinations by Lender. Unless otherwise provided in this Loan Agreement, in any instance where the consent or approval of Lender may be given or is required, or where any determination, judgment or decision is to be rendered by Lender under this Loan Agreement, the granting, withholding or denial of such consent or approval and the rendering of such determination, judgment or decision will be made or exercised by Lender (or its designated representative) at its sole and exclusive option and in its sole and absolute discretion.

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12.10 Sale of Note; Change in Servicer; Loan Servicing. The Note or a partial interest in the Note (together with this Loan Agreement and the other Loan Documents) may be sold one or more times without prior Notice to Borrower. A sale may result in a change of the Loan Servicer. There also may be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given Notice of the change. All actions regarding the servicing of the Loan evidenced by the Note, including the collection of payments, the giving and receipt of Notice, inspections of the Mortgaged Property, inspections of books and records, and the granting of consents and approvals, may be taken by the Loan Servicer unless Borrower receives Notice to the contrary. If Borrower receives conflicting Notices regarding the identity of the Loan Servicer or any other subject, any such Notice from Lender will govern.

12.11 Supplemental Financing.

(a) This Section will apply only if at the time of any application referred to in Section 12.11(b), Freddie Mac has in effect a product described in its Multifamily Seller/Servicer Guide under which it purchases supplemental mortgages on multifamily properties that meet specified criteria (“Supplemental Mortgage Product”).

(b) After the first anniversary of the date of the Senior Indebtedness, Freddie Mac will consider an application from an originating lender that is generally approved by Freddie Mac to sell mortgages to Freddie Mac under the Supplemental Mortgage Product (“Approved Seller/Servicer”) for the purchase by Freddie Mac of a proposed indebtedness of Borrower to the Approved Seller/Servicer to be secured by one or more Supplemental Instruments on the Mortgaged Property. Freddie Mac will purchase each Supplemental Loan secured by the Mortgaged Property if each of the following conditions is satisfied:

(i) At the time of the proposed Supplemental Loan, no Event of Default may have occurred and be continuing and no event or condition may have occurred and be continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(ii) Borrower and the Mortgaged Property must be acceptable to Freddie Mac under its Supplemental Mortgage Product.

(iii) New loan documents must be entered into to reflect each Supplemental Loan, such documents to be acceptable to Freddie Mac in its discretion.

(iv) No Supplemental Loan may cause the combined debt service coverage ratio of the Mortgaged Property after the making of that Supplemental Loan to be less than the Required DSCR. As used in this Section, the term “combined debt service coverage ratio” means, with respect to the Mortgaged Property, the ratio of:

(A) the annual net operating income from the operations of the Mortgaged Property at the time of the proposed Supplemental Loan,

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to

(B)   the aggregate of the annual principal and interest payable on all of the following:

(I) the Indebtedness under this Loan Agreement (using a 30 year amortization schedule),

(II) any “Indebtedness” as defined in any security instruments recorded against the Mortgaged Property (using a 30 year amortization schedule for any Supplemental Loans), and

(III) the proposed “Indebtedness” for any Supplemental Loan (using a 30 year amortization schedule).

As used in this Section, “annual principal and interest” with respect to an adjustable-rate loan will be calculated by Freddie Mac using an interest rate equal to one of the following:

(X) If the loan has an internal interest rate cap, the Capped Interest Rate.

(Y) If the loan has an external interest rate cap, the external interest rate cap.

(Z) If the loan has no interest rate cap, the greater of (I) 7%, or (II) the then-current LIBOR Index Rate plus the Margin plus 300 basis points.

The annual net operating income of the Mortgaged Property will be as determined by Freddie Mac in its discretion considering factors such as income in place at the time of the proposed Supplemental Loan and income during the preceding 12 months, and actual, historical and anticipated operating expenses. Freddie Mac will determine the combined debt service coverage ratio of the Mortgaged Property based on its underwriting. Borrower will provide Freddie Mac such financial statements and other information Freddie Mac may require to make these determinations.

(v) No Supplemental Loan may cause the combined loan to value ratio of the Mortgaged Property after the making of that Supplemental Loan to exceed the Required LTV, as determined by Freddie Mac. As used in this Section, “combined loan to value ratio” means, with respect to the Mortgaged Property, the ratio, expressed as a percentage, of:

(A)   the aggregate outstanding principal balances of all of the following:

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(I) the Indebtedness under this Loan Agreement,

(II) any “Indebtedness” as defined in any security instruments recorded against the Mortgaged Property, and

(III) the proposed “Indebtedness” for any Supplemental Loan,

to

(B)   the value of the Mortgaged Property.

Freddie Mac will determine the combined loan to value ratio of the Mortgaged Property based on its underwriting. Borrower will provide Freddie Mac such financial statements and other information Freddie Mac may require to make these determinations. In addition, Freddie Mac, at Borrower’s expense, may obtain MAI appraisals of the Mortgaged Property in order to assist Freddie Mac in making the determinations under this Section. If Freddie Mac requires an appraisal, then the value of the Mortgaged Property that will be used to determine whether the Required LTV has been met will be the lesser of the appraised value set forth in such appraisal or the value of the Mortgaged Property as determined by Freddie Mac.

(vi) Borrower’s organizational documents are amended to permit Borrower to incur additional debt in the form of Supplemental Loans (Lender will consent to such amendment(s)).

(vii) One or more Persons acceptable to Freddie Mac executes and delivers to the Approved Seller/Servicer a Guaranty in a form acceptable to Freddie Mac with respect to the exceptions to non-recourse liability described in Freddie Mac’s form promissory note, unless Freddie Mac has elected to waive its requirement for a Guaranty.

(viii) The loan term of each Supplemental Loan will be coterminous with the Senior Indebtedness or longer than the Senior Indebtedness, including any “Extension Period” described in the Note secured by the Senior Instrument, at Freddie Mac’s discretion.

(ix) The Prepayment Premium Period of each Supplemental Loan will be coterminous with the Prepayment Premium Period or the combined Lockout Period and Defeasance Period, as applicable, of the Senior Indebtedness.

(x) The interest rate of each Supplemental Loan will be determined by Freddie Mac in its discretion.

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(xi) Lender enters into an intercreditor agreement (“Intercreditor Agreement”) acceptable to Freddie Mac and to Lender for each Supplemental Loan.

(xii) Borrower’s payment of fees and other expenses charged by Lender, Freddie Mac, the Approved Seller/Servicer, and the Rating Agencies (including reasonable Attorneys’ Fees and Costs) in connection with reviewing and originating each Supplemental Loan.

(xiii) Notwithstanding anything to the contrary in Article IV, Borrower will make all required deposits under the Senior Indebtedness for the payment of any Impositions, so long as a Supplemental Loan is outstanding, and such deposits will be credited to the payment of any such required Impositions under any Supplemental Loan.

(xiv) All other requirements of the Supplemental Mortgage Product must be met, unless Freddie Mac has elected to waive one or more of its requirements.

(c) No later than 5 Business Days after Lender’s receipt of a written request from Borrower, Lender will provide the following information to an Approved Seller/Servicer upon Borrower’s written request. Lender will only be obligated to provide this information in connection with Borrower’s request for a Supplemental Loan from an Approved Seller/Servicer; provided, however, if Freddie Mac is the owner of the Note, Lender will not be obligated to provide such information:

(i) The then-current outstanding principal balance of the Senior Indebtedness.

(ii) Payment history of the Senior Indebtedness.

(iii) Whether any Reserve Funds are being collected on the Senior Indebtedness and the amount of each such Reserve Fund deposit as of the date of the request.

(iv) Whether any Repairs, Capital Replacements or improvements or rental achievement or burn-off guaranty requirements are existing or outstanding under the terms of the Senior Indebtedness.

(v) A copy of the most recent inspection report for the Mortgaged Property.

(vi) Whether any modifications or amendments have been made to the Loan Documents for the Senior Indebtedness since origination of the Senior Indebtedness and, if applicable, a copy of such modifications and amendments.

(vii) Whether to Lender’s knowledge any Event of Default exists under the Senior Indebtedness.

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(d) Lender will have no obligation to consent to any mortgage or Lien on the Mortgaged Property that secures any indebtedness other than the Indebtedness, except as set forth in this Loan Agreement.

(e) If a Supplemental Loan is made to Borrower, Borrower agrees that the terms of the Intercreditor Agreement will govern with respect to any distributions of excess proceeds by Lender to the Supplemental Lender, and Borrower agrees that Lender may distribute any excess proceeds received by Lender pursuant to the Loan Documents to Supplemental Lender pursuant to the Intercreditor Agreement.

12.12 Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date). This Section 12.12 will apply if the Note is assigned to a REMIC trust prior to the Cut-off Date, and, subject to Section 12.12(a) and (c), Borrower will have the right to defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions:

(a) Borrower will not have the right to obtain Defeasance at any of the following times:

(i) If the Loan is not assigned to a REMIC trust.

(ii) During the Lockout Period.

(iii) After the expiration of the Defeasance Period.

(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.

(b) Borrower will give Lender Notice (“Defeasance Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which the Defeasance Notice is received by Lender. Lender will acknowledge receipt of the Defeasance Notice and will state in such receipt whether Lender will designate the Successor Borrower or will permit Borrower to designate the Successor Borrower.

(c) The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”). If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice will terminate.

            (d)      (i)    If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations under this Section,

                     Lender will have the right to retain the Defeasance Fee as liquidated damages for Borrower’s default and,

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except as provided in Section 12.12(d)(ii), Borrower will be released from all further obligations under this Section 12.12. Borrower acknowledges that Lender will incur financing costs in arranging and preparing for the release of the Mortgaged Property from the Lien of the Security Instrument in reliance on the executed Defeasance Notice. Borrower agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Loan Agreement, of the damages Lender will incur by reason of Borrower’s default.

(ii) If the Defeasance is not consummated on the Defeasance Closing Date for any reason, Borrower agrees to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 12.12(d)(i)) incurred by Lender in reliance on the executed Defeasance Notice, within 5 Business Days after Borrower receives a written demand for payment, accompanied by a statement, in reasonable detail, of Lender’s third party costs and expenses.

(iii) All payments required to be made by Borrower to Lender pursuant to this Section 12.12 will be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.

(e) No Event of Default has occurred and is continuing.

(f) Each of the following documents must be delivered to Lender on or prior to the Defeasance Closing Date:

(i) An opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that Lender has a valid and perfected Lien and security interest of first priority in the Defeasance Collateral and the proceeds thereof.

(ii) An opinion of counsel for Borrower, in form and substance satisfactory to Lender, to the effect that the Pledge Agreement is duly authorized, executed, delivered and enforceable against Borrower in accordance with the respective terms.

(iii) Unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Transfer and Assumption Agreement is duly authorized, executed, delivered and enforceable against Successor Borrower in accordance with the respective terms.

(iv) Unless waived by Lender or unless Lender designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender, to the effect that the Successor Borrower has been validly created.

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(v) If Borrower designates the Successor Borrower, an opinion of counsel for Successor Borrower, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation of the assets of the Successor Borrower with those of its Affiliates by a bankruptcy court.

(vi) Unless waived by Lender, an opinion of counsel for Borrower, in form and substance satisfactory to Lender, confirming each of the following:

(A) If, as of the Defeasance Closing Date, the Note is held by a REMIC trust, (1) the Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time), (2) the qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Defeasance, and (3) the REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of the Defeasance.

(B) The Defeasance will not result in a “sale or exchange” of the Note within the meaning of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder.

(vii) Unless waived by Lender, a written certificate from an independent certified public accounting firm (reasonably acceptable to Lender), confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they fall due under the Note, including full payment due on the Note on the Maturity Date.

(viii) Lender’s form of a pledge and security agreement (“Pledge Agreement”) and financing statements which pledge and create a first priority security interest in the Defeasance Collateral in favor of Lender.

(ix) Lender’s form of a transfer and assumption agreement (“Transfer and Assumption Agreement”), whereupon Borrower and any Guarantor (in each case, subject to satisfaction of all requirements under this Loan Agreement) will be relieved from liability in connection with the Loan (other than any liability under Sections 6.12 and 10.02 for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance Closing Date) and Successor Borrower will assume all remaining obligations.

(x) Forms of all documents necessary to release the Mortgaged Property from the Liens created by the Security Instrument and related UCC financing statements (collectively, “Release Instruments”), each in appropriate form required by the state in which the Property is located.

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(xi) Such other opinions, certificates, documents or instruments as Lender may reasonably request.

(g) Borrower will deliver to Lender on or prior to the Defeasance Closing Date each of the following:

(i) The Defeasance Collateral, which meets all of the following requirements:

(A) It is owned by Borrower, free and clear of all Liens and claims of third-parties.

(B) It is in an amount to provide for (A) redemption payments to occur prior, but as close as possible, to all successive Installment Due Dates occurring under the Note after the Defeasance Closing Date, and (B) deliver redemption proceeds at least equal to the amount of principal and interest due on the Note on each Installment Due Date including full payment due on the Note on the Maturity Date (“Scheduled Debt Payments”).

(C) It is arranged such that redemption payments received from the Defeasance Collateral are paid directly to Lender to be applied on account of the Scheduled Debt Payments.

(D) Unless otherwise agreed in writing by Lender, the pledge of the Defeasance Collateral will be effected through the book-entry facilities of a qualified securities intermediary designated by Lender in conformity with all applicable laws.

(ii) All accrued and unpaid interest and all other sums due under the Note, this Loan Agreement and under the other Loan Documents, including all amounts due under Section 12.12(i), up to the Defeasance Closing Date.

(h) If Lender permits Borrower to designate the Successor Borrower, then Borrower will, at Borrower’s expense, designate or establish an accommodation borrower (“Successor Borrower”) satisfactory to Lender (or Lender, at its option, may designate the Successor Borrower) which satisfies Lender’s then current requirements for a “Single Purpose Entity” to assume at the time of Defeasance ownership of the Defeasance Collateral and liability for all of Borrower’s obligations under the Pledge Agreement and the Loan Documents (to the extent that liability thereunder survives release of the Lien of the Security Instrument). Borrower will pay to Successor Borrower a fee of $1,000.00 as consideration of Successor Borrower’s assumption of Borrower’s obligations under the Loan Documents. Notwithstanding any contrary provision in this Loan Agreement, no Transfer Fee is payable to Lender upon a Transfer of the Loan in accordance with this Section.

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(i) Borrower will pay all reasonable costs and expenses incurred by Lender in connection with the Defeasance in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments and whether or not Defeasance is completed. Such expenses include the following:

(A) All fees, costs and expenses incurred by Lender and its agents in connection with the Defeasance (including reasonable Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described in this Loan Agreement and any related documentation, and any servicing fees, Rating Agencies’ fees or other costs related to the Defeasance).

(B) Reasonable Attorneys’ Fees and Costs.

(C) A processing fee to cover Lender’s administrative costs to process Borrower’s Defeasance request.

Lender reserves the right to require that Borrower post a deposit to cover costs which Lender reasonably anticipates will be incurred.

12.13 Lender’s Rights to Sell or Securitize. Borrower acknowledges that Lender, and each successor to Lender’s interest, may (without prior Notice to Borrower or Borrower’s prior consent), sell or grant participations in the Loan (or any part of the Loan), sell or subcontract the servicing rights related to the Loan, securitize the Loan or include the Loan as part of a trust. Borrower, at its expense, agrees to cooperate with all reasonable requests of Lender in connection with any of the foregoing including executing or causing to be executed any financing statements or other documents deemed necessary by Lender or its transferee to create, perfect or preserve the rights and interest to be acquired by such transferee, providing any updated financial information with appropriate verification through auditors letters, delivering revised organizational documents and counsel opinions satisfactory to the Rating Agencies, executed amendments to the Loan Documents, and review information contained in a preliminary or final private placement memorandum, prospectus, prospectus supplements or other Disclosure Document, and providing a mortgagor estoppel certificate and such other information about Borrower, any SPE Equity Owner, any Guarantor, any operator of the Facility, any Property Manager or the Mortgaged Property as Lender may require for Lender’s offering materials.

12.14 Cooperation with Rating Agencies and Investors. Borrower covenants and agrees that if Lender decides to include the Loan as an asset of a Secondary Market Transaction, Borrower will (a) at Lender’s request, meet with representatives of the Rating Agencies and/or investors to discuss the business and operations of the Mortgaged Property, and (b) permit Lender or its representatives to provide related information to the Rating Agencies and/or investors, and (c) cooperate with the reasonable requests of the Rating Agencies and/or investors in connection with all of the foregoing.

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12.15 Time is of the Essence. Time is of the essence with respect to each covenant of this Loan Agreement.

ARTICLE XIII DEFINITIONS.

The following terms, when used in this Loan Agreement (including when used in the recitals), will have the following meanings:

“Activities of Daily Living” means personal care services that provide the frail elderly with assistance in eating, dressing, bathing, incontinence care and assistance in moving from one place to another (such as from a bed to a wheelchair).

“Affiliate” of any Person means (i) any other Person which, directly or indirectly, is in Control of, is under the Control of, or is under common Control with, such Person; (ii) any other Person who is a director or officer of (A) such Person, (B) any subsidiary of such Person, or (C) any Person described in clause (i) of this definition; or (iii) any corporation, limited liability company or partnership which has as a director any Person described in Section (ii) of this definition.

“Aggregate Carrier Exposure” means:

(i) For each individual carrier providing Hazard Insurance, one of the following:

(A) The sum of the required building coverage limits and required business income/rental value Insurance if such coverage is provided by specific Insurance or a policy covering only the Mortgaged Property.

(B) The blanket Insurance or master program limit if such coverage is provided by a Blanket Insurance Policy or master program from a single carrier.

(C) The total limit provided by the carrier in all layers in which the carrier participates if such coverage is provided by a Blanket Insurance Policy or master program with more than one carrier participating with layered limits.

(ii) For each individual carrier providing liability Insurance pursuant to Section 6.10(a)(ii) or as otherwise required by Lender, one of the following:

(A) The total aggregate limits (general liability plus excess/umbrella) if such coverage is provided by specific Insurance or a policy covering only the Mortgaged Property.

(B) The total aggregate limits (general liability plus excess/umbrella) if such coverage is provided by liability Insurance for multiple properties or a master program from a single carrier.

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(C) The total limit provided by the carrier in all layers in which the carrier participates if such coverage is provided by an individual policy, liability Insurance policy for multiple properties or a master program with more than one carrier participating with layered limits Blanket Insurance Policy or master program with more than one carrier participating with layered limits.

“Approved Seller/Servicer” is defined in Section 12.11(b).

“Assignment of Management Agreement” means the Collateral Assignment of Management Agreement and Subordination of Management Fees of even date herewith among Borrower, Lender and Property Manager, including all schedules, riders, allonges and addenda, as such Assignment of Management Agreement may be amended from time to time.

“Assisted Living Residences” means residences that are designed to accommodate and provide 24-hour protective oversight and assistance for natural persons with functional limitations, including meals in a central location and assistance with Activities of Daily Living and Alzheimer’s care.

“Attorneys’ Fees and Costs” means (i) fees and out of pocket costs of Lender’s and Loan Servicer’s attorneys, as applicable, including costs of Lender’s and Loan Servicer’s in-house counsel, support staff costs, costs of preparing for litigation, computerized research, telephone and facsimile transmission expenses, mileage, deposition costs, postage, duplicating, process service, videotaping and similar costs and expenses; (ii) costs and fees of expert witnesses, including appraisers; (iii) investigatory fees; and (iv) costs for any opinion required by Lender pursuant to the terms of the Loan Documents.

“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq., as amended from time to time.

“Blanket Insurance Policy” is defined in Section 6.10(h).

“Borrower” means all Persons identified as “Borrower” in the first paragraph of this Loan Agreement, together with their successors and assigns.

“Borrower Information” is defined in Section 10.02(d).

“Borrower Information Sections” is defined in Section 10.02(d).

“Borrower Principal” means any of the following:

(i) Any general partner of Borrower (if Borrower is a partnership).

(ii) Any manager or managing member of Borrower (if Borrower is a limited liability company).

(iii) Any Person (limited partner, member or shareholder) with a collective direct or indirect equity interest in Borrower equal to or greater than 25%.

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(iv) Any Guarantor of all or any portion of the Loan or of any obligations of Borrower under the Loan Documents.

“Borrower Proof of Loss Threshold” means the amount that is the greater of (i) $50,000, or (ii) $28,000.00.

“Borrower Proof of Loss Maximum” means $112,000.00.

“Business Day” means any day other than a Saturday, a Sunday, or any other day on which Lender or the national banking associations are not open for business.

“Capital Replacement” means the replacement of those items listed on Exhibit F and such other replacements of equipment, major components or capital systems related to the Improvements as may be approved in writing or required by Lender.

“Capped Interest Rate” is defined in the Note.

“Claim” is defined in Section 10.02(f).

“Closing Date” means the date on which Lender disburses the proceeds of the Loan to or for the account of Borrower.

“Commitment Letter” means the commitment letter or early rate lock application dated April 17, 2012, from Lender to Borrower, as it may have thereafter been modified, amended or extended.

“Completion Date” means N/A , 2012, or such other date(s) as may be specified for particular Repairs in Exhibit C, as such date may be extended.

“Condemnation” is defined in Section 6.11(a).

“Continuing Care Retirement Community” or “CCRC” means a property designed to provide a continuum of care within a single community. The living accommodations and care provided within a CCRC are a combination of the accommodations and services provided by Seniors Apartments, Independent Living Units, Assisted Living Residences and Skilled Nursing Beds.

“Contract” means any present or future contract for the provision of goods or services (or with respect to payment therefore), together with all modifications, extensions and renewals, in connection with the operation or management of the Facility (other than Leases), including without limitation (i) those with Borrower or an operator of the Facility and (ii) Third Party Provider Agreements, together with all modifications, extensions or renewals.

“Control” means to possess, directly or indirectly, the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, including the power to elect a majority of the directors or trustees of a corporation or trust, as the case may be.

“Cut-off Date” is defined in the Note.

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“Default Rate” is defined in the Note.

“Defeasance” is defined in Section 12.12.

“Defeasance Closing Date” is defined in Section 12.12(b).

“Defeasance Collateral” means (i) a Freddie Mac Debt Security, (ii) a Fannie Mae Debt Security, (iii) U.S. Treasury Obligations, or (iv) FHLB Obligations.

“Defeasance Fee” is defined in Section 12.12(c).

“Defeasance Notice” is defined in Section 12.12(b).

“Defeasance Period” is defined in the Note.

“Designated Entity for Transfers” means each entity so identified in Exhibit I, and that entity’s successors and permitted assigns.

“Disclosure Document” is defined in Section 12.08.

“Downgrade” as it applies to a License, means a License is modified so as to permit a less acute level of care (such as, but not limited to, elimination of skilled nursing or assisted living care or services included therein) by the Governmental Authority responsible for issuing such License.

“Eligible Account” means an identifiable account which is separate from all other funds held by the holding institution that is either (i) an account or accounts maintained with the corporate trust department of a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or (ii) a segregated trust account or accounts maintained with the corporate trust department of a federal or state chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution or trust company is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal and state authority. An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument.

“Eligible Institution” means a federal or state chartered depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations or commercial paper of which are rated at least A-1 by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., P-1 by Moody’s Investors Service, Inc. and F-3 by Fitch, Inc. in the case of accounts in which funds are held for 30 days or less or, in the case of letters of credit or accounts in which funds are held for more than 30 days, the long term unsecured debt obligations of which are rated at least “A” by Fitch, Inc. and Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and “A2” by Moody’s Investors Service, Inc. If at any time an Eligible Institution does not meet the required rating, the Loan Servicer must move the Eligible Account within 30 days of such event to an appropriately rated Eligible Institution.

“Environmental Inspections” is defined in Section 6.12(e).

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“Environmental Permit” means any permit, license, or other authorization issued under any Hazardous Materials Law with respect to any activities or businesses conducted on or in relation to the Mortgaged Property.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Event of Default” means the occurrence of any event listed in Section 9.01.

“External Cap Agreement Reserve Fund” means the account established pursuant to Section 4.07, if applicable, to pay for the cost of a Replacement Cap Agreement.

“Facility” means the senior housing facility located on the Land, and including the Land and Improvements thereon.

“Fannie Mae Debt Security” means any non-callable bond, debenture, note, or other similar debt obligation issued by the Federal National Mortgage Association.

“FHLB Obligations” mean direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by the Federal Home Loan Bank.

“Fixtures” means all property owned by Borrower which is attached to the Land or the Improvements so as to constitute a fixture under applicable law, including: machinery, equipment, engines, boilers, incinerators and installed building materials; systems and equipment for the purpose of supplying or distributing heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring and conduits used in connection with radio, television, security, fire prevention or fire detection or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances; light fixtures, awnings, storm windows and storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors; cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants; swimming pools; and exercise equipment.

“Freddie Mac” means the Federal Home Loan Mortgage Corporation.

“Freddie Mac Debt Security” means any non-callable bond, debenture, note, or other similar debt obligation issued by Freddie Mac.

“Freddie Mac Web Site” means the web site of Freddie Mac, located at www.freddiemac.com.

“GAAP” means generally accepted accounting principles.

“Governmental Authority” means any board, commission, department, agency or body of any municipal, county, state or federal governmental unit, or any subdivision of any of them, that has or acquires jurisdiction over the Mortgaged Property, or the use, operation or improvement of the Mortgaged Property, or over Borrower including, without limitation, all applicable licensing or accreditation bodies or agencies (whether federal, state, county, district, municipal, city or

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otherwise, whether now or hereafter in existence, including without limitation, applicable non-governmental organizations, such as the Joint Commission on the Accreditation of Healthcare Organizations) that have or acquire jurisdiction over Borrower, an operator of the Facility (as pertains to the Facility), the Facility or the use, operation, improvement, accreditation, licensing or permitting of the Facility or the operations thereof.

“Guarantor” means the Person(s) required by Lender to guaranty all or a portion of Borrower’s obligations under the Loan Documents, as set forth in the Guaranty: The required Guarantors are set forth in Exhibit I.

“Guaranty” means the Guaranty executed by Guarantor and/or any replacement or supplemental guaranty executed pursuant to the terms of this Loan Agreement.

“Hazard Insurance” is defined in Section 6.10(a).

“Hazardous Materials” means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives; flammable materials; radioactive materials; polychlorinated biphenyls (PCBs) and compounds containing them; lead and lead-based paint; asbestos or asbestos containing materials in any form that is or could become friable; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which on the Mortgaged Property is prohibited by any Governmental Authority; any medical products or devices, including, those materials defined as “medical waste” or “biological waste” under relevant statutes, ordinances or regulations pertaining to Hazardous Materials Law; any substance that requires special handling and any other material or substance now or in the future that (i) is defined as a “hazardous substance,” “hazardous material,” “hazardous waste,” “toxic substance,” “toxic pollutant,” “contaminant,” or “pollutant” by or within the meaning of any Hazardous Materials Law, or (ii) is regulated in any way by or within the meaning of any Hazardous Materials Law.

“Hazardous Materials Law” and “Hazardous Materials Laws” means any and all federal, state and local laws, ordinances, regulations and standards, rules, policies and other governmental requirements, administrative rulings and court judgments and decrees in effect now or in the future, including all amendments, that relate to Hazardous Materials or the protection of human health or the environment and apply to Borrower or to the Mortgaged Property. Hazardous Materials Laws include the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101 et seq., and their state analogs.

“Healthcare Laws” means all federal, state, municipal or other Governmental Authority laws, codes and statutes and all regulations and rules promulgated thereunder and all Governmental Authority interpretations thereof, applicable or pertaining to the ownership, leasing, operation or management of medical or senior housing facilities (including without limitation, Independent Living Units, adult care facilities, Assisted Living Residences, skilled nursing care, rehabilitation services, CCRC’s, and dementia and/or memory care facilities), including without limitation those pertaining to Licenses necessary to operate or manage any such facility, those pertaining to

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billing Medicare, Medicaid or TRICARE (or any so-called “waiver program” associated therewith) or any other Governmental Authority payor for similar goods or services or providing goods or services to natural persons receiving benefits under Medicare, Medicaid or TRICARE or other Governmental Authority programs, those pertaining to patient care and Privacy Laws, quality and safety standards, accepted professional standards, and principles that apply to professionals providing services to the Facility, accreditation standards, and requirements of the applicable state department of health and all other Governmental Authorities including, without limitation, those requirements relating to the Facility’s physical structure and environment, licensing, quality and adequacy of medical care, distribution of pharmaceuticals, rate setting, equipment, personnel, operating policies, additions to facilities and services and fee splitting.

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996, as amended from time to time, together with all rules and regulations promulgated thereunder from time to time.

“HVAC System” is defined in Section 6.10(a)(v).

“Immediate Family Members” means a Person’s spouse, parent, child (including stepchild), grandchild (including step-grandchild) or sibling.

“Imposition Reserve Deposits” is defined in Section 4.02(a).

“Impositions” is defined in Section 4.02(a).

“Improvements” means the buildings, structures and improvements now constructed or at any time in the future constructed or placed upon the Land, including any future alterations, replacements and additions.

“Indebtedness” means the principal of, interest at the fixed or variable rate set forth in the Note on, and all other amounts due at any time under, the Note, this Loan Agreement or any other Loan Document, including prepayment premiums, late charges, default interest, and advances as provided in Section 9.02 to protect the security of the Security Instrument.

“Indemnified Party/ies” is defined in Section 10.02(d)(i).

“Indemnitees” is defined in Section 10.02(a).

“Independent Living Units” means residential units that are accompanied by optional services designed to aid the residents’ independence, including, but not limited to, building security, optional meals, housekeeping, laundry, and at least some incidental services and activities not related to personal care, such as valet shopping, financial planning, unscheduled transportation, beautician services, recreational and social activities and 24-hour staff presence.

“Inspection Fee” means a fee payable to Lender or Loan Servicer for performing any inspection required by this Agreement in an amount not to exceed $750.00 per inspection.

“Insurance” means Hazard Insurance, liability insurance and all other insurance that Lender requires Borrower to maintain pursuant to this Loan Agreement.

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“Intended Use” is defined in Section 5.25.

“Intercreditor Agreement” is defined in Section 12.11(b)(xi).

“Investment Fee” means a one time fee for establishing the (i) Replacement Reserve Fund in the amount of $500.00 and (ii) Repair Reserve Fund in the amount of $1,000.00.

“Issuer Group” is defined in Section 10.02(d).

“Issuer Person” is defined in Section 10.02(d).

“Land” means the land described in Exhibit A.

“Leases” means all present and future leases, subleases, occupancy agreements pertaining to occupants of the Facility, including both residential and commercial agreements and patient admission or resident care agreements, licenses, concessions or grants or other possessory interests now or hereafter in force, whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals.

“Lender” means the entity identified as “Lender” in the first paragraph of this Loan Agreement, or any subsequent holder of the Note.

“Lender’s Discretion” means Lender’s reasonable discretion unless otherwise set forth in this Loan Agreement.

“Letter of Credit” means any letter of credit required under the terms of this Loan Agreement.

“LIBOR Index Rate” is defined in the Note.

“License” means any license, permit, regulatory agreement, certificate, approval, certificate of need or similar certificate, authorization, accreditation, approved provider status in any approved provider payment program, or approval issued by an applicable state department of health (or any subdivision thereof) or state licensing agency, as applicable, in each instance whether issued by a Governmental Authority or otherwise, used in connection with, or necessary or desirable to use, occupy or operate the Facility for its Intended Use, including without limitation, the provision of all goods and services to be provided by Borrower or the operator of the Facility to the residents of the Facility.

“Lien” means any mortgage, deed of trust, deed to secure debt, security interest or other lien or encumbrance on the Mortgaged Property.

“Loan” is defined on Page 1 of this Loan Agreement.

“Loan Agreement” means this Seniors Housing Loan and Security Agreement.

“Loan Application” is defined in Section 5.16(a).

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“Loan Documents” means the Note, the Security Instrument, this Loan Agreement, all guaranties, all indemnity agreements, all collateral agreements, UCC filings, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any Guarantor or any other Person in connection with the Loan evidenced by the Note, as such documents may be amended from time to time.

“Loan Servicer” means the entity that from time to time is designated by Lender to collect payments and deposits and receive Notices under the Note, the Security Instrument, this Loan Agreement and any other Loan Document, and otherwise to service the Loan evidenced by the Note for the benefit of Lender. Unless Borrower receives Notice to the contrary, the Loan Servicer is the entity identified as “Lender” in the first paragraph of this Loan Agreement.

“Lockout Period” is defined in the Note.

“Manager” or “Managers” means a Person who is named or designated as a manager or managing member or otherwise acts in the capacity of a manager or managing member of a limited liability company in a limited liability company agreement or similar instrument under which the limited liability company is formed or operated.

“Margin” is defined in the Note.

“Material Adverse Change” means any set of circumstances or events which, in Lender’s Discretion would have or is then reasonably expected to have a Material Adverse Effect on (i) the validity or enforceability of this Loan Agreement or the other Loan Documents taken as a whole, (ii) the ability of Borrower to duly and punctually pay the Indebtedness or perform its obligations, (iii) the ability of Lender to enforce its legal remedies pursuant to this Loan Agreement or the other Loan Documents taken as a whole, including by realizing upon any collateral or any guaranty, (iv) the business prospects or financial condition of Borrower or any Guarantor, (v) the financial performance or market value of the Mortgaged Property, or (vi) the compliance of the Mortgaged Property with any law dealing with the use, ownership or operation of the Mortgaged Property or any law, the noncompliance with which could reasonably be expected to have a Material Adverse Effect on the financial performance or market value of the Mortgaged Property.

“Material Adverse Effect” means a significant detrimental effect on (i) the Mortgaged Property (including, without limitation, the Facility), (ii) the business, prospects, profits, operations or condition (financial or otherwise) of Borrower or any operator of the Facility, (iii) the enforceability, validity, perfection or priority of the Lien of any Loan Document, (iv) the ability of Borrower or any operator of the Facility to perform any obligations under any Loan Document or (v) Borrower’s or any operator of the Facility’s interest in the Facility including, without limitation, a Downgrade, termination, revocation or suspension of, or refusal to renew or reissue, any applicable License, or a ban on new resident admissions.

“Material Contract” means Contracts:

(i) for preparing or serving food (but do not include food supply Contracts);

(ii) for medical services or healthcare provider agreements;

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(iii) the average annual consideration of which, directly or indirectly, is at least $20,000;

(iv) having a term of more than one year unless subject to termination by Borrower or if Borrower is not a party to the Contract, the operator of the Facility, and their respective successors and assigns, upon not more than thirty days notice, without cause and without payment of any termination fee, penalty or extra charge; or

(v) determined by Lender to be material to the operation of the Facility.

“Maturity Date” means the Scheduled Maturity Date, as defined in the Note.

“MMP” means a moisture management plan to control water intrusion and prevent the development of Mold or moisture at the Mortgaged Property throughout the term of this Loan Agreement.

“Modified Non-Residential Lease” means an extension or modification of any Non-Residential Lease, which Non-Residential Lease was in existence as of the date of this Loan Agreement.

“Mold” means mold, fungus, microbial contamination or pathogenic organisms.

“Mortgaged Property” means all of Borrower’s present and future right, title and interest in and to all of the following:

(i) The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease, the Ground Lease and the Leasehold Estate.

(ii) The Improvements (including, without limitation, the Facility).

(iii) The Fixtures.

(iv) The Personalty.

(v) All current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights of way, strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses and appurtenances related to or benefiting the Land or the Improvements, or both, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated.

(vi) All proceeds paid or to be paid by any insurer of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, whether or not Borrower obtained the Insurance pursuant to Lender’s requirement.

(vii) All awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Land or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, including any awards or settlements resulting

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from Condemnation proceedings or the total or partial taking of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property under the power of eminent domain or otherwise and including any conveyance in lieu thereof.

(viii) All contracts, options and other agreements for the sale of the Land, or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations.

(ix) All proceeds from the conversion, voluntary or involuntary, of any of the items described in items (i) through (viii) of this definition, into cash or liquidated claims, and the right to collect such proceeds.

(x) All Rents and Leases.

(xi) All earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed proceeds of the Loan.

(xii) All Imposition Reserve Deposits.

(xiii) All refunds or rebates of Impositions by any Governmental Authority or insurance company (other than refunds applicable to periods before the real property tax year in which this Loan Agreement is dated).

(xiv) All tenant security deposits which have not been forfeited by any tenant under any Lease and any bond or other security in lieu of such deposits.

(xv) All names under or by which any of the Mortgaged Property may be operated or known, and all trademarks, trade names and goodwill relating to any of the Mortgaged Property.

(xvi) If required by the terms of Section 4.05, all rights under the Letter of Credit and the Proceeds, as such Proceeds may increase or decrease from time to time.

(xvii) All payments received and all rights to receive payments from any source, which payments (or rights thereto) arise from operation of or at the Facility, including, without limitation, entrance fees, application fees, processing fees, community fees and any other amounts or fees deposited or to be deposited by any resident or tenant, payments received and the right to receive payments of second party charges added to base rental income, base and additional meal sales, payments received and rights to receive payments from commercial operations located at or on the Facility or provided as a service to the occupants of the Facility, rental from guest suites, seasonal lease charges, rental payments under furniture leases, income from laundry service, and income and fees from any and all other services provided to residents of the Facility.

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(xviii) All rights to payments from Medicare, Medicaid or TRICARE programs or similar federal, state or local programs or agencies and rights to payment from private insurers, arising from the operation of the Facility.

(xix) All Licenses.

(xx) All Contracts, including without limitation, operating contracts, franchises, licensing agreements, healthcare services contracts, food service contracts and other contracts for services related to the operation of the Facility.

(xxi) All utility deposits.

(xxii) If the Note provides for interest to accrue at an adjustable or variable rate and there is a Cap Agreement, the Cap Collateral.

(xxiii) Without duplication of the foregoing or the inclusions in Mortgaged Property set forth elsewhere in this Loan Agreement, all of the real and personal property, both tangible and intangible, described on Exhibit N.

“NFIP” is defined in Section 6.10(a)(iv).

“Non-Residential Lease” is a Lease of a portion of the Mortgaged Property to be used for non-residential purposes.

“New Non-Residential Lease” is any Non-Residential Lease not in existence as of the date of this Loan Agreement.

“Note” means the Multifamily Note (including any Amended and Restated Note, Consolidated, Amended and Restated Note, or Extended and Restated Note) executed by Borrower in favor of Lender and dated as of the date of this Loan Agreement, including all schedules, riders, allonges and addenda, as such Multifamily Note may be amended, modified and/or restated from time to time.

“Notice” or “Notices” means all notices, demands and other communication required under the Loan Documents, provided in accordance with the requirements of Section 12.03.

“O&M Program” is defined in Section 6.12(c) and consists of the following: Asbestos O&M Program as set forth in that environmental report dated October 12, 2011 prepared by EMG Corporation.

“operator of the Facility” means any tenant (an “Operating Tenant”) under a lease with Borrower (as landlord) of all or substantially all of the Facility, as well as any manager or operator of the Facility pursuant to a Contract with Borrower or with an Operating Tenant.

“Person” means any natural person, sole proprietorship, corporation, general partnership, limited partnership, limited liability company, limited liability partnership, limited liability limited partnership, joint venture, association, joint stock company, bank, trust, estate, unincorporated organization, any federal, state, county or municipal government (or any agency or political subdivision thereof), endowment fund or any other form of entity.

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“Personalty” means all of the following:

(i) Accounts (including deposit accounts) of Borrower related to the Mortgaged Property.

(ii) Equipment and inventory owned by Borrower, which are used now or in the future in connection with the ownership, management or operation of the Land or Improvements or are located on the Land or Improvements, including furniture, furnishings, machinery, building materials, goods, supplies, tools, books, records (whether in written or electronic form) and computer equipment (hardware and software).

(iii) Other tangible personal property owned by Borrower which is used now or in the future in connection with the ownership, management or operation of the Land or Improvements or is located on the Land or in the Improvements, including ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances (other than Fixtures).

(iv) Any operating agreements relating to the Land or the Improvements.

(v) Any surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements.

(vi) All other intangible property, general intangibles and rights relating to the operation of, or used in connection with, the Land or the Improvements, including all governmental permits relating to any activities on the Land and including subsidy or similar payments received from any sources, including a Governmental Authority.

(vii) Any rights of Borrower in or under any Letter of Credit.

“Pledge Agreement” is defined in Section 12.12(f)(viii).

“Prepayment Premium Period” is defined in the Note.

“Prior Lien” means a pre-existing mortgage, deed of trust or other Lien encumbering the Mortgaged Property.

“Privacy Laws” means all federal, state, municipal or other Governmental Authority laws, codes and statutes and all regulations and rules promulgated thereunder and all Governmental Authority interpretations thereof, applicable or pertaining to resident, tenant and patient privacy. Privacy Laws include, but are not limited to, HIPAA.

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“Proceeding” means, whether voluntary or involuntary, any case, proceeding or other action against Borrower or any SPE Equity Owner under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors.

“Proceeds” means the cash obtained by a draw on a Letter of Credit.

“Prohibited Activity or Condition” means each of the following:

(i) The presence, use, generation, release, treatment, processing, storage (including storage in above-ground and underground storage tanks), handling or disposal of any Hazardous Materials on or under the Mortgaged Property.

(ii) The transportation of any Hazardous Materials to, from or across the Mortgaged Property.

(iii) Any occurrence or condition on the Mortgaged Property, which occurrence or condition is or may be in violation of Hazardous Materials Laws.

(iv) Any violation of or noncompliance with the terms of any Environmental Permit with respect to the Mortgaged Property.

(v) Any violation or noncompliance with the terms of any O&M Program.

However, the term “Prohibited Activity or Condition” expressly excludes lawful conditions permitted by an O&M Program or the safe and lawful use and storage of quantities of (i) medical products or devices or medical waste, (ii) pre-packaged supplies, cleaning materials and petroleum products customarily used in the operation and maintenance of comparable multifamily properties, (iii) cleaning materials, personal grooming items and other items sold in pre-packaged containers for consumer use and used by tenants and occupants of residential dwelling units in the Mortgaged Property, and (iv) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Mortgaged Property’s parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance with Hazardous Materials Laws.

“Property Jurisdiction” means the jurisdiction in which the Land is located.

“Property Manager” means Greenfield Management, L.L.C., a Virginia limited liability company, or such other residential rental property manager approved by Lender in writing.

“Property Seller” is defined in Section 5.24.

“Public Fund/REIT Securities” is defined in Section 7.03(c).

“Rating Agencies” means Fitch, Inc., Moody’s Investors Service, Inc., or Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor entity of the foregoing, or any other nationally recognized statistical rating organization.

“Release Instruments” is defined in Section 12.12(f)(x).

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“Remedial Work” is defined in Section 6.12(f).

“Rent(s)” means all rents (whether from residential or non-residential space), revenues and other income of the Land or the Improvements, parking fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property, whether now due, past due or to become due, and deposits forfeited by tenants, and, if Borrower is a cooperative housing corporation or association, maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements, whether now due, past due or to become due.

“Rent Schedule” means a written schedule for the Mortgaged Property showing the name of each tenant, and for each tenant, the space occupied, the lease expiration date, the rent payable for the current month, the date through which rent has been paid, and any related information requested by Lender.

“Repairs” means the repairs to be made to the Mortgaged Property, as described on the Repair Schedule of Work or as otherwise required by Lender in accordance with this Loan Agreement.

“Replacement Cost” means the estimated replacement cost of the Improvements, Fixtures, and Personalty (or, when used in reference to a property that is not the Mortgaged Property, all improvements, fixtures, and personalty located on such property), excluding any deduction for depreciation, all as determined annually by Borrower using customary methodology and sources of information acceptable to Lender in Lender’s Discretion. Replacement Cost will not include the cost to reconstruct foundations or site improvements, such as driveways, parking lots, sidewalks, and landscaping.

“Required DSCR” means, with respect to a Supplemental Loan, (i) if the Senior Indebtedness bears interest at a fixed rate, then (A) 1.30:1 for Mortgaged Properties classified by Lender as Independent Living and (B) 1.40:1 for Mortgaged Properties classified by Lender as Assisted Living, or (ii) if the Senior Indebtedness bears interest at an adjustable rate, then (A) 1.15:1 for Mortgaged Properties classified by Lender as Independent Living and (B) 1.20:1 for Mortgaged Properties classified by Lender as Assisted Living.

“Required LTV” means 75%.

“Reserve Fund” means each account established for Imposition Reserve Deposits, the Replacement Reserve Fund, the Repair Reserve Fund (if any), the External Cap Agreement Reserve Fund (if any), the Rental Achievement Fund (if any), and any other account established pursuant to Article IV of this Loan Agreement.

“Restoration” is defined in Section 6.10(i).

“Scheduled Debt Payments” is defined in Section 12.12(g)(ii).

“Secondary Market Transaction” means (i) any sale or assignment of this Loan Agreement, the Note and the other Loan Documents to one or more investors as a whole loan, (ii) a participation of the Loan to one or more investors, (iii) any deposit of this Loan Agreement, the Note and the other Loan Documents with a trust or other entity which may sell certificates or

Seniors Housing Loan and Security Agreement (CME) Page 96

other instruments to investors evidencing an ownership interest in the assets of such trust or other entity, or (iv) any other sale, assignment or transfer of the Loan or any interest in the Loan to one or more investors.

“Securities Liabilities” is defined in Section 10.02(d).

“Securitization” means when the Note or any portion of the Note is assigned to a REMIC trust.

“Security Instrument” means the mortgage, deed of trust, deed to secure debt or other similar security instrument encumbering the Mortgaged Property and securing Borrower’s performance of its Loan obligations, including Borrower’s obligations under the Note and this Loan Agreement (including any Amended and Restated Security Instrument, Consolidation, Modification and Extension Agreement, Extension and Modification Agreement or similar agreement or instrument amending and restating existing security instruments).

“Senior Indebtedness” means, for a Supplemental Loan, if any, the Indebtedness evidenced by the Senior Note and secured by the Senior Instrument for the benefit of Senior Lender.

“Senior Instrument” – Not applicable.

“Senior Lender” means the holder of the Senior Note.

“Senior Loan Documents” means, for a Supplemental Loan, if any, all documents relating to the loan evidenced by the Senior Note.

“Senior Note” means, for a Supplemental Loan, if any, the Multifamily Note secured by the Senior Instrument.

“Seniors Apartments” means age-restricted apartments for senior residents who are able to function independently. These residences are typically restricted to residents 55 and older (or 62 and older). Seniors Apartments do not provide healthcare services, medication assistance, meal services or other third-party contract services

“Servicing Arrangement” is defined in Section 12.06(b).

“SFHA” is defined in Section 6.10(a)(iv).

“Single Purpose Entity” is defined in Section 6.13(a).

“Skilled Nursing Beds” means a portion of a property that provides licensed skilled nursing care and related services for patients who require medical, nursing or rehabilitative services, including Alzheimer’s care.

“SPE Equity Owner” is not applicable. Borrower will not be required to maintain an SPE Equity Owner in its organizational structure during the term of the Loan and all references to SPE Equity Owner in this Loan Agreement and in the Note will be of no force or effect.

“Successor Borrower” is defined in Section 12.12(h).

Seniors Housing Loan and Security Agreement (CME) Page 97

“Supplemental Indebtedness” the Indebtedness evidenced by the Supplemental Note and secured by the Supplemental Instrument for the benefit of Supplemental Lender, if any.

“Supplemental Instrument” means, for a Supplemental Loan, if any, the Security Instrument executed to secure the Supplemental Note.

“Supplemental Lender” means, for a Supplemental Loan, if any, the Approved Seller/Servicer named in the Supplemental Instrument and its successors and/or assigns.

“Supplemental Loan” means a loan that is subordinate to the Senior Indebtedness.

“Supplemental Loan Documents” means, for a Supplemental Loan, if any, all documents relating to the loan evidenced by the Supplemental Note.

“Supplemental Mortgage Product” is defined in Section 12.11(a).

“Supplemental Note” means, for a Supplemental Loan, if any, the Multifamily Note secured by the Supplemental Instrument.

“Tax Code” means the Internal Revenue Code of the United States, 26 U.S.C. Section 1 et seq., as amended from time to time.

“Taxes” means all taxes, assessments, vault rentals and other charges, if any, whether general, special or otherwise, including all assessments for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority or quasi-public authority, and which, if not paid, will become a Lien on the Land or the Improvements.

“Third Party Information” is defined in Section 10.02(d).

“Third Party Provider Agreements” means any contract pursuant to which payments arising from operation of or at the Facility are to be made by or pursuant to Medicare, Medicaid or TRICARE programs or similar federal, state or local programs or agencies or private insurers.

“Transfer” means any of the following:

(i) A sale, assignment, transfer or other disposition or divestment of any interest in Borrower or the Mortgaged Property (whether voluntary, involuntary or by operation of law).

(ii) The granting, creating or attachment of a Lien, encumbrance or security interest (whether voluntary, involuntary or by operation of law).

(iii) The issuance or other creation of an ownership interest in a legal entity, including a partnership interest, interest in a limited liability company or corporate stock.

(iv) The withdrawal, retirement, removal or involuntary resignation of a partner in a partnership or a member or Manager in a limited liability company.

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(v) The merger, dissolution, liquidation, or consolidation of a legal entity or the reconstitution of one type of legal entity into another type of legal entity.

(vi) A change of the Guarantor.

For purposes of defining the term “Transfer,” the term “partnership” means a general partnership or a limited partnership, and the term “partner” means a general partner or a limited partner.

“Transfer” does not include any of the following:

(i) A conveyance of the Mortgaged Property at a judicial or non-judicial foreclosure sale under the Security Instrument.

(ii) The Mortgaged Property becoming part of a bankruptcy estate by operation of law under the Bankruptcy Code.

(iii) The filing or recording of a Lien against the Mortgaged Property for local taxes and/or assessments not then due and payable.

“Transfer and Assumption Agreement” is defined in Section 12.12(f)(ix).

“Transfer Fee” means a fee paid when the Transfer is completed. Unless otherwise specified, the Transfer Fee will be equal to 1% of the outstanding principal balance of the Indebtedness as of the date of the Transfer. Notwithstanding anything set forth in Article VII to the contrary, the Transfer Fee will not exceed 1% of the outstanding principal balance of the Loan.

“Transfer Review Fee” means a nonrefundable fee of $5,000 for Lender’s review of a proposed Transfer.

“U.S. Treasury Obligations” means direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by the United States of America.

“UCC Collateral” is defined in Section 3.03.

“Underwriter Group” is defined in Section 10.02(d).

“Uniform Commercial Code” means the Uniform Commercial Code as promulgated in the applicable jurisdiction.

“Windstorm Coverage” is defined in Section 6.10(a)(ix).

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ARTICLE XIV   INCORPORATION OF ATTACHED RIDERS.

The following Riders are attached to this Loan Agreement:

Name of Rider	Date Revised
Seniors Housing Operator		9/1/2011
Recycled Borrower		9/1/2011
Replacement Reserve Fund – Immediate Deposits		9/1/2011
Entity Guarantor		9/1/2011
Month to Month Leases		1/11/2012
Affiliate Transfer		9/1/2011
Alzheimer’s Care, Dementia Care and/or Memory Care		1/1/2012
Cash Management Agreement		9/1/2011
Trade Names		1/11/2012

ARTICLE XV INCORPORATION OF ATTACHED EXHIBITS.

The following Exhibits, if marked with an “X” in the space provided, are attached to this Loan Agreement:

x	Exhibit A	Description of the Land (required)
x	Exhibit B	Modifications to Seniors Housing Loan and Security Agreement
¨	Exhibit C	Repair Schedule of Work
¨	Exhibit D	Repair Disbursement Request
¨	Exhibit E	Work Commenced at Mortgaged Property
x	Exhibit F	Capital Replacements (required)
¨	Exhibit G	Description of Ground Lease
x	Exhibit H	Organizational Chart of Borrower as of the Closing Date (required)
x	Exhibit I	Designated Entities for Transfers and Guarantor(s) (required)
x	Exhibit J	Licenses (required)
x	Exhibit K	Furniture, Fixtures, Equipment and Motor Vehicles (required)
x	Exhibit L	Contracts (required)

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x	Exhibit M	Material Contracts (required)
x	Exhibit N	Additional Mortgaged Property (required)

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURES ON FOLLOWING PAGES

Seniors Housing Loan and Security Agreement (CME) Page 101

BORROWER:

CARE GSL BERRYVILLE LLC,

a Delaware limited liability company

By: /s/ Salvatore (Torey) V. Riso, Jr.                     

Name: Salvatore (Torey) V. Riso, Jr.

Title: President and Chief Executive Officer

SIGNATURES CONTINUE ON FOLLOWING PAGE

Seniors Housing Loan and Security Agreement (CME) Page 102

LENDER:

KEYCORP REAL ESTATE CAPITAL

MARKETS, INC., an Ohio corporation

By: /s/ Crystal L. Williams                     

Name: Crystal L. Williams

Title:   Vice President

Seniors Housing Loan and Security Agreement (CME) Page 103

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME)

SENIORS HOUSING OPERATOR

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Article XI is deleted and replaced with the following:

ARTICLE XI SENIORS HOUSING OPERATOR.

11.01  Additions to Definitions. The following terms, when used in this Loan Agreement, will have the following meanings or will add to the definitions in Article XIII, as applicable:

(a) The term “Lease” includes any master lease agreement or operating lease under which control of the use or operation of part or all of the Mortgaged Property has been granted to another entity.

(b) “Operating Lease” or “operating lease” means that Lease, dated as of September 20, 2011, entered into by and between Borrower, as landlord, and Operator, as tenant, leasing the Land and Improvements, together with certain personal property used in connection therewith, as described in said Lease, and all modifications, extensions or renewals.

(c) “Operator” or “operator” means Greenfield Assisted Living of Berryville, L.L.C., a Virginia limited liability company, the tenant of the Land and Improvements under the Operating Lease, together with its permitted successors and assigns.

11.02  Additional Covenants. In addition to those covenants contained in Article VI, Borrower covenants to Lender as follows:

(a) Borrower will furnish to Lender (i) within 5 days after the receipt by Borrower from Operator, copies of any and all notices of Borrower’s default or failure to pay or perform an obligation under the Operating Lease, and/or (ii) immediately upon the issuance by Borrower to Operator, copies of any and all notices of Operator’s default or failure to pay or perform an obligation under the Operating Lease.

(b) Borrower will not surrender, terminate, cancel, modify, renew or extend the Operating Lease; permit the change of the Operator; enter into any other agreement relating to the operation of the Facility with the Operator or any other Person; or consent to the assignment by the Operator of its

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Seniors Housing Operator

interest under the Operating Lease or similar agreement, as applicable, in each case without the prior written approval of Lender, and in each such instance the approval by Lender of the Operating Lease; provided, however, with respect to a new operator, such consent may be conditioned upon Borrower delivering a Rating Confirmation as to such new operator. If at any time Lender consents to the appointment of a new operator of the Facility, such new operator and Borrower will, as a condition of Lender’s consent, execute an assignment of operating agreement, in a form acceptable to Lender in its discretion. If any such replacement operator is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered at the origination of the Loan, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to the Rating Agencies (unless waived by the Rating Agencies) with regard to nonconsolidation.

11.03  Additional Representations and Warranties. In addition to those representations and warranties contained in Article V, Borrower represents and warrants to Lender as follows:

(a) Any management or similar agreement or Operating Lease between Borrower and Operator or between Operator and any management agent or operator of the Facility are in full force and effect and there is no default, breach or violation existing under any management or similar agreement or Operating Lease by any party thereto and no event (other than payments due but not yet delinquent) which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach or violation by any party under any management or similar agreement or Operating Lease.

11.04  Additional Events of Default. In addition to the Events of Default listed in Article IX, each of the following will also constitute an Event of Default:

(a) With regard to the Operating Lease, (i) if the Operating Lease is terminated for any reason prior to the stated term of the Operating Lease or during any renewal period of the Operating Lease, or (ii) if Operator fails to exercise any or all renewal options contained in the Operating Lease or (iii) if Borrower and Operator amend, modify or revise in any way the Operating Lease without the prior written consent of Lender, which consent will be given in Lender’s sole and exclusive discretion or (iv) if a default occurs under the Operating Lease. Notwithstanding the foregoing, it will not be an Event of Default upon the occurrence of any of (i), (ii) or (iv), if Borrower has entered into a new operating lease for the Facility with a term commencing upon the termination of the existing Operating Lease (or as to circumstances described in clause (iv), commencing upon the termination of the existing Operating Lease, which will be on a date agreed to by Lender, in Lender’s sole and exclusive discretion), containing the same terms and conditions as such existing

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Seniors Housing Operator

Operating Lease or including such other terms and conditions as Lender may have approved in writing, with a new operator for the Facility which Lender has approved in writing prior to the execution of the new operating lease, which approval will be given in Lender’s sole and exclusive discretion in accordance with the terms of Section 11.02(b).

(b) Any change of the operator of the Facility or of any management agent of the Facility as of the date of this Instrument without Lender’s prior written consent, which consent will be given in Lender’s sole and exclusive discretion in accordance with the terms of Section 11.02(b); provided, however, that Sections 7.02(b) through 7.02(e) and the definition of “Controlling Entity” will apply to the Operator as modified solely for purposes of this subsection as follows: the word “Borrower” used in these subsections will be deleted and replaced with “Operator”.

(c) Any failure by Operator to perform any of its obligations as and when required under any Loan Document which continues beyond the applicable cure period, if any, specified in that Loan Document.

11.05  Financial Reporting

(a) Sections 6.07(d) and (e) are deleted and replaced with the following:

(d) Form of Statements; Audited Financials. A natural person having authority to bind Borrower (or the SPE Equity Owner, Operator or guarantor, as applicable) will certify each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b) to be complete and accurate. Each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c)(i) and (iii), 6.07(f) and 11.05(b) will be in such form and contain such detail as Lender may reasonably require. Lender also may require that any of the statements, schedules or reports listed in Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b) be audited at Borrower’s expense by independent certified public accountants acceptable to Lender, at any time when an Event of Default has occurred and is continuing or at any time that Lender, in its reasonable judgment, determines that audited financial statements are required for an accurate assessment of the financial condition of Borrower or of the Mortgaged Property.

(e) Failure to Timely Provide Financial Statements. If Borrower fails to provide, or cause to be provided, in a timely manner the statements, schedules and reports required by Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b), Lender will give Borrower Notice specifying the statements, schedules and reports required by Sections 6.07(b), 6.07(c), 6.07(f) and 11.05(b) that Borrower has failed to provide or cause to be provided. If Borrower has not provided or caused to be provided the required statements, schedules and reports within 10 Business Days following such Notice, then (i) Borrower will pay a late fee of $500 for each late

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Seniors Housing Operator

statement, schedule or report, plus an additional $500 per month that any such statement, schedule or report continues to be late, and (ii) Lender will have the right to have the books and records relating to the Mortgaged Property audited, at Borrower’s expense, by independent certified public accountants selected by Lender in order to obtain such statements, schedules and reports, and all related costs and expenses of Lender will become immediately due and payable and will become an additional part of the Indebtedness as provided in Section 9.02. Notice to Borrower of Lender’s exercise of its rights to require an audit will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

(b) In addition to those financial reporting covenants in Section 6.07, Borrower will cause Operator to furnish to Lender each of the following:

(i) If, in connection with this Loan, the Borrower purchased the Mortgaged Property, then a statement of income and expenses for Operator’s operation of the Mortgaged Property from the origination date to the end of the first full calendar quarter following such origination date, such statement to be provided within 25 days after the end of such quarter; or, for all other cases (for example, a refinance of a loan, a purchase of partnership or other interests, or new debt being placed on the Mortgaged Property), a statement of income and expenses for Operator’s operation of the Mortgaged Property for the trailing 6 months, such statement to be provided within 25 days after the end of such quarter.

(ii) After Borrower has caused Operator to furnish such statements required by Section 11.05(b)(i) above, within 25 days after the end of each subsequent calendar quarter of Operator, the following:

(A) A Rent Schedule.

(B) A statement of income and expenses for Operator’s operation of the Mortgaged Property for that calendar quarter.

(iii) Within 25 days after the end of each fiscal quarter of Operator, Borrower will cause Operator to furnish to Lender a statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Operator relating to the Mortgaged Property as of the end of that fiscal quarter.

(iv) Within 90 days after the end of each fiscal year of Operator, Borrower will cause Operator to furnish to Lender each of the following:

(A) An annual statement of income and expenses for Operator’s operation of the Mortgaged Property for that fiscal year.

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Seniors Housing Operator

(B) A statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal year.

(C) A balance sheet showing all assets and liabilities of Operator relating to the Mortgaged Property as of the end of that fiscal year and a profit and loss statement for Operator.

(D) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.

(v) Borrower will cause Operator to furnish to Lender each of the following:

(A) Prior to a Securitization, and thereafter upon Lender’s reasonable request, a monthly Rent Schedule and a monthly statement of income and expenses for Operator’s operation of the Mortgaged Property.

(B) Such other financial information or property management information (including, without limitation, information on tenants under Leases to the extent such information is available to Operator, copies of bank account statements from financial institutions where funds owned or controlled by Operator are maintained, and an accounting of security deposits) as may be required by Lender from time to time.

Rider to Seniors Housing Loan and Security Agreement (CME)

Seniors Housing Operator

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME)

RECYCLED BORROWER

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. The following is added as a new Section to Article V:

5.40 Recycled Borrower.

(a) Underwriting Representations. Borrower hereby represents that from the date of its formation, each of the following is true:

(i) Borrower is and always has been duly formed, validly existing, and in good standing in the state of its formation and in all other jurisdictions where it is qualified to do business.

(ii) Borrower has no judgments or liens of any nature against it except for tax liens not yet due.

(iii) Borrower is in compliance with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Loan Agreement, has received all permits necessary for it to operate.

(iv) Borrower is not involved in any dispute with any taxing authority.

(v) Borrower has paid all taxes which it owes.

(vi) Borrower has never owned any real property other than the Mortgaged Property and personal property necessary or incidental to its ownership or operation of the Mortgaged Property and has never engaged in any business other than the ownership and operation of the Mortgaged Property.

(vii) Borrower is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending or that resulted in a judgment against it that has not been paid in full.

(viii) Borrower has provided Lender with complete financial statements that reflect a fair and accurate view of the entity’s financial condition.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

(ix) Borrower has obtained a current Phase I environmental site assessment (“ESA”) for the Mortgaged Property prepared consistent with ASTM Practice E 1527 and the ESA has not identified any recognized environmental conditions that require further investigation or remediation.

(x) Borrower has no material contingent or actual obligations not related to the Mortgaged Property.

(xi) Each amendment and restatement of Borrower’s organizational documents has been accomplished in accordance with, and was permitted by, the relevant provisions of said documents prior to its amendment or restatement from time to time.

(b) Separateness Representations. Borrower hereby represents that from the date of its formation, each of the following is true:

(i) Borrower has not entered into any contract or agreement with any Related Party Affiliate, except upon terms and conditions that are commercially reasonable and substantially similar to those available in an arm’s-length transaction with an unrelated party.

(ii) Borrower has paid all of its debts and liabilities from its assets.

(iii) Borrower has done or caused to be done all things necessary to observe all organizational formalities applicable to it and to preserve its existence.

(iv) Borrower has maintained all of its books, records, financial statements and bank accounts separate from those of any other Person.

(v) Borrower has not had its assets listed as assets on the financial statement of any other Person.

(vi) Borrower has filed its own tax returns (except to the extent that it has been a tax-disregarded entity not required to file tax returns under applicable law) and, if it is a corporation, has not filed a consolidated federal income tax return with any other Person.

(vii) Borrower has been, and at all times has held itself out to the public as, a legal entity separate and distinct from any other Person (including any Affiliate or other Related Party Affiliate);

(viii) Borrower has corrected any known misunderstanding regarding its status as a separate entity.

(ix) Borrower has conducted all of its business and held all of its assets in its own name.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

(x) Borrower has not identified itself or any of its affiliates as a division or part of the other.

(xi) Borrower has maintained and utilized separate stationery, invoices and checks bearing its own name.

(xii) Borrower has not commingled its assets with those of any other Person and has held all of its assets in its own name.

(xiii) Borrower has not guaranteed or become obligated for the debts of any other Person.

(xiv) Borrower has not held itself out as being responsible for the debts or obligations of any other Person.

(xv) Borrower has allocated fairly and reasonably any overhead expenses that have been shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate or Related Party Affiliate.

(xvi) Borrower has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the Loan.

(xvii) Borrower has maintained adequate capital in light of its contemplated business operations.

(xviii) Borrower has maintained a sufficient number of employees in light of its contemplated business operations and has paid the salaries of its own employees from its own funds.

(xix) Borrower has not owned any subsidiary or any equity interest in any other entity.

(xx) Borrower has not incurred any indebtedness that is still outstanding other than Indebtedness that is permitted under the Loan Documents.

(xxi) Borrower has not had any of its obligations guaranteed by an Affiliate or other Related Party Affiliate, except for guarantees that have been either released or discharged (or that will be discharged as a result of the closing of the Loan) or guarantees that are expressly contemplated by the Loan Documents.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

(xxii) None of the tenants holding leasehold interests with respect to the Mortgaged Property are an Affiliate of Borrower or other Related Party Affiliate.

B. The following definition is added to Article XII:

“Related Party Affiliate” means any of the Borrower’s Affiliates, constituents, or owners, or any guarantors of any of the Borrower’s obligations or any Affiliate of any of the foregoing.

Rider to Multifamily Loan and Security Agreement (CME)

Recycled Borrower

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

REPLACEMENT RESERVE FUND – IMMEDIATE DEPOSITS

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 4.04 is deleted and replaced with the following:

4.04 Replacement Reserve Fund.

(a) Deposits to Replacement Reserve Fund. On the Closing Date, the parties will establish the Replacement Reserve Fund and Borrower will pay the Initial Deposit to Lender for deposit into the Replacement Reserve Fund. Commencing on the date the first installment of principal and/or interest is due under the Note and continuing on the same day of each successive month until the Loan is paid in full, Borrower will pay the Monthly Deposit to Lender for deposit into the Replacement Reserve Fund, together with its regular monthly payments of principal and/or interest as required by the Note. A transfer of funds into the Replacement Reserve Fund from the Repair Reserve Fund, pursuant to the terms of Section 4.03(e), if applicable, will not alter or reduce the amount of any deposits to the Replacement Reserve Fund.

(b) Fees Deducted From Replacement Reserve Fund. Lender will be entitled to deduct from the Replacement Reserve Fund (i) the Investment Fee for establishing the Replacement Reserve Fund and (ii) the Inspection Fee for any inspection required pursuant to this Section 4.04. If Lender, in its discretion, retains a professional inspection engineer or other qualified third party to inspect any Capital Replacements pursuant to the terms of Section 6.06, Lender also will be entitled to deduct from the Replacement Reserve Fund an amount sufficient to pay all reasonable fees and expenses charged by such third party inspector.

(c) Adjustments to Replacement Reserve Fund. Lender reserves the right to adjust the amount of the Monthly Deposit based on Lender’s assessment of the physical condition of the Mortgaged Property. Unless the Loan has an initial term of greater than 120 months, Lender will not make such an adjustment prior to the date that is 120 months after the first installment due date, nor more frequently than every 10 years thereafter during the term of the Loan. Upon Notice from Lender or Loan Servicer, Borrower will begin paying the Revised Monthly Deposit on the first monthly payment date that is at least 30 days after the date of Lender’s or Loan Servicer’s Notice. If Lender or Loan Servicer does not provide Borrower with Notice of a Revised Monthly Deposit, Borrower will continue to pay the Monthly Deposit or the Revised Monthly Deposit then in effect.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

(d) Insufficient Amount in Replacement Reserve Fund. If Borrower requests disbursement from the Replacement Reserve Fund for a Capital Replacement in accordance with this Loan Agreement in an amount which exceeds the amount on deposit in the Replacement Reserve Fund, Lender will disburse to Borrower only the amount on deposit in the Replacement Reserve Fund. Borrower will pay all additional amounts required in connection with any such Capital Replacement from Borrower’s own funds.

(e) INTENTIONALLY OMITTED.

(f) INTENTIONALLY OMITTED.

(g) Disbursements from Replacement Reserve Fund.

(i) Requests for Disbursement. Lender will disburse funds from the Replacement Reserve Fund as follows:

(A) Borrower’s Request. If Borrower determines, at any time or from time to time, that a Capital Replacement is necessary or desirable, Borrower will perform such Capital Replacement and request from Lender, in writing, reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed description of the Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital Replacement has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor or materials for such Capital Replacement.

(B) Lender’s Request. If Lender reasonably determines at any time or from time to time, that a Capital Replacement is necessary for the proper maintenance of the Mortgaged Property, it will so notify Borrower, in writing, requesting that Borrower obtain and submit to Lender bids for all labor and materials required in connection with such Capital Replacement. Borrower will submit such bids and a time schedule for completing each Capital Replacement to Lender within 30 days after Borrower’s receipt of Lender’s Notice. Borrower will perform such Capital Replacement and request from Lender, in writing, reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed description of the

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital Replacement has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor or materials for such Capital Replacement.

(C) Borrower’s Requests for Incremental Disbursements. Notwithstanding the provisions of Sections 4.04(g)(i)(A) and (B) above, Borrower shall have the right to request reimbursement for a portion of the cost of any Capital Replacement performed under this Agreement (each, a “Partial Payment”) prior to the completion of such Capital Replacement provided that each of the following conditions are satisfied:

(1) the cost of such Capital Replacement shall exceed $50,000;

(2) prior to the commencement of such Capital Replacement, Lender shall receive the following, all of which shall be acceptable to Lender in its discretion: (a) the agreement(s) of each contractor and material supplier providing labor or materials for such Capital Replacement, and (b) a proposed schedule of disbursements for such Capital Replacement that sets forth the amount and timing of each proposed Partial Payment and that specifies what portion of the Capital Replacement shall be completed prior to the disbursement of each Partial Payment (such schedule, as approved by Lender, the “Schedule of Disbursement”);

(3) prior to the disbursement of each such Partial Payment, Lender receives the following: (a) evidence satisfactory to Lender that all work required under the Schedule of Disbursement to be completed prior to such Partial Payment has been completed, (b) evidence satisfactory to Lender that the amount of such Partial Payment has been paid (or, subject to the requirements of this paragraph, will be paid from such disbursement) and does not exceed the amount contemplated in the Schedule of Disbursement, and (c) if required by Lender, partial lien waivers from any contractor and/or material supplier providing labor or materials for such

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

Capital Replacement. Upon Borrower’s request, Lender may in its discretion agree that such Partial Payment may be used to pay amounts owed to any contractor and/or material supplier providing labor or materials for such Capital Replacement rather than to reimburse Borrower for such payment, in which event such disbursements shall be made by Lender either directly to such contractor or supplier on behalf of Borrower or by joint check to Borrower and such contractor or supplier, as Lender shall elect at its sole option.

(ii) Conditions Precedent. Disbursement from the Replacement Reserve Fund will be made no more frequently than once every Replacement Reserve Disbursement Period and, except for the final disbursement, no disbursement will be made in an amount less than the Minimum Replacement Disbursement Request Amount. Disbursements (including any disbursements for Partial Payments) will be made only if the following conditions precedent have been satisfied, as reasonably determined by Lender in Lender’s Discretion:

(A) Each Capital Replacement has been performed and/or installed on the Mortgaged Property in a good and workmanlike manner with suitable materials (or in the case of a partial disbursement, performed and/or installed on the Mortgaged Property to an acceptable stage), in accordance with good building practices and all applicable laws, ordinances, rules and regulations, building setback lines and restrictions applicable to the Mortgaged Property, and has been paid for by Borrower as evidenced by copies of all applicable paid invoices or bills submitted to Lender by Borrower at the time Borrower requests disbursement from the Replacement Reserve Fund.

(B) There is no condition, event or act that would constitute a default (with or without Notice and/or lapse of time).

(C) No Lien or claim based on furnishing labor or materials has been recorded, filed or asserted against the Mortgaged Property, unless Borrower has properly provided a bond or other security against loss in accordance with applicable law.

(D) All licenses, permits and approvals of any Governmental Authority required for the Capital Replacement as completed to the applicable stage have been obtained and submitted to Lender upon Lender’s request.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

(h) Right to Complete Capital Replacements. If Borrower abandons or fails to proceed diligently with any Capital Replacement in a timely fashion or an Event of Default occurs and continues under this Loan Agreement for 30 days after Notice of such failure by Lender to Borrower, Lender will have the right (but not the obligation) to enter upon the Mortgaged Property and take over and cause the completion of such Capital Replacement. However, no such Notice or cure period will apply in the case of such failure which could, in Lender’s sole and absolute judgment, absent immediate exercise by Lender of a right or remedy under this Loan Agreement, result in harm to Lender, tenants or third parties or impairment of the security given under this Loan Agreement, the Security Instrument or any other Loan Document. Any contracts entered into or indebtedness incurred upon the exercise of such right may be in the name of Borrower, and Lender is irrevocably appointed the attorney in fact for Borrower, such appointment being coupled with an interest, to enter into such contracts, incur such obligations, enforce any contracts or agreements made by or on behalf of Borrower (including the prosecution and defense of all actions and proceedings in connection with the Capital Replacement and the payment, settlement or compromise of all bills and claims for materials and work performed in connection with the Capital Replacement) and do any and all things necessary or proper to complete any Capital Replacement, including signing Borrower’s name to any contracts and documents as may be deemed necessary by Lender. In no event will Lender be required to expend its own funds to complete any Capital Replacement, but Lender may, in Lender’s Discretion, advance such funds. Any funds advanced will be added to the Indebtedness, secured by the Security Instrument and payable to Lender by Borrower in accordance with the provisions of the Note, this Loan Agreement, the Security Instrument and any other Loan Document pertaining to the protection of Lender’s security and advances made by Lender.

(i) Completion of Capital Replacements. Lender’s disbursement of monies from the Replacement Reserve Fund or other acknowledgment of completion of any Capital Replacement in a manner satisfactory to Lender in Lender’s Discretion will not be deemed a certification by Lender that the Capital Replacement has been completed in accordance with applicable building, zoning or other codes, ordinances, statutes, laws, regulations or requirements of any Governmental Authority. Borrower will at all times have the sole responsibility for ensuring that all Capital Replacements are completed in accordance with all such requirements of any Governmental Authority.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

B. The following definitions are added to Article XIII:

‘“Initial Deposit” means $0.

“Minimum Replacement Disbursement Request Amount” means $5,000.00

“Monthly Deposit” means $1,200.00.

“Replacement Reserve Deposit” means the Initial Deposit, the Monthly Deposit and/or the Revised Monthly Deposit, as appropriate.

“Replacement Reserve Disbursement Period” means the interval between disbursements from the Replacement Reserve Fund, which interval will be no shorter than once a month.

“Replacement Reserve Fund” means the account established pursuant to this Loan Agreement to defray the costs of Capital Replacements.

“Revised Monthly Deposit” means the adjusted amount per month that Lender determines Borrower must deposit in the Replacement Reserve Fund following any adjustment determination by Lender pursuant to Section 4.04(c).

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Replacement Reserve Fund – Immediate Deposits

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

ENTITY GUARANTOR

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. The following is added as a new subsection to Section 9.01:

(w) Guarantor fails to comply with the provisions of the Section of the Guaranty entitled “Material Adverse Change” or “Minimum Net Worth/Liquidity Requirements”, as applicable.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Entity Guarantor

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

MONTH TO MONTH LEASES

(Revised 1-11-2012)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 5.11 is deleted and replaced with the following:

5.11 Term of Leases. Unless otherwise approved in writing by Lender, all Leases for residential dwelling units with respect to the Mortgaged Property are on forms acceptable to Lender, are for initial terms of at least 6 months and not more than 2 years, and do not include options to purchase; provided, however, that up to 100% of all Leases may be for an initial term of less than 6 months, but not less than 1 month.

B. Section 6.15(a) is deleted and replaced with the following:

(a) Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect. All Leases for residential dwelling units will be on forms acceptable to Lender, will be for initial terms of at least 6 months and not more than 2 years, and will not include options to purchase; provided, however, that up to 100% of all Leases may be for an initial term of less than 6 months, but not less than 1 month.

Rider to Multifamily Loan and Security Agreement (CME and Portfolio)

Month to Month Leases

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME)

AFFILIATE TRANSFER

(Revised 9-1-2011)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 7.03(d) is deleted and replaced with the following:

(d) Affiliate Transfer. A Transfer of any direct or indirect interests in Borrower held by an entity wholly-owned and controlled by Care Investment Trust Inc., a Maryland corporation, to one or more of its Affiliates (“Affiliate Transfer”) provided that each of the following conditions is satisfied:

(i) Borrower provides Lender with at least 30 days prior Notice of the proposed Affiliate Transfer and pays to Lender the Transfer Review Fee.

(ii) At the time of the proposed Affiliate Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(iii) Lender determines, in Lender’s Discretion, that the Affiliate meets Lender’s eligibility, credit, management and other standards for seniors housing properties.

(iv) After the Affiliate Transfer, Control and management of the day-to-day operations of Borrower and the Facility continue to be held by the Person exercising such Control and management immediately prior to the Affiliate Transfer and there is no change in the Guarantor, if applicable.

(v) Lender receives organizational charts reflecting the structure of Borrower prior to and after the Affiliate Transfer.

(vi) Borrower pays or reimburses Lender, upon demand, for all costs and expenses including all Attorneys’ Fees and Costs, incurred by Lender in connection with the Affiliate Transfer.

(vii) At the time of the Affiliate Transfer, Borrower pays a $25,000 Transfer Fee to Lender.

(viii) If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to the Affiliate Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a 50% direct or

Rider to Multifamily Loan and Security Agreement (CME)

Affiliate Transfer

indirect interest in Borrower as of the Closing Date, Borrower delivers to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender and to the Rating Agencies, with regard to nonconsolidation.

(ix) If required by Lender, Lender receives confirmation acceptable to Lender that the requirements of Section 6.13 continue to be satisfied.

(x) Borrower delivers to Lender a search confirming that the Affiliate is not on the list of Specially Designated Nationals or other blocked persons published by the U.S. Office of Foreign Assets Control, or on the list of persons or entities prohibited from doing business with the Department of Housing and Urban Development.

B. The following definition is added to Article XIII:

“Affiliate Transfer” is defined in Section 7.03(d).

Rider to Multifamily Loan and Security Agreement (CME)

Affiliate Transfer

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

ALZHEIMER’S CARE, DEMENTIA CARE AND/OR MEMORY CARE

(Revised 1-11-2012)

The following changes are made to the Loan Agreement which precedes this Rider:

A. The following is added to Section 5.25:

The bed count identified in the Intended Uses as “Assisted Living Residences devoted to Alzheimer’s care, dementia care and/or memory care”, may vary up to the limits allowed in the current licensing for the Mortgaged Property, provided that no more than 40% of the beds at the Mortgaged Property (including any beds added by the construction of any additional units) may be dedicated to the care of residents with Alzheimer’s disease or other dementia.

Rider to Seniors Housing Loan & Security Agreement (CME and Portfolio)

Alzheimer’s Care, Dementia Care and/or Memory Care

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

(CME)

CASH MANAGEMENT AGREEMENT

(Revised 9-1-2011)

The following modifications are made to the Loan Agreement which precedes this Rider:

A. The definition of Collateral Agreement in Article XII is deleted and replaced with the following:

“Loan Documents” means the Note, the Security Instrument, this Loan Agreement, all guaranties, all indemnity agreements, all collateral agreements (including the Clearing Account Agreement and the Cash Management Agreement), UCC filings, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any Guarantor or any other Person in connection with the Loan evidenced by the Note, as such documents may be amended from time to time.

B. The following definitions are added to Article XII:

“Cash Management Agreement” means that certain cash management agreement dated the same date as this Loan Agreement among Borrower, Lender and Property Manager.

“Clearing Account Agreement” means that certain clearing account agreement dated the same date as this Loan Agreement among Borrower, Lender and Clearing Bank.

“Clearing Bank” is defined in the Clearing Account Agreement.

Rider to Seniors Housing Loan & Security Agreement (CME and Portfolio)

Alzheimer’s Care, Dementia Care and/or Memory Care

RIDER TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

(CME AND PORTFOLIO)

TRADE NAMES

(Revised 1-11-2012)

The following changes are made to the Loan Agreement which precedes this Rider:

A. The following new subsection is added to Section 6.29 as follows:

¨. Lender’s Right To Use Trade Name. Notwithstanding anything contained in this Loan Agreement, Borrower agrees that Lender will have an irrevocable license, coupled with an interest and for which consideration has been paid and received, to use the name “Greenfield Assisted Living of Berryville” and/or associated trademark rights and trade names relating to any of the Mortgaged Property for a period not to exceed 120 days after the date Lender acquires the Mortgaged Property by foreclosure or deed-in-lieu of foreclosure.

B. Subsection “(xv)” of the definition of “Mortgaged Property” in Article XIII is deleted and replaced with the following:

(xv) all names under or by which any of the Mortgaged Property may be operated or known, and all trademarks, trade names and goodwill relating to any of the Mortgaged Property; provided however, that the name “Greenfield Assisted Living of Berryville” and/or associated trademark rights are not assigned to Lender, subject to Section 6.29 of this Loan Agreement.

Seniors Housing Loan and Security Agreement (CME) Page A-1

EXHIBIT A

DESCRIPTION OF THE LAND

ALL that certain piece, parcel or tract of land situate, lying and being in the County of Clarke, Town of Berryville, Commonwealth of Virginia, being known and designated as Lot 251-I, Battlefield Estates, as shown on plat of survey recorded in the Clerk’s Office of the Circuit Court of Clarke County, Virginia, in Deed Book 293, pages 659 through 663, and containing 2.418 acres, more or less, according to a more recent survey entitled “413 McClellan Street, Clarke County, Berryville, Virginia”, dated August 10, 2011, prepared by Site Design, Inc., and according to said plat, having the following metes and bounds, to wit:

BEGINNING at a  ¹/2” rebar iron pin set located on the Northern right of way of McClellan Street at the joint corner of Robert B. & Violah M. Lee property (Lot 1, Sec. 2, Ph. 1, Battlefield Estates), now or formerly; thence leaving said right of way and running along the common line of Lot 1, and also with the common lines of Brian & Lindsay Sayre property (Lot 2, Sec. 2, Ph. 1, Battlefield Estates), now or formerly, Kenneth & Sharon Maurer (Lot 3, Sec. 2, Ph. 1, Battlefield Estates), now or formerly, and Angela M. Hammett (Lot 4, Sec. 2, Ph. 1, Battlefield Estates), now or formerly, N. 40°29’27” W. 339.00 feet to an old  ¹/2” rebar iron pin at the joint corner of A.C. Echols, Jr. property, now or formerly; thence turning and running along the common lines of the Echols property the following courses and distances: N. 40°30’33” E. 311.00 feet to an old 5/8” rebar iron pin; thence S. 40°29’37” E. 282.98 feet to a  ¹/2” rebar iron pin set; thence along a curve to the left having a radius of 375.00 feet, an arc length of 28.92 feet and a chord bearing and distance of S. 42°07’10” E. 28.91 feet to an old  ¹/2” rebar iron pin located at the northern terminus of Chamberlain Road and at the Northern end of a radial corner marking the intersection of the western right of way of Chamberlain Road and the Northern right of way of McClellan Street; thence turning and running along said radial corner along a curve to the right having a radius of 25.00 feet, and arc length of 41.21 feet and a chord bearing and distance of S. 01°51’45” W. 36.70 feet to a  ¹/2” rebar iron pin set located on the Northern right of way of McClellan Street; thence turning and running along said right of way S. 49°30’33” W. 287.11 feet to the point and place of beginning.

Together with a 50 foot Private Access Easement and turn around as shown on said Plat recorded in the Clerk’s Office of the Circuit Court of Clarke County, Virginia in Deed Book 293, pages 659-663, (for identification purposes is called a “Temporary Private Access Easement” on said Plat.) and as granted in Deed recorded in Deed Book 293, page 759.

BEING the same real estate conveyed to Care GSL Berryville LLC from Greenfield Assisted Living of Berryville, LLC by Deed dated September 20, 2011, recorded in the Clerk’s Office, Circuit Court, Clarke County, Virginia in Deed Book 538, page 418.

Seniors Housing Loan and Security Agreement (CME) Page A-1

EXHIBIT B

MODIFICATIONS TO SENIORS HOUSING LOAN AND SECURITY AGREEMENT

1. Section 5.04(b) of the Loan Agreement is deleted and the following is inserted in lieu thereof:

“(b) Without limiting the generality of subsection (a) above, neither Borrower, to the best of Borrower’s knowledge after due inquiry and investigation, any operator of the Facility, nor the Facility are subject to any proceeding, suit or investigation by any Governmental Authority and neither Borrower nor to the best of Borrower’s knowledge after due inquiry and investigation, any operator of the Facility has received any notice from any Governmental Authority which may, directly or indirectly, or with the passage of time, result in the imposition of a fine, or interim or final sanction, or would (i) have a Material Adverse Effect, (ii) result in the appointment of a receiver or trustee, (iii) affect Borrower’s or any operator of the Facility’s ability to accept and retain residents, (iv) result in the Downgrade, revocation, transfer, surrender or suspension, or non-renewal or reissuance or other impairment of any License, or (v) affect Borrower’s or operator’s continued participation in any Governmental Payor Program, or any successor programs thereto, at current rate certifications.”

2. Sections 5.07(b) and (c) are deleted and the following are inserted in lieu thereof:

“(b) Without limiting the generality of subsection (a) above, Borrower, any operator of the Facility, and the Facility (and its operation) and all residential care agreements and residential Leases are in compliance with the applicable provisions of all laws, regulations, ordinances, orders or standards of any Governmental Authority having jurisdiction over the operation of the Facility (including any Governmental Payor Program requirements and disclosure of ownership and related information requirements), including without limitation: (i) Healthcare Laws, Privacy Laws, fire and safety codes and building codes (and no waivers of such requirements exist at the Facility); (ii) laws, rules, regulations and published interpretations thereof regulating the preparation and serving of food; (iii) laws, rules, regulations and published interpretations thereof regulating the handling and disposal of medical or biological waste; (iv) the applicable provisions of all laws, rules, regulations and published interpretations thereof to which Borrower or the Facility is subject by virtue of its Intended Use; and (v) all criteria established to classify the Facility as housing for older persons under the Fair Housing Amendments Act of 1988.”

(c) Borrower has received no written notice of, and is not aware of, any violation of applicable antitrust laws or securities laws relating to the Facility, the Borrower, or any operator of the Facility.”

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3. Section 5.09(f) is deleted and the following is inserted in lieu thereof:

“(f) Neither the execution and delivery of the Note, this Loan Agreement, the Security Instrument nor any other Loan Document, Borrower’s performance under the Loan Documents, nor the recordation of the Security Instrument, nor the exercise of any remedies by Lender pursuant to the Loan Documents, at law or in equity, will adversely affect the Licenses. Notwithstanding anything to the contrary contained in this subsection, the exercise of certain remedies by Lender against the Operator pursuant to the Subordination, Non-Disturbance and Attornment Agreement which results in the termination of the Master Lease or the operation of the Property directly by Lender may adversely affect the Licenses.”

4. Section 5.14 is deleted and the following is inserted in lieu thereof:

“5.14   Taxes Paid. Borrower has filed all federal, state, county and municipal tax returns required to have been filed by Borrower, and has paid all Taxes prior to delinquency which have become due pursuant to such returns or to any notice of assessment received by Borrower, and Borrower has no knowledge of any basis for additional assessment with respect to such taxes. To the best of Borrower’s knowledge after due inquiry and investigation, there are not presently pending any special assessments against the Mortgaged Property or any part of the Mortgaged Property.”

5. Section 5.32 of the Loan Agreement must be deleted and replaced with the following:

“Medicare and Medicaid. Borrower represents and warrants that neither Borrower nor any management agent for the Mortgaged Property or any operator of the Mortgaged Property currently participates in any Governmental Payor Program in connection with the operation of the Mortgaged Property.”

6. Section 5.34 is deleted and the following is inserted in lieu thereof:

“5.34   No Transfer or Pledge of Licenses. The Licenses, including, without limitation, the certificate of need, may not be, and have not been, transferred to any location other than the Facility, have not been pledged as collateral security for any other loan or indebtedness (other than existing debt being refinanced by this Loan, the liens for which have been released), and are held free from restrictions or known conflicts that would materially impair the use or operation of the Facility for its Intended Use, and are not provisional, probationary, or restricted in any way.”

7. Section 5.35 is deleted and the following is inserted in lieu thereof:

“5.35   No Pledge of Receivables. Neither Borrower nor the operator of the Facility has pledged its receivables as collateral security for any other loan or indebtedness (other than existing debt being refinanced by this Loan, the liens for which have been released).”

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8. Section 5.38 is deleted and the following is inserted in lieu thereof:

“5.38   No Facility Deficiencies, Enforcement Actions or Violations.

(a) The Facility has not received a statement of charges or deficiencies (other than with respect to non-material deficiencies that have been noted during routine licensure surveys and that have been cured) and no penalty enforcement actions have been undertaken against the Facility, the operator of the Facility or Borrower or against any officer, director or stockholder thereof, by any Governmental Agency during the last three calendar years, and there have been no violations over the past three years that have threatened the Facility’s or the operator of the Facility’s or Borrower’s certification for participation in any third-party payor programs.

(b) [RESERVED]”

9. Section 6.01 is deleted and the following is inserted in lieu thereof:

“6.01   Compliance with Laws. Borrower will comply with all laws, ordinances, rules, regulations and requirements of any Governmental Authority having jurisdiction over the Mortgaged Property and all recorded covenants and agreements relating to or affecting the Mortgaged Property, including all laws, ordinances, regulations, requirements and covenants pertaining to health and safety, construction of improvements on the Mortgaged Property, Repairs, Capital Replacements, fair housing, disability accommodation, zoning and land use, applicable building codes, special use permits and environmental regulations, Leases and the maintenance and disposition of tenant security deposits. Borrower will take appropriate measures to prevent, and will not engage in or knowingly permit, any illegal activities at the Mortgaged Property, including those that could endanger tenants or visitors, result in damage to the Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise materially impair the Lien created by the Security Instrument or Lender’s interest in the Mortgaged Property. Borrower will at all times maintain or cause to be maintained records sufficient to demonstrate compliance with the provisions of this Section 6.01.”

10. Section 6.04(a) is deleted and the following is inserted in lieu thereof:

“(a) Prohibited New Non-Residential Leases or Modified Non-Residential Leases. Borrower will not enter into any New Non-Residential Lease, enter into any Modified Non-Residential Lease or terminate any Non-Residential Lease (but not including any Non-Residential Lease in existence on the date of this Loan Agreement which may be terminated at Borrower’s option so long as Borrower provides notice of such termination to Lender promptly thereafter) without the prior written consent of Lender; provided, however, that Lender’s prior written consent and prior written approval shall not be required with respect to Non-Residential Leases covering floor space not exceeding 2,000 square feet and further providing that no residential units are converted to commercial leased space.”

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11. Section 6.04(d) is deleted and the following is inserted in lieu thereof:

“(d) Subordination and Attornment Requirements. All new Non-Residential Leases and Modified Non-Residential Leases will specifically include the following provisions:

(i) The Lease is subordinate to the Lien of the Security Instrument, with such subordination to be self-executing.

(ii) The tenant will attorn to Lender and any purchaser at a foreclosure sale, such attornment to be self-executing and effective upon acquisition of title to the Mortgaged Property by any purchaser at a foreclosure sale or by Lender in any manner.

(iii) The tenant agrees to execute such further evidences of attornment as Lender or any purchaser at a foreclosure sale may from time to time request.

(iv) The tenant will, upon receipt of a written request from Lender following the occurrence of and during the continuance of an Event of Default, pay all Rents payable under the Lease to Lender.

(v) If Lender or a purchaser at a foreclosure sale so elects, the Lease shall not be terminated by foreclosure or any other transfer of the Mortgaged Property.

(vi) After a foreclosure sale of the Mortgaged Property, Lender or any other purchaser at such foreclosure sale may, at Lender’s or such purchaser’s option, accept or terminate such Lease without payment of any fee or penalty.”

12. Section 6.07(b) is deleted and the following is inserted in lieu thereof:

“(b) Delivery of Statement of Income and Expenses; Rent Schedule and Other Statements. Borrower will furnish to Lender each of the following:

(i) Within 25 days after the end of each calendar quarter prior to Securitization and within 35 days after each calendar quarter after Securitization (provided however that the statement of changes and other information set forth in Section 6.07(b)(i)(C) may be provided within 45 days after each calendar quarter after Securitization), each of the following:

(A) A Rent Schedule dated no earlier than the date that is 5 days prior to the end of such quarter.

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(B) A statement of income and expenses for Borrower’s operation of the Mortgaged Property that is either of the following:

(a)  For the 12 month period ending on the last day of such quarter.

(b)  If at the end of such quarter Borrower or any Affiliate of Borrower has owned the Mortgaged Property for less than 12 months, for the period commencing with the acquisition of the Mortgaged Property by Borrower or its Affiliate, and ending on the last day of such quarter.

(C) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal quarter.

(ii) Within 120 days after the end of each fiscal year of Borrower, each of the following:

(1) An annual statement of income and expenses for Borrower’s operation of the Mortgaged Property for that fiscal year.

(2) A statement of changes in financial position of Borrower relating to the Mortgaged Property for that fiscal year.

(3) A balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal year and a profit and loss statement for Borrower.

(4) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.

(iii) Within 30 days after the date of filing, copies of all tax returns filed by Borrower.”

13. Section 6.07(c) is deleted and the following is inserted in lieu thereof:

“(c) Delivery of Borrower Financial Statements Upon Request. Borrower will furnish or cause to be furnished to Lender each of the following:

(i) Upon Lender’s request, in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s

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Discretion, a monthly Rent Schedule and a monthly statement of income and expenses for Borrower’s operation of the Mortgaged Property, in each case within 25 days after the end of each month.

(ii) Upon Lender’s request in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a statement that identifies all owners of any interest in Borrower and any Designated Entity for Transfers and the interest held by each (unless Borrower or any Designated Entity for Transfers is a publicly-traded entity in which case such statement of ownership will not be required), and if Borrower or a Designated Entity for Transfers is a corporation then all officers and directors of Borrower and the Designated Entity for Transfers, and if Borrower or a Designated Entity for Transfers is a limited liability company then all Managers who are not members, in each case within 10 business days after such request.

(iii) Upon Lender’s request in Lender’s Discretion, such other financial information or property management information (including information on tenants under Leases to the extent such information is available to Borrower, copies of bank account statements from financial institutions where funds owned or controlled by Borrower are maintained, and an accounting of security deposits) as may be required by Lender from time to time, in each case within 30 days after such request.

(iv) Upon Lender’s request in Lender’s Discretion, a monthly property management report for the Mortgaged Property, showing the number of inquiries made and rental applications received from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender within 45 days after such request. However, Lender will not require the foregoing more frequently than quarterly except when there has been an Event of Default and such Event of Default is continuing, in which case Lender may require Borrower to furnish the foregoing more frequently.”

14. Section 6.07(f) is deleted and the following is inserted in lieu thereof:

“(f) Delivery of Guarantor and SPE Equity Owner Financial Statements Upon Request. Borrower will cause each Guarantor and, at Lender’s request in Lender’s Discretion, any SPE Equity Owner, to provide to Lender (i) within 120 days after the close of such party’s fiscal year, such party’s balance sheet and profit and loss statement (or if such party is a natural person, within 120 days after the close of each calendar year, such party’s personal financial statements) in form reasonably satisfactory to Lender and certified by such party to be accurate and complete; and (ii) such additional financial information (including copies of state and federal tax returns with respect to any SPE Equity Owner but Lender will only require copies of such tax returns with respect to each Guarantor if an Event of Default has occurred and is continuing) as Lender may

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reasonably require from time to time and in such detail as reasonably required by Lender. Provided no Event of Default has occurred and is continuing and so long as Guarantor is publicly traded on a nationally recognized stock exchange and so long as the Guarantor certifies to Lender that such filings are true, correct and complete, the filings required to be made by the applicable statutes and regulations will fulfill the requirements of sub-section (i) hereof.”

15. Section 6.08(b) is deleted and the following is inserted in lieu thereof:

“(b) Payment of Operating Expenses. Subject to the provisions of Section 6.08(c), Borrower will (i) pay the expenses of operating, managing, maintaining and repairing the Mortgaged Property (including utilities, Repairs and Capital Replacements) before the last date upon which each such payment may be made without any penalty or interest charge being added, and (ii) pay Insurance premiums, within the time periods set forth in Section 6.10(e) prior to the expiration date of each policy of Insurance, unless applicable law specifies some lesser period.”

16. Section 6.09(c) is deleted and the following is inserted in lieu thereof:

“(c) Preservation of Mortgaged Property. Borrower will restore or repair promptly, in a good and workmanlike manner, any damaged part of the Mortgaged Property to the equivalent of its original condition, or such other condition as Lender may approve in writing, whether or not Insurance proceeds or Condemnation awards are available to cover any costs of such Restoration or repair; provided, however, that Borrower will not be obligated to perform such Restoration or repair if (i) no Event of Default has occurred and is continuing, and (ii) Lender has elected to apply any available Insurance proceeds and/or Condemnation awards to the payment of Indebtedness pursuant to Section 6.10(j) or Section 6.11(d). For the purposes hereof, the term “original condition” shall mean the condition of the Mortgaged Property as of the date of this Agreement, as enhanced or improved by (i) any repairs or replacements required under the terms of this Agreement or any other Loan Document to be completed prior to the date of such damage or destruction, and (ii) any repairs or replacements otherwise completed prior to the date of such damage or destruction to the extent the same were completed in accordance with the applicable terms and conditions of this Agreement and the other Loan Documents.”

17. Section 6.09(d) is deleted and the following is inserted in lieu thereof:

“(d) Property Management. Borrower will or will cause the Operator to provide for professional management of the Mortgaged Property by the Property Manager at all times under a property management agreement approved by Lender in writing. Borrower will not and will cause the Operator not to surrender, terminate, cancel, modify, renew or extend its property management agreement, or enter into any other agreement relating to the overall management or operation of the

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Property with Property Manager or any other Person, or consent to the assignment by the Property Manager of its interest under such property management agreement, in each case without the consent of Lender, which consent will not be unreasonably withheld. If at any time Lender consents to the appointment of a new Property Manager, such new Property Manager and Borrower will, as a condition of Lender’s consent, execute an Assignment of Management Agreement in a form acceptable to Lender. If any such replacement Property Manager is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered on the Closing Date, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to the Rating Agencies (unless waived by the Rating Agencies) with regard to nonconsolidation.”

18. Section 6.09(e) is deleted and the following is inserted in lieu thereof:

“(e) Alteration of Mortgaged Property. Borrower will give Notice to Lender of and, unless otherwise directed in writing by Lender, will appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement. Borrower will not (and will not permit any tenant or other Person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property, including any removal, demolition or alteration occurring in connection with a rehabilitation of all or part of the Mortgaged Property, except (i) Repairs or Capital Replacements pursuant to the terms of Sections 4.03 or 4.04, (ii) in connection with the replacement of tangible Personalty, (iii) if Borrower is a cooperative housing corporation or association, to the extent permitted with respect to individual dwelling units under the form of a proprietary lease or occupancy agreement, (iv) Repairs and Capital Replacements in connection with making an individual unit ready for a new occupant or pursuant to the terms of Sections 6.09(a) and (c), and (v) Repairs made in connection with and pursuant to the Repair Schedule of Work, if applicable. Notwithstanding any provisions to the contrary in this Section 6.9(e), as long as no Event of Default, or any event which, with the service of notice, passage of time, or both, if incurred, would constitute an Event of Default hereunder has occurred and is continuing, Borrower shall be entitled to make improvements or alterations to the Improvements on the Mortgaged Property from time to time, subject to the following restrictions: (i) such alterations and additions are completed in a lien free and good and workmanlike manner in accordance with applicable laws and the provisions of this Loan Agreement, (ii) neither the performance nor completion of the alterations or additions (A) adversely affects the structural integrity of the Improvements or the occupancy of the Improvements, (B) changes unit configurations, or (C) reduces the total number of units, and (iii) the aggregate costs of all such alterations and additions does not exceed $100,000 per year.”

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19. Section 6.10(a)(ii) is deleted and the following is inserted in lieu thereof:

“(ii) Commercial General Liability. Commercial general liability Insurance on a claims made and/or occurrence-based policy form that insures against legal liability resulting from bodily injury, property damage, personal injury and advertising injury, and includes contractual liability coverage and any and all claims, including all legal liability (to the extent insurable) imposed upon Borrower and all Attorneys’ Fees and Costs arising out of or connected with the possession, use, leasing, operation, maintenance or condition of the Mortgaged Property with a combined limit of not less than $2,000,000 in the aggregate and $1,000,000 per occurrence; umbrella or excess liability coverage with minimum limits in the aggregate and per occurrence of $1,000,000 in coverage for each story of the Improvements with a maximum required coverage of $8,000,000 (provided, however, that if the Indebtedness is $3,000,000 or less and the Improvements have 3 stories or fewer, then no umbrella or excess liability coverage is required); and if the Borrower owns, leases, hires, rents, borrowers, uses, or has another use on its behalf a vehicle in conjunction with the operation of the Mortgaged Property, vehicle liability Insurance of not less than $1,000,000 per occurrence. The maximum per occurrence deductible or self-insured retention, or combined deductible or self-insured retention, for all coverage required under this Section 6.10(a)(ii), will not exceed $35,000.”

20. Section 6.10(a)(x) is deleted and the following is inserted in lieu thereof:

“(x) Other. Such other Insurance against loss or damage with respect to the Improvements and Personalty located on the Mortgaged Property as required by Lender to the extent available (including liquor/dramshop and Mold Insurance) provided such Insurance is of the kind for risks from time to time customarily insured against and in such minimum coverage amounts and maximum deductibles as are generally required by institutional lenders for properties comparable to the Mortgaged Property or which Lender may deem necessary in Lender’s Discretion.”

21. Section 6.10(e) is deleted and the following is inserted in lieu thereof:

“(e) Evidence of Insurance; Renewals. Borrower will deliver to Lender a legible copy of each Insurance policy (or duplicate original), and Borrower will promptly deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies. Borrower will ensure that the Mortgaged Property is continuously covered by the required Insurance policies and will deliver to Lender evidence acceptable to Lender in Lender’s Discretion that each policy has been renewed at least 10 days prior to the expiration date of such Insurance policy provided, however, that such evidence that the policy has been renewed may be provided to Lender at least 5 days prior to the expiration date if and only if the policy contains a “Lenders Endorsement” stating that the Lender’s coverage will not be terminated in the event the policy is not renewed prior to expiration. If the evidence of a renewal does not include a

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legible copy of the renewal policy (or duplicate original), Borrower will deliver a legible copy of such renewal policy (or duplicate original) in a form satisfactory to Lender in Lender’s Discretion prior to the earlier of (i) 60 days after the expiration date of the original policy, or (ii) the date of any Notice to Lender under Section 6.10(i).”

22. Section 6.10(i)(i) is deleted and the following is inserted in lieu thereof:

“(i) Obligations Upon Casualty; Proof of Loss.

(i) In the event of loss for which the total cost of repair is equal to $25,000 or greater, Borrower will give immediate written notice to the Insurance carrier and to Lender.”

23. Section 6.10(i)(ii)(A) is deleted and the following is inserted in lieu thereof:

“(A)   Require a “repair or replacement” settlement, in which case the proceeds will be used to reimburse Borrower for the cost of restoring and repairing the Mortgaged Property to the equivalent to its original condition, or to a condition approved by Lender (“Restoration”). If Lender determines to require a repair or replacement settlement and to apply Insurance proceeds to Restoration, Lender will apply the proceeds in accordance with Lender’s then-current policies relating to the Restoration of casualty damage on similar multifamily properties. For the purposes hereof, the term “original condition” shall mean the condition of the Mortgaged Property as of the date of this Agreement, as enhanced or improved by (i) any repairs or replacements required under the terms of this Agreement or any other Loan Document to be completed prior to the date of such damage or destruction, and (ii) any repairs or replacements otherwise completed prior to the date of such damage or destruction to the extent the same were completed in accordance with the applicable terms and conditions of this Agreement and the other Loan Documents.”

24. Section 6.13(a)(i) is deleted and the following is inserted in lieu thereof:

“(i) It will not engage in any business or activity, other than the ownership, operation, leasing and maintenance of the Mortgaged Property and activities incidental thereto.”

25. Section 6.13(a)(v) is deleted and the following is inserted in lieu thereof:

“(v) It will not take any action to dissolve, wind-up, terminate or liquidate in whole or in part; to sell, transfer or otherwise dispose of all or substantially all of its assets; to change its legal structure; transfer or permit the direct or indirect transfer of any partnership, membership or other equity interests, as applicable, other than

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Transfers permitted under this Loan Agreement; issue additional partnership, membership or other equity interests, as applicable, or seek to accomplish any of the foregoing. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof Borrower admitted Care Investment Trust Inc. as a second member of Borrower, and that such admission shall not be deemed a violation of this Section.”

26. Section 6.13(a)(ix) is deleted and the following is inserted in lieu thereof:

“(ix)   It will not commingle its assets with the assets of any other Person and will hold all of its assets in its own name, except as required under the terms of the Cash Management Agreement – Seniors (CME), and the Clearing Account Agreement – Seniors (CME) each dated of even date herewith.”

27. Section 6.13(a)(xi) is deleted and the following is inserted in lieu thereof:

“(xi)   It will maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person and will not list its assets as assets on the financial statement of any other Person, except as required under the terms of the Cash Management Agreement – Seniors (CME) and the Clearing Account Agreement – Seniors (CME) each dated of even date herewith; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (A) appropriate notation will be made on such consolidated financial statements to indicate the separateness of Borrower from such Affiliate and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (B) such assets will also be listed on Borrower’s own separate balance sheet. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof, Borrower maintained joint bank accounts with Related Borrowers and Care Investment Trust, Inc., and that such previously existing joint accounts shall not be a violation of this section.”

28. Section 6.13(a)(xii) is deleted and the following is inserted in lieu thereof:

“(xii)   Except for (a) capital contributions or capital distributions permitted under the terms and conditions of its organizational documents, (b) the Master Lease and (c) the Contribution Agreement, it will only enter into any contract or agreement with any general partner, member, shareholder, principal or Affiliate of Borrower or any Guarantor, or any general partner, member, principal or Affiliate thereof, upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties.”

29. Section 6.13(a)(xiii) is deleted and the following is inserted in lieu thereof:

“(xiii)   It will not maintain its assets in such a manner that will be costly or difficult to segregate, ascertain or identify its   individual assets from those of any other

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person, except as required under the terms of the Cash Management Agreement Seniors (CME) and the Clearing Account Agreement – Seniors (CME) each dated of even date herewith.”

30. Section 6.13(a)(xiv) is deleted and the following is inserted in lieu thereof:

“(xiv)   It will not assume or guaranty (excluding any guaranty that has been executed and delivered in connection with the Note) the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person (other than in connection with the Loan and the Cross-Collateralization Agreement), or hold out its credit as being available to satisfy the obligations of any other Person except as set forth in the Contribution Agreement.”

31. Section 6.13(a)(xviii) is deleted and the following is inserted in lieu thereof:

“(xviii)   It will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and will pay its debts and liabilities from its own assets as the same become due. provided, however, that compliance with this subsection shall not require the members of the Borrower to make additional capital contributions.”

32. Section 6.13(a)(xx) is deleted and the following is inserted in lieu thereof:

“(xx)   It will pay (or cause the Property Manager or any operator of the Facility to pay on behalf of Borrower from Borrower’s funds) its own liabilities (including salaries of its own employees) from Borrower’s own funds, provided, however, that compliance with this subsection shall not require the members of the Borrower to make additional capital contributions.”

33. Section 6.13(a)(xxiii) is deleted and the following is inserted in lieu thereof:

“(xxiii)   It will maintain a sufficient number of employees (if any) in light of its contemplated business operations and pay the salaries of its own employees, if any, only from its own funds, provided, however, that compliance with this subsection shall not require the members of the Borrower to make additional capital contributions.”

34. The final paragraph of Section 6.17 is deleted and the following is inserted in lieu thereof:

“Borrower acknowledges and agrees that, in connection with each request by Borrower under this Loan Agreement or any Loan Document, Borrower will pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender and Loan Servicer, including any fees charged by the Rating Agencies, regardless of whether the matter is approved, denied or withdrawn. Any amounts payable by Borrower under this Loan

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Agreement will be deemed a part of the Indebtedness, will be secured by the Security Instrument and will bear interest at the Default Rate if not fully paid within 10 days of written demand for payment.”

35. Section 6.22(a) is deleted and the following is inserted in lieu thereof:

“(a) Borrower will, or will cause any operator of the Facility to, furnish to Lender, within 10 days after receipt by Borrower or any operator of the Facility, any and all written notices from any Governmental Authority that (i) any License is being Downgraded, revoked, terminated, suspended, restricted or conditioned or may not be renewed or reissued or that action is pending or being considered to Downgrade, revoke, terminate, suspend, restrict or condition (or not renew or reissue) any such License, (ii) any violation, fine, finding, investigation or corrective action concerning any License is pending or being considered, rendered or adopted, or (iii) any Healthcare Law or any health or safety code or building code violation or other deficiency at the Mortgaged Property has been identified, but in each case only if the subject matter of such written notice (A) could materially adversely impact the operation or value of the Facility, or (B) requires additional formal or informal action by Borrower or operator of the Facility that is more than development or implementation of a routine plan of correction, including, without limitation, participation in hearings concerning continued licensing or Medicare or Medicaid participation, entering into consent orders affecting licensing affecting the Facility, or engaging in oversight management.”

36. Section 6.22(d) is deleted and the following is inserted in lieu thereof:

“(d) Borrower will provide Lender with a copy of any License issued or renewed in the future by a Governmental Authority within 30 days after receipt of written evidence of its issuance or renewal. To the extent that any such License is assignable, Borrower will assign it to Lender as additional security for the Indebtedness, using a form of assignment acceptable to Lender in its discretion. If any License is issued to an operator of the Facility, to the extent such License is assignable, Borrower will cause such operator or management agent to assign the License to Lender as additional security for the Indebtedness, using a form of assignment acceptable to Lender in its discretion.”

37. Section 6.28 of the Loan Agreement must be deleted and replaced with the following:

“6.28   Medicare and Medicaid.

(a) Without the prior written consent of Lender, which may be granted or withheld in Lender’s discretion, Borrower will not, and will not permit any management agent for the Mortgaged Property or any operator of the Mortgaged Property to, participate in any Governmental Payor Program, or any provider agreement under any Governmental Payor Program, or accept any resident whose ability to reside in the Mortgaged Property requires that Borrower, the Mortgaged Property or any management agent for the Mortgaged Property or any operator of the Mortgaged Property participate in any Governmental Payor Program.

Seniors Housing Loan and Security Agreement (CME) Page B-13

(b) In addition to the Events of Default listed in Section 9.01, it also will constitute an Event of Default if Borrower participates, or permits any management agent for the Mortgaged Property or operator of the Mortgaged Property to participate, in any Governmental Payor Program.”

38. Section 7.03(c) is deleted and the following is inserted in lieu thereof:

“(c) Publicly-Held Fund or Real Estate Investment Trust. If a Designated Entity for Transfers is a publicly held fund or real estate investment trust, the public issuance of common stock, convertible debt, equity or other similar securities (“Public Fund/REIT Securities”) and the subsequent Transfer of such Public Fund/REIT Securities; provided that each of the following conditions is satisfied::

(i) If any Public Fund/REIT Securities holder acquires and ownership percentage of more than 10% (“10% Transfer”), the Designated Entity for Transfers provides Lender with Notice of the 10% Transfer within 30 days after the Transfer along with a copy of the Securities and Exchange Commission Form 4.

(ii) Lender receives confirmation that after the 10% Transfer, there will not be a change of Control of the Borrower, if applicable.

(iii) If there is a change of Control of the Borrower such that the Guarantor, if applicable, no longer Controls the Borrower, Borrower provides Lender with a substitute Guarantor or other collateral acceptable to Lender (“Substitute Collateral”). If the Substitute Collateral is a letter of credit or cash, the amount of the Substitute Collateral will be 10% of the outstanding principal balance of the Mortgage.”

39. Section 7.03 is amended by the addition of the following new subsection 7.03(e) at the end thereof:

“(e) Any Condemnation, provided that Borrower has complied with the obligations under the applicable provisions of the Loan Documents, including, without limitation, Section 6.11 of the Loan Agreement, with respect thereto.”

40. Section 12.03 is amended by the addition of the following new subsection (d):

“(d) Lender shall endeavor to give the individuals or entities listed below courtesy copies of any notice given to Borrower and Borrower by Lender, at the addresses set forth below; provided, however, that failure to provide such courtesy copies of notices shall not affect the validity or sufficiency

Seniors Housing Loan and Security Agreement (CME) Page B-14

of any notice to Borrower or Borrower, shall not affect Lender’s rights and remedies hereunder or under any other Loan Documents, nor subject Lender to any claims by or liability to Borrower or any other individual or entity, it being acknowledged and agreed that no individual or entity listed below is a third-party beneficiary to any of the Loan Documents.

Bass, Berry & Sims, PLC

150 3^rd Avenue South, Suite 2800

Nashville, TN 37212

Attn: Susan W. Foxman”

41. The following is added as a new subsection to 12.11(b):

“(xv)   If any covenants, conditions and restrictions affecting the Mortgaged Property provide for a lien for any assessments or other unpaid amounts, Borrower will provide satisfactory evidence that such lien will be subordinate to the lien of the Supplemental Instrument.”

42. Section 12.13 is amended by adding the following at the end thereof:

“provided, however, that Borrower will not be required to modify or amend any Loan Document if such modification or amendment would (i) change the interest rate, the stated maturity or the amortization of principal set forth in the Note, or (ii) modify or amend any other material economic term of the Loan.”

43. The following definitions are added to Article XIII:

““Contribution Agreement” means that certain Contribution Agreement dated of even date herewith by and between Borrower and Related Borrowers.

“Governmental Payor Program” means any Medicare, Medicaid, TRICARE programs or similar federal, state, local or any other third party payors’ programs or other similar provider payment programs.

“Master Lease” means that certain Master Lease dated September 20, 2011, by and between Borrower and Related Borrowers, as Lessors, and Operator and Related Operators as Lessees.

“Operator” means Greenfield Assisted Living of Berryville, L.L.C.

“Related Borrowers” means Care GSL Fredericksburg LLC, a Delaware limited liability company, and Care GSL Stafford LLC, a Delaware limited liability company

“Related Operators” means Greenfield Assisted Living of Fredericksburg, L.L.C. and Greenfield Assisted Living of Stafford, LLC.”

44. The definition of “Material Contracts” is deleted from Article XIII and the following is inserted in lieu thereof:

Seniors Housing Loan and Security Agreement (CME) Page B-15

““Material Contract” means Contracts:

(i) for preparing or serving food (but do not include food supply Contracts);

(ii) for medical services or healthcare provider agreements but not including the following:

Registered Dietitian / Nutritionist Consultant Agreement dated May 6, 2010	Greenfield Assisted Living of Berryville; Judy Mauner
Agreement, last executed June 28, 2010 (Re: mental health professional services)	Greenfield Senior Living; Northwestern Community Services

(iii) the average annual consideration of which, directly or indirectly, is at least $50,000;

(iv) having a term of more than one year and the aggregate amount payable over the life of such contract is equal to or greater than $125,000.00 unless such contract is subject to termination by Borrower or if Borrower is not a party to the Contract, the operator of the Facility, and their respective successors and assigns, upon not more than thirty days notice, without cause and without payment of any termination fee, penalty or extra charge; or

(v) determined by Lender to be material to the operation of the Facility.”

45. The definition of “Prohibited Activity or Condition” is deleted from Article XIII and the following is inserted in lieu thereof:

““Prohibited Activity or Condition” means each of the following:

(i) The presence, use, generation, release, treatment, processing, storage (including storage in above-ground and underground storage tanks), handling or disposal of any Hazardous Materials on or under the Mortgaged Property.

(ii) The transportation of any Hazardous Materials to, from or across the Mortgaged Property.

(iii) Any occurrence or condition on the Mortgaged Property, which occurrence or condition is or may be in violation of Hazardous Materials Laws.

(iv) Any violation of or noncompliance with the terms of any Environmental Permit with respect to the Mortgaged Property.

Seniors Housing Loan and Security Agreement (CME) Page B-16

(v) Any violation or noncompliance with the terms of any O&M Program.

However, the term “Prohibited Activity or Condition” expressly excludes lawful conditions permitted by an O&M Program or the safe and lawful use and storage of quantities of (i) medical products or devices or medical waste, (ii) pre-packaged supplies, cleaning materials and petroleum products customarily used in the operation and maintenance of comparable senior housing properties, (iii) cleaning materials, personal grooming items and other items sold in pre-packaged containers for consumer use and used by tenants and occupants of residential dwelling units in the Mortgaged Property, and (iv) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Mortgaged Property’s parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance with Hazardous Materials Laws.”

46. Sections 11.05(b)(iii) and (iv) of the Rider to Seniors Housing Loan and Security Agreement (CME) Seniors Housing Operators are deleted and the following are inserted in lieu thereof:

“(iii) Within 25 days after the end of each fiscal quarter of Operator, Borrower will cause Operator to furnish to Lender a statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal quarter and, when requested by Lender, a balance sheet showing all assets and liabilities of Operator relating to the Mortgaged Property as of the end of that fiscal quarter, provided however, that after Securitization, such information shall be furnished within 45 days after the end of each fiscal quarter.

(iv) Within 120 days after the end of each fiscal year of Operator, Borrower will cause Operator to furnish to Lender each of the following:

(A) An annual statement of income and expenses for Operator’s operation of the Mortgaged Property for that fiscal year.

(B) A statement of changes in financial position of Operator relating to the Mortgaged Property for that fiscal year.

(C) A balance sheet showing all assets and liabilities of Operator relating to the Mortgaged Property as of the end of that fiscal year and a profit and loss statement for Operator.

(D) An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.”

47. Section A(a)(v) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

Seniors Housing Loan and Security Agreement (CME) Page B-17

“(v) Borrower has paid all taxes which it owes prior to delinquency.”

48. Section A(b)(iv) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

“(iv) Borrower has maintained all of its books, records, financial statements and bank accounts separate from those of any other person or entity. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof, Borrower maintained joint bank accounts with Related Borrowers and Care Investment Trust, Inc., and that such previously existing joint accounts shall not be a violation of this section.”

49. Section A(b)(xii) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

“(xii)   Borrower has not commingled its assets with those of any other person or entity and has held all of its assets in its own name. Notwithstanding the foregoing, it is acknowledged that prior to the date hereof, Borrower maintained joint bank accounts with Related Borrowers and Care Investment Trust, Inc., and that such previously existing joint accounts shall not be a violation of this section.”

50. Section A(b)(xvi) of the Rider to Multifamily Loan and Security Agreement (CME) Recycled Borrower is deleted and the following is inserted in lieu thereof:

“(xvi)   Borrower has not pledged its assets to secure the obligations of any other Person and no such pledge remains outstanding except in connection with the loan being refinanced, which pledge has been satisfied and released, and the Loan.”

51. The Replacement Reserve Fund Rider – Immediate Deposits is modified as shown by the blacklined changes on said Rider attached hereto.

Seniors Housing Loan and Security Agreement (CME) Page B-18

EXHIBIT C

REPAIR SCHEDULE OF WORK

Not Applicable

Seniors Housing Loan and Security Agreement (CME) Page C-1

EXHIBIT D

REPAIR DISBURSEMENT REQUEST

The undersigned hereby requests from             (“Lender”) the disbursement of funds in the amount of $            (“Disbursement Request”) from the Repair Reserve Fund established pursuant to the Multifamily Loan and Security Agreement dated             , 20        by and between Lender and the undersigned (the “Loan Agreement”) to pay for repairs to the multifamily apartment project known as             and located in             .

The undersigned hereby represents and warrants to Lender that the following information and certifications provided in connection with this Disbursement Request are true and correct as of the date hereof:

1. Purpose for which disbursement is requested:

2. To whom the disbursement will be made (may be the undersigned in the case of reimbursement for advances and payments made or cost incurred for work done by the undersigned):                                                                                                                  

3. Estimated costs of completing the uncompleted Repairs as of the date of this Disbursement Request:                                    

4. The undersigned certifies that each of the following is true:

(a) The disbursement requested pursuant to this Disbursement Request will be used solely to pay a cost or costs allowable under the Loan Agreement.

(b) None of the items for which disbursement is requested pursuant to this Disbursement Request has formed the basis for any disbursement previously made from the Repair Reserve Fund.

(c) All labor and materials for which disbursements have been requested have been incorporated into the Improvements or suitably stored upon the Property in accordance with reasonable and standard building practices, the Loan Agreement and all applicable laws, ordinances, rules and regulations of any governmental authority having jurisdiction over the Property.

(d) The materials, supplies and equipment furnished or installed for the Repairs are not subject to any Lien or security interest or that the funds to be disbursed pursuant to this Disbursement Request are to be used to satisfy any such Lien or security interest.

Seniors Housing Loan and Security Agreement (CME) Page D-1

5. All capitalized terms used in this Disbursement Request without definition will have the meanings ascribed to them in the Loan Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Disbursement Request as of the day and date first above written.

	BORROWER:
Date:	CARE GSL BERRYVILLE LLC, a Delaware limited liability company
	By:
	Name:
	Title:

Seniors Housing Loan and Security Agreement (CME) Page D-2

EXHIBIT E

WORK COMMENCED AT MORTGAGED PROPERTY

None

Seniors Housing Loan and Security Agreement (CME) Page E-1

EXHIBIT F

CAPITAL REPLACEMENTS

• Carpet/vinyl flooring

• Window treatments

• Roofs

• Furnaces/boilers

• Air conditioners

• Ovens/ranges

• Refrigerators

• Dishwashers

• Water heaters

• Garbage disposals

The following additional items may also be funded from the Replacement Reserve Fund:

Common area walls and ceilings, commercial kitchen equipment, commercial washers, elevators

Seniors Housing Loan and Security Agreement (CME) Page F-1

EXHIBIT G

DESCRIPTION OF GROUND LEASE

Not Applicable

Seniors Housing Loan and Security Agreement (CME) Page G-1

EXHIBIT H

ORGANIZATIONAL CHART OF BORROWER AS OF THE CLOSING DATE

FINAL ORGANIZATIONAL CHART OF BORROWER

Seniors Housing Loan and Security Agreement (CME) Page H-1

EXHIBIT I

DESIGNATED ENTITIES FOR TRANSFERS AND GUARANTOR(S)

Designated Entities for Transfers

Care GSL Holdings LLC

Care Investment Trust Inc.

Guarantor(s)

Care Investment Trust Inc.

Seniors Housing Loan and Security Agreement (CME) Page I-1

EXHIBIT J

LICENSES

LICENSE	HOLDER
Commonwealth of Virginia Department of Social Services Assisted Living Facility License – Residential and Assisted Living Care (license number 1103987 – L703) dated September 6, 2011	Greenfield Assisted Living of Berryville
Town of Berryville Business License (license number 2418) issued March 13, 2012	Greenfield Senior Living
Commonwealth of Virginia Department of Health Food Establishment / Adult Care Home Food Service Permit	Berryville Operations, LLC
Commonwealth of Virginia Department of Health Professions Assisted Living Facility Administrator License (license number 1706000232) dated December 8, 2008	Suzanne S. Grubb
Commonwealth of Virginia Department of Health Professions Assisted Living Facility Preceptor License (license number 1707000132) dated February 26, 2010	Suzanne S. Grubb
Commonwealth of Virginia Department of Professional and Occupational Regulation Cosmetologist License (license number 1201025781)	Lillian S. Collins

Seniors Housing Loan and Security Agreement (CME) Page J-1

EXHIBIT K

FF&E AND MOTOR VEHICLES

All of the following is owned by the Borrower and leased to Greenfield Assisted Living of Berryville, LLC pursuant to the Master Lease:

Common Areas:	QTY	Item
Lobby /Foyer Entrance
	1	Chandelier
	1	Large Round Table
	2	Side Tables
	1	Large Buffet
	2	Lamps
	4	Chairs
	1	Cabinet
	2	Large Decorative Trees
	2	Pictures
	QTY	Item
Activities Room
	1	Large TV
	7	Chairs
	4	Tables
	2	Bookcases
	QTY	Item
Living Rooms
	4	Entertainment Center Cabinets
	7	Sofas
	7	End Tables
	4	Coffee Tables
	18	Chairs
	1	Piano
	8	Lamps
	2	Bookcases
	1	Display Cabinet
	10	Wall Art
Porches / Outdoors
Porches	QTY	Item
	9	Rocking Chairs
	2	Wicker Love Seats
	4	Wicker Chairs
	2	Wicker Tables

Seniors Housing Loan and Security Agreement (CME) Page K-1

Outdoor Furniture
	4	Lounge Swings
	1	Outdoor Table with Umbrella
	4	Outdoor Chairs
Office Areas	QTY	Item
	8	Desk
	7	Desk Chairs
	5	File Cabinets
	6	CPU & Monitors
	5	Printers ( 3 InkJet 2 Laser)
	2	Fax Machines
	2	Lamps
	7	File Cabinets
	2	Office Artwork Pictures
Resident Rooms	QTY	Item
Resident Rooms
	27	Twin Beds
	12	Chairs
	30	Small Dressers
	40	Night Stands
Dining & Kitchen	QTY	Item
Kitchen Area
	1	Steam Table
	1	Toast Machine
	1	Ice Machine
	1	Slicer
	8	Shelving Units
	2	Cooking tables
	2	Set-up table
	1	Gas Stove - Commercial Grade
	1	Gas Stove - Residential
	2	Refrigerators - Residential
	1	Refrigerator - Commercial
	1	Freezer - Residential
	1	Freezer - Commercial
Dining Room Area	QTY	Item
	22	Tables
	55	Chairs
	1	China Cabinet
	1	Small Stand
	20	Light Fixtures

Seniors Housing Loan and Security Agreement (CME) Page K-2

Private Dining Rm	QTY	Item
	1	Dining Table
	4	Chairs
	2	Corner Chairs
	1	Buffett
	1	Library Table
	2	Mirrors
	1	Picture
Laundry Room	QTY	Item
Laundry
	1	Washer - Residential
	1	Dryer - Residential
	2	Dryers - Commercial
	1	Table 8’
	1	Locker Stand - 6 Lockers
	2	Storage Cabinets

The following is owned by Greenfield Assisted Living of Berryville, LLC:

1999 FORD ECONOLINE E350 SUPER DUTY (VIN 1FBSS31L6XHC12740; 5.4L V8 PFI SOHC 16V; REAR WHEEL DRIVE)

The following is owned by third parties and leased to Greenfield Assisted Living of Berryville, LLC:

- 1 Dishmachine Model PA1 and related parts and equipment pursuant to Clean Force Dishmachine Lease dated February 7, 2007 between Greenfield of Berryville and U.S. Foodservice, Inc.

- 1 Top Load Washer (Model MAT13PN) and 1 Electric Dryer (Model MDE16PN) and related ancillary equipment pursuant to Total Laundry Care Agreement dated August 9, 2007 between Greenfield of Berryville and Caldwell & Gregory, Inc.

Seniors Housing Loan and Security Agreement (CME) Page K-3

EXHIBIT L

CONTRACTS

CONTRACTS	PARTIES
Advertising Agreement dated May 6, 2010*	Greenfield of Berryville; Idearc Media LLC
Agreement dated March 22, 2011 (Re: grease trap service)*	Greenfield Senior Living; Valley Proteins, Inc.
Subscription Agreement dated April 20, 2007 (Re: telephone on-hold message service)*	Greenfield Senior Living; Oh Hold Marketing (OHM) of Richmond, Virginia
Clean Force Dishmachine Lease, last executed February 7, 2007*	Greenfield of Berryville; U.S. Foodservice, Inc.; Puritan Services, Inc.
Illustratus Group Newsletter Service Agreement, last executed October 30, 2007 (Re: design and printing of monthly community newsletters)	Greenfield Senior Living; Uhlig LLC
Service Contract Comprehensive Coverage dated June 14, 2011 (Re: printer maintenance)	Greenfield of Berryville; Service Net Warranty, LLC
Service Agreement dated July 26, 2011 (Re: pest control)	Greenfield of Berryville; J.C. Ehrlich Co., Inc.
Eldercare Information Service Agreement dated December 4, 2007 (Re: referral services)	Greenfield Senior Living; A Place for Mom, Inc.
Assisted / Independent Living Referral Agreement dated September 1, 2009*	Greenfield; Senior-Living.com, Inc.
Client Contract for Medical Waste Management Services dated July 25, 2011*	Greenfield of Berryville; Virginia Health Care Waste Transportation, Inc. d/b/a Sci-Med Waste Systems, Inc.
Registered Dietitian / Nutritionist Consultant Agreement dated May 6, 2010	Greenfield Assisted Living of Berryville; Judy Mauner
Agreement, last executed June 28, 2010 (Re: mental health professional services)	Greenfield Senior Living; Northwestern Community Services
Total Laundry Care Agreement dated August 9, 2007 (Re: lease of laundry equipment)*	Greenfield Assisted Living of Berryville; Caldwell & Gregory, Inc.
Hotel/Motel Bulk Services Agreement dated August 4, 2011*	Greenfield Assisted Living of Berryville, LLC; Comcast of California/Maryland/ Pennsylvania/Virginia/West Virginia, LLC
Greenfield Management Agreement dated September 20, 2011, as amended by Amendment to Management Agreement of even date herewith	Greenfield Assisted Living of Berryville, LLC; Greenfield Management, L.L.C.

* Contract does not provide that it is terminable by Operator on no more than 30 days prior notice without termination fee or penalty.

Seniors Housing Loan and Security Agreement (CME) Page L-1

EXHIBIT M

MATERIAL CONTRACTS

MATERIAL CONTRACTS	PARTIES
Greenfield Management Agreement dated September 20, 2011, as amended by Amendment to Management Agreement of even date herewith	Greenfield Assisted Living of Berryville, LLC; Greenfield Management, L.L.C.

Seniors Housing Loan and Security Agreement (CME) Page M-1

EXHIBIT N

ADDITIONAL MORTGAGED PROPERTY

1. All of Borrower’s present and future right, title and interest in and to all of the following that are used now or in the future in connection with the ownership, management or operation of the Land and/or the Improvements on such Land (“Property”), including without limitation, the Facility: machinery, equipment, engines, boilers, incinerators, installed building materials; systems and equipment for the purpose of supplying or distributing heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring and conduits used in connection with radio, television, security, fire prevention or fire detection or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposals, washers, dryers, and other appliances; light fixtures, awnings, storm windows and storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors, cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants; swimming pools; and exercise equipment (any of the foregoing that are so attached to the Property as to constitute fixtures under applicable law are referred to below as “Facility Fixtures”).

2. All furniture, furnishings, equipment, machinery, building materials, appliances, goods, supplies, tools, books, records (whether in written or electronic form), computer equipment (hardware and software) healthcare equipment, recreational equipment, pool equipment, dishes, silverware, glassware, kitchen equipment and other tangible personal property (other than Facility Fixtures) that are used now or in the future in connection with the ownership, management or operation of the Property or are located on the Property, and any operating leases relating to the Property, and any surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Property and all other intangible property and rights relating to the operation of, or used in connection with, the Property, including all governmental permits relating to any activities on the Property (“Facility Personalty”).

3. All current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights-of-way, strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses, and appurtenances related to or benefiting the Property, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated.

4. All proceeds paid or to be paid by any insurer of the Property, the Facility Fixtures, the Personalty or any other item listed in this Schedule 1.

5. All awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Property, the Facility Fixtures, the Facility Personalty or any other item listed in this Schedule 1, including any awards or settlements resulting from condemnation proceedings or the total or partial taking of the

Seniors Housing Loan and Security Agreement (CME) Page N-1

Property, the Facility Fixtures, the Facility Personalty or any other item listed in this Schedule 1 under the power of eminent domain or otherwise and including any conveyance in lieu thereof.

6. All contracts, options and other agreements for the sale of the Property, the Facility Fixtures, the Facility Personalty or any other item listed in this Schedule 1 entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations; and all other contracts and agreements pertaining to the ownership, leasing, operation or management of the Property, including without limitation, management and similar agreements, utility contracts and agreements for the provision of goods or services (or payment therefor) at the Facility (whether to Borrower, Operator or the residents of the Facility), including without limitation Third Party Provider Agreements.

7. All present and future leases, subleases, licenses, concessions or grants or other possessory interests, including master leases or operating leases and agreements, now or hereafter in force, whether oral or written, covering or affecting the Property or its operation, or any portion of the Property (including proprietary leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals; and all occupancy agreements (including both residential and commercial agreements), patient admissions or resident care agreements (“Facility Leases”).

8. All earnings, royalties, accounts receivable (including accounts receivable for all rents, revenues and other income of the Property), including parking fees, issues and profits from the Property or its operation, or any other item listed in this Schedule 1, and all undisbursed proceeds of the loan secured by the security interests to which this financing statement relates and, if Borrower is a cooperative housing corporation, maintenance charges or assessments payable by shareholders or residents.

9. All refunds or rebates of (a) water and sewer charges, (b) premiums for fire and other hazard insurance, rent loss insurance and any other insurance required by Lender, (c) taxes, assessments, vault rentals, and (d) other charges or expenses required by Lender to protect the Property, to prevent the imposition of liens on the Property, or otherwise to protect Lender’s interests by any municipal, state or federal authority or insurance company; and all refunds of utility deposits.

10. All tenant security deposits which have not been forfeited by any tenant under any Lease.

11. Subject to the terms of this Loan Agreement, all names under or by which the Property or any part of it may be operated or known, and all trademarks, trade names, and goodwill relating to any of the Property or any part of it.

12. All payments received and all rights to receive payments from any source, which payments (or rights thereto) arise from operation of or at the Property, including without limitation, entrance fees, application fees, processing fees, community fees and any other amounts or fees deposited or to be deposited by any resident or tenant, payments received

Seniors Housing Loan and Security Agreement (CME) Page N-2

and the right to receive payments of second party charges added to base rental income, base and additional meal sales, payments received and the right to receive payments from commercial operations located on the Property or provided as a service to the occupants of the Facility, rental from guest suites, seasonal lease charges, rental payments under furniture leases, income from healthcare services, income from laundry service, income from vending machines and income and fees from any and all other services provided to residents of the Property.

13. All rights to payments from Medicare, Medicaid or TRICARE programs or similar federal, state or local programs or agencies and rights to payment from private insurers.

14. All Licenses, approvals, permits, accreditations, determinations of need, certificates of need, and other certificates.

15. All operating contracts, franchises, license agreements, healthcare services contracts, food service contracts and other contracts for services related to the Property.

16. All utility deposits.

17. All proceeds from the conversion, voluntary or involuntary, of any of the above into cash or liquidated claims, and the right to collect such proceeds and any supporting obligations of any of the above.

Seniors Housing Loan and Security Agreement (CME) Page N-3

EX-10.8

Exhibit 10.8

Freddie Mac Loan Number: 504183346

Property Name: Greenfield Assisted Living of Berryville

MULTIFAMILY NOTE

(CME)

MULTISTATE – FIXED RATE

DEFEASANCE

(Revised 2-2-2012)

US $5,665,000.00 Effective Date: April 24, 2012

FOR VALUE RECEIVED, CARE GSL BERRYVILLE LLC, a Delaware limited liability company (together with such party’s or parties’ successors and assigns, “Borrower”) jointly and severally (if more than one) promises to pay to the order of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation, the principal sum of Five Million Six Hundred Sixty-Five Thousand and No/100 Dollars ($5,665,000.00), with interest on the unpaid principal balance, as hereinafter provided.

1. Defined Terms.

(a) As used in this Note:

“Base Recourse” means a portion of the Indebtedness equal to 0% of the original principal balance of this Note.

“Business Day” means any day other than a Saturday, a Sunday or any other day on which Lender or the national banking associations are not open for business.

“Cut-off Date” means the 12^th Installment Due Date.

“Defeasance Date” means the 2^nd anniversary of the “startup date” of the last REMIC within the meaning of Section
860G(a)(9) of the Tax Code which holds all or any portion of the Loan.

“Default Rate” means an annual interest rate equal to 4 percentage points above the Fixed Interest Rate. However, at no time will the Default Rate exceed the Maximum Interest Rate.

“Defeasance Period” is the period beginning the day after the Defeasance Date until but not including the first day of the Window Period. The Defeasance Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.

Multifamily Multistate Fixed Rate Note (CME)

Defeasance

“Fixed Interest Rate” means the annual interest rate of 4.76%.

“Installment Due Date” means, for any monthly installment of interest-only or principal and interest, the date on which such monthly installment is due and payable pursuant to Section 3 of this Note. The “First Installment Due Date” under this Note is June 1, 2012.

“Lender” means the holder from time to time of this Note.

“Loan” means the loan evidenced by this Note.

“Loan Agreement” means the Multifamily Loan and Security Agreement entered into by and between Borrower and Lender, effective as of the effective date of this Note, as amended, modified or supplemented from time to time.

“Lockout Period” means the period beginning on the day that this Note is assigned to a REMIC trust until and including the Defeasance Date. The Lockout Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.

“Maturity Date” means the earlier of (i) May 1, 2022 (“Scheduled Maturity Date”), or (ii) the date on which the unpaid principal balance of this Note becomes due and payable by acceleration or otherwise pursuant to the Loan Documents or the exercise by Lender of any right or remedy under any Loan Document; provided, however, that if the unpaid principal balance of this Note becomes due and payable by acceleration but such acceleration is rendered null and void and of no further force and effect by operation of law or agreement by Lender, such acceleration will have no effect on the Maturity Date.

“Maximum Interest Rate” means the rate of interest which results in the maximum amount of interest allowed by applicable law.

“Prepayment Premium Period” means the period during which, if a prepayment of principal occurs, a prepayment premium will be payable by Borrower to Lender. The Prepayment Premium Period is the period from and including the date of this Note until but not including (i) the day that this Note is assigned to a REMIC trust, if this Note is assigned to a REMIC trust prior to the Cut-off Date, or (ii) the first day of the Window Period, if this Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date.

“Security Instrument” means the multifamily mortgage, deed to secure debt or deed of trust effective as of the effective date of this Note, from Borrower to or for the benefit of Lender and securing this Note, as amended, modified or supplemented from time to time.

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“Window Period” means the 3 consecutive calendar month period prior to the Scheduled Maturity Date.

“Yield Maintenance Expiration Date” means November 1, 2021.

“Yield Maintenance Period” means the period from and including the date of this Note until but not including (i) the day that this Note is assigned to a REMIC trust, if this Note is assigned to a REMIC trust prior to the Cut-off Date, or (ii) the Yield Maintenance Expiration Date, if this Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date.

(b) Other capitalized terms used but not defined in this Note will have the meanings given to such terms in the Loan Agreement.

2. Address for Payment. All payments due under this Note will be payable at P.O. Box 145404, Cincinnati, Ohio 45250, or such other place as may be designated by Notice to Borrower from or on behalf of Lender.

3. Payments.

(a) Interest will accrue on the outstanding principal balance of this Note at the Fixed Interest Rate, subject to the provisions of Section 8 of this Note.

(b) Interest under this Note will be computed, payable and allocated on the basis of an actual/360 interest calculation schedule (interest is payable for the actual number of days in each month, and each month’s interest is calculated by multiplying the unpaid principal amount of this Note as of the first day of the month for which interest is being calculated by the Fixed Interest Rate, dividing the product by 360, and multiplying the quotient by the number of days in the month for which interest is being calculated). The portion of the monthly installment of principal and interest under this Note attributable to principal and the portion attributable to interest will vary based upon the number of days in the month for which such installment is paid. Each monthly payment of principal and interest will first be applied to pay in full interest due, and the balance of the monthly installment payment paid by Borrower will be credited to principal.

(c) Unless disbursement of principal is made by Lender to Borrower on the first day of a calendar month, interest for the period beginning on the date of disbursement and ending on and including the last day of such calendar month will be payable by Borrower simultaneously with the execution of this Note. If disbursement of principal is made by Lender to Borrower on the first day of a calendar month, then no payment will be due from Borrower at the time of the execution of this Note. The Installment Due Date for the first monthly installment payment under Section 3(d) of interest-only or principal and interest, as applicable, will be the First Installment Due Date set forth in Section 1(a) of this Note. Except as provided in this Section 3(c), Section 10 and in Section 11, accrued interest will be payable in arrears.

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(d) Beginning on the First Installment Due Date, and continuing until and including the monthly installment due on the Maturity Date, principal and accrued interest will be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar month. The amount of the monthly installment of principal and interest payable pursuant to this Section 3(d) on an Installment Due Date will be $29,585.48.

(e) All remaining Indebtedness, including all principal and interest, will be due and payable by Borrower on the Maturity Date.

(f) All payments under this Note must be made in immediately available U.S. funds.

(g) Any regularly scheduled monthly installment of interest-only or principal and interest payable pursuant to this Section 3 that is received by Lender before the date it is due will be deemed to have been received on the due date for the purpose of calculating interest due.

(h) Any accrued interest remaining past due for 30 days or more, at Lender’s discretion, may be added to and become part of the unpaid principal balance of this Note and any reference to “accrued interest” will refer to accrued interest which has not become part of the unpaid principal balance. Any amount added to principal pursuant to the Loan Documents will bear interest at the applicable rate or rates specified in this Note and will be payable with such interest upon demand by Lender and absent such demand, as provided in this Note for the payment of principal and interest.

4. Application of Partial Payments. If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, Lender may apply the amount received to amounts then due and payable in any manner and in any order determined by Lender, in Lender’s discretion. Borrower agrees that neither Lender’s acceptance of a payment from Borrower in an amount that is less than all amounts then due and payable nor Lender’s application of such payment will constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction.

5. Security. The Indebtedness is secured by, among other things, the Security Instrument and reference is made to the Security Instrument and Loan Agreement for other rights of Lender as to collateral for the Indebtedness.

6. Acceleration. If an Event of Default has occurred and is continuing, the entire unpaid principal balance, any accrued interest, any prepayment premium payable under Section 10 and Section 11, and all other amounts payable under this Note and any other Loan Document, will at once become due and payable, at the option of Lender, without

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any prior Notice to Borrower (except if notice is required by applicable law, then after such notice). Lender may exercise this option to accelerate regardless of any prior forbearance. For purposes of exercising such option, Lender will calculate the prepayment premium as if prepayment occurred on the date of acceleration. If prepayment occurs thereafter, Lender will recalculate the prepayment premium as of the actual prepayment date.

7. Late Charge.

(a) If any monthly installment of interest or principal and interest or other amount payable under this Note or under the Loan Agreement or any other Loan Document is not received in full by Lender within 10 days after the installment or other amount is due, counting from and including the date such installment or other amount is due (unless applicable law requires a longer period of time before a late charge may be imposed, in which event such longer period will be substituted), Borrower must pay to Lender, immediately and without demand by Lender, a late charge equal to 5% of such installment or other amount due (unless applicable law requires a lesser amount be charged, in which event such lesser amount will be substituted). If the Loan is not fully amortizing, the late charge will not be due on the final payment of principal owed on the Maturity Date if such payment is not timely made.

(b) Borrower acknowledges that its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan and that it is extremely difficult and impractical to determine those additional expenses. Borrower agrees that the late charge payable pursuant to this Section represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional expenses Lender will incur by reason of such late payment. The late charge is payable in addition to, and not in lieu of, any interest payable at the Default Rate pursuant to Section 8.

8. Default Rate.

(a) So long as (i) any monthly installment under this Note remains past due for 30 days or more or (ii) any other Event of Default has occurred and is continuing, then notwithstanding anything in Section 3 of this Note to the contrary, interest under this Note will accrue on the unpaid principal balance from the Installment Due Date of the first such unpaid monthly installment or the occurrence of such other Event of Default, as applicable, at the Default Rate.

(b) From and after the Maturity Date, the unpaid principal balance will continue to bear interest at the Default Rate until and including the date on which the entire principal balance is paid in full.

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(c) Borrower acknowledges that (i) its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan, (ii) during the time that any monthly installment under this Note is delinquent for 30 days or more, Lender will incur additional costs and expenses arising from its loss of the use of the money due and from the adverse impact on Lender’s ability to meet its other obligations and to take advantage of other investment opportunities, and (iii) it is extremely difficult and impractical to determine those additional costs and expenses. Borrower also acknowledges that, during the time that any monthly installment under this Note is delinquent for 30 days or more or any other Event of Default has occurred and is continuing, Lender’s risk of nonpayment of this Note will be materially increased and Lender is entitled to be compensated for such increased risk. Borrower agrees that the increase in the rate of interest payable under this Note to the Default Rate represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional costs and expenses Lender will incur by reason of the Borrower’s delinquent payment and the additional compensation Lender is entitled to receive for the increased risks of nonpayment associated with a delinquent loan.

9. Limits on Personal Liability.

(a) Except as otherwise provided in this Section 9, Borrower will have no personal liability under this Note, the Loan Agreement or any other Loan Document for the repayment of the Indebtedness or for the performance of or compliance with any other obligations of Borrower under the Loan Documents and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and remedies with respect to the Mortgaged Property and to any other collateral held by Lender as security for the Indebtedness. This limitation on Borrower’s liability will not limit or impair Lender’s enforcement of its rights against any Guarantor of the Indebtedness or any Guarantor of any other obligations of Borrower.

(b) Borrower will be personally liable to Lender for the amount of the Base Recourse, plus any other amounts for which Borrower has personal liability under this Section 9.

(c) In addition to the Base Recourse, Borrower will be personally liable to Lender for the repayment of a further portion of the Indebtedness equal to any loss or damage suffered by Lender as a result of the occurrence of any of the following events:

(i) Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender is entitled under Section 3 of the Security Instrument and the amount of all security deposits collected by Borrower from tenants then in residence. However, Borrower will not be personally liable for any failure described in this Section 9(c)(i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

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(ii) Borrower fails to apply all Insurance proceeds and Condemnation proceeds as required by the Loan Agreement. However, Borrower will not be personally liable for any failure described in this Section 9(c)(ii) if Borrower is unable to apply Insurance or Condemnation proceeds as required by the Loan Agreement because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

(iii) Either of the following occurs:

(A) Borrower fails to deliver the statements, schedules and reports required by Section 6.07 of the Loan Agreement and Lender exercises its right to audit those statements, schedules and reports.

(B) If an Event of Default has occurred and is continuing, Borrower fails to deliver all books and records relating to the Mortgaged Property or its operation in accordance with the provisions of Section 6.07 of the Loan Agreement.

(iv) Borrower fails to pay when due in accordance with the terms of the Loan Agreement the amount of any item below marked “Deferred”; provided however, that if no item is marked “Deferred”, this Section 9(c)(iv) will be of no force or effect.

[ Deferred ] Hazard Insurance premiums or other Insurance premiums

[ Collect ] Taxes or payments in lieu of taxes (PILOT)

[ Deferred ] water and sewer charges (that could become a lien on the Mortgaged Property)

[ N/A ] Ground Rents

[ Deferred ] assessments or other charges (that could become a lien on the Mortgaged Property)

(v) Borrower engages in any willful act of material waste of the Mortgaged Property.

(vi) Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v) of the Loan Agreement (subject to possible full recourse liability as set forth in Section 9(f)(ii)).

(vii) Any of the following Transfers occurs:

(A) Any Person that is not an Affiliate creates a mechanic’s lien or other involuntary lien or encumbrance against the Mortgaged Property and Borrower has not complied with the provisions of the Loan Agreement.

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(B) A Transfer of property by devise, descent or operation of law occurs upon the death of a natural person and such Transfer does not meet the requirements set forth in the Loan Agreement.

(C) Borrower grants an easement that does not meet the requirements set forth in the Loan Agreement.

(D) Borrower executes a Lease that does not meet the requirements set forth in the Loan Agreement.

(d) In addition to the Base Recourse, Borrower will be personally liable to Lender for all of the following:

(i) Borrower will be personally liable for the performance of and compliance with all of Borrower’s obligations under Sections 6.12 and 10.02(b) of the Loan Agreement (relating to environmental matters).

(ii) Borrower will be personally liable for the costs of any audit under Section 6.07 of the Loan Agreement.

(iii) Borrower will be personally liable for any costs and expenses incurred by Lender in connection with the collection of any amount for which Borrower is personally liable under this Section 9, including Attorneys’ Fees and Costs and the costs of conducting any independent audit of Borrower’s books and records to determine the amount for which Borrower has personal liability.

(e) All payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Loan Agreement and the other Loan Documents will be applied first to the portion of the Indebtedness for which Borrower has no personal liability.

(f) Notwithstanding the Base Recourse, Borrower will become personally liable to Lender for the repayment of all of the Indebtedness upon the occurrence of any of the following Events of Default:

(i) Borrower fails to comply with Section 6.13(a)(i) or (ii) of the Loan Agreement or any SPE Equity Owner fails to comply with Section 6.13(b)(i) or (ii) of the Loan Agreement.

(ii) Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v) of the Loan

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Agreement and a court of competent jurisdiction holds or determines that such failure or combination of failures is the basis, in whole or in part, for the substantive consolidation of the assets and liabilities of Borrower or any SPE Equity Owner with the assets and liabilities of a debtor pursuant to Title 11 of the Bankruptcy Code.

(iii) A Transfer that is an Event of Default under Section 7.02 of the Loan Agreement occurs other than a Transfer set forth in Section 9(c)(vii) above (for which Borrower will have personal liability for Lender’s loss or damage); provided, however, that Borrower will not have any personal liability for a Transfer consisting solely of the involuntary removal or involuntary withdrawal of a general partner in a limited partnership or a manager in a limited liability company).

(iv) There was fraud or written material misrepresentation by Borrower or any officer, director, partner, member or employee of Borrower in connection with the application for or creation of the Indebtedness or there is fraud in connection with any request for any action or consent by Lender.

(v) Borrower or any SPE Equity Owner voluntarily files for bankruptcy protection under the Bankruptcy Code.

(vi) Borrower or any SPE Equity Owner voluntarily becomes subject to any reorganization, receivership, insolvency proceeding, or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights.

(vii) The Mortgaged Property or any part of the Mortgaged Property becomes an asset in a voluntary bankruptcy or becomes subject to any voluntary reorganization, receivership, insolvency proceeding, or other similar voluntary proceeding pursuant to any other federal or state law affecting debtor and creditor rights.

(viii) An order of relief is entered against Borrower or any SPE Equity Owner pursuant to the Bankruptcy Code or other federal or state law affecting debtor and creditor rights in any involuntary bankruptcy proceeding initiated or joined in by a Related Party.

(ix) An involuntary bankruptcy or other involuntary insolvency proceeding is commenced against Borrower or any SPE Equity Owner (by a party other than Lender) but only if Borrower or such SPE Equity Owner has failed to use commercially reasonable efforts to dismiss such proceeding or has consented to such proceeding. “Commercially reasonable efforts” will not require any direct or indirect interest holders in Borrower or any SPE Equity Owner to contribute or cause the contribution of additional capital to Borrower or any SPE Equity Owner.

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(g) For purposes of Section 9(f) the term “Related Party” will include all of the following:

(i) Borrower, any Guarantor or any SPE Equity Owner.

(ii) Any Person that holds, directly or indirectly, any ownership interest (including any shareholder, member or partner) in Borrower, any Guarantor or any SPE Equity Owner or any Person that has a right to manage Borrower, any Guarantor or any SPE Equity Owner.

(iii) Any Person in which Borrower, any Guarantor or any SPE Equity Owner has any ownership interest (direct or indirect) or right to manage.

(iv) Any Person in which any partner, shareholder or member of Borrower, any Guarantor or any SPE equity Owner has an ownership interest or right to manage.

(v) Any Person in which any Person holding an interest in Borrower, any Guarantor or any SPE Equity Owner also has any ownership interest.

(vi) Any creditor of Borrower that is related by blood, marriage or adoption to Borrower, any Guarantor or any SPE Equity Owner.

(vii) Any creditor of Borrower that is related to any partner, shareholder or member of, or any other Person holding an interest in, Borrower, any Guarantor or any SPE Equity Owner.

(h) If Borrower, any Guarantor, any SPE Equity Owner or any Related Party has solicited creditors to initiate or participate in any proceeding referred to in Section 9(f), regardless of whether any of the creditors solicited actually initiates or participates in the proceeding, then such proceeding will be considered as having been initiated by a Related Party.

(i) To the extent that Borrower has personal liability under this Section 9, Lender may, to the fullest extent permitted by applicable law, exercise its rights against Borrower personally without regard to whether Lender has exercised any rights against the Mortgaged Property or any other security, or pursued any rights against any Guarantor, or pursued any other rights available to Lender under this Note, the Loan Agreement, any other Loan Document or applicable law. To the fullest extent permitted by applicable law, in any action to enforce Borrower’s personal liability under this Section 9, Borrower waives any right to set off the value of the Mortgaged Property against such personal liability.

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10. Voluntary and Involuntary Prepayments During the Prepayment Premium Period (Section Applies unless and until Loan is Assigned to REMIC Trust Prior to the Cut-off Date).

(a) This Section 10 will apply unless and until this Note is assigned to a REMIC trust prior to the Cut-off Date.

(b) Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment under this Note.

(c) During the Prepayment Premium Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. Unless Lender has previously notified Borrower of the expiration of the Prepayment Premium Period, upon receipt of such Notice from Borrower, Lender will notify Borrower if the Note has been assigned to a REMIC trust prior to the Cut-off Date and the Prepayment Premium Period has expired. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this Section 10 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled Installment Due Date.

(d) Notwithstanding Section 10(c), Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 10(c) above and meets the other requirements set forth in this Section 10(d). Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a Business Day other than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower will be responsible for all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment.

(e) Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all of the principal of this Note, Borrower must pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment, plus (iii) any prepayment premium calculated pursuant to Section 10(f).

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(f) Except as provided in Section 10(g), a prepayment premium will be due and payable by Borrower in connection with any prepayment of principal under this Note during the Prepayment Premium Period. The prepayment premium will be computed as follows:

(i) For any prepayment made during the Yield Maintenance Period, the prepayment premium will be whichever is the greater of subsections (A) and (B) below:

(A) 1.0% of the amount of principal being prepaid; or

(B) the product obtained by multiplying:

(1) the amount of principal being prepaid or accelerated,

by

(2) the excess (if any) of the Monthly Note Rate over the Assumed Reinvestment Rate,

by

(3) the Present Value Factor.

For purposes of Section 10(f)(i)(B), the following definitions will apply:

Monthly Note Rate: 1/12 of the Fixed Interest Rate, expressed as a decimal calculated to 5 digits.

Prepayment Date: in the case of a voluntary prepayment, the date on which the prepayment is made; in the case of the application by Lender of collateral or security to a portion of the principal balance, the date of such application.

Assumed Reinvestment Rate: 1/12 of the yield rate expressed as a decimal to 2 digits, as of the close of the trading session which is 5 Business Days before the Prepayment Date, found among the Daily Treasury Yield Curve Rates, commonly known as Constant Maturity Treasury (“CMT”) rates, with a maturity equal to the remaining Yield Maintenance Period, as reported on the U.S. Department of the Treasury website. If no published CMT maturity matches the remaining Yield Maintenance Period, Lender will interpolate as a decimal to 2 digits the yield rate between (a) the CMT with a maturity closest to, but shorter than, the remaining Yield Maintenance Period, and (b) the CMT with a maturity closest to, but longer than, the remaining Yield Maintenance Period, as follows:

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A = yield rate for the CMT with a maturity shorter than the remaining Yield Maintenance Period

B = yield rate for the CMT with a maturity longer than the remaining Yield Maintenance Period

C = number of months to maturity for the CMT maturity shorter than the remaining Yield Maintenance Period

D = number of months to maturity for the CMT maturity longer than the remaining Yield Maintenance Period

E = number of months remaining in the Yield Maintenance Period

In the event the U.S. Department of the Treasury ceases publication of the CMT rates, the Assumed Reinvestment Rate will equal the yield rate on the first U.S. Treasury security which is not callable or indexed to inflation and which matures after the expiration of the Yield Maintenance Period.

The Assumed Reinvestment Rate may be a positive number, a negative number or zero.

If the Assumed Reinvestment Rate is a positive number or a negative number, Lender will calculate the prepayment premium using such positive number or negative number, as appropriate, as the Assumed Reinvestment Rate in
10(f)(i)(B)(2) and in the calculation of the Present Value Factor.

If the Assumed Reinvestment Rate is zero, Lender will calculate the prepayment premium twice as set forth in (I) and (II) below and will average the results to determine the actual prepayment premium.

(I) Lender will calculate the prepayment premium using an Assumed Reinvestment Rate of one basis point (+0.01%) in Section 10(f)(i)(B)(2) and in the calculation of the Present Value Factor.

(II) Lender will calculate the prepayment premium using an Assumed Reinvestment Rate of negative one basis point (-0.01%) in Section 10(f)(i)(B)(2) and in the calculation of the Present Value Factor.

Present Value Factor: the factor that discounts to present value the costs resulting to Lender from the difference in interest rates during the months remaining in the Yield Maintenance Period, using the Assumed Reinvestment Rate as the discount rate, with monthly compounding, expressed numerically as follows:

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n = the number of months remaining in Yield Maintenance Period; provided, however, if a prepayment occurs on an Installment Due Date, then the number of months remaining in the Yield Maintenance Period will be calculated beginning with the month in which such prepayment occurs and if such prepayment occurs on a Business Day other than an Installment Due Date, then the number of months remaining in the Yield Maintenance Period will be calculated beginning with the month immediately following the date of such prepayment.

ARR = Assumed Reinvestment Rate

(ii) For any prepayment made after the expiration of the Yield Maintenance Period but during the remainder of the Prepayment Premium Period, the prepayment premium will be 1.0% of the amount of principal being prepaid.

(g) Notwithstanding any other provision of this Section 10, no prepayment premium will be payable with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award under the Loan Agreement.

(h) Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the unpaid principal balance of this Note will not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments.

(i) Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth in this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that the prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions.

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11. Voluntary and Involuntary Prepayments During the Lockout Period and During the Defeasance Period (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date).

(a) This Section 11 will apply in the event this Note is assigned to a REMIC trust prior to the Cut-off Date. This Section 11 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date or if this Note is not assigned to a REMIC trust.

(b) Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment under this Note.

(c) Borrower may not voluntarily prepay any portion of the principal balance of this Note during the Lockout Period or during the Defeasance Period; provided, however, any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award under the Loan Agreement will be permitted during the Lockout Period and during the Defeasance Period. If any portion of the principal balance of this Note is prepaid during the Lockout Period or during the Defeasance Period by reason of the application by Lender of any proceeds of collateral or other security to any portion of the unpaid principal balance of this Note or following a determination that the prohibition on voluntary prepayments during the Lockout Period or during the Defeasance Period is in contravention of applicable law, then Borrower must also pay to Lender upon demand by Lender, a prepayment premium equal to 5.0% of the amount of principal being prepaid.

(d) Notwithstanding any other provision of this Section 11, no prepayment premium will be payable with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award under the Loan Agreement.

(e) After the expiration of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this Section 11 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled Installment Due Date.

(f) Notwithstanding Section 11(e) above, following the end of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 11(e) and meets the other requirements set forth in this Section 11(f). Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a

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Business Day other than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower will be responsible for all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment.

(g) Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all of the principal of this Note, Borrower must also pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment.

(h) Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the unpaid principal balance of this Note will not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments.

(i) Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth in Section 11(c) of this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that the lockout and prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions.

(j) If, after the expiration of the Lockout Period, Borrower defeases the Loan as described in Section 11.12 of the Loan Agreement during the Defeasance Period, Borrower will not have the right to voluntarily prepay any of the principal of this Note at any time.

12. Defeasance (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date).

(a) This Section 12 will apply in the event this Note is assigned to a REMIC trust prior to the Cut-off Date. This Section 12 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date or if this Note is not assigned to a REMIC trust.

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(b) Section 5 of this Note is amended by adding a new paragraph at the end of the Section as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, the Indebtedness will be secured by the Pledge Agreement and reference will be made to the Pledge Agreement for other rights of Lender as to collateral for the Indebtedness.

(c) Section 9 of this Note is amended by adding a new paragraph at the end thereof as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, Borrower will have no personal liability under this Note or the Pledge Agreement for the repayment of the Indebtedness or for the performance of any other obligations of Borrower under this Note or the Pledge Agreement (other than any liability under Section 6.12 or Section 10.02 of the Loan Agreement for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance Closing Date), and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and remedies with respect to the collateral held by Lender under the Pledge Agreement as security for the Indebtedness.

(d) Section 21(a) of this Note is amended by adding a new paragraph at the end of that subsection as follows:

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, all Notices, demands and other communications required or permitted to be given pursuant to this Note will be given in accordance with the Pledge Agreement.

13. Costs and Expenses. To the fullest extent allowed by applicable law, Borrower must pay all expenses and costs, including Attorneys’ Fees and Costs incurred by Lender as a result of any default under this Note or in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure proceeding. Borrower acknowledges and agrees that, in connection with each request by Borrower under this Note or any Loan Document, Borrower must pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees charged by the Rating Agencies, regardless of whether the matter is approved, denied or withdrawn.

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14. Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note, the Loan Agreement, or any other Loan Document or otherwise afforded by applicable law, will not be a waiver of or preclude the exercise of that or any other right or remedy. The acceptance by Lender of any payment after the due date of such payment, or in an amount which is less than the required payment, will not be a waiver of Lender’s right to require prompt payment when due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment. Enforcement by Lender of any security for Borrower’s obligations under this Note will not constitute an election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender.

15. Waivers. Borrower and all endorsers and Guarantors of this Note and all other third party obligors waive presentment, demand, notice of dishonor, protest, notice of acceleration, notice of intent to demand or accelerate payment or maturity, presentment for payment, notice of nonpayment, grace, and diligence in collecting the Indebtedness.

16. Loan Charges. Neither this Note nor any of the other Loan Documents will be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate greater than the Maximum Interest Rate. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower in connection with the Loan is interpreted so that any interest or other charge provided for in any Loan Document, whether considered separately or together with other charges provided for in any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate that violation. The amounts, if any, previously paid to Lender in excess of the permitted amounts will be applied by Lender to reduce the unpaid principal balance of this Note. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, will be deemed to be allocated and spread ratably over the stated term of this Note. Unless otherwise required by applicable law, such allocation and spreading will be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of this Note.

17. Commercial Purpose. Borrower represents that Borrower is incurring the Indebtedness solely for the purpose of carrying on a business or commercial enterprise, and not for personal, family, household, or agricultural purposes.

18. Counting of Days. Any reference in this Note to a period of “days” means calendar days, not Business Days except where otherwise specifically provided.

19. Governing Law. This Note will be governed by the law of the Property Jurisdiction.

20. Captions. The captions of the Sections of this Note are for convenience only and will be disregarded in construing this Note.

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21. Notices; Written Modifications.

(a) All Notices, demands and other communications required or permitted to be given pursuant to this Note will be given in accordance with Section 11.03 of the Loan Agreement.

(b) Any modification or amendment to this Note will be ineffective unless in writing and signed by the party sought to be charged with such modification or amendment; provided, however, in the event of a Transfer under the terms of the Loan Agreement that requires Lender’s consent, any or some or all of the Modifications to Multifamily Note set forth in Exhibit A to this Note may be modified or rendered void by Lender at Lender’s option, by Notice to Borrower and the transferee, as a condition of Lender’s consent.

22. Consent to Jurisdiction and Venue. Borrower agrees that any controversy arising under or in relation to this Note may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that will arise under or in relation to this Note. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Note is intended to limit any right that Lender may have to bring any suit, action or proceeding relating to matters arising under this Note in any court of any other jurisdiction.

23. WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH (a) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (b) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

24. State-Specific Provisions. N/A

25. Attached Riders. The following Riders are attached to this Note:

Recycled Borrower and/or Recycled SPE Equity Owner

Seniors Housing

Recourse for Non-Conforming Property

26. Attached Exhibit. The following Exhibit, if marked with an “X” in the space provided, is attached to this Note:

x Exhibit A         Modifications to Multifamily Note

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IN WITNESS WHEREOF, and in consideration of the Lender’s agreement to lend Borrower the principal amount set forth above, Borrower has signed and delivered this Note under seal or has caused this Note to be signed and delivered under seal by its duly authorized representative. Borrower intends that this Note will be deemed to be signed and delivered as a sealed instrument.

CARE GSL BERRYVILLE LLC, a Delaware limited liability company
By:	/s/ Salvatore (Torey) V. Riso, Jr.
Name: Salvatore (Torey) V. Riso, Jr. Title:   President and Chief Executive Officer

45-3274225

Borrower’s Employer ID Number

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PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE CORPORATION WITHOUT RECOURSE.

KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation
By:	/s/ Crystal L. Williams
Name: Crystal L. Williams Title:   Vice President Date: April 24, 2012

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RIDER TO MULTIFAMILY NOTE

(CME)

RECYCLED BORROWER AND/OR RECYCLED SPE EQUITY OWNER

(Revised 9-1-2011)

The following changes are made to the Note which precedes this Rider:

A. The following is added as a new subsection to Section 9(c):

(viii) Any of the Underwriting Representations set forth in Section 5.40(a) of the Loan Agreement or any of the Separateness Representations set forth in Section 5.40(b) of the Loan Agreement are false or misleading in any material respect.

Rider to Multifamily Note (CME)

Recycled Borrower and/or Recycled SPE Equity Owner

RIDER TO MULTIFAMILY NOTE

(CME AND PORTFOLIO)

SENIORS HOUSING

(Revised 3-20-2012)

The following changes are made to the Note which precedes this Rider:

A. The following new subsections are added to Section 9(c):

(ix) Borrower fails to cause the renewal, continuation, extension or maintenance of all Licenses required to legally operate the Mortgaged Property as a seniors housing Facility.

(x) Borrower fails upon an Event of Default to cooperate, or Borrower otherwise intentionally interferes with, hinders or delays Lender (or its nominee or designee), in connection with the timely and orderly transfer of any and all Licenses.

B. In Sections 11(j), 12(b), 12(c) and 12(d), all references to “Section 11.12” are modified to refer to “Section 12.12”.

Rider to Multifamily Note (CME)

Recycled Borrower and/or Recycled SPE Equity Owner

RIDER TO MULTIFAMILY NOTE

(CME AND PORTFOLIO)

RECOURSE FOR NON-CONFORMING PROPERTY

(Revised 9-1-2011)

The following changes are made to the Note which precedes this Rider:

A. The following is added as a new subsection to Section 9(c):

(xi) A casualty occurs affecting the Mortgaged Property, which results in loss or damage to Lender because of either of the following:

(A) (1) the Mortgaged Property is legally non-conforming under the applicable zoning laws, ordinances and/or regulations in the Property Jurisdiction (“Zoning Code”), (2) the affected Improvements cannot be rebuilt to their pre-casualty condition under the terms of the Zoning Code, and (3) the Hazard Insurance proceeds available to Lender under the terms of the Loan Agreement are insufficient to repay the Indebtedness in full.

(B) Borrower fails to commence and diligently pursue completion of any Restoration within the time frame required by the Zoning Code and any permits issued pursuant thereto as necessary to allow the Restoration to the pre-casualty condition described in (A)(2) above.

Rider to Multifamily Note (CME)

Recycled Borrower and/or Recycled SPE Equity Owner

EXHIBIT A

MODIFICATIONS TO MULTIFAMILY NOTE

The following modifications are made to the text of the Note that precedes this Exhibit.

1. The word “Multifamily” is deleted and the phrase “Seniors Housing” is inserted in the first line of the definition of the Loan Agreement in Section 1 of the Note.

2. Section 9(c)(i) is deleted and the following is inserted in lieu thereof:

“(i) Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender is entitled under Section 3 of the Security Instrument and the amount of all security deposits collected by Borrower from tenants then in residence and not applied pursuant to the terms of the tenant’s lease. However, Borrower will not be personally liable for any failure described in this Section 9(c)(i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.”

3. Section 9(c) of the Note is modified by adding the following new subsection:

“(xii) the avoidance, in whole or in part, of the transfer creating the lien of the Security Instrument, or a court order providing an alternative remedy to that avoidance, because of the occurrence on or before the date that the Security Instrument was recorded of a fraudulent transfer or a preference under federal bankruptcy, state insolvency, or similar creditors’ rights laws.”

4. The following is added as Section 9(d)(iv):

“(iv) Borrower will be personally liable for the amount of, and any loss or damage suffered by Lender by reason of any failure to fully and timely pay, all recordation, transfer, or similar taxes, if any, imposed in connection with the Loan or any advances thereof, any indebtedness or obligation refinanced in whole or in part by the Loan, any mortgage or deed of trust that secured any such indebtedness or obligation, this Note, the Security Instrument, any default under any Loan Document, or any other transaction relating to or arising out of the Loan, plus all interest, penalties and fines that may be or may become due.”

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EX-10.9

Exhibit 10.9

Freddie Mac Loan Number: 504183346

Property Name: Greenfield Assisted Living of Berryville

GUARANTY

(CME AND PORTFOLIO)

MULTISTATE

(Revised 10-18-2011)

THIS GUARANTY (“Guaranty”) is entered into to be effective as of April 24, 2012, by CARE INVESTMENT TRUST INC., a Maryland corporation, (“Guarantor”, collectively if more than one), for the benefit of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation (“Lender”).

RECITALS

A. Pursuant to the terms of a Multifamily Loan and Security Agreement dated the same date as this Guaranty (as amended, modified or supplemented from time to time, the “Loan Agreement”), CARE GSL BERRYVILLE LLC, a Delaware limited liability company (“Borrower”) has requested that Lender make a loan to Borrower in the amount of Five Million Six Hundred Sixty-Five Thousand and No/100 Dollars ($5,665,000.00) (“Loan”). The Loan will be evidenced by a Multifamily Note from Borrower to Lender dated effective as of the effective date of this Guaranty (as amended, modified or supplemented from time to time, the “Note”). The Note will be secured by a Multifamily Mortgage, Deed of Trust, or Deed to Secure Debt dated effective as of the effective date of the Note (as amended, modified or supplemented from time to time, the “Security Instrument”), encumbering the Mortgaged Property described in the Loan Agreement.

B. As a condition to making the Loan to Borrower, Lender requires that Guarantor execute this Guaranty.

C. Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material benefit from the making of the Loan.

AGREEMENT

NOW, THEREFORE, in order to induce Lender to make the Loan to Borrower, and in consideration thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

1. Defined Terms. The terms “Indebtedness”, “Loan Documents”, and “Property Jurisdiction”, and other capitalized terms used but not defined in this Guaranty, will have the meanings assigned to them in the Loan Agreement.

Guaranty - Multistate (CME and Portfolio)

2. Scope of Guaranty.

(a) Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender each of the following:

(i) Guarantor guarantees the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, of each of the following:

(A) Guarantor guarantees a portion of the Indebtedness equal to 0% of the original principal balance of the Note (“Base Guaranty”).

(B) In addition to the Base Guaranty, Guarantor guarantees all other amounts for which Borrower is personally liable under Sections 9(c), 9(d) and 9(f) of the Note (provided, however, that Guarantor will have no liability for failure of Borrower or SPE Equity Owner to comply with (I) Section 6.13(a)(xviii) of the Loan Agreement, and (II) the requirement in Section 6.13(a)(x)(B) of the Loan Agreement as to payment of trade payables within 60 days of the date incurred). (CME loans only)

(C) Guarantor guarantees all costs and expenses, including reasonable Attorneys’ Fees and Costs incurred by Lender in enforcing its rights under this Guaranty.

(ii) Guarantor guarantees the full and prompt payment and performance of and/or compliance with all of Borrower’s obligations relating to environmental matters under Sections 6.12 and 10.02 of the Loan Agreement when due and the accuracy of Borrower’s representations and warranties under Section 5.05 of the Loan Agreement.

(b) If the Base Guaranty stated in Section 2(a)(i)(A) is 100% of the original principal balance of the Note, then the following will be applicable:

(i) The Base Guaranty will mean and include, and Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender, the full and complete prompt payment of the entire Indebtedness, the performance of and/or compliance with all of Borrower’s obligations under the Loan Documents when due, and the accuracy of Borrower’s representations and warranties contained in the Loan Documents.

Guaranty - Multistate (CME and Portfolio)

(ii) For so long as the Base Guaranty remains in effect (there being no limit to the duration of the Base Guaranty unless otherwise expressly provided in this Guaranty), the obligations guaranteed pursuant to Sections 2(a)(i)(B) and
2(a)(i)(C) will be part of, and not in addition to or in limitation of, the Base Guaranty.

(c) If the Base Guaranty stated in Section 2(a)(i)(A) is less than 100% of the original principal balance of the Note, then Section 2(b) will be completely inapplicable.

(d) If Guarantor is not liable for the entire Indebtedness, then all payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Loan Agreement and the other Loan Documents (except this Guaranty) will be applied first to the portion of the Indebtedness for which neither Borrower nor Guarantor has personal liability.

3. Guarantor’s Obligations Survive Foreclosure. The obligations of Guarantor under this Guaranty will survive any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Security Instrument, and, in addition, the obligations of Guarantor relating to Borrower’s representations and warranties under Section 5.05 of the Loan Agreement and Borrower’s obligations relating to environmental matters under Sections 6.12 and 10.02 of the Loan Agreement will survive any repayment or discharge of the Indebtedness. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of or held title to the Mortgaged Property, Guarantor will have no obligation under this Guaranty relating to Borrower’s representations and warranties under Section 5.05 of the Loan Agreement or Borrower’s obligations relating to environmental matters under Sections 6.12 and 10.02 of the Loan Agreement after the date of the release of record of the lien of the Security Instrument as a result of the payment in full of the Indebtedness on the Maturity Date or by voluntary prepayment in full.

4. Guaranty of Payment and Performance. Guarantor’s obligations under this Guaranty constitute an unconditional guaranty of payment and performance and not merely a guaranty of collection.

5. No Demand by Lender Necessary; Waivers by Guarantor – All States Except California. The obligations of Guarantor under this Guaranty must be performed without demand by Lender and will be unconditional regardless of the genuineness, validity, regularity or enforceability of the Note, the Loan Agreement, or any other Loan Document, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor. Guarantor hereby waives, to the fullest extent permitted by applicable law, all of the following:

(a) The benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty and agrees that Guarantor’s obligations will not be affected by any circumstances, whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor.

Guaranty - Multistate (CME and Portfolio)

(b) The benefits of any right of discharge under any and all statutes or other laws relating to a guarantor, a surety, a borrower or a mortgagor, and any other rights of a surety, a guarantor, a borrower or a mortgagor under such statutes or laws.

(c) Diligence in collecting the Indebtedness, presentment, demand for payment, protest, all notices with respect to the Note and this Guaranty which may be required by statute, rule of law or otherwise to preserve Lender’s rights against Guarantor under this Guaranty, including notice of acceptance, notice of any amendment of the Loan Documents, notice of the occurrence of any default or Event of Default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by Borrower of any obligation or indebtedness.

(d) All rights to cause a marshalling of the Borrower’s assets or to require Lender to do any of the following:

(i) Proceed against Borrower or any other guarantor of Borrower’s payment or performance under the Loan Documents (an “Other Guarantor”).

(ii) Proceed against any general partner of Borrower or any Other Guarantor if Borrower or any Other Guarantor is a partnership.

(iii) Proceed against or exhaust any collateral held by Lender to secure the repayment of the Indebtedness.

(iv) Pursue any other remedy it may now or hereafter have against Borrower, or, if Borrower is a partnership, any general partner of Borrower.

(e) Any right to object to the timing, manner or conduct of Lender’s enforcement of its rights under any of the Loan Documents.

(f) Any right to revoke this Guaranty as to any future advances by Lender under the terms of the Loan Agreement to protect Lender’s interest in the Mortgaged Property.

6. Modification of Loan Documents. At any time or from time to time and any number of times, without notice to Guarantor and without affecting the liability of Guarantor, all of the following will apply:

(a) Lender may extend the time for payment of the principal of or interest on the Indebtedness or renew the Indebtedness in whole or in part.

Guaranty - Multistate (CME and Portfolio)

(b) Lender may extend the time for Borrower’s performance of or compliance with any covenant or agreement contained in the Note, the Loan Agreement or any other Loan Document, whether presently existing or in this Guaranty after entered into, or waive such performance or compliance.

(c) Lender may accelerate the Maturity Date of the Indebtedness as provided in the Note, the Loan Agreement, or any other Loan Document.

(d) Lender and Borrower may modify or amend the Note, the Loan Agreement, or any other Loan Document in any respect, including an increase in the principal amount.

(e) Lender may modify, exchange, surrender or otherwise deal with any security for the Indebtedness or accept additional security that is pledged or mortgaged for the Indebtedness.

7. Joint and Several Liability. The obligations of Guarantor (and each party named as a Guarantor in this Guaranty) and any Other Guarantor will be joint and several. Lender, in its sole and absolute discretion, may take any of the following actions:

(a) Lender may bring suit against Guarantor, or any one or more of the parties named as a Guarantor in this Guaranty, and any Other Guarantor, jointly and severally, or against any one or more of them.

(b) Lender may compromise or settle with Guarantor, any one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, for such consideration as Lender may deem proper.

(c) Lender may release one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, from liability.

(d) Lender may otherwise deal with Guarantor and any Other Guarantor, or any one or more of them, in any manner.

No action of Lender described in this Section 7 will affect or impair the rights of Lender to collect from any one or more of the parties named as a Guarantor under this Guaranty any amount guaranteed by Guarantor under this Guaranty.

8. Subordination of Borrower’s Indebtedness to Guarantor. Any indebtedness of Borrower held by Guarantor now or in the future is and will be subordinated to the Indebtedness and Guarantor will collect, enforce and receive any such indebtedness of Borrower as trustee for Lender, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.

Guaranty - Multistate (CME and Portfolio)

9. Waiver of Subrogation. Guarantor will have no right of, and hereby waives any claim for, subrogation or reimbursement against Borrower or any general partner of Borrower by reason of any payment by Guarantor under this Guaranty, whether such right or claim arises at law or in equity or under any contract or statute, until the Indebtedness has been paid in full and there has expired the maximum possible period thereafter during which any payment made by Borrower to Lender with respect to the Indebtedness could be deemed a preference under the United States Bankruptcy Code.

10. Preference. If any payment by Borrower is held to constitute a preference under any applicable bankruptcy, insolvency, or similar laws, or if for any other reason Lender is required to refund any sums to Borrower, such refund will not constitute a release of any liability of Guarantor under this Guaranty. It is the intention of Lender and Guarantor that Guarantor’s obligations under this Guaranty will not be discharged except by Guarantor’s performance of such obligations and then only to the extent of such performance.

11. Financial Information. Guarantor, from time to time upon written request by Lender, will deliver to Lender such financial statements as Lender may reasonably require. If an Event of Default has occurred and is continuing, Guarantor will deliver to Lender upon written request copies of its state and federal tax returns.

12. Assignment. Lender may assign its rights under this Guaranty in whole or in part and upon any such assignment, all the terms and provisions of this Guaranty will inure to the benefit of such assignee to the extent so assigned. The terms used to designate any of the parties in this Guaranty will be deemed to include the heirs, legal representatives, successors and assigns of such parties, and the term “Lender” will also include any lawful owner, holder or pledgee of the Note.

13. Complete and Final Agreement. This Guaranty and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements. There are no unwritten oral agreements between the parties. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this Guaranty and the other Loan Documents. Guarantor acknowledges that Guarantor has received a copy of the Note and all other Loan Documents. Neither this Guaranty nor any of its provisions may be waived, modified, amended, discharged, or terminated except by a writing signed by the party against which the enforcement of the waiver, modification, amendment, discharge, or termination is sought, and then only to the extent set forth in that writing.

14. Governing Law. This Guaranty will be governed by and enforced in accordance with the laws of the Property Jurisdiction, without giving effect to the choice of law principles of the Property Jurisdiction that would require the application of the laws of a jurisdiction other than the Property Jurisdiction.

15. Jurisdiction; Venue. Guarantor agrees that any controversy arising under or in relation to this Guaranty may be litigated in the Property Jurisdiction, and that the state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies which will arise under or in relation to this Guaranty. Guarantor irrevocably consents to service, jurisdiction and venue of such courts for any

Guaranty - Multistate (CME and Portfolio)

such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Guaranty is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters arising under this Guaranty against Guarantor or any of Guarantor’s assets in any court of any other jurisdiction.

16. Guarantor’s Interest in Borrower. Guarantor represents to Lender that Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material financial benefit from the making of the Loan.

17. State-Specific Provisions.

Guarantor waives the benefit of the provisions of Sections 49-25 and 49-26 of the Code of Virginia (1950), as amended.

18. Community Property Provision.

Not applicable.

19. WAIVER OF TRIAL BY JURY.

(a) GUARANTOR AND LENDER EACH COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY.

(b) GUARANTOR AND LENDER EACH WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

20. Attached Riders. The following Riders, if marked with an “X” in the space provided, are attached to this Guaranty:

¨ None

¨ Material Adverse Change Rider

x Minimum Net Worth/Liquidity Requirements Rider

¨ Other             

Guaranty - Multistate (CME and Portfolio)

21. Attached Exhibit. The following Exhibit, if marked with an “X” in the space provided, is attached to this Guaranty:

x Exhibit A              Modifications to Guaranty

(Remainder of page intentionally left blank; signature pages follow.)

Guaranty - Multistate (CME and Portfolio)

IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal or has caused this Guaranty to be signed and delivered under seal by its duly authorized representative. Guarantor intends that this Guaranty will be deemed to be signed and delivered as a sealed instrument.

CARE INVESTMENT TRUST INC., a Maryland corporation
By:	/s/ Salvatore (Torey) V. Riso, Jr.
Name: Salvatore (Torey) V. Riso, Jr. Title:   President and Chief Executive Officer

STATE OF New York

COUNTY OF New York

The foregoing instrument was acknowledged before me this 13^th day of April, 2012 by Salvatore (Torey) V. Riso, Jr., President and Chief Executive Officer of CARE INVESTMENT TRUST INC., a Maryland corporation, on behalf of the corporation.

/s/ Danielle M. DePalma

Notary Public

Printed Name: Danielle M. DePalma

My Commission Expires:

January 10, 2015

Guaranty - Multistate (CME and Portfolio)

(a) Name and Address of Guarantor

Name: Care Investment Trust Inc.

Address: 780 Third Avenue, 21^st Floor

New York, New York 10017

(b) Guarantor represents and warrants that Guarantor is:

¨ single

¨ married

x an entity

(c) Guarantor represents and warrants that Guarantor’s state of residence is N/A.

GUARANTOR CARE INVESTMENT TRUST INC., a Maryland corporation
By:	/s/ Salvatore (Torey) V. Riso, Jr.
Name: Salvatore (Torey) V. Riso, Jr. Title:   President and Chief Executive Officer

Guaranty - Multistate (CME and Portfolio)

RIDER TO GUARANTY

(CME AND PORTFOLIO)

MINIMUM NET WORTH/LIQUIDITY

(Revised 9-1-2011)

The following changes are made to the Guaranty which precedes this Rider:

A. The following is added as a new Section:

22. Minimum Net Worth/Liquidity Requirements.

(a) Guarantor must maintain a minimum net worth of $5,000,000.00 with liquid assets of at least $566,500.00 (collectively, “Minimum Net Worth Requirement”).

(b) In addition to the financial information that Guarantor is required to provide pursuant to Section 11 of this Guaranty, annually within 120 days after the end of each fiscal year of Guarantor, Guarantor must provide Lender with a written certification (“Guarantor Certification”) of the net worth and liquid assets of Guarantor, as of the end of such fiscal year derived in accordance with customarily acceptable accounting practices. The Guarantor must certify the Guarantor Certification under penalty of perjury as true and complete. So long as no Event of Default has occurred and is continuing, and so long as Guarantor is publically traded on a nationally recognized stock exchange and so long as such filings are certified by Guarantor to Lender to be true, correct and complete, the filings required to be made by the applicable statutes and regulations will fulfill the requirements of this sub-section.

(c) Within 30 days of receipt of Notice from Lender that Guarantor has failed to maintain the Minimum Net Worth Requirement, Guarantor must either:

(i) cause one or more natural persons or entities who individually or collectively, as applicable, meet the Minimum Net Worth Requirement and is/are acceptable to Lender, in its sole discretion, to execute and deliver to Lender a guaranty in the same form as this Guaranty, without any cost or expense to Lender; or

(ii) deliver to Lender a letter of credit or other collateral acceptable to Lender in its discretion meeting the following conditions, as applicable:

(A) If Guarantor supplies a letter of credit, the letter of credit must be in the form found on Freddie Mac’s website at: http://www.freddiemac.com/multifamily/cme_documents.html

Rider To Guaranty (CME and Portfolio)

Minimum Net Worth/Liquidity

The letter of credit must name Lender as the sole beneficiary, have an initial term of not less than 12 months and be issued by a bank acceptable to Lender in its sole discretion.

(B) The letter of credit or other collateral must be in an amount equal to the greatest of:

(X) the positive difference, if any, obtained by subtracting the net worth identified in the Guarantor Certification from the minimum net worth required under the Minimum Net Worth Requirement,

(Y) the positive difference, if any, obtained by subtracting the liquid assets identified in the Guarantor Certification from the minimum liquid assets required under the Minimum Net Worth Requirement, and

(Z) $100,000.

(C) If Guarantor supplies cash, the cash deposited with Lender shall be credited to Guarantor’s net worth and liquid assets in determining compliance with the Minimum Net Worth Requirement subsequent to such delivery for the purpose of determining whether or not additional collateral will be required, but not for the purposes of determining whether or not the collateral will be released.

(d) Provided no Event of Default then exists, Guarantor will be entitled to request at any time after ninety (90) days after the Letter of Credit or other collateral, as applicable, is delivered to Lender, but in no event more often than once every three (3) months, a return of the unused portion, if any, of the letter of credit or other collateral in the event it delivers to Lender evidence in form and substance satisfactory to Lender, including a Guarantor Certification prepared as of the date of such delivery, that Guarantor has satisfied the Minimum Net Worth Requirement. Provided no Event of Default then exists, Lender will, within a reasonable period of time following Guarantor’s request, return the unused portion, if any, of the letter of credit or other collateral.

(e) Guarantor conveys, pledges, transfers and grants to Lender a security interest pursuant to the Uniform Commercial Code of the Property Jurisdiction or any other applicable law in and to the Letter of Credit and/or any other collateral, including cash, delivered to Lender in accordance with this Section, as the same may increase or decrease from time to time, to secure the Indebtedness and/or Guarantor’s obligations pursuant to the terms of this Guaranty and the other Loan Documents.

Rider To Guaranty (CME and Portfolio)

Minimum Net Worth/Liquidity

EXHIBIT A

MODIFICATIONS TO GUARANTY

The following modifications are made to the text of the Guaranty that precedes this Exhibit.

1. The word “Multifamily” is deleted and the phrase “Seniors Housing” is inserted in lieu thereof in the first line of Recital A.

2. Section 11 is deleted and the following is inserted in lieu thereof:

“Financial Information. Guarantor, from time to time upon written request by Lender, will deliver to Lender such financial statements as Lender may reasonably require. If an Event of Default has occurred and is continuing, Guarantor will deliver to Lender upon written request copies of its state and federal tax returns. So long as no Event of Default has occurred and is continuing, and so long as Guarantor is publically traded on a nationally recognized stock exchange, and so long as such filings are certified by Guarantor to Lender to be true, correct and complete, the filings required to be made by the applicable statutes and regulations will fulfill the requirements of this Section.”

3. A new Section 22 is added, reading as follows:

“22. The obligations of Guarantor shall not be impaired or in any way limited by (i) any action taken by Lender to enforce its rights under or realize upon collateral for any of the “Related Loans” as defined in the Cross-Collateralization Agreement and Amendment to Security Instrument dated the same date as this Guaranty between Lender and Borrower (the “Cross-Collateralization Agreement”), (ii) the fact that Lender may be seeking to realize upon some but not all of the collateral for the “Loans” as defined in the Cross-Collateralization Agreement, or (iii) the exercise or not, concurrently, consecutively or otherwise, of any of the rights or remedies available to Lender under the Cross-Collateralization Agreement or applicable law.”

4. The Rider to Guaranty, Minimum Net Worth/Liquidity is modified as shown by the blacklined changes on said Rider attached hereto.

Guaranty - Multistate (CME and Portfolio)

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Salvatore (Torey) V. Riso, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Care Investment Trust Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2012	/s/ Salvatore (Torey) V. Riso, Jr.
	Salvatore (Torey) V. Riso, Jr.
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Steven M. Sherwyn, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Care Investment Trust Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2012	/s/ Steven M. Sherwyn
	Steven M. Sherwyn
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Care Investment Trust Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Salvatore (Torey) V. Riso, Jr., the Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that;

(i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Salvatore (Torey) V. Riso, Jr.

Salvatore (Torey) V. Riso, Jr.

Chief Executive Officer

Date: May 15, 2012

EX-32.2

Exhibit 32.2

Certification Pursuant to Section 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Care Investment Trust Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven M. Sherwyn, the Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that;

(i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Steven M. Sherwyn

Steven M. Sherwyn

Chief Financial Officer

Date: May 15, 2012

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash Flow From Operating Activities
Net income (loss)	$ 294	$ (1,113)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities
Increase in deferred rent receivable	(399)	(594)
(Income) or loss from investments in partially-owned entities, net	(81)	614
Distribution of income from partially-owned entities	80	1,222
Amortization of above-market leases	52	52
Amortization of deferred financing costs	67
Amortization of mortgage note premium	(37)	(37)
Stock-based compensation	69	30
Non-cash incentive fee		61
Depreciation and amortization on real estate and fixed assets, including intangible assets	982	868
Unrealized (gain) or loss on derivative instruments, net	(420)	256
Changes in operating assets and liabilities:
Other assets		409
Accounts payable and accrued expenses	(743)	419
Other liabilities including payable to related parties	(1,310)	240
Net cash (used in) provided by operating activities	(1,446)	2,427
Cash Flow From Investing Activities
Fixed asset purchases		(221)
Cash deposit for derivative	(632)
Proceeds from loan repayments	86	1,276
Net cash (used in) provided by investing activities	(546)	1,055
Cash Flow From Financing Activities
Principal payments under mortgage notes payable	(383)	(168)
Financing costs	(64)
Net cash used in financing activities	(447)	(168)
Net increase (decrease) in cash and cash equivalents	(2,439)	3,314
Cash and cash equivalents, beginning of period	52,306	5,032
Cash and cash equivalents, end of period	49,867	8,346
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	1,559	912
Cash paid for taxes	227	2
Non-cash financing and investing activities
Reduction of accrued expenses for shares issued to related parties	360
Accrued expenses for financing costs	$ 157

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Real estate:
Land	$ 10,620	$ 10,620
Buildings and improvements	116,222	116,222
Less: accumulated depreciation and amortization	(5,386)	(4,540)
Total real estate, net	121,456	122,302
Investment in loans	5,680	5,766
Investments in partially-owned entities	2,492	2,491
Identified intangible assets - leases in place, net	6,766	6,939
Cash and cash equivalents	49,867	52,306
Other assets	5,939	4,412
Total Assets	192,200	194,216
Liabilities:
Mortgage notes payable	95,659	96,079
Accounts payable and accrued expenses	1,520	2,170
Accrued expenses payable to related party	92	1,794
Other liabilities	641	593
Total Liabilities	97,912	100,636
Commitments and Contingencies
Stockholders' Equity
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued or outstanding
Common stock: $0.001 par value, 250,000,000 shares authorized 10,223,427 and 10,171,550 shares issued and outstanding, respectively	11	11
Additional paid-in capital	84,029	83,615
Retained earnings	10,248	9,954
Total Stockholders' Equity	94,288	93,580
Total Liabilities and Stockholders' Equity	$ 192,200	$ 194,216

XML

Condensed Consolidated Statement of Stockholders Equity (Unaudited) (USD $) In Thousands, except Share data	Total	Common stock		Additional paid-in capital	Retained earnings
Balance at Dec. 31, 2011	$ 93,580	$ 11		$ 83,615	$ 9,954
Balance, shares at Dec. 31, 2011		10,171,550
Stock-based compensation to directors for services, shares		2,304
Stock-based compensation to directors for services, value	15		[1]	15
Stock-based compensation to employees	54			54
Issuance of stock for related party incentive fee, shares		49,573
Issuance of stock for related party incentive fee, value	345		[1]	345
Net income	294				294
Balance at Mar. 31, 2012	$ 94,288	$ 11		$ 84,029	$ 10,248
Balance, shares at Mar. 31, 2012		10,223,427

[1] * Less than $500

XML

Condensed Consolidated Statement of Stockholders Equity (Unaudited) (Parenthetical) (Common stock)	3 Months Ended
	Mar. 31, 2012
Common stock
Stock-based compensation to directors for services	Less than $500
Issuance of stock for related party incentive fee	Less than $500

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	10,223,427	10,171,550
Common stock, shares outstanding	10,223,427	10,171,550

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 9 — Fair Value Measurements

The Company has established processes for determining fair value measurements. Fair value is based on quoted market prices, where available. If listed prices or quotes are not available, then fair value is based upon internally developed models that primarily use inputs that are market-based or independently-sourced market parameters.

An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of valuation hierarchy are defined as follows:

Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The following describes the valuation methodologies used for the Company’s assets and liabilities measured at fair value, as well as the general classification of such pursuant to the valuation hierarchy.

Real estate — The estimated fair value of tangible and intangible assets and liabilities recorded in connection with real estate properties acquired are based on Level 3 inputs. We estimated fair values utilizing income and market valuation techniques. The Company may estimate fair values using market information such as recent sales data for similar assets, income capitalization, or discounted cash flow models. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations.

Investments in loans — The estimated fair value of loans is determined utilizing either internal modeling using Level 3 inputs or third party appraisals. The methodology used to value the loans is based on collateral performance, credit risk, interest rate spread movements, and market data. Loans of the type which the Company invests in are infrequently traded and market quotes are not widely available and disseminated.

Obligation to issue operating partnership units — Prior to the sale of our interest in the Cambridge Portfolio, the fair value of our obligation to issue the OP Units associated with the Cambridge acquisition was based on internally developed valuation models, as quoted market prices were not available nor were quoted prices available for similar liabilities. Our model involved the use of management estimates as well as some Level 2 inputs. The variables in the model prior to April 15, 2011 included the estimated release dates of the shares out of escrow, based on the expected performance of the underlying properties, a discount factor of approximately 21%, and the market price and expected quarterly dividend of Care’s common shares at each measurement date. As discussed above in Note 5, pursuant to the Omnibus Agreement, as of April 15, 2011, the number of OP Units outstanding was reduced to 200,000 and the terms of such OP Units were altered to eliminate any conversion right and provided for forfeiture of the OP Units upon the occurrence of certain events. Under the modified terms, the variables (Level 3 inputs) in the model include the expected life of the OP Units, and the expected dividend rate on our common stock and a discount factor of 12%. The obligation with respect to OP Units was eliminated in conjunction with the sale of the Cambridge Portfolio.

U.S. Treasury Short-Sale — The estimated fair value of our position in a 10-Year U.S. Treasury Note is based on market quoted prices, a Level 1 input. For the purposes of determining fair value we obtain market quotes from at least two independent sources.

ASC 820 requires disclosure of the amounts of significant transfers among levels of the fair value hierarchy and the reasons for the transfers. In addition, ASC 820 requires entities to separately disclose, in their roll-forward reconciliation of Level 3 fair value measurements, changes attributable to transfers in and/or out of Level 3 and the reasons for those transfers. Significant transfers into a level must be disclosed separately from transfers out of a level. We had no transfers among levels for the three month periods ended March 31, 2012 and 2011.

Recurring Fair Value Measurement

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets as of March 31, 2012 (as of December 31, 2011 we had no such assets or liabilities):

	Fair Value at March 31, 2012
(dollars in millions)	Level 1		Level 2		Level 3		Total
Assets
10-Year U.S. Treasury Note (short sale) (1)	$	0.4	$	—	$	—	$	0.4

(1) For the three month period ended March 31, 2012, we recorded an unrealized gain of approximately $0.4 million related to our short position on the 10-Year U.S. Treasury Note of November 15, 2021. Related to this position we were required to maintain approximately $0.6 million on margin which has been included in our other assets as of March 31, 2012 (see Note 7).

The tables below present reconciliations for all assets and liabilities measured at fair value on a recurring basis using significant Level 3 inputs during the three month period ended March 31, 2011 (for the three month period ended March 31, 2012 we had no such assets or liabilities). Level 3 instruments presented in the tables include a liability to issue OP Units, which were carried at fair value. The Level 3 instruments were valued using internally developed valuation models that, in management’s judgment, reflect the assumptions a marketplace participant would utilize:

Level 3 Instruments Fair Value Measurements March 31, 2011 (dollars in millions)	Obligation to Issue Partnership Units
Balance, December 31, 2010	$	(2.1	)
Net change in unrealized loss from obligations		(0.3	)
Balance, March 31, 2011	$	(2.4	)

We are required to recognize all derivative instruments as either assets or liabilities at fair value in the statement of financial position. As discussed in Note 5, Cambridge forfeited all of its rights and interests in the OP Units upon the closing of the purchase of Care’s interest in the Cambridge Portfolio on November 30, 2011. As of December 31, 2011, we did not have any derivative instruments outstanding. As of March 31, 2012, the Company had one derivative instrument that pertained to the short position of the 10-Year U.S. Treasury Note due November 15, 2021, which had a fair value of approximately $0.4 million (see Note 7).

(dollars in millions)	March 31, 2012
Derivatives not designated as hedging instruments	Balance Sheet Location		Fair Value
10-Year U.S. Treasury Note (short-sale)		Other assets	$	0.4

(dollars in millions)	Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives not designated as hedging instruments	Location of (Gain) Loss Recognized in Income on Derivative	Three Months Ended March 31, 2012		Three Months Ended March 31, 2011
Operating partnership units	Unrealized loss on derivative instruments	$	—	$	(0.3	)
10-Year U.S. Treasury Note (short sale)	Unrealized gain on derivative instruments	$	0.4	$	—

Estimates of other assets and liabilities in financial statements

We are required to disclose fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate that value. In cases where quoted market prices are not available, fair value is based upon the application of discount rates to estimated future cash flows based on market yields or other appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

In addition to the amounts reflected in the financial statements at fair value as provided above, cash and cash equivalents, restricted cash, accrued interest receivable, accounts payable and other liabilities reasonably approximate their fair values due to the short maturities of these items. The mortgage notes payable that were used to finance the acquisitions of the Bickford properties have a combined fair value of approximately $83.9 and $84.8 million as of March 31, 2012 and December 31, 2011, respectively. The fair value of the debt was calculated by determining the present value of the agreed upon interest and principal payments at a discount rate reflective of financing terms currently available to us for collateral with the similar credit and quality characteristics (based on Level 2 measurements). The Bridge Loan used to finance the Greenfield acquisition is a floating rate facility and closed on September 20, 2011. Due to the short -term nature of the Bridge Loan and the fact that it has a floating interest rate, the carrying value of the Bridge Loan approximates fair market value as of March 31, 2012 and December 31, 2011. We determined that the fair value of our loan investment, computed by discounting expected future cash flow at market rate, was approximately equal to our carrying value at March 31, 2012 and December 31, 2011.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2012	May 14, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	Care Investment Trust Inc.
Entity Central Index Key	0001393726
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		10,225,551

XML

Stockholders' Equity

3 Months Ended

Mar. 31, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 10 — Stockholders’ Equity

Our authorized capital stock consists of 100,000,000 shares of preferred stock, $0.001 par value and 250,000,000 shares of common stock, $0.001 par value. As of March 31, 2012 and December 31, 2011, no shares of preferred stock were issued and outstanding and 10,223,427 and 10,171,550 shares of our common stock were issued and outstanding, respectively.

Tiptree owns the 2008 Warrant which entitles it to purchase 652,500 shares of our common stock at a price of $11.33 per share under the Manager Equity Plan, which was adopted in June 2007 (the “Manager Equity Plan”). The 2008 Warrant is immediately exercisable and expires on September 30, 2018.

On January 3, 2012, we issued 2,304 shares of common stock with a combined aggregate fair value of approximately $15,000 to our independent directors as part of their retainer for the fourth quarter of 2011. Each independent director receives an annual base retainer of $50,000, payable quarterly in arrears, of which 70% is paid in cash and 30% in shares of Care common stock. Shares are issued under our Equity Plan, which was adopted in June 2007 (the “Equity Plan”).

On March 30, 2012, we issued 49,573 common shares with a combined aggregate fair value of approximately $345,000 to TREIT in conjunction with the 2011 fourth quarter incentive fee due under the Services Agreement (see Note 8). These shares were issued under the Manager Equity Plan.

As of March 31, 2012, 172,260 common shares remain available for future issuances under the Equity Plan and 134,629 shares (which is net of 652,500 shares that are reserved for potential issuance upon conversion of the 2008 Warrant) remain available for future issuances under the Manager Equity Plan.

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenue
Rental income	$ 3,442	$ 2,961
Reimbursable Income	351	315
Income from investments in loans	182	245
Total Revenue	3,975	3,521
Expenses
Base services fees to related party	112	104
Incentive fee to related party		305
Marketing, general and administrative (including stock-based compensation of $69 and $30, respectively)	1,172	828
Reimbursed property expenses	351	308
Depreciation and amortization	982	868
Operating Expenses	2,617	2,413
Other (Income) Expense
(Income) or loss from investments in partially-owned entities, net	(81)	614
Unrealized (gain) or loss on derivative instruments, net	(420)	256
Interest income	(21)	(3)
Interest expense including amortization of deferred financing costs	1,586	1,354
Net income (loss)	$ 294	$ (1,113)
Net income or (loss) per share of common stock
Net income (loss), basic	$ 0.03	$ (0.11)
Net income (loss), diluted	$ 0.03	$ (0.11)
Weighted average common shares outstanding, basic	10,175,438	10,140,422
Weighted average common shares outstanding, diluted	10,186,222	10,140,422

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Investments in Loans

3 Months Ended

Mar. 31, 2012

Investments in Loans [Abstract]

Investments in Loans

Note 4 — Investments in Loans

As of March 31, 2012 and December 31, 2011, our remaining loan investment is part of a larger credit facility, in which we have an approximately one-third interest. The loan is secured by a total of ten (10) properties consisting of skilled nursing facilities, assisted living facilities and a multifamily property all located in Louisiana. Originally scheduled to mature on February 1, 2011, the loan was extended several times during 2011 and eventually restructured in November 2011. Pursuant to the restructuring, the revised loan has a five (5) year term with a maturity date of November 1, 2016, a 25 year amortization schedule and a limited cash sweep. The interest rate on the loan was increased from London Interbank Offered Rate (“Libor”) plus 4.00% to Libor plus 6.00% in year one through year three, Libor plus 8.00% in year four and Libor plus 10.00% in year five. At the time of the restructuring, our portion of the loan had a notional balance of approximately $10.1 million. In conjunction with the restructuring, we received a revised note with a face amount of approximately $10.5 million. As part of the analysis at the time of the restructuring of the loan, we determined that expected future gross receipts, exclusive of interest payments, from this investment were approximately equal to our carrying value of approximately $5.8 million. Accordingly, all principal amortization payments, including prepayments received from the limited cash sweep are applied to the carrying value of our asset. No gain or loss was recognized as a result of the restructuring. One month Libor was 0.24% and 0.30% at March 31, 2012 and December 31, 2011, respectively. Pursuant to Accounting Standards Codification Topic 310 Receivables (“ASC 310”), we recognize interest income at the effective interest rate based on Libor in effect at the inception of the restructured loan and using a weighted average spread of 7.20%. Accordingly, cash interest will be less than effective interest during the first three (3) years of the loan and cash interest will be greater than effective interest during the last two (2) years of the loan. As part of the restructuring, a new independent operator was brought in to manage the properties. Our cost basis in the loan at March 31, 2012 and December 31, 2011 was approximately $5.7 million and approximately $5.8 million, respectively.

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Investments in Real Estate

3 Months Ended

Mar. 31, 2012

Investments in Real Estate [Abstract]

Investments in Real Estate

Note 3 — Investments in Real Estate

As of March 31, 2012 and December 31, 2011, we own 17 senior housing facilities. In 2008, we acquired 14 senior living properties located in four (4) states, of which six (6) are in Iowa, five (5) in Illinois, two (2) in Nebraska and one (1) in Indiana. These 14 properties were acquired in two separate transactions from Bickford Senior Living Group, L.L.C., a privately-held owner and operator of senior housing facilities (“Bickford”). We lease those properties to Bickford Master I, LLC (the “Bickford Master Lessee”) for an initial annual base rent of approximately $9.1 million and additional base rent of approximately $0.3 million, with fixed escalations of 3.0% per annum through June 2023. The leases provide for four (4) renewal options of ten (10) years each. The additional base rent was deferred and accrued until July 2011 and is being paid over a 24 month period which commenced at that time. See also Note 7 for the mortgage loans underlying the Bickford properties.

As an enticement for the Company to enter into the leasing arrangement for the properties, we received additional collateral and guarantees of the lease obligation from parties affiliated with Bickford. The additional collateral pledged in support of Bickford’s obligation to the lease commitment included ownership interests in Bickford affiliated companies.

The Bickford real estate assets, including personal property, consist of the following at each period end (in millions):

	March 31, 2012			December 31, 2011
Land	$	5.0		$	5.0
Buildings and improvements		102.0			102.0
Less: accumulated depreciation and amortization		(5.2	)		(4.4	)
Total real estate, net	$	101.8		$	102.6

In September 2011, the Company acquired three (3) assisted living and memory care facilities located in Virginia from affiliates of Greenfield Senior Living, Inc., a privately-held owner and operator of senior housing facilities (“Greenfield”). The aggregate purchase price for the three (3) properties was $20.8 million, of which approximately $15.5 million was funded with the proceeds of a first mortgage bridge loan (the “Bridge Loan”) with KeyBank National Association (“KeyBank”) (see Notes 7 and 13), and the balance with cash on hand. Concurrent with the acquisition, the properties were leased to three (3) wholly-owned affiliates of Greenfield, which are responsible for operating each of the properties pursuant to a triple net master lease (the “Greenfield Master Lease”). The initial term of the Greenfield Master Lease is 12 years with two (2) renewal options of ten (10) years each. Rent payments during the first year are approximately $1.7 million, with rental increases of 2.75% per annum during the initial term of the lease. At the end of the initial term, Greenfield, subject to certain conditions, holds a one-time purchase option that provides the right to acquire all three (3) of the properties at the then fair market value. Greenfield has guaranteed the obligations of the tenants under the Greenfield Master Lease.

The Greenfield real estate assets, including personal property, consist of the following at each period end (in millions):

	March 31, 2012			December 31, 2011
Land	$	5.6		$	5.6
Buildings and improvements		14.2			14.2
Less: accumulated depreciation and amortization		(0.2	)		(0.1	)
Total real estate, net	$	19.6		$	19.7

For the three months ended March 31, 2012, revenues from the Bickford and Greenfield tenants accounted for approximately 95% of total revenue and for the three months ended March 31 2011, revenues from the Bickford tenants accounted for approximately 93% of total revenue.

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Income (Loss) per share (in thousands, except share and per share data)

3 Months Ended

Mar. 31, 2012

Income (Loss) per share (in thousands, except share and per share data) [Abstract]

Income (Loss) per share (in thousands, except share and per share data)

Note 11 — Income (Loss) per Share (in thousands, except share and per share data)

	Three Months Ended
	March 31, 2012		March 31, 2011
Net income or (loss) per share of common stock
Net income (loss) per share, basic	$	0.03	$	(0.11	)
Net income (loss) per share, diluted	$	0.03	$	(0.11	)
Numerator:
Net income (loss), basic and diluted	$	294	$	(1,113	)
Denominator:
Weighted average common shares outstanding, basic		10,175,438		10,140,422
Shares underlying RSU Grants		10,784		—
Weighted average common shares outstanding, diluted		10,186,222		10,140,422

For the three months ended March 31, 2012, diluted income per share includes the effect of 100,153 unvested restricted stock units which were granted to certain officers and employees on December 30, 2011. The restricted stock units are participating securities.

For the three months ended March 31, 2011, diluted loss per share was the same as basic loss per share and excludes the effect of 501,966 common shares pertaining to the OP Units issued to Cambridge (see Note 5) that were held in escrow, prior to being restructured on April 15, 2011 in conjunction with the Omnibus Agreement, when they were no longer redeemable for or convertible into shares of our common stock, as they were anti-dilutive.

All periods above exclude the dilutive effect of the 2008 Warrant convertible into 652,500 shares because the exercise price was more than the average market price during such periods.

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Borrowings under Mortgage Notes Payable

3 Months Ended

Mar. 31, 2012

Borrowings under Mortgage Notes Payable [Abstract]

Borrowings under Mortgage Notes Payable

Note 7 — Borrowings under Mortgage Notes Payable

The following table summarizes the Company’s outstanding mortgage notes as of March 31, 2012 and December 31, 2011 (dollars in millions):

	Interest Rate	Date of Mortgage Note	Maturity Date	March 31, 2012		December 31, 2011
Red Mortgage Capital, Inc (12 properties) (1)	6.845%	June 2008	July 2015	$	72.6	$	72.8
Red Mortgage Capital, Inc (2 properties) (1)	7.17%	September 2008	July 2015		7.4		7.5
Key Bank National Association (3 properties) (2)	Libor +4.00%	September 2011	June 2012		15.2		15.3
Subtotal					95.2		95.6
Unamortized premium (3)					0.5		0.5
Total				$	95.7	$	96.1

(1) The mortgage loan obtained on June 26, 2008 (the “June Bickford Loan”) requires a fixed monthly payment of approximately $0.5 million for both principal and interest, until maturity in July 2015, at which time the then outstanding balance of approximately $69.6 million is due and payable. The mortgage loan obtained on September 30, 2008 together with the June Bickford Loan, the “Bickford Loans”) provides for a fixed monthly debt service payment of approximately $52,000 for principal and interest until the maturity in July 2015 when the then outstanding balance of approximately $7.1 million is due and payable. In addition, we are required to make monthly escrow payments for taxes and reserves for which we are reimbursed by the Bickford Master Lessee under the Bickford Master Lease. Both mortgage loans are serviced by and payable to Red Mortgage Capital, Inc. (“Red Capital”) and contain prepayment restrictions that impact our ability to refinance either of the mortgage loans prior to 2015. The Bickford Loans are secured by separate cross-collateralized, cross-defaulted first priority mortgages/deeds of trust on each of the Bickford properties. The Bickford Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for the Bickford Loans. Each Bickford Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Bickford Loans, which would result in all amounts owing under each of the Bickford Loans to become immediately due and payable since all of the Bickford Loans are cross-defaulted. On March 31, 2012, the Bickford Loans had an effective yield of 6.88% and the Company was in compliance with respect to the financial covenants related to the Bickford Loans.

(2) On September 20, 2011, in connection with our acquisition of the Greenfield properties, the Company entered into the Bridge Loan with KeyBank in the principal amount of approximately $15.5 million (see Notes 3 and 13). The Bridge Loan is secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. Care has guaranteed payment of up to $5.0 million of the obligations under the Bridge Loan. The Bridge Loan bears interest at a floating rate per annum equal to Libor plus 400 basis points, with no Libor floor, and provides for monthly interest and principal payments commencing on October 1, 2011. The Bridge Loan was scheduled to mature on June 20, 2012. On March 31, 2012, the Bridge Loan had an effective yield of 4.25% and the Company was in compliance with respect to the financial covenants related to the Bridge Loan. On April 24, 2012, Care refinanced the Bridge Loan for the Greenfield properties by entering into three separate non-recourse loans (each a “Greenfield Loan” and collectively the “Greenfield Loans”) with KeyCorp Real Estate Capital Markets, Inc. (“KeyCorp”) for an aggregate amount of $15,680,000. The Greenfield Loans bear interest at a fixed rate of 4.76%, amortize over a 30-year period, provide for monthly interest and principal payments commencing on June 1, 2012 and mature on May 1, 2022. The Greenfield Loans are secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. The Greenfield Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for each Greenfield Loan. Each Greenfield Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Greenfield Loans, which would result in all amounts owing under each of the Greenfield Loans to become immediately due and payable since all of the Greenfield Loans are cross-defaulted. KeyCorp intends to sell each of the Greenfield Loans to Federal Home Loan Mortgage Corporation (“Freddie Mac”) under Freddie Mac’s CME Program.

(3) As a result of the utilization of push-down accounting in connection with the Tiptree Transaction, the Red Mortgage Capital mortgage notes payable were recorded at their then fair value of approximately $82.1 million, an increase of approximately $0.8 million over the combined amortized loan balances of approximately $81.3 million at August 13, 2010. The premium is amortized over the remaining term of such loans.

On February 1, 2012, the Company became party to the short sale of a $15.5 million 2.00% U.S. Treasury Note due November 15, 2021 (the “10-Year U.S. Treasury Note”). Care entered into this transaction in conjunction with its application to Freddie Mac for a ten-year fixed rate mortgage to be secured by the Greenfield properties in order to limit its interest rate exposure. For the three month period ended March 31, 2012, we had an unrealized gain on this open position of approximately $0.4 million (see Note 9). The Company closed the aforementioned short position upon rate locking the Freddie Mac mortgage on April 18, 2012 and realized a net gain of approximately $0.1 million. Tiptree acted as agent, through its prime broker, for us with respect to this transaction and assigned to us all of its rights and obligations related to this transaction.

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Investments in Partially Owned Entities

3 Months Ended

Mar. 31, 2012

Investments in Partially Owned Entities [Abstract]

Investments in Partially Owned Entities

Note 5 — Investments in Partially Owned Entities

The following table summarizes the Company’s investments in partially owned entities at March 31, 2012 and December 31, 2011 (in millions):

Investment	March 31, 2012		December 31, 2011
Senior Management Concepts Senior Living Portfolio		2.5		2.5
Total	$	2.5	$	2.5

Cambridge Medical Office Building Portfolio

On November 30, 2011, we sold our entire interest in the Cambridge Medical Office Portfolio (the “Cambridge Portfolio”) and subsequently dissolved our related partnership entities, ERC Sub, L.P. and ERC Sub, LLC. In December of 2007, we acquired an 85% equity interest in eight (8) limited partnerships that own nine (9) Class A medical office buildings owned and operated by affiliates of Cambridge Holdings, Inc. (“Cambridge”). Our total investment was approximately $72.4 million consisting of: (i) approximately $61.9 million of cash, of which approximately $2.8 million was held back to perform tenant improvements; and (ii) subject to the properties achieving certain performance hurdles, the commitment to issue to Cambridge 700,000 operating partnership units (the “OP Units”) in ERC Sub, L.P. (the limited partnership through which we held our investment in the Cambridge Portfolio) with a stated value of $10.5 million. Total rentable area of the Cambridge Portfolio was approximately 767,000 square feet. As originally structured, Cambridge retained ownership of the remaining 15% interest in each of the limited partnerships and continued to operate the underlying properties pursuant to long-term management contracts. In accordance with the terms of our management agreements, Cambridge acted as the manager and leasing agent of each medical office building.

On April 14, 2011 (effective as of April 15, 2011) we entered into an Omnibus Agreement (the “Omnibus Agreement”) with Cambridge and certain of its affiliates (the “Cambridge Parties”) regarding our investment in the Cambridge Portfolio. Pursuant to the Omnibus Agreement, we simultaneously entered into a settlement agreement with Cambridge in regard to the ongoing litigation between ourselves and Cambridge. The economic terms of our investment in the Cambridge Portfolio were amended by the Omnibus Agreement as follows:

• The number and terms of the OP Units were revised such that Cambridge retained rights to 200,000 OP Units. These OP Units were entitled to dividend equivalent payments equal to any ordinary dividend declared and paid by Care to its stockholders, but were no longer convertible into or redeemable for shares of common stock of Care and had limited voting rights in ERC Sub, L.P.;

• We issued a warrant (the “Warrant”) to Cambridge to purchase 300,000 shares of our common stock at $6.00 per share;

• Our obligation to fund up to approximately $0.9 million in additional tenant improvements in the Cambridge Portfolio was eliminated;

• Our aggregate interest in the Cambridge Portfolio was converted from a stated equity interest of 85% to a fixed dollar investment of $40 million with a preferred return of 14%;

• Retroactive to January 1, 2011, we were to receive a preferential distribution of cash flow from operations with a target distribution rate of 12% on our $40 million fixed dollar investment with any cash flow from operations in excess of the target distribution rate being retained by Cambridge;

• We had a preference with regard to any distributions from special events, such as property sales, refinancings and capital contributions, equal to the sum of our outstanding fixed dollar investment plus our accrued but unpaid preferred return;

• Cambridge received the right to purchase our interest in the Cambridge Portfolio at any time during the term of the Omnibus Agreement for an amount equal to the sum of our outstanding fixed dollar investment plus our accrued but unpaid preferred return plus a cash premium that increased annually as well as the return to Care of the OP Units, the Warrant and any Care stock acquired upon a cashless exercise of the Warrant (the “Redemption Price” as defined in the Omnibus Agreement);

Prior to April 15, 2011, we included 85% of the operating losses from the Cambridge Portfolio in our statements of operations and reduced the value of our investment in the Cambridge Portfolio based on such losses and the receipt of cash distributions. Our statement of operations for the three months ended March 31, 2011 includes the aforementioned allocated loss of approximately $0.8 million as well as a loss of approximately $0.3 million pertaining to an increase in the liability associated with the operating partnership units. The OP Units had been accounted for as a derivative obligation on our balance sheet. Their value was derived from our stock price (as each OP Unit was redeemable for one share of our common stock, or at the cash equivalent thereof, at our option), and the overall performance of the Cambridge Portfolio (as the number of OP Units eventually payable to Cambridge was subject to reduction to the extent such OP Units were utilized as credit support for our preferred distribution). The modified OP Units were valued based on the expected dividend equivalent payments equal to expected ordinary dividends declared and paid on our common stock to be made during the expected term of the OP Units, discounted by a risk adjusted rate.

On October 19, 2011, we entered into an agreement with Cambridge to amend the Omnibus Agreement (the “First Amendment”). Pursuant to the First Amendment, Cambridge was granted the ability to purchase our interest in the Cambridge Portfolio at any time up to December 9, 2011 for an amount equal to the sum of our $40 million fixed dollar investment plus our accrued but unpaid preferred return (approximately $2.0 million inclusive of our preferred distribution of cash flow from operations). As consideration for the First Amendment, Cambridge agreed to forfeit all of its rights and interests in the Warrant and the OP Units upon the earlier of the closing of such purchase or December 9, 2011.

On November 30, 2011, Cambridge completed its acquisition of our preferred interest in the Cambridge Portfolio. In connection therewith, the parties to the Omnibus Agreement terminated the agreement. We received proceeds of approximately $42 million of which, approximately $40.8 million of the proceeds received were treated as proceeds from sale of investments and the balance of approximately $1.2 million as income from investments in partially-owned entities.

Summarized financial information as of and for the three months ended March 31, 2011 of the Cambridge Portfolio is as follows (amounts in millions):

	2011
Assets	$	234.9
Liabilities	$	218.4
Equity	$	16.5
Revenue	$	6.3
Expenses	$	7.6
Net loss	$	(1.3	)

Senior Management Concepts Senior Living Portfolio

Until May 2011, we owned a preferred and common equity investment in four (4) independent and assisted living facilities located in Utah and operated by Senior Management Concepts, LLC (“SMC”), a privately held owner and operator of senior housing facilities. The four (4) private pay facilities contain 408 units of which 243 are independent living units and 165 are assisted living units. At the time of our acquisition, four (4) affiliates of SMC each entered into 15-year leases for the respective facilities that expire in 2022. We acquired our preferred and common equity interest in the SMC portfolio in December 2007, paying approximately $6.8 million in exchange for 100% of the preferred equity interests and 10% of the common equity interests in the four (4) properties. At the time of our initial investment, we entered into an agreement with SMC that provides for payments to us of an annual cumulative preferred return of 15.0% on our investment. In addition, we are to receive a common equity return payable for up to ten (10) years equal to 10.0% of budgeted free cash flow after payment of debt service and the preferred return as such amounts were determined prior to closing, as well as 10% of the net proceeds from a sale of one or more of the properties. Subject to certain conditions being met, our preferred equity interest in the properties is subject to redemption at par. If our preferred equity interest is redeemed, we have the right to put our common equity interests to SMC within 30 days after notice at fair market value as determined by a third-party appraiser. In addition, we have an option to put our preferred equity interest to SMC at par any time beginning on January 1, 2016, along with our common equity interests at fair market value as determined by a third-party appraiser.

In May 2011, with our prior consent, three (3) of the four (4) SMC properties were sold. We received approximately $6.6 million of gross proceeds consisting of approximately $5.2 million representing a return of our preferred equity investment allocable to the three (3) sold properties, approximately $0.9 million representing our 10% common equity interest in the three (3) sold properties and approximately $0.4 million which satisfied all outstanding delinquent preferred return and default interest payments. In conjunction with the sale of the three (3) properties, we returned a security deposit of approximately $0.4 million which was held by us as payment collateral for those facilities. We received approximately $12,000 in excess of the then current cost basis of our investment.

Subsequent to the aforementioned sale and through March 31, 2012, we retain our 100% preferred equity interest and 10% common equity interest in the remaining property in Utah. The remaining facility contains 120 units of which approximately one-half are assisted living and one-half are independent living. The property is subject to a lease which expires in 2022.

The summarized financial information as of March 31, 2012 and December 31, 2011 and for the three months ended March 31, 2012 and 2011, for the Company’s unconsolidated joint venture in SMC, which for the three months ended March 31, 2011 includes the net results of operations for the three (3) properties sold in May 2011 as discontinued operations, is as follows (amounts in millions):

	March 31, 2012			December 31, 2011
Assets	$	11.0		$	11.1
Liabilities		14.7			14.6
Equity	$	(3.6	)	$	(3.5	)

	For the three months ended March 31, 2012			For the three months ended March 31, 2011
Revenue	$	0.9		$	3.3
Expenses		0.9			3.2
Net loss from discontinued operations		—			(0.0	)
Net income (loss)	$	(0.1	)	$	0.1

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Identified Intangible Assets - leases in-place, net

3 Months Ended

Mar. 31, 2012

Identified Intangible Assets - leases in-place, net [Abstract]

Identified Intangible Assets - leases in-place, net

Note 6 — Identified Intangible Assets — leases in-place, net

The following table summarizes the Company’s identified intangible assets at March 31, 2012 and December 31, 2011 (in millions):

	March 31, 2012			December 31, 2011
Leases in-place — including above market leases of $2.7	$	7.7		$	7.7
Accumulated amortization		(0.9	)		(0.8	)
Total	$	6.8		$	6.9

The Company amortizes these intangible assets over the terms of the underlying leases on a straight-line basis. Amortization expense for each of the next five (5) years is expected to be approximately $0.4 million per annum and the amortization for above-market leases, which reduces rental income, is expected to be approximately $0.2 million per annum for each of the next five (5) years.

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Related Party Transactions

3 Months Ended

Mar. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

Note 8 — Related Party Transactions

Services Agreement with TREIT Management LLC

The Company has a Services Agreement with TREIT pursuant to which TREIT provides certain advisory and support services related to the Company’s business. For such services, the Company: (i) pays TREIT a monthly base services fee in arrears of one-twelfth of 0.5% of the Company’s Equity (as defined in the Services Agreement) as adjusted to account for Equity Offerings (as defined in the Services Agreement); (ii) provides TREIT with office space and certain office-related services (as provided in the Services Agreement and subject to a cost sharing agreement between the Company and TREIT); and (iii) pays, to the extent earned, a quarterly incentive fee equal to the lesser of (a) 15% of the Company’s adjusted funds from operations (“AFFO”) Plus Gain/(Loss) on Sale (as defined in the Services Agreement) and (b) the amount by which the Company’s AFFO Plus Gain /(Loss) on Sale exceeds an amount equal to Adjusted Equity multiplied by the Hurdle Rate (as defined in the Services Agreement). Twenty percent (20%) of any such incentive fee shall be paid in shares of common stock of the Company, unless a greater percentage is requested by TREIT and approved by an independent committee of directors. On November 9, 2011, we entered into an amendment to the Services Agreement which clarified the basis upon which the Company calculates the quarterly incentive fee. The initial term of the Services Agreement extends until December 31, 2013. Unless terminated earlier in accordance with its terms, the Services Agreement will be automatically renewed for one year periods following such date unless either party elects not to renew. If the Company elects to terminate without cause, or elects not to renew the Services Agreement, a Termination Fee (as defined in the Services Agreement) shall be payable by the Company to TREIT. Such termination fee is not fixed and determinable.

For the three months ended March 31, 2012 and 2011, we incurred approximately $0.1 million and $0.1 million, respectively, in base service fee expense to TREIT. In addition, during the three months ended March 31, 2012 and 2011, we incurred an incentive fee payable to TREIT of none and approximately $0.3 million, respectively, of which 20% was paid in the Company’s common stock. For the three month period ended March 31, 2012, TREIT’s reimbursement to the Company for certain office related services was approximately $4,000. At March 31, 2012, accrued expenses payable to TREIT of approximately $43,000 for the outstanding base service fee was offset by the reimbursement due to us.

Other Transactions with Related Parties

At March 31, 2012 and December 31, 2011, Tiptree owns a warrant (the “2008 Warrant”) to purchase 652,500 shares of the Company’s common stock at $11.33 per share under the Manager Equity Plan adopted by the Company on June 21, 2007 (the “Manager Equity Plan”). The warrant is immediately exercisable and expires on September 30, 2018.

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Subsequent Events

3 Months Ended

Mar. 31, 2012

Subsequent Events [Abstract]

Subsequent Events

Note 13 — Subsequent Events

Share Issuances

On April 3, 2012, we issued 2,124 shares of common stock with a combined aggregate fair value of approximately $15,000 to our independent directors as part of their quarterly retainer for the quarter ended March 31, 2012.

Dividends Declaration

On April 3, 2012, the Company declared a cash dividend of $0.135 per share of common stock with respect to the fourth quarter of 2011 which was paid on May 1, 2012 to stockholders of record as of April 17, 2012. Such dividend will be treated as a 2012 distribution for tax purposes.

On May 10, 2012, the Company declared a cash dividend of $0.135 per share of common stock for the quarter ended on March 31, 2012 payable on June 7, 2012 to stockholders of record as of May 24, 2012.

Mortgage Financing

On April 24, 2012, Care refinanced the Bridge Loan for the Greenfield properties by entering into three (3) separate non-recourse loans with KeyCorp for an aggregate amount of $15,680,000. The Greenfield Loans bear interest at a fixed rate of 4.76%, amortize over a 30-year period, provide for monthly interest and principal payments commencing on June 1, 2012 and mature on May 1, 2022. The Greenfield Loans are secured by separate cross-collateralized, cross-defaulted first priority deeds of trust on each of the Greenfield properties. The Greenfield Loans are non-recourse to the Company except for certain non-recourse carveouts (customary for transactions of this type), as provided in the related guaranty agreements for each Greenfield Loan. Each Greenfield Loan contains typical representations and covenants for loans of this type. A breach of the representations or covenants could result in a default under each of the Greenfield Loans, which would result in all amounts owing under each of the Greenfield Loans to become immediately due and payable since all of the Greenfield Loans are cross-defaulted. KeyCorp intends to sell each of the Greenfield Loans to Freddie Mac under Freddie Mac’s CME Program.

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Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Condensed Consolidated Statements of Operations [Abstract]
Stock-based compensation to employees	$ 69	$ 30

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Basis of Presentation and Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

Basis of Presentation and Significant Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

Note 2 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited. In our opinion, all estimates and adjustments necessary to present fairly the financial position, results of operations and cash flows have been made. The condensed consolidated balance sheet as of December 31, 2011 has been derived from the audited consolidated balance sheet as of that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the U. S. (“GAAP”) have been omitted in accordance with Article 10 of Regulation S-X and the instructions to Form 10-Q. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the Securities and Exchange Commission (“SEC”). The results of operations for the three months ended March 31, 2012 are not necessarily indicative of the operating results for the full year ending December 31, 2012.

Consolidation

The condensed consolidated financial statements include our accounts and those of our subsidiaries, which are wholly-owned or controlled by us. All intercompany balances and transactions have been eliminated. Our condensed consolidated financial statements are prepared in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.

Comprehensive Income

We have no items of other comprehensive income, and accordingly net income (loss) is equal to comprehensive income (loss) for all periods presented.

Segment Reporting

ASC 280 Segment Reporting (“ASC 280”) establishes standards for the way that public entities report information about operating segments in the financial statements. We are a REIT focused on originating and acquiring healthcare-related real estate and commercial mortgage debt and currently operate in only one reportable segment.

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Included in cash and cash equivalents at March 31, 2012 and December 31, 2011 is approximately $49.9 million and approximately $52.3 million, respectively, deposited with one major financial institution.

Real Estate and Identified Intangible Assets

Real estate and identified intangible assets are carried at cost, net of accumulated depreciation and amortization. Betterments, major renewals and certain costs directly related to the improvement and leasing of real estate are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is provided on a straight-line basis over the assets’ estimated useful lives, which range from 9 to 40 years. Amortization is provided on a straight-line basis over the life of the in-place leases.

Upon the acquisition of real estate, we assess the fair value of acquired assets (including land, buildings and improvements, personal property and identified intangible assets such as above and below market leases, acquired in-place leases and customer relationships) and acquired liabilities in accordance with ASC 805 Business Combinations (“ASC 805”), and ASC 350 Intangibles — Goodwill and Other (“ASC 350”), and we allocate purchase price based on these assessments. We assess fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, leases in place, known trends, and market/economic conditions that may affect the property. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each property and the respective tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods and market conditions. In estimating carrying costs, the Company includes estimates of lost rents at estimated market rates during the hypothetical expected lease-up periods, which are dependent on local market conditions and expected trends.

We review the carrying value of our real estate assets and intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable in accordance with ASC 360, Impairment or Disposal of Long-Lived Assets, (“ASC 360”). If such reviews indicate that the asset is impaired, the asset’s carrying amount is written down to its fair value. An impairment loss is measured based on the excess of the carrying amount over the fair value. We determine fair value by using a discounted cash flow model and appropriate discount and capitalization rates. Estimates of future cash flows are based on a number of factors including the historical operating results, leases in place, known trends, and market/economic conditions that may affect the property. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. If our anticipated holding periods change or estimated cash flows decline based on market conditions or otherwise, an impairment loss may be recognized. Long-lived assets to be disposed of are recorded at the lower of carrying value or fair value less estimated costs to sell. There were no impairments of our wholly-owned real estate investments and intangibles for the three-month period ended March 31, 2012 and 2011.

Investments in Loans

We account for our investment in loans in accordance with ASC Topic 948 Financial Services — Mortgage Banking (“ASC 948”). Under ASC 948, loans expected to be held for the foreseeable future or to maturity should be held at amortized cost, and all other loans should be held at lower of cost or market (“LOCOM”), measured on an individual basis. In accordance with ASC 820 Fair Value Measurements and Disclosures (“ASC 820”), the Company includes nonperformance risk in calculating fair value adjustments. As specified in ASC 820, the framework for measuring fair value is based on observable inputs of market data.

We periodically review our loans held for investment. Impairment losses are taken for impaired loans based on the fair value of collateral and a recoverability analysis on an individual loan basis. The fair value of the collateral may be determined by an evaluation of operating cash flow from the property during the projected holding period, and/or estimated sales value computed by applying an expected capitalization rate to the current net operating income of the specific property, less selling costs. Whichever method is used, other factors considered relate to geographic trends and project diversification, the size of the portfolio and current economic conditions. When it is probable that we will be unable to collect all amounts contractually due, the loan would be considered impaired.

Interest income is generally recognized using the effective interest method or on a basis approximating a level rate of return over the term of the loan. Nonaccrual loans are those on which the accrual of interest has been suspended. Loans are placed on nonaccrual status and considered nonperforming when full payment of principal and interest is in doubt, or when principal or interest is 90 days or more past due or if cash collateral, if any, is insufficient to cover principal and interest. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed against interest income. In addition, the amortization of net deferred loan fees is suspended. Interest income on nonaccrual loans may be recognized only to the extent it is received in cash. However, where there is doubt regarding the ultimate collectability of loan principal, cash receipts on such nonaccrual loans are applied to reduce the carrying value of such loans. Nonaccrual loans may be returned to accrual status when repayment is reasonably assured and there has been demonstrated performance under the terms of the loan or, if applicable, the restructured terms of such loan. The Company did not have any loans on non-accrual status as of March 31, 2012 or December 31, 2011.

Our intent is to hold the remaining loan to maturity and as such it is carried on the March 31, 2012 and December 31, 2011 balance sheets at its amortized cost basis, net of principal payments received.

Investments in Partially-Owned Entities

We invest in common equity and preferred equity interests that allow us to participate in a percentage of the underlying property’s cash flows from operations and proceeds from a sale or refinancing. At the inception of the investment, we must determine whether such investment should be accounted for as a loan, joint venture or as real estate. Investments in partially-owned entities where we exercise significant influence over operating and financial policies of the subsidiary, but do not control the subsidiary, are reported under the equity method of accounting. Under the equity method of accounting, the Company’s share of the investee’s earnings or loss is included in the Company’s operating results. As of March 31, 2012 and December 31, 2011, we held one (1) such equity investment and account for such investment under the equity method.

We assess whether there are indicators that the value of our partially owned entities may be impaired. An investment’s value is impaired if we determine that a decline in the value of the investment below its carrying value is other than temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the estimated value of the investment. For the three-month periods ended March 31, 2012 and 2011, we did not recognize any impairment on investments in partially owned entities.

Rental Revenue

We recognize rental revenue in accordance with ASC 840 Leases (“ASC 840”). ASC 840 requires that revenue be recognized on a straight-line basis over the non-cancelable term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Renewal options in leases with rental terms that are higher than those in the primary term are excluded from the calculation of straight line rent if the renewals are not reasonably assured. We commence rental revenue recognition when the tenant takes control of the leased space. The Company recognizes lease termination payments as a component of rental revenue in the period received, provided that there are no further obligations under the lease. Amortization expense of above-market leases reduces rental income on a straight-line basis over the non-cancelable term of the lease. Taxes, insurance and reserves collected from tenants are separately shown as reimbursable income and corresponding payments are included in reimbursed property expenses.

Deferred Financing Costs

Deferred financing costs represent commitment fees, legal and other third party costs associated with obtaining such financing. These costs are amortized over the terms of the respective financing agreements and the amortization of such costs is reflected in interest expense. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close.

Stock-based Compensation Plans

We have two stock-based compensation plans. We recognize compensation cost for stock-based compensation ratably over the service period of the award for employees, board members and non-employees. Compensation cost recorded for employees (including awards to non-employee directors) is measured based on the estimated fair value of the award on the grant date, and such amount is charged to compensation expense on a straight-line basis over the vesting period. Compensation cost recorded for our non-employees are adjusted in each subsequent reporting period based on the fair value of the award at the end of the reporting period until such time as the award has vested and the service being provided, if required, is substantially completed or, under certain circumstances, likely to be completed, whichever occurs first.

Derivative Instruments

We account for derivative instruments in accordance with ASC 815, Derivatives and Hedging (“ASC 815”). In the normal course of business, we may use a variety of derivative instruments to manage, or hedge, interest rate risk. We will require that hedging derivative instruments be effective in reducing the interest rate risk exposure they are designated to hedge. This effectiveness is essential for qualifying for hedge accounting. Some derivative instruments may be associated with an anticipated transaction. In those cases, hedge effectiveness criteria also require that it be probable that the underlying transaction will occur. Instruments that meet these hedging criteria, to the extent we elect to utilize hedge accounting, will be formally designated as hedges at the inception of the derivative contract.

To determine the fair value of derivative instruments, we may use a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date including standard market conventions and techniques such as discounted cash flow analysis, option-pricing models, replacement cost, and termination cost. All methods of assessing fair value result in a general approximation of fair value, and such value may never actually be realized.

Unrealized gain or loss on the change in the value of a derivative instrument for which hedge accounting is elected, to the extent that it is determined to be an effective hedge, is included in other comprehensive income. Realized gain or loss on a derivative instrument, as well as the unrealized gain or loss on a derivative instrument for which hedge accounting is not elected, or the portion of such derivative instrument which is not an effective hedge, will be included in net income (loss) from operations.

We may use a variety of commonly used derivative products that are considered “plain vanilla” derivatives. These derivatives typically include interest rate swaps, caps, collars and floors. Similarly, we may also become a party to the sale or “short” of U.S. Treasury securities in anticipation of entering into a fixed rate mortgage of approximately equal duration. We expressly prohibit the use of unconventional derivative instruments and using derivative instruments for trading or speculative purposes. Further, we have a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors; therefore, we do not anticipate nonperformance by any of our counterparties.

Income Taxes

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our REIT taxable income to stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to Federal income tax on our taxable income at regular corporate rates and we will not be permitted to qualify for treatment as a REIT for Federal income tax purposes for four (4) years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distributions to stockholders. We believe that we will continue to operate in such a manner as to qualify for treatment as a REIT for Federal income tax purposes. We may, however, be subject to certain state and local taxes.

Deferred tax assets and liabilities, if any, are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as, operating loss and tax credit carryforwards. As a REIT, we generally will not be subject to Federal income tax on taxable income that we distribute to our stockholders and, therefore, the inclusion of Federal deferred tax assets and liabilities in our financial statements may not be applicable. Notwithstanding the foregoing, subject to certain limitations, net operating losses (“NOLs”) incurred by the Company can be treated as a carryforward for up to 20 years and utilized to reduced our taxable income in future years, thereby reducing the amount of taxable income which we are required to distribute to our shareholders in order to maintain our REIT status or, to the extent that we elect to distribute less than 100% of our taxable income to our shareholders, reducing our Federal tax liability on that portion of our taxable income which we elect not to distribute.

In assessing the potential realization of deferred tax assets, if any, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences reverse and/or NOL carryforwards are available. Management considers the scheduled reversal of deferred tax assets and liabilities, projected future taxable income, and tax planning strategies in making this assessment. Due to our limited operating history, management does not believe that it is more likely than not that the Company will realize the benefits of these temporary differences and NOL carryforwards and therefore established a full valuation allowance at March 31, 2012 and December 31, 2011.

We account for uncertain tax positions in accordance with FASB Interpretation No. 48 Accounting for Uncertainty in Income Taxes — An Interpretation (“ASC 740”) of FASB Statement No. 109 (“FIN 48”). ASC 740 prescribes a recognition threshold and measurement attribute for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740 requires that the financial statements reflect expected future tax consequences of such positions presuming the taxing authorities’ full knowledge of the position and all relevant facts, but without considering time values. We evaluate uncertainties of tax positions taken or expected to be taken in our tax returns based on the probability of whether it is more likely than not those positions would be sustained upon audit by applicable tax authorities, based on technical merit for open tax years. We assessed the Company’s tax positions for open federal, state and local tax years from 2008 through 2011. The Company does not have any uncertain tax positions as of March 31, 2012. Our policy is, if necessary, to account for interest and penalties related to uncertain tax positions as a component of our income tax provision.

Earnings per Share

Basic earnings per share (“EPS”) excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur, if securities or other contracts to issue common stock were exercised or converted into common stock where such exercise or conversion would result in a lower earnings per share amount.

In accordance with ASC 260 Earnings Per Share, regarding the determination of whether instruments granted in share-based payments transactions are participation securities, we have applied the two-class method of computing basic EPS. This guidance clarifies that outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends or dividend equivalent payments participate in undistributed earnings with common stockholders and are considered participating securities.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses in the consolidated financial statements and the accompanying notes. Significant estimates are made for the valuation of real estate and related intangibles, valuation of financial instruments, impairment assessments and fair value assessments with respect to purchase price allocations. Actual results could differ from those estimates.

Concentrations of Credit Risk

Real estate triple-net leases and financial instruments, primarily consisting of cash, mortgage loan investments and interest receivable, potentially subject us to concentrations of credit risk. We may place our cash investments in excess of insured amounts with high quality financial institutions. We perform ongoing analysis of credit risk concentrations in our real estate and loan investment portfolios by evaluating exposure to various markets, underlying property types, investment structure, term, sponsors, tenant mix and other credit metrics. Our triple-net leases rely on our underlying tenants. The collateral securing our investment in our remaining loan is real estate properties located in the U.S.

In addition, we are required to disclose fair value information about financial instruments, whether or not recognized in the financial statements, for which it is practical to estimate that value. In cases where quoted market prices are not available, fair value is based upon the application of discount rates to estimated future cash flows based on market yields or other appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Reclassification

Certain prior period amounts have been reclassified to conform to the current period presentation.

Recent Accounting Pronouncements

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). The amendments in ASU 2011-04 change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments are intended to create comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with GAAP and International Financial Reporting Standards. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. The adoption of this standard did not have a material effect on the condensed consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income (“ASU 2011-05”), which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. This ASU does not change the items that must be reported in other comprehensive income. ASU 2011-05 is effective for interim and annual periods beginning after December 15, 2011. As we have no other comprehensive income, the adoption of this standard did not have any effect on the condensed consolidated financial statements.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 12 — Commitments and Contingencies

The table below summarizes our remaining contractual obligations as of March 31, 2012.

Amounts in millions	2012		2013		2014		2015		2016		2017		Thereafter		Total
Mortgage notes payable and related interest	$	20.0	$	6.5	$	6.5	$	80.4	$	—	$	—	$	—	$	113.4
Base Service Fee Obligations (1)		0.5		0.5		—		—		—		—		—		1.0
Operating Lease Obligations (2)		0.2		0.2		0.2		0.2		0.3		0.2		0.4		1.7
Total	$	20.7	$	7.2	$	6.7	$	80.6	$	0.3	$	0.2	$	0.4	$	116.1

(1) TREIT base service fee, subject to increase based on changes in shareholders’ equity. The termination fee payable to TREIT in the event of non-renewal of the Services Agreement by the Company is not fixed and determinable and is therefore not included in the table.

(2) Minimum rental obligations for Company office lease.

For the three month periods ended March 31, 2012 and 2011, rent expense for the Company’s office lease was approximately $0.1 million and $0.1 million, respectively.

Litigation

Care is not presently involved in any material litigation or, to our knowledge, is any material litigation threatened against us or our investments, other than routine litigation arising in the ordinary course of business. Management believes the costs, if any, incurred by us related to litigation will not materially affect our financial position, operating results or liquidity.