10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

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: 001-32641

BROOKDALE SENIOR LIVING INC.

(Exact name of registrant as specified in its charter)

Delaware	20-3068069
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

111 Westwood Place,	Suite 400,	Brentwood,	Tennessee	37027
(Address of principal executive offices)				(Zip Code)

(Registrant's telephone number, including area code)                    (615) 221-2250

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share	BKD	New York Stock Exchange

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 ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).  Yes ☒  No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

1

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

As of August 6, 2020, 183,240,758 shares of the registrant's common stock, $0.01 par value, were outstanding (excluding restricted shares and restricted stock units).

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TABLE OF CONTENTS

BROOKDALE SENIOR LIVING INC.

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2020

		PAGE
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets -
	As of June 30, 2020 (Unaudited) and December 31, 2019	4
	Condensed Consolidated Statements of Operations -
	Three and six months ended June 30, 2020 and 2019 (Unaudited)	5
	Condensed Consolidated Statements of Equity -
	Three and six months ended June 30, 2020 and 2019 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows -
	Six months ended June 30, 2020 and 2019 (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	64
Item 4.	Controls and Procedures	64
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	64
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 6.	Exhibits	68
Signatures		69

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PART I.   FINANCIAL INFORMATION

Item 1.  Financial Statements

BROOKDALE SENIOR LIVING INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except stock amounts)

	June 30, 2020			December 31, 2019
Assets	(Unaudited)
Current assets
Cash and cash equivalents	$	452,441		$	240,227
Marketable securities	109,873			68,567
Restricted cash	28,397			26,856
Accounts receivable, net	120,503			133,613
Assets held for sale	37,397			42,671
Prepaid expenses and other current assets, net	89,416			84,241
Total current assets	838,027			596,175
Property, plant and equipment and leasehold intangibles, net	5,256,368			5,109,834
Operating lease right-of-use assets	1,030,505			1,159,738
Restricted cash	41,292			34,614
Investment in unconsolidated ventures	5,601			21,210
Goodwill	154,131			154,131
Other assets, net	98,619			118,731
Total assets	$	7,424,543		$	7,194,433
Liabilities and Equity
Current liabilities
Current portion of long-term debt	$	222,572		$	339,413
Current portion of financing lease obligations	44,667			63,146
Current portion of operating lease obligations	183,300			193,587
Trade accounts payable	61,780			104,721
Accrued expenses	259,499			266,703
Refundable fees and deferred revenue	158,608			79,402
Total current liabilities	930,426			1,046,972
Long-term debt, less current portion	3,469,793			3,215,710
Financing lease obligations, less current portion	558,307			771,434
Operating lease obligations, less current portion	1,226,242			1,277,178
Line of credit	166,381			—
Deferred tax liability	144			15,397
Other liabilities	133,361			169,017
Total liabilities	6,484,654			6,495,708
Preferred stock, $0.01 par value, 50,000,000 shares authorized at June 30, 2020 and December 31, 2019; no shares issued and outstanding	—			—
Common stock, $0.01 par value, 400,000,000 shares authorized at June 30, 2020 and December 31, 2019; 198,447,200 and 199,593,343 shares issued and 187,919,675 and 192,128,586 shares outstanding (including 4,733,385 and 7,252,459 unvested restricted shares), respectively	1,984			1,996
Additional paid-in-capital	4,180,436			4,172,099
Treasury stock, at cost; 10,527,525 and 7,464,757 shares at June 30, 2020 and December 31, 2019, respectively	(102,774		)	(84,651		)
Accumulated deficit	(3,142,089		)	(3,393,088		)
Total Brookdale Senior Living Inc. stockholders' equity	937,557			696,356
Noncontrolling interest	2,332			2,369
Total equity	939,889			698,725
Total liabilities and equity	$	7,424,543		$	7,194,433

See accompanying notes to condensed consolidated financial statements.

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BROOKDALE SENIOR LIVING INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenue and other operating income
Resident fees	$	731,629		$	801,863		$	1,514,336		$	1,611,342
Management fees	6,076			15,449			114,791			31,192
Reimbursed costs incurred on behalf of managed communities	101,511			202,145			224,228			418,967
Other operating income	26,693			—			26,693			—
Total revenue and other operating income	865,909			1,019,457			1,880,048			2,061,501
Expense
Facility operating expense (excluding facility depreciation and amortization of $86,971, $86,070, $171,272, and $174,897, respectively)	606,034			590,246			1,194,516			1,176,340
General and administrative expense (including non-cash stock-based compensation expense of $6,119, $6,030, $12,076, and $12,386, respectively)	52,518			57,576			107,113			113,887
Facility operating lease expense	62,379			67,689			126,860			136,357
Depreciation and amortization	93,154			94,024			183,892			190,912
Asset impairment	10,290			3,769			88,516			4,160
Loss (gain) on facility lease termination and modification, net	—			1,797			—			2,006
Costs incurred on behalf of managed communities	101,511			202,145			224,228			418,967
Total operating expense	925,886			1,017,246			1,925,125			2,042,629
Income (loss) from operations	(59,977		)	2,211			(45,077		)	18,872
Interest income	2,243			2,813			3,698			5,897
Interest expense:
Debt	(38,974		)	(45,193		)	(80,737		)	(90,836		)
Financing lease obligations	(11,892		)	(16,649		)	(25,174		)	(33,392		)
Amortization of deferred financing costs and debt discount	(1,556		)	(986		)	(2,871		)	(1,965		)
Gain (loss) on debt modification and extinguishment, net	(157		)	(2,672		)	19,024			(2,739		)
Equity in earnings (loss) of unconsolidated ventures	438			(991		)	(570		)	(1,517		)
Gain (loss) on sale of assets, net	(1,029		)	2,846			371,810			2,144
Other non-operating income (loss)	988			3,199			3,650			6,187
Income (loss) before income taxes	(109,916		)	(55,422		)	243,753			(97,349		)
Benefit (provision) for income taxes	(8,504		)	(633		)	7,324			(1,312		)
Net income (loss)	(118,420		)	(56,055		)	251,077			(98,661		)
Net (income) loss attributable to noncontrolling interest	19			585			37			596
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders	$	(118,401	)	$	(55,470	)	$	251,114		$	(98,065	)
Net income (loss) per share attributable to Brookdale Senior Living Inc. common stockholders:
Basic	$	(0.65	)	$	(0.30	)	$	1.37		$	(0.53	)
Diluted	$	(0.65	)	$	(0.30	)	$	1.37		$	(0.53	)
Weighted average common shares outstanding:
Basic	183,178			186,140			183,682			186,442
Diluted	183,178			186,140			183,862			186,442

See accompanying notes to condensed consolidated financial statements.

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BROOKDALE SENIOR LIVING INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited, in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Total equity, balance at beginning of period	$	1,052,230		$	917,597		$	698,725		$	1,018,413
Common stock:
Balance at beginning of period	$	1,985		$	2,000		$	1,996		$	1,968
Issuance of common stock under Associate Stock Purchase Plan	—			1			1			2
Restricted stock, net	(1		)	(3		)	(7		)	32
Shares withheld for employee taxes	—			—			(6		)	(4		)
Balance at end of period	$	1,984		$	1,998		$	1,984		$	1,998
Additional paid-in-capital:
Balance at beginning of period	$	4,174,356		$	4,154,790		$	4,172,099		$	4,151,147
Compensation expense related to restricted stock grants	6,119			6,030			12,076			12,386
Issuance of common stock under Associate Stock Purchase Plan	—			299			168			597
Restricted stock, net	1			3			7			(32		)
Shares withheld for employee taxes	(59		)	(108		)	(3,951		)	(3,101		)
Other, net	19			31			37			48
Balance at end of period	$	4,180,436		$	4,161,045		$	4,180,436		$	4,161,045
Treasury stock:
Balance at beginning of period	$	(102,774	)	$	(70,940	)	$	(84,651	)	$	(64,940	)
Purchase of treasury stock	—			(8,157		)	(18,123		)	(14,157		)
Balance at end of period	$	(102,774	)	$	(79,097	)	$	(102,774	)	$	(79,097	)
Accumulated deficit:
Balance at beginning of period	$	(3,023,688	)	$	(3,167,752	)	$	(3,393,088	)	$	(3,069,272	)
Cumulative effect of change in accounting principle (Note 2)	—			—			(115		)	(55,885		)
Net income (loss)	(118,401		)	(55,470		)	251,114			(98,065		)
Balance at end of period	$	(3,142,089	)	$	(3,223,222	)	$	(3,142,089	)	$	(3,223,222	)
Noncontrolling interest:
Balance at beginning of period	$	2,351		$	(501	)	$	2,369		$	(490	)
Net income (loss) attributable to noncontrolling interest	(19		)	(585		)	(37		)	(596		)
Noncontrolling interest contribution	—			6,566			—			6,566
Balance at end of period	$	2,332		$	5,480		$	2,332		$	5,480
Total equity, balance at end of period	$	939,889		$	866,204		$	939,889		$	866,204
Common stock share activity
Outstanding shares of common stock:
Balance at beginning of period	188,012			194,573			192,129			192,356
Issuance of common stock under Associate Stock Purchase Plan	—			46			61			96
Restricted stock grants, net	(75		)	(214		)	(579		)	3,320
Shares withheld for employee taxes	(17		)	(16		)	(628		)	(450		)
Purchase of treasury stock	—			(1,278		)	(3,063		)	(2,211		)
Balance at end of period	187,920			193,111			187,920			193,111

See accompanying notes to condensed consolidated financial statements.

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BROOKDALE SENIOR LIVING INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Six Months Ended June 30,
	2020			2019
Cash Flows from Operating Activities
Net income (loss)	$	251,077		$	(98,661	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss (gain) on debt modification and extinguishment, net	(19,024		)	2,739
Depreciation and amortization, net	186,763			192,877
Asset impairment	88,516			4,160
Equity in (earnings) loss of unconsolidated ventures	570			1,517
Distributions from unconsolidated ventures from cumulative share of net earnings	—			1,530
Amortization of entrance fees	(925		)	(772		)
Proceeds from deferred entrance fee revenue	85			1,739
Deferred income tax (benefit) provision	(15,253		)	470
Operating lease expense adjustment	(14,954		)	(8,812		)
Loss (gain) on sale of assets, net	(371,810		)	(2,144		)
Loss (gain) on facility lease termination and modification, net	—			2,006
Non-cash stock-based compensation expense	12,076			12,386
Non-cash management contract termination gain	—			(640		)
Other	(1,800		)	(4,401		)
Changes in operating assets and liabilities:
Accounts receivable, net	12,995			(3,997		)
Prepaid expenses and other assets, net	20,162			30,823
Prepaid insurance premiums financed with notes payable	(11,664		)	(12,090		)
Trade accounts payable and accrued expenses	(18,692		)	(43,385		)
Refundable fees and deferred revenue	80,688			(17,226		)
Operating lease assets and liabilities for lessor capital expenditure reimbursements	10,509			1,000
Net cash provided by (used in) operating activities	209,319			59,119
Cash Flows from Investing Activities
Change in lease security deposits and lease acquisition deposits, net	3,304			(83		)
Purchase of marketable securities	(149,236		)	(98,059		)
Sale and maturities of marketable securities	108,750			55,000
Capital expenditures, net of related payables	(112,863		)	(122,297		)
Acquisition of assets, net of related payables and cash received	(446,688		)	—
Investment in unconsolidated ventures	(356		)	(4,204		)
Distributions received from unconsolidated ventures	—			5,305
Proceeds from sale of assets, net	300,539			52,430
Proceeds from notes receivable	1,140			31,609
Net cash provided by (used in) investing activities	(295,410		)	(80,299		)
Cash Flows from Financing Activities
Proceeds from debt	473,460			158,231
Repayment of debt and financing lease obligations	(303,920		)	(238,036		)
Proceeds from line of credit	166,381			—
Purchase of treasury stock, net of related payables	(18,123		)	(18,401		)
Payment of financing costs, net of related payables	(7,469		)	(3,342		)
Payments of employee taxes for withheld shares	(3,951		)	(3,105		)
Other	146			574
Net cash provided by (used in) financing activities	306,524			(104,079		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	220,433			(125,259		)
Cash, cash equivalents, and restricted cash at beginning of period	301,697			450,218
Cash, cash equivalents, and restricted cash at end of period	$	522,130		$	324,959

See accompanying notes to condensed consolidated financial statements.

7

BROOKDALE SENIOR LIVING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.  Description of Business

Brookdale Senior Living Inc. ("Brookdale" or the "Company") is an operator of senior living communities throughout the United States. The Company is committed to providing senior living solutions primarily within properties that are designed, purpose-built, and operated to provide quality service, care, and living accommodations for residents. The Company operates and manages independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs"). The Company also offers a range of home health, hospice, and outpatient therapy services to residents of many of its communities and to seniors living outside of its communities.

2.  Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q. In the opinion of management, these financial statements include all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position, results of operations, and cash flows of the Company for all periods presented. Certain information and footnote disclosures included in annual financial statements have been condensed or omitted. The Company believes that the disclosures included are adequate and provide a fair presentation of interim period results. Interim financial statements are not necessarily indicative of the financial position or operating results for an entire year. These interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 19, 2020. Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's condensed consolidated financial position or results of operations.

Except for the changes for the impact of the recently adopted accounting pronouncements discussed in this Note, the Company has consistently applied its accounting policies to all periods presented in these condensed consolidated financial statements.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Brookdale and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Investments in affiliated companies that the Company does not control, but has the ability to exercise significant influence over governance and operations, are accounted for by the equity method. The ownership interest of consolidated entities not wholly-owned by the Company are presented as noncontrolling interests in the accompanying condensed consolidated financial statements. Noncontrolling interest represents the share of consolidated entities owned by third parties. Noncontrolling interest is adjusted for the noncontrolling holder's share of additional contributions, distributions, and the proportionate share of the net income or loss of each respective entity.

Use of Estimates

The preparation of the condensed consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, revenue and other operating income, asset impairments, self-insurance reserves, performance-based compensation, the allowance for credit losses, depreciation and amortization, leasing transactions, income taxes, and other contingencies. Although these estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from the original estimates.

Lease Accounting

The Company, as lessee, recognizes a right-of-use asset and a lease liability on the Company's condensed consolidated balance sheet for its community, office, and equipment leases. As of the commencement date of a lease, a lease liability and corresponding right-of-use asset is established on the Company's condensed consolidated balance sheet at the present value of future minimum lease payments. The Company's community leases generally contain fixed annual rent escalators or annual rent escalators based on an index, such as the consumer price index. The future minimum lease payments recognized on the condensed consolidated balance sheet include fixed payments (including in-substance fixed payments) and variable payments estimated utilizing the index

8

or rate on the lease commencement date. The Company recognizes lease expense as incurred for additional variable payments. For the Company's leases that do not contain an implicit rate, the Company utilizes its estimated incremental borrowing rate to determine the present value of lease payments based on information available at commencement of the lease. The Company's estimated incremental borrowing rate reflects the fixed rate at which the Company could borrow a similar amount for the same term on a collateralized basis. The Company elected the short-term lease exception policy which permits leases with an initial term of 12 months or less to not be recorded on the Company's consolidated balance sheet and instead to be recognized as lease expense as incurred.

The Company, as lessee, makes a determination with respect to each of its community, office, and equipment leases as to whether each should be accounted for as an operating lease or financing lease. The classification criteria is based on estimates regarding the fair value of the leased asset, minimum lease payments, effective cost of funds, economic life of the asset, and certain other terms in the lease agreements.

Lease right-of-use assets are reviewed for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of right-of-use assets are assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset, calculated utilizing the lowest level of identifiable cash flows. If estimated future undiscounted net cash flows are less than the carrying amount of the asset then the fair value of the asset is estimated. The impairment expense is determined by comparing the estimated fair value of the asset to its carrying amount, with any amount in excess of fair value recognized as an expense in the current period. Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates and estimated lease coverage ratios (Level 3).

Operating Leases

The Company recognizes operating lease expense for actual rent paid, generally plus or minus a straight-line adjustment for estimated minimum lease escalators if applicable. The right-of-use asset is generally reduced each period by an amount equal to the difference between the operating lease expense and the amount of expense on the lease liability utilizing the effective interest method. Subsequent to the impairment of an operating lease right-of-use asset, the Company recognizes operating lease expense consisting of the reduction of the right-of-use asset on a straight-line basis over the remaining lease term and the amount of expense on the lease liability utilizing the effective interest method.

Financing Leases

Financing lease right-of-use assets are recognized within property, plant and equipment and leasehold intangibles, net on the Company's consolidated balance sheets. The Company recognizes interest expense on the financing lease liabilities utilizing the effective interest method. The right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term unless the lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise. If the Company is reasonably certain to exercise the purchase option, the asset is amortized over the useful life.

Sale-Leaseback Transactions

For transactions in which an owned community is sold and leased back from the buyer (sale-leaseback transactions), the Company recognizes an asset sale and lease accounting is applied if the Company has transferred control of the community. For such transactions, the Company removes the transferred assets from the consolidated balance sheet and a gain or loss on the sale is recognized for the difference between the carrying amount of the asset and the transaction price for the sale transaction.

For sale‑leaseback transactions in which the Company has not transferred control of the underlying asset, the Company does not recognize an asset sale or derecognize the underlying asset until control is transferred. For such transactions, the Company continues to recognize the assets within property, plant and equipment and leasehold intangibles, net and continues to depreciate the asset over its useful life. Additionally, the Company accounts for any amounts received as a financing lease liability and the Company recognizes interest expense on the financing lease liability utilizing the effective interest method with the interest expense limited to an amount that is not greater than the cash payments on the financing lease liability over the term of the lease.

Gain (Loss) on Sale of Assets

The Company regularly enters into real estate transactions which may include the disposition of certain communities, including the associated real estate. The Company recognizes gain or loss from real estate sales when the transfer of control is complete.

9

The Company recognizes gain or loss from the sale of equity method investments when the transfer of control is complete and the Company has no continuing involvement with the transferred financial assets.

Property, Plant and Equipment and Leasehold Intangibles, Net

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset group may not be recoverable. Recoverability of an asset group is assessed by comparing its carrying amount to the estimated future undiscounted net cash flows expected to be generated by the asset group through operation or disposition, calculated utilizing the lowest level of identifiable cash flows. If this comparison indicates that the carrying amount of an asset group is not recoverable, the Company is required to recognize an impairment loss. The impairment loss is measured by the amount by which the carrying amount of the asset exceeds its estimated fair value, with any amount in excess of fair value recognized as an expense in the current period. Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates, estimated holding periods, and estimated capitalization rates (Level 3).

Goodwill

The Company tests goodwill for impairment annually during the fourth quarter or more frequently if indicators of impairment arise. Factors the Company considers important in its analysis of whether an indicator of impairment exists include a significant decline in the Company's stock price or market capitalization for a sustained period since the last testing date, significant underperformance relative to historical or projected future operating results, and significant negative industry or economic trends. The Company first assesses qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If so, the Company performs a quantitative goodwill impairment test based upon a comparison of the estimated fair value of the reporting unit to which the goodwill has been assigned with the reporting unit's carrying amount. The fair values used in the quantitative goodwill impairment test are estimated using Level 3 inputs based upon discounted future cash flow projections for the reporting unit. These cash flow projections are based upon a number of estimates and assumptions such as revenue and expense growth rates, capitalization rates, and discount rates. The Company also considers market-based measures such as earnings multiples in its analysis of estimated fair values of its reporting units. If the quantitative goodwill impairment test results in a reporting unit's carrying amount exceeding its estimated fair value, an impairment charge will be recorded based on the difference, with the impairment charge limited to the amount of goodwill allocated to the reporting unit.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 replaces the current incurred loss impairment methodology for credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted this standard effective January 1, 2020 and recognized the cumulative effect of the adoption as an immaterial adjustment to beginning accumulated deficit as of January 1, 2020 for the cumulative effect of adopting ASU 2016-13.

In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"), which amends the former accounting principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and lessors. The Company adopted these lease accounting standards effective January 1, 2019 and recognized the cumulative effect of the adoption as a $55.9 million adjustment to beginning accumulated deficit as of January 1, 2019. See Footnote 2, Summary of Significant Accounting Policies, in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 for more details regarding the adoption of this accounting pronouncement.

3.  COVID-19 Pandemic

The United States broadly continues to experience the COVID-19 pandemic, which has significantly disrupted, and likely will continue to significantly disrupt for some period, the nation’s economy, the senior living industry, and the Company’s business. Although a significant portion of the Company’s corporate support associates began working from home in March 2020, the Company continues to serve and care for seniors through the pandemic. Due to the average age and prevalence of chronic medical conditions among the Company’s residents and patients, they generally are at disproportionately higher risk of hospitalization and adverse outcomes if they contract COVID-19.

Due to the pandemic, in March 2020 the Company began restricting visitors at all its communities to essential healthcare personnel and certain compassionate care situations, screening associates and permitted visitors, suspending group outings, modifying communal dining and programming to comply with social distancing guidelines and, in most cases, implementing in-room only dining and activities programming, requesting that residents refrain from leaving the community unless medically necessary, and

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requiring new residents and residents returning from a hospital or nursing home to isolate in their apartment for fourteen days. Upon confirmation of positive COVID-19 exposure at a community, the Company follows government guidance regarding minimizing further exposure, including associates’ adhering to personal protection protocols, restricting new resident admissions, and in some cases isolating residents. These restrictions were in place across the Company’s portfolio for the three months ended June 30, 2020.

The pandemic and response efforts of senior living communities have significantly disrupted demand for senior living communities and the sales process. The Company cannot predict with reasonable certainty whether or when demand for senior living communities will return to pre-COVID-19 levels or the extent to which the pandemic’s effect on demand may adversely affect the amount of resident fees the Company is able to collect from its residents.

The pandemic and the Company’s response efforts began to adversely impact the Company’s occupancy and resident fee revenue significantly during March 2020, as new resident leads, visits (including virtual visits), and move-in activity declined significantly compared to typical levels. Further deterioration of the Company's resident fee revenue will result from lower move-in activity and the resident attrition inherent in its business, which may increase due to the impacts of COVID-19. The Company’s home health average daily census also began to decrease in March 2020 due to lower occupancy in its communities and fewer elective medical procedures and hospital discharges.

Facility operating expense for the three and six months ended June 30, 2020 includes $60.6 million and $70.6 million, respectively, of incremental direct costs to prepare for and respond to the pandemic, including costs for acquisition of additional personal protective equipment ("PPE"), medical equipment, and cleaning and disposable food service supplies, enhanced cleaning and environmental sanitation costs, increased labor expense, increased workers compensation and health plan expense, increased insurance premiums and retentions, consulting and professional services costs, and costs for COVID-19 testing of residents and associates where not otherwise covered by government payor or third-party insurance sources. The Company is not able to reasonably predict the total amount of costs it will incur related to the pandemic, and such costs are likely to be substantial. As described further in Note 6, the Company also recorded non-cash impairment charges in its operating results of $10.3 million and $87.0 million for the three and six months ended June 30, 2020, respectively, for its operating lease right-of-use assets and property, plant and equipment and leasehold intangibles, primarily due to the COVID-19 pandemic and lower than expected operating performance at communities for which assets were impaired.

The Company has taken, and continues to take, actions to enhance and preserve its liquidity in response to the pandemic. The Company drew $166.4 million on its revolving credit facility in March 2020, and suspended repurchases under the Company’s existing share repurchase program. During the three months ended June 30, 2020, the Company accepted $33.5 million of cash for grants under the Public Health and Social Services Emergency Fund (the “Emergency Fund”) and $85.0 million of accelerated/advanced Medicare payments, and the Company deferred $26.5 million of the employer portion of social security payroll taxes. Each of these programs were created or expanded under the Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act"), as described below. The Company also has delayed or canceled a number of elective capital expenditure projects resulting in an approximate $50 million reduction to its pre-pandemic full-year 2020 capital expenditure plans. On July 26, 2020, the Company entered into definitive agreements with Ventas, Inc. ("Ventas") to restructure its 120 community triple-net master lease arrangements as further described in Note 17. Pursuant to the multi-part transaction, among other things, the Company paid a $119.2 million one-time cash payment to Ventas, reduced its initial annual minimum rent under the amended and restated master lease to $100 million effective July 1, 2020, and removed the prior requirements that the Company satisfy financial covenants and that the Company maintain a security deposit with Ventas. The annual minimum rent under the amended and restated master lease reflects a reduction of approximately $86 million over the next twelve months.

As of June 30, 2020, the Company’s total liquidity was $600.2 million, consisting of $452.4 million of unrestricted cash and cash equivalents, $109.9 million of marketable securities, and $37.9 million of additional availability on its revolving credit facility. As of June 30, 2020, $166.4 million of borrowings were outstanding on the revolving credit facility. The Company continues to seek opportunities to enhance and preserve its liquidity, including through reducing expenses and elective capital expenditures, continuing to evaluate its financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the COVID-19 pandemic.

During March 2020, the Company completed its financing plans in the regular course of business, including closing three non-recourse mortgage debt financing transactions totaling $208.5 million with the proceeds used to refinance the majority of the Company’s 2020 maturities and to partially fund the Company’s acquisitions of 26 communities completed during the three months ended March 31, 2020. As of June 30, 2020, the Company’s remaining 2020 and 2021 maturities (after giving effect to the multi-part transaction with Ventas on July 26, 2020) are $36.4 million and $254.1 million, respectively, which are primarily non-recourse mortgage debt maturities.

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As described further in Note 10, availability under the Company’s revolving credit facility will vary from time to time based on borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and the Company's consolidated fixed charge coverage ratio. To the extent the outstanding borrowings on the credit facility exceed future borrowing base calculations, the Company would be required to repay the difference to restore the outstanding balance to the new borrowing base. Due primarily to the impacts of the COVID-19 pandemic, and based upon the Company’s current estimate of cash flows, the Company has determined that it is probable that it will not satisfy the minimum consolidated fixed charge coverage ratio covenant under the credit facility for one or more quarterly determination dates in the first half of 2021 without further action on the Company’s part. Failure to satisfy the minimum ratio would result in the availability under the revolving credit facility being reduced to zero and the Company being required to repay the $166.4 million of borrowings outstanding on the revolving credit facility.

Based upon the Company’s current liquidity and estimated cash flows, the Company has estimated that it would be unable to repay a portion of the 2021 maturities and the borrowings outstanding on the revolving credit facility as they become due without refinancing these maturities or obtaining additional financing proceeds. The Company has continued efforts on its plan to refinance the assets currently securing the credit facility and to refinance the substantial majority of the remaining 2020 and 2021 maturities with non-recourse mortgage debt. The Company currently anticipates that it is probable that such refinancings will be completed and the proceeds of such refinancings, together with cash on hand, will be sufficient to repay the $166.4 million balance on its revolving credit facility and terminate the facility without payment of a premium or penalty and to pay the Company’s contractual obligations as they come due over the next twelve months. However, there is no assurance that debt financing will continue to be available on terms consistent with the Company’s expectations or at all, in which case the Company would expect to take other mitigating actions prior to the maturity dates.

In response to the pandemic, on March 27, 2020, the President signed the CARES Act into law, which was amended and expanded by the Paycheck Protection Program and Health Care Enhancement Act signed into law on April 24, 2020. The legislation provides liquidity and financial relief to certain businesses, among other things. The impacts to the Company of certain provisions of the CARES Act are summarized below.

• During the three months ended June 30, 2020, the Company accepted $33.5 million of cash for grants from the Emergency Fund, which was expanded by the CARES Act to provide grants or other funding mechanisms to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19. Approximately $28.8 million of the grants were made available pursuant to the Emergency Fund's general distribution, with grant amounts based primarily on the Company's relative share of aggregate 2019 Medicare fee-for-service reimbursements and generally related to home health, hospice, outpatient therapy, and skilled nursing care provided through the Company's Health Care Services and CCRCs segments. Approximately $4.7 million of the grants were made available pursuant to the Emergency Fund's targeted allocation for certified skilled nursing facilities, with amounts determined using a per-facility and per-bed model. During July 2020, the Company applied for additional grants pursuant to the Emergency Fund's Medicaid and CHIP allocation. The amount of such grants are expected to be based on 2% of a portion of the Company's 2018 gross revenues from patient care.

The grants are subject to the terms and conditions of the program, including that such funds may only be used to prevent, prepare for, and respond to COVID-19 and will reimburse only for healthcare related expenses or lost revenues that are attributable to COVID-19. During the three months ended June 30, 2020, the Company recognized $26.4 million of the grants as other operating income based upon the Company’s estimates of its satisfaction of the conditions of the grants during such period. As of June 30, 2020, $7.1 million of unrecognized grants were included in refundable fees and deferred revenue within the Company's condensed consolidated balance sheets. The $33.5 million of grants accepted from the Emergency Fund during the six months ended June 30, 2020 has been presented within net cash provided by (used in) operating activities within the Company’s condensed consolidated statement of cash flows.

• During three months ended June 30, 2020, the Company received $85.0 million under the Accelerated and Advance Payment Program administered by CMS, which was temporarily expanded by the CARES Act. Under the program, the Company requested acceleration/advancement of 100% of its Medicare payment amount for a three-month period. Recoupment of accelerated/advanced payments are required to begin 120 days after their issuance through offsets of new Medicare claims, and all accelerated/advanced payments are due 210 days following their issuance. Such amount has been presented within net cash provided by operating activities within the Company’s condensed consolidated statement of cash flows.

• Under the CARES Act, the Company has elected to defer payment of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020. One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022. As of June 30, 2020, the Company has deferred payment of $26.5 million of payroll taxes and presented such amount within other liabilities within the Company's condensed consolidated balance sheets.

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• The CARES Act temporarily suspended the 2% Medicare sequestration for the period May 1, 2020 to December 31, 2020, which primarily benefits the Company’s Health Care Services segment.

The Company cannot predict with reasonable certainty the impacts that COVID-19 ultimately will have on its business, results of operations, cash flow, and liquidity, and the Company’s response efforts may continue to delay or negatively impact its strategic initiatives, including plans for future growth. The ultimate impacts of COVID-19 will depend on many factors, some of which cannot be foreseen, including the duration, severity, and breadth of the pandemic and any resurgence of the disease; the impact of COVID-19 on the nation’s economy and debt and equity markets and the local economies in the Company’s markets; the development and availability of COVID-19 testing, therapeutic agents, and vaccines and the prioritization of such resources among businesses and demographic groups; government financial and regulatory relief efforts that may become available to business and individuals, including the Company's ability to qualify for and satisfy the terms and conditions of financial relief; perceptions regarding the safety of senior living communities during and after the pandemic; changes in demand for senior living communities and the Company’s ability to adapt its sales and marketing efforts to meet that demand; the impact of COVID-19 on the Company’s residents’ and their families’ ability to afford its resident fees, including due to changes in unemployment rates, consumer confidence, and equity markets caused by COVID-19; changes in the acuity levels of the Company’s new residents; the disproportionate impact of COVID-19 on seniors generally and those residing in the Company’s communities; the duration and costs of the Company’s response efforts, including increased equipment, supplies, labor, litigation, testing, and other expenses; the impact of COVID-19 on the Company’s ability to complete financings, refinancings, or other transactions (including dispositions) or to generate sufficient cash flow to cover required interest and lease payments and to satisfy financial and other covenants in the Company’s debt and lease documents; increased regulatory requirements, including unfunded, mandatory testing; increased enforcement actions resulting from COVID-19, including those that may limit the Company’s collection efforts for delinquent accounts; and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or the Company’s response efforts.

4.  Earnings Per Share

Basic earnings per share ("EPS") is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the issuance of common stock. Potentially dilutive common stock equivalents include unvested restricted stock and restricted stock units.

The following table summarizes the computation of basic and diluted earnings (loss) per share amounts presented in the condensed consolidated statements of operations:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020		2019
Income attributable to common shareholders:
Net income (loss)	$	(118,401	)	$	(55,470	)	$	251,114	$	(98,065	)
Weighted average shares outstanding - basic	183,178			186,140			183,682		186,442
Effect of dilutive securities - Unvested restricted stock and restricted stock units	—			—			180		—
Weighted average shares outstanding - diluted	183,178			186,140			183,862		186,442
Basic earnings (loss) per common share:
Net income (loss) per share attributable to common shareholders	$	(0.65	)	$	(0.30	)	$	1.37	$	(0.53	)
Diluted earnings (loss) per common share:
Net income (loss) per share attributable to common shareholders	$	(0.65	)	$	(0.30	)	$	1.37	$	(0.53	)

For the three months ended June 30, 2020, the Company reported a consolidated net loss. As a result of the net loss, unvested restricted stock and restricted stock units were antidilutive for the period and were not included in the computation of diluted weighted average shares. The weighted average restricted stock and restricted stock units excluded from the calculation of diluted net loss per share was 9.1 million for the three months ended June 30, 2020. For the six months ended June 30, 2020, the calculation

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of diluted weighted average shares excludes 7.1 million of non-performance-based restricted stock and restricted stock units, as the inclusion of such award would have been antidilutive. Performance-based equity awards are included in the diluted earnings per share calculation based on the attainment of the applicable performance metrics to date. For the six months ended June 30, 2020, the calculation of diluted weighted average shares excludes 1.8 million of performance-based restricted stock and restricted stock units. During the three and six months ended June 30, 2019, the Company reported a consolidated net loss. As a result of the net loss, unvested restricted stock and restricted stock units were antidilutive for the periods and were not included in the computation of diluted weighted average shares. The weighted average restricted stock and restricted stock units excluded from the calculation of diluted net loss per share was 7.8 million and 7.5 million for the three and six months ended June 30, 2019, respectively.

5.  Acquisitions, Dispositions and Other Transactions

During the period from January 1, 2019 through June 30, 2020, the Company acquired 26 communities that the Company formerly leased, disposed of 15 owned communities, and sold its ownership interest in its unconsolidated entry fee CCRC Venture (the "CCRC Venture") with Healthpeak Properties, Inc. ("Healthpeak"), and the Company's triple-net lease obligations on 12 communities were terminated. The acquisitions of formerly leased communities include the 18 communities acquired from Healthpeak described below and eight communities acquired pursuant to the exercise of a purchase option for a purchase price of $39.3 million, all of which occurred during the three months ended March 31, 2020.

As of June 30, 2020, the Company owned 355 communities, leased 305 communities, managed 77 communities, and two unencumbered communities in the CCRCs segment were classified as held for sale, resulting in $37.4 million being recorded as assets held for sale. The closings of the various pending and expected transactions described within this note are, or will be, subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals. However, there can be no assurance that the transactions will close or, if they do, when the actual closings will occur.

Dispositions of Owned Communities

During the six months ended June 30, 2020, the Company completed the sale of one owned community for cash proceeds of $5.5 million, net of transaction costs, and recognized a net gain on sale of assets of $0.2 million.

During the year ended December 31, 2019, the Company completed the sale of 14 owned communities for cash proceeds of $85.4 million, net of transaction costs, and recognized a net gain on sale of assets of $5.5 million. The Company utilized a portion of the cash proceeds from the asset sales to repay approximately $5.1 million of associated mortgage debt and debt prepayment penalties. These dispositions included the sale of eight communities during the six months ended June 30, 2019 for which the Company received cash proceeds of $44.1 million, net of transaction costs.

Healthpeak CCRC Venture and Master Lease Transactions

On October 1, 2019, the Company entered into definitive agreements, including a Master Transactions and Cooperation Agreement (the "MTCA") and an Equity Interest Purchase Agreement (the "Purchase Agreement"), providing for a multi-part transaction with Healthpeak. The parties subsequently amended the agreements to include one additional entry fee CCRC community as part of the sale of the Company's interest in the CCRC Venture (rather than removing the community from the CCRC Venture for joint marketing and sale). The components of the multi-part transaction include:

• CCRC Venture Transaction. Pursuant to the Purchase Agreement, on January 31, 2020, Healthpeak acquired the Company's 51% ownership interest in the CCRC Venture, which held 14 entry fee CCRCs, for a purchase price of $289.2 million, net of a $5.9 million post-closing net working capital adjustment paid to Healthpeak during the three months ended June 30, 2020 (representing an aggregate valuation of $1.06 billion less portfolio debt, subject to a net working capital adjustment). The $289.2 million of cash received from Healthpeak is presented within net cash used in investing activities for the six months ended June 30, 2020. The Company recognized a $369.8 million gain on sale of assets for the six months ended June 30, 2020, and the Company derecognized the net equity method liability for the sale of the ownership interest in the CCRC Venture. At the closing, the parties terminated the Company's existing management agreements with the 14 entry fee CCRCs, Healthpeak paid the Company a $100.0 million management agreement termination fee, and the Company transitioned operations of the entry fee CCRCs to a new operator. The Company recognized $100.0 million of management fee revenue for the three months ended March 31, 2020 for the management termination fee. Prior to the January 31, 2020 closing, the parties moved the remaining two entry fee CCRCs into a new unconsolidated venture on substantially the same terms as the CCRC Venture to accommodate the sale of such two communities expected to occur in 2021. Subsequent to these transactions, the Company will have exited substantially all of its entry fee CCRC operations.

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• Master Lease Transactions. Pursuant to the MTCA, on January 31, 2020, the parties amended and restated the existing master lease pursuant to which the Company continues to lease 25 communities from Healthpeak, and the Company acquired 18 formerly leased communities from Healthpeak, at which time the 18 communities were removed from the master lease. At the closing, the Company paid $405.5 million to acquire such communities and to reduce its annual rent under the amended and restated master lease. The $405.5 million of cash paid to Healthpeak and $1.7 million of direct acquisition costs are presented within net cash used in investing activities for the six months ended June 30, 2020. The Company funded the community acquisitions with $192.6 million of non-recourse mortgage financing and the proceeds from the multi-part transaction. In addition, Healthpeak has agreed to terminate the lease for one leased community. With respect to the continuing 24 communities, the Company's amended and restated master lease: (i) has an initial term to expire on December 31, 2027, subject to two extension options at the Company's election for ten years each, which must be exercised with respect to the entire pool of leased communities; (ii) the initial annual base rent for the 24 communities is $41.7 million and is subject to an escalator of 2.4% per annum on April 1st of each year; and (iii) Healthpeak has agreed to make available up to $35.0 million for capital expenditures for a five-year period related to the 24 communities at an initial lease rate of 7.0%. As a result of the community acquisition transaction, the Company recognized a $19.7 million gain on debt extinguishment and derecognized the $105.1 million carrying amount of financing lease obligations for eight communities which were previously subject to sale-leaseback transactions in which the Company was deemed to have continuing involvement.

6.  Fair Value Measurements

Marketable Securities

As of June 30, 2020, marketable securities of $109.9 million are stated at fair value based on valuation provided by third-party pricing services and are classified within Level 2 of the valuation hierarchy.

Debt

The Company had outstanding long-term debt obligations, including $166.4 million of borrowings outstanding on the revolving credit facility as of June 30, 2020, with a carrying value of $3.9 billion and $3.6 billion as of June 30, 2020 and December 31, 2019, respectively. Fair value of the long-term debt approximates carrying value in all periods presented. The Company's fair value of long-term debt disclosure is classified within Level 2 of the valuation hierarchy.

Asset Impairment Expense

The following is a summary of asset impairment expense.

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Property, plant and equipment and leasehold intangibles, net	$	3.7	$	1.2	$	14.7	$	1.2
Operating lease right-of-use assets	6.6		—		72.3		—
Investment in unconsolidated ventures	—		—		1.5		—
Other intangible assets, net	—		2.6		—		2.6
Other assets, net	—		—		—		0.4
Asset impairment	$	10.3	$	3.8	$	88.5	$	4.2

Although the Company cannot predict with reasonable certainty the ultimate impacts of the COVID-19 pandemic, the Company concluded that the impacts of the pandemic have adversely affected the Company’s projections of revenue, expense, and cash flow for its senior housing community long-lived assets and constitute an indicator of potential impairment. Accordingly, the Company assessed its long-lived assets for recoverability. Refer to Note 3 for additional information on the COVID-19 pandemic.

In estimating the recoverability of asset groups for purposes of the Company’s long-lived asset impairment testing during the six months ended June 30, 2020, the Company utilized future cash flow projections that are generally developed internally. Any estimates of future cash flow projections necessarily involve predicting unknown future circumstances and events and require significant management judgments and estimates. In arriving at the cash flow projections, the Company considers its estimates of the impacts of the pandemic, historic operating results, approved budgets and business plans, future demographic factors, expected growth rates, estimated asset holding periods, and other factors.

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As of March 31, 2020 and June 30, 2020, there was a wide range of possible outcomes as a result of the pandemic, as there was a high degree of uncertainty about its ultimate impacts. Management’s estimates of the impacts of the pandemic are highly dependent on variables that are difficult to predict, as further described in Note 3. Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments.

Operating Lease Right-of-Use Assets

As a result of the COVID-19 pandemic during the six months ended June 30, 2020, the Company evaluated operating lease right-of-use assets for impairment and identified communities with a carrying amount of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets. The Company compared the estimated fair value of the assets to their carrying amount for these identified communities and recorded an impairment charge for the excess of carrying amount over fair value. The Company recognized the right-of-use assets for the operating leases for 35 communities on the condensed consolidated balance sheets as of March 31, 2020 at the estimated fair value of $106.7 million. Additionally, during the three months ended June 30, 2020, the Company recognized the right-of-use assets for the operating leases for nine communities on the condensed consolidated balance sheets at the estimated fair value of $10.3 million. As a result, the Company recorded non-cash impairment charges for the operating lease right-of-use assets of $6.6 million and $72.3 million for the three and six months ended June 30, 2020, respectively.

The fair values of the operating lease right-of-use assets of these communities were estimated utilizing a discounted cash flow approach based upon historical and projected community cash flows and market data, including management fees and a market supported lease coverage ratio, all of which are considered Level 3 inputs within the valuation hierarchy. The estimated future cash flows were discounted at a rate that is consistent with a weighted average cost of capital from a market participant perspective. The range of discount rates utilized was 11.2% to 12.3%, depending upon the property type, geographical location, and the quality of the respective community. These impairment charges are primarily due to the COVID-19 pandemic and lower than expected operating performance at these communities and reflect the amount by which the carrying amounts of the assets exceeded their estimated fair value.

Property, Plant and Equipment and Leasehold Intangibles, Net

During the six months ended June 30, 2020, the Company evaluated property, plant and equipment and leasehold intangibles for impairment and identified communities with a carrying amount of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets. The Company compared the estimated fair value of the assets to their carrying amount for these identified communities and recorded an impairment charge for the excess of carrying amount over fair value. The Company recorded property, plant and equipment and leasehold intangibles non-cash impairment charges in its operating results of $3.7 million and $14.7 million for the three and six months ended June 30, 2020, respectively. The fair values of the property, plant and equipment of these communities were primarily determined utilizing a discounted cash flow approach considering stabilized facility operating income and market capitalization rates. These fair value measurements are considered Level 3 measurements within the valuation hierarchy. These impairment charges are primarily due to the COVID-19 pandemic and lower than expected operating performance at these communities and reflect the amount by which the carrying amounts of the assets exceeded their estimated fair value.

7.  Stock-Based Compensation

Grants of restricted stock units and stock awards under the Company's 2014 Omnibus Incentive Plan were as follows:

(in thousands, except for per share and unit amounts)	Restricted Stock Units and Stock Awards Granted	Weighted Average Grant Date Fair Value		Total Grant Date Fair Value
Three months ended March 31, 2020	4,438	$	7.06	$	31,341
Three months ended June 30, 2020	78	$	3.91	$	303

8.  Goodwill

The Company's Independent Living and Health Care Services segments had a carrying value of goodwill of $27.3 million and $126.8 million, respectively, as of both June 30, 2020 and December 31, 2019.

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During the six months ended June 30, 2020, the Company identified indicators of impairment of goodwill, including the COVID-19 pandemic and a significant decline in the Company's stock price and market capitalization for a sustained period. Refer to Note 3 for additional information on the COVID-19 pandemic.

As a result of the COVID-19 pandemic, the Company performed an interim quantitative goodwill impairment test as of March 31, 2020. The Company’s quantitative goodwill impairment test as of March 31, 2020 included reduced estimates of projected future cash flows as a result of changes to significant assumptions using information known or knowable about the COVID-19 pandemic, including current industry and economic trends, changes in business plans, and changes in expected revenue and facility operating expense growth rates. Additionally, the Company considered the additional risk within the future cash flow estimates when selecting risk-adjusted discount rates. The Company determined no impairment of goodwill was necessary for the six months ended June 30, 2020.

Determining the fair value of the Company’s reporting units involves the use of significant estimates and assumptions that are unpredictable and inherently uncertain. These estimates and assumptions include revenue and expense growth rates and operating margins used to calculate projected future cash flows and risk-adjusted discount rates. Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments. Future events that may result in impairment charges include differences in the projected occupancy rates or monthly service fee rates, changes in the cost structure of existing communities, changes in reimbursement rates from Medicare for healthcare services, and changes in healthcare reform. Significant adverse changes in the Company’s future revenues and/or operating margins, significant changes in the market for senior housing or the valuation of the real estate of senior living communities, as well as other events and circumstances, including but not limited to increased competition, changes in reimbursement rates from Medicare for healthcare services, and changing economic or market conditions, including market control premiums, could result in changes in fair value and the determination that goodwill is impaired.

9.  Property, Plant and Equipment and Leasehold Intangibles, Net

As of June 30, 2020 and December 31, 2019, net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following:

(in thousands)	June 30, 2020			December 31, 2019
Land	$	507,336		$	450,894
Buildings and improvements	5,257,530			4,790,769
Furniture and equipment	935,755			859,849
Resident and leasehold operating intangibles	316,704			317,111
Construction in progress	60,653			80,729
Assets under financing leases and leasehold improvements	1,548,305			1,847,493
Property, plant and equipment and leasehold intangibles	8,626,283			8,346,845
Accumulated depreciation and amortization	(3,369,915		)	(3,237,011		)
Property, plant and equipment and leasehold intangibles, net	$	5,256,368		$	5,109,834

Assets under financing leases and leasehold improvements includes $0.4 billion and $0.6 billion of financing lease right-of-use assets, net of accumulated amortization, as of June 30, 2020 and December 31, 2019, respectively. Refer to Note 11 for further information on the Company's financing leases.

The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $93.2 million for both the three months ended June 30, 2020 and 2019, and $183.9 million and $189.3 million for the six months ended June 30, 2020 and 2019, respectively.

Long-lived assets with definite useful lives are depreciated or amortized on a straight-line basis over their estimated useful lives (or, in certain cases, the shorter of their estimated useful lives or the lease term) and are tested for impairment whenever indicators of impairment arise. Refer to Note 6 for additional information on impairment expense for property, plant and equipment and leasehold intangibles.

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10.  Debt

Long-term debt as of June 30, 2020 and December 31, 2019 consists of the following:

(in thousands)	June 30, 2020		December 31, 2019
Mortgage notes payable due 2020 through 2047; weighted average interest rate of 4.08% for the six months ended June 30, 2020, less debt discount and deferred financing costs of $21.8 million and $17.0 million as of June 30, 2020 and December 31, 2019, respectively (weighted average interest rate of 4.72% in 2019)	$	3,681,795	$	3,496,735
Other notes payable, weighted average interest rate of 4.56% for the six months ended June 30, 2020 (weighted average interest rate of 5.77% in 2019) and maturity dates ranging from 2020 to 2021	10,570		58,388
Total long-term debt	3,692,365		3,555,123
Current portion	222,572		339,413
Total long-term debt, less current portion	$	3,469,793	$	3,215,710

The $166.4 million of borrowings outstanding on the revolving credit facility as of June 30, 2020 are excluded from the table above and are further described below.

Credit Facilities

The Company's Fifth Amended and Restated Credit Agreement with Capital One, National Association, as administrative agent, lender and swingline lender and the other lenders from time to time parties thereto (the "Credit Agreement"), provides commitments for a $250 million revolving credit facility with a $60 million sublimit for letters of credit and a $50 million swingline feature. The Company has a one-time right under the Credit Agreement to increase commitments on the revolving credit facility by an additional $100 million, subject to obtaining commitments for the amount of such increase from acceptable lenders. The Credit Agreement provides the Company a one-time right to reduce the amount of the revolving credit commitments, and the Company may terminate the revolving credit facility at any time, in each case without payment of a premium or penalty. The Credit Agreement matures on January 3, 2024. Amounts drawn under the facility bear interest at 90-day LIBOR plus an applicable margin. The applicable margin varies based on the percentage of the total commitment drawn, with a 2.25% margin at utilization equal to or lower than 35%, a 2.75% margin at utilization greater than 35% but less than or equal to 50%, and a 3.25% margin at utilization greater than 50%. A quarterly commitment fee is payable on the unused portion of the facility at 0.25% per annum when the outstanding amount of obligations (including revolving credit and swingline loans and letter of credit obligations) is greater than or equal to 50% of the revolving credit commitment amount or 0.35% per annum when such outstanding amount is less than 50% of the revolving credit commitment amount.

The credit facility is secured by first priority mortgages on certain of the Company's communities. In addition, the Credit Agreement permits the Company to pledge the equity interests in subsidiaries that own other communities and grant negative pledges in connection therewith (rather than mortgaging such communities), provided that not more than 10% of the borrowing base may result from communities subject to negative pledges. Availability under the revolving credit facility will vary from time to time based on borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and the Company's consolidated fixed charge coverage ratio. To the extent the outstanding borrowings on the credit facility exceed future borrowing base calculations, the Company would be required to repay the difference to restore the outstanding balance to the new borrowing base.

During 2019, parties entered into an amendment to the Credit Agreement that provides for availability calculations to be made at additional consolidated fixed charge coverage ratio thresholds.

The Credit Agreement contains typical affirmative and negative covenants, including financial covenants with respect to minimum consolidated fixed charge coverage and minimum consolidated tangible net worth. Amounts drawn on the credit facility may be used for general corporate purposes.

As of June 30, 2020, $166.4 million of borrowings were outstanding on the revolving credit facility, $45.5 million of letters of credit were outstanding, and the revolving credit facility had $37.9 million of availability. The Company also had a separate unsecured letter of credit facility of up to $50.0 million of letters of credit as of June 30, 2020 under which $48.2 million had been issued as of that date.

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Financings

During March 2020, the Company completed its financing plans in the regular course of business, including closing three non-recourse mortgage debt financing transactions totaling $208.5 million as described below. Refer to Note 3 for more information regarding the Company's planned financing activities.

On January 31, 2020, the Company obtained $238.2 million of debt secured by the non-recourse first mortgages on 14 communities, including $192.6 million of non-recourse first mortgage financing on 13 communities acquired from Healthpeak on such date. Seventy percent of the principal amount bears interest at a fixed rate of 3.62%, and the remaining thirty percent of the principal amount bears interest at a variable rate equal to 30-day LIBOR plus a margin of 209 basis points. The debt matures in February 2030. The proceeds from the financing were utilized to fund the acquisition of communities from Healthpeak and repay $33.1 million of outstanding mortgage debt maturing in 2020. Refer to Note 5 for more information about the Company's acquisition of communities from Healthpeak.

On March 19, 2020, the Company obtained $29.2 million of debt secured by the non-recourse first mortgages on seven communities, primarily communities acquired during the three months ended March 31, 2020. The loan bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 225 basis points and matures in April 2030.

On March 20, 2020, the Company obtained $30.0 million of debt secured by the non-recourse first mortgage on one community acquired from Healthpeak on January 31, 2020. The loan bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 250 basis points and matures in March 2022.

On March 31, 2020, the Company obtained $149.3 million of debt secured by the non-recourse first mortgages on 18 communities. Of the total principal, $73.1 million bears interest at a fixed rate of 3.55%, and the remaining $76.2 million bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 210 basis points. The debt matures in April 2030. The $149.3 million of proceeds from the financing were primarily utilized to repay $136.3 million of outstanding mortgage debt maturing in 2020.

Financial Covenants

Certain of the Company's debt documents contain restrictions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders' equity levels and debt service ratios, and requiring the Company not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis. In addition, the Company's debt documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements.

The Company's failure to comply with applicable covenants could constitute an event of default under the applicable debt documents. Many of the Company's debt documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors). Furthermore, the Company's debt is secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.

As of June 30, 2020, the Company is in compliance with the financial covenants of its debt agreements.

11.  Leases

As of June 30, 2020, the Company operated 305 communities under long-term leases (237 operating leases and 68 financing leases). The substantial majority of the Company's lease arrangements are structured as master leases. Under a master lease, numerous communities are leased through an indivisible lease. The Company typically guarantees the performance and lease payment obligations of its subsidiary lessees under the master leases. An event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio.

The leases relating to these communities are generally fixed rate leases with annual escalators that are either fixed or based upon changes in the consumer price index or the leased property revenue. The Company is responsible for all operating costs, including repairs, property taxes, and insurance. The leases generally provide for renewal or extension options from 5 to 20 years and in some instances, purchase options.

The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders' equity levels and lease coverage ratios, in each case on a

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consolidated, portfolio-wide, multi-community, single-community and/or entity basis. In addition, the Company's lease documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements.

The Company's failure to comply with applicable covenants could constitute an event of default under the applicable lease documents. Many of the Company's debt and lease documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors). Certain leases contain cure provisions, which generally allow the Company to post an additional lease security deposit if the required covenant is not met. Furthermore, the Company's leases are secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.

As of June 30, 2020, the Company is in compliance with the financial covenants of its long-term leases.

A summary of operating and financing lease expense (including the respective presentation on the condensed consolidated statements of operations) and cash flows from leasing transactions is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
Operating Leases (in thousands)	2020			2019			2020			2019
Facility operating expense	$	4,935		$	4,604		$	9,785		$	9,229
Facility lease expense	62,379			67,689			126,860			136,357
Operating lease expense	67,314			72,293			136,645			145,586
Operating lease expense adjustment (1)	8,221			4,429			14,954			8,812
Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements	(6,421		)	(1,000		)	(10,509		)	(1,000		)
Operating cash flows from operating leases	$	69,114		$	75,722		$	141,090		$	153,398

(1) Represents the difference between cash paid and expense recognized.

	Three Months Ended June 30,					Six Months Ended June 30,
Financing Leases (in thousands)	2020			2019		2020			2019
Depreciation and amortization	$	8,037		$	11,677	$	17,181		$	23,355
Interest expense: financing lease obligations	11,892			16,649		25,174			33,392
Financing lease expense	$	19,929		$	28,326	$	42,355		$	56,747
Operating cash flows from financing leases	$	11,892		$	16,649	$	25,174		$	33,392
Financing cash flows from financing leases	4,677			5,500		9,764			10,953
Changes in financing lease assets and liabilities for lessor capital expenditure reimbursement	(1,675		)	—		(3,414		)	—
Total cash flows from financing leases	$	14,894		$	22,149	$	31,524		$	44,345

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The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of June 30, 2020 are as follows (in thousands):

Year Ending December 31,	Operating Leases			Financing Leases
2020 (six months)	$	149,099		$	33,263
2021	287,241			66,168
2022	286,171			66,808
2023	288,435			67,571
2024	289,829			68,814
Thereafter	578,012			168,527
Total lease payments	1,878,787			471,151
Purchase option liability and non-cash gain on future sale of property	—			437,356
Imputed interest and variable lease payments	(469,245		)	(305,533		)
Total lease obligations	$	1,409,542		$	602,974

12.  Litigation

The Company has been and is currently involved in litigation and claims incidental to the conduct of its business, which it believes are generally comparable to other companies in the senior living and healthcare industries, including, but not limited to, putative class action claims from time to time regarding staffing at the Company’s communities and compliance with consumer protection laws and the Americans with Disabilities Act. Certain claims and lawsuits allege large damage amounts and may require significant costs to defend and resolve. As a result, the Company maintains general liability, professional liability, and other insurance policies in amounts and with coverage and deductibles the Company believes are appropriate, based on the nature and risks of its business, historical experience, availability, and industry standards. The Company's current policies provide for deductibles for each claim and contain various exclusions from coverage. Accordingly, the Company is, in effect, self-insured for claims that are less than the deductible amounts and for claims or portions of claims that are not covered by such policies and/or exceed the policy limits.

Similarly, the senior living and healthcare industries are continuously subject to scrutiny by governmental regulators, which could result in reviews, audits, investigations, enforcement activities or litigation related to regulatory compliance matters. In addition, as a result of the Company's participation in the Medicare and Medicaid programs, the Company is subject to various governmental reviews, audits and investigations, including but not limited to audits under various government programs, such as the Recovery Audit Contractors (RAC), Zone Program Integrity Contractors (ZPIC), and Unified Program Integrity Contractors (UPIC) programs. The costs to respond to and defend such reviews, audits, and investigations may be significant, and an adverse determination could result in citations, sanctions and other criminal or civil fines and penalties, the refund of overpayments, payment suspensions, termination of participation in Medicare and Medicaid programs, and/or damage to the Company's business reputation.

In June 2020, the Company and several current and former executive officers were named as defendants in a putative class action lawsuit alleging violations of the federal securities laws filed in the federal court for the Middle District of Tennessee. The lawsuit asserts that the defendants made material misstatements and omissions concerning the Company's business, operational and compliance policies that caused the Company's stock price to be artificially inflated between August 2016 and April 2020. While the Company cannot predict with certainty the result of this or any other legal proceedings, the Company believes the allegations in the suit are without merit and does not expect this matter to have a material adverse effect on the Company's financial condition, results of operations, or cash flows.

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13.  Supplemental Disclosure of Cash Flow Information

	Six Months Ended June 30,
(in thousands)	2020			2019
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	107,854		$	124,647
Income taxes paid, net of refunds	1,388			1,916
Capital expenditures, net of related payables:
Capital expenditures - non-development, net	$	82,077		$	121,066
Capital expenditures - development, net	6,823			10,623
Capital expenditures - non-development - reimbursable	13,923			1,000
Trade accounts payable	10,040			(10,392		)
Net cash paid	$	112,863		$	122,297
Acquisition of communities from Healthpeak:
Property, plant and equipment and leasehold intangibles, net	$	286,734		$	—
Operating lease right-of-use assets	(63,285		)	—
Financing lease obligations	129,196			—
Operating lease obligations	74,335			—
Loss (gain) on debt modification and extinguishment, net	(19,731		)	—
Net cash paid	$	407,249		$	—
Acquisition of other assets, net of related payables and cash received:
Property, plant and equipment and leasehold intangibles, net	$	179		$	—
Financing lease obligations	39,260			—
Net cash paid	$	39,439		$	—
Proceeds from sale of CCRC Venture, net:
Investments in unconsolidated ventures	$	(14,848	)	$	—
Current portion of long-term debt	34,706			—
Other liabilities	60,748			—
Loss (gain) on sale of assets, net	(369,831		)	—
Net cash received	$	(289,225	)	$	—
Proceeds from sale of other assets, net:
Prepaid expenses and other assets, net	$	(1,261	)	$	(5,798	)
Assets held for sale	(5,274		)	(41,882		)
Property, plant and equipment and leasehold intangibles, net	(938		)	(688		)
Investments in unconsolidated ventures	—			(156		)
Other liabilities	(1,862		)	(1,762		)
Loss (gain) on sale of assets, net	(1,979		)	(2,144		)
Net cash received	$	(11,314	)	$	(52,430	)
Supplemental Schedule of Non-cash Operating, Investing, and Financing Activities:
Assets designated as held for sale:
Prepaid expenses and other assets, net	$	—		$	(5	)
Assets held for sale	—			(4,928		)
Property, plant and equipment and leasehold intangibles, net	—			4,933
Net	$	—		$	—

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Healthpeak master lease modification:
Property, plant and equipment and leasehold intangibles, net	$	(57,462	)	$	—
Operating lease right-of-use assets	88,044			—
Financing lease obligations	70,874			—
Operating lease obligations	(101,456		)	—
Net	$	—		$	—
Other lease termination and modification, net:
Prepaid expenses and other assets, net	$	—		$	(648	)
Property, plant and equipment and leasehold intangibles, net	13,548			(1,666		)
Operating lease right-of-use assets	1,350			(5,009		)
Financing lease obligations	(15,483		)	—
Operating lease obligations	606			5,654
Other liabilities	(21		)	(337		)
Loss (gain) on facility lease termination and modification, net	—			2,006
Net	$	—		$	—

During the three months ended June 30, 2019, the Company and its joint venture partner contributed cash in an aggregate amount of $13.3 million to a consolidated joint venture which owned three senior housing communities. The Company obtained a $6.6 million promissory note receivable from its joint venture partner secured by a 50% equity interest in the joint venture in a non-cash exchange for the Company funding the $13.3 million aggregate contribution in cash.

Restricted cash consists principally of escrow deposits for real estate taxes, property insurance, and capital expenditures required by certain lenders under mortgage debt agreements and deposits as security for self-insured retention risk under workers' compensation programs and property insurance programs. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sums to the total of the same such amounts shown in the condensed consolidated statements of cash flows.

(in thousands)	June 30, 2020		December 31, 2019
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	452,441	$	240,227
Restricted cash	28,397		26,856
Long-term restricted cash	41,292		34,614
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$	522,130	$	301,697

14.  Income Taxes

The difference between the Company's effective tax rate for the three and six months ended June 30, 2020 and June 30, 2019 was primarily due to the tax impact of the multi-part transaction with Healthpeak that occurred in the three months ended March 31, 2020. The impact represented the tax expense recorded on the gain of the sale of the Company's interest in the CCRC Venture offset by a decrease in the valuation allowance that was a direct result of the multi-part transaction with Healthpeak. This was slightly offset by the adjustment for stock-based compensation, which was greater in the six months ended June 30, 2019 compared to the six months ended June 30, 2020.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $26.7 million for the three months ended June 30, 2020 and an aggregate deferred federal, state, and local tax expense of $64.2 million for the six months ended June 30, 2020. The expense includes $93.1 million as a result of the gain on the sale of the Company's interest in the CCRC Venture offset by a benefit of $28.9 million as a result of the operating losses (exclusive of the CCRC Venture sale) for the six months ended June 30, 2020. The benefit for the three months ended June 30, 2020 is offset by additional valuation allowance of $33.2 million. The tax expense for the six months ended June 30, 2020 is offset by a reduction in valuation allowance of $79.5 million. The Company recorded an aggregate deferred federal, state, and local tax benefit of $13.0 million and $19.5 million for the three and six months ended June 30, 2019. The benefit includes $13.0 million and $21.2 million as a result of the operating losses for the three and six months ended June 30, 2019. The benefit was reduced by a $1.7 million reduction in the deferred tax asset related to employee stock compensation for the six months ended June 30, 2019.

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The Company evaluates its deferred tax assets each quarter to determine if a valuation allowance is required based on whether it is more likely than not that some portion of the deferred tax asset would not be realized. The Company's valuation allowance as of June 30, 2020 and December 31, 2019 was $329.5 million and $408.9 million, respectively.

The change in the valuation allowance for the six months ended June 30, 2020 is primarily the result of a reduction in the Company’s valuation allowance of $117.6 million as a result of the Healthpeak transaction offset by the anticipated reversal of future tax liabilities offset by future tax deductions. The increase in the valuation allowance during the six months ended June 30, 2019 was comprised of multiple components. The increase included $13.8 million resulting from the adoption of Accounting Standards Codification ("ASC") 842, Leases ("ASC 842") recorded to equity, and the related addition of future timing differences recorded in the three months ended March 31, 2019. An additional $21.7 million of allowance was established against the current operating loss incurred during the six months ended June 30, 2019. Offsetting the increases was a decrease of $1.7 million of allowance as a result of removal of future timing differences related to employee stock compensation recorded in the three months ended March 31, 2019.

The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three and six months ended June 30, 2020 and 2019 which are included in income tax expense or benefit for the period. As of June 30, 2020, tax returns for years 2015 through 2018 are subject to future examination by tax authorities. In addition, the net operating losses from prior years are subject to adjustment under examination.

15.  Revenue

Disaggregation of Revenue

The Company disaggregates its revenue from contracts with customers by payor source. The Company believes it best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. See details on a reportable segment basis in the tables below.

	Three Months Ended June 30, 2020
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	129,678	$	414,276	$	59,980	$	258	$	604,192
Government reimbursement	600		17,880		13,744		70,566		102,790
Other third-party payor programs	—		—		5,301		19,346		24,647
Total resident fee revenue	$	130,278	$	432,156	$	79,025	$	90,170	$	731,629
	Three Months Ended June 30, 2019
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	135,348	$	433,589	$	71,092	$	193	$	640,222
Government reimbursement	603		16,636		20,196		91,614		129,049
Other third-party payor programs	—		—		9,965		22,627		32,592
Total resident fee revenue	$	135,951	$	450,225	$	101,253	$	114,434	$	801,863
	Six Months Ended June 30, 2020
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	264,968	$	854,889	$	124,683	$	428	$	1,244,968
Government reimbursement	1,172		34,746		33,149		144,255		213,322
Other third-party payor programs	—		—		15,740		40,306		56,046
Total resident fee revenue	$	266,140	$	889,635	$	173,572	$	184,989	$	1,514,336

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	Six Months Ended June 30, 2019
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	270,393	$	875,500	$	142,625	$	383	$	1,288,901
Government reimbursement	1,252		33,251		41,683		180,271		256,457
Other third-party payor programs	—		—		20,672		45,312		65,984
Total resident fee revenue	$	271,645	$	908,751	$	204,980	$	225,966	$	1,611,342

Contract Balances

The payment terms and conditions within the Company's revenue-generating contracts vary by contract type and payor source, although terms generally include payment to be made within 30 days.

Resident fee revenue for recurring and routine monthly services is generally billed monthly in advance under the Company's independent living, assisted living, and memory care residency agreements. Resident fee revenue for standalone or certain healthcare services is generally billed monthly in arrears. A portion of the Company's reimbursement from Medicare for certain healthcare services is billed near the start of each period of care, and cash is generally received before all services are rendered. The amount of revenue recognized for periods of care which are incomplete at period end is based on the Company's historical average percentage of days complete on each period of care and any unearned amounts are deferred and recognized when the service is performed. Additionally, non-refundable community fees are generally billed and collected in advance or upon move-in of a resident under the Company's independent living, assisted living, and memory care residency agreements. Amounts of revenue that are collected from residents in advance are recognized as deferred revenue until the performance obligations are satisfied. The Company had total deferred revenue (included within refundable fees and deferred revenue and other liabilities within the condensed consolidated balance sheets) of $154.7 million and $72.5 million, including $34.7 million and $38.9 million of monthly resident fees billed and received in advance, as of June 30, 2020 and December 31, 2019, respectively. Such amount of total deferred revenue as of June 30, 2020 also included $85.0 million received in April 2020 under a temporary expansion of the Accelerated and Advance Payment Program administered by the Centers for Medicare & Medicaid Services ("CMS"). Such amount of advance receipts is anticipated to either be recognized as revenue and retained by the Company during the recoupment period from August to November 2020 as services are provided or refunded by the Company at the conclusion of such period. Refer to Note 3 for additional information on such program. For the six months ended June 30, 2020 and 2019, the Company recognized $55.2 million and $72.7 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2020 and 2019. The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose amounts for remaining performance obligations that have original expected durations of one year or less.

For both the three months ended June 30, 2020 and 2019, the Company recognized $3.6 million and for both the six months ended June 30, 2020 and 2019, the Company recognized $7.6 million and $7.1 million, respectively, of charges within facility operating expense within the condensed consolidated statements of operations for additions to the allowance for credit losses.

16.  Segment Information

The Company has five reportable segments: Independent Living; Assisted Living and Memory Care; CCRCs; Health Care Services; and Management Services. Operating segments are defined as components of an enterprise that engage in business activities from which it may earn revenues and incur expenses; for which separate financial information is available; and whose operating results are regularly reviewed by the chief operating decision maker to assess the performance of the individual segment and make decisions about resources to be allocated to the segment.

Independent Living. The Company's Independent Living segment includes owned or leased communities that are primarily designed for middle to upper income seniors who desire an upscale residential environment providing the highest quality of service. The majority of the Company's independent living communities consist of both independent and assisted living units in a single community, which allows residents to age-in-place by providing them with a continuum of senior independent and assisted living services.

Assisted Living and Memory Care. The Company's Assisted Living and Memory Care segment includes owned or leased communities that offer housing and 24-hour assistance with activities of daily life to mid-acuity frail and elderly residents. Assisted living and memory care communities include both freestanding, multi-story communities and freestanding, single story

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communities. The Company also provides memory care services at freestanding memory care communities that are specially designed for residents with Alzheimer's disease and other dementias.

CCRCs. The Company's CCRCs segment includes large owned or leased communities that offer a variety of living arrangements and services to accommodate all levels of physical ability and health. Most of the Company's CCRCs have independent living, assisted living, and skilled nursing available on one campus or within the immediate market, and some also include memory care services.

Health Care Services. The Company's Health Care Services segment includes the home health, hospice, and outpatient therapy services, as well as education and wellness programs, provided to residents of many of the Company's communities and to seniors living outside of the Company's communities. The Health Care Services segment does not include the skilled nursing and inpatient healthcare services provided in the Company's skilled nursing units, which are included in the Company's CCRCs segment.

Management Services. The Company's Management Services segment includes communities operated by the Company pursuant to management agreements. In some of the cases, the controlling financial interest in the community is held by third parties and, in other cases, the community is owned in a venture structure in which the Company has an ownership interest. Under the management agreements for these communities, the Company receives management fees as well as reimbursed expenses, which represent the reimbursement of expenses it incurs on behalf of the owners.

The following table sets forth selected segment financial and operating data:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2020			2019		2020			2019
Revenue and other operating income:
Independent Living (1)	$	130,278		$	135,951	$	266,140		$	271,645
Assisted Living and Memory Care (1)	432,308			450,225		889,787			908,751
CCRCs (1)(2)	88,571			101,253		183,118			204,980
Health Care Services(1)(2)	107,165			114,434		201,984			225,966
Management Services(3)	107,587			217,594		339,019			450,159
Total revenue and other operating income	$	865,909		$	1,019,457	$	1,880,048		$	2,061,501
Segment operating income: (4)
Independent Living	$	41,038		$	51,459	$	92,452		$	104,335
Assisted Living and Memory Care	87,708			133,144		219,709			273,843
CCRCs	13,850			17,847		33,781			39,484
Health Care Services	9,692			9,167		571			17,340
Management Services	6,076			15,449		114,791			31,192
Total segment operating income	158,364			227,066		461,304			466,194
General and administrative expense (including non-cash stock-based compensation expense)	52,518			57,576		107,113			113,887
Facility operating lease expense	62,379			67,689		126,860			136,357
Depreciation and amortization	93,154			94,024		183,892			190,912
Asset impairment:
Independent Living	—			—		31,317			—
Assisted Living and Memory Care	10,290			1,180		43,088			1,537
CCRCs	—			—		12,173			—
Health Care Services	—			—		—			—
Management Services	—			2,589		1,938			2,623
Total asset impairment:	10,290			3,769		88,516			4,160
Loss (gain) on facility lease termination and modification, net	—			1,797		—			2,006
Income (loss) from operations	$	(59,977	)	$	2,211	$	(45,077	)	$	18,872

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	As of
(in thousands)	June 30, 2020		December 31, 2019
Total assets:
Independent Living	$	1,510,783	$	1,441,652
Assisted Living and Memory Care	4,043,817		4,157,610
CCRCs	792,989		742,809
Health Care Services	248,702		256,715
Corporate and Management Services	828,252		595,647
Total assets	$	7,424,543	$	7,194,433

(1) All revenue and other operating income is earned from external third parties in the United States.

(2) The CCRCs and Health Care Services segments include $9.7 million and $17.0 million, respectively, of other operating income recognized for grants pursuant to the Emergency Fund described in Note 3 and other government sources. Allocations to the applicable segment reflect the segment's receipt and acceptance of the amounts and the Company's estimates of the segment's satisfaction of the conditions of grant during the period.

(3) Management services segment revenue includes management fees and reimbursements of costs incurred on behalf of managed communities.

(4) Segment operating income is defined as segment revenues and other operating income less segment facility operating expense (excluding depreciation and amortization) and costs incurred on behalf of managed communities.

17.  Subsequent Events

On July 26, 2020 (the “Effective Date”), the Company entered into definitive agreements with Ventas in connection with the restructuring of the Company’s lease arrangements with Ventas, including a Master Transaction Letter Agreement (the “Master Agreement”). Pursuant to the Master Agreement:

• On the Effective Date the parties entered into the Amended and Restated Master Lease and Security Agreement (the “Master Lease”) and Amended and Restated Guaranty (the “Guaranty”), which amended and restated the prior Master Lease and Security Agreement and prior Guaranty, each dated as of April 26, 2018 and as amended from time to time. Pursuant to the Master Lease, the Company continues to lease 120 communities for an aggregate initial annual minimum rent of approximately $100 million, which reflects a reduction of approximately $83 million of annual minimum rent in effect prior to the transaction. Effective on January 1 of each lease year, beginning January 1, 2022, the annual minimum rent will be subject to a 3% escalator. The initial term of the Master Lease ends December 31, 2025, with two 10-year extension options available to the Company. The annual minimum rent for the initial lease year of any such renewal term will be the greater of the fair market rental of the communities or the increased annual minimum rent for such lease year applying the foregoing 3% escalator. The Master Lease removed the prior provision that would have automatically extended the initial term in the event of the consummation of a change of control transaction by the Company. The Master Lease requires the Company to spend (or escrow with Ventas) a minimum of $1,500 per unit on a community-level basis and $3,600 per unit on an aggregate basis of all communities, in each case per 24-month period ending December 31 during the lease term, commencing with the 24-month period ending December 31, 2021. In addition, Ventas has agreed to fund costs associated with certain pre-approved capital expenditure projects in the aggregate amount of up to $37.8 million. Upon disbursement of such expenditures, the annual minimum rent under the Master Lease will increase by the amount of the disbursement multiplied by 50% of the sum of the then current 10-year treasury note rate and 4.5%. The transaction agreements with Ventas further provide that the Master Lease and certain other agreements between the parties will be cross-defaulted.

The Company’s subsidiaries’ obligations under the Master Lease are guaranteed at the parent level pursuant to the Guaranty. The Guaranty removed the prior requirements that the Company satisfy, at the parent level, financial covenants and that the Company maintain a security deposit with Ventas. The Guaranty also removed the prior right of Ventas to terminate the Master Lease on the basis of parent level financial covenants. Pursuant to the terms of the Guaranty, the Company may consummate a change of control transaction without the need for consent of Ventas so long as certain objective conditions are satisfied, including the post-transaction guarantor’s maintaining a minimum tangible net worth of at least $600 million, having minimum levels of operational experience and reputation in the senior living industry, and paying a change of control fee of $25 million to Ventas. The Guaranty removed the prior provisions that would have required that such post-transaction guarantor satisfy

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a maximum leverage ratio level, that the Company fund additional capital expenditures, and that the Company extend the term upon the occurrence of the change in control transaction. Under the terms of the Guaranty, commencing January 1, 2024 (and until such time (if any) as the Company exercises its lease term extension option with respect to the Master Lease), Ventas shall have the right to terminate the Master Lease (with respect to one or more communities), provided that the trailing twelve month coverage ratio of each such community is less than 0.9x and provided further that the removal and termination of any such communities does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such removal and termination.

• On the Effective Date, the Company entered into a Second Amended and Restated Omnibus Agreement with Ventas, which provides that if a default occurs and is continuing under certain other material leases or under certain material financings and if the same continues beyond the permitted cure period or the applicable landlord or lender exercises any material remedies, Ventas shall have the right to transition all or a portion of the communities from the Master Lease to a management arrangement with the Company pursuant to a market management agreement (which is terminable by either party). Notwithstanding the foregoing, Ventas may only transition community(ies) from the Master Lease to a management arrangement if such transition does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such transition.

• On the Effective Date, the Company conveyed five owned communities to Ventas in full release and satisfaction of $78 million principal amount of indebtedness secured by the communities. Upon closing, the parties entered into new terminable, market rate management agreements pursuant to which the Company will manage the communities. The Company also paid to Ventas $115 million in cash, released all security deposits under the former guaranty (which included the release of a $42.4 million deposit held by Ventas and the payment of $4.2 million in cash as settlement of the amount of letters of credit), and issued a $45 million unsecured interest-only promissory note to Ventas. The initial interest rate of the promissory note is 9.0% per annum and will increase by 0.50% on each anniversary of the date of issuance. The Company may prepay the outstanding principal amount in whole or in part at any time without premium or penalty. The promissory note matures on the earlier of December 31, 2025 or the occurrence of a change of control transaction (as defined in the Guaranty).

• On the Effective Date, the Company issued to Ventas a warrant (the “Warrant”) to purchase 16.3 million shares of the Company’s common stock, $0.01 par value per share, at a price per share of $3.00. The Warrant is exercisable at Ventas’ option at any time and from time to time, in whole or in part, until December 31, 2025. The exercise price and the number of shares issuable on exercise of the Warrant are subject to certain anti-dilution adjustments, including for cash dividends, stock dividends, stock splits, reclassifications, non-cash distributions, certain repurchases of common stock and business combination transactions. To the extent that the number of shares owned by Ventas (including shares underlying the Warrant) would be more than 9.6% of the total combined voting power of all the Company’s classes of capital stock or of the total value of shares of all the Company’s classes of capital stock (the “Ownership Cap”) (other than as a result of actions taken by Ventas), the Company would generally be required to repurchase the number of shares necessary to avoid Ventas exceeding the Ownership Cap unless Ventas makes an election to require the Company to pay Ventas cash in lieu of issuing shares pursuant to the Warrant in excess of the Ownership Cap. The Warrant and the shares issuable upon exercise thereof have not been registered under the Securities Act of 1933, as amended, and were issued in a private placement pursuant to Section 4(a)(2) thereof. On the Effective Date, the parties entered into a Registration Rights Agreement, pursuant to which Ventas and its permitted transferees are entitled to certain registration rights. Under the terms of the agreement, the Company is required to use reasonable best efforts to prepare and file a shelf registration statement with the SEC as promptly as practicable, but no later than the close of business on the fifth day following the date on which the Company files its Quarterly Report on Form 10-Q for the period ended June 30, 2020, with respect to the shares of common stock underlying the Warrant, and, if the registration statement is not automatically effective, to have the registration statement declared effective promptly thereafter. Ventas is entitled to customary underwritten offering, piggyback and additional demand registration rights with respect to the shares underlying the Warrant.

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Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements in this Quarterly Report on Form 10-Q may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties and include all statements that are not historical statements of fact and those regarding our intent, belief or expectations, including those related to the COVID-19 pandemic. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "could," "would," "potential," "intend," "expect," "endeavor," "seek," "anticipate," "estimate," "believe," "project," "predict," "continue," "plan," "target," or other similar words or expressions. These forward-looking statements are based on certain assumptions and expectations, and our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Although we believe that expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our assumptions or expectations will be attained, and actual results and performance could differ materially from those projected. Factors which could have a material adverse effect on our operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include, but are not limited to: the impacts of the COVID-19 pandemic, including the response efforts of federal, state, and local government authorities, businesses, individuals and us, on our business, results of operations, cash flow, liquidity, and our strategic initiatives, including plans for future growth, which will depend on many factors, some of which cannot be foreseen, including the duration, severity, and breadth of the pandemic and any resurgence of the disease, the impact of COVID-19 on the nation's economy and debt and equity markets and the local economies in our markets, the development and availability of COVID-19 testing, therapeutic agents, and vaccines and the prioritization of such resources among businesses and demographic groups, government financial and regulatory relief efforts that may become available to business and individuals, including our ability to qualify for and satisfy the terms and conditions of financial relief; perceptions regarding the safety of senior living communities during and after the pandemic, changes in demand for senior living communities and our ability to adapt our sales and marketing efforts to meet that demand, changes in the acuity levels of our new residents, the disproportionate impact of COVID-19 on seniors generally and those residing in our communities, the duration and costs of our response efforts, including increased equipment, supplies, labor, litigation, testing, and other expenses, the impact of COVID-19 on our ability to complete financings, refinancings, or other transactions (including dispositions) or to generate sufficient cash flow to cover required interest and lease payments and to satisfy financial and other covenants in our debt and lease documents, increased regulatory requirements, including unfunded mandatory testing, increased and enforcement actions resulting from COVID-19, including those that may limit our collection efforts for delinquent accounts and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or our response efforts; events which adversely affect the ability of seniors to afford resident fees, including downturns in the economy, housing markets, consumer confidence or the equity markets and unemployment among family members, which may be adversely impacted by the pandemic; changes in reimbursement rates, methods or timing under governmental reimbursement programs including the Medicare and Medicaid programs; the impact of ongoing healthcare reform efforts; the effects of senior housing construction and development, oversupply and increased competition; disruptions in the financial markets, including those related to the pandemic, that affect our ability to obtain financing or extend or refinance debt as it matures and our financing costs; the risks associated with current global economic conditions, including changes related to the pandemic, and general economic factors such as inflation, the consumer price index, commodity costs, fuel and other energy costs, costs of salaries, wages, benefits, and insurance, interest rates, and tax rates; the impact of seasonal contagious illness or an outbreak of COVID-19 or other contagious disease in the markets in which we operate; our ability to generate sufficient cash flow to cover required interest and long-term lease payments and to fund our planned capital projects, which may be adversely affected by the pandemic; the effect of our indebtedness and long-term leases on our liquidity; the effect of our non-compliance with any of our debt or lease agreements (including the financial covenants contained therein), including the risk of lenders or lessors declaring a cross default in the event of our non-compliance with any such agreements and the risk of loss of our property securing leases and indebtedness due to any resulting lease terminations and foreclosure actions; the effect of our borrowing base calculations and our consolidated fixed charge coverage ratio on availability under our revolving credit facility; the potential phasing out of LIBOR which may increase the costs of our debt obligations; increased competition for or a shortage of personnel, wage pressures resulting from increased competition, low unemployment levels, minimum wage increases and changes in overtime laws, and union activity; failure to maintain the security and functionality of our information systems, to prevent a cybersecurity attack or breach, or to comply with applicable privacy and consumer protection laws, including HIPAA; our inability to achieve or maintain profitability; our ability to complete pending or expected disposition, acquisition, or other transactions on agreed upon terms or at all, including in respect of the satisfaction of closing conditions, the risk that regulatory approvals are not obtained or are subject to unanticipated conditions, and uncertainties as to the timing of closing, and our ability to identify and pursue any such opportunities in the future; our ability to obtain additional capital on terms acceptable to us; our ability to complete our capital expenditures in accordance with our plans; our ability to identify and pursue development, investment and acquisition opportunities and our ability to successfully integrate acquisitions; competition for the acquisition of assets; delays in obtaining regulatory approvals; terminations, early or otherwise, or non-renewal of management agreements; conditions of housing markets, regulatory changes, acts of nature, and the effects of climate change in geographic areas where we are concentrated; terminations of our resident agreements and vacancies in the living

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spaces we lease, which may be adversely impacted by the pandemic; departures of key officers and potential disruption caused by changes in management; risks related to the implementation of our strategy, including initiatives undertaken to execute on our strategic priorities and their effect on our results; actions of activist stockholders, including a proxy contest; market conditions and capital allocation decisions that may influence our determination from time to time whether to purchase any shares under our existing share repurchase program and our ability to fund any repurchases; our ability to maintain consistent quality control; a decrease in the overall demand for senior housing, which may be adversely impacted by the pandemic; environmental contamination at any of our communities; failure to comply with existing environmental laws; costs to defend against, or an adverse determination or resolution of, complaints filed against us; the cost and difficulty of complying with increasing and evolving regulation; costs to respond to, and adverse determinations resulting from, government reviews, audits and investigations; unanticipated costs to comply with legislative or regulatory developments; as well as other risks detailed from time to time in our filings with the Securities and Exchange Commission ("SEC"), including those set forth under "Item 1A. Risk Factors" contained in our Annual Report on Form 10-K for the year ended December 31, 2019 and Part II, "Item 1A. Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in such SEC filings. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect management's views as of the date of this Quarterly Report on Form 10-Q. We cannot guarantee future results, levels of activity, performance or achievements, and, except as required by law, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

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Overview

As of June 30, 2020, we are the largest operator of senior living communities in the United States based on total capacity, with 737 communities in 44 states and the ability to serve approximately 65,000 residents. We offer our residents access to a broad continuum of services across the most attractive sectors of the senior living industry. We operate and manage independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs"). We also offer a range of home health, hospice, and outpatient therapy services to more than 17,000 patients as of that date.

Our goal is to be the first choice in senior living by being the nation's most trusted and effective senior living provider and employer. With our range of community and service offerings, we believe that we are positioned to take advantage of favorable demographic trends over time. Our community and service offerings combine housing with hospitality and healthcare services. Our senior living communities offer residents a supportive home-like setting, assistance with activities of daily living such as eating, bathing, dressing, toileting, transferring/walking, and, in certain communities, licensed skilled nursing services. We also provide home health, hospice, and outpatient therapy services to residents of many of our communities and to seniors living outside of our communities. By providing residents with a range of service options as their needs change, we provide greater continuity of care, enabling seniors to age-in-place, which we believe enables them to maintain residency with us for a longer period of time. The ability of residents to age-in-place is also beneficial to our residents and their families who are concerned with care decisions for their elderly relatives.

COVID-19 Pandemic

The United States broadly continues to experience the COVID-19 pandemic, which has significantly disrupted, and likely will continue to significantly disrupt for some period, our nation’s economy, the senior living industry, and our business. Although a significant portion of our corporate support associates began working from home in March 2020, we continue to serve and care for seniors through the pandemic. Due to the average age and prevalence of chronic medical conditions among our residents and patients, they generally are at disproportionately higher risk of hospitalization and adverse outcomes if they contract COVID-19.

The health and wellbeing of our residents, patients, and associates is and has been our highest priority. We initiated our COVID-19 preparation efforts in January 2020 and continue to actively monitor requirements and guidance of federal, state, and local governments and agencies, including the U.S. Centers for Disease Control and Prevention and U.S. Centers for Medicare & Medicaid Services ("CMS"), and adapt our policies and procedures when applicable. Our response efforts center on infection prevention and control protocols. We have enhanced and reinforced training our associates in such protocols.

Seeking to prevent the introduction of COVID-19 into our communities, and to help control further exposure to infections within communities, in March 2020 we began restricting visitors at all our communities to essential healthcare personnel and certain compassionate care situations, screening associates and permitted visitors, suspending group outings, modifying communal dining and programming to comply with social distancing guidelines and, in most cases, implementing in-room only dining and activities programming, requesting that residents refrain from leaving the community unless medically necessary, and requiring new residents and residents returning from a hospital or nursing home to isolate in their apartment for fourteen days. Upon confirmation of positive COVID-19 exposure at a community, we follow government guidance regarding minimizing further exposure, including associates’ adhering to personal protection protocols, restricting new resident admissions, and in some cases isolating residents. These restrictions were in place across our portfolio for the three months ended June 30, 2020. More recently, in response to federal, state, and local efforts to reopen the economies surrounding our communities, we have adopted a framework for determining when to ease restrictions at each of our communities based on several criteria, including regulatory requirements and guidance, completion of baseline testing at the community, and the community having no current confirmed positive COVID-19 cases. Beginning in July 2020, we began offering residents at some of our communities outdoor visits with families, reduced capacity communal dining, and limited communal activities programming. Due to the vulnerable nature of our residents, we expect many of the foregoing restrictions will continue at our communities for some time, even as federal, state, and local stay-at-home and social distancing orders and recommendations are relaxed.

In April 2020, we proactively commenced a resident and associate testing program for our communities. We conducted the testing program in conjunction with state and local testing requirements at several of our communities. We undertook the program to identify positive, but asymptomatic, individuals, to better understand how our infection protocols are working, and to help minimize the exposure to residents and associates of someone known to be COVID positive. We have completed baseline testing at all of our communities. To date, the program has accumulated over 100,000 test results. Less than 1% of our residents as of July 31, 2020 are currently confirmed positive for COVID-19. Based on results of our program and other testing, around 3% of our residents who have lived with us anytime during 2020 have tested positive. Further testing, whether undertaken proactively or as a result of regulatory requirements, may result in significant additional expense, additional temporary restrictions on move-ins at affected

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communities, continued need for isolating positive residents, increased use of personal protection equipment by our associates, and increased labor costs.

The pandemic and related infection prevention and control protocols within senior living communities have significantly disrupted demand for senior living communities and the sales process, which typically includes in-person prospective resident visits within communities. We believe potential residents and their families are more cautious regarding moving into senior living communities while the pandemic continues, and such caution may persist for some time. In response to these developments, we have redesigned our sales process to include virtual tours, video engagement, and outdoor prospective resident meetings, enhanced and adapted our marketing programs to address the social distancing environment, and sought to strengthen our relationships with referral partners. We cannot predict with reasonable certainty whether or when demand for senior living communities will return to pre-COVID-19 levels or the extent to which the pandemic’s effect on demand may adversely affect the amount of resident fees we are able to collect from our residents. We are accepting new residents to most of our communities, which as of July 31, 2020 includes 85% of our communities.

The pandemic and our response efforts began to adversely impact our occupancy and resident fee revenue significantly during March 2020, as new resident leads, visits (including virtual visits), and move-in activity declined significantly compared to typical levels. During the three months ended June 30, 2020, the year-over-year decrease in monthly move-ins of our same-community portfolio ranged from approximately 65% in April 2020 to approximately 35% in June 2020, and was approximately 40% for July 2020. Lower move-in activity was partially offset by lower than normal controllable move-out activity. As a result, our same community weighted average monthly occupancy declined from 83.0% in March 2020 to 77.8% in June 2020, and was 76.8% in July 2020. We estimate that the pandemic and our response efforts resulted in $43.1 million of lost resident fee revenue in our same-community portfolio for the three months ended June 30, 2020. Further deterioration of our resident fee revenue will result from lower move-in activity and the resident attrition inherent in our business, which may increase due to the impacts of COVID-19. Lower controllable move-out activity during the pandemic may continue to partially offset future adverse revenue impacts. Our home health average daily census also began to decrease in March 2020 due to lower occupancy in our communities and fewer elective medical procedures and hospital discharges, resulting in an 18.7% year-over-year decline in home health average daily census for the three months ended June 30, 2020. We expect home health average daily census to begin to recover during the six months ended December 31, 2020 with gradual improvements to elective medical procedures, hospital discharges, and senior housing occupancy.

Facility operating expense for the three and six months ended June 30, 2020 includes $60.6 million and $70.6 million, respectively, of incremental direct costs to prepare for and respond to the pandemic, including costs for acquisition of additional personal protective equipment ("PPE"), medical equipment, and cleaning and disposable food service supplies, enhanced cleaning and environmental sanitation costs, increased labor expense, increased workers compensation and health plan expense, increased insurance premiums and retentions, consulting and professional services costs, and costs for COVID-19 testing of residents and associates where not otherwise covered by government payor or third-party insurance sources. We are not able to reasonably predict the total amount of costs we will incur related to the pandemic, and such costs are likely to be substantial. As described further below, we also recorded non-cash impairment charges in our operating results of $76.7 million for the three months ended March 31, 2020 for our operating lease right-of-use assets and property, plant and equipment and leasehold intangibles, primarily due to the COVID-19 pandemic and lower than expected operating performance at communities for which assets were impaired.

We have taken, and continue to take, actions to enhance and preserve our liquidity in response to the pandemic. We drew $166.4 million on our revolving credit facility, in March 2020, and we suspended repurchases under our existing share repurchase program. During the three months ended June 30, 2020, we accepted $33.5 million of cash for grants under the Public Health and Social Services Emergency Fund (the “Emergency Fund”) and $85.0 million of accelerated/advanced Medicare payments, and we deferred $26.5 million of the employer portion of social security payroll taxes. Each of these programs were created or expanded under the Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act"), as described below. We also have delayed or canceled a number of elective capital expenditure projects resulting in an approximate $50 million reduction to our pre-pandemic full-year 2020 capital expenditure plans. On July 26, 2020, we entered into definitive agreements with Ventas, Inc. ("Ventas") to restructure our 120 community (10,174 units) triple-net master lease arrangements as further described below. Pursuant to the multi-part transaction, among other things, we paid a $119.2 million one-time cash payment to Ventas, reduced our initial annual minimum rent under the amended and restated master lease to $100 million effective July 1, 2020, and removed the prior requirements that we satisfy financial covenants and that we maintain a security deposit with Ventas. The annual minimum rent under the amended and restated master lease reflects a reduction of approximately $86 million over the next twelve months.

As of June 30, 2020, our total liquidity was $600.2 million, consisting of $452.4 million of unrestricted cash and cash equivalents, $109.9 million of marketable securities, and $37.9 million of additional availability on our revolving credit facility. As of June 30, 2020, $166.4 million of borrowings were outstanding on the revolving credit facility. We continue to seek opportunities to enhance and preserve our liquidity, including through reducing expenses and elective capital expenditures, continuing to evaluate

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our financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the COVID-19 pandemic.

During March 2020, we completed our financing plans in the regular course of business, including closing three non-recourse mortgage debt financing transactions totaling $208.5 million with the proceeds used to refinance the majority of our 2020 maturities and to partially fund our acquisitions of 26 communities completed during the three months ended March 31, 2020. As of June 30, 2020, our remaining 2020 and 2021 maturities (after giving effect to the multi-part transaction with Ventas on July 26, 2020) are $36.4 million and $254.1 million, respectively, which are primarily non-recourse mortgage debt maturities.

Availability under the revolving credit facility will vary from time to time based on borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and our consolidated fixed charge coverage ratio. To the extent the outstanding borrowings on the credit facility exceed future borrowing base calculations, we would be required to repay the difference to restore the outstanding balance to the new borrowing base. During 2019, the parties entered into an amendment to the credit facility agreement that provides for availability calculations to be made at additional consolidated fixed charge coverage ratio thresholds, with a minimum required consolidated fixed charge coverage ratio of 1.00. For the twelve months ended June 30, 2020, the consolidated fixed charge coverage ratio was 1.28.

Due primarily to the impacts of the COVID-19 pandemic, and based upon our current estimate of cash flows, we have determined that it is probable that we will not satisfy the minimum consolidated fixed charge coverage ratio covenant under the credit facility for one or more quarterly determination dates in the first half of 2021 without further action on our part. Failure to satisfy the minimum ratio would result in the availability under the revolving credit facility being reduced to zero and a requirement to repay the $166.4 million of borrowings outstanding on the revolving credit facility.

As a result, we have continued efforts on our plan to refinance the assets currently securing the credit facility. We currently anticipate that such refinancings will be completed and the proceeds of such refinancings, together with cash on hand, will be sufficient to repay the $166.4 million balance on the revolving credit facility and terminate the facility without payment of a premium or penalty. However, there can be no assurance that any such additional financing will be available or on terms that are acceptable to us, in which case we would expect to take other mitigating actions prior to the maturity dates.

Based upon our current liquidity and estimated cash flows, we have estimated that we would be unable to repay a portion of the 2021 maturities and the borrowings outstanding on the revolving credit facility as they become due without refinancing these maturities or obtaining additional financing proceeds. We have continued efforts on our plan to refinance the assets currently securing the credit facility and to refinance the substantial majority of the remaining 2020 and 2021 maturities with non-recourse mortgage debt. We currently anticipate that it is probable that such refinancings will be completed and the proceeds of such refinancings, together with cash on hand, will be sufficient to repay the $166.4 million balance on the revolving credit facility and terminate the facility without payment of a premium or penalty and to pay our contractual obligations as they come due over the next twelve months. However, there is no assurance that debt financing will continue to be available on terms consistent with our expectations or at all, in which case we would expect to take other mitigating actions prior to the maturity dates.

In response to the pandemic, on March 27, 2020, the President signed the CARES Act into law, which was amended and expanded by the Paycheck Protection Program and Health Care Enhancement Act signed into law on April 24, 2020. The legislation provides liquidity and financial relief to certain businesses, among other things. The impacts to us of certain provisions of the CARES Act are summarized below.

• During the three months ended June 30, 2020, we accepted $33.5 million of cash for grants from the Emergency Fund, which was expanded by the CARES Act to provide grants or other funding mechanisms to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19. Approximately $28.8 million of the grants were made available pursuant to the Emergency Fund’s general distribution, with grant amounts based primarily on our relative share of aggregate 2019 Medicare fee-for-service reimbursements and generally related to home health, hospice, outpatient therapy, and skilled nursing care provided through our Health Care Services and CCRCs segments. Approximately $4.7 million of the grants were made available pursuant to the Emergency Fund’s targeted allocation for certified skilled nursing facilities, with amounts determined using a per-facility and per-bed model. During July 2020, we applied for additional grants pursuant to the Emergency Fund’s Medicaid and CHIP allocation. The amount of such grants are expected to be based on 2% of a portion of our 2018 gross revenues from patient care, and we expect to receive up to approximately $50 million of grants from this allocation.

The grants received are subject to the terms and conditions of the program, including that such funds may only be used to prevent, prepare for, and respond to COVID-19 and will reimburse only for healthcare related expenses or lost revenues that are attributable to COVID-19. During the three months ended June 30, 2020, we recognized $26.4 million of the grants as

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other operating income based upon our estimates of our satisfaction of the conditions of the grants during such period. As of June 30, 2020, $7.1 million of unrecognized grants were included in refundable fees and deferred revenue within our condensed consolidated balance sheets and are expected to be recognized in other operating income during the six months ended December 31, 2020.

HHS continues to evaluate and provide allocations of, and regulation and guidance regarding, grants made under the Emergency Fund. We intend to pursue additional funding that may become available pursuant to the Emergency Fund. However, there can be no assurance that we will qualify for, or receive, grants in the amount we expect or that future funding programs will be made available for which we qualify.

• During the three months ended June 30, 2020, we received $85.0 million under the Accelerated and Advance Payment Program administered by CMS, which was temporarily expanded by the CARES Act. Recoupment of accelerated/advanced payments are required to begin 120 days after their issuance through offsets of new Medicare claims, and all accelerated/advanced payments are due 210 days following their issuance.

• Under the CARES Act, we have elected to defer payment of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020. One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022. As of June 30, 2020 we have deferred $26.5 million under the program and intend to defer an additional approximately $40 million of the employer portion of payroll taxes estimated to be incurred for the six months ending December 31, 2020.

• The CARES Act temporarily suspended the 2% Medicare sequestration for the period May 1, 2020 to December 31, 2020, which primarily benefits our Health Care Services segment. This suspension had a favorable impact of $1.0 million on the segment’s resident fee revenue for the three months ended June 30, 2020, and we estimate that the suspension will have a $3.0 million favorable impact on the segment’s resident fee revenue for the six months ended December 31, 2020.

• We continue to evaluate our eligibility to claim the employee retention tax credit under the CARES Act for certain of our associates. The refundable tax credit is available to employers that fully or partially suspend operations during any calendar quarter in 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19, and is equal to 50% of qualified wages paid after March 12, 2020 through December 31, 2020 to qualified employees, with a maximum credit of $5,000 per employee. We estimate that we will be eligible to claim tax credits of $10 million or more. However, there can be no assurance that we will qualify for, or receive, tax credits in the amount we expect.

We cannot predict with reasonable certainty the impacts that COVID-19 ultimately will have on our business, results of operations, cash flow, and liquidity, and our response efforts may continue to delay or negatively impact our strategic initiatives, including plans for future growth. The ultimate impacts of COVID-19 will depend on many factors, some of which cannot be foreseen, including the duration, severity, and breadth of the pandemic and any resurgence of the disease; the impact of COVID-19 on the nation’s economy and debt and equity markets and the local economies in our markets; the development and availability of COVID-19 testing, therapeutic agents, and vaccines and the prioritization of such resources among businesses and demographic groups; government financial and regulatory relief efforts that may become available to business and individuals, including our ability to qualify and satisfy the terms and conditions of financial relief; perceptions regarding the safety of senior living communities during and after the pandemic; changes in demand for senior living communities and our ability to adapt our sales and marketing efforts to meet that demand; the impact of COVID-19 on our residents’ and their families’ ability to afford our resident fees, including due to changes in unemployment rates, consumer confidence, and equity markets caused by COVID-19; changes in the acuity levels of our new residents; the disproportionate impact of COVID-19 on seniors generally and those residing in our communities; the duration and costs of our response efforts, including increased equipment, supplies, labor, litigation, testing, and other expenses; the impact of COVID-19 on our ability to complete financings, refinancings, or other transactions (including dispositions) or to generate sufficient cash flow to cover required interest and lease payments and to satisfy financial and other covenants in our debt and lease documents; increased regulatory requirements, including unfunded, mandatory testing; increased enforcement actions resulting from COVID-19, including those that may limit our collection efforts for delinquent accounts; and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or our response efforts.

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Transaction Activity and Impact of Dispositions on Results of Operations

During the period from January 1, 2019 through June 30, 2020, we acquired 26 formerly leased communities, disposed of 15 owned communities (1,707 units), and sold our ownership interest in our unconsolidated entry fee CCRC Venture (the “CCRC Venture”) with Healthpeak Properties, Inc. (“Healthpeak”), and our triple-net lease obligations on 12 communities (789 units) were terminated. On July 26, 2020, we entered into definitive agreements with Ventas to restructure our 120 community (10,174 units) triple-net master lease arrangements. In addition, we conveyed to Ventas five communities and will manage the communities following the closing.

Summaries of the significant transactions impacting the periods presented, and the impacts of dispositions of owned and leased communities on our results of operations, are included below. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2019 for more details regarding the terms of such transactions, including transactions we entered into with Healthpeak during 2019.

During the next 12 months, we expect to close on the dispositions of two owned unencumbered communities (417 units) classified as held for sale as of June 30, 2020 and the termination of our lease obligation on two communities (148 units). We also anticipate terminations of certain of our management arrangements with third parties as we transition to new operators our management on certain former unconsolidated ventures in which we sold our interest and our interim management on formerly leased communities. The closings of the various pending and expected transactions described herein are, or will be, subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals. However, there can be no assurance that the transactions will close or, if they do, when the actual closings will occur.

Summaries of Transactions

• Healthpeak: On October 1, 2019, we entered into definitive agreements, including a Master Transactions and Cooperation Agreement (the "MTCA") and an Equity Interest Purchase Agreement (the "Purchase Agreement"), providing for a multi-part transaction with Healthpeak. The parties subsequently amended the agreements to include one additional entry fee CCRC community as part of the sale of our interest in the CCRC Venture (rather than removing the community from the CCRC Venture for joint marketing and sale). The components of the multi-part transaction include:

• CCRC Venture Transaction: Pursuant to the Purchase Agreement, on January 31, 2020, Healthpeak acquired our 51% ownership interest in the CCRC Venture, which held 14 entry fee CCRCs (6,383 units), for a purchase price of $289.2 million, net of a $5.9 million post-closing net working capital adjustment paid to Healthpeak during the three months ended June 30, 2020 (representing an aggregate valuation of $1.06 billion less portfolio debt, subject to a net working capital adjustment). We recognized a $369.8 million gain on sale of assets for the six months ended June 30, 2020, and we derecognized the net equity method liability for the sale of the ownership interest in the CCRC Venture. At the closing, the parties terminated the existing management agreements on the 14 entry fee CCRCs, Healthpeak paid us a $100.0 million management agreement termination fee, and we transitioned operations of the entry fee CCRCs to a new operator. We recognized $100.0 million of management fee revenue for the three months ended March 31, 2020 for the management termination fee. The sale of our interest in the CCRC Venture and the $100.0 million of management termination fees generated approximately $579.0 million of taxable income in three months ended March 31, 2020. We will utilize any 2020 operating losses generated and tax loss carryforwards (including our capital loss carryforward that was generated in 2018) to offset the taxable gain on this transaction. Prior to the January 31, 2020 closing, the parties moved the remaining two entry fee CCRCs (889 units) into a new unconsolidated venture on substantially the same terms as the CCRC Venture to accommodate the sale of such two communities expected to occur in 2021. Subsequent to these transactions, we will have exited substantially all of our entry fee CCRC operations.

• Master Lease Transactions. Pursuant to the MTCA, on January 31, 2020, the parties amended and restated our existing master lease pursuant to which we continue to lease 25 communities (2,711 units) from Healthpeak, and we acquired 18 formerly leased communities (2,014 units) from Healthpeak, at which time the 18 communities were removed from the master lease. At the closing, we paid $405.5 million to acquire such communities and to reduce our annual rent under the amended and restated master lease. We funded the community acquisitions with $192.6 million of non-recourse mortgage financing and the proceeds from the multi-part transaction. In addition, Healthpeak has agreed to terminate the lease for one leased community (159 units). With respect to the continuing 24 communities (2,552 units), our amended and restated master lease: (i) has an initial term to expire on December 31, 2027, subject to two extension options at our election for ten years each, which must be exercised with respect to the entire pool of leased communities; (ii) the initial annual base rent for the 24 communities is $41.7 million and is subject to an escalator of 2.4% per annum on April 1st of each year; and (iii) Healthpeak has agreed to make available up to $35.0 million for capital expenditures for a five-year period related to the 24 communities at an initial lease rate of 7.0%. As a result of the community acquisition

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transaction, we recognized a $19.7 million gain on debt extinguishment and derecognized the $105.1 million carrying amount of financing lease obligations for eight communities which were previously subject to sale-leaseback transactions in which we were deemed to have continuing involvement. During the three months ended March 31, 2020, we obtained $30.0 million of additional non-recourse mortgage financing on the acquired communities.

• Acquisitions Pursuant to Purchase Options: On January 22, 2020, we acquired eight formerly leased communities (336 units) from National Health Investors, Inc. pursuant to our exercise of a purchase option for a purchase price of $39.3 million. We funded the community acquisitions with cash on hand. During the three months ended March 31, 2020, we obtained $29.2 million of non-recourse mortgage financing, primarily secured by the acquired communities.

• Dispositions of Owned Communities. During the six months ended June 30, 2020, we completed the sale of one owned community (78 units) for cash proceeds of $5.5 million, net of transaction costs, and for which we recognized a net gain on sale of assets of $0.2 million for the six months ended June 30, 2020.

• Ventas Lease Portfolio Restructuring: On July 26, 2020 (the “Effective Date”), we entered into definitive agreements with Ventas in connection with the restructuring of our lease arrangements with Ventas, including a Master Transaction Letter Agreement (the “Master Agreement”). Pursuant to the Master Agreement:

• On the Effective Date the parties entered into the Amended and Restated Master Lease and Security Agreement (the “Master Lease”) and Amended and Restated Guaranty (the “Guaranty”), which amended and restated the prior Master Lease and Security Agreement and prior Guaranty, each dated as of April 26, 2018 and as amended from time to time. Pursuant to the Master Lease, we continue to lease 120 communities (10,174 units) for an aggregate initial annual minimum rent of approximately $100 million, which reflects a reduction of approximately $83 million of annual minimum rent in effect prior to the transaction. Effective on January 1 of each lease year, beginning January 1, 2022, the annual minimum rent will be subject to a 3% escalator. The initial term of the Master Lease ends December 31, 2025, with two 10-year extension options available to us. The annual minimum rent for the initial lease year of any such renewal term will be the greater of the fair market rental of the communities or the increased annual minimum rent for such lease year applying the foregoing 3% escalator. The Master Lease removed the prior provision that would have automatically extended the initial term in the event of the consummation of a change of control transaction by us. The Master Lease requires us to spend (or escrow with Ventas) a minimum of $1,500 per unit on a community-level basis and $3,600 per unit on an aggregate basis of all communities, in each case per 24-month period ending December 31 during the lease term, commencing with the 24-month period ending December 31, 2021. In addition, Ventas has agreed to fund costs associated with certain pre-approved capital expenditure projects in the aggregate amount of up to $37.8 million. Upon disbursement of such expenditures, the annual minimum rent under the Master Lease will increase by the amount of the disbursement multiplied by 50% of the sum of the then current 10-year treasury note rate and 4.5%. The transaction agreements with Ventas further provide that the Master Lease and certain other agreements between the parties will be cross-defaulted.

Our subsidiaries’ obligations under the Master Lease are guaranteed at the parent level pursuant to the Guaranty. The Guaranty removed the prior requirements that we satisfy, at the parent level, financial covenants and that we maintain a security deposit with Ventas. The Guaranty also removed the prior right of Ventas to terminate the Master Lease on the basis of parent level financial covenants. Pursuant to the terms of the Guaranty, we may consummate a change of control transaction without the need for consent of Ventas so long as certain objective conditions are satisfied, including the post-transaction guarantor’s maintaining a minimum tangible net worth of at least $600 million, having minimum levels of operational experience and reputation in the senior living industry, and paying a change of control fee of $25 million to Ventas. The Guaranty removed the prior provisions that would have required that such post-transaction guarantor satisfy a maximum leverage ratio level, that we fund additional capital expenditures, and that we extend the term upon the occurrence of the change in control transaction. Under the terms of the Guaranty, commencing January 1, 2024 (and until such time (if any) as we exercise our lease term extension option with respect to the Master Lease), Ventas shall have the right to terminate the Master Lease (with respect to one or more communities), provided that the trailing twelve month coverage ratio of each such community is less than 0.9x and provided further that the removal and termination of any such communities does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such removal and termination.

• On the Effective Date, we entered into a Second Amended and Restated Omnibus Agreement with Ventas, which provides that if a default occurs and is continuing under certain other material leases or under certain material financings and if the same continues beyond the permitted cure period or the applicable landlord or lender exercises any material remedies, Ventas shall have the right to transition all or a portion of the communities from the Master Lease to a management arrangement with us pursuant to a market management agreement (which is terminable by either party). Notwithstanding the foregoing, Ventas may only transition community(ies) from the Master Lease to a management arrangement if such

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transition does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such transition.

• On the Effective Date, we conveyed five owned communities (471 units) to Ventas in full release and satisfaction of $78 million principal amount of indebtedness secured by the communities. Upon closing, the parties entered into new terminable, market rate management agreements pursuant to which we will manage the communities. We also paid to Ventas $115 million in cash, released all security deposits under the former guaranty (which included the release of a $42.4 million deposit held by Ventas and the payment of $4.2 million in cash as settlement of the amount of letters of credit), and issued a $45 million unsecured interest-only promissory note to Ventas. The initial interest rate of the promissory note is 9.0% per annum and will increase by 0.50% on each anniversary of the date of issuance. We may prepay the outstanding principal amount in whole or in part at any time without premium or penalty. The promissory note matures on the earlier of December 31, 2025 or the occurrence of a change of control transaction (as defined in the Guaranty).

• On the Effective Date, we issued to Ventas a warrant (the “Warrant”) to purchase 16.3 million shares of our common stock, $0.01 par value per share, at a price per share of $3.00. The Warrant is exercisable at Ventas’ option at any time and from time to time, in whole or in part, until December 31, 2025. The exercise price and the number of shares issuable on exercise of the Warrant are subject to certain anti-dilution adjustments, including for cash dividends, stock dividends, stock splits, reclassifications, non-cash distributions, certain repurchases of common stock and business combination transactions. To the extent that the number of shares owned by Ventas (including shares underlying the Warrant) would be more than 9.6% of the total combined voting power of all our classes of capital stock or of the total value of shares of all our classes of capital stock (the “Ownership Cap”) (other than as a result of actions taken by Ventas), we would generally be required to repurchase the number of shares necessary to avoid Ventas exceeding the Ownership Cap unless Ventas makes an election to require us to pay Ventas cash in lieu of issuing shares pursuant to the Warrant in excess of the Ownership Cap. The Warrant and the shares issuable upon exercise thereof have not been registered under the Securities Act of 1933, as amended, and were issued in a private placement pursuant to Section 4(a)(2) thereof. On the Effective Date, the parties entered into a Registration Rights Agreement, pursuant to which Ventas and its permitted transferees are entitled to certain registration rights. Under the terms of the agreement, we are required to use reasonable best efforts to prepare and file a shelf registration statement with the SEC as promptly as practicable, but no later than the close of business on the fifth day following the date on which we file our Quarterly Report on Form 10-Q for the period ended June 30, 2020, with respect to the shares of common stock underlying the Warrant, and, if the registration statement is not automatically effective, to have the registration statement declared effective promptly thereafter. Ventas is entitled to customary underwritten offering, piggyback and additional demand registration rights with respect to the shares underlying the Warrant.

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Summary of Financial Impact of Completed Dispositions

The following table sets forth, for the periods indicated, the amounts included within our consolidated financial data for the 20 communities that we disposed through sales and lease terminations during the period from April 1, 2019 to June 30, 2020 through the respective disposition dates.

	Three Months Ended June 30, 2020
(in thousands)	Actual Results		Amounts Attributable to Completed Dispositions		Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
Independent Living	$	130,278	$	—	$	130,278
Assisted Living and Memory Care	432,156		103		432,053
CCRCs	79,025		—		79,025
Senior housing resident fees	$	641,459	$	103	$	641,356
Facility operating expense
Independent Living	$	89,240	$	—	$	89,240
Assisted Living and Memory Care	344,600		647		343,953
CCRCs	74,721		—		74,721
Senior housing facility operating expense	$	508,561	$	647	$	507,914
Cash facility lease payments	$	87,169	$	366	$	86,803

	Three Months Ended June 30, 2019
(in thousands)	Actual Results		Amounts Attributable to Completed Dispositions		Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
Independent Living	$	135,951	$	—	$	135,951
Assisted Living and Memory Care	450,225		5,809		444,416
CCRCs	101,253		9,476		91,777
Senior housing resident fees	$	687,429	$	15,285	$	672,144
Facility operating expense
Independent Living	$	84,492	$	—	$	84,492
Assisted Living and Memory Care	317,081		5,489		311,592
CCRCs	83,406		9,508		73,898
Senior housing facility operating expense	$	484,979	$	14,997	$	469,982
Cash facility lease payments	$	94,267	$	961	$	93,306

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The following table sets forth, for the periods indicated, the amounts included within our consolidated financial data for the 27 communities that we disposed through sales and lease terminations during the period from January 1, 2019 to June 30, 2020 through the respective disposition dates.

	Six Months Ended June 30, 2020
(in thousands)	Actual Results		Amounts Attributable to Completed Dispositions		Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
Independent Living	$	266,140	$	—	$	266,140
Assisted Living and Memory Care	889,635		1,455		888,180
CCRCs	173,572		—		173,572
Senior housing resident fees	$	1,329,347	$	1,455	$	1,327,892
Facility operating expense
Independent Living	$	173,688	$	—	$	173,688
Assisted Living and Memory Care	670,078		2,476		667,602
CCRCs	149,337		—		149,337
Senior housing facility operating expense	$	993,103	$	2,476	$	990,627
Cash facility lease payments	$	176,752	$	964	$	175,788

	Six Months Ended June 30, 2019
(in thousands)	Actual Results		Amounts Attributable to Completed Dispositions		Actual Results Less Amounts Attributable to Completed Dispositions
Resident fees
Independent Living	$	271,645	$	—	$	271,645
Assisted Living and Memory Care	908,751		19,501		889,250
CCRCs	204,980		19,354		185,626
Senior housing resident fees	$	1,385,376	$	38,855	$	1,346,521
Facility operating expense
Independent Living	$	167,310	$	—	$	167,310
Assisted Living and Memory Care	634,908		17,668		617,240
CCRCs	165,496		19,010		146,486
Senior housing facility operating expense	$	967,714	$	36,678	$	931,036
Cash facility lease payments	$	255,483	$	2,388	$	253,095

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The following table sets forth the number of communities and units in our senior housing segments disposed through sales and lease terminations during the six months ended June 30, 2020 and twelve months ended December 31, 2019:

	Six Months Ended June 30, 2020	Twelve Months Ended December 31, 2019
Number of communities
Assisted Living and Memory Care	3	20
CCRCs	—	4
Total	3	24
Total units
Assisted Living and Memory Care	208	1,600
CCRCs	—	827
Total	208	2,427

Other Recent Developments

Goodwill Impairment Estimates

As of June 30, 2020, we had a goodwill balance of $154.1 million. Goodwill recorded in connection with business combinations is allocated to the respective reporting unit and included in our application of the provisions of ASC 350, Intangibles - Goodwill and Other.

Goodwill allocated to our Independent Living and Health Care Services reporting units is $27.3 million and $126.8 million as of June 30, 2020, respectively. Our interim goodwill impairment analyses did not result in any impairment charges during the six months ended June 30, 2020. Based on the results of our interim quantitative goodwill impairment test as of March 31, 2020, we estimated that the fair values of both our Independent Living and Health Care Services reporting units exceeded their carrying amount by approximately 20%. Additionally, we estimated that there were no significant changes to the fair values of both our Independent Living and Health Care Services reporting units during the three months ended June 30, 2020.

Determining the fair value of a reporting unit involves the use of significant estimates and assumptions that are unpredictable and inherently uncertain. These estimates and assumptions include revenue and expense growth rates and operating margins used to calculate projected future cash flows and risk-adjusted discount rates. Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments. Future events that may result in impairment charges include differences in the projected occupancy rates or monthly service fee rates, changes in the cost structure of existing communities, changes in reimbursement rates from Medicare for healthcare services, and changes in healthcare reform. Significant adverse changes in our future revenues and/or operating margins, significant changes in the market for senior housing or the valuation of the real estate of senior living communities, as well as other events and circumstances, including, but not limited to, increased competition, changes in reimbursement rates from Medicare for healthcare services, and changing economic or market conditions, including market control premiums, could result in changes in fair value and the determination that additional goodwill is impaired.

Our impairment loss assessment contains uncertainties because it requires us to apply judgment to estimate whether there has been a decline in the fair value of our reporting units, including estimating future cash flows, and if necessary, the fair value of our assets and liabilities. As we periodically perform this assessment, changes in our estimates and assumptions may cause us to realize material impairment charges in the future. Although we make every reasonable effort to ensure the accuracy of our estimate of the fair value of our reporting units, future changes in the assumptions used to make these estimates could result in the recording of an impairment loss.

As of March 31, 2020 and June 30, 2020, there was a wide range of possible outcomes as a result of the COVID-19 pandemic, as there was a high degree of uncertainty about its ultimate impacts. Management’s estimates of the impacts of the pandemic are highly dependent on variables that are difficult to predict, as described above. Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments.

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Capital Expenditures

In response to the COVID-19 pandemic, we have delayed or canceled a number of elective capital expenditure projects. As a result, we expect our full-year 2020 non-development capital expenditures, net of anticipated lessor reimbursements, and development capital expenditures to be approximately $150 million and $20 million, which reflects a $40 million and $10 million reduction to our pre-pandemic plans for 2020, respectively. We anticipate that our 2020 capital expenditures will be funded from cash on hand, cash flows from operations, and reimbursements from lessors.

Results of Operations

As of June 30, 2020 our total operations included 737 communities with a capacity to serve approximately 65,000 residents. As of that date we owned 355 communities (32,481 units), leased 305 communities (21,538 units), and managed 77 communities (10,694 units). The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes, which are included in "Item 1. Financial Statements" of this Quarterly Report on Form 10-Q. The results of operations for any particular period are not necessarily indicative of results for any future period. Transactions completed during the period of January 1, 2019 to June 30, 2020 affect the comparability of our results of operations, and summaries of such transactions and their impact on our results of operations are discussed above in "Transaction Activity and Impact of Dispositions on Results of Operations."

We use the operating measures described below in connection with operating and managing our business and reporting our results of operations. Our adoption and application of the new lease accounting standard impacted our results for the year ended December 31, 2019 due to our recognition of additional resident fee revenue and facility operating expense, which are non-cash and are non-recurring in years subsequent to December 31, 2019. To aid in comparability between periods, presentations of our results on a same community basis, and RevPAR and RevPOR, exclude the impact of the lease accounting standard.

• Operating results and data presented on a same community basis reflect results and data of a consistent population of communities by excluding the impact of changes in the composition of our portfolio of communities. The operating results exclude hurricane and natural disaster expense and related insurance recoveries, and for the 2019 periods, exclude the additional resident fee revenue and facility operating expense recognized as a result of the application of the lease accounting standard ASC 842. We define our same community portfolio as communities consolidated and operational for the full period in both comparison years. Consolidated communities excluded from the same community portfolio include communities acquired or disposed of since the beginning of the prior year, communities classified as assets held for sale, certain communities planned for disposition, certain communities that have undergone or are undergoing expansion, redevelopment, and repositioning projects, certain communities that have expansion, redevelopment, and repositioning projects that are anticipated to be under construction in the current year, and certain communities that have experienced a casualty event that significantly impacts their operations. Our management uses same community operating results and data, and we believe such results and data provide useful information to investors, because it enables comparisons of revenue, expense, and other operating measures for a consistent portfolio over time without giving effect to the impacts of communities that were not consolidated and operational for the comparison periods, communities acquired or disposed during the comparison periods (or planned for disposition), and communities with results that are or likely will be impacted by completed, in-process, or planned development-related capital expenditure projects. As presented herein, same community results include the direct costs incurred to prepare for and respond to the COVID-19 pandemic. These costs had been excluded from same community results presented in our quarterly report on Form 10-Q for the three months ended March 31, 2020.

• RevPAR, or average monthly senior housing resident fee revenue per available unit, is defined as resident fee revenue for the corresponding portfolio for the period (excluding Health Care Services segment revenue and entrance fee amortization, and, for the 2019 periods, the additional resident fee revenue recognized as a result of the application of the lease accounting standard ASC 842), divided by the weighted average number of available units in the corresponding portfolio for the period, divided by the number of months in the period. We measure RevPAR at the consolidated level, as well as at the segment level with respect to our Independent Living, Assisted Living and Memory Care, and CCRCs segments. Our management uses RevPAR, and we believe the measure provides useful information to investors, because the measure is an indicator of senior housing resident fee revenue performance that reflects the impact of both senior housing occupancy and rate.

• RevPOR, or average monthly senior housing resident fee revenue per occupied unit, is defined as resident fee revenue for the corresponding portfolio for the period (excluding Health Care Services segment revenue and entrance fee amortization, and, for the 2019 periods, the additional resident fee revenue recognized as a result of the application of the lease accounting standard ASC 842), divided by the weighted average number of occupied units in the corresponding portfolio for the period, divided by the number of months in the period. We measure RevPOR at the consolidated level, as well as at the segment level with respect to our Independent Living, Assisted Living and Memory Care, and CCRCs segments. Our management uses

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RevPOR, and we believe the measure provides useful information to investors, because it reflects the average amount of senior housing resident fee revenue we derive from an occupied unit per month without factoring occupancy rates. RevPOR is a significant driver of our senior housing revenue performance.

• Weighted average occupancy rate reflects the percentage of units at our owned and leased communities being utilized by residents over a reporting period. We measure occupancy rates with respect to our Independent Living, Assisted Living and Memory Care, and CCRCs segments, and also measure this metric both on a consolidated senior housing and a same community basis. Our management uses weighted average occupancy, and we believe the measure provides useful information to investors, because it is a significant driver to senior housing resident fee revenue.

This section includes the non-GAAP performance measure Adjusted EBITDA. See "Non-GAAP Financial Measures" below for our definition of the measure and other important information regarding such measure, including reconciliations to the most comparable GAAP measures.

Comparison of Three Months Ended June 30, 2020 and 2019

Summary Operating Results

The following table summarizes our overall operating results for the three months ended June 30, 2020 and 2019.

	Three Months Ended June 30,						Increase (Decrease)
(in thousands)	2020			2019			Amount			Percent
Total revenue and other operating income	$	865,909		$	1,019,457		$	(153,548	)	(15.1	)%
Facility operating expense	606,034			590,246			15,788			2.7	%
Net income (loss)	(118,420		)	(56,055		)	62,365			111.3	%
Adjusted EBITDA	44,733			104,036			(59,303		)	(57.0	)%

The decrease in total revenue and other operating income was primarily attributable to a $110.0 million decrease in management services revenue, including management fees and reimbursed costs incurred on behalf of managed communities, primarily due to terminations of management agreements subsequent to the beginning of the prior year period. Resident fees decreased $70.2 million, including a 3.5% decrease in same community RevPAR, comprised of a 480 basis points decrease in same community weighted average occupancy and a 2.3% increase in same community RevPOR. We estimate that the COVID-19 pandemic and our response efforts resulted in $43.1 million of lost resident fee revenue on a same community basis for the three months ended June 30, 2020. Estimated lost resident fee revenue represents the difference between the actual revenue for the period and our expectations prior to estimating the effects of COVID-19. Revenue for home health services decreased $24.3 million, as our home health average daily census began to decrease in March 2020 due to the COVID-19 pandemic and the implementation of the Patient-Driven Grouping Model ("PDGM"), an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020. Additionally, the disposition of 20 communities through sales of owned communities and lease terminations since the beginning of the prior year period resulted in $15.2 million less in resident fees during the three months ended June 30, 2020 compared to the prior year period. Our total revenue and other operating income for the three months ended June 30, 2020 includes $26.7 million of government grants as other operating income based on our estimates of our satisfaction of the conditions of the grants during the period.

The increase in facility operating expense was primarily attributable to an 11.3% increase in same community facility operating expense, which was primarily due to $52.9 million of incremental costs incurred during the three months ended June 30, 2020 to address the COVID-19 pandemic. Additionally, there was an increase in labor expense on a same community basis arising from wage rate increases. The increase in same community facility operating expense was partially offset by decreases in repairs and maintenance costs due to fewer move-ins and advertising costs during the period as we intentionally scaled back such activities. The increase in facility operating expense was partially offset by a decrease in labor costs for home health services as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model.

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense of $5.3 million and $11.8 million, respectively, during the three months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense excludes $4.9 million and $10.9 million, respectively, of such additional revenue and expenses.

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The increase in net loss was primarily attributable to a $100.6 million decrease in reimbursed costs incurred on behalf of managed communities, as well as the revenue and facility operating expense factors previously discussed.

The decrease in Adjusted EBITDA was primarily attributable to the revenue and facility operating expense factors previously discussed, partially offset by a decrease in general and administrative expense.

Operating Results - Senior Housing Segments

The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the three months ended June 30, 2020 and 2019, including operating results and data on a same community basis. See management's discussion and analysis of the operating results on an individual segment basis on the following pages.

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Three Months Ended June 30,						Increase (Decrease)
	2020			2019			Amount			Percent
Resident fees	$	641,459		$	687,429		$	(45,970	)	(6.7	)%
Other operating income	$	9,698		$	—		$	9,698		NM
Facility operating expense	$	508,561		$	484,979		$	23,582		4.9	%
Number of communities (period end)	660			671			(11		)	(1.6	)%
Number of units (period end)	54,019			55,209			(1,190		)	(2.2	)%
Total average units	54,040			55,465			(1,425		)	(2.6	)%
RevPAR	$	3,954		$	4,097		$	(143	)	(3.5	)%
Occupancy rate (weighted average)	78.7		%	83.5		%	(480		) bps	n/a
RevPOR	$	5,022		$	4,909		$	113		2.3	%
Same Community Operating Results and Data
Resident fees	$	597,511		$	619,285		$	(21,774	)	(3.5	)%
Other operating income	$	6,445		$	—		$	6,445		NM
Facility operating expense	$	467,970		$	420,643		$	47,327		11.3	%
Number of communities	638			638			—			—
Total average units	50,107			50,101			6			—
RevPAR	$	3,975		$	4,120		$	(145	)	(3.5	)%
Occupancy rate (weighted average)	79.2		%	84.0		%	(480		) bps	n/a
RevPOR	$	5,020		$	4,905		$	115		2.3	%

43

Independent Living Segment

The following table summarizes the operating results and data for our Independent Living segment for the three months ended June 30, 2020 and 2019, including operating results and data on a same community basis.

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Three Months Ended June 30,						Increase (Decrease)
	2020			2019			Amount			Percent
Resident fees	$	130,278		$	135,951		$	(5,673	)	(4.2	)%
Facility operating expense	$	89,240		$	84,492		$	4,748		5.6	%
Number of communities (period end)	68			68			—			—	%
Number of units (period end)	12,534			12,460			74			0.6	%
Total average units	12,534			12,440			94			0.8	%
RevPAR	$	3,465		$	3,592		$	(127	)	(3.5	)%
Occupancy rate (weighted average)	83.5		%	89.1		%	(560		) bps	n/a
RevPOR	$	4,147		$	4,033		$	114		2.8	%
Same Community Operating Results and Data
Resident fees	$	122,716		$	126,563		$	(3,847	)	(3.0	)%
Facility operating expense	$	83,492		$	76,796		$	6,696		8.7	%
Number of communities	64			64			—			—
Total average units	11,703			11,690			13			0.1	%
RevPAR	$	3,495		$	3,609		$	(114	)	(3.2	)%
Occupancy rate (weighted average)	83.8		%	88.8		%	(500		) bps	n/a
RevPOR	$	4,169		$	4,063		$	106		2.6	%

The decrease in the segment's resident fees was primarily attributable to a decrease in the segment's same community RevPAR, comprised of a 500 basis points decrease in same community weighted average occupancy and a 2.6% increase in same community RevPOR. The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts. We estimate that the COVID-19 pandemic and our response efforts resulted in $6.4 million of lost resident fee revenue on a same community basis for this segment for the three months ended June 30, 2020. The increase in the segment's same community RevPOR was primarily the result of in-place rent increases.

The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense as a result of $8.8 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, partially offset by decreases in repairs and maintenance costs due to fewer move-ins and advertising costs during the period as we intentionally scaled back such activities.

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $1.9 million and $3.1 million, respectively, during the three months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense for this segment excludes $1.8 million and $2.9 million, respectively, of such additional revenue and expenses.

44

Assisted Living and Memory Care Segment

The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the three months ended June 30, 2020 and 2019, including operating results and data on a same community basis.

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Three Months Ended June 30,						Increase (Decrease)
	2020			2019			Amount			Percent
Resident fees	$	432,156		$	450,225		$	(18,069	)	(4.0	)%
Other operating income	$	152		$	—		$	152		NM
Facility operating expense	$	344,600		$	317,081		$	27,519		8.7	%
Number of communities (period end)	570			577			(7		)	(1.2	)%
Number of units (period end)	35,744			36,175			(431		)	(1.2	)%
Total average units	35,785			36,451			(666		)	(1.8	)%
RevPAR	$	4,025		$	4,092		$	(67	)	(1.6	)%
Occupancy rate (weighted average)	77.8		%	82.1		%	(430		) bps	n/a
RevPOR	$	5,172		$	4,987		$	185		3.7	%
Same Community Operating Results and Data
Resident fees	$	424,021		$	433,211		$	(9,190	)	(2.1	)%
Other operating income	$	151		$	—		$	151		NM
Facility operating expense	$	336,342		$	297,421		$	38,921		13.1	%
Number of communities	560			560			—			—
Total average units	34,792			34,799			(7		)	—
RevPAR	$	4,062		$	4,150		$	(88	)	(2.1	)%
Occupancy rate (weighted average)	78.2		%	82.6		%	(440		) bps	n/a
RevPOR	$	5,191		$	5,024		$	167		3.3	%

The decrease in the segment's resident fees was primarily attributable to a decrease in the segment's same community RevPAR, comprised of a 440 basis points decrease in same community weighted average occupancy and a 3.3% increase in same community RevPOR. The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts. We estimate that the COVID-19 pandemic and our response efforts resulted in $26.0 million of lost resident fee revenue on a same community basis for this segment for the three months ended June 30, 2020. The increase in the segment's same community RevPOR was primarily the result of in-place rent increases. Additionally, the disposition of 16 communities since the beginning of the prior year period resulted in $5.7 million less in resident fees during the three months ended June 30, 2020 compared to the prior year period.

The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense, including $38.0 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, and an increase in labor expense arising from wage rate increases. The increase in the segment's same community facility operating expense was partially offset by decreases in repairs and maintenance costs due to fewer move-ins and advertising costs during the period as we intentionally scaled back such activities. Additionally, the disposition of communities since the beginning of the prior year period resulted in $4.8 million less in facility operating expense during the three months ended June 30, 2020 compared to the prior year period.

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $2.7 million and $7.4 million, respectively, during the three months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense for this segment excludes $2.6 million and $7.1 million, respectively, of such additional revenue and expenses.

45

CCRCs Segment

The following table summarizes the operating results and data for our CCRCs segment for the three months ended June 30, 2020 and 2019, including operating results and data on a same community basis.

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Three Months Ended June 30,						Increase (Decrease)
	2020			2019			Amount			Percent
Resident fees	$	79,025		$	101,253		$	(22,228	)	(22.0	)%
Other operating income	$	9,546		$	—		$	9,546		NM
Facility operating expense	$	74,721		$	83,406		$	(8,685	)	(10.4	)%
Number of communities (period end)	22			26			(4		)	(15.4	)%
Number of units (period end)	5,741			6,574			(833		)	(12.7	)%
Total average units	5,721			6,574			(853		)	(13.0	)%
RevPAR	$	4,572		$	5,081		$	(509	)	(10.0	)%
Occupancy rate (weighted average)	74.0		%	80.6		%	(660		) bps	n/a
RevPOR	$	6,181		$	6,305		$	(124	)	(2.0	)%
Same Community Operating Results and Data
Resident fees	$	50,774		$	59,511		$	(8,737	)	(14.7	)%
Other operating income	$	6,294		$	—		$	6,294		NM
Facility operating expense	$	48,136		$	46,426		$	1,710		3.7	%
Number of communities	14			14			—			—
Total average units	3,612			3,612			—			—
RevPAR	$	4,686		$	5,492		$	(806	)	(14.7	)%
Occupancy rate (weighted average)	72.9		%	82.0		%	(910		) bps	n/a
RevPOR	$	6,430		$	6,701		$	(271	)	(4.0	)%

The decrease in the segment's resident fees was primarily attributable to a decrease in the segment's same community RevPAR, comprised of a 910 basis points decrease in same community weighted average occupancy and a 4.0% decrease in same community RevPOR. The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts. We estimate that the COVID-19 pandemic and our response efforts resulted in $10.7 million of lost resident fee revenue on a same community basis for this segment for the three months ended June 30, 2020. The decrease in the segment's same community RevPOR was primarily the result of a mix shift away from skilled nursing within the segment, partially offset by in-place rent increases. Additionally, the disposition of four communities since the beginning of the prior year period resulted in $9.5 million less in resident fees during the three months ended June 30, 2020 compared to the prior year period.

The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $9.5 million less in facility operating expense during the three months ended June 30, 2020 compared to the prior year period. The decrease in facility operating expense was partially offset by an increase in the segment's same community facility operating expense as a result of $6.1 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, partially offset by decreases in labor expense arising from fewer hours worked and healthcare supplies costs during the period as we intentionally scaled back such costs for the reduced occupancy.

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of $0.7 million and $1.3 million, respectively, during the three months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense for this segment excludes $0.5 million and $0.9 million, respectively, of such additional revenue and expenses.

46

Operating Results - Health Care Services Segment

The following table summarizes the operating results and data for our Health Care Services segment for the three months ended June 30, 2020 and 2019.

(in thousands, except census and treatment codes)	Three Months Ended June 30,				Increase (Decrease)
	2020		2019		Amount			Percent
Resident fees	$	90,170	$	114,434	$	(24,264	)	(21.2	)%
Other operating income	$	16,995	$	—	$	16,995		NM
Facility operating expense	$	97,473	$	105,267	$	(7,794	)	(7.4	)%
Home health average daily census	12,980		15,966		(2,986		)	(18.7	)%
Hospice average daily census	1,646		1,540		106			6.9	%

The decrease in the segment's resident fees was primarily attributable to a decrease in revenue for home health services, as our home health average daily census began to decrease in March 2020 due to the COVID-19 pandemic, as referrals declined significantly due to suspension of elective medical procedures and hospital discharges increased due to stay-at-home orders and recommendations. Additionally, the implementation of the Patient-Driven Grouping Model ("PDGM"), an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020, resulted in a decrease in revenue for home health services. The decrease in resident fees was partially offset by an increase in volume and related revenues for hospice services. We estimate that the COVID-19 pandemic and our response efforts resulted in $14.8 million of lost resident fee revenue for the three months ended June 30, 2020.

The decrease in the segment's facility operating expense was primarily attributable to a decrease in labor costs for home health services as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model. The decrease in the segment's facility operating expense was partially offset by $3.1 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic and an increase in labor costs for hospice services arising from wage rate increases and the expansion of our hospice services throughout 2019.

Operating Results - Management Services Segment

The following table summarizes the operating results and data for our Management Services segment for the three months ended June 30, 2020 and 2019.

(in thousands, except communities, units, and occupancy)	Three Months Ended June 30,				Increase (Decrease)
	2020		2019		Amount			Percent
Management fees	$	6,076	$	15,449	$	(9,373	)	(60.7	)%
Reimbursed costs incurred on behalf of managed communities	$	101,511	$	202,145	$	(100,634	)	(49.8	)%
Number of communities (period end)	77		138		(61		)	(44.2	)%
Number of units (period end)	10,694		21,451		(10,757		)	(50.1	)%
Total average units	10,905		22,464		(11,559		)	(51.5	)%

The decrease in management fees was primarily attributable to the transition of management arrangements on 87 net communities since the beginning of the prior year period, generally for management arrangements on certain former unconsolidated ventures in which we sold our interest and interim management arrangements on formerly leased communities. Management fees of $6.1 million for the three months ended June 30, 2020 include $1.8 million of management fees attributable to communities for which our management agreements were terminated during such period or we expect the terminations of our management agreements to occur in the next approximately 12 months, including management arrangements on certain former unconsolidated ventures in which we sold our interest, management agreements on communities owned by unconsolidated ventures, and interim management arrangements on formerly leased communities.

47

The decrease in reimbursed costs incurred on behalf of managed communities was primarily attributable to terminations of management agreements subsequent to the beginning of the prior year period.

Operating Results - Other Income and Expense Items

The following table summarizes other income and expense items in our operating results for the three months ended June 30, 2020 and 2019.

(in thousands)	Three Months Ended June 30,						Increase (Decrease)
	2020			2019			Amount			Percent
General and administrative expense	$	52,518		$	57,576		$	(5,058	)	(8.8	)%
Facility operating lease expense	62,379			67,689			(5,310		)	(7.8	)%
Depreciation and amortization	93,154			94,024			(870		)	(0.9	)%
Asset impairment	10,290			3,769			6,521			173.0	%
Loss (gain) on facility lease termination and modification, net	—			1,797			(1,797		)	(100.0	)%
Costs incurred on behalf of managed communities	101,511			202,145			(100,634		)	(49.8	)%
Interest income	2,243			2,813			(570		)	(20.3	)%
Interest expense	(52,422		)	(62,828		)	(10,406		)	(16.6	)%
Gain (loss) on debt modification and extinguishment, net	(157		)	(2,672		)	(2,515		)	(94.1	)%
Equity in earnings (loss) of unconsolidated ventures	438			(991		)	1,429			NM
Gain (loss) on sale of assets, net	(1,029		)	2,846			(3,875		)	NM
Other non-operating income (loss)	988			3,199			(2,211		)	(69.1	)%
Benefit (provision) for income taxes	(8,504		)	(633		)	7,871			NM

General and Administrative Expense. The decrease in general and administrative expense was primarily attributable to a reduction in our travel costs as we intentionally scaled back such activities, a reduction in our incentive compensation costs, and a reduction in our corporate headcount as we scaled our general and administrative costs in connection with community dispositions. The decrease was partially offset by a $2.7 million increase in transactional and organizational restructuring costs compared to the prior period, to $3.4 million for the three months ended June 30, 2020. Transaction costs include those directly related to acquisition, disposition, financing and leasing activity, and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees and other third party costs. Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance costs. We expect transaction and organizational restructuring costs will be higher in the three months ending September 30, 2020 including such costs incurred with respect to the transaction with Ventas announced on July 27, 2020.

Facility Operating Lease Expense. The decrease in facility operating lease expense was primarily due to the acquisition of formerly leased communities since the beginning of the prior year period.

Asset Impairment. During the current year period, we recorded $10.3 million of non-cash impairment charges, primarily for right-of-use assets for certain leased communities with decreased future cash flow estimates as a result of the COVID-19 pandemic. During the prior year period, we recorded $3.8 million of non-cash impairment charges. See Note 6 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information about the impairment charges.

Costs Incurred on Behalf of Managed Communities. The decrease in costs incurred on behalf of managed communities was primarily due to terminations of management agreements subsequent to the beginning of the prior year period.

Interest Expense. The decrease in interest expense was primarily due to a decrease in interest expense on long-term debt, reflecting the impact of lower interest rates, and the acquisition of communities previously subject to financing leases since the beginning of the prior year period.

Benefit (Provision) for Income Taxes. The difference between our effective tax rate for the three months ended June 30, 2020 and 2019 was primarily due to the annualized effective rate for 2020.

48

We recorded an aggregate deferred federal, state, and local tax benefit of $26.7 million as a result of the operating loss for the three months ended June 30, 2020, which was offset by an increase in the valuation allowance of $33.2 million. The change in the valuation allowance for the three months ended June 30, 2020 resulted from the anticipated reversal of future tax liabilities offset by future tax deductions. We recorded an aggregate deferred federal, state, and local tax benefit of $13.0 million as a result of the operating loss for the three months ended June 30, 2019. The tax benefit was offset by an increase in the valuation allowance of $13.3 million.

Comparison of Six Months Ended June 30, 2020 and 2019

Summary Operating Results

The following table summarizes our overall operating results for the six months ended June 30, 2020 and 2019.

	Six Months Ended June 30,					Increase (Decrease)
(in thousands)	2020		2019			Amount			Percent
Total revenue and other operating income	$	1,880,048	$	2,061,501		$	(181,453	)	(8.8	)%
Facility operating expense	1,194,516		1,176,340			18,176			1.5	%
Net income (loss)	251,077		(98,661		)	349,738			NM
Adjusted EBITDA	229,802		220,619			9,183			4.2	%

The decrease in total revenue and other operating income was primarily attributable to an $111.1 million decrease in management services revenue, including management fees and reimbursed costs incurred on behalf of managed communities, primarily due to terminations of management agreements subsequent to the beginning of the prior year period, partially offset by $100.0 million of management fee revenue during the three months ended March 31, 2020 for the management termination fee payment from Healthpeak. Resident fees decreased $97.0 million, including a $42.5 million decrease for home health services, as our home health average daily census began to decrease in March 2020 due to the COVID-19 pandemic and the implementation of the Patient-Driven Grouping Model ("PDGM"), an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020. Additionally, the disposition of 27 communities through sales of owned communities and lease terminations since the beginning of the prior year period resulted in $37.4 million less in resident fees during the six months ended June 30, 2020 compared to the prior year period. Same community RevPAR decreased 0.7%, comprised of a 280 basis points decrease in same community weighted average occupancy and a 2.7% increase in same community RevPOR. We estimate that the COVID-19 pandemic and our response efforts resulted in $45.5 million of lost resident fee revenue on a same community basis for the six months ended June 30, 2020. Our total revenue and other operating income for the six months ended June 30, 2020 includes $26.7 million of government grants as other operating income based on our estimates of our satisfaction of the conditions of the grants during the period.

The increase in facility operating expense was primarily attributable to a 9.2% increase in same community facility operating expense, which was primarily due to $62.0 million of incremental costs incurred during the six months ended June 30, 2020 to address the COVID-19 pandemic. Additionally, there was an increase in labor expense arising from wage rate increases, an increase in employee benefit expense, and an extra day of expense due to the leap year. The increase was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $34.2 million less in facility operating expense during the six months ended June 30, 2020 compared to the prior year period.

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense of $8.1 million and $21.0 million, respectively, during the six months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense excludes $7.4 million and $19.3 million, respectively, of such additional revenue and expenses.

The increase in net income was primarily attributable to a $369.8 million increase in net gain on sale of assets, resulting from our sale of our interest in the CCRC Venture, offset by the net revenue and facility operating expense factors previously discussed.

The increase in Adjusted EBITDA was primarily attributable to the management termination fee, offset by the other revenue and facility operating expense factors previously discussed.

49

Operating Results - Senior Housing Segments

The following table summarizes the operating results and data of our three senior housing segments (Independent Living, Assisted Living and Memory Care, and CCRCs) on a combined basis for the six months ended June 30, 2020 and 2019 including operating results and data on a same community basis. See management's discussion and analysis of the operating results on an individual segment basis on the following pages.

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Six Months Ended June 30,						Increase (Decrease)
	2020			2019			Amount			Percent
Resident fees	$	1,329,347		$	1,385,376		$	(56,029	)	(4.0	)%
Other operating income	$	9,698		$	—		$	9,698		NM
Facility operating expense	$	993,103		$	967,714		$	25,389		2.6	%
Number of communities (period end)	660			671			(11		)	(1.6	)%
Number of units (period end)	54,019			55,209			(1,190		)	(2.2	)%
Total average units	54,112			55,963			(1,851		)	(3.3	)%
RevPAR	$	4,092		$	4,100		$	(8	)	(0.2	)%
Occupancy rate (weighted average)	81.0		%	83.5		%	(250		) bps	n/a
RevPOR	$	5,054		$	4,909		$	145		3.0	%
Same Community Operating Results and Data
Resident fees	$	1,234,565		$	1,243,404		$	(8,839	)	(0.7	)%
Other operating income	$	6,445		$	—		$	6,445		NM
Facility operating expense	$	913,589		$	836,479		$	77,110		9.2	%
Number of communities	638			638			—			—
Total average units	50,111			50,097			14			—
RevPAR	$	4,106		$	4,137		$	(31	)	(0.7	)%
Occupancy rate (weighted average)	81.4		%	84.2		%	(280		) bps	n/a
RevPOR	$	5,047		$	4,914		$	133		2.7	%

50

Independent Living Segment

The following table summarizes the operating results and data for our Independent Living segment for the six months ended June 30, 2020 and 2019, including operating results and data on a same community basis.

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Six Months Ended June 30,						Increase (Decrease)
	2020			2019			Amount			Percent
Resident fees	$	266,140		$	271,645		$	(5,505	)	(2.0	)%
Other operating income	$	—		$	—		$	—		NM
Facility operating expense	$	173,688		$	167,310		$	6,378		3.8	%
Number of communities (period end)	68			68			—			—	%
Number of units (period end)	12,534			12,460			74			0.6	%
Total average units	12,532			12,435			97			0.8	%
RevPAR	$	3,540		$	3,597		$	(57	)	(1.6	)%
Occupancy rate (weighted average)	85.3		%	89.4		%	(410		) bps	n/a
RevPOR	$	4,149		$	4,023		$	126		3.1	%
Same Community Operating Results and Data
Resident fees	$	250,659		$	253,385		$	(2,726	)	(1.1	)%
Other operating income	$	—		$	—		$	—		NM
Facility operating expense	$	162,656		$	152,121		$	10,535		6.9	%
Number of communities	64			64			—			—
Total average units	11,705			11,685			20			0.2	%
RevPAR	$	3,569		$	3,614		$	(45	)	(1.2	)%
Occupancy rate (weighted average)	85.6		%	89.2		%	(360		) bps	n/a
RevPOR	$	4,172		$	4,053		$	119		2.9	%

The decrease in the segment's resident fees was primarily attributable to the additional resident fee revenue for this segment of $3.3 million during the six months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019 and a decrease in the segment's same community RevPAR, comprised of a 360 basis points decrease in same community weighted average occupancy and a 2.9% increase in same community RevPOR. The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts. We estimate that the COVID-19 pandemic and our response efforts resulted in $6.9 million of lost resident fee revenue on a same community basis for this segment for the six months ended June 30, 2020. The increase in the segment's same community RevPOR was primarily the result of in-place rent increases.

The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense, including $9.9 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, an increase in labor expense arising from wage rate increases, an increase in employee benefit expense, and an extra day of expense due to the leap year. These increases in the segment's same community facility operating expense were partially offset by decreases in repairs and maintenance costs due to fewer move-ins during the period as we intentionally scaled back such activities.

We recognized additional resident fee revenue and additional facility operating expense for this segment of $3.3 million and $5.7 million, respectively, during the six months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense for this segment excludes approximately $3.1 million and $5.4 million, respectively, of such additional revenue and expenses.

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Assisted Living and Memory Care Segment

The following table summarizes the operating results and data for our Assisted Living and Memory Care segment for the six months ended June 30, 2020 and 2019, including operating results and data on a same community basis.

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Six Months Ended June 30,						Increase (Decrease)
	2020			2019			Amount			Percent
Resident fees	$	889,635		$	908,751		$	(19,116	)	(2.1	)%
Other operating income	$	152		$	—		$	152		NM
Facility operating expense	$	670,078		$	634,908		$	35,170		5.5	%
Number of communities (period end)	570			577			(7		)	(1.2	)%
Number of units (period end)	35,744			36,175			(431		)	(1.2	)%
Total average units	35,864			36,964			(1,100		)	(3.0	)%
RevPAR	$	4,134		$	4,081		$	53		1.3	%
Occupancy rate (weighted average)	79.9		%	81.8		%	(190		) bps	n/a
RevPOR	$	5,175		$	4,987		$	188		3.8	%
Same Community Operating Results and Data
Resident fees	$	871,629		$	868,798		$	2,831		0.3	%
Other operating income	$	151		$	—		$	151		NM
Facility operating expense	$	654,941		$	591,394		$	63,547		10.7	%
Number of communities	560			560			—			—
Total average units	34,794			34,800			(6		)	—
RevPAR	$	4,175		$	4,161		$	14		0.3	%
Occupancy rate (weighted average)	80.3		%	82.7		%	(240		) bps	n/a
RevPOR	$	5,197		$	5,036		$	161		3.2	%

The decrease in the segment's resident fees was primarily attributable to the disposition of 22 communities since the beginning of the prior year period, which resulted in $18.0 million less in resident fees during the six months ended June 30, 2020 compared to the prior year period. The decrease in resident fees was partially offset by the increase in the segment's same community RevPAR, comprised of a 3.2% increase in same community RevPOR and a 240 basis points decrease in same community weighted average occupancy. The increase in the segment's same community RevPOR was primarily the result of in-place rent increases. The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts. We estimate that the COVID-19 pandemic and our response efforts resulted in $27.6 million of lost resident fee revenue on a same community basis for this segment for the six months ended June 30, 2020.

The increase in the segment's facility operating expense was primarily attributable to an increase in the segment's same community facility operating expense, including $45.5 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, and an increase in labor expense arising from wage rate increases, increased contract labor costs, an increase in employee benefit expense, and an extra day of expense due to the leap year. The increase in the segment's same community facility operating expense was partially offset by decreases in repairs and maintenance costs due to fewer move-ins during the period as we intentionally scaled back such activities. The increase in facility operating expense was partially offset by the disposition of communities since the beginning of the prior year period, which resulted in $15.2 million less in facility operating expense during the six months ended June 30, 2020 compared to the prior year period.

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of approximately $3.6 million and $12.8 million, respectively, during the six months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense for this segment excludes approximately $3.5 million and $12.2 million, respectively, of such additional revenue and expenses.

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CCRCs Segment

The following table summarizes the operating results and data for our CCRCs segment for the six months ended June 30, 2020 and 2019, including operating results and data on a same community basis.

(in thousands, except communities, units, occupancy, RevPAR, and RevPOR)	Six Months Ended June 30,						Increase (Decrease)
	2020			2019			Amount			Percent
Resident fees	$	173,572		$	204,980		$	(31,408	)	(15.3	)%
Other operating income	$	9,546		$	—		$	9,546		NM
Facility operating expense	$	149,337		$	165,496		$	(16,159	)	(9.8	)%
Number of communities (period end)	22			26			(4		)	(15.4	)%
Number of units (period end)	5,741			6,574			(833		)	(12.7	)%
Total average units	5,716			6,564			(848		)	(12.9	)%
RevPAR	$	5,034		$	5,156		$	(122	)	(2.4	)%
Occupancy rate (weighted average)	78.2		%	81.7		%	(350		) bps	n/a
RevPOR	$	6,438		$	6,308		$	130		2.1	%
Same Community Operating Results and Data
Resident fees	$	112,277		$	121,221		$	(8,944	)	(7.4	)%
Other operating income	$	6,294		$	—		$	6,294		NM
Facility operating expense	$	95,992		$	92,964		$	3,028		3.3	%
Number of communities	14			14			—			—
Total average units	3,612			3,612			—			—
RevPAR	$	5,181		$	5,594		$	(413	)	(7.4	)%
Occupancy rate (weighted average)	77.5		%	83.2		%	(570		) bps	n/a
RevPOR	$	6,672		$	6,725		$	(53	)	(0.8	)%

The decrease in the segment's resident fees was primarily attributable to the disposition of five communities since the beginning of the prior year period, which resulted in $19.4 million less in resident fees during the six months ended June 30, 2020 compared to the prior year period. Additionally, there was a decrease in the segment's same community RevPAR, comprised of a 570 basis points decrease in same community weighted average occupancy and a 0.8% decrease in same community RevPOR. The decrease in the segment's same community weighted average occupancy primarily reflects the impact of reduced move-in activity related to the COVID-19 pandemic and our response efforts. We estimate that the COVID-19 pandemic and our response efforts resulted in $11.0 million of lost resident fee revenue on a same community basis for this segment for the six months ended June 30, 2020. The decrease in the segment's same community RevPOR was primarily the result of a mix shift away from skilled nursing within the segment, partially offset by in-place rent increases.

The decrease in the segment's facility operating expense was primarily attributable to the disposition of communities since the beginning of the prior year period, which resulted in $19.0 million less in facility operating expense during the six months ended June 30, 2020 compared to the prior year period. The decrease in facility operating expense was partially offset by an increase in the segment's same community facility operating expense, including $6.5 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic, partially offset by decreases in labor expense arising from fewer hours worked and healthcare supplies costs during the period as we intentionally scaled back such costs for the reduced occupancy.

In addition to the foregoing factors, we recognized additional resident fee revenue and additional facility operating expense for this segment of approximately $1.1 million and $2.5 million, respectively, during the six months ended June 30, 2019 as a result of the application of the new lease accounting standard effective January 1, 2019. Same community resident fee revenue and facility operating expense for this segment excludes approximately $0.8 million and $1.7 million, respectively, of such additional revenue and expenses.

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Operating Results - Health Care Services Segment

The following table summarizes the operating results and data for our Health Care Services segment for the six months ended June 30, 2020 and 2019.

(in thousands, except census and treatment codes)	Six Months Ended June 30,				Increase (Decrease)
	2020		2019		Amount			Percent
Resident fees	$	184,989	$	225,966	$	(40,977	)	(18.1	)%
Other operating income	$	16,995	$	—	$	16,995		NM
Facility operating expense	$	201,413	$	208,626	$	(7,213	)	(3.5	)%
Home health average daily census	13,500		15,935		(2,435		)	(15.3	)%
Hospice average daily census	1,672		1,485		187			12.6	%

The decrease in the segment's resident fees was primarily attributable to a decrease in revenue for home health services, which reflects the implementation of the Patient-Driven Grouping Model ("PDGM"), an alternate home health case-mix adjustment methodology with a 30-day unit of payment, which became effective beginning January 1, 2020. Additionally, our home health average daily census also began to decrease in March 2020 due to the COVID-19 pandemic, as referrals declined significantly due to suspension of elective medical procedures and hospital discharges increased due to stay-at-home orders and recommendations. The decrease in resident fees was partially offset by an increase in volume for hospice services. We estimate that the COVID-19 pandemic and our response efforts resulted in $17.9 million of lost resident fee revenue for the six months ended June 30, 2020.

The decrease in the segment's facility operating expense was primarily attributable to a decrease in labor costs for home health services as we adjusted our home health services operational structure, to better align our facility operating expenses and business model with the new payment model. The decrease in the segment's facility operating expense was partially offset by $3.5 million of incremental direct costs to prepare for and respond to the COVID-19 pandemic and an increase in labor costs for hospice services arising from wage rate increases and the expansion of our hospice services throughout 2019.

Operating Results - Management Services Segment

The following table summarizes the operating results and data for our Management Services segment for the six months ended June 30, 2020 and 2019.

(in thousands, except communities, units, and occupancy)	Six Months Ended June 30,				Increase (Decrease)
	2020		2019		Amount			Percent
Management fees	$	114,791	$	31,192	$	83,599		NM
Reimbursed costs incurred on behalf of managed communities	$	224,228	$	418,967	$(194,739)			(46.5	)%
Number of communities (period end)	77		138		(61		)	(44.2	)%
Number of units (period end)	10,694		21,451		(10,757		)	(50.1	)%
Total average units	12,115		23,755		(11,640		)	(49.0	)%

The increase in management fees was primarily attributable to the $100.0 million management termination fee payment received from Healthpeak during the three months ended March 31, 2020. We have completed the transition of management arrangements on 128 net communities since the beginning of the prior year period, generally for interim management arrangements on former unconsolidated ventures in which we sold our interest and interim management arrangements on formerly leased or owned communities. Management fees of $114.8 million for the six months ended June 30, 2020 include $102.2 million of management fees attributable to communities for which our management agreements were terminated during such period and approximately $3.3 million of management fees attributable to communities that we expect the terminations of our management agreements to occur in the next approximately 12 months, including management agreements on certain former unconsolidated ventures in which

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we sold our interest, management agreements on communities owned by unconsolidated ventures, and interim management arrangements on formerly leased communities.

The decrease in reimbursed costs incurred on behalf of managed communities was primarily attributable to terminations of management agreements subsequent to the beginning of the prior year period.

Operating Results - Other Income and Expense Items

The following table summarizes other income and expense items in our operating results for the six months ended June 30, 2020 and 2019.

(in thousands)	Six Months Ended June 30,						Increase (Decrease)
	2020			2019			Amount			Percent
General and administrative expense	$	107,113		$	113,887		$	(6,774	)	(5.9	)%
Facility operating lease expense	126,860			136,357			(9,497		)	(7.0	)%
Depreciation and amortization	183,892			190,912			(7,020		)	(3.7	)%
Asset impairment	88,516			4,160			84,356			NM
Loss (gain) on facility lease termination and modification, net	—			2,006			(2,006		)	(100.0	)%
Costs incurred on behalf of managed communities	224,228			418,967			(194,739		)	(46.5	)%
Interest income	3,698			5,897			(2,199		)	(37.3	)%
Interest expense	(108,782		)	(126,193		)	(17,411		)	(13.8	)%
Gain (loss) on debt modification and extinguishment, net	19,024			(2,739		)	21,763			NM
Equity in earnings (loss) of unconsolidated ventures	(570		)	(1,517		)	(947		)	(62.4	)%
Gain (loss) on sale of assets, net	371,810			2,144			369,666			NM
Other non-operating income (loss)	3,650			6,187			(2,537		)	(41.0	)%
Benefit (provision) for income taxes	7,324			(1,312		)	8,636			NM

General and Administrative Expense. The decrease in general and administrative expense was primarily attributable to a reduction in our corporate headcount, as we scaled our general and administrative costs in connection with community dispositions, a reduction in our travel costs as we intentionally scaled back such activities, and a reduction in our incentive compensation costs. The decrease was partially offset by a $4.3 million increase in transactional and organizational restructuring costs compared to the prior period, to $5.3 million for the six months ended June 30, 2020. Transaction costs include those directly related to acquisition, disposition, financing and leasing activity, and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees and other third party costs. Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance costs. We expect transaction and organizational restructuring costs will be higher in the three months ending September 30, 2020 including such costs incurred with respect to the transaction with Ventas announced on July 27, 2020.

Facility Operating Lease Expense. The decrease in facility operating lease expense was primarily due to the acquisition of formerly leased communities and lease termination activity since the beginning of the prior year.

Depreciation and Amortization. The decrease in depreciation and amortization expense was primarily due to disposition activity through sales and lease terminations since the beginning of the prior year.

Asset Impairment. During the current year period, we recorded $88.5 million of non-cash impairment charges, primarily for right-of-use assets for certain leased communities with decreased future cash flow estimates as a result of the COVID-19 pandemic. During the prior year period, we recorded $4.2 million of non-cash impairment charges. See Note 6 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information about the impairment charges.

Costs Incurred on Behalf of Managed Communities. The decrease in costs incurred on behalf of managed communities was primarily due to terminations of management agreements subsequent to the beginning of the prior year period.

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Interest Expense. The decrease in interest expense was primarily due to interest expense on long-term debt, reflecting the impact of lower interest rates, and the acquisition of communities previously subject to financing leases since the beginning of the prior year period.

Gain (Loss) on Debt Modification and Extinguishment, Net. The increase in gain on debt modification and extinguishment was primarily due to a $19.7 million gain on debt extinguishment recognized during the three months ended March 31, 2020 for the extinguishment of financing lease obligations for the acquisition from Healthpeak of eight communities which were previously subject to sale-leaseback transactions in which we were deemed to have continuing involvement.

Gain (Loss) on Sale of Assets, Net. The increase in gain on sale of assets, net was primarily due to a $369.8 million gain on sale of assets recognized for the sale of our ownership interest in the CCRC Venture during the six months ended June 30, 2020.

Benefit (Provision) for Income Taxes. The difference between our effective tax rate for the six months ended June 30, 2020 and 2019 was primarily due to a decrease in the valuation allowance that was a direct result of the multi-part transaction with Healthpeak. This was partially offset by the adjustment for stock-based compensation, which was greater in the six months ended June 30, 2019 compared to the six months ended June 30, 2020.

We recorded an aggregate deferred federal, state, and local tax expense of $64.2 million, of which, $28.9 million was recorded as a result of the benefit on our operating loss for the six months ended June 30, 2020. The benefit was offset by $93.1 million of tax expense that was recorded on the sale of our interest in the CCRC Venture. The tax expense was offset by a decrease in the valuation allowance of $79.5 million. The change in the valuation allowance for the six months ended June 30, 2020 resulted from the tax impact of the Healthpeak transaction and the anticipated reversal of future tax liabilities offset by future tax deductions. We recorded an aggregate deferred federal, state, and local tax benefit of $21.2 million as a result of the operating loss for the six months ended June 30, 2019, which was offset by an increase in the valuation allowance of $21.7 million.

Liquidity and Capital Resources

This section includes the non-GAAP liquidity measure Adjusted Free Cash Flow. See "Non-GAAP Financial Measures" below for our definition of the measure and other important information regarding such measure, including reconciliations to the most comparable GAAP measures.

Liquidity and Indebtedness

The following is a summary of cash flows from operating, investing, and financing activities, as reflected in the condensed consolidated statements of cash flows, and our Adjusted Free Cash Flow:

	Six Months Ended June 30,						Increase (Decrease)
(in thousands)	2020			2019			Amount			Percent
Net cash provided by (used in) operating activities	$	209,319		$	59,119		$	150,200		NM
Net cash provided by (used in) investing activities	(295,410		)	(80,299		)	215,111			NM
Net cash provided by (used in) financing activities	306,524			(104,079		)	410,603			NM
Net increase (decrease) in cash, cash equivalents, and restricted cash	220,433			(125,259		)	345,692			NM
Cash, cash equivalents, and restricted cash at beginning of period	301,697			450,218			(148,521		)	(33.0	)%
Cash, cash equivalents, and restricted cash at end of period	$	522,130		$	324,959		$	197,171		60.7	%
Adjusted Free Cash Flow	$	118,633		$	(63,340	)	$	181,973		NM

The increase in net cash provided by operating activities was attributable primarily to the $100.0 million management termination fee payment received from Healthpeak, $85.0 million of cash received under the Medicare accelerated and advance payment program, $33.5 million of government grants accepted, and $26.5 million of social security payroll taxes deferred during the current year period. These changes were partially offset by an increase in same community facility operating expense, a decrease in same community revenue, and a decrease in revenue for home health services compared to the prior year period.

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The increase in net cash used in investing activities was primarily attributable to $446.7 million of cash paid for the acquisition of communities during the current year period, a $51.2 million increase in purchases of marketable securities compared to the prior year period, and a $30.5 million decrease in cash proceeds from notes receivable compared to the prior year period. These changes were partially offset by a $248.1 million increase in net proceeds from the sale of assets, a $53.8 million increase in proceeds from sales and maturities of marketable securities, and a $9.4 million decrease in cash paid for capital expenditures compared to the prior year period.

The change in net cash provided by (used in) financing activities was primarily attributable to a $315.2 million increase in debt proceeds compared to the prior year period and $166.4 million of draws on our secured credit facility during the current year period. These changes were partially offset by a $65.9 million increase in repayment of debt and financing lease obligations compared to the prior year period and a $4.1 million increase in cash paid during the current year period for financing costs.

The increase in Adjusted Free Cash Flow was primarily attributable to the increase in net cash provided by operating activities and a $39.0 million decrease in non-development capital expenditures, net compared to the prior year period.

Our principal sources of liquidity have historically been from:

• cash balances on hand, cash equivalents, and marketable securities;

• cash flows from operations;

• proceeds from our credit facilities;

• funds generated through unconsolidated venture arrangements;

• proceeds from mortgage financing, refinancing of various assets, or sale-leaseback transactions;

• funds raised in the debt or equity markets; and

• proceeds from the disposition of assets.

Over the longer-term, we expect to continue to fund our business through these principal sources of liquidity. During the three months ended June 30, 2020, we also have received cash grants and advanced/accelerated Medicare payments under programs expanded or created under the CARES Act, and we have elected to utilize the CARES Act payroll tax deferral program, each as described above. We continue to seek further government-sponsored financial relief related to the COVID-19 pandemic, although we cannot provide assurance that such efforts will be successful or regarding the amount of, or conditions required to qualify for, any government-sponsored relief.

Our liquidity requirements have historically arisen from:

• working capital;

• operating costs such as employee compensation and related benefits, severance costs, general and administrative expense, and supply costs;

• debt service and lease payments;

• acquisition consideration, lease termination and restructuring costs, and transaction and integration costs;

• capital expenditures and improvements, including the expansion, renovation, redevelopment, and repositioning of our current communities and the development of new communities;

• cash collateral required to be posted in connection with our financial instruments and insurance programs;

• purchases of common stock under our share repurchase authorizations;

• other corporate initiatives (including integration, information systems, branding, and other strategic projects); and

• prior to 2009, dividend payments.

Over the near-term, we expect that our liquidity requirements will primarily arise from:

• working capital;

• operating costs such as employee compensation and related benefits, severance costs, general and administrative expense, and supply costs, including those related to the COVID-19 pandemic;

• debt service and lease payments;

• payment of deferred payroll taxes under the CARES Act;

• acquisition consideration;

• transaction costs and expansion of our healthcare services;

• capital expenditures and improvements, including the expansion, renovation, redevelopment, and repositioning of our existing communities;

• cash collateral required to be posted in connection with our financial instruments and insurance programs; and

• other corporate initiatives (including information systems and other strategic projects).

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We are highly leveraged and have significant debt and lease obligations. As of June 30, 2020, we had two principal corporate-level debt obligations: our secured credit facility providing commitments of $250.0 million and our separate unsecured facility providing for up to $50.0 million of letters of credit.

As of June 30, 2020, we had $3.9 billion of debt outstanding, including $166.4 million drawn on our secured credit facility and excluding lease obligations, at a weighted average interest rate of 3.8%. As of such date, 92.7%, or $3.6 billion of our total debt obligations represented non-recourse property-level mortgage financings, $93.7 million of letters of credit had been issued under our secured credit facility and separate unsecured letter of credit facility, and $166.4 million was drawn on our secured credit facility. As of June 30, 2020, $1.3 billion of our long-term debt is variable rate debt subject to interest rate cap agreements. The remaining $131.0 million of our long-term variable rate debt and $166.4 million drawn on our secured credit facility are not subject to any interest rate cap agreements.

As of June 30, 2020, we had $2.0 billion of operating and financing lease obligations. For the twelve months ending June 30, 2021, we will be required to make approximately $392.6 million of cash lease payments in connection with our existing operating and financing leases, including a $119.2 million one-time cash payment to Ventas on July 27, 2020 (after giving effect to the multi-part transaction with Ventas on July 26, 2020).

Total liquidity of $600.2 million as of June 30, 2020 included $452.4 million of unrestricted cash and cash equivalents (excluding restricted cash and lease security deposits of $115.5 million in the aggregate), $109.9 million of marketable securities, and $37.9 million of availability on our secured credit facility. Total liquidity as of June 30, 2020 increased $118.9 million from total liquidity of $481.3 million as of December 31, 2019. The increase was primarily attributable to temporary liquidity relief under the CARES Act and the transactions with Healthpeak completed during the three months ended March 31, 2020, including the impact of the related financing transactions.

We continue to seek opportunities to enhance and preserve our liquidity, including through reducing expenses and elective capital expenditures, continuing to evaluate our financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the COVID-19 pandemic. As of June 30, 2020, our remaining 2020 and 2021 maturities (after giving effect to the multi-part transaction with Ventas on July 26, 2020) are $36.4 million and $254.1 million, respectively, which are primarily non-recourse mortgage debt maturities. We have continued efforts on our plan to refinance those and other maturities, including our line of credit, with non-recourse mortgage debt. There is no assurance that debt financing will continue to be available on terms consistent with our expectations or at all, or that our efforts will be successful in seeking further government-sponsored financial relief or regarding the terms and conditions of any such relief. Additionally, 49 communities (3,925 units) were unencumbered by mortgage debt as of June 30, 2020.

We currently estimate that our existing cash flows from operations, together with cash on hand, amounts available under our secured credit facility, expected grants to be received from the Emergency Fund, proceeds from anticipated dispositions of owned communities, and financings and refinancings of various assets, will be sufficient to fund our liquidity needs for at least the next 12 months, assuming continued access to credit markets and the impacts of the pandemic on the economy and our industry begin to moderate in the near term.

Our actual liquidity and capital funding requirements depend on numerous factors, including our operating results, our actual level of capital expenditures, general economic conditions, and the cost of capital. Volatility in the credit and financial markets may have an adverse impact on our liquidity by making it more difficult for us to obtain financing or refinancing. Shortfalls in cash flows from operating results or other principal sources of liquidity may have an adverse impact on our ability to fund our planned capital expenditures, or to pursue any acquisition, investment, development, or potential lease restructuring opportunities that we identify, or to fund investments to support our strategy. In order to continue some of these activities at historical or planned levels, we may incur additional indebtedness or lease financing to provide additional funding. There can be no assurance that any such additional financing will be available or on terms that are acceptable to us.

Capital Expenditures

Our capital expenditures are comprised of community-level, corporate, and development capital expenditures. Community-level capital expenditures include recurring expenditures (routine maintenance of communities over $1,500 per occurrence, including for unit turnovers (subject to a $500 floor)) and community renovations, apartment upgrades, and other major building infrastructure projects. Corporate capital expenditures include those for information technology systems and equipment, the expansion of our support platform and healthcare services programs, and the remediation or replacement of assets as a result of casualty losses. Development capital expenditures include community expansions, major community redevelopment and repositioning projects, and the development of new communities.

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With our development capital expenditures program, we intend to expand, renovate, redevelop, and reposition certain of our communities where economically advantageous. Certain of our communities may benefit from additions and expansions or from adding a new level of service for residents to meet the evolving needs of our customers. These development projects include converting space from one level of care to another, reconfiguration of existing units, the addition of services that are not currently present, or physical plant modifications.

The following table summarizes our capital expenditures for the six months ended June 30, 2020 for our consolidated business:

(in millions)	Six Months Ended June 30, 2020
Community-level capital expenditures, net (1)	$	68.9
Corporate capital expenditures, net(2)	13.2
Non-development capital expenditures, net (3)	82.1
Development capital expenditures, net	6.8
Total capital expenditures, net	$	88.9

(1) Reflects the amount invested, net of lessor reimbursements of $13.9 million.

(2) Includes $1.3 million of remediation costs at our communities resulting from hurricanes and other natural disasters and for the acquisition of emergency power generators at our impacted Florida communities.

(3) Amount is included in Adjusted Free Cash Flow.

In response to the COVID-19 pandemic, we have delayed or canceled a number of elective capital expenditure projects. As a result, we expect our full-year 2020 non-development capital expenditures, net of anticipated lessor reimbursements, and development capital expenditures to be approximately $150 million and $20 million, which reflects a $40 million and $10 million reduction to our pre-pandemic plans for 2020, respectively. We anticipate that our 2020 capital expenditures will be funded from cash on hand, cash flows from operations, and reimbursements from lessors.

Funding our planned capital expenditures, pursuing any acquisition, investment, development, or potential lease restructuring opportunities that we identify, or funding investments to support our strategy may require additional capital. We expect to continue to assess our financing alternatives periodically and access the capital markets opportunistically. If our existing resources are insufficient to satisfy our liquidity requirements, we may need to sell additional equity or debt securities. Any such sale of additional equity securities will dilute the percentage ownership of our existing stockholders, and we cannot be certain that additional public or private financing will be available in amounts or on terms acceptable to us, if at all. Any newly issued equity securities may have rights, preferences or privileges senior to those of our common stock. If we are unable to raise additional funds or obtain them on terms acceptable to us, we may have to delay or abandon our plans.

Credit Facilities

Our Fifth Amended and Restated Credit Agreement with Capital One, National Association, as administrative agent, lender, and swingline lender and the other lenders from time to time parties thereto (the "Credit Agreement") provides commitments for a $250 million revolving credit facility with a $60 million sublimit for letters of credit and a $50 million swingline feature. We have a one-time right under the Credit Agreement to increase commitments on the revolving credit facility by an additional $100 million, subject to obtaining commitments for the amount of such increase from acceptable lenders. The Credit Agreement provides us a one-time right to reduce the amount of the revolving credit commitments, and we may terminate the revolving credit facility at any time, in each case without payment of a premium or penalty. The Credit Agreement matures on January 3, 2024. Amounts drawn under the facility bear interest at 90-day LIBOR plus an applicable margin. The applicable margin varies based on the percentage of the total commitment drawn, with a 2.25% margin at utilization equal to or lower than 35%, a 2.75% margin at utilization greater than 35% but less than or equal to 50%, and a 3.25% margin at utilization greater than 50%. A quarterly commitment fee is payable on the unused portion of the facility at 0.25% per annum when the outstanding amount of obligations (including revolving credit and swingline loans and letter of credit obligations) is greater than or equal to 50% of the revolving credit commitment amount or 0.35% per annum when such outstanding amount is less than 50% of the revolving credit commitment amount.

The credit facility is secured by first priority mortgages on certain of our communities. In addition, the Credit Agreement permits us to pledge the equity interests in subsidiaries that own other communities and grant negative pledges in connection therewith

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(rather than mortgaging such communities), provided that not more than 10% of the borrowing base may result from communities subject to negative pledges. Availability under the revolving credit facility will vary from time to time based on borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and our consolidated fixed charge coverage ratio. To the extent the outstanding borrowings on the credit facility exceed future borrowing base calculations, we would be required to repay the difference to restore the outstanding balance to the new borrowing base. During 2019, the parties entered into an amendment to the Credit Agreement that provides for availability calculations to be made at additional consolidated fixed charge coverage ratio thresholds.

The Credit Agreement contains typical affirmative and negative covenants, including financial covenants with respect to minimum consolidated fixed charge coverage and minimum consolidated tangible net worth. Amounts drawn on the credit facility may be used for general corporate purposes.

As of June 30, 2020, $166.4 million of borrowings were outstanding on the revolving credit facility, $45.5 million of letters of credit were outstanding, and the revolving credit facility had $37.9 million of availability. We also had a separate unsecured letter of credit facility providing for up to $50.0 million of letters of credit as of June 30, 2020 under which $48.2 million of had been issued as of that date.

Long-Term Leases

As of June 30, 2020, we operated 305 communities under long-term leases (237 operating leases and 68 financing leases). The substantial majority of our lease arrangements are structured as master leases. Under a master lease, numerous communities are leased through an indivisible lease. We typically guarantee the performance and lease payment obligations of our subsidiary lessees under the master leases. Due to the nature of such master leases, it is difficult to restructure the composition of our leased portfolios or economic terms of the leases without the consent of the applicable landlord. In addition, an event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio.

The leases relating to these communities are generally fixed rate leases with annual escalators that are either fixed or based upon changes in the consumer price index or leased property revenue. We are responsible for all operating costs, including repairs, property taxes, and insurance. The lease terms generally provide for renewal or extension options from 5 to 20 years, and, in some instances, purchase options.

The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions, and financial covenants, such as those requiring us to maintain prescribed minimum net worth and stockholders' equity levels and lease coverage ratios, as further described below. In addition, our lease documents generally contain non-financial covenants, such as those requiring us to comply with Medicare or Medicaid provider requirements. Certain leases contain cure provisions, which generally allow us to post an additional lease security deposit if the required covenant is not met.

In addition, certain of our master leases and management agreements contain radius restrictions, which limit our ability to own, develop or acquire new communities within a specified distance from certain existing communities covered by such agreements. These radius restrictions could negatively affect our ability to expand, develop, or acquire senior housing communities and operating companies.

For the three and six months ended June 30, 2020, our cash lease payments for our operating leases were $75.5 million and $151.6 million, respectively, and for our financing leases were $16.6 million and $34.9 million, respectively. For the twelve months ending June 30, 2021, we will be required to make $392.6 million of cash lease payments in connection with our existing operating and financing leases, including a $119.2 million one-time cash payment to Ventas on July 27, 2020 (after giving effect to the multi-part transaction with Ventas on July 26, 2020). Our capital expenditure plans for 2020 include required minimum spend of approximately $17 million for capital expenditures under certain of our community leases. Additionally, we are required to spend an average of approximately $25 million per year for each of the following four years and approximately $41 million thereafter under the initial lease terms of such leases.

Debt and Lease Covenants

Certain of our debt and lease documents contain restrictions and financial covenants, such as those requiring us to maintain prescribed minimum net worth and stockholders' equity levels and debt service and lease coverage ratios, and requiring us not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis. Net worth is generally calculated as stockholders' equity as calculated in accordance with GAAP, and in certain

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circumstances, reduced by intangible assets or liabilities or increased by deferred gains from sale-leaseback transactions and deferred entrance fee revenue. The debt service and lease coverage ratios are generally calculated as revenues less operating expenses, including an implied management fee and a reserve for capital expenditures, divided by the debt (principal and interest) or lease payments. In addition, our debt and lease documents generally contain non-financial covenants, such as those requiring us to comply with Medicare or Medicaid provider requirements.

Our failure to comply with applicable covenants could constitute an event of default under the applicable debt or lease documents. Many of our debt and lease documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors).

Furthermore, our debt and leases are secured by our communities and, in certain cases, a guaranty by us and/or one or more of our subsidiaries. Therefore, if an event of default has occurred under any of our debt or lease documents, subject to cure provisions in certain instances, the respective lender or lessor would have the right to declare all the related outstanding amounts of indebtedness or cash lease obligations immediately due and payable, to foreclose on our mortgaged communities, to terminate our leasehold interests, to foreclose on other collateral securing the indebtedness and leases, to discontinue our operation of leased communities, and/or to pursue other remedies available to such lender or lessor. Further, an event of default could trigger cross-default provisions in our other debt and lease documents (including documents with other lenders or lessors). We cannot provide assurance that we would be able to pay the debt or lease obligations if they became due upon acceleration following an event of default.

As of June 30, 2020, we are in compliance with the financial covenants of our debt agreements and long-term leases.

Contractual Commitments

Significant ongoing commitments consist primarily of leases, debt, purchase commitments, and certain other long-term liabilities. For a summary and complete presentation and description of our ongoing commitments and contractual obligations, see the "Contractual Commitments" section of Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 19, 2020. Except as discussed therein, there were no other material changes outside the ordinary course of business in our contractual commitments during the six months ended June 30, 2020.

As a result of the multi-part transaction with Ventas on July 26, 2020, our cash lease payments were increased by $77.7 million for the year ending December 31, 2020 and we eliminated future cash lease payments of $89.3 million, $90.6 million, $92.0 million, $93.4 million, and $94.8 million for each of the years ending December 31, 2021, 2022, 2023, 2024, and 2025, respectively. Additionally, our long-term debt obligations (excluding related interest payments) decreased by $78.4 million for year ending December 31, 2021, and increased by $45.0 million for the year ending December 31, 2025 as a result of the multi-part transaction with Ventas. See Note 17 to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information about the multi-part transaction with Ventas.

Off-Balance Sheet Arrangements

As of June 30, 2020, we do not have an interest in any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Non-GAAP Financial Measures

This Quarterly Report on Form 10-Q contains the financial measures Adjusted EBITDA and Adjusted Free Cash Flow, which are not calculated in accordance with GAAP. Presentations of these non-GAAP financial measures are intended to aid investors in better understanding the factors and trends affecting our performance and liquidity. However, investors should not consider these non-GAAP financial measures as a substitute for financial measures determined in accordance with GAAP, including net income (loss), income (loss) from operations, or net cash provided by (used in) operating activities. We caution investors that amounts presented in accordance with our definitions of these non-GAAP financial measures may not be comparable to similar measures disclosed by other companies because not all companies calculate non-GAAP measures in the same manner. We urge investors to review the following reconciliations of these non-GAAP financial measures from the most comparable financial measures determined in accordance with GAAP.

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Adjusted EBITDA

Adjusted EBITDA is a non-GAAP performance measure that we define as net income (loss) excluding: benefit/provision for income taxes, non-operating income/expense items, and depreciation and amortization; and further adjusted to exclude income/expense associated with non-cash, non-operational, transactional, cost reduction, or organizational restructuring items that management does not consider as part of our underlying core operating performance and that management believes impact the comparability of performance between periods. For the periods presented herein, such other items include non-cash impairment charges, gain/loss on facility lease termination and modification, operating lease expense adjustment, amortization of deferred gain, change in future service obligation, non-cash stock-based compensation expense, and transaction and organizational restructuring costs. Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity, and stockholder relations advisory matters, and are primarily comprised of legal, finance, consulting, professional fees, and other third party costs. Organizational restructuring costs include those related to our efforts to reduce general and administrative expense and our senior leadership changes, including severance.

We believe that presentation of Adjusted EBITDA as a performance measure is useful to investors because (i) it is one of the metrics used by our management for budgeting and other planning purposes, to review our historic and prospective core operating performance, and to make day-to-day operating decisions; (ii) it provides an assessment of operational factors that management can impact in the short-term, namely revenues and the controllable cost structure of the organization, by eliminating items related to our financing and capital structure and other items that management does not consider as part of our underlying core operating performance and that management believes impact the comparability of performance between periods; and (iii) we believe that this measure is used by research analysts and investors to evaluate our operating results and to value companies in our industry.

Adjusted EBITDA has material limitations as a performance measure, including: (i) excluded interest and income tax are necessary to operate our business under our current financing and capital structure; (ii) excluded depreciation, amortization, and impairment charges may represent the wear and tear and/or reduction in value of our communities, goodwill, and other assets and may be indicative of future needs for capital expenditures; and (iii) we may incur income/expense similar to those for which adjustments are made, such as gain/loss on sale of assets, facility lease termination and modification, or debt modification and extinguishment, non-cash stock-based compensation expense, and transaction and other costs, and such income/expense may significantly affect our operating results.

The table below reconciles our Adjusted EBITDA from our net income (loss).

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2020			2019			2020			2019
Net income (loss)	$	(118,420	)	$	(56,055	)	$	251,077		$	(98,661	)
Provision (benefit) for income taxes	8,504			633			(7,324		)	1,312
Equity in (earnings) loss of unconsolidated ventures	(438		)	991			570			1,517
Loss (gain) on debt modification and extinguishment, net	157			2,672			(19,024		)	2,739
Loss (gain) on sale of assets, net	1,029			(2,846		)	(371,810		)	(2,144		)
Other non-operating (income) loss	(988		)	(3,199		)	(3,650		)	(6,187		)
Interest expense	52,422			62,828			108,782			126,193
Interest income	(2,243		)	(2,813		)	(3,698		)	(5,897		)
Income (loss) from operations	(59,977		)	2,211			(45,077		)	18,872
Depreciation and amortization	93,154			94,024			183,892			190,912
Asset impairment	10,290			3,769			88,516			4,160
Loss (gain) on facility lease termination and modification, net	—			1,797			—			2,006
Operating lease expense adjustment	(8,221		)	(4,429		)	(14,954		)	(8,812		)
Non-cash stock-based compensation expense	6,119			6,030			12,076			12,386
Transaction and organizational restructuring costs	3,368			634			5,349			1,095
Adjusted EBITDA (1)	$	44,733		$	104,036		$	229,802		$	220,619

(1) Adjusted EBITDA for the three and six months ended June 30, 2019 includes a negative non-recurring net impact of $6.5 million and $13.0 million, respectively, from the application of the lease accounting standard effective January 1, 2019, for

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the six months ended June 30, 2020 includes the $100.0 million management agreement termination fee payment received from Healthpeak, and for the three months ended June 30, 2020 includes $26.7 million of government grants recognized in other operating income during the period.

Adjusted Free Cash Flow

Adjusted Free Cash Flow is a non-GAAP liquidity measure that we define as net cash provided by (used in) operating activities before: distributions from unconsolidated ventures from cumulative share of net earnings, changes in prepaid insurance premiums financed with notes payable, changes in operating lease liability for lease termination and modification, cash paid/received for gain/loss on facility lease termination and modification, and lessor capital expenditure reimbursements under operating leases; plus: property insurance proceeds and proceeds from refundable entrance fees, net of refunds; less: non-development capital expenditures and payment of financing lease obligations. Non-development capital expenditures are comprised of corporate and community-level capital expenditures, including those related to maintenance, renovations, upgrades and other major building infrastructure projects for our communities and is presented net of lessor reimbursements. Non-development capital expenditures do not include capital expenditures for community expansions and major community redevelopment and repositioning projects, and the development of new communities.

We believe that presentation of Adjusted Free Cash flow as a liquidity measure is useful to investors because (i) it is one of the metrics used by our management for budgeting and other planning purposes, to review our historic and prospective sources of operating liquidity, and to review our ability to service our outstanding indebtedness, pay dividends to stockholders, engage in share repurchases, and make capital expenditures, including development capital expenditures; (ii) it is used as a metric in our performance-based compensation programs; and (iii) it provides an indicator to management to determine if adjustments to current spending decisions are needed.

Adjusted Free Cash Flow has material limitations as a liquidity measure, including: (i) it does not represent cash available for dividends, share repurchases, or discretionary expenditures since certain non-discretionary expenditures, including mandatory debt principal payments, are not reflected in this measure; (ii) the cash portion of non-recurring charges related to gain/loss on facility lease termination and modification generally represent charges/gains that may significantly affect our liquidity; and (iii) the impact of timing of cash expenditures, including the timing of non-development capital expenditures, limits the usefulness of the measure for short-term comparisons.

The table below reconciles our Adjusted Free Cash Flow from our net cash provided by (used in) operating activities.

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2020			2019			2020			2019
Net cash provided by (used in) operating activities	$	151,840		$	64,128		$	209,319		$	59,119
Net cash provided by (used in) investing activities	(47,483		)	19,774			(295,410		)	(80,299		)
Net cash provided by (used in) financing activities	(40,726		)	(87,443		)	306,524			(104,079		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	$	63,631		$	(3,541	)	$	220,433		$	(125,259	)
Net cash provided by (used in) operating activities	$	151,840		$	64,128		$	209,319		$	59,119
Distributions from unconsolidated ventures from cumulative share of net earnings	—			(781		)	—			(1,530		)
Changes in prepaid insurance premiums financed with notes payable	(5,770		)	(6,752		)	11,664			12,090
Changes in assets and liabilities for lessor capital expenditure reimbursements under operating leases	(6,421		)	(1,000		)	(10,509		)	(1,000		)
Non-development capital expenditures, net	(21,521		)	(66,464		)	(82,077		)	(121,066		)
Payment of financing lease obligations	(4,677		)	(5,500		)	(9,764		)	(10,953		)
Adjusted Free Cash Flow (1)	$	113,451		$	(16,369	)	$	118,633		$	(63,340	)

(1) Adjusted Free Cash Flow includes transaction and organizational restructuring costs of $3.4 million and $0.6 million for the three months ended June 30, 2020 and 2019, respectively, and $5.3 million and $1.1 million for the six months ended June 30, 2020 and 2019, respectively; includes the $100.0 million management agreement termination fee payment received from

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Healthpeak for the six months ended June 30, 2020; and includes $85.0 million of accelerated/advanced Medicare payments, $33.5 million of Emergency Fund government grants accepted, and $26.5 million of payroll taxes deferred during the three months ended June 30, 2020.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

We are subject to market risks from changes in interest rates charged on our credit facilities and other variable-rate indebtedness. The impact on earnings and the value of our long-term debt are subject to change as a result of movements in market rates and prices. As of June 30, 2020, we had $2.3 billion of long-term fixed rate debt, $1.4 billion of long-term variable rate debt, and $166.4 million drawn on our variable rate secured credit facility. For the six months ended June 30, 2020, our total fixed-rate debt and variable-rate debt outstanding, including our secured credit facility had a weighted average interest rate of 4.09%.

In the normal course of business, we enter into certain interest rate cap agreements with major financial institutions to effectively manage our risk above certain interest rates on variable rate debt. As of June 30, 2020, $1.3 billion, or 34.2%, of our long-term debt is variable rate debt subject to interest rate cap agreements and $131.0 million, or 3.5%, of our long-term debt is variable rate debt not subject to any interest rate cap agreements. The $166.4 million drawn on our secured credit facility is variable rate debt not subject to any interest rate cap agreements. Our outstanding variable rate debt is indexed to LIBOR, and accordingly our annual interest expense related to variable rate debt is directly affected by movements in LIBOR. After consideration of hedging instruments currently in place, and including the impact of our variable rate secured credit facility, increases in LIBOR of 100, 200, and 500 basis points would have resulted in additional annual interest expense of $15.9 million, $31.8 million, and $71.0 million, respectively. Certain of our variable debt instruments include springing provisions that obligate us to acquire additional interest rate caps in the event that LIBOR increases above certain levels, and the implementation of those provisions would result in additional mitigation of interest costs.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision of and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined under Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer each concluded that, as of June 30, 2020, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There has not been any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

The information contained in Note 12 to the Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by this reference.

Item 1A.  Risk Factors

The following risk factors add and modify the risk factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 19, 2020.

The COVID-19 pandemic, including the response efforts of federal, state, and local government authorities, businesses, individuals and us, is adversely impacting, and likely will continue to adversely impact our business, results of operations, cash flow, liquidity, and stock price, and such impacts may be material.

The United States broadly continues to experience the COVID-19 pandemic, which has significantly disrupted, and likely will continue to significantly disrupt for some period, our nation’s economy, the senior living industry, and our business. We expect that the pandemic, and the response efforts of federal, state, and local government authorities, businesses, individuals and us, likely

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will continue to adversely impact our business, results of operations, cash flow, and liquidity through 2021. We cannot predict with reasonable certainty the impacts that COVID-19 ultimately will have on our business, results of operations, cash flow, liquidity, and stock price, and such impacts may be material and persist for some time. Further, our response efforts may continue to delay or negatively impact our strategic initiatives, including plans for future growth.

Due to the average age and prevalence of chronic medical conditions among our residents and patients, they generally are at disproportionately higher risk of hospitalization and adverse outcomes if they contract COVID-19. Seeking to prevent the introduction of COVID-19 into our communities, and to help control further exposure to infections within communities, in March 2020 we began restricting visitors at all our communities to essential healthcare personnel and certain compassionate care situations, screening associates and permitted visitors, suspending group outings, modifying communal dining and programming to comply with social distancing guidelines and, in most cases, implementing in-room only dining and activities programming, requesting that residents refrain from leaving the community unless medically necessary, and requiring new residents and residents returning from a hospital or nursing home to isolate in their apartment for fourteen days. Upon confirmation of positive COVID-19 exposure at a community, we follow government guidance regarding minimizing further exposure, including associates’ adhering to personal protection protocols, restricting new resident admissions, and in some cases isolating residents. These restrictions were in place across our portfolio for the three months ended June 30, 2020. Due to the vulnerable nature of our residents, we expect many of the foregoing restrictions will continue at our communities for some time, even as federal, state, and local stay-at-home and social distancing orders and recommendations are relaxed. We have completed baseline COVID-19 testing at all of our communities. Further testing, whether undertaken proactively or as a result of regulatory requirements, may result in significant additional expense, additional temporary restrictions on move-ins at affected communities, continued need for isolating positive residents, increased use of personal protection equipment by our associates, and increased labor costs.

The pandemic and related infection prevention and control protocols within senior living communities have significantly disrupted demand for senior living communities and the sales process, which typically includes in-person prospective resident visits within communities. We believe potential residents and their families are more cautious regarding moving into senior living communities while the pandemic continues, and such caution may persist for some time. Our efforts to adapt our sales and marketing efforts to meet demand may not be successful. We cannot predict with reasonable certainty whether or when demand for senior living communities will return to pre-COVID-19 levels or the extent to which the pandemic’s effect on demand may adversely affect the amount of resident fees we are able to collect from our residents.

The pandemic and our response efforts began to adversely impact our occupancy and resident fee revenue significantly during March 2020, as new resident leads, visits (including virtual visits), and move-in activity declined significantly compared to typical levels. During the three months ended June 30, 2020, the year-over-year decrease in monthly move-ins of our same-community portfolio ranged from approximately 65% in April 2020 to approximately 35% in June 2020, and was approximately 40% for July 2020. Furthermore, our same community weighted average monthly occupancy declined from 83.0% in March 2020 to 77.8% in June 2020, and was 78.6% in July 2020. We estimate that the pandemic and our response efforts resulted in $43.1 million of lost resident fee revenue in our same-community portfolio for the three months ended June 30, 2020. Further deterioration of our resident fee revenue will result from lower move-in activity and the resident attrition inherent in our business, which may increase due to the impacts of COVID-19. In addition, our home health average daily census also began to decrease in March 2020 due to lower occupancy in our communities and fewer elective medical procedures and hospital discharges, resulting in an 18.7% year-over-year decline in home health average daily census for the three months ended June 30, 2020.

Facility operating expense for the three and six months ended June 30, 2020 includes $60.6 million and $70.6 million, respectively, of incremental direct costs to prepare for and respond to the pandemic, including costs for acquisition of additional personal protective equipment, medical equipment, and cleaning and disposable food service supplies, enhanced cleaning and environmental sanitation costs, increased labor expense, increased workers compensation and health plan expense, increased insurance premiums and retentions, and consulting and professional services costs, as well as costs for COVID-19 testing of residents and associates where not otherwise covered by government payor or third-party insurance sources. We are not able to reasonably predict the total amount of costs we will incur related to the pandemic, and such costs are likely to be substantial. We have taken, and may take in future periods, significant impairment charges related to COVID-19 due to lower than expected operating performance at communities.

We continue to seek opportunities to enhance and preserve our liquidity, including through reducing expenses and elective capital expenditures, continuing to evaluate our financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the COVID-19 pandemic. As of June 30, 2020, our remaining 2020 and 2021 maturities (after giving effect to the multi-part transaction with Ventas on July 26, 2020) are $36.4 million and $254.1 million, respectively, which are primarily non-recourse mortgage debt maturities. As of June 30, 2020, $166.4 million of borrowings are outstanding under our revolving credit facility. Availability under the revolving credit facility will vary from time to time based on borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and our consolidated

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fixed charge coverage ratio. To the extent the outstanding borrowings on the credit facility exceed future borrowing base calculations, we would be required to repay the difference to restore the outstanding balance to the new borrowing base. Due primarily to the impacts of the COVID-19 pandemic, and based upon our current estimate of cash flows, we have determined that it is probable that we will not satisfy the minimum consolidated fixed charge coverage ratio covenant under the credit facility for one or more quarterly determination dates in the first half of 2021 without further action on our part. Failure to satisfy the minimum ratio would result in the availability under the revolving credit facility being reduced to zero and a requirement to repay the $166.4 million of borrowings outstanding on the revolving credit facility. As a result, we have continued efforts on our plan to refinance the assets currently securing the credit facility. We currently anticipate that such refinancings will be completed and the proceeds of such refinancings, together with cash on hand, will be sufficient to repay the $166.4 million balance on the revolving credit facility and terminate the facility without payment of a premium or penalty. However, there can be no assurance that any such additional financing will be available or on terms that are acceptable to us, in which case we would expect to take other mitigating actions prior to financing maturity dates.

The pandemic has also caused substantial volatility in the market prices and trading volumes in the equity markets, including our stock. Our stock price and trading volume may continue to be subject to wide fluctuations as a result of the pandemic, and may decline in the future.

The ultimate impacts of COVID-19 on our business, results of operations, cash flow, liquidity, and stock price will depend on many factors, some of which cannot be foreseen, including the duration, severity, and breadth of the pandemic and any resurgence of the disease; the impact of COVID-19 on the nation’s economy and debt and equity markets and the local economies in our markets; the development and availability of COVID-19 testing, therapeutic agents, and vaccines and the prioritization of such resources among businesses and demographic groups; government financial and regulatory relief efforts that may become available to business and individuals, including our ability to qualify for and satisfy the terms and conditions of financial relief; perceptions regarding the safety of senior living communities during and after the pandemic; changes in demand for senior living communities and our ability to adapt our sales and marketing efforts to meet that demand; the impact of COVID-19 on our residents’ and their families’ ability to afford our resident fees, including due to changes in unemployment rates, consumer confidence, and equity markets caused by COVID-19; changes in the acuity levels of our new residents; the disproportionate impact of COVID-19 on seniors generally and those residing in our communities; the duration and costs of response efforts, including increased equipment, supplies, labor, litigation, testing, and other expenses; the impact of COVID-19 on our ability to complete financings, refinancings, or other transactions (including dispositions) or to generate sufficient cash flow to cover required interest and lease payments and to satisfy financial and other covenants in our debt and lease documents; increased regulatory requirements, including unfunded mandatory testing; increased enforcement actions resulting from COVID-19, including those that may limit our collection efforts for delinquent accounts; and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or our response efforts.

Significant legal actions and liability claims against us could subject us to increased operating costs and substantial uninsured liabilities, which may adversely affect our financial condition and results of operations.

We have been and are currently involved in litigation and claims incidental to the conduct of our business, which we believe are generally comparable to other companies in the senior living and healthcare industries, including, but not limited to, putative class action claims from time to time regarding staffing at our communities and compliance with consumer protection laws and the Americans with Disabilities Act. Certain claims and lawsuits allege large damage amounts and may require significant costs to defend and resolve. As a result, we maintain general liability, professional liability, and other insurance policies in amounts and with coverage and deductibles we believe are appropriate, based on the nature and risks of our business, historical experience, availability, and industry standards. Our current policies provide for deductibles for each claim and contain various exclusions from coverage. Accordingly, we are, in effect, self-insured for claims that are less than the deductible amounts and for claims or portions of claims that are not covered by such policies and/or exceed the policy limits. If we experience a greater number of losses than we anticipate, or if certain claims are not covered by insurance, our results of operations and financial condition could be adversely affected.

The senior living and healthcare services businesses entail an inherent risk of liability, particularly given the demographics of our residents and patients, including age and health, and the services we provide. In recent years, we, as well as other participants in our industry, have been subject to an increasing number of claims and lawsuits alleging that our services have resulted in resident injury or other adverse effects. Many of these lawsuits involve large damage claims and significant legal costs. The frequency and magnitude of such alleged claims and legal costs may increase due to the COVID-19 pandemic or our response efforts. Many states continue to consider tort reform and how it will apply to the senior living industry. We may continue to be faced with the threat of large jury verdicts in jurisdictions that do not find favor with large senior living or healthcare providers. There can be no guarantee that we will not have any claims that exceed our policy limits in the future, which could subject us to substantial uninsured liabilities.

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If a successful claim is made against us and it is not covered by our insurance or exceeds the policy limits, our financial condition and results of operations could be materially and adversely affected. In some states, state law may prohibit or limit insurance coverage for the risk of punitive damages arising from professional liability and general liability claims and/or litigation. As a result, we may be liable for punitive damage awards in these states that either are not covered or are in excess of our insurance policy limits. Also, our insurance policies' deductibles, or self-insured retention, are accrued based on an actuarial projection of future liabilities. If these projections are inaccurate and if there is an unexpectedly large number of successful claims that result in liabilities in excess of our accrued reserves, our operating results could be negatively affected. Claims against us, regardless of their merit or eventual outcome, also could have a material adverse effect on our ability to attract residents or expand our business and could require our management to devote time to matters unrelated to the day-to-day operation of our business. We also have to renew our policies every year and negotiate terms for coverage, exposing us to the volatility of the insurance markets, including the possibility of rate increases and changes in coverage and other terms. There can be no assurance that we will be able to obtain liability insurance in the future or, if available, that such coverage will be available on acceptable terms.

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

(a) Not applicable.

(b) Not applicable.

(c) The following table contains information regarding purchases of our common stock made during the quarter ended June 30, 2020 by or on behalf of the Company or any ''affiliated purchaser,'' as defined by Rule 10b-18(a)(3) of the Exchange Act:

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs ($ in thousands) (2)
4/1/2020 - 4/30/2020	—	$	—	—	$	44,026
5/1/2020 - 5/31/2020	17,061	3.46		—	44,026
6/1/2020 - 6/30/2020	—	—		—	44,026
Total	17,061	$	3.46	—

(1) Consists entirely of shares withheld to satisfy tax liabilities due upon the vesting of restricted stock. The average price paid per share for such share withholding is based on the closing price per share on the vesting date of the restricted stock or, if such date is not a trading day, the trading day immediately prior to such vesting date.

(2) On November 1, 2016, the Company announced that its Board of Directors had approved a share repurchase program that authorizes the Company to purchase up to $100.0 million in the aggregate of its common stock. The share repurchase program is intended to be implemented through purchases made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or block trades, or by any combination of such methods, in accordance with applicable insider trading and other securities laws and regulations. The size, scope and timing of any purchases will be based on business, market and other conditions and factors, including price, regulatory and contractual requirements, and capital availability. The repurchase program does not obligate the Company to acquire any particular amount of common stock and the program may be suspended, modified or discontinued at any time at the Company's discretion without prior notice. Shares of stock repurchased under the program will be held as treasury shares. As of June 30, 2020, $44.0 million remained available under the repurchase program.

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Item 6.  Exhibits

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed on November 5, 2019 (File No. 001-32641)).
3.2	Amended and Restated Bylaws of the Company dated October 29, 2019 (incorporated by reference to Exhibit 3.3 to the Company's Current Report on Form 8-K filed on October 29, 2019 (File No. 001-32641)).
4.1	Form of Certificate for common stock (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1 (Amendment No. 3) filed on November 7, 2005 (File No. 333-127372)).
4.2	Description of the Company's common stock (incorporated by reference to Exhibit 4.2 to the Company's Annual Report on Form 10-K filed on February 19, 2020 (File No. 001-32641)).
10.1	Letter Agreement dated as of July 26, 2020 by and between the Company and Ventas.*
10.2	Amended and Restated Master Lease and Security Agreement dated as of July 26, 2020 by and among certain subsidiaries of the Company as Tenant and certain subsidiaries of Ventas as Landlord.*
10.3	Amended and Restated Guaranty dated as of July 26, 2020 by and among the Company as Guarantor, certain subsidiaries of the Company as Tenant, and Ventas and certain of its subsidiaries.*
10.4	Warrant dated July 26, 2020 by and between the Company and Ventas.
10.5	Registration Rights Agreement dated as of July 26, 2020 by and between the Company and Ventas.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL (included in Exhibit 101).
*	Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

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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.

BROOKDALE SENIOR LIVING INC.
(Registrant)
By:	/s/ Steven E. Swain
Name:	Steven E. Swain
Title:	Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date:	August 10, 2020

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EX-10.1

Exhibit 10.1

EXECUTION VERSION

Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

July 26, 2020

Brookdale Senior Living Inc.

111 Westwood Place, Suite 400

Brentwood, Tennessee 37027

Re: Agreements regarding Leased Properties and Summerville Loan

Dear Ladies and Gentlemen,

Reference is made to (a) that certain Master Lease and Security Agreement dated as of April 26, 2018 (as amended, the “Combination Lease”), by and among certain affiliates of Ventas (as defined below) and certain affiliates of Brookdale (as defined below), (b) those certain leases, agreements regarding leases and other documents relating thereto, which are described on Exhibit A attached hereto and made a part hereof (each such lease, and any such agreements regarding leases and other documents relating thereto, as amended, a “Separate Lease”, and, collectively, the “Separate Leases”), and (c) that certain loan (the “Summerville Loan”) evidenced by that certain Promissory Note Secured by Open-End Mortgage and Security Agreement and Fixture Filing With Assignment of Leases and Rents, dated as of October 1, 2015, and each of the other loan documents executed in connection therewith (collectively, the “Summerville Loan Documents”), which Summerville Loan is secured by a mortgage lien against each of the properties identified on Exhibit B attached hereto (the “Summerville Properties”). Capitalized terms used but not otherwise defined in this letter agreement (this letter agreement, as hereafter amended, amended and restated, supplemented, replaced or extended from time to time, this “Letter Agreement”) shall have the respective meanings given to them in the Amended and Restated Master Lease (as hereinafter defined).

As used in this Letter Agreement, the term “Ventas” shall mean and refer to Ventas, Inc., its successors and assigns, and the term “Brookdale” shall mean and refer to Brookdale Senior Living Inc., its successors and assigns.

In consideration of the agreements set forth herein, Ventas and Brookdale hereby agree that:

1.Lease Changes. Each of Ventas and Brookdale shall cause each of the following documents to be executed and delivered to the other party on the date hereof (the “Effective Date”): (i) Amended and Restated Master Lease and Security Agreement in the form of Exhibit C-1 attached hereto (the “Amended and Restated Master Lease”), (ii) Amended and Restated

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Guaranty in the form of Exhibit C-2 attached hereto (the “Amended and Restated Guaranty”), (iv) Amended and Restated Letter Agreement in the form of Exhibit C-3 attached hereto (the “Amended and Restated Side Letter”), and (v) Second Amended and Restated Omnibus Agreement in the form of Exhibit C-4 attached hereto (the “Amended and Restated Omnibus Agreement”). On July 27, 2020, Ventas shall pay to Brookdale $6,911,321.66 in immediately available funds, representing the overpayment of July 2020 Minimum Rent (as defined in the Amended and Restated Master Lease), by wire transfer to an account identified by Brookdale. The parties hereby agree that if an error in the calculation of such overpayment is identified following the Effective Date, the parties, each acting reasonably, shall cooperate with each other to correct and remedy such error.

2.Security Deposit Payment. On July 27, 2020, Brookdale will (i) release to Ventas the cash portion of the Security Deposit in the amount of $42,352,790.43, and (ii) Brookdale shall pay to Ventas the aggregate amount of the Letters of Credit (as defined below), and thereafter (except as required pursuant to the existing terms of the Amended and Restated Master Lease and any Separate Lease and subject to the terms of the Amended and Restated Omnibus Agreement), as of the date hereof, no further security deposit, similar deposit(s) or letter(s) of credit are required with respect to the Amended and Restated Master Lease, any Separate Lease or any other Crossed Agreement (as defined in the Amended and Restated Side Letter), provided that escrows relating to taxes and insurance may be required in the future under the terms of the Amended and Restated Master Lease. Promptly following the payment described in clause (ii) (but in any event not more than 10 business days following the date hereof), Ventas shall return each of the letter(s) of credit identified on Exhibit G attached hereto (the “Letters of Credit”) to Brookdale.

3.Fee Payment. On July 27, 2020, Brookdale shall (i) pay to Ventas One Hundred Fifteen Million Dollars ($115,000,000.00) in immediately available funds (the “Fee”) by wire transfer to an account identified by Ventas, and (ii) deliver to Ventas a note (“Promissory Note”) in the original principal amount of Forty Five Million Dollars ($45,000,000.00) and in the form attached hereto as Exhibit D. In the event that Brookdale shall fail (a) to deliver the Fee and the aggregate amount of the Letters of Credit, in each case by wire transfer on July 27, 2020, (b) to deliver the originally executed Promissory Note to a reputable nationally recognized overnight courier service on July 27, 2020, for delivery to Skadden Arps for hand delivery to Barack Ferrazzano Kirschbaum & Nagelberg LLP at 200 West Madison Street, Suite 3900, Chicago, Illinois 60606 on or before July 29, 2020, or (c) to deliver an originally executed copy of each deed associated with the conveyance of the applicable Summerville Property to a reputable nationally recognized overnight courier service on July 27, 2020, for delivery to Skadden Arps for hand delivery to Barack Ferrazzano Kirschbaum & Nagelberg LLP at 200 West Madison Street, Suite 3900, Chicago, Illinois 60606 on or before July 29, 2020, then absent delivery by Ventas of written notice (which may be by e-mail) to the contrary to Brookdale on or prior to 11:59 p.m. on July 27, 2020, the Transaction Documents shall be deemed void ab initio, except for the effect of this sentence, and the parties shall take such actions and make such deliveries as are reasonably required to restore the parties to their respective contractual positions immediately prior to the entry into the Transaction Documents.

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4.Summerville Properties.

4.1. Conveyances. On the Effective Date, (i) the borrowers under the Summerville Loan Documents (the “Brookdale Transferors”) shall transfer each of the Summerville Properties to a Ventas Party (as defined below) (the “Ventas Transferees”) pursuant to the terms of conveyance documents for each such Summerville Property agreed upon by Ventas and Brookdale in consideration, and in full release and satisfaction, of all amounts due and owing under, and all obligations of Brookdale and its Affiliates relating to, the Summerville Loan, (ii) certain Ventas Parties (the “Ventas Opcos”) and a Brookdale Party that is an “eligible independent contractor” (“Brookdale Manager”) shall enter into a management agreement for each Summerville Property in the form agreed to by Ventas and Brookdale; and (iii) if the Brookdale Manager is not the current license holder, Brookdale Manager shall enter into a sub-management arrangement with the Brookdale Party that is the current license holder for the applicable Facility. Following the Effective Date, the parties hereto shall cause their appropriate Affiliates to promptly deliver any notice or seek regulatory approval as required by applicable law in connection with the transfer of ownership of the Summerville Properties, and licensing, as contemplated herein.

4.2. Prorations. Within 30 days after the Effective Date the parties shall cause (i) customary real estate prorations and adjustments to be made between the transferors and transferees of the Summerville Properties and (ii) prorations and adjustments to be made between the transferors and transferees of the Summerville Properties with respect to the operations of the Summerville Properties as if an operations transfer agreement in the form of the Form OTA (as defined in the Amended and Restated Master Lease) had governed the transfer of such operations.

4.3. Indemnification by Brookdale.

4.3.1 Indemnity for Pre-Closing Period. To the maximum extent permitted by applicable Legal Requirements (which shall have the same meaning in the Amended and Restated Master Lease as if references to the Tenant referred to the transferors), and without regard to the existence of any insurance provided for herein or the policy limits of any such insurance, Brookdale shall protect, indemnify, defend and save harmless Ventas, its Affiliates, and each of their directors, officers, shareholders, members, agents and employees (collectively, the “Ventas Indemnified Parties”) for, from, against and regarding any and all foreseeable or unforeseeable liability, expense, loss, cost, deficiency, fine, penalty or damage (including consequential or punitive damages) of any kind or nature, (including reasonable attorneys’ fees, and including from any suits, claims or demands) on account of any matter or thing, or action or failure to act, arising out of or in connection with (A) the operation of any Summerville Property but solely with respect to any such matter or thing, or action or failure to act that occurred during the period of Brookdale’s ownership of any such Summerville Property and prior to the Summerville Closing and (B) the existence of any monetary lien against any Summerville Property arising during the period of Brookdale’s ownership of any such Summerville Property and caused by or at the direction of or on behalf of any Brookdale Party. Notwithstanding anything herein to the contrary, Brookdale’s indemnification obligations under this Section 4.3 shall include, and extend to, any and all expenses, judgments, damages, penalties, fines, liabilities, losses of every kind and nature and related costs and fees, including reasonable attorneys’ and reasonable consultants’ fees and expenses, and

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environmental costs (collectively, “Losses”) regardless of whether the possibility of any such Losses has been disclosed to Brookdale in advance or whether the possibility of any such Losses could have been reasonably foreseen by Brookdale, but shall expressly exclude special, punitive and consequential damages (other than reasonably foreseeable consequential damages), unless a Ventas Indemnified Party is obligated to pay such damages to a third party.

4.3.2 Indemnity Claims Process. Brookdale shall pay any Losses due to a Ventas Party under this Section 4.3 within 10 days after a Ventas Party’s written demand (the “Claim Notice Date”), and if not timely paid, such amounts shall bear interest at the Agreed Rate (as defined in the Amended and Restated Master Lease) from the date that is 10 days following the Claim Notice Date until paid. Brookdale, at its expense, shall contest, resist and defend any such claim, action or proceeding asserted or instituted against Ventas or any Ventas Indemnified Parties, with counsel approved by Ventas and shall not, under any circumstances, compromise or otherwise dispose of any suit, action or proceeding without obtaining Ventas’s prior consent; provided that any such required approval or consent by Ventas, (i) with respect to any claims which are covered by Brookdale’s insurance policy(ies), shall not be unreasonably withheld, conditioned or delayed, and (ii) with respect to claims not covered by Brookdale’s insurance policy(ies), may be granted or withheld in its sole discretion. Brookdale shall have the right to control the defense or settlement of any claim provided that (a) Brookdale shall first confirm in writing to Ventas that Brookdale is obligated under this Section 4.3 to indemnify the Ventas Parties, (b) Brookdale shall pay any and all amounts required to be paid in respect of such claim, and (c) any compromise or settlement shall require the prior approval of Ventas, which approval shall not be unreasonably withheld provided Ventas (or the applicable Ventas Indemnified Parties) are irrevocably released from all Losses in connection with such claim as part of such settlement or compromise. Ventas, at its election and sole cost and expense, shall have the right, but not the obligation, to participate in the defense of any claim. If Brookdale does not act with reasonable promptness and diligence to satisfy its indemnification obligations hereunder, Ventas and the Ventas Parties may resist and defend any such claims against Ventas or any Ventas Indemnified Party at Brookdale’s sole cost.

4.4. Release Regarding Loan. Each of the parties affiliated with the Brookdale Borrowers and guarantors under the Summerville Loan Documents, for itself, himself or herself (as the case may be), and their respective affiliates, heirs and successors and assigns (collectively, “Borrower Parties”), does hereby release, remise, acquit, satisfy, and forever discharge the lender and all Ventas Parties and their past and present employees, officers, members, parents, subsidiaries, partners, agents, predecessors, successors, owners, affiliates, all related corporate and operating entities, and all agents and attorneys (collectively, the “Lender Parties”), of and from all manner of action and actions, causes and causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, executions, losses, liabilities, claims and demands whatsoever in law or in equity, which any or all of the Borrower Parties ever had, now have or which any personal representative, successor, heir, or assign of any or all of the Borrower Parties hereafter can, shall or may have for, upon or by reason of any matter, cause or thing whatsoever, relating to, arising from or pertaining to the Summerville Loan or the Summerville Loan Documents, from the beginning of the world to the day of these presents.  Each of the Borrower Parties shall forever

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forbear and shall not, against any of the Lender Parties, file or cause to be filed or bring litigation to assert in any state or federal court or agency any claim relating to any or all of the Summerville Loan or the Summerville Loan Documents.

4.5. Post Transfer Insurance. Brookdale shall keep in force the commercial general liability and healthcare professional liability insurance policies for the Summerville Properties as were required under the Summerville Loan Documents, or shall secure an extended reporting period on such policies that has a term of, at least the lesser of (i) statute of limitations in the state in which each such facility is located or (ii) two years after the Effective Date, which shall name the Ventas Indemnified Parties as additional insureds. If the retroactive date is advanced or the policy is cancelled or not renewed and not replaced with a similar policy with the same retroactive date, Brookdale must secure an extended reporting period for such retroactive-date-advanced, cancelled or non-renewed policy covering the facilities to which such policy applies or applied of not less than the lesser of (i) the statute of limitations in the state in which such facility is located or (ii) two years following the date such policy’s retroactive date was advanced or such policy was cancelled or not renewed which shall name Ventas Indemnified Parties as additional insureds.

4.6. In the event of any breach by Brookdale or its Affiliates of any of the terms of Sections 4.2, 4.3, and/or 4.5, such breach shall not constitute an “Event of Default” under the Amended and Restated Master Lease and/or pursuant to the Amended and Restated Omnibus Agreement.

5.Equity.

5.1. Issuance. On the Effective Date, Brookdale shall issue to Ventas a warrant (the “Warrant”) in the form attached hereto as Exhibit F to purchase 16.3 million shares of Brookdale’s common stock, $0.01 par value per share (the “Warrant Shares”).

5.2. REIT Provisions.

5.2.1. Capitalized Terms used in this Section 5.2, but not defined, shall have that meaning ascribed to them in the Warrant.

5.2.2. “Subsidiary” means, with respect to a particular Person, (a) any corporation in which such Person and/or other Subsidiaries of such Person own or control, directly or indirectly, a majority of the corporation’s total economic interest or the total voting power of the corporation’s capital stock (without regard to the occurrence of any contingency) to vote in the election of the corporation’s directors and (b) any limited liability company, partnership, association or other business entity in which such Person and/or other Subsidiaries of such Person (i) owns or controls, directly or indirectly, a majority of the partnership or similar ownership interest, (ii) is allocated a majority of entity gains or losses or (iii) is or controls any managing director or general partner.

5.2.3. The parties hereto acknowledge that the Holder or its Affiliate is a real estate investment trust under the United States Internal Revenue Code of 1986, as amended (the

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“Code”) and as such the Holder will need to determine, in its good faith discretion, that its acquisition or ownership of the Warrant Shares would not result in the Holder and its Affiliates owning in the aggregate, directly, indirectly or constructively (as determined under Section 856(d)(5) of the Code), more than 9.60% of the total combined voting power of all classes of capital stock of the Company or of the total value of shares of all classes of capital stock of the Company (the “Ownership Condition”). For purposes of determining the Ownership Condition only shares of capital stock of the Company that are actually outstanding shall be taken into account, the Warrant Shares shall be deemed to be outstanding (it being understood that if the Holder makes a Cash Settlement Election, the number of Warrant Shares issuable pursuant to the Warrant for purposes of applying Section 5.2.5, Section 5.2.6, Section 5.2.7 and Section 5.2.8 from and after the time such election is made shall be equal to the maximum number of Shares (as defined below) issuable pursuant to Section 3(d)(i) of the Warrant (for the avoidance of doubt, taking into account the effect of the Cash Settlement Election)) and, except for purposes of Section 5.2.7, Holder shall be deemed to own only the Warrant Shares and not any other Shares directly, indirectly or constructively owned by it.

5.2.4. Notwithstanding any other provision of the Warrant to the contrary, during any period during which the Holder owns capital stock of the Company (“Shares”) or holds the Warrant, the Company shall provide the Holder with at least five (5) business days’ written notice prior to any redemption or repurchase of any Shares by the Company or any of its Subsidiaries if any such redemption or repurchase could reasonably be expected to cause the Ownership Condition to not be met. Such notice shall specify the number of Shares that may be so redeemed or repurchased and the anticipated timing thereof. For the avoidance of doubt, no repurchase of Shares or other action taken pursuant to the remaining provisions of this Section 5.2 shall limit any right or remedy of the Holder for breach of this Section 5.2.4.

5.2.5. If, whether as a result of a reduction in the outstanding Shares, an increase in the capital of the Company (whether or not additional Shares are issued), the Company’s redemption or repurchase (or any Subsidiary of the Company’s repurchase), whether with or without the consent of the Holder, of any Shares from a Company stockholder (other than the Holder) or any other reason other than actions taken by Holder or its Affiliates (each of the foregoing, a “Relevant Transaction”), the Ownership Condition would not be met, the Shares held by the Holder shall automatically be repurchased by the Company, effective immediately prior to such other reduction, increase, repurchase, redemption, purchase, or other event or occurrence to the extent necessary so that the Ownership Condition is satisfied, it being understood that if the Holder does not at such time hold sufficient Shares in order to comply with this sentence, the Warrant shall be deemed exercised (and the Aggregate Exercise Price in connection with such exercise deemed paid pursuant to Section 3(b)(ii) of the Warrant) to the extent necessary to comply with this Section 5.2.5.

5.2.6. If the Holder at any time determines in good faith that the Ownership Condition is, as a result of a Relevant Transaction, not met or would not be met as a result of any contemplated Relevant Transaction and the Holder delivers written notice to the Company pursuant to this Section 5.2.6, then the Company shall repurchase from the Holder, no later than two Business

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Days following delivery of such notice, such number of Shares as are necessary so that the Ownership Condition thereafter is met, it being understood that if the Holder does not at such time hold sufficient Shares in order to comply with this sentence, the Warrant shall be deemed exercised (and the Aggregate Exercise Price in connection with such exercise deemed paid pursuant to Section 3(b)(ii) of the Warrant) to the extent necessary to comply with this Section 5.2.6. The notice delivered by the Holder pursuant to this Section 5.2.6 shall specify the number of shares that the Holder in good faith believes is required for the Company to repurchase pursuant to this Section 5.2.6 so that the Ownership Condition thereafter is met. For the avoidance of doubt, the Company shall have no obligation to purchase any Shares other than such number of Shares as is necessary so that the Ownership Condition following the purchase (or, if applicable, the contemplated transaction or other event involving the capital stock of the Company) is met.

5.2.7. If there is a purported transfer of Shares, change in capital structure or other event such that, after taking into account and notwithstanding Section 5.2.5 and Section 5.2.6 hereof, the Ownership Condition would not be met, then that number of Shares which otherwise would cause the Ownership Condition not to be met (rounded up to the nearest whole Share) shall be automatically transferred to a trust for the benefit of a charitable beneficiary effective as of the close of business on the Business Day prior to the date of such purported transfer, change or other event, and the Holder shall have no rights in such Shares, it being understood that if the Holder does not at such time hold sufficient Shares in order to comply with this sentence, the Warrant shall be deemed exercised (and the Aggregate Exercise Price in connection with such exercise deemed paid pursuant to Section 3(b)(ii) of the Warrant) to the extent necessary to comply with this Section 5.2.7.

5.2.8. From time to time upon the reasonable request in writing of the Holder, the Company shall and shall cause its Subsidiaries to reasonably cooperate with and provide such information to the Holder as may reasonably be required to determine whether the Ownership Condition is satisfied. The Company agrees to and to cause its Subsidiaries to exercise commercially reasonable efforts to assist the Holder in taking such action (whether by amendment to the Warrant to reduce the amount or the term of the Warrant or otherwise) as may be deemed necessary by the Holder, in the exercise of its reasonable discretion, to prevent the loss of Ventas, Inc.’s status as a real estate investment trust for tax purposes pursuant to Sections 856-860 of the Code as result of Holder’s actual or constructive ownership of Shares of the Company; provided that the Holder shall reimburse the Company for all expenses incurred in connection therewith.

5.2.9. The repurchase price per Share for each Share repurchased pursuant to Section 5.2.5 or Section 5.2.6 shall equal the Fair Market Value per Share. Payment of such repurchase price shall be made by transfer of immediately available funds no later than two Business Days after Shares held by the Holder are automatically repurchased (in the case of a repurchase pursuant to Section 5.2.5) or the Holder delivers written notice (in the case of a repurchase pursuant to Section 5.2.6).

5.2.10. Notwithstanding anything to the contrary, in any circumstance in which Shares are required to be repurchased or transferred to a trust pursuant to this Section 5.2 (other than as a result of an event that is not a Relevant Transaction), the Holder may, in lieu of such

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repurchase or transfer, irrevocably elect pursuant to this Section 5.2.10 for the Warrant Shares that, if issued, would cause the Ownership Condition to not be met, to instead be cash settled (the “Cash Settlement Election”) in accordance with Section 3(d) of the Warrant to the extent necessary to reduce the number of Shares issuable pursuant to the Warrant so that the Ownership Condition is met without such repurchase or transfer being required.

5.2.11. The rights and obligations under this Section 5.2 shall terminate on December 31, 2026.

6.Costs and Expenses. Except as otherwise expressly set forth in this Letter Agreement and the other definitive documents contemplated in this Letter Agreement (collectively, the “Transaction Documents”), each of Brookdale and its Affiliates (the “Brookdale Parties”), on the one hand, and Ventas and its Affiliates (the “Ventas Parties”), on the other hand, shall bear its own expenses in connection with (a) the negotiation of this Letter Agreement and the other Transaction Documents, and (b) the consummation of the transactions contemplated by this Letter Agreement and the other Transaction Documents (collectively, the “Transaction”).

7.Public Disclosures. Ventas and Brookdale shall use reasonable efforts to consult with each other before issuing or causing or consenting to (i) the publication of any press release or other public announcement with respect to the execution of this Letter Agreement and/or any of the other Definitive Documents or (ii) the filing of any of the Definitive Documents on EDGAR (it being acknowledged that the parties may wish to request confidential treatment for certain portions of such documents from the Securities and Exchange Commission), and each party will provide the other party reasonable time to comment on any such release or document to be filed, and reasonably consider any such comments, in advance of its issuance or publication or filing, as applicable; provided, however, that nothing herein will prohibit any party from issuing or causing the publication of any such press release or public announcement, or the filing of any such document, on a particular timeframe or in a particular form to the extent that such disclosure or filing is, based on advice of such party’s outside legal counsel, required by law or order, or by the rules of (or an applicable list agreement with) a national securities exchange, to be made on such timeframe or in such form, in which case the party making such determination will, if practicable under the circumstances, use commercially reasonable efforts to allow the other party reasonable time to comment on such release or announcement or document for filing in advance of its issuance or publication or filing; providedfurther, that it shall not be deemed a breach of this Section 7 for any party to make a public comment with respect to the Transactions if the substance of such comment was disclosed publicly from and after the date hereof and prior to the date of such public comment in accordance with the foregoing requirements; providedfurther, that the restrictions in this Section 7 shall not apply to any communication made by any party in connection with any dispute between the parties regarding the Transactions.

8.Waiver and Release of Certain Disputes. Each of Ventas, for itself and on behalf of the other Ventas Parties hereby waives and releases as to the Brookdale Parties, and Brookdale, for itself and on behalf of the other Brookdale Parties, hereby waives and releases as to the Ventas Parties, any and all alleged disputes, breaches, defaults and events of default with respect to any matter, condition or circumstance existing, arising or occurring prior to the Effective Date with

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respect to the Crossed Agreements (as defined in the Amended and Restated Omnibus Agreement) and any other agreement or arrangement by, between and/or among any of the foregoing parties (the “Waived/Released Disputes”). Notwithstanding the foregoing, and for the avoidance of doubt, the waiver and release contemplated by this Section 8 (and the term Waived/Released Disputes) shall not pertain to any default that arises under the Amended and Restated Lease or any Separate Lease from and after the Effective Date (collectively “Post-Waiver Defaults”), it being acknowledged that Post-Waiver Defaults may arise on account of facts, circumstances, or conditions that existed prior to, and continue from and after, the Effective Date (except that a default under Section 5.6 of the Combination Lease (or the Amended and Restated Lease) or any Separate Lease shall not, in any instance, occur as the result of or on account of facts, circumstances, or conditions that first existed, arose or occurred prior to the Effective Date), provided that no such default shall be or become a Master Lease Event of Default or Facility Default (taking into account the interpretation and effect of the terms of the Amended and Restated Side Letter) unless all applicable notice and cure periods provided in the Amended and Restated Master Lease (or, with respect to any Crossed Agreement that is not a Lease and taking into account the interpretation and effect of the terms of the Amended and Restated Side Letter, any other Crossed Agreement) have expired. Ventas, for itself and on behalf of the other Ventas Parties, and Brookdale, for itself and on behalf of the other Brookdale Parties, agrees and acknowledges that, it shall not have any right to initiate or pursue any claim, proceeding or action with respect to any Waived/Released Disputes.

9.Certain Representations Regarding Defaults. Ventas, for itself and on behalf of the other Ventas Parties, hereby represents and warrants to the Brookdale Parties, and, Brookdale, for itself and on behalf of the other Brookdale Parties, hereby represents and warrants to the Ventas Parties, that such party has no actual knowledge of the occurrence of any “Event of Default” (as defined in the Amended and Restated Master Lease and in each other Crossed Agreement) under any such agreement, or any failure or default that, with notice or the passage of time or both may or could become an Event of Default (as defined in the Amended and Restated Master Lease and in each other Crossed Agreement and in Section 2.4 of the Amended and Restated Omnibus Agreement) as of the Effective Date.

10.Bankruptcy Matters; Disgorgement.

10.1. In consideration of the Ventas Parties’ agreement to the terms and conditions of the Transaction, including this Agreement, the Ventas Parties’ rely upon the Brookdale Parties’ warranty that they have reviewed their respective financial situations and that each of them is currently is solvent within the meaning of 11 U.S.C. § § 547(b)(3) and 548(a)(I)(B)(ii)(I), and will remain solvent following payment to the Ventas Parties of all cash and other consideration in connection with the consummation of the Transaction, including without limitation the Promissory Note and the Warrant (the “Settlement Payments”). Furthermore, each of the Brookdale Parties warrants that, in evaluating whether to execute this Agreement and the other Transaction Documents, the Brookdale Parties (a) intended that the mutual promises, covenants, and obligations set forth herein and therein constitute a contemporaneous exchange for new value given to the Brookdale Parties, within the meaning of 11 U.S.C. § 547(c)(1); and (b) concluded that the mutual

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promises, covenants, and obligations set forth in the Transaction Documents do, in fact, constitute such a contemporaneous exchange. In addition, each of the Brookdale Parties warrants that the mutual promises, covenants, and obligations set forth in the Transaction Documents are intended to and do, in fact, represent a reasonably equivalent exchange of value which is not meant to hinder or delay payment to, or to defraud, any entity to which any Brookdale Party was or became indebted on the date hereof, all within the meaning of 11 U.S.C. § 548(a)(l).

10.2. If after the date hereof, any Brookdale Party or any third-party commences any case, proceeding, or other action under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors, including under Title 11 of the U.S. Code, (i) seeking to have any order for relief of such party’s debts, or seeking to adjudicate such party as bankrupt or insolvent, or (ii) seeking appointment of a receiver, trustee, custodian, or other similar official for such Brookdale Party or for all or any substantial part of such Brookdale Party’s assets (an “Insolvency Proceeding”), each of the Brookdale Parties covenants and agrees as follows:

10.2.1 The Brookdale Parties’ obligations under the Transaction Documents may not be avoided pursuant to 11 U.S.C. §§ 547 or 548 or any analogous law of any jurisdiction, and the Brookdale Parties will not argue or otherwise take the position in any such case, proceeding, or action that: (i) any Brookdale Party’s obligations under any Transaction Document may be avoided under 11 U.S.C. §§ 547 or 548 or any analogous law of any jurisdiction; (ii) any Brookdale Party was insolvent at the time the Transaction Documents were entered into, or became insolvent as a result of the payment made to the Ventas Parties hereunder; or (iii) the mutual promises, covenants, and obligations set forth in the Transaction Documents do not constitute a contemporaneous exchange for new value given to the Brookdale Parties;

10.2.2. If any of the Ventas Parties are required to disgorge all or any portion of the Settlement Payments, notwithstanding any provisions of the Transaction Documents (including this Agreement, the Amended and Restated Omnibus Agreement and the Amended and Restated Master Lease), Landlord Parties (as defined in the Amended and Restated Omnibus Agreement) shall have a claim consistent with the Bankruptcy Code against applicable Tenant Parties (as defined in the Amended and Restated Omnibus Agreement) for all claims to which Landlord Parties would be entitled under the provisions of the Amended and Restated Master Lease and all other existing documents set forth on Exhibits A and B to the Amended and Restated Omnibus Agreement) (without regard to the Transaction Documents). For the avoidance of doubt, in the event of any such disgorgement, Landlord Parties shall have a claim, consistent with the Bankruptcy Code, for all claims under all such existing documents as if none of the Transaction Documents existed; and

10.2.3. Each of the Brookdale Parties acknowledges and agrees that its covenants and agreements in this Section 10 are provided in exchange for valuable consideration provided by and through the Transaction Documents.

11.Representations and Warranties of Brookdale. Brookdale hereby represents and warrants to Ventas as of the date hereof as follows:

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11.1 Brookdale (and the other Brookdale Parties) has full power, authority and legal right to execute and deliver this Letter Agreement and each of the Definitive Documents to which it is a party and to perform and observe the provisions of this Letter Agreement.

11.2 This Letter Agreement has been duly authorized, executed and delivered by Brookdale, and constitutes the valid and binding obligation of such party enforceable against Brookdale in accordance with its terms.

11.3. No consent, approval or other authorization of, or registration, declaration or filing with or to, any governmental authority is required by Brookdale for the due execution and delivery of this Letter Agreement, or for the performance by Brookdale or the validity or enforceability thereof against Brookdale.

11.4. The execution and delivery of this Letter Agreement by Brookdale will not result in a breach or violation of (i) any federal, state, county, municipal or other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees or injunctions of any governmental authority affecting or binding upon Brookdale or its business (including without limitation any permits, licenses, authorizations or regulations relating thereto); or (ii) the organizational documents of Brookdale.

11.5. Such party has not assigned, transferred, sold or otherwise disposed of to any other person or entity any of its right, title or interest in or with respect to any of the Crossed Agreements including, without limitation, any right to make any claim or bring any action thereunder.

11.6. The Warrant has been duly authorized and, upon issuance in accordance with the terms of this Letter Agreement, will be validly issued. The Warrant shall be, upon issuance, a legal, valid and binding obligation of Brookdale, enforceable against Brookdale in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

11.7. The Warrant Shares have been duly authorized and, upon issuance in accordance with the terms of the Warrant, will be validly issued, fully paid, non-assessable and free and clear of all liens and encumbrances, and issued without violation of (and will not trigger) any preemptive or similar rights of any stockholder of Brookdale.

11.8. As of June 30, 2020, Brookdale is in compliance with the financial covenants of its debt and lease agreements, and expects compliance through December 31, 2020 after giving effect to management’s plan to replace its credit facilities.

12.Representations and Warranties of Ventas. Ventas represents and warrants to Brookdale as of the date hereof as follows:

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12.1. Ventas (and the other Ventas Parties) has full power, authority and legal right to execute and deliver this Letter Agreement and each of the Definitive Documents to which it is a party and to perform and observe the provisions of this Letter Agreement.

12.2.This Letter Agreement has been duly authorized, executed and delivered by Ventas, and constitutes the valid and binding obligation of such party enforceable against Ventas in accordance with its terms.

12.3. No consent, approval or other authorization of, or registration, declaration or filing with or to, any governmental authority is required by Ventas for the due execution and delivery of this Letter Agreement, or for the performance by Ventas or the validity or enforceability thereof against Ventas.

12.4. The execution and delivery of this Letter Agreement by Ventas will not result in a breach or violation of (i) any federal, state, county, municipal or other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees or injunctions of any governmental authority affecting or binding upon Ventas or its business (including without limitation any permits, licenses, authorizations or regulations relating thereto); or (ii) the organizational documents of Ventas.

12.5. Ventas has not assigned, transferred, sold or otherwise disposed of to any other person or entity any of its right, title or interest in or with respect to any of the Crossed Agreements including, without limitation, any right to make any claim or bring any action thereunder.

12.6. Ventas is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. Ventas is acquiring the Warrant and the Warrant Shares to be issued upon exercise of the Warrant for investment for its own account and not with any present intention to distribute the Warrant or the Warrant Shares to be issued upon exercise of the Warrant, except in compliance with the Securities Act.

12.7. Ventas understands and acknowledges that the Warrant and the Warrant Shares to be issued upon exercise of the Warrant are “restricted securities” under the federal securities laws inasmuch as they are being acquired from Brookdale in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, Ventas represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

12.8. Ventas acknowledges that it has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the Warrant and the Warrant Shares. Ventas has had an opportunity to discuss with Brookdale the terms and conditions of the Warrant and the business, properties, prospects and financial condition of Brookdale.

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13.Notice. Notices to the parties to this Letter Agreement shall be in writing and sent and deemed effective in the manner and at the time provided in the Amended and Restated Guaranty. Brookdale hereby notifies Ventas that the address for Brookdale and the other Brookdale Parties for receipt of notices under this Letter Agreement is as follows:

c/o Brookdale Senior Living Inc.

111 Westwood Place, Suite 400

Brentwood, Tennessee 37027

Attention: General Counsel

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

One Manhattan West

New York, New York 10001

Attn: Joseph A. Coco

Ventas hereby notifies Brookdale that the address for Ventas and the other Ventas Parties for receipt of notices under this Letter Agreement is as follows:

c/o Ventas, Inc.

500 North Hurstbourne Parkway, Suite 200

Louisville, Kentucky 40222

Attn: Lease Administration

With a copy to:

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300 Chicago, Illinois 60654

Attn: Legal Department

14.Miscellaneous Provisions.

14.1. Successors and Assigns. Subject to the restrictions and other limitations expressly set forth herein, the terms, covenants and conditions hereof shall inure to the benefit of and be binding upon the respective parties hereto, their successors and permitted assigns.

14.2. Counterparts. This Letter Agreement may be executed in any number of counterparts and by different parties to this Letter Agreement in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Letter Agreement. Delivery of an executed counterpart of a signature page to this Letter Agreement via facsimile transmission or via electronic mail transmission in .pdf format shall be as effective as delivery of a manually executed counterpart of this Letter Agreement.

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14.3. Attorneys’ Fees in Disputes. In any dispute or action between the parties arising out of this Letter Agreement, the prevailing party shall be entitled to have and recover from the losing party such amount as the court may adjudge reasonable as attorneys’ fees and expenses together with costs of litigation incurred by the prevailing party, in addition to all other amounts provided at law.

14.4. Amendment. Any alteration, change or modification of or to this Letter Agreement, in order to become effective, must be made in writing and in each instance signed on behalf of each party to be charged.

14.5. Severability. If any term, provision, condition or covenant of this Letter Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Letter Agreement, or the application of the term, provision, condition or covenant to persons, entities or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law, provided, however, that the parties hereto shall negotiate in good faith to amend this Letter Agreement to modify any such illegal, invalid or unenforceable provision in order to carry out the intent and agreement of the parties as embodied herein to the maximum extent permitted by applicable law.

14.6. Integration; Survival. This Letter Agreement and the other Definitive Documents contain the entire understandings among the parties relating to the matters set forth herein. All prior or contemporaneous agreements, understandings, representations and statements with respect to the subject matters hereof, whether direct or indirect, oral or written, are merged into and superseded by this Letter Agreement and/or the other Definitive Documents, and shall be of no further force or effect. The provisions of this Letter Agreement will survive the consummation of the Transactions.

14.7. Governing Law.

14.7.1. This Agreement shall be construed under the laws of the State of Illinois.

14.7.2. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER OR RELATE TO THIS LETTER AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS LETTER AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS LETTER AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER,

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(ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS LETTER AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.

14.8. No Third Party Beneficiaries. Nothing in this Letter Agreement is intended to or shall confer upon any person or entity (other than the parties hereto, the Ventas Parties and the Brookdale Parties) any right, benefit or remedy of any nature whatsoever.

[SIGNATURE PAGE FOLLOWS]

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July 26, 2020

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Sincerely,

VENTAS, INC.

On behalf of itself and the other Ventas Parties

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Its: Executive Vice President

Agreed and Accepted:

BROOKDALE SENIOR LIVING INC.

On behalf of itself and the other Brookdale Parties

By: /s/ George T. Hicks            

Name: George T. Hicks

Its: Executive Vice President – Finance and Treasurer

Exhibit D

Portions of this exhibit that have been marked by [***] have been omitted because the Registrant has determined they are not material and would likely cause competitive harm to the Registrant if publicly disclosed.

EXECUTION VERSION

PROMISSORY NOTE

$45,000,000.00    Date: July 26, 2020

1.FOR VALUE RECEIVED, BROOKDALE SENIOR LIVING, INC., a Delaware corporation (“Borrower”) promises to pay to VENTAS, INC., a Delaware corporation, and its successors and assigns (“Holder”), by wire transfer in accordance with Section 4 below, in lawful money of the United States, the principal sum of Forty Five Million and 00/100 Dollars ($45,000,000.00) with interest on the principal balance from time to time remaining unpaid from the date hereof (the “Funding Date”) until paid, at the per annum rate (the “Note Rate”) of (i) 9.0% for the period from and including the Funding Date through and including July 25, 2021, (ii) 9.5% for the period from and including July 26, 2021, through and including July 25, 2022, (iii) 10.0% for the period from and including July 26, 2022, through and including July 25, 2023, (iv) 10.5% for the period from and including July 26, 2023, through and including July 25, 2024, (v) 11.0% for the period from and including July 26, 2024, through and including July 25, 2025, and (vi) 11.5% for the period from and including July 26, 2025, through and including the Maturity Date (as hereinafter defined). Interest shall be computed based on a 360-day year of twelve 30-day months.

2.Accrued interest shall be payable in arrears at the applicable Note Rate on the first day of each calendar month and continuing likewise thereafter. On the earlier of (i) December 31, 2025, and (ii) the occurrence of a Change of Control (as defined in the Amended and Restated Guaranty (as it may be further amended, modified, amended, modified, amended and restated or divided from time to time in accordance with the terms thereof), dated as of the Funding Date, by and among Brookdale Senior Living Inc., Ventas, Inc., and the other parties thereto), the entire indebtedness evidenced by this Note, including all unpaid principal and all accrued, unpaid interest, shall be immediately due and payable (the “Maturity Date”).

3.Each payment under this Note shall be credited first to any expense reimbursements due under this Note, then to accrued and unpaid interest, and the remainder to principal. Interest shall cease to accrue upon the principal so credited.

4.Until directed otherwise in writing by Holder, all payments under this Note shall be made by Borrower by wire transfer in immediately available funds to Holder’s account as Holder shall designate in advance. No payment due under this Note shall be deemed paid unless and until Holder has actually received confirmed good funds by electronic funds transfer in Holder’s receiving bank account, except that any taxes that are required to withheld from such payment shall be treated for all purposes as paid to Holder if such taxes are withheld and paid to the appropriate taxing authority. The parties agree that: (a) any payment due on a day other than a Business Day (as hereinafter defined) may be paid on the next Business Day, and (b) any payment received by Holder after 3:00 p.m. Central time on any Business Day shall be deemed paid on the next Business Day. The term “Business Day” as used herein shall mean a weekday, Monday through Friday, except a legal holiday or a day on which banking institutions in Chicago, Illinois are authorized by law to be closed. All payments under this Note shall be made

without setoff, defense, counterclaim or deduction of any kind, except for taxes required to be withheld by law.

5.While any Event of Default exists, any principal and (to the maximum extent permitted by applicable law) any interest and other amounts payable under this Note that, in each case, are then overdue shall bear interest at the Note Rate plus two percent (2.0%) per annum (the “Default Rate”) from such date until such amounts are paid in full. Considering all of the circumstances on the date of this Note, such interest represents a fair and reasonable estimate of the costs and expenses that will result from the loss of use of the money due. The parties further agree that proof of actual damages would be costly or inconvenient. Interest at the Default Rate shall be paid without prejudice to the right of Holder to collect any other amounts due or to declare a default under this Note or to exercise any other rights or remedies of Holder. If the Default Rate provided for herein exceeds the maximum interest rate permitted by applicable law, the Default Rate shall be automatically reduced to the maximum interest rate permitted by applicable law.

6.The following shall be “Events of Default”:

(a) default by the Borrower in the payment (i) of principal when due (whether on the stated due date therefor, on the Maturity Date, on the Acceleration Date or otherwise) and/or (ii) interest or any other amounts within five days after the due date therefor;

(b) default by the Borrower in the performance of or breach by the Borrower of any term, covenant or agreement of the Borrower in this Note (other than those specified in clause (a) above);

(c) a court having jurisdiction in the premises enters a decree or order for (A) relief in respect of the Borrower or any of its Significant Subsidiaries in an involuntary case under any applicable bankruptcy or other similar law now or hereafter in effect, (B) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Borrower or any of its Significant Subsidiaries or (C) the winding up or liquidation of the affairs of the Borrower or any of its Significant Subsidiaries, and, in each case, such decree or order shall remain unstayed and in effect for a period of [***] ([***]) consecutive days;

(d) the Borrower or any of its Significant Subsidiaries (A) commences a voluntary case under any applicable bankruptcy or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (B) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Person or for all or substantially all of the property and assets of such Person or (C) effects any general assignment for the benefit of creditors;

(e) the Borrower or any of its Significant Subsidiaries fails to pay any Indebtedness (other than this Note) at final maturity, or the occurrence of any event or condition that results in any Indebtedness of the Borrower or any of its Significant Subsidiaries (other than this Note) becoming due prior to its final maturity or would allow the holders (or trustee or agent therefor) thereof to cause such Indebtedness (with or without the giving of notice) to become due prior to its final maturity (other than mandatory prepayments of secured Indebtedness that become payable as a result of a disposition of the property or assets securing such Indebtedness; provided that such Indebtedness is repaid when required), in each case, if the total amount of such Indebtedness as to which a default or event of default or such other event or condition has occurred or that is unpaid or accelerated exceeds $[***] or its foreign currency equivalent;

(f) the Borrower or any of its Significant Subsidiaries fails to pay final judgments aggregating in excess of $[***] or its foreign currency equivalent (net of any amounts which are covered by insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed or bonded pending appeal within the time required by the terms of the judgment; or

(g) the occurrence of a “Master Lease Event of Default” (as defined in the Amended and Restated Master Lease and Security Agreement (as it may be further amended, modified, amended, modified, amended and restated or divided from time to time in accordance with the terms thereof), dated as of the Funding Date, by and among certain Subsidiaries and affiliates of Holder and certain Subsidiaries and affiliates of Borrower).

If an Event of Default (other than an Event of Default specified in clause (c) or (d) above) occurs and is continuing, then and in every such case the Holder may declare the principal of, and all accrued and unpaid interest under and all other amounts accrued or owing under this Note to be due and payable immediately, by a notice in writing to the Borrower, and upon any such declaration such principal and interest and other amounts shall become due and payable immediately. If an Event of Default specified in clause (c) or (d) above occurs, the principal of and all accrued and unpaid interest under and all other amounts accrued or owing under this Note shall ipso facto become and be immediately due and payable in cash without any declaration or other act on the part of the Holder.

For purposes of this Note, (a) “Acceleration Date” shall mean the date of any acceleration under this paragraph, (b) “Indebtedness” shall mean, as to any Person at any particular time, all of the following, whether or not included as indebtedness or liabilities in accordance with US GAAP: (i) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (ii) the maximum amount of all reimbursement obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments; (iii) net obligations of such Person under any hedging, swap or other derivative transaction of any kind (valued, if such transaction has been closed out and

termination values determined in connection therewith on or prior to the date of determination, at such termination values, or otherwise at the mark-to-market value of such transaction as of the date of determination); (iv) all obligations of such Person to pay the deferred purchase price of property or services (other than (x) trade accounts payable in the ordinary course of business and (y) earnouts (except to the extent required to be reflected on a balance sheet of such Person in accordance with US GAAP and not paid when due)); (v) indebtedness (excluding prepaid interest thereon) secured by a lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; (vi) all obligations of such Person in respect of any leases that have been or should be, in accordance with US GAAP, recorded as capitalized or finance leases; and (vii) all guarantees (or other obligations having the effect of guarantees) of such Person in respect of any of the foregoing (it being understood for all purposes hereof that the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person); provided that (x) the adoption of ASU 2016-02 shall be ignored for purposes of this definition and the definition of “Indebtedness” such that clause (vi) of the definition of “Indebtedness” shall specifically exclude any operating lease liabilities (regardless of whether such operating leases were in effect on the date ASU 2016-02 was adopted or were entered into thereafter or after the Funding Date) under US GAAP as in effect immediately prior to the adoption of ASU 2016-02, and (y) if at any time the obligations of any Person in respect of an operating lease are otherwise required to be characterized or recharacterized as capitalized or finance lease obligations as a result of a change in US GAAP after the date of this Note, then for purposes hereof such Person’s obligations under such operating lease shall not, notwithstanding such characterization or recharacterization, be deemed capitalized or finance lease obligations, (c) “Person” shall mean an individual, sole proprietorship, partnership, corporation, association, institution, entity, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or governmental authority, (d) “Significant Subsidiary” of a Person shall mean any Subsidiary of such Person that would be a “significant subsidiary” of such Person within the meaning of Rule 1-02 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission, as such regulation was in effect on the Funding Date, (e) “Subsidiary” of a Person shall mean a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person and (f) “US GAAP” shall mean generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant

segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

The Borrower shall immediately notify the Holder in writing upon the occurrence of any Event of Default.

7.Notwithstanding any of the foregoing, at any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained, the Holder may rescind and annul such declaration and its consequences by notice to the Borrower in writing of their desire to do so. No such rescission and annulment shall affect any subsequent default or impair any right consequent thereon.

8.The principal evidenced hereby may be prepaid in whole or in part without premium or penalty on any Business Day prior to the Maturity Date upon at least three (3) Business Days’ advance written notice by Borrower to Holder.

9.Notwithstanding anything herein to the contrary, if at any time the applicable interest rate, together with all fees and charges that are treated as interest under applicable law (collectively, the “Charges”), as provided for herein or in any other document executed in connection herewith, or otherwise contracted for, charged, received, taken or reserved by the Holder, shall exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken, received or reserved by the Holder in accordance with applicable law, the rate of interest payable hereunder, together with all Charges payable to such holder, shall be limited to the Maximum Rate. In the event that the Holder ever receives any amount as a result of interest and other Charges paid in excess of the Maximum Rate, such amount which would be excessive interest shall be applied to the reduction of the principal sum hereof, and if the principal sum is paid in full, any remaining excess shall forthwith be paid to the Borrower.

10.The Borrower represents and warrants to Holder that the proceeds of the loan evidenced by this Note shall be used for general corporate purposes of the Borrower.

11.The Borrower shall not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not the Borrower is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:

(a) the Borrower is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than the Borrower) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory of the United States (the Borrower or such Person, as the case may be, being herein called the “Successor Company”);

(b) the Successor Company (if other than the Borrower) expressly assumes all the obligations of the Borrower under this Note pursuant to a document or instrument in form and substance reasonably satisfactory to the Holder;

(c) immediately after giving effect to such transaction no Event of Default shall have occurred and be continuing; and

(d) other than in connection with a consolidation, amalgamation or merger of a Subsidiary of the Borrower with and into the Borrower where the Borrower is the surviving Person, the Successor Company shall have delivered to the Holder an officer’s certificate and an opinion of counsel (in form and substance reasonably satisfactory to the Holder), each stating that such consolidation, merger or transfer complies with this Note.

The Successor Company (if other than the Borrower) shall succeed to, and be substituted for, the Borrower under this Note, and in such event (other than in the case of a lease of all or substantially all of the properties or assets of the Borrower) the Borrower will automatically be released and discharged from its obligations under this Note.

12.No delay or omission on the part of Holder in exercising any rights under this Note on default by Borrower shall operate as a waiver of such right or of any other right under this Note, for the same default or any other default. Borrower and all sureties, guarantors and endorsers of this Note consent to all extensions without notice for any period or periods of time and to the acceptance of partial payments before or after maturity, and to the acceptance, release and substitution of security, all without prejudice to Holder. Holder shall have the right to deal in any way, at any time, with one or more of the foregoing parties without notice to any other party, and to grant any such party any extensions of time for payment of any of the indebtedness, or to grant any other indulgence or forbearance whatsoever, without notice to any other party and without in any way affecting the personal liability of any such party.

13.The Borrower hereby waives presentment for payment, protest and demand, and, except as specifically set forth or required herein or hereunder, notice of protest, intent, demand, dishonor and nonpayment of this Note and all other notices of any kind.

14.Any and all makers, sureties, guarantors and endorsers of this Note hereby waive presentment, notice of dishonor and protest.

15.All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows:

If to the Borrower:

Brookdale Senior Living Inc.

111 Westwood Place, Suite 200

Brentwood, TN 37027

Attention: General Counsel

With a copy to:

Brookdale Senior Living Inc.

6737 W. Washington Street, Suite 2300

Milwaukee, WI 53214

Attention: Legal Department

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

One Manhattan West

New York, New York 10001

Attention: Joseph A. Coco

If to the Holder:

Ventas Inc.

500 North Hurstbourne Parkway

Suite 200

Louisville, KY 40222

Attention: Lease Administration

With a copy to:

Ventas, Inc.

353 North Clark Street

Suite 3300

Chicago, IL 60654

Attention: Legal Department

With a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52^nd Street

New York, New York 10019

Attention: Robin Panovka and Victor Goldfeld

The Borrower and the Holder by written notice to the other may designate additional or different addresses for subsequent notices or communications. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (electronic confirmation of receipt received).

16.Borrower agrees to pay (by a date no later than ten (10) Business Days following written demand therefor) the following fees, costs and expenses paid or incurred by Holder, or adjudged by a court: (1) reasonable costs, expenses and fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed; and (2) reasonable costs of suit and attorneys' fees and expenses in any action to enforce payment of this Note; the legal costs, fees and expenses described in clauses (1) and (2) above shall include without limitation reasonable attorney's fees and expenses incurred in any bankruptcy or judicial or non-judicial foreclosure proceeding.

17.Holder shall have the right in its sole discretion (and without the consent of Borrower) to sell, assign or otherwise transfer (including by participation), either in part or in its entirety, this Note or any other document or instrument evidencing or securing the indebtedness of this Note to any other person, and Borrower hereby agrees to reasonably cooperate (without cost to Borrower) to facilitate any such sale, assignment or other transfer so long as Borrower shall not be obligated to increase its obligations hereunder, including by delivering to any such transferee a note evidencing the obligations so sold, assigned or otherwise transferred in such transferee’s (or such transferee’s designee’s) name. Holder, acting solely for this purpose as an agent of Borrower, shall maintain (i) a copy of each agreement by which such sale, assignment or other transfer is effected and (ii) a register for the recordation of the names and addresses of the purchasers, participants, assignees, or other transferees and the principal amounts (and stated interest) of the Note owed to each such person pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and Borrower, Holder, and such purchasers, participants, assignees, and other transferees shall treat each person whose name is recorded in the Register pursuant to the terms hereof as Holder hereunder for all purposes of this Agreement. The Register shall be available for inspection by Borrower and Holder at any reasonable time and from time to time upon reasonable prior notice. This provision is intended to ensure that the loan evidenced by this Note is in registered form within the meaning of Section 5f.103-1(c) of the United States Treasury Regulations and shall be interpreted consistent with such intent.

18.This Note shall be the joint and several obligation of all makers and endorsers, and shall be binding upon them and their successors and assigns.

19.This Note shall be binding on and inure to the benefit of the respective legal and personal representatives, devisees, heirs, successors, and assigns of Borrower and Holder; provided, however, that (subject to Section 11) Borrower shall not be permitted to assign or delegate its rights or obligations hereunder.

20.This Note shall be construed according to the laws of the state of New York (without giving effect to any principle of conflicts of laws that would cause the laws of any jurisdiction other than the state of New York to be applied).

21.Time is of the essence for each obligation under this Note.

22.The provisions of this Note may not be amended, modified or waived without the written consent of the Holder to such amendment, modification or waiver, delivered to the Borrower. The Holder shall not, by any act of omission or commission, be deemed to waive any of its rights or remedies hereunder unless such waiver be in writing and signed by the Holder and then only to the extent specifically set forth therein; a waiver on one occasion shall not, except as specifically set forth therein, be construed as continuing or as a bar to or waiver of a right or remedy on any other occasion. All remedies conferred upon the Holder by this Note shall be cumulative and none is exclusive, and such remedies may be exercised concurrently or consecutively at the Holder’s option.

23.No Person other than the parties hereto shall be a beneficiary of this Note.

24.If any one or more of the provisions contained in this Note shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Note and such provision shall be interpreted to the fullest extent permitted by the law; provided that the Borrower and the Holder shall act reasonably to achieve the same or substantially the same result as that contemplated by such provision.

25.This Note constitutes the entire agreement of the Borrower and the Holder with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the Borrower and the Holder, whether oral or written, with respect to the subject matter hereof.

26.(A) BORROWER, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, (I) SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON ARISING FROM OR RELATING TO THIS NOTE, (II) AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN NEW YORK COUNTY, NEW YORK, (III) SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (IV) TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR PROCEEDING IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK OR FEDERAL COURTS SITTING IN NEW YORK COUNTY, NEW YORK (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF HOLDER TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM). BORROWER FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS,

COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO BORROWER AT THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 15 HEREOF, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW).

(B) EACH OF BORROWER AND HOLDER, TO THE FULLEST EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY AND THE RIGHT TO CLAIM OR RECEIVE CONSEQUENTIAL OR PUNITIVE DAMAGES IN ANY LITIGATION, ACTION, CLAIM, SUIT OR PROCEEDING , OR COUNTERCLAIM, BASED UPON THIS NOTE (IT BEING UNDERSTOOD, FOR THE AVOIDANCE OF DOUBT, THAT THIS CLAUSE (B) SHALL NOT RELATE TO OR LIMIT IN ANY WAY ANY RIGHTS OR REMEDIES OF THE PARTIES HERETO UNDER ANY CONTRACTUAL OR OTHER RELATIONSHIP (OTHER THAN THIS NOTE AND THE OBLIGATIONS HEREUNDER)).

[Signatures on next page]

Borrower has executed this Note on the date first indicated above.

BORROWER:

BROOKDALE SENIOR LIVING INC., a Delaware corporation

By:     __________________________

Name:     __________________________

Its:      ___________________________

Exhibits listed below have been omitted pursuant to Item 601(a)(5) of Regulation S-K:

Exhibit A: Certain leases, agreements regarding leases and other documents relating thereto

Exhibit B: Properties against which the Summerville Loan is secured by a mortgage lien

Exhibit C-1: Amended and Restated Master Lease and Security Agreement (filed separately as Exhibit 10.2)

Exhibit C-2: Amended and Restated Guaranty (filed separately as Exhibit 10.3)

Exhibit C-3: Amended and Restated Letter Agreement

Exhibit C-4: Second Amended and Restated Omnibus Agreement

Exhibit E: [Reserved]

Exhibit F: Warrant (filed separately as Exhibit 10.4)

Exhibit G: Letters of Credit

EX-10.2

Exhibit 10.2

Portions of this exhibit that have been marked by [***] have been omitted because the Registrant has determined they are not material and would likely cause competitive harm to the Registrant if publicly disclosed.

EXECUTION VERSION

AMENDED AND RESTATED MASTER LEASE AND SECURITY AGREEMENT

Between

The Entities That Are Signatories Hereto As “Landlord”,

as Landlord

and

The Entities That Are Signatories Hereto As “Tenant”,

as Tenant

July 26, 2020

Table of Contents

Section    Page

1.Defined Terms	1
2.Premises; Single Lease; Lease Combination and Amendment and Restatement	1
2.1.Premises	1
2.2.Single Lease	2
2.3.Amendment and Restatement	2
3.Term	3
3.1.Initial Term	3
3.2.Renewal Terms	3
3.3.Term Defined	3
4.Rent	4
4.1.Minimum Rent, Adjustments	4
4.2.Additional Rent	5
4.3.[Reserved]	6
4.4.Tax and Insurance Escrow	6
4.5.Absolute Net Lease	9
4.6.Payment Method	9
5.Operating Covenants	9
5.1Insurance	9
5.2.Permitted Use	13
5.3.Tenant Property	14
5.4.Authorizations	14
5.5.Compliance with Requirements, Third Party Payor Programs and Permitted Encumbrances	15
5.6.Preservation of Business	17
5.7.Hazardous Materials	17
5.8.Financial, Management and Regulatory Reports	18
5.9.Intentionally Deleted	18
5.10.Negative Covenants	18
5.11.Furnish Information	19
5.12.Further Assurances	20
5.13.No Impairment	20
5.14.Permitted AR Financing	20
5.15.No Liens	20
6.Condition and Maintenance of the Premises	20
6.1.Acceptance “AS IS”	20
6.2.Tenant’s Maintenance Obligations	21
6.3.Upgrade Expenditures	21

1

6.4.Alterations	25
6.5.Minimum Rent Increases	26
6.6.Granting of Easements and Licenses	27
7.Events of Default; Remedies	28
7.1.Master Lease Events of Default	28
7.2.Facility Defaults	30
7.3.Landlord Termination Right	31
7.4.Remedies	32
8.Obligations of Tenant on Expiration or Early Termination of the Lease	35
8.1.Surrender of Possession	35
8.2.Transition of Operations	36
8.3.Facility Termination	38
8.4.Tenant Property	39
8.5.Holding Over	39
8.6.Survival	39
9.Certain Landlord Rights	39
9.1.Landlord’s Security Interest and Financing Statements	39
9.2.Entry and Examination of Records	40
9.3.Estoppel Certificates	40
9.4.Conveyance Release	40
9.5.Landlord’s Financing	41
10.Assignment and Subletting	41
10.1.Prohibition on Transfer	41
10.2.Effect of any Unapproved Transfer	41
10.3.Permitted Transfers	41
10.4.Rights of Landlord	42
10.5.Transfer Defined	42
10.6.Subleases	42
11.Damage and Destruction	43
11.1.Notice of Property Loss	43
11.2.Substantial Destruction	43
11.3.Partial Destruction	44
11.4.Restoration	44
11.5.Disbursement of Insurance Proceeds	45
11.6.Insufficient Proceeds/Risk of Loss	45
11.7.Landlord’s Inspection	46
11.8.Not Trust Funds	46
11.9.Waiver	46
11.10.Facility Mortgagee	46
12.Condemnation	46

2

12.1.Total Taking	46
12.2.Partial Taking	47
12.3.Restoration	47
12.4.Temporary Taking	47
12.5.Waiver	47
13.Indemnification by Tenant	47
13.1.Indemnity	47
13.2.Indemnity Claims Process	48
13.3.Survival of Indemnity	48
13.4.Waiver of Subrogation	49
14.Combination of Leases and New Leases	49
14.1.Combination of Leases	49
14.2.New Lease	49
15.Miscellaneous	49
15.1.Attorneys’ Fees	49
15.2.Non-Recourse	49
15.3.General REIT Provisions	49
15.4.Prohibited Transactions	50
15.5.Personal Property REIT Requirements	50
15.6.Impermissible Services REIT Requirements	50
15.7.Waiver of Jury Trial	51
15.8.Notices	51
15.9.Interpretation	52
15.10.Time of the Essence	52
15.11.Severability	52
15.12.General Terms	52
15.13.Governing Law	52
15.14.Anti-Terrorism Representations	53
15.15.Notice to the Department of Health	53
15.16.Confidentiality	53
15.17.Permitted Contests	54
15.18.Landlord Restructuring Right	55
15.19.State Specific Provisions	55

3

EXHIBITS AND SCHEDULES

Defined Terms.....................................................................................................................Exhibit A

Real Property Legal Description..........................................................................................Exhibit B

Landlord Personal Property..................................................................................................Exhibit C

Fair Market Rental...............................................................................................................Exhibit D

Form OTA............................................................................................................................Exhibit E

Financial, Management and Regulatory Reports..................................................................Exhibit F

Restrictive Covenants..........................................................................................................Exhibit G

Combination of Leases and New Leases; Proportionate Shares..........................................Exhibit H

Request Form........................................................................................................................Exhibit I

[Reserved]............................................................................................................................Exhibit J

Form of Subordination of Management Agreement.............................................................Exhibit K

Sale Facilities.......................................................................................................................Exhibit L

Facility Information...........................................................................................................Schedule 1

Authorizations and Licensed Units/Beds.......................................................................Schedule 1A

[Reserved]..................................................................................................................Schedule 2.3.1

Site Specific Provisions...............................................................................................Schedule 2.3.5

[Reserved]..................................................................................................................Schedule 4.1.5

[Reserved]..................................................................................................................Schedule 4.1.6

[Reserved].....................................................................................................................Schedule 4.6

4

Facilities Previously Under Existing Lease with no Vehicle Conveyance.......................Schedule 5.3

Affiliate Management Agreements............................................................................Schedule 5.10.1

Illustrative Example of Upgrade Expenditures Provisions...........................................Schedule 6.3.5

Upgrade Expenditures..............................................................................................Schedule 6.3.5.2

[Reserved]...............................................................................................................Schedule 6.5.5.9

Form of Guaranty Reaffirmation................................................................................Schedule 7.2.7

5

AMENDED AND RESTATED MASTER LEASE AND SECURITY AGREEMENT

This AMENDED AND RESTATED MASTER LEASE AND SECURITY AGREEMENT (this “Lease”) is entered into as of July 26, 2020 (the “Effective Date”) by and among each of the entities identified on Schedule 1 as a Landlord (individually and collectively, “Landlord”), and each of the entities identified on Schedule 1 as a Tenant (individually and collectively, “Tenant”).

WHEREAS, Landlord and Tenant entered into that certain Master Lease and Security Agreement dated as of April 26, 2018, as amended by that certain Amendment No. 1 to Master Lease and Security Agreement effective as of September 1, 2018, that certain Amendment No. 2 to Master Lease and Security Agreement dated as of April 22, 2019, that certain Amendment No. 3 to Master Lease and Security Agreement dated as of May 1, 2019, that certain Amendment No. 4 to Master Lease and Security Agreement dated as of September 26, 2019, that certain Amendment No. 5 to Master Lease and Security Agreement dated as of December 9, 2019, that certain Amendment No. 6 to Master Lease and Security Agreement dated as of March 4, 2020 and that certain Amendment No. 7 to Master Lease and Security Agreement dated as of July 1, 2020 (the “Original Master Lease”);

NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements set forth in this Lease, Landlord and Tenant do hereby amend and restate the Original Master Lease as follows:

1.Defined Terms. For all purposes of this Lease, (a) except as otherwise expressly provided, all accounting terms not otherwise defined in this Lease have the meanings assigned to them under GAAP and (b) words whose initial letters are capitalized are defined terms. When used in this Lease, defined terms shall have the meaning set forth on Exhibit A to this Lease or as defined elsewhere in this Lease and include the plural as well as the singular.

2.Premises; Single Lease; Lease Combination and Amendment and Restatement.

2.1. Premises. Subject to the Permitted Encumbrances and the terms and conditions of this Lease, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the real property legally described on Exhibit B, the improvements located thereon (each a “Facility”, and collectively, the “Facilities”) and the personal property owned by Landlord and located therein (and specifically excluding the Excluded Property and the Excluded Vehicles, which shall at all times be and remain the sole property of Tenant, subject to the other terms of this Lease ) (the “Landlord Personal Property”) as described on Exhibit C, with each such Facility to be used in accordance with and for the purposes set forth in Section 5.2. All of the real property, Facilities and Landlord Personal Property is hereinafter collectively referred to as the “Premises” and business conducted at the Premises is hereinafter referred to as the “Business”. Landlord and Tenant acknowledge that Tenant may elect to require Landlord to market for sale the Sale Facilities, and that, upon any such sale, this Lease

1

shall terminate as to the applicable Sale Facility(ies), in each case pursuant to the terms of Exhibit L.

2.2. Single Lease. Tenant and Landlord acknowledge and agree that this Lease constitutes a single, indivisible lease of all of the Premises, and together the Premises constitute a single economic unit. Landlord has agreed to all the provisions of this Lease, including Minimum Rent, Additional Rent and other amounts payable hereunder, based on the intent to lease all of the Premises as a single and inseparable transaction, and such provisions would have been materially different had the parties intended to enter into separate leases or a divisible lease. Tenant hereby knowingly waives and relinquishes all of its rights (a) under Section 365 (11 U.S.C. § 365) of the Federal Bankruptcy Code or any successor or replacement thereof or any analogous state or federal law, to assume, reject or assign, selectively or individually, the right to lease any of the Facilities covered by this Lease separately from the other Facilities covered by this Lease and (b) to assert that this Lease is anything other than a single, indivisible lease of all of the Premises or anything other than a single and inseparable transaction. Tenant further acknowledges and agrees that the existence of multiple landlords, and multiple tenants, under this Lease, and the existence of provisions within this Lease that allocate shares of the Minimum Rent among the Facilities included in the Premises, do not supersede or affect the parties’ clear, fundamental and material intention that this Lease is and constitutes a single, indivisible lease of all of the Premises and a single and inseparable transaction; provided, however, the terms of the foregoing Section 2.2 are subject to Landlord’s obligation to sell the Sale Facilities as provided herein and pursuant to Exhibit L, and each and every other provision of this Lease that permits or provides for the removal of a Facility and partial termination of this Lease with respect to any Facility.

2.3. Amendment and Restatement.

2.3.1 Amendment and Restatement. Each of the Persons that is included within the terms “Landlord” and “Tenant” under this Lease acknowledges and agrees that, as of immediately prior to the Effective Date, it is a landlord or a tenant under the Original Master Lease.

2.3.2 Assumption by Landlord. Each Person that is included within the term “Landlord” hereby joins in and agrees to be bound by this Lease as a Landlord hereunder and hereby assumes all of the liabilities and obligations of a Landlord under this Lease arising from and after the Effective Date.

2.3.3. Assumption by Tenant. Each Person that is included within the term “Tenant” hereby joins in and agrees to be bound by this Lease as a Tenant hereunder, hereby assumes all of the liabilities and obligations of a Tenant under this Lease arising from and after the Effective Date and, as further provided in Section 15.11 hereof, hereby agrees that it is and shall be jointly and severally liable for all liabilities and obligations of Tenant under this Lease.

2

2.3.4. Certain Effects of the Lease Combination under the Original Master Lease. Effective as of the Effective Date of the Original Master Lease and without limitation of the other provisions of this Lease, Landlord and Tenant hereby re-confirm that:

2.3.4.1 Notwithstanding anything to the contrary contained in this Lease, (i) those certain Facilities commonly known as Brookdale Santa Fe in Santa Fe, New Mexico, Brookdale Allenmore in Tacoma, Washington, and Brookdale Mt. Hood in Gresham, Oregon, remain subject to Ground Leases, and (ii) Landlord and Tenant acknowledge and agree that, with respect to each such Facility and for so long as the Ground Lease pertaining to such Facility remains in effect, (a) the lessee under the Ground Lease applicable to such Facility (all such Ground Lease lessees collectively, the “Ground Lease Facility Landlords”) is and shall remain, until the applicable ground lessor shall otherwise agree, the sole ground lessee under such Ground Lease notwithstanding the master lease nature of this Lease, and no other Person constituting “Landlord” hereunder shall be deemed a ground lessee under such Ground Lease or be deemed to have assumed any rights or obligations under such Ground Lease, (b) the Person listed on Schedule 1 as the “Tenant” with respect to such Facility (all such Persons, collectively, the “Ground Lease Facility Tenants”) is and shall remain the sole ground sublessee of such Facility, until the ground lessor shall otherwise agree (other than residents or patients of such Facility and sub-sublessees permitted by the terms of such Ground Lease), and no other Person constituting “Tenant” hereunder shall be deemed a ground sublessee under such Ground Lease or be deemed to have assumed any rights or obligations under this Lease with respect to such Ground Lease; provided, however, that the terms of this clause (b) shall not be deemed to limit the obligations of Guarantor under the Guaranty with respect to any such Facility or Tenant, and (c) this Lease, as it relates to each such Facility, constitutes a continuation of the Existing Lease (as defined in the Original Master Lease) and respective Existing ARLs/Documents (as defined in the Original Master Lease) that relate to such Facility.

2.3.5 Site Specific Provisions. Tenant and Landlord shall continue to be bound by the provisions set forth in Schedule 2.3.5 attached hereto as to the Facilities to which they relate, as specified in such Schedule 2.3.5.

3.Term.

3.1. Initial Term. The initial term (the “Initial Term”) of this Lease shall be deemed to have commenced, with respect to each Facility, on the commencement date that is applicable to such Facility as provided in the Existing Lease that applied to such Facility prior to the Effective Date of the Original Master Lease and shall end at 11:59:59 p.m. on December 31, 2025.

3.2. Renewal Terms. Provided there is not an existing and continuing Master Lease Event of Default under this Lease as of the date of delivery of the Renewal Notice or on the first day of the Renewal Term, and subject to the terms of Exhibit H, Tenant shall have the option to extend this Lease for 2 renewal terms (each, a “Renewal Term" and collectively, the “Renewal Terms”) of 10 years each, commencing upon the expiration of the Initial Term

3

or the then applicable Renewal Term, upon the terms and conditions of this Lease. To exercise the option as to any Renewal Term, subject to the terms of Exhibit H, Tenant shall deliver to Landlord notice (each, a “Renewal Notice”) of Tenant’s intention to exercise such extension no earlier than 18 months, and no later than 13 months, before the end of the Initial Term or the then current Renewal Term.

3.3. Term Defined. When used in this Lease, the “Term” includes the Initial Term and all Renewal Terms for which Tenant has extended this Lease pursuant to this Section 3 and any extension by Landlord pursuant to Section 8.2.5 and any extension pursuant to Section 5.7 with respect to the applicable Facility(ies) subject to such extension pursuant to Section 5.7 (unless Landlord otherwise so elects).

4.Rent.

4.1. Minimum Rent, Adjustments. During the Term, Tenant shall pay to Landlord as minimum rent (“Minimum Rent”) the amounts set forth in this Section 4.1.

4.1.1.Minimum Rent. Commencing on July 1, 2020 the Minimum Rent shall be at the rate of $85,367,193.71 per annum (with Minimum Rent for the period between July 1, 2020 and December 31, 2020 prorated accordingly). Minimum Rent shall be increased during the Term pursuant to Section 4.1.2. Minimum Rent shall be payable in 12 equal monthly installments on the 21st day of each month during the Term with each such payment being attributable to the month in which such payment is made (i.e., in arrears for the first 20 days of the month and in advance for the remainder of such month), and shall be in addition to all other amounts payable by Tenant to Landlord under this Lease. As of the Effective Date, Schedule 1 includes, with respect to each Facility, the proportionate share of Minimum Rent allocated to such Facility (the “Proportionate Share”), which Proportionate Share is expressed as a percentage (to two decimal places). For each Lease Year, subject to adjustment as otherwise provided in this Lease, the respective Proportionate Share of such Minimum Rent applicable to each Facility shall be as set forth on a revised Schedule 1 to be attached hereto and made a part hereof.

4.1.2. Adjustments to Minimum Rent. On January 1, 2022 and on January 1 of each Lease Year thereafter (subject to Section 4.1.3 below), the Minimum Rent for such Lease Year shall be an amount equal to the sum of:

4.1.2.1. the annual Minimum Rent that was in effect with respect to the Premises as of the end of the immediately preceding Lease Year, plus

4.1.2.2. the product of the annual Minimum Rent referenced in Section 4.1.2.1 above multiplied by 3%.

4.1.3. Minimum Rent for First Lease Year of Each Renewal Term. Notwithstanding anything in Section 4.1.2 to the contrary, Minimum Rent for the first Lease Year of each Renewal Term, if any, shall be the greater of (a) the Fair Market Rental of the

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Premises as established pursuant to the terms of Exhibit D or (b) the increased Minimum Rent for such Lease Year as determined pursuant to Section 4.1.2, and such Minimum Rent shall be allocated to the Facilities as jointly determined by Landlord and Tenant in their commercially reasonable discretion and Schedule 1 shall be amended accordingly to reflect the revised Proportionate Share applicable to each Facility. In the event that Landlord and Tenant are unable to agree on an allocation of Minimum Rent in such first Lease Year of any Renewal Term, the Proportionate Share allocable to each Facility then subject to this Lease shall remain unchanged from the Proportionate Share allocated to such Facility immediately prior to such Renewal Term.

4.1.4. Additional Adjustment of Minimum Rent. If the Premises are owned by a real estate investment trust or an entity owned directly or indirectly by a real estate investment trust (other than a taxable real estate investment trust subsidiary), then Landlord and Tenant agree that all Minimum Rent paid to Landlord under this Lease are intended to qualify as “rents from real property” within the meaning of Section 856(d) of the Internal Revenue Code of 1986, as amended (the “Code”) and any regulations promulgated thereunder. Should the Code or such regulations, or interpretations of them by the Internal Revenue Service, be changed in a manner which causes the Landlord to have reasonable doubt that any or all of the Minimum Rent qualifies as “rent from real property” for the purposes of Section 856(d) of the Code and such regulations, other than by reason of the application of Section 856(d)(2)(B) of the Code, then Landlord may adjust Minimum Rent so that it will qualify, provided, however, that any adjustments required pursuant to this Section shall be made so as to produce the equivalent (in economic terms) Minimum Rent as payable prior to the adjustment, and for the avoidance of doubt, no such changes will have the effect of increasing, in the aggregate or in present value terms, Tenant’s payment obligations under this Lease.

4.2. Additional Rent. In addition to Minimum Rent, Tenant shall pay and discharge as and when due and payable the following and other amounts payable by Tenant to Landlord under this Lease other than Minimum Rent (collectively, “Additional Rent”):

4.2.1. Taxes; Other Charges. Subject to Section 4.4, Tenant shall pay and discharge all Taxes and Other Charges assessed against the Premises and/or the Business prior to delinquency or imposition of any fine or penalty (“Penalty”). Tenant may pay the Taxes and Other Charges in permitted installments (whether or not interest accrues on the unpaid balance) when due and before any Penalty. Each party has the right, but not the obligation, in good faith to protest or contest (a “Protest”) in whole or in part (a) the amount or payment of any Taxes or Other Charges and (b) the existence, amount or validity of any Lien by appropriate proceedings sufficient to prevent its collection or other realization and the sale, forfeiture or loss of any portion of the Premises or Rent to satisfy it (as long as Tenant provides Landlord with reasonable security to assure the foregoing (which shall include a posting a bond)). Tenant shall diligently prosecute any such Protest instituted by Tenant at its sole cost and expense and pay such Taxes, Other Charges or Liens before the imposition of any Penalty. Landlord will cooperate fully in any Protest, subject to Tenant’s obligations under Section 4.2.3.

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4.2.2. Insurance Premiums. Subject to the provisions of Section 4.4,Tenant shall pay all premiums for the insurance coverage required by Section 5.1.

4.2.3. Other Landlord Expenses. Tenant shall pay, on behalf of Landlord, or reimburse Landlord for, all out-of-pocket costs or expenses paid or incurred by Landlord, including reasonable attorneys’ fees (collectively, such expenses, “Other Landlord Expenses”), in connection with any of the following activities undertaken by, or on behalf of, Landlord under this Lease:

4.2.3.1. The review, execution, negotiation or delivery of any consent, waiver, or approval requested of Landlord by Tenant under this Lease (other than as excluded in this Section 4.2.3.1), including any request for consent to a Transfer (including in connection with a Transfer permitted by Section10.3.3) or any so-called “landlord’s waiver”; provided, however, notwithstanding the foregoing, Tenant is not required to pay any such costs or expenses (a) arising out of or in connection with any Change of Control or (b) for consent or approval of or review by Landlord or its representatives of any Alterations or other improvements including any plans and specifications in connection therewith and including any Restoration Plans and Specifications.

4.2.3.2. (i) Any assistance provided by Landlord at Tenant’s request in connection with a Protest pursuant to Section 4.2.1, and (ii) any Protest pursued solely by Landlord but only to the extent such costs and expenses are less than or equal to the amount of any tax reduction obtained by Landlord as a result of such Protest; and

4.2.3.3. The review, execution, negotiation or delivery of any intercreditor agreement (or any amendment or supplement thereto) permitted pursuant to Section 5.14.

4.2.4. Late Charges. The late payment of Rent or other amounts due under this Lease will cause Landlord to lose the use of such money and incur administrative and other expenses not contemplated under this Lease. While the exact amount of the foregoing is extremely difficult to ascertain, the parties agree that, as a reasonable estimate of fair compensation to Landlord, if any Rent or other amount is not paid within (a) five days after the due date for such payment, then Tenant shall thereafter pay to Landlord on demand a late charge equal to 5% of such delinquent amounts and (b) 10 days after the due date for such payment, such unpaid amount shall accrue interest from such due date at the Agreed Rate until paid.

4.2.5. Reimbursement. Any costs or expenses paid or incurred by Landlord on behalf of Tenant that constitute Additional Rent shall be reimbursed by Tenant to Landlord within 10 days after the presentation by Landlord to Tenant of invoices for such Additional Rent.

4.3. [Reserved.]

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4.4. Tax and Insurance Escrow.

4.4.1. Suspension of Obligation. Notwithstanding anything to the contrary contained in this Section 4.4, Tenant shall not be required to make or maintain any Escrow Deposits, and Tenant’s obligation to make Escrow Deposits (as defined below) pursuant to the provisions of this Section 4.4 shall be suspended if and for so long as no Key Provisions Event of Default has occurred. Subject to the terms of Section 4.4.2, upon the occurrence of Key Provision Event of Default, Tenant shall, within 10 Business Days after notice from Landlord, deposit such amounts as Landlord reasonably determines to be required to cause the Escrow Deposits (defined below) to be funded at levels that ensure that such Escrow Deposits, taking account of the monthly Escrow Deposits required by the below provisions of this Section 4.4, are adequate to pay 100% of the anticipated expenses to which such Escrow Deposits relate for the 12-month period from and after such deposit date.

4.4.2. Impound. Following the occurrence of a Key Provision Event of Default, on or before the first day of each month during the Term, commencing, in the case of each Facility, with the first day of the month immediately following the Effective Date, Tenant shall deposit (“Escrow Deposits”) (a) 1/12^th of 100% of the amount required to discharge, when due, the annual amount of real property Taxes that are attributable, on an accrual basis, to the then-current Lease Year (as reasonably estimated or determined by Landlord) (“Real Property Taxes”) and (b) 1/12^th of 100% of the annual premiums for all of the insurance policies required by Section 5.1 (excluding workers’ compensation and motor vehicle liability insurance) with respect to the then-current Lease Year (as reasonably estimated or determined by Landlord). Notwithstanding anything to the contrary contained in this Lease (but except as set forth in the definition of Insurance Premium Impound Account Trigger Event, which shall govern Escrow Deposits for insurance premiums), in the event that Escrow Deposits are commenced pursuant to this Section 4.4.2 and thereafter Tenant cures the Key Provision Event of Default that triggered the requirement for such Escrow Deposits and, following such cure, no Key Provision Event of Default occurs in the one (1) year period following such cure, Tenant’s obligation to continue to make Escrow Deposits shall again be suspended pursuant to Section 4.4.1. Such suspension shall continue unless a new Key Provision Event of Default occurs, whereupon this Section 4.4.2 shall again become operative in its entirety.

4.4.3. Initial Deposits. Subject to Section 6 below, if the requirement to post Escrow Deposits shall commence on any day other than the first day of any month, on such date, Tenant shall make (a) an Escrow Deposit with respect to Real Property Taxes equal to a pro-rata portion (based on the number of days remaining in the month) of 1/12^th of 100% of the amount required to discharge, when due, the annual amount of Real Property Taxes that are attributable, on an accrual basis, to the then-current Lease Year (as estimated or determined by Landlord) and (b) an Escrow Deposit with respect to insurance premiums equal to a pro-rata portion (based on the number of days remaining) of 1/12^th of 100% of the amount required to discharge, when due, the annual premiums for all of the insurance policies required by Section 5.1 (excluding workers’ compensation and motor vehicle liability insurance).

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4.4.4. Adjustments to Deposits. If Landlord determines, at any time, with respect to a particular calendar year, that (a) the sum of (1) the current Escrow Deposits held by Landlord for Real Property Taxes or insurance premiums (as applicable) attributable (on an accrual basis), to such calendar year, plus (2) the amount of the Escrow Deposits that are expected to be paid by Tenant for such Real Property Taxes or insurance premiums (as applicable) attributable (on an accrual basis) to such calendar year on or prior to the date that is 30 days prior to the due date of the next installment or payment of such Real Property Taxes or insurance premiums (as applicable), will be less than (b) 100% of the estimated amount of the portion of such next installment or payment(as reasonably estimated or determined by Landlord) that is attributable (on an accrual basis) to the Term, Tenant shall remit the amount of the deficiency to Landlord within 10 days after demand from Landlord (any such required payment, a “Required Escrow Deficiency Payment”). Landlord may commingle the Escrow Deposits with other assets of Landlord or its Affiliates, and Tenant shall not be entitled to any interest on the Escrow Deposits.

4.4.4.1. If Landlord transfers this Lease to any transferee, it shall transfer all such Escrow Deposits to such transferee, and Landlord shall thereafter have no liability of any kind with respect to any amounts so transferred to such transferee.

4.4.4.2. Notwithstanding any provision to the contrary in this Section 4.4.4, if in connection with the expiration or earlier termination of this Lease as it relates to a particular Facility, Landlord reasonably determines that any of the then current Escrow Deposits relating to such Facility will be less than 100% of the amount of the actual obligation of Tenant for which such Escrow Deposits relating to such Facility are being held (as reasonably estimated or determined by Landlord), on an accrual basis and taking into account such termination date then within 10 days of Landlord’s request, Tenant shall remit the amount of the deficiency to Landlord; provided that if the Escrow Deposits relating to such Facility that are held by Landlord, based on actual bills and invoices, exceed 100% of the amount of the actual obligation to which they relate, then, provided no Master Lease Event of Default is in existence and, as to the applicable Facility, that no Facility Default is in existence, Landlord will refund such excess amount to Tenant on or prior to the date that is 30 days after the final determination by Landlord of the amount of such obligations (and in no event later than 60 days after such expiration or termination). Other than as expressly set forth in the immediately preceding sentence, upon the expiration or earlier termination of this Lease as it relates to a particular Facility, all Escrow Deposits held by Landlord with respect to such Facility in accordance with this Section 4.4 shall remain the property of Landlord, without any obligation on Landlord’s part to credit Tenant in any manner therefor, it being the intent of the parties’ that because Escrow Deposits are being made by Tenant on an accrual basis, there should be no need for prorationing of Taxes (or Escrow Deposits related thereto) upon termination of this Lease as to one (1) or more Facilities; provided, however, if following such termination, any Real Property Taxes are refunded or credited as a result of any Protest filed during the Term with respect to such Facility(ies), within thirty (30) days after receipt of such refund or credit Landlord shall refund to Tenant any proportionate share thereof attributable

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on a pro rata basis to the period prior to termination except for amounts owed to Landlord relating to an Event of Default.

4.4.5. Survival. The rights and obligations of Landlord and Tenant under this Section 4.4 shall survive the expiration or earlier termination of this Lease.

4.4.5. Use of Escrows.

4.4.6.1. The Escrow Deposits shall be the property of Landlord, subject to the Landlord’s obligations to return all or a portion of such Escrow Deposits to Tenant in accordance with the terms of this Lease, and shall not bear interest nor be held by Landlord in trust or as an agent of Tenant and may be commingled with other assets of Landlord or its Affiliates.

4.4.6.2. As long as no Master Lease Event of Default or, with respect to the applicable Facility, any Facility Default has occurred and remains outstanding and Tenant has delivered to Landlord any bills or premium notices that it has received, Landlord shall remit, to either (a) the applicable Governmental Authority, insurance carrier or other payee or (b) Tenant, out of Escrow Deposits deposited with Landlord pursuant to this Section 4.4, the Real Property Taxes and Tenant’s insurance premiums (excluding insurance premiums for workers’ compensation or motor vehicle liability insurance). Notwithstanding anything to the contrary in the immediately preceding sentence, Landlord shall have no obligation to pay, or any liability to Tenant for failing to pay, any Real Property Taxes or such insurance premiums to the extent that (1) any Master Lease Event of Default has occurred and is continuing or, with respect to a Facility, a Facility Default has occurred and is continuing with respect to such Facility, (2) insufficient Escrow Deposits are held by Landlord at the time Real Property Taxes or such insurance premiums become due and payable, or (3) Tenant has failed to provide Landlord with bills and premium notices.

4.4.6.3. Following the occurrence of any Master Lease Event of Default, Landlord may apply the Escrow Deposits to cure the Master Lease Event of Default, on account of any damages suffered or incurred by Landlord in connection with any Master Lease Event of Default or to any other obligations of Tenant arising under this Lease, in such order as Landlord may determine in its discretion.

4.4.6.4. Following the occurrence and during the continuance of any Facility Event of Default, Landlord may apply the Escrow Deposits posted with respect to the Facility where such Facility Default exists or occurred to cure such Facility Default or on account of any damages suffered or incurred by Landlord in connection with such Facility Default in such order as Landlord may determine in its discretion.

4.5. Absolute Net Lease. All Rent payments shall be absolutely net to Landlord, free of any and all Taxes, Other Charges, and operating or other expenses of Tenant of any kind whatsoever relating to the Premises, all of which shall be paid by Tenant. Tenant shall continue to perform its obligations under this Lease even if Tenant claims that it has been

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damaged by Landlord or Landlord has defaulted hereunder. Thus, Tenant shall at all times remain obligated under this Lease without any right of set-off, counterclaim, abatement, deduction, reduction or defense of any kind. Tenant’s sole right to recover damages against Landlord under this Lease shall be to prove such damages in a separate action.

4.6. Payment Method. All payments of Rent shall be made to Landlord (or to such Person as Landlord may designate in writing) by wire transfer of immediately available federal funds pursuant to wiring instructions provided by Landlord.

5.Operating Covenants.

5.1. Insurance.

5.1.1. General Requirements.

5.1.1.1. All insurance provided for in this Lease shall (A) be maintained under valid and enforceable policies issued by insurers approved to do business in the state or states where the Premises are located and having general policyholders and financial ratings of not less than “A-” and “VII”, respectively, in the then current A.M. Best’s Insurance Report, or Tenant may insure various risks in Tenant’s, Guarantor’s or Guarantor’s Affiliate’s captive insurance company, as referenced in Section 5.1.4, (B) name Landlord, any Facility Mortgagee and any ground lessor under a Ground Lease and their respective Affiliates, shareholders, directors, officers, employees, property managers, agents, representatives and assigns (“Landlord Insured Parties”) as additional insureds (with the exception of Tenant’s workers’ compensation/employer’s liability insurance, crime and employment practices liability insurance), and for the property insurance referenced in Section 5.1.2.1, Section 5.1.2.2, Section 5.1.2.3 and Section 5.1.2.4, name the Landlord as the owner and name the Landlord and any Facility Mortgagee, if applicable, as loss payable beneficiaries, (C) cover Tenant’s operations at the applicable Facility or Facilities, (D) in the event any insurance policy is cancelled or materially changed provide not less than 30 days’ prior written notice to Landlord (10 days in the event of non-payment of premium) as agreed to by insurers, (E) be primary and provide that any insurance maintained by Landlord Insured Parties for the Premises is excess and noncontributing with Tenant’s insurance or captive insurance policy, (F) be written on an “occurrence based” policy, unless otherwise provided in this Section 5.1; and (G) include a waiver of subrogation and all rights of recovery limited to any deductible or self-insured retention (1) that is in favor and for the benefit of Landlord Insured Parties (2) for any claim or liability arising from Tenant’s operations at, or occupation and use of, the Premises or other actions covered by any such captive insurance policy.

5.1.1.2. Tenant shall provide Landlord: (A) for any policy described in Section 5.1.2.1-5.1.2.4; an ACORD 28 Evidence of Commercial Property Insurance Certificate of Insurance, or equivalent form; (B) evidence of any National Flood Insurance Policy(ies) (C) an annual statement of the total insured property values for the Facility or Facilities covered under Section 5.1.2.1-5.1.2.4, as well as, an annual statement of total insured property values for Tenant’s entire portfolio grouped by zip code, and (D) for any

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policy other than those described in Section 5.1.2.1-5.1.2.4, a satisfactory ACORD 25 (05/2010) edition Certificate of Liability Insurance, or equivalent form, in each case evidencing the existence of the insurance required by this Lease and showing the interest of Landlord Insured Parties prior to the commencement of the Term and, for any renewal policy, delivered prior to the expiration date of the policy being renewed. In addition, Landlord may require that Tenant provide a complete copy of the related policy at the later of (a) 15 Business Days or (b) three Business Days after the policy becomes available to Tenant.

5.1.1.3. Tenant may satisfy the requirements for insurance coverage under this Lease through coverage under a so-called blanket policy or policies of insurance carried and maintained by Tenant; provided, however, that the coverage afforded Landlord will not be reduced or diminished or otherwise be different from that which would exist under a separate policy meeting all other requirements of this Lease.

5.1.2. Required Policies. During the Term, Tenant shall maintain the following insurance at its sole cost and expense, including any policy deductibles or self-insured retentions, and any claims thereunder shall be defended by and adjudicated by and at the expense of its insurance carrier, or by Tenant within any deductible or self-insured retention:

5.1.2.1. Property insurance coverage with respect to each Facility or Facilities against loss or damage from all causes under standard “all risk” or “special perils” property insurance coverage with an agreed amount endorsement (such that the insurance carrier(s) has accepted the amount of coverage and has agreed that there will be no co-insurance penalty), without exclusion for fire, lightning, windstorm, hail, water damage, explosion, smoke damage, vehicle damage, sprinkler leakage, flood, mold (only as a result of a covered peril), vandalism and malicious mischief, named storm, earthquake, terrorism or any other risks normally covered under an extended coverage endorsement, in amounts that are not less than 100% of the full replacement cost of such Facility, including all Alterations, and all Landlord Personal Property and Tenant Personal Property associated therewith (including the cost of compliance with changes in Legal Requirements, demolition, debris removal and increased cost of construction) and such property insurance policy shall cover mold as a result of a covered peril at a sublimit of $[***];

5.1.2.2. If any Facility contains steam boilers, steam pipes, steam engines, steam turbines or other high pressure vessels, machinery and equipment breakdown insurance with an agreed amount endorsement (such that the insurance carrier(s) has/have accepted the amount of coverage and has agreed that there will be no co-insurance penalty), covering the major components of the central heating, air conditioning and ventilating systems, boilers, other pressure vessels, high pressure piping, and machinery, elevators, and escalators, if any, and other similar equipment installed in such Facility, in an amount equal to 100% of the full replacement cost of such Facility, which policies shall insure against physical damage to and loss of occupancy and use of such Facility arising out of an accident, explosion, or breakdown covered thereunder;

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5.1.2.3. Business interruption and extra expense coverage (A) with respect to each Facility for loss of time element on an actual loss sustained basis or, but no less than 12 months, covering perils consistent with the requirements of Section 5.1.2.1 (B) with an agreed amount endorsement (such that the insurance carrier(s) has accepted the amount of coverage and has agreed that there will be no co-insurance penalty), (C) providing that any covered loss thereunder shall be payable to Tenant and Landlord as joint loss payees, and (D) containing an extended period indemnity endorsement that provides that the continued loss of income will be insured until such income returns to the same level it was prior to the loss or the expiration of not fewer than six months after the date of the completed repairs;

5.1.2.4. Builder’s risk insurance coverage, at all times during which Alterations or structural construction or repairs are being made with respect to any Facility, and only if the coverage under Section 5.1.2.1 above does not otherwise apply, secured and written on a completed value form, (a) covering all risks insured against pursuant to Section 5.1.2.1 above, (b) including permission for early occupancy of the Facilities, (c) with an agreed amount endorsement (such that the insurance carrier(s) has accepted the amount of coverage and has agreed that there will be no co-insurance penalty) and (d) covering the interests of Landlord and Tenant and their respective architects, engineers, contractors and subcontractors;

5.1.2.5. Commercial general liability insurance coverage with respect to each Facility including, but not limited to, premises operations, products and completed operations liability, liquor liability, broad form property damage, blanket contractual liability for insured contracts, personal injury and advertising injury coverage and medical payments coverage against claims for bodily injury, death, personal and advertising injury, medical expenses, and property damage occurring on, in or about such Facility, affording the Landlord Insured Parties defense and indemnity protection, including healthcare professional liability coverage, occurrence or claims-made form with respect to all Facilities for damages for bodily injury, death, loss of service, or otherwise on account of professional services rendered or which should have been rendered, with no exclusion for [***], in a minimum amount of not less than $[***] each occurrence or claim and $[***] annual aggregate;

5.1.2.6. Workers’ compensation insurance coverage with respect to each Facility for injuries or occupational illness sustained by Tenant’s employees in the course of their employment and otherwise consistent with all applicable statutory and Legal Requirements and employer’s liability insurance coverage with limits of not less than $[***] each accident, $[***] bodily injury due to disease each employee and $[***] bodily injury due to disease policy limit and excess workers’ compensation with a limit not less than $[***] and excess workers’ compensation with limits not less than $[***] each accident dedicated to the Ohio locations only. In states where permissible, Tenant can provide similar coverage on a nonsubscriber basis;

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5.1.2.7. Motor vehicle liability insurance for all owned and non-owned vehicles, including any rented, hired, and/or leased vehicles, covering bodily injury, including death, and property damage with limits not less than $[***] each accident;

5.1.2.8. Umbrella/excess liability insurance in addition to primary coverage in an amount not less than $[***] each occurrence or claim and $[***] annual aggregate, on terms consistent with the commercial general liability insurance and healthcare professional liability policy, motor vehicle liability policies and employer’s liability policies required under this Section 5.1.2 and covering all claims typically covered by an umbrella/excess liability policy;

5.1.2.9. Crime insurance against employee dishonesty, with limits not less than $[***] per incident, including coverage for third parties;

5.1.2.10. Employment practices liability insurance on a claims made basis, with limits not less than $[***] per claim, including coverage for third parties;

5.1.2.11. Liquor liability insurance which may be on a claims made or occurrence basis covering dram shop liability if liquor is sold on the Premises, with limits not less than $[***] each incident and $[***] annual aggregate; and

5.1.2.12. Deductibles/self-insured retentions for the above policies shall not be greater than a $[***] deductible/self-insured retention for property insurance with a maximum [***]% of total insured values deductible/self-insured retention for high hazard wind, a maximum $[***] deductible/self-insured retention for flood and a maximum [***]% of total insured values deductible/self-insured retention for earthquake coverage; a $[***] deductible/self-insured retention for workers’ compensation/employer’s liability under nonsubscriber programs and under the Ohio excess workers’ compensation policy; a $[***] deductible/self-insured retention for motor vehicle liability; a $[***] deductible/self-insured retention for crime; a $[***] deductible/self-insured retention for employment practices liability; and a $[***] deductible/self-insured retention each claim for commercial general liability and a $[***] deductible/self-insured retention each claim for healthcare professional liability.

5.1.3. Claims Made Policies’ Requirements. With respect to the commercial general liability and healthcare professional liability insurance coverage required by this Section 5.1, Tenant may obtain and maintain commercial general liability and healthcare professional liability insurance on a claims-made basis, provided, however, that (1) the retroactive date must precede the Effective Date, (2) upon the expiration or termination of this Lease as it relates to, or with respect to any closed and discontinued operation at any Facility, Tenant shall keep in force the commercial general liability and healthcare professional liability insurance policies required under this Lease that relate to any such Facility for, or shall secure an extended reporting period on such policies that has a term of, at least the lesser of (i) statute of limitations in the state in which such Facility is located or (ii) 2 years after such expiration or termination of this Lease or closing and discontinuation of operations, as applicable, which

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shall name Landlord Insured Parties as additional insureds, (3) if the retroactive date is advanced or the policy is cancelled or not renewed and not replaced with a similar policy with the same retroactive date, Tenant must secure an extended reporting period for such retroactive-date-advanced, cancelled or non-renewed policy covering the Facility(ies) to which such policy applies or applied of not less than the lesser of (i) the statute of limitations in the state in which such Facility is located or (ii) 2 years following the date such policy’s retroactive date was advanced or such policy was cancelled or not renewed which shall name Landlord Insured Parties as additional insureds; and (4) the obligations referenced in clauses (2) and (3) of this Section 5.1.3 shall survive the expiration or termination of this Lease.

5.1.4. Captive Insurance. Notwithstanding anything to the contrary set forth in the Lease, but subject to the following terms and conditions, Tenant may self-insure, in full or in part, with respect to all or a substantial portion of the risks commonly insured against under the various types of insurance as are required to be carried herein through its Captive, Senior Service Insurance Limited, a wholly owned captive of Tenant (“Insurance Captive”). Throughout the Agreement Term, Insurance Captive shall continue to be fully funded annually, based on an actuarial review process approved by the board of directors of Insurance Captive, external auditor and any applicable Governmental Authority. Insurance Captive shall certify every twelve (12) months from the Effective Date of this Lease that Tenant’s Captive Insurance program is materially true, accurate and correct by two members of the board of directors of the Insurance Captive, and that its financial position is sufficient from a claims-paying ability.

5.1.5. Business Continuity. Tenant has in place, and shall maintain at all times, a business continuity plan for dealing in a commercially reasonably manner with different types of disasters, acts of God, or other events that have the potential to materially disrupt Tenant’s business at any Facility. Tenant has previously provided a written description of such plan to Landlord. Tenant shall notify Landlord promptly following any material change to such plan, which notice shall contain a description of the revised plan with the same level of detail as such written description.

5.1.6. Requirements for Claims Made Policies. Should any contractor’s, service provider’s, or vendor’s (each, a “Service Provider”) commercial general liability insurance coverage be written on a claims-made policy form, Tenant shall cause Service Provider for a period of two (2) years after completion and acceptance of the Work (i) to maintain commercial general liability insurance, including, but not limited to, products and completed operations liability, at their sole cost and expense, including any policy deductibles or self-insured retentions, satisfying the foregoing, or (ii) secure “tail” or extended reporting coverage if the commercial general liability policy, including, but not limited to, products and completed operations liability, is not renewed..

5.2. Permitted Use. Tenant shall use each Facility during the Term (a) as a Facility operated for the Primary Intended Use as shown on Schedule 1, and licensed as shown on such Schedule 1, if applicable, (b) for Ancillary Services, and (c) for no other purpose.

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Subject to the foregoing and the other provisions of this Lease, Tenant shall have the right from time to time to (i) increase the applicable number of licensed or unlicensed Units at a Facility, (ii) reduce the number of licensed Units or unlicensed Units at a Facility provided that (1) such Unit is removed in order to combine it with another Unit to create a larger resident Unit or convert it to create space to provide another use (whether Primary Intended Use of such Facility or any for permitted Ancillary Services), (2) the aggregate number of Units so removed from any Facility does not exceed the lesser of (A) [***] percent ([***]%) of the total number of licensed Units for such Facility and (B) [***] ([***]), and (3) a future application for the licensing of Units of the same type and number as the removed Units would not (under the Legal Requirement in effect at the time of such removal) require a certificate of need or any similar requirement. In addition and not in limitation of the foregoing, Tenant may seek Landlord’s consent to convert all or a portion of any Facility from one licensed category to another category (e.g. convert IL to AL) and Landlord agrees to not unreasonably withhold, condition or delay such consent. Landlord acknowledges and agrees that the number of licensed Units set forth on Schedule 1 represent the number of such Units as reflected on Tenant’s healthcare Authorizations for such Facilities (if such Facilities are licensed), but that Tenant may not have as many Units physically constructed or in use at any Facility on the Effective Date and thereafter from time to time. If, as a result of any Alteration or otherwise, the number of licensed Units at any Facility is increased or decreased in accordance with the terms of this Lease, or any of changes specified above shall occur, Schedule 1 shall, without further action of the parties, be correspondingly amended.

5.3. Tenant Property. Tenant shall obtain and install all items of furniture, fixtures, supplies and equipment not included as Landlord Personal Property as are reasonably necessary to operate each Facility in compliance with this Lease and all applicable Legal Requirements (all such Property as Tenant has obtained, “Tenant Personal Property”) and shall, at its expense, replace Landlord Personal Property as reasonably necessary for the aforesaid operation. Any fixtures installed at the Premises shall be the property of Landlord, whenever such fixtures are installed. Notwithstanding anything to the contrary contained herein, Landlord and Tenant acknowledge that (i) the Excluded Property is Tenant’s Property and will not be surrendered to Landlord upon the expiration or earlier termination of the Term, such Excluded Property being defined and more particularly described on Schedule 5.3(a) and (ii) Tenant’s Property includes any vehicles now or hereafter located at certain of the Facilities, such Facilities being more particularly described on Schedule 5.3(b) (the “Excluded Vehicles”) and such vehicles will not be surrendered to Landlord upon the expiration or earlier termination of the Term, subject however to the provisions of Section 9.1.

5.4. Authorizations. The Authorizations for any Facility shall, to the maximum extent permitted by Legal Requirements, relate and apply exclusively to such Facility, and Tenant acknowledges and agrees that, subject to all applicable Legal Requirements, the Authorizations are appurtenant to the Facility(ies) to which they apply, both during and following the termination or expiration of the Term; provided, however, that the foregoing shall not be deemed to permit Landlord or any successor operator to operate under any such Authorizations. In jurisdictions where the Authorizations are issued to a Tenant or

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its permitted subtenant and/or permitted manager, as the Facility operator, Tenant agrees that, to the extent permitted by Legal Requirements, and except as limited by Section 8 below, (a) such Authorizations shall nevertheless remain the property of Landlord and be held by Tenant or such subtenant or manager, in trust for the benefit of Landlord pursuant to a revocable, temporary Authorization that may be revoked by Landlord at any time and (b) as required by Landlord, Tenant shall reasonably cooperate with Landlord to turn over all of Tenant’s or any such subtenant’s or manager’s rights in connection with such Authorizations to Landlord or a successor operator, as applicable. All inspection fees, costs and charges associated with owning or holding the Authorizations or with any modification to the Authorizations shall be borne solely by Tenant, except as provided pursuant to Section 8. This Section 5.4 shall survive the expiration or earlier termination of this Lease.

5.5. Compliance with Requirements, Third Party Payor Programs and Permitted Encumbrances.

5.5.1. Tenant’s use of the Premises and Tenant’s operation of the Business shall at all times comply in all material respects with all Legal Requirements and Authorizations, all material Insurance Requirements and all CC&R’s (and Landlord shall have no responsibility for such compliance).

5.5.2. Tenant shall keep all Authorizations material to the operation of the Business in full force and effect and Tenant shall keep in full force and effect and comply with, in all material respects, the Facility Provider Agreements for any period that Tenant elects in its sole discretion to participate in any such Governmental Programs or Third Party Payor Programs to which such Facility Provider Agreements relate.

5.5.3. Tenant and the Premises shall comply in all material respects with all applicable certification requirements of any Third Party Payor Program required to permit Tenant to receive payment or reimbursement under such Third Party Payor Program. Further, if any applicable Legal Requirement requires that the Premises be licensed for the Primary Intended Use under Section 5.2. Tenant shall ensure that the Premises are licensed in Tenant’s name (or any permitted manager’s name) throughout the Term to permit Tenant to serve its resident population, fully certified for participation in Medicare and Medicaid (or any successor program) and any other applicable Third Party Payor Program which Tenant in its sole discretion from time to time has elected to participate in at any applicable Facility, throughout the Term. Tenant shall not violate, in any material respect, any certificate of occupancy affecting the Premises. During the Term, all inspection fees, costs and charges associated with a change of any licensure or certification shall be borne solely by Tenant, but, for avoidance of doubt, (i) excluding any such costs or expenses to the extent they arise out of any application process or otherwise in connection with a healthcare license or other Authorization applied for by Landlord, its nominee or manager upon or in connection with the expiration or earlier termination of this Lease, but (ii) including any non-compliance with the covenants under the Lease. As an example of the foregoing, if any Governmental Authority requires, as part of such application process, that the physical plant of any Facility be modified

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or altered but no such modification or alteration was required of Tenant because Tenant was legally “grandfathered” with respect to such requirement, the cost and expense of such modification or alteration shall be borne by Landlord or its designee, whereas if any Governmental Authority conducting an inspection of the Facility as a part of such application discovers that the Facility is not compliant under Tenant’s then-existing Authorizations, the cost of any modification or alteration shall be borne by Tenant.

5.5.4. Tenant shall, (and shall cause its subtenants and contractors), at Tenant’s own cost, observe, perform and comply in all material respects with all Permitted Encumbrances as the same apply or relate to the Premises.

5.5.5. Each Ground Lease Facility Tenant shall, at its own cost and expense, observe, perform and comply, in all material respects, with all of the obligations of the applicable Ground Lease Facility Landlord, as lessee, under the applicable Ground Lease, including, without limitation, all obligations relating to use of such Facilities, payment of ground rents, taxes, assessments and utility charges, maintenance and alterations of such Facilities and assignment and subletting. Tenant shall not cause, or permit its respective agents, employees, contractors, invitees, subtenants, licensees, concessionaires or assigns (whether or not permitted hereunder) to cause, whether by act or omission, any material breach of or material default under, or termination of any Ground Lease. Notwithstanding anything to the contrary contained in this Lease, a Facility Default shall be deemed to have occurred under this Lease on account of a Ground Lease Facility Tenant’s breach of this Section 5.5.5, when, and only if, (i) Ground Lease Facility Tenant’s breach of this Section 5.5.5 also results in a material breach or default of an obligation under the applicable Ground Lease and the ground lessor delivers a notice of default to Landlord or Tenant, (ii) such Ground Lease breach or default is not cured by the Ground Lease Facility Tenant on or prior to the expiration of the cure period, if any, applicable to such breach or default by the terms of such Ground Lease (or such longer cure period as may be expressly authorized by an order of a court of competent jurisdiction), and (iii) if the Ground Lease breach or default referenced in subsection (i) above is a non-monetary breach or default of the Ground Lease, such Ground Lease is at material risk on account of such breach or default of being terminated or has been terminated. Each Ground Lease Facility Landlord agrees that, in the event such Ground Lease Facility Landlord receives any written notice of default from the ground lessor under any Ground Lease, such Ground Lease Facility Landlord shall promptly forward a copy thereof to the applicable Ground Lease Facility Tenant. Each Ground Lease Facility Landlord further agrees that such Ground Lease Facility Landlord shall timely exercise any options to renew or extend contained in the applicable Ground Leases, as and to the extent necessary from time to time so that each Ground Lease shall not expire prior to the expiration or termination of this Lease as it applies to the Facility affected by such Ground Lease (including any Extended Terms applicable to such Facility) and each Ground Lease Facility Landlord further agrees comply in all material respects with the terms of such Ground Lease, if any, that can only be satisfied by such Ground Lease Landlord (e.g. the Ground Lease obligates such Ground Lease Facility Landlord to maintain its corporate existence in good standing). Each Ground Lease Facility Tenant agrees that, if the applicable Ground Lease Facility Landlord, at its option, elects to cure a Facility Default

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under this Section 5.5.5, such cure shall not excuse such Ground Lease Facility Tenant from, or be deemed a cure of, such Facility Default, nor shall such Ground Lease Facility Tenant’s reimbursement to the applicable Ground Lease Facility Landlord of any costs and expenses incurred by such Ground Lease Facility Landlord in affecting any such cure be deemed a cure of any such Facility Default. Nothing contained in this Section 5.5.5 shall limit or impair Landlord’s indemnification rights under Section 13 below.

5.5.6. If a Ground Lease breach or default of the nature described in Section 5.5.5(i) above occurs or if the condition in Section 5.5.5(iii) is, or is likely to be, satisfied, each Ground Lease Facility Tenant agrees that, notwithstanding anything to the contrary contained in this Lease, the applicable Ground Lease Facility Landlord may, but shall not be obligated to, in its discretion and regardless of whether such Ground Lease Facility Tenant is proceeding to cure, or attempting to cure, the Ground Lease breach or default, take such actions as it deems necessary or appropriate to attempt to cure such Ground Lease breach or default. If a Ground Lease Facility Landlord so proceeds to attempt to cure any such Ground Lease breach or default, the applicable Ground Lease Facility Tenant agrees, within fifteen (15) days following receipt of a written demand therefor and reasonable supporting documentation, to reimburse such Ground Lease Facility Landlord for the reasonable amount of all costs and expenses incurred by such Ground Lease Facility Landlord in curing, or attempting to cure, any such Ground Lease breach or default.

5.6. Preservation of Business. Tenant acknowledges that a fair return to Landlord on, and protection of, its investment in, the Premises is dependent on Tenant’s dedication to the Business, without impairment of its value due to similar businesses of Tenant and its Affiliates in the geographical area of each Facility. Tenant further acknowledges that the provisions of healthcare items or services from any Facility to other facilities owned or operated by Tenant or its Affiliates will have a material adverse effect on the value and utility of such Facility. Therefore, Tenant shall, and shall cause all of its Affiliates and Guarantors to, comply with the restrictive covenants set forth on Exhibit G to this Lease (the “Restrictive Covenants”).

5.7. Hazardous Materials. Tenant’s use of the Premises shall comply with all applicable Hazardous Materials Laws.

5.7.1. Notification of Landlord. Tenant shall promptly, upon discovery, notify Landlord of any of the following: (a) any material violation of any Hazardous Materials Laws related to the use of the Premises; (b) Hazardous Materials Claims against Tenant or any portion of the Premises; (c) remedial action in response to any Hazardous Materials Claims or any Hazardous Materials on, under or about any portion of the Premises; and (d) Tenant’s discovery of any occurrence or condition on or in the vicinity of any portion of the Premises that materially increases the risk that any portion of the Premises or any occupant of the Premises will be exposed to Hazardous Materials in violation of Hazardous Materials Laws. Tenant shall promptly notify Landlord, and provide it with copies of, all communications to or from Tenant, any Governmental Authority or any other Person relating to any material

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violation of Hazardous Materials Laws or Hazardous Materials Claims with respect to any portion of the Premises.

5.7.2. Remediation. If any Environmental Activities occur causing the release of Hazardous Materials on the Premises in violation of Hazardous Material Laws, or if any violation of any Hazardous Materials Laws occurs on the Premises as a result of any act or omission of Tenant, Tenant shall promptly obtain all permits and approvals necessary to remedy any such release or violation through the removal of Hazardous Materials as required by any applicable Legal Requirement, and upon approval of the remediation plan by any applicable Governmental Authority and by Landlord (not to be unreasonably withheld, delayed or conditioned), remedy any such problem in accordance with the requirements of applicable Governmental Authorities and all Hazardous Materials Laws.

5.7.3. Extension of Term. Notwithstanding any other provision of this Lease to the contrary, if any Hazardous Materials are discovered on or under any portion of the Premises in violation of any Hazardous Materials Law as a result of any act by Tenant, at Landlord’s option, in its discretion, the Term shall be automatically extended and this Lease shall remain in full force and effect with respect to the Facility at which such Hazardous Materials are located, but not otherwise, until the earliest to occur of (i) the completion of all remedial action or monitoring as required by applicable Governmental Authorities and Hazardous Materials Laws, (ii) when finally approved or released from monitoring by any Governmental Authority with respect to such Hazardous Materials, in accordance with all Hazardous Materials Laws, or (iii) the date specified in a notice from Landlord to Tenant terminating this Lease as to such Facility (which date may be subsequent to the date upon which the Term was to have expired).

5.7.4. Landlord’s Participation. Landlord shall have the right, at Tenant’s sole cost and expense (including Landlord’s reasonable attorneys’ fees and costs) and with counsel chosen by Landlord in its discretion, to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims asserted against Tenant with respect to the Premises.

5.7.5. Limitation of Tenant’s Liability. Notwithstanding any other provision of this Lease to the contrary, Tenant’s liability and obligations with respect to any: (i) Environmental Activities that were not caused or undertaken by the Tenant or (ii) Hazardous Materials Claims that do not arise from Tenant’s use of the Premises shall, in each case, be limited to taking such actions as is necessary to protect the buildings on the Premises and the health and safety of Tenant’s occupants in such buildings and shall not include any remedial actions with respect to Hazardous Materials in the outdoor environments.

5.8. Financial, Management and Regulatory Reports. Tenant shall provide Landlord with the reports listed and other information or documentation set forth on Exhibit F within the time frames described therein, and such other information about and documentation that is readily available to Tenant and related to the Premises and/or the Business

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as Landlord may reasonably request from time to time within a reasonable time following such request. All financial information provided shall be prepared in accordance with GAAP (if applicable) and shall be submitted electronically by Tenant to Landlord.

5.9. Intentionally Deleted.

5.10. Negative Covenants.

5.10.1. Affiliate Transactions and Payments. No Tenant shall enter into, or be a party to, any transaction with an Affiliate of any Tenant or any of the partners, members or shareholders of any Tenant relating to the Premises except  on terms that are fully disclosed to Landlord in advance and are no less favorable to any Tenant or such Affiliate than would be obtained in a comparable arm’s-length transaction with an unrelated third party; provided, however, the foregoing requirements for advance notice and an arms’ length transaction shall be inapplicable to any arrangements or agreements in the ordinary course of business between Tenant and its  Affiliates to the extent such arrangements or agreements result in a pass through to Tenant of actual costs incurred by such Affiliate that are consistently allocated across Guarantor’s consolidated portfolio where such costs are incurred. Subject to the requirements of the immediately preceding sentence and subject to the restrictions set forth in Section 10.1.2, Tenant may (without Landlord approval) enter into management agreements with respect to any Facility with any Affiliate of such Tenant that is wholly-owned by Guarantor (an “Affiliate Manager”), which such management agreements may provide for a fee of up to [***]% of the gross revenues of the applicable Facility(ies), provided that any such Affiliate Manager, as manager (as well as any other property manager of a Facility) shall enter into a subordination agreement relative thereto and in favor of Landlord in form and substance reasonably satisfactory to Landlord. No property management agreement, whether with an Affiliate Manager or otherwise, shall be permitted or effective unless and until a subordination agreement relative thereto and in favor of Landlord in form and substance reasonably satisfactory to Landlord has been executed and delivered to Landlord. Landlord agrees that the form of subordination attached hereto as Exhibit K is acceptable to Landlord. Schedule 5.10.1 sets forth all management agreements relating to the Facilities with an Affiliate Manager as of the Effective Date. Tenant shall cause all such Management Agreements to comply with the requirements of this Section 5.10.1 within 60 days after the Effective Date, subject to such extension as may be reasonably required to obtain any necessary regulatory approval of such modifications.

5.10.2. Distributions after Default. After the occurrence of a Master Lease Event of Default under Section 7.1.1 and until such Master Lease Event of Default is cured, no Tenant shall make any payments or distributions (including salaries, bonuses, fees, principal, interest, dividends, liquidating distributions, management fees, cash flow distributions or lease payments) to any Affiliate of any Tenant or any Guarantor, or any shareholder, member, partner or other equity interest holder of any Tenant, any Guarantor or any Affiliate of any Tenant or any Guarantor; provided, however, that Tenant may make payments or distributions directly to Guarantor and Tenant and Tenant’s Affiliates shall have

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the right to pay Facility-level operating expenses in the ordinary course of their respective businesses consistent with past practice including salaries, bonuses, equipment, vehicle and service contracts, maintenance expenses, general and administrative costs and other similar expenses.

5.10.3. Use Specific Negative Covenants. No Tenant shall do any of the following:

5.10.3.1. Transfer any Authorizations to any third party, or any location other than the Facility operated by such Tenant or as otherwise required by the terms of this Lease nor pledge any Authorizations as collateral security for any loan or indebtedness;

5.10.3.2. Voluntarily rescind, withdraw, revoke, terminate, relinquish, amend, restate, supplement, allow to expire without renewal or otherwise alter the nature, tenor or scope of any Authorization for any Facility except as permitted hereunder in Section 5.2 and except for Tenant’s voluntary withdrawal from any Governmental Program or Third Party Payor Program; or

5.10.3.3. Except as otherwise expressly permitted in this Section 5, amend or otherwise change, by consent, acquiescence or otherwise, any Facility’s (A) Unit capacity, or the number or type of Units, authorized by the Authorizations applicable to such Facility, or (B) Authorization’s category or type, in each case as the same exist on the applicable Effective Date for each Facility, or apply for approval of any of the foregoing amendments or changes.

5.11 Furnish Information. Tenant shall promptly notify Landlord of any condition or event of which an officer of Tenant has actual knowledge that constitutes a material default under this Lease.

5.12 Further Assurances. Tenant and Landlord shall, upon request of the other party from time to time, execute, deliver, and furnish such documents as may be necessary or appropriate to consummate fully the transactions contemplated under this Lease.

5.13 No Impairment. The obligations of Landlord and Tenant under this Lease shall be separate and independent covenants and agreements, and the Rent and all other sums payable by Tenant under this Lease shall continue to be payable in all events unless and to the extent such sums have been fully paid by Tenant.

5.14 Permitted AR Financing. Tenant shall not obtain financing with respect to any Facility (or its operations) or otherwise that pledges or otherwise grants any third party a security or collateral interest in any Facility Accounts Receivables and/or Tenant Personal Property (“AR Financing”) unless (a) such AR Financing relates solely to any one or more of the Facilities, (b) Tenant obtains Landlord’s prior consent to the terms of such AR Financing, (c) Landlord and the lender for the AR Financing have entered into an intercreditor agreement reasonably satisfactory to Landlord, and (d) at the time of execution

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of such AR Financing, no Master Lease Event of Default exists under this Lease and no Facility Default exists relating to any Facility the assets connected to which are to serve as collateral for such AR Financing. Notwithstanding the immediately preceding sentence, Tenant (or its Affiliates) shall have the right, from time to time, to enter into (i) equipment leases in the ordinary course of business for equipment used or useful to the operation of the Business, such as copiers or dishwashers and (ii) leases (or similar arrangements) of vehicles for use at the Facilities, in each case in Tenant’s or its Affiliate’s reasonable discretion; provided that the security interest granted to Landlord with respect to Tenant’s Personal Property shall be subordinate to any security interest granted in connection with such leases only if and so long as the lessor or financier of such Tenant’s Personal Property agrees to give Landlord written notice of any default by Tenant under the terms of such lease, to give Landlord a reasonable time following such notice to cure any such default and consents to Landlord’s written assumption of such lease upon Landlord’s curing of any such defaults.

5.15. No Liens. Tenant shall not cause or permit any Liens to be placed or assessed against the Premises or the operation thereof for any reason, provided Tenant shall not be in default hereunder if a Lien exists and Tenant shall, in good faith and at its expense, contest the existence and validity of such Lien upon the Premises by appropriate proceedings sufficient to prevent the collection or other realization of the Lien so contested, as well as the sale, forfeiture or loss of any of the Premises or any rent to satisfy the same. Tenant shall provide Landlord with security satisfactory to Landlord in Landlord’s reasonable judgment to assure the foregoing (which shall include a bond). Each contest permitted by this Section 5.15 shall be promptly and diligently prosecuted to a final conclusion by Tenant.

6.Condition and Maintenance of the Premises.

6.1. Acceptance “AS IS”. Tenant acknowledges that it is presently engaged in the Business conducted at each Facility in the state where such Facility is located and has expertise in such industry and, in deciding to enter into this Lease, has not relied on any representations or warranties, express or implied, of any kind from Landlord. Tenant has examined the condition of title to and thoroughly investigated the Premises, has concluded that no improvements or modifications to them are required in order to conduct the Business and accepts them on an “AS IS” basis and assumes all responsibility and cost for the correction of any observed or unobserved deficiencies or violations. Tenant expressly understands and agrees that any inspection by or on behalf of Landlord of the business conducted at the Premises or of the Premises is for Landlord’s sole and exclusive benefit and is not directly or indirectly for the benefit of, nor should be relied in any manner upon by, Tenant, its residents, its patients or any other third party.

6.2. Tenant’s Maintenance Obligations.

6.2.1. Tenant shall (a) keep and maintain the Premises in good, safe, and operational condition, in all material respects (damages by casualty, Condemnation or acts of Landlord or its agent and ordinary wear and tear excepted), taking into consideration the age

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of the Facilities at the time Tenant’s compliance with the foregoing is measured (the foregoing, collectively “Condition Standard”), and maintain proper housekeeping, (b) except as provided in Sections 8, 11 and 12,promptly make all repairs (including without limitation, any interior and exterior, structural and nonstructural, ordinary and extraordinary, foreseen and unforeseen or arising by reason of a condition existing prior to or from and after the commencement of the Term (concealed or otherwise)) necessary to keep each Facility in not less than the Condition Standard and in substantial compliance with all applicable Legal Requirements, including, if applicable, if Tenant elects to participate in same from time to time, certification for participation in Third Party Payor Programs, and (c) keep and maintain (if necessary, by repair and replacement thereof) the Landlord Personal Property and Tenant Personal Property in not less than the Condition Standard.

6.2.2. Tenant hereby waives, to the extent permitted by law, the right to make repairs at the expense of Landlord pursuant to any law in effect at the time of the execution of this Lease or thereafter enacted.

6.3. Upgrade Expenditures.

6.3.1. Facility Upgrade Deposit Requirement. Commencing with the twenty-four month period ending December 31, 2021, and for the 24-month period ending on each December 31 thereafter during the Term (each such period, an “Upgrade Expenditures Test Period”), on or prior to the due date of the Upgrade Expenditures Report for the last calendar year of such Upgrade Expenditures Test Period, Tenant shall deposit with Landlord an amount equal to the amount, if any, by which the Facility Required Upgrade Expenditures Amount for each Facility described in clause (I) of the definition thereof or for all Facilities in the aggregate described in clause (II) of the definition thereof is greater than the sum of the Facility Actual Upgrade Expenditures Amount for such Facility or in the aggregate for all Facilities, as applicable, for such Upgrade Expenditures Test Period plus the aggregate amount of capital expenditure escrows, if any, deposited by Tenant and then held by Facility Mortgagee for any Facility and during such Upgrade Expenditures Test Period (each such deposit, a “Facility Upgrade Deposit”). If, with respect to a particular Upgrade Expenditures Test Period, the aggregate Facility Actual Upgrade Expenditures Amount for all Facilities is greater than the Facility Required Upgrade Expenditures Amount for all Facilities as described in clause (II) of the definition thereof, and if the Facility Actual Upgrade Expenditures Amount for each Facility for such Upgrade Expenditures Test Period is greater than the Facility Required Upgrade Expenditures Amount for each such Facility as described in clause (I) of the definition thereof, then, provided no Master Lease Event of Default by Tenant exists hereunder, within five (5) Business Days after Tenant’s presentation of its Upgrade Expenditures Report reflecting such greater expenditure, Landlord shall pay to Tenant the lesser of (i) the amount by which the Facility Actual Upgrade Expenditures Amount (on an aggregate basis for all Facilities) expended during the applicable Upgrade Expenditures Test Period exceeds the Facility Required Upgrade Expenditures Amount (on an aggregate basis for all Facilities) for such Upgrade Expenditures Test Period, (ii) the total Facility Actual Upgrade Expenditures (on an aggregate basis for all Facilities) expended during the second year of such Upgrade

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Expenditures Test Period or (iii) the aggregate amount of the Facility Upgrade Deposits that have been made and not previously returned to Tenant pursuant to the terms of this Section 6.3.1 (such lesser amount, the “Facility Upgrade Reimbursement Amount”). Any Facility Upgrade Reimbursement Amount returned to Tenant shall be deemed to have been reimbursed in respect of amounts spent during the second year of the applicable Upgrade Expenditures Test Period and allocated to the Facilities in proportion to the Facility Actual Upgrade Expenditures of the Facilities during such year. As used herein, “Facility Actual Upgrade Expenditures Amount” means, (1) with respect to each Facility and a given Upgrade Expenditures Test Period, the aggregate amount of the Upgrade Expenditures made by Tenant with respect to such Facility during such Upgrade Expenditures Test Period and not previously reimbursed to Tenant pursuant to this Section 6.3.1 or a Facility Mortgagee, specifically excluding, however, any Landlord UE Funds paid or approved to be paid to Tenant with respect to such Facility and such Upgrade Expenditures Test Period pursuant to Section 6.3.5, and (2) with respect to all Facilities in the aggregate and a given Upgrade Expenditures Test Period, the aggregate amount of the Upgrade Expenditures made by Tenant with respect to all Facilities during such Upgrade Expenditures Test Period and not previously reimbursed to Tenant pursuant to this Section 6.3.1 or a Facility Mortgagee, specifically excluding, however, any Landlord UE Funds paid or approved to be paid to Tenant with respect to such Facility and such Upgrade Expenditures Test Period pursuant to Section 6.3.5. As used herein, “Facility Required Upgrade Expenditures Amount” means, (I) with respect to each Facility and a given Upgrade Expenditures Test Period, an amount equal to $1,500 per Unit multiplied by the number of units in such Facility, and (II) with respect to all of the Facilities in the aggregate and a given Upgrade Expenditures Test Period, an amount equal to $3,600 per Unit multiplied by the aggregate number of Units in all of the Facilities. The amount of the Facility Required Upgrade Expenditures Amount shall not increase during the Term. For purposes of determining the Facility Required Upgrade Expenditures Amount for a given Facility and Upgrade Expenditures Test Period, the Facility Required Upgrade Expenditures Amount shall be calculated (i) based upon the actual Unit capacity of such Facility as of the first day of such Upgrade Expenditures Test Period, and (ii) with respect to any Facility with respect to which this Lease is terminated prior to the end of a given Upgrade Expenditures Test Period, the Facility Required Upgrade Expenditures Amount and Facility Actual Upgrade Expenditures Amount for such Facility and such Upgrade Expenditures Test Period shall be equitably prorated.

6.3.2. Retention of Facility Upgrade Deposits. Landlord may commingle the Facility Upgrade Deposits with other assets of Landlord or its Affiliates, and Tenant shall not be entitled to any interest on such amounts. Upon the occurrence and during the continuance of any Master Lease Event of Default or a Facility Default with respect to any Facility for which Landlord is holding a Facility Upgrade Deposit, Landlord may apply any portion of the Facility Upgrade Deposits to the extent required for the payment of any sum then due and payable under this Lease or for any sum which Landlord may have expended or may be required to expend by reason of the occurrence of such Master Lease Event of Default or Facility Default respectively, including any damages or deficiency accrued before or after summary proceedings or other re-entry by Landlord. Upon any such application of Facility

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Upgrade Deposits for a Master Lease Event of Default, Tenant shall, within two (2) Business Days of request by Landlord therefor, deposit with Landlord the amount of such applied Facility Upgrade Deposits In connection with any assignment of Landlord’s interest under this Lease, the assigning Landlord shall be obligated to transfer all Facility Upgrade Deposits related to the Facilities subject to this Lease or any portion hereof being so assigned then held by the assigning Landlord and not previously applied by Landlord as set forth in this Section 6.3.2 or returned to Tenant as provided in Section 6.3.1 above to such assignee, and, upon such transfer, the assigning Landlord transferring any such Facility Upgrade Deposits shall thereupon be completely released from all liability with respect to such amounts so transferred, and Tenant shall look solely to said assignee in reference thereto. The Facility Upgrade Deposits shall be the property of Landlord; provided, however, that in the event it is ever determined by a court of competent jurisdiction that the Facility Upgrade Deposits are the property of Tenant (or part of Tenant’s estate), then Tenant, as debtor, hereby grants to Landlord, as secured party, a security interest in, and an express contractual lien upon, all of Tenant’s right, title and interest in and to the Facility Upgrade Deposits and all products and proceeds thereof. For the avoidance of doubt, the Facility Upgrade Deposits held by Landlord as of the Effective Date pursuant to the terms of the Original Master Lease shall constitute Facility Upgrade Deposits for purposes of this Lease and be held, disbursed and applied pursuant to the terms hereof.

6.3.3. Disposition of Facility Upgrade Deposits. Within thirty (30) days following the expiration or termination of this Lease as to any one or more Facilities, Tenant shall deliver to Landlord an Upgrade Expenditures Report with respect to such Facility(ies) for the calendar year or partial calendar year immediately preceding such expiration or termination, calculated pro rata taking into consideration any partial Upgrade Expenditure Test Period and, if applicable deposit the required Facility Upgrade Deposit with Landlord; provided, however, Tenant’s obligation to make Facility Upgrade Deposits hereunder shall be limited solely to any termination or expiration whereby the Premises that are terminated are returned to Landlord or its Affiliates or third party designees and in no event shall Tenant have any obligation to make such Facility Upgrade Deposits when such Premises are acquired or transferred to Tenant or any Affiliate of Tenant or Guarantor or for any termination pursuant to Section 11 or Section 12. Upon the expiration or termination of this Lease as to any one or more Facilities, all Facility Upgrade Deposits for the applicable Facility(ies) (including any funds that are required to be deposited therein by Tenant with respect to the calendar year or partial calendar year immediately preceding such expiration or termination if and to extent required by the immediately preceding sentence) shall automatically and without further action of the parties become the property of Landlord, without any obligation on Landlord’s part to credit Tenant in any manner therefor. The obligations of Landlord and Tenant under this Section 6.3.3 shall survive the expiration or termination of this Lease.

6.3.4. Upgrade Expenditures Report. For each Lease Year during the Term, Tenant shall deliver to Landlord, together with the fourth quarter Quarterly Reports required by Exhibit F, a report of Upgrade Expenditures by Facility for the applicable Upgrade Expenditures Test Period (each, an “Upgrade Expenditures Report”), including a reasonably detailed description thereof; provided that, notwithstanding the requirements of Exhibit F,

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Tenant may extend the required delivery timeframe as reasonably required to perform the applicable calculations, not to exceed an additional 30 days.

6.3.5. Request for Landlord Funding. From and after the Effective Date, Tenant shall have the right to request (subject to Landlord’s approval in its sole and absolute discretion) that Landlord reimburse Tenant for all or any portion of the Upgrade Expenditures for any given Facility (any such project, a “Subject Project ”) for a particular Lease Year (such Upgrade Expenditures that Landlord agrees to fund, “Landlord Funded Upgrade Expenditures”, and such Landlord funds, “Landlord UE Funds”).

6.3.5.1. Tenant shall submit each request for disbursement of the Landlord UE Funds by delivery to Landlord of written notice of such request on the form attached hereto as Exhibit I (the “Request Form”). Tenant may request disbursement of Landlord UE Funds no more than one time per calendar month and in amounts of not less than $50,000.

6.3.5.2. Landlord shall promptly (and in any event within 15 Business Days after receipt of the complete Request Form) fund to Tenant the Landlord UE Funds in the amounts indicated in the Request Form, provided that (i) at the time of delivery of the Request Form, no Master Lease Event of Default or Facility Default relating to the Facility that is the subject of the request has occurred and is continuing and (ii) Tenant delivers to Landlord invoices, proof of payment, and, for any work in excess of $10,000, lien waivers, in each case relating to the applicable Upgrade Expenditures. Tenant shall promptly provide such additional information as Landlord may reasonably request in connection with any such request for disbursement, but provision of such information shall not be a condition to disbursement. Notwithstanding anything to the contrary contained in this Lease, the parties hereby agree and acknowledge that Tenant previously requested that Landlord provide up to an aggregate maximum of $37,800,000 of Landlord UE Funds (the “Requested Landlord UE Funds”), of which an aggregate maximum of $34,774,119.36 remains available as of the Effective Date, for those certain Upgrade Expenditures described on Schedule 6.3.5.2 attached hereto (each of the Subject Projects listed on such Schedule 6.3.5.2, an “Approved Project ”), and Landlord has approved the same and agreed to provide the Requested Landlord UE Funds to Tenant following delivery of a Request Form and accompanying deliverables for such Requested Landlord UE Funds pursuant to this Section 6.3.5.2 without any further Landlord approval required pursuant to the terms of this Section 6.3.5 (other than as expressly required pursuant to Section 6.3.5.3 and/or Section 6.3.5.4 below), provided (x) Tenant shall make any requests for disbursement of Requested Landlord UE Funds on or prior to September 30, 2021 and Landlord shall have no obligation to disburse Required Landlord UE Funds requested after such date, and (y) the parties hereto agree that all Requested Landlord UE Funds funded with respect to the Approved Projects prior to the Effective Date have been included in the calculation of Minimum Rent as set forth in Section 4.1.1 and that Landlord UE Funds funded from and after the Effective Date, with respect to the Approved Projects or other Subject Projects, shall cause an adjustment in Minimum Rent pursuant to the provisions of Section 6.5.

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6.3.5.3. This Section 6.3.5.3 shall apply solely for the purposes of determining whether Landlord will make Requested Landlord UE Funds available for the Approved Projects and shall not give rise to, or result in, any default, Master Lease Event of Default, or Facility Default. Tenant shall promptly notify Landlord of any proposed change in the scope or nature of any Approved Project from the description of such Approved Project set forth on Schedule 6.3.5.2, as applicable, and Tenant acknowledges and agrees that no Material Change shall be permitted without Landlord’s consent (regardless of whether Tenant is required to obtain Landlord’s consent to such change pursuant to the terms of this Lease), and Material Changes will only be considered by Landlord if Tenant has demonstrated to Landlord’s reasonable satisfaction actual Cost Savings with respect to other Approved Projects that, in the aggregate, would offset any increased cost associated with such Material Change. Any right of Landlord to withhold consent to a Material Change pursuant to the terms of this Lease for reasons other than an increase in the cost of the Approved Project shall not be deemed to have been modified by the terms of this Section 6.3.5.3. “Material Change” shall mean a change in the scope or nature of a proposed project that is expected to result in (i) cost increases that exceed the amount shown on Schedule 6.3.5.2, as applicable, for an Approved Project by $250,000 or more or (ii) any change in the nature of the Approved Project such that the description of the Approved Project materially deviates from the description provided in Schedule 6.3.5.2. “Cost Savings” shall mean a reduction in the actual cost of an Approved Project below the amount shown on Schedule 6.3.5.2, for such Approved Project by way of efficiencies or reductions in scope of such Approved Project.

6.3.5.4. Included with each draw request and in any event no later than 30 days after the end of each calendar quarter, Tenant shall deliver, on a quarterly and year-to-date basis, the following:

6.3.5.4.1. A report of the Subject Projects detailing actual amounts invoiced and paid versus the budgeted amounts for such Subject Projects and the quarterly expectations for future amounts to be incurred and the current status of the Subject Projects. Such reporting shall include a total of estimated Cost Savings for each Subject Project (if any), and the total and estimated amount of Landlord UE Funds expended to date and through completion of such Subject Project.

6.3.5.4.2. Facility-by-Facility and project-by-project report of actual amounts invoiced and paid for Upgrade Expenditures that are not related to Subject Projects.

6.3.6. Certain Definitions. “Upgrade Expenditures” means, with respect to a Facility, expenditures in commercially reasonable amounts paid by Tenant to Persons that are not Affiliates of Tenant or any Guarantor for upgrades or improvements to such Facility that are “capital expenditures” (as defined under GAAP) that have the effect of maintaining or improving the real property improvements or fixtures or equipment at the Facility; provided however, that Upgrade Expenditures shall not include expenditures related to: (A) routine repairs and maintenance for Unit turnovers with an aggregate cost of $[***] or

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less per Unit, (B) projects with an aggregate cost of $[***] or less  (but expressly excluding Unit turnovers with an aggregate cost in excess of $[***], which shall be treated as Upgrade Expenditures) , or (C) purchases of supplies.

6.4. Alterations.

6.4.1. Permitted Alterations. Tenant may alter, improve, exchange, replace, modify or expand (collectively, “Alterations”) the Facilities and equipment or appliances in the Premises from time to time as it may determine is desirable for the continuing and proper use and maintenance of the Premises; provided, however, that any Alterations that (a) are structural in nature, (b) will change the existing footprint of any Facility located on the Premises, (c) adversely modify any legal right of access to the Premises, (d) reduce in any material respect any available parking at the Premises, or (e) are expected to cost in excess of $500,000 with respect to any individual Facility in any rolling 12-month period shall require Landlord’s prior consent, which consent shall not be unreasonably withheld, conditioned or denied; provided further, that any Alterations to the Premises must satisfy the requirements set forth in Sections 4.04 (2) and (3) of Revenue Procedure 2001-28 (Internal Revenue Bulletin No. 2001-19).

6.4.2. Ownership. All Alterations funded by Tenant (and whether or not reimbursed by Landlord UE Funds (as defined in Section 6.3.5)) shall immediately become a part of the Premises and the property of Landlord upon the Termination/Dispossession Date. Except to the extent that Landlord in its discretion agrees to fund any Alterations following Tenant’s request therefor (in which case, such Alterations funded by Landlord shall immediately become a part of the Premises and the property of Landlord subject to this Lease, although during the Term, Tenant shall be deemed the tax owner of such Alterations), the cost of all Alterations or other purchases, whether undertaken pursuant to a Legal Requirement or otherwise, shall be borne solely by Tenant.

6.4.3. Requirements for All Alterations. For each Alteration, Landlord and Tenant shall work together in good faith to agree upon reasonable insurance requirements for any Service Provider to perform any part of any Alterations, and such requirements shall be included within the definition of “Insurance Requirements” for such Alterations and Service Providers. All work done in connection with Alterations shall be done in a good and workmanlike manner and in material compliance with applicable Legal Requirements pertaining to the Premises and applicable Insurance Requirements. Prior to commencing construction of any Alteration requiring Landlord’s consent pursuant to the express terms of this Lease, Tenant shall submit to Landlord, in writing, a proposal setting forth, in reasonable detail, any proposed Alteration and shall provide to Landlord such plans and specifications, permits, licenses, contracts and other information concerning the proposed Alteration as Landlord may reasonably request. Landlord shall have 15 days to review all materials submitted to Landlord in connection with any such proposal. Failure of Landlord to respond to Tenant’s proposal within 15 days after receipt of all information and materials reasonably requested by Landlord in connection with the proposed Alteration shall be deemed

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to constitute approval of such proposed Alteration, subject in all events, however, to Tenant’s compliance with the other requirements of this Lease.

6.5. Minimum Rent Increases.

6.5.1. Annual Minimum Rent shall increase each month that Landlord makes a disbursement to Tenant under Section 6.3.5, effective on the date of each such disbursement, by an annual amount equal to the product of the amount of the disbursement multiplied by the Landlord Funds Rate as of the date of such disbursement (each, a “Landlord Funds Rent Increase”).

6.5.2. If Landlord makes a disbursement to Tenant on a day other than the first day of a calendar month, then the Landlord Funds Rent Increase associated with that disbursement shall, for the month in which such disbursement occurs, be prorated based on the number of days in the month falling on and after the date of disbursement over the total number of days in the month and shall be due with the next scheduled installment of Minimum Rent. Upon each Landlord Funds Rent Increase, and without further action of the parties, Schedule 1 to this Lease shall be revised as follows: (a) the annual amount of the Landlord Funds Rent Increase shall be allocated to the applicable Eligible Facility (or, if applicable, the Facility with respect to which Landlord UE Funds have been disbursed) and (b) following that allocation, the Proportionate Share percentage for each Facility shall be revised to equal the percentage obtained by dividing the annual Minimum Rent allocated to that Facility (as adjusted under this Section 6.5.2, if applicable) by the aggregate annual Minimum Rent for the Premises (as adjusted under this Section 6.5.2).

6.5.3. For purposes of determining the annual increase in Minimum Rent under Section 4.1.2 for a particular Lease Year immediately following a Lease Year in which a Landlord Funds Rent Increase occurs, the full annual amount of each such Landlord Funds Rent Increase shall be included for purposes of calculating the annual Minimum Rent for such particular Lease Year; except that the percentage by which each such annual amount of Landlord Funds Rent Increase shall increase under Section 4.1.2 shall be prorated by the number of days in the Lease Year in which the Landlord Funds Rent Increase occurred that fall on and after the date of that increase over the total number of days in that Lease Year (and shall be subject to the full increase under Section 4.1.2 in subsequent Lease Years) (and, if, as a result of the provisions of this sentence, a portion of the annual Minimum Rent that is allocable to a particular Facility increases at a prorated percentage rate, rather than the full percentage rate described in Section 4.1.2, Schedule 1 to this Lease, and the Proportionate Shares for the Facilities, shall be revised accordingly to reflect such difference in the rate of percentage increase).

6.5.4. As an example only and without limiting the terms of this Lease, assume that (a) at the commencement of the Lease Year ending on December 31, 2022, annual Minimum Rent is equal to $[***], (b) during such Lease Year, Landlord makes one disbursement of Landlord UE Funds to Tenant, on March 15, 2022, in the amount of $[***],

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(c) on the date of disbursement, the Landlord Funds Rate is [***]%, and (d) during such Lease Year and subsequent Lease Years, Landlord makes no further disbursement of Landlord UE Funds. Annual Minimum Rent will increase by $[***] ($[***] multiplied by [***]%) effective on March 15, 2022, to equal $[***], and Tenant must pay Landlord the prorated amount of that Landlord Funds Rent Increase (in the amount of $[***] (17 days over 31 days multiplied by $[***] divided by 12) on April 21, 2022 (along with the monthly Minimum Rent installment that is due on such date (which monthly Minimum Rent installment shall include the monthly amount of the Landlord Funds Rent Increase arising due to the above described Landlord UE Funds disbursement)). On January 1, 2023, annual Minimum Rent will be increased under Section 4.1.2 to equal $[***] ($[***] of the annual Minimum Rent that was in effect as of December 31, 2022 shall increase by [***]%, and the remaining annual Minimum Rent that was in effect as of December 31, 2022 (i.e., the Landlord Funds Rent Increase in the amount of $[***] that commenced on March 15, 2022) shall increase by a prorated amount of such [***]% increase equal to [***]% (291 days over 365 days multiplied by [***]%)). Assuming that no additional disbursement of Landlord UE Funds is made to Tenant after March 15, 2022, annual Minimum Rent will be increased by [***]% to equal $[***] effective on January 1, 2024.”

6.6. Granting of Easements and Licenses. Landlord may, from time to time, with respect to all or any part of the Premises: (1) grant easements, covenants, restrictions, and/or CC&R’s, and other rights in the nature of easements, covenants, restrictions and/or CC&R’s, (2) release existing easements, covenants, restrictions, and/or CC&R’s, or other rights in the nature of easements, covenants, restrictions, and/or CC&R’s, that are for the benefit of any part of the Premises, (3) dedicate or transfer unimproved portions of the Premises for road, highway or other public purposes, (4) execute petitions to have any part of the Premises annexed to any municipal corporation or utility district, (5) execute amendments to any easements, covenants and restrictions affecting any part of the Premises, and (6) execute and deliver to any Person any instrument appropriate to confirm or effect such grants, releases, dedications and transfers (to the extent of its interests in the Premises) without the necessity of obtaining Tenant’s consent, provided that such easement or other instrument or action contemplated by this Section 6.6 would not, and could not reasonably be expected to, unreasonably interfere with the conduct of, or unreasonably adversely affect, the Business at the affected Facility(ies). If any easement or other instrument or action described in this Section 6.6 unreasonably interferes with, or unreasonably adversely affects, the conduct of Business by the applicable Tenant at the affected Facility(ies), Landlord shall obtain Tenant’s prior consent to such proposed easement, instrument or action, which consent may be granted or withheld by Tenant in its sole discretion, which consent shall be deemed given if not expressly denied by Tenant, in writing, within 30 days after Landlord’s delivery of such request; provided that if a Governmental Authority or utility company is the counterparty to, or a beneficiary of, such easement or other instrument or requesting such action, then Tenant consent shall not be required, but Landlord shall reasonably consult with Tenant with respect thereto.

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7.Events of Default; Remedies. “Event of Default” shall mean any Master Lease Event of Default or Facility Default:

7.1. Master Lease Events of Default. The occurrence of any of the following events shall constitute a “Master LeaseEvent ofDefault” on the part of Tenant, and there shall be no cure period therefor except as otherwise expressly provided:

7.1.1. Tenant fails to pay when due any Rent, Taxes, Other Charges or other required payments or deposits (including any deposit required pursuant to Section 6.3.1 or Section 4) and the same is not cured within 5 days after notice from Landlord of nonpayment thereof;

7.1.2. Intentionally Deleted;

7.1.3. The entry of any final, non-appealable judgment against Guarantor in excess of $[***] that remains unsatisfied or not stayed or superseded for more than [***] days, or the recording of any final, non-appealable judgment against Guarantor or the service of a notice of levy or of a writ of attachment or execution, or other like process with respect to any final, non-appealable obligation, against the assets of Guarantor in each case in excess of $[***] that remains unsatisfied or not stayed or superseded for more than [***] days;

7.1.4. If at any time of determination, Facility Defaults (expressly excluding any Facility Default pursuant to Section 7.2.11) under this Lease, and/or Events of Default under any Other Lease that would constitute Facility Defaults hereunder if the facilities leased pursuant to such Other Leases were subject to this Lease (expressly excluding any Event of Default similar to the Facility Default pursuant to Section 7.2.11), remain uncured and are continuing with respect to [***]% or more of the aggregate number of Facilities subject to this Lease plus the number of facilities subject to the Other Leases in existence as of such time (but in any event not less than ten (10) Facilities).

7.1.5. (1) Guarantor generally fails to pay its debts as they become due, or admits in writing (other than a writing solely to Landlord or any of its Affiliates) its inability to pay its debts generally, or makes an assignment of all or substantially all of its property for the benefit of creditors, (2) a receiver, trustee or liquidator is appointed for Guarantor or any of its property (unless, within three Business Days following such appointment, Guarantor notifies Landlord in writing that it intends to cause such appointment to be discharged and such discharge is diligently prosecuted to completion within 60 days after the date of such appointment), (3) the filing by Guarantor of a voluntary petition under any federal bankruptcy or state Legal Requirements to be adjudicated as bankrupt or for any arrangement or other debtor’s relief, (4) the involuntary filing of such a petition against Guarantor by any other party other than Landlord (unless, within three Business Days after such filing, Guarantor notifies Landlord in writing that it intends to cause such petition to be dismissed, such dismissal is diligently prosecuted and such petition is dismissed within 90 days after filing), or (5) any of

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the matters described in (1) through (4) above occur with respect to Tenant under this Lease and/or the tenants or borrowers under the Other Leases;

7.1.6. A default by Tenant or any Affiliate of Tenant that is classified as a “Master Lease Event of Default” under any Crossed Agreement pursuant to, and in accordance with, the terms of the Omnibus Agreement (the parties agreeing that if any “Event of Default” under any Crossed Agreement is classified as a Facility Default pursuant to the terms of the Omnibus Agreement, then such “Event of Default” shall not constitute a Master Lease Event of Default or Facility Default under this Lease, but such “Event of Default” may nevertheless count for purposes of the test described in Section 7.1.4 above);

7.1.7. Intentionally Deleted;

7.1.8. Intentionally Deleted;

7.1.9. Any Governmental Authority or Governmental Payor assesses a final, non-appealable fine or penalty against Tenant or Guarantor in excess of $[***], and such fine or penalty is not paid, satisfied or stayed within [***] ([***]) days;

7.1.10. Tenant’s failure to perform or comply with the provisions of Section 5.1[Insurance], Section 5.10.1[Affiliate Transactions] or Section 10 [Assignment and Subletting] if not remedied within ten (10) Business Days after Tenant’s receipt of notice from Landlord of such failure;

7.1.11. Any intentional and material misrepresentation by Tenant under this Lease or intentional and material misstatement or intentional and material omission of fact in any written report required (and/or the Officer’s Certificate relating thereto) under Sections 3.1, 3.2, and 3.3 of Exhibit F from Tenant;

7.1.12. Any Master Lease Event of Default arising pursuant to the terms of Section 7.2.6 or Section 7.2.7 below; or

7.1.13. Tenant fails to perform any of the material terms, covenants or conditions contained in this Lease, such failure is with respect to all or substantially all of the Facilities and such failure is not otherwise specifically addressed in this Section 7.1 above, in each case if not remedied within [***] ([***]) days after receipt of notice from Landlord of such failure to perform, or, if such failure to perform cannot reasonably be remedied within such period, Tenant does not within [***] ([***]) days after such notice thereof commence such act or acts as shall be necessary to remedy such failure and shall not thereafter diligently complete such act or acts within a reasonable time, provided, however, in no event shall such cure period extend beyond [***] ([***]) days after notice from Landlord thereof.

7.1.14. Tenant fails to deliver any of the reports listed in Sections 2.1, 2.2,3.1, 3.2, 3.3, 3.5, 5, 6.1 or 6.2 of Exhibit F or the officer’s certificate required by Section 3.6 of Exhibit F within 10 days after notice from Landlord of such failure.

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7.2. Facility Defaults. The occurrence of any of the following events with respect to a particular Facility shall constitute a “FacilityDefault” on the part of Tenant with respect to such Facility:

7.2.1. (x) there is issued any (i) stop placement order against Tenant with respect to a Facility that (A) is in effect for more than [***] ([***]) consecutive days and (B) is or becomes final and non-appealable, or (ii) final non-appealable termination or revocation of a Facility’s healthcare Authorizations material to such Facility’s operation for its Primary Intended Use, or any termination or revocation of any Facility Provider Agreements (including, without limitation, its certification for participation in the Medicare or Medicaid reimbursement programs) that is not reinstated or replaced within [***] ([***]) days, or (y) there occurs any termination or revocation that is subject to appeal by Tenant, or any suspension of any such Authorizations that results in the subject Facility ceasing operation for a period of more than [***] ([***]) consecutive days at any time, except, as to any stop placement order, to the extent relating to or resulting from any industry-wide action, directive or requirement of any Governmental Authority in connection with COVID-19 or any other epidemic or pandemic;

7.2.2. subject to Section 15.17 regarding permitted contests, Tenant fails to cure or abate any material violation occurring during the Term that is claimed by any Governmental Authority, or any officer acting on behalf thereof, of any Legal Requirement pertaining to the operation of any Facility, and within the time permitted by such Governmental Authority for such cure or abatement;

7.2.3. If Tenant voluntarily ceases operation of the Business of a Facility for its Primary Intended Use, except (i) as a result of a casualty or a partial or complete Condemnation or (ii) for any temporary cessation of operations in any Premises (or any portion thereof), not to exceed [***] ([***]) days, in connection with COVID-19 or any other epidemic or pandemic, provided that Tenant shall reasonably consult with Landlord regarding any such cessation of operations prior to effecting it;

7.2.4. The sale or transfer of all or any portion of any certificate of need, bed or unit right or other similar Authorization relating to any material portion of the Business of a Facility or any material portion of a Facility;

7.2.5. Tenant's failure to perform any of the material terms, covenants or conditions contained in this Lease not otherwise specifically identified in this Section 7.2 with respect to a Facility, if not remedied or corrected within [***] ([***]) days after receipt of notice from Landlord thereof, or, if such failure to perform cannot reasonably be remedied within such period, Tenant does not within [***] ([***]) days after notice thereof commence such act or acts as shall be necessary to remedy the default and shall not thereafter diligently complete such act or acts within a reasonable time, provided, however, in no event shall such cure period extend beyond [***] ([***]) days after notice from Landlord thereof;

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7.2.6. The entry of any final, non-appealable judgment against Tenant with respect to one or more Facilities but less than all of the Facilities leased by such Tenant in excess of $[***] that remains unsatisfied or not stayed or superseded for more than [***] days, or the recording of any judgment or abstract of judgment against Tenant or the service of a notice of levy or of a writ of attachment or execution, or other like process that is final and non-appealable, against the assets of Tenant in each case in excess of $[***] that remains unsatisfied or not stayed or superseded for more than [***] days; provided, however, that such event shall constitute a Master Lease Event of Default rather than a Facility Default if Guarantor fails to execute and deliver to Landlord a reaffirmation of the Guaranty in the form attached hereto as Schedule 7.2.7, within [***] days of written request from Landlord therefor;

7.2.7. If Tenant becomes bankrupt or insolvent, or files any debtor proceedings, or files pursuant to any statute a petition in bankruptcy or insolvency or for reorganization, or files a petition for the appointment of a receiver or trustee for all or substantially all of its assets, or (x) any of the foregoing are filed against Tenant and such petition or appointment shall not have been set aside within ninety (90) days after the date of such petition or appointment, or (y) Tenant makes an assignment for the benefit of creditors or shall admit in writing in a legal proceeding its inability to pay its debts generally as they become due, or if Tenant's interest in this Lease is attached, levied upon, seized or made subject to any other judicial seizure and such seizure or attachment is not discharged within ninety (90) days; provided, however, that such event shall constitute a Master Lease Event of Default rather than a Facility Default unless (a) Guarantor executes and delivers to Landlord a reaffirmation of the Guaranty in the form attached hereto as Schedule 7.2.7 within five days of written request from Landlord therefor, and (b) Guarantor promptly replaces such Tenant with an Affiliate of Guarantor that has the legal power and authority to perform such Tenant’s obligations under this Lease;

7.2.8. Tenant’s failure to perform or comply with the provisions of Section 5.10.3 [Use Specific Negative Covenants] with respect to a Facility if not remedied within [***] ([***]) Business Days after receipt of notice from Landlord thereof;

7.2.9. Tenant’s failure to perform or comply with the provisions of Section 5.5.5 if such failure would, pursuant to the terms of such Section, be an Event of Default;

7.2.10. Intentionally Deleted; or

7.2.11. Any breach by Tenant of an Executed OTA that is not remedied within [***] ([***]) business days after receipt of written notice from Landlord thereof.

7.3. Landlord Termination Right. During the continuance of the Landlord Termination Right Period (as defined in the Brookdale Guaranty), subject to the terms, conditions and restrictions of Section 16 of the Brookdale Guaranty, Landlord will have the right to terminate this Lease with respect to any or all of the Facilities, in which case the provisions of Section 7.4.12 shall pertain. Upon such termination, Minimum Rent shall be

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reduced by the then applicable Proportionate Share of such Minimum Rent applicable to the terminated Facilities.

7.4. Remedies. Landlord will have the following rights and remedies upon the occurrence and during the continuance a Master Lease Event of Default and, subject to Section 7.4.6, upon the occurrence and during the continuance of a Facility Default with respect to the applicable Facility:

7.4.1. General. Upon the occurrence and during the continuance of an Event of Default, Landlord may exercise all rights and remedies under this Lease and the Legal Requirements of the state or states in which the Premises are located that are available to a lessor or landlord of real and personal property following a default by its lessee or tenant, and as to the Tenant Property, all remedies granted under the Legal Requirements of such state(s) to a secured party under its Uniform Commercial Code. Except as required by applicable Legal Requirements, Landlord shall have no duty to mitigate damages unless required by applicable Legal Requirements and shall not be responsible or liable for any failure to relet any of the Premises or to collect any rent due upon any such reletting. Tenant shall pay Landlord, immediately upon demand, all expenses incurred by it in obtaining possession and reletting any of the Premises, including fees, commissions and costs of attorneys, architects, agents and brokers.

7.4.2. Termination Right. Upon the occurrence of and during the continuance of an Event of Default, Landlord, in its sole discretion, may terminate immediately (1) this Lease with respect to all of the Premises or (2) this Lease with respect to any Facility at or with respect to which the Event of Default exists, by delivery to Tenant of notice of Landlord’s intent to terminate (any termination under such clause (2), a “Limited Termination Election”). Upon delivery of any such notice of termination, all of Tenant’s rights under this Lease shall cease as to the particular portion of the Premises specified in such notice, and if less than all of the Premises are identified in the notice, the provisions of Section 7.4.12 shall apply. Without limiting the foregoing, if Landlord makes a Limited Termination Election, the deletion of the applicable Facility from this Lease shall be absolutely without limitation of each Tenant’s continuing obligation (on a joint and several basis) for the damages and other amounts owing on account of the Event of Default giving rise to the deletion from this Lease of such Facility or the termination of this Lease as to such Facility.

7.4.3. Other Remedies. Without limiting the foregoing, Landlord shall have the right (but not the obligation) to do any of the following upon the occurrence and during the continuance of an Event of Default: (1) sue for specific performance of any covenant of Tenant as to which it is in breach; (2) enter upon and dispossess Tenant from any portion of the Premises and sue for money damages by reason of Tenant’s breach, including the acceleration of all Rent that would have accrued after any termination of this Lease as it relates to all or any portion of the Premises or any such dispossession, and all obligations and liabilities of Tenant under this Lease that survive such termination or dispossession; (3) elect to leave this Lease in place and sue for Rent and other money damages as the same come due; and (4)

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before or after repossession of any portion of the Premises pursuant to clause (2) above and whether or not this Lease has been terminated, relet any portion of the Premises to such tenant or tenants, for such terms (which may be greater or less than the remaining balance of the Term), rent, conditions (which may include concessions or free rent) and uses as Landlord may determine in its sole discretion and collect and receive any rents payable by reason of such reletting.

7.4.4. Receivership. Upon the occurrence and during the continuance of an Event of Default and to the extent permitted by applicable Legal Requirements, Landlord may petition any appropriate court for the appointment of a receiver to take possession of all or any part of the Premises, to manage the operation of all or any part of the Premises, to collect and disburse all rents, issues, profits and income generated thereby and to the extent applicable and possible, to preserve or replace any affected license or provider certification for all or any part of the Premises and/or otherwise to substitute the licensee or provider certificate holder (a “Receivership”). If Landlord commences a Receivership, the applicable receiver shall be paid a reasonable fee for its services and all such fees and other expenses of such Receivership shall be paid by Tenant in addition to the Rent otherwise due to Landlord hereunder. Tenant irrevocably consents to a Receivership upon an Event of Default and thus stipulates to and agrees not to contest the appointment of a receiver under such circumstances and for such purposes.

7.4.5. Remedies Cumulative; No Waiver. No right or remedy conferred upon or reserved to Landlord under this Lease is exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given under this Lease or now or hereafter existing at law or in equity. Any notice or cure period under this Lease shall run concurrently with any notice or cure period required under applicable Legal Requirements. No failure of Landlord to insist at any time upon the strict performance of any provision of this Lease or to exercise any option, right, power or remedy contained in this Lease shall be construed as a waiver, modification or relinquishment of any similar or different breach (future or otherwise) by Tenant or of any option, right, power or remedy of Landlord. Landlord’s receipt of any Rent or other sum due under this Lease (including any late charge) with knowledge of any breach shall not be deemed a waiver of such breach, and no waiver by Landlord of any provision of this Lease shall be effective unless expressed in a writing signed by it. Notwithstanding anything in this Lease to the contrary, the sale of the Premises (or any part thereof) by Landlord during the continuance of an Event of Default shall not constitute Landlord’s acceptance of Tenant’s abandonment of the Premises (or any part thereof) or rejection of the Lease or in any way impair Landlord’s rights upon Tenant’s default, including Landlord’s right to damages.

7.4.6. Restriction on Remedies for Facility Defaults. Notwithstanding anything contained in this Lease which may be construed to the contrary, to the extent that (A) any Facility Default is continuing and (B) no Master Lease Event of Default is then continuing, Landlord’s remedies under this Lease shall be limited, and may apply solely, to the Facility that is the subject of such Facility Default, including (i) termination of this Lease

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solely with respect to such Facility(ies) pursuant to Section 7.4.2, (ii) repossessing solely such Facility(ies) pursuant to Section 7.4.3, (iii) accelerating Rent (based on such Facility’s Proportionate Share) solely with respect to such Facility(ies) pursuant to Section 7.4.3, (iv) causing a receiver to be appointed solely with respect to such Facility(ies) pursuant to Section 7.4.4, or (v) applying Escrow Deposits solely attributable to such Facility(ies). The foregoing shall not limit or impair Landlord from thereafter exercising any remedy under this Lease upon the occurrence and during the continuance of a Master Lease Event of Default, including but not limited to receiving any portion of the Security Deposit (as defined in the Brookdale Guaranty) and applying such Security Deposit to the amounts then owed to Landlord resulting from any Master Lease Event of Default under this Lease, or limit Landlord’s ability to maintain an action against Tenant, on a joint and several basis, for damages or specific performance as to any Master Lease Event of Default.

7.4.7. [Reserved.]

7.4.8. Performance of Tenant’s Obligations. If Tenant at any time fails to make any payment or perform any act on its part required to be made or performed under this Lease, then Landlord, without waiving or releasing Tenant from any obligations or default under this Lease, may make such payment or perform such act for the account and at the expense of Tenant, and enter upon any portion of the Premises for the purpose of taking all such action as Landlord may deem to be reasonably necessary or appropriate. No such entry shall be deemed an eviction of Tenant. All sums so paid by Landlord and all necessary and incidental costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the performance of any such act by Landlord or its representatives, together with interest at the Agreed Rate from the date of the making of such payment or the incurring of such costs and expenses, shall be payable by Tenant to Landlord upon Landlord’s demand.

7.4.9. Application of Funds. Notwithstanding anything in this Lease to the contrary, (except and as otherwise as set forth in Section 7.4.6),any payments, deposits, escrows, Property Loss Insurance Proceeds or Awards received or held by Landlord under any of the provisions of this Lease may, during the continuance of any Event of Default and at Landlord’s option, in its sole discretion, be applied to Tenant’s obligations in the order that Landlord in its sole discretion may determine.

7.4.10. Tenant’s Waiver; Mitigation. In connection with the exercise by Landlord of any of its remedies under this Section 7.4, including the termination of this Lease, in whole or in part, Tenant waives, to the maximum extent permitted by applicable Legal Requirements, (1) any right of redemption, re-entry or repossession, (2) the benefit of any moratorium laws or any laws now or hereafter in force exempting property from liability for rent or for debt, (3) any duty on the part of Landlord to mitigate the damages recoverable from Tenant on account of any Event of Default by Tenant, except that, notwithstanding the foregoing or anything in this Lease to the contrary, Landlord agrees to comply with any duty to mitigate damages where applicable Legal Requirements do not allow Tenant to waive such right, (4) the right to interpose any counterclaim (other than compulsory counterclaims) in any

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summary proceeding instituted by Landlord against Tenant in any court or in any action instituted by Landlord in any court for unpaid Rent under this Lease, and (5) any other right provided to Tenant under applicable Legal Requirements relating to a breach of or Event of Default under this Lease, including any rights to cure such breach or Event of Default.

7.4.11. Limitation on Certain of Tenant’s Remedies. If Tenant claims or asserts that Landlord has violated or failed to perform a covenant of Landlord not to unreasonably withhold, delay or condition Landlord’s consent or approval under this Lease, or in any case where Landlord’s reasonableness in exercising its judgment is in issue, Tenant’s sole remedy shall be an action for specific performance, declaratory judgment or injunction, and in no event shall Tenant be entitled to any monetary damages for a breach of any such covenant or unreasonable exercise of judgment, and Tenant hereby specifically waives the right to any monetary damages or other remedies in connection with any such breach or unreasonable exercise of judgment. Without limitation of the foregoing and notwithstanding anything in this Lease to the contrary, Tenant agrees that no breach or default by Landlord under this Lease shall excuse Tenant from performing, or constitute a defense to Tenant’s performance of, any duty, liability or obligation of Tenant under this Lease and in no event shall any breach or default by Landlord under this Lease entitle Tenant to terminate this Lease, or abate Rent, in whole or in part.

7.4.12. Deletion of Facility. If this Lease is terminated as to one or more Facilities (but not all of the Facilities) including but not limited to pursuant to Section 7.3 or Section 7.4.2 or in connection with a Property Loss or Condemnation or in connection with a sale of a Facility to Tenant or its Affiliate or a nominee of Tenant or its Affiliate or in connection with a sale of a Subject Facility (as defined in, and subject to the terms of, Exhibit L), the provisions of this Section 7.4.12 shall be applicable. Without necessity of any further action of the parties, this Lease shall terminate as to the Facility or Facilities (the “Deleted Facility” or the “Deleted Facility or Facilities”) being removed from this Lease, and the Deleted Facility or Facilities shall be separated and removed from this Lease, as of the applicable termination date (e.g., as of the date of Landlord’s delivery of a notice of termination (in the case of a partial termination of this Lease under Section 7.4.2) or as of the Date of Taking (in the case of a partial termination of this Lease under Section 12.2) or as of the closing date of the sale of any Subject Facility (in the case of such sale pursuant to the terms of Exhibit L)) (such date, the “Property Removal Date”). As of the applicable Property Removal Date, this Lease shall be amended automatically (and without any further action by the parties) to (1) remove the Deleted Facility or Facilities from this Lease, (2) exclude the Deleted Facility or Facilities from the definition of the Premises, and (3) reduce the Minimum Rent payable under this Lease by the amount of Minimum Rent previously allocated to the Deleted Facility or Facilities (based upon the Proportionate Share(s) of such Deleted Facility or Facilities and as described in Exhibit H); provided, however, that if the Deleted Facility is a Subject Facility being terminated on account of a sale of such Subject Facility, then Minimum Rent shall be reduced in accordance with the provisions of Exhibit L. Promptly (and in any event within 10 days after delivery of Landlord’s request therefor), Tenant shall execute and deliver to Landlord such instruments as Landlord may from time to time request reflecting the elimination of any

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Deleted Facility or Facilities from this Lease on the terms described above and such other amendments reasonably necessary to effect the deletion of the Deleted Facility or Facilities from this Lease. With respect to any Deleted Facility(ies), the terms of items (1) through (3) above shall not limit the liability of Tenant (joint and several) for any Minimum Rent or Additional Rent allocated to the Deleted Facility(ies) which may remain due and owing, and (i) in case of any termination of this Lease as to one or more Facilities as a result of any Event of Default, for any damages resulting from the Event of Default that resulted in the deletion of such Facility(ies) herefrom and (ii) in case of any termination of this Lease pursuant to Section 11 or Section 12 hereof, for any obligations owed by Tenant to Landlord on account of such termination under Section 11 or Section 12 hereof.

8.Obligations of Tenant on Expiration or Early Termination of the Lease.

8.1. Surrender of Possession. On the expiration of the Term, or earlier termination of this Lease, as it relates to the Premises or a portion thereof, or on the dispossession of Tenant from the Premises or a portion thereof (the Premises or portion thereof as to which this Lease has so expired or terminated, or as to which Tenant has been so dispossessed, is herein referred to as the “Terminated/Dispossessed Premises”, and the scheduled date of any such expiration or termination, or dispossession, as to particular Terminated/Dispossessed Premises is herein referred to as the “Termination/Dispossession Date” for such Terminated/Dispossessed Premises), Tenant shall deliver to Landlord or its designee possession of such Terminated/Dispossessed Premises and associated Landlord Personal Property in a condition that is in compliance with the Condition Standard. For the avoidance of doubt, Tenant shall not be obligated to remove Alterations that were permitted by the terms of this Lease or otherwise approved by Landlord.

8.2. Transition of Operations. With respect to the termination and transition of any Terminated/Dispossessed Premises:

8.2.1. On the Termination/Dispossession Date, Tenant shall deliver to Landlord or its designee such Terminated/Dispossessed Premises in compliance with the Condition Standard and otherwise operational in all material respects, and immediately prior to such delivery, Tenant shall have been operating under Tenant’s applicable material Authorizations with no material restrictions or suspensions that adversely affect Landlord’s or its designee’s efforts to obtain the issuance of its own material Authorizations from any applicable Governmental Authority. Except for Tenant’s obligation to comply with the first sentence of this Section 8.2.1 and the other provisions of this Lease, in no event shall Tenant have any duty or obligation to make any Alterations, or incur any costs or expenses necessitated by, or imposed in connection with, any application for a change of ownership with respect to any Authorizations or any inspection or survey in connection therewith or related to the transfer of operation of such Terminated/Dispossessed Premises to Landlord or its designee; provided, however, that the foregoing shall not relieve Tenant of any obligation to comply with requirements imposed by any applicable Governmental Authority to keep or restore Tenant’s Authorizations to the extent required by any applicable Governmental Authority as required

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in connection with Tenant’s Authorizations (as opposed to requirements for obtaining new Authorizations for a successor operator).

8.2.2. Tenant shall not at any time as to any Terminated/Dispossessed Premises seek to transfer, surrender, allow to lapse or grant any security or other interest in and to any of the Authorizations relating to any portion of the Business or such Terminated/Dispossessed Premises, nor shall Tenant commit or omit any act that would jeopardize any portion of the Business or any Authorization relating to such Terminated/Dispossessed Premises.

8.2.3. Tenant shall not commence to wind up and terminate the operations of any Facility or relocate the patients or occupants of any Facility to any other health care facility (any such wind up, termination or relocation, a “Facility Termination”); provided, however, Tenant may commence such Facility Termination in a reasonable period of time preceding the expiration of the Reimbursement Period if Landlord or its designee has failed to obtain (or it is reasonably determined that such parties will be unable to obtain in a timely manner by the end of the Reimbursement Period) all required Authorizations for the operation of the Business at such Terminated/Dispossessed Premises within the time period specified in Section 8.2.6 below.

8.2.4. Tenant shall reasonably cooperate with Landlord or its designee upon reasonable request and at Landlord’s or its designee’s cost and expense (other than Tenant’s de minimus costs which shall be paid by Tenant) in connection with the application for all necessary Authorizations filed by Landlord or its designee, and Tenant shall act reasonably to accomplish an orderly transition of, subject to all Legal Requirements: (1) operations of the Terminated/Dispossessed Premises, (2) possession of such Terminated/Dispossessed Premises, and (3) Patient Information (including, without limitation all patient charts and resident records, along with appropriate resident consents if necessary) to the extent such Patient Information can lawfully be transferred in accordance with all Legal Requirements. Tenant agrees, upon reasonable advance notice from Landlord and with respect to each Facility that is part of such Terminated/Dispossessed Premises, to enter into an operations transfer agreement and to cause Guarantor to guaranty certain provisions in the OTA that are usual and customary for facilities comparable to such Facility with Landlord or its designee (it being acknowledged that (i) no monetary consideration shall be paid by Landlord or its designee for the transition of operations contemplated by such operations transfer agreement other than reconciliation of accounts receivable and accounts payable and other similar transitional costs and expenses and (ii) such operations transfer agreement will require Tenant to provide certain customary representations and warranties to the successor operator, provided that Tenant shall not be required to provide a scope of, or recourse for, representations and warranties that would increase Tenant’s ultimate liability for its obligations under this Lease other than to a de minimus extent). If the applicable successor operator with respect to any Facility that is part of a Terminated/Dispossessed Premises is an Affiliate of Landlord, then the operations transfer agreement to be executed by Tenant pursuant to Section 8.2.4 with respect to such Facility shall be in the form attached hereto as Exhibit E (the “Form OTA”), and Tenant shall execute

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(and Landlord shall cause Landlord’s successor operator to execute) such operations transfer agreement (an “Executed OTA”) not more than ten (10) days after receipt of notice by Tenant from Landlord of the termination of this Lease as to such Facility in connection with a sale or transition of such Facility, provided that such notice shall be delivered not less than thirty (30) days prior to the Termination/Dispossession Date. If the applicable successor operator with respect to any Facility that is part of a Terminated/Dispossessed Premises is not an Affiliate of Landlord, then Tenant shall use commercially reasonable efforts to negotiate and execute with such third party successor operator an operations transfer agreement in form substantially similar to the Form OTA on a timeframe that is compatible with the timeframes contemplated by the applicable agreement between Landlord and such third party successor operator (or its affiliate).

8.2.5. In connection with the transfer of the operations of any Terminated/Dispossessed Premises to a new operator, upon notice from Landlord, Tenant shall operate such Terminated/Dispossessed Premises in accordance with the terms of this Lease until the earlier to occur of (1) the date on which such successor operator shall assume operation of such Terminated/Dispossessed Premises and (2) the date that is 360 days after the applicable Termination/Dispossession Date with respect to such Terminated/Dispossessed Premises.

8.2.6. If Tenant operates any Terminated/Dispossessed Premises at Landlord’s request after the Termination/Dispossession Date applicable to such Terminated/Dispossessed Premises, then, from and after the applicable Termination/Dispossession Date as to such Terminated/Dispossessed Premises and until the earlier to occur of the dates described in Section 8.2.5 relative to such Terminated/Dispossessed Premises (the “Reimbursement Period”), (1) Landlord or its designee shall provide Tenant with an operating budget, (2) Landlord shall include in the aforesaid operating budget, and Tenant shall continue to pay during the Reimbursement Period, all Rent that would have been owing under this Lease as to such Terminated/Dispossessed Premises if this Lease had not expired or terminated as to, and/or Tenant had not been dispossessed from, such Terminated/Dispossessed Premises (based upon the Proportionate Shares of such Terminated/Dispossessed Premises and as described in of Exhibit H), (3) Tenant shall be entitled to retain any profits resulting from Tenant’s operations during the Reimbursement Period and, if Tenant remains in possession of the Terminated/Dispossessed Premises at Landlord’s request after the expiration of the Term, Landlord shall pay to Tenant a management fee in an amount equal to 5% of the gross revenues of the applicable Terminated/Dispossessed Facilities (which amount may be deducted or offset against Rent payable from Tenant to Landlord during the Reimbursement Period at Tenant’s option) and (4) provided that this Lease was not terminated with respect to, and Tenant was not dispossessed from, such Terminated/Dispossessed Premises due to an Event of Default, Landlord shall reimburse Tenant for any operating deficits (including Rent) with respect to such Terminated/Dispossessed Premises that Tenant may be required to fund out-of-pocket on account of operating losses and expenses of such Terminated/Dispossessed Premises incurred by Tenant by reason of, or arising out of compliance with, such budget with respect to the Reimbursement Period applicable to such Terminated/Dispossessed Premises. Any such reimbursement shall be due from Landlord to Tenant within 30 days after request by Tenant, provided that (i) Tenant

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shall furnish such documentation of any operating deficits, losses and expenses as Landlord may reasonably request and (ii) Tenant may set-off any reimbursement amount against Rent payable in the following month. The terms of this Section 8.2 shall survive the expiration or earlier termination of this Lease and/or any dispossession of Tenant from any part of the Premises.

8.3. Facility Termination. Notwithstanding the provisions of Section 8.2 above or any other provisions to the contrary contained in this Lease, Landlord may, by written notice delivered to Tenant at any time or from time to time after (i) a Master Lease Event of Default (including after any transition of operations as provided in Section 8.2 has commenced with respect to any Section 8.3 Premises (as defined below)), and (ii) a Facility Default (including after any such transition has commenced with respect to the Facility that is the subject of such Facility Default), elect to require that Tenant implement a Facility Termination with respect to the Terminated/Dispossessed Premises or such portion thereof as is specified in Landlord’s notice (the Terminated/Dispossessed Premises or portion thereof, as applicable, specified in any such notice, the “Section 8.3 Premises”). In connection with any such Facility Termination for any Section 8.3 Premises, Tenant shall, at its sole cost and expense, in compliance with all applicable Legal Requirements, and except as otherwise directed in writing by Landlord:

8.3.1. promptly commence and diligently prosecute a Facility Termination with respect to each applicable Section 8.3 Premises;

8.3.2. (1) remove and relocate all patients/residents therefrom, (2) remove all Patient Information therefrom, (3) terminate all subleases, vendor and service contracts and other agreements that Tenant may have entered into with respect to such Section 8.3 Premises, (4) take all necessary steps to transfer all basic utility service into Landlord’s name, (5) fully vacate such Section 8.3 Premises, (6) observe and comply with the obligations set forth in this Lease relative to the physical condition of such Section 8.3 Premises upon vacation therefrom and surrender thereof, (7) take all necessary steps to transfer all Tenant Property to Landlord in accordance with Section 8.4 and (8) shut down, close and secure such Section 8.3 Premises; and

8.3.3. complete such Facility Termination(s) as soon as reasonably practicable in compliance with applicable Legal Requirements.

8.4. Tenant Property. Upon the expiration or earlier termination of this Lease with respect to, or the dispossession of Tenant from, any Terminated/Dispossessed Premises (unless such termination is the result of Tenant’s purchase of such Terminated/Dispossessed Premises), all Tenant Property (excluding the Excluded Property and the Excluded Vehicles) relating to such Terminated/Dispossessed Premises shall become the property of Landlord, free of any Lien, and Tenant shall, at its expense, take any actions reasonably necessary to discharge any applicable Lien.Subject to Section 9.1, Landlord acknowledges and agrees the Excluded Property and the Excluded Vehicles are not to be transferred to Landlord pursuant

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to this Section 8.4. Tenant shall execute and deliver such assignments, conveyance documents, bills of sale and other instruments as Landlord shall reasonably require to evidence the conveyances and transfers referenced in this Section 8.4 and otherwise reasonably assist Landlord with such conveyances and transfers.

8.5. Holding Over. This Section 8.5 shall not apply in the case of any Terminated/Dispossessed Premises as to which Tenant has been dispossessed without Landlord having terminated this Lease as it applies to such Terminated/Dispossessed Premises, and, in any such case, notwithstanding anything to the contrary in this Section 8.5 or elsewhere in this Section 8, Landlord shall retain all of its money damages and other rights and remedies on account of any such dispossession or any Event of Default allowing such dispossession. If Tenant shall for any reason remain in possession of any portion of the Terminated/Dispossessed Premises after the applicable Termination/Dispossession Date except where Tenant remains in possession under Section 8.2.5, such possession shall be a month-to-month tenancy during which time Tenant shall pay as rental on the first day of each month one and one-half times the total of the monthly Minimum Rent payable with respect to the Terminated/Dispossessed Premises as of the end of the last Lease Year (excluding any Renewal Terms for which Tenant has not exercised its option to renew) (determined on the basis of the Proportionate Share(s) of such Terminated/Dispossessed Premises, as described in Exhibit H) plus Additional Rent and all additional charges accruing during the month, and all other sums payable by Tenant pursuant to this Lease, with respect to such Terminated/Dispossessed Premises. Nothing contained herein shall constitute the consent, express or implied, of Landlord to the holding over of Tenant after any applicable Termination/Dispossession Date, nor shall anything contained herein be deemed to limit Landlord’s remedies.

8.6. Survival. All representations, warranties, covenants and other obligations of Tenant under this Lease shall survive any applicable Termination/Dispossession Date.

9.Certain Landlord Rights.

9.1. Landlord’s Security Interest and Financing Statements. Tenant, as debtor, hereby grants to Landlord, as security for Tenant’s obligations under this Lease and any related agreements, a security interest in, and an express contractual Lien upon, all of Tenant’s right, title and interest in and to the Tenant Property (excluding the Excluded Property) and all products and proceeds thereof, that Tenant now owns or leases or in which Tenant hereafter acquires an interest or right. This Lease constitutes a security agreement covering all such Tenant Property.

9.1.1. The security interest granted to Landlord in such Tenant Property is subordinate to any security interest granted in Tenant Property in connection with purchase money financing of such Tenant Property, as long as (a) Tenant provides Landlord with copies of the documentation evidencing such financing or leasing and (b) the lessor or financier agrees to give Landlord notice of any default by Tenant under the terms of such arrangement and a

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reasonable time following such notice to cure any such default and to consent to Landlord’s written assumption of such arrangement upon curing such default.

9.1.2. Tenant shall give Landlord at least five days’ prior written notice of any change in Tenant’s name, identity, jurisdiction of organization or form of entity. With respect to such change, Tenant will promptly execute and deliver such additional security agreements, financing statements, fixture filings and other documents as Landlord may reasonably require to perfect or to continue the perfection of its security interest.

9.1.3. This security interest and agreement shall survive the expiration or termination of this Lease.

9.2. Entry and Inspection. Landlord and its representative may enter the Premises at any reasonable time after reasonable notice to Tenant for the purpose of inspecting the Premises for any reason including, without limitation, Tenant’s default under this Lease, or to exhibit the Premises for sale, lease (but as to showing for lease, in the 12 months prior to the expiration of the Initial Term or any applicable Renewal Term, so long as there is no Event of Default under this Lease, only if Tenant has not exercised its option to renew pursuant to Section 3.2) or mortgage financing, or posting notices of default, or non-responsibility under any mechanic’s or materialman’s lien law or to otherwise inspect the Premises for compliance with the terms of this Lease. Any such entry shall not unreasonably interfere with residents, patients, patient care, Tenant’s operations in the ordinary course of the Business, shall be on not less than five (5) Business Days’ notice during normal business hours and only when accompanied by a representative of Tenant.

9.3. Estoppel Certificates. Tenant shall, at any time upon not less than ten (10) Business Days prior request by Landlord, have an authorized representative execute, acknowledge and deliver to Landlord or its designee a written statement certifying (a) that this Lease, together with any modifications, is in full force and effect, (b) the dates to which Rent and Additional Rent have been paid, (c) that no default by either party exists or specifying any such default, and (d) as to such other matters as Landlord may reasonably request.

9.4. Conveyance Release. If Landlord or any successor owner shall transfer any portion of the Premises in accordance with this Lease, it shall thereupon be released from all future liabilities and obligations under this Lease arising or accruing from and after the date of such conveyance or other transfer, which instead shall thereupon be binding upon the transferee.

9.5. Landlord’s Financing.

9.5.1. Cooperation; Other Agreements. Tenant agrees to reasonably cooperate in Landlord’s financing or refinancing of the Facilities as required under Guarantor’s Guaranty in favor of Landlord of even date herewith.

10.Assignment and Subletting.

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10.1. Prohibition on Transfer. Tenant shall not do or permit any of the following without obtaining Landlord’s prior consent, which consent may be withheld or granted in Landlord’s sole discretion:

10.1.1. Transfer, directly or indirectly all or any part of any of the Premises, the Business, the Facilities or Tenant’s right, title, or interest in and to this Lease;

10.1.2. Engage the services of any Person (including without limitation any Affiliate) for the management of all or any part of any of the Premises, Business or the Facilities, provided that Tenant may enter into a management agreement with an Affiliate for the management of one or more Facilities subject to the terms of Section 5.10.1, it being acknowledged that, following the engagement of any Person in accordance with this Section 10.1.2, any subsequent Transfer of any stock, partnership, membership or other equity interests in such Person resulting in a Change of Control of such Person shall constitute a new engagement of such Person for purposes of this Section 10.1.2;

10.1.3. Transfer any stock, partnership, membership or other equity interests in any Tenant if such Transfer results in Guarantor no longer Controlling Tenant;

10.1.4. Dissolve any Tenant; or

10.1.5. Transfer all or substantially all of the assets of any Tenant.

10.2. Effect of any Unapproved Transfer. Any purported Transfer that is prohibited in Section 10.1 made without the prior consent of Landlord (“Unpermitted Transfer”) shall be absolutely null and void. If Landlord consents to any Transfer, such Transfer shall not be effective and valid unless and until the applicable transferee executes and delivers to Landlord any and all documentation reasonably required by Landlord. Any consent by Landlord to a particular Transfer shall not constitute consent or approval of any subsequent Transfer, and Landlord’s consent shall be required in all such instances. No consent by Landlord to any Transfer shall be deemed to release any Tenant or Guarantor from its obligations under or relating to this Lease or its Lease Guaranty, as applicable, and each Tenant and Guarantor shall remain fully liable for payment and performance of all obligations under this Lease or its Lease Guaranty, as the case may be.

10.3. Permitted Transfers. Notwithstanding anything in this Section 10 to the contrary, Tenant may, without the prior consent of Landlord, do any of the following (each a “Permitted Transfer”):

10.3.1. Provided that no Master Lease Event of Default has occurred and is continuing, Transfer its interest and rights under this Lease to any Guarantor or a Person wholly owned and Controlled by any Guarantor, provided and on the conditions that (1) Tenant and such assignee deliver to Landlord an assignment and assumption agreement in customary form to effect such transfer of Tenant’s interest in this Lease and pursuant to which such assignee assumes Tenant’s obligations under this Lease, (2) neither Tenant nor any Guarantor shall be

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released from any of their respective obligations under this Lease or any Lease Guaranty on account of such assignment, (3) all required Authorizations shall have been obtained for such Transfer, and (4) such Transfer shall not violate any Legal Requirements;

10.3.2 Enter into residency agreements or occupancy agreements with residents and patients of such Facility;

10.3.3. Pledge or encumber assets to the extent expressly permitted by the terms of this Lease;

10.3.4. Any Transfer expressly permitted by any Lease Guaranty;

10.3.5. Enter into subleases for portions of the Premises (not to exceed, in the aggregate, 5% of the square feet of the applicable Facility), whereby the sublessee (i) provides or administers Ancillary Services, (ii) provides services or products that are amenities to residents of such Facility, such as a beauty salon, or (iii) otherwise generates a rent stream without interference with the operations of the Business, such as a rooftop cell tower. Any such sublease shall in any case be subject to the requirements of Section 10.6 and any such sublease with an Affiliate shall be subject to the requirements of Section 5.10.1.

10.4. Rights of Landlord. If Tenant Transfers any interest in this Lease, in any of the Facilities, the Premises or the Business (including any sublet but excluding any Permitted Transfers), whether or not in violation of this Lease, Landlord may (without prejudice to or waiver of its rights) collect rent from the transferee, subtenant or occupant. Landlord may apply the net amount collected to the Rent in this Lease required to be paid by Tenant, but such application shall not be deemed a waiver of any of Landlord’s rights under this Section 10.

10.5. Transfer Defined. For purposes of this Lease, the term “Transfer” shall mean any direct or indirect sale, exchange, assignment, sublease, pledge, mortgage, hypothecation, encumbrance, attachment, lien, pledge, garnishment, execution, levy, seizure, gift, transfer upon death by will, trust or the laws of descent or intestacy, transfer in connection with bankruptcy, transfer at judicial order, transfer in connection with a divorce or other marital property settlement, transfer by operation of law, including a merger, consolidation or share exchange, and all other kinds of conveyances, dispositions or alienations, voluntary or involuntary, direct or indirect, to or for the benefit of any other Person.

10.6. Subleases. Without limitation of the prohibitions set forth in Section 10.1 hereof, each sublease of any portion of a Facility shall be subject and subordinate to the provisions of this Lease and shall provide that Landlord, at its option and without any obligation to do so, may require any sublessee to, at the request and option of Landlord, attorn to Landlord, in which event Landlord shall undertake the obligations of Tenant, as sublessor under such sublease from the time of the exercise of such option to the termination of such sublease, and in such case, Landlord shall not be (a) liable for any act, omission or default of Tenant under such sublease occurring prior to the attornment, (b) liable for, or subject to, any offset,

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abatement or reduction of rent or other consideration under such sublease because of any default of Tenant under such sublease occurring prior to the attornment, (c) bound by any previous modification or amendment to any such sublease or any previous prepayment of more than one month’s rent, unless such modification, amendment or prepayment shall have been approved in writing by Landlord or, in the case of such prepayment, such prepayment of rent has actually been delivered to Landlord, or (d) liable for any security deposit or other collateral deposited or delivered to Tenant pursuant to such sublease unless such security deposit or other collateral has actually been delivered to Landlord. In the event that Landlord shall not require such attornment with respect to any sublease, then such sublease shall automatically terminate upon the expiration or earlier termination of this Lease with respect to the subleased Facility, including any earlier termination by mutual consent of Landlord and Tenant. No sublease made as permitted by this Section 10 shall affect or reduce any of the obligations of Tenant hereunder, and all such obligations shall continue in full force and effect as if no sublease had been made. No sublease shall impose any additional obligations on Landlord under this Lease. Anything contained in this Lease to the contrary notwithstanding, Tenant shall not sublet any Facility on any basis that the rental to be paid by the subtenant thereunder would be based, in whole or in part, on either (i) the income or profits derived by the business activities of the subtenant, or (ii) any other formula such that any portion of the sublease rental, if received by Landlord, would fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code, or any similar or successor provision thereto.

11.Damage and Destruction.

11.1. Notice of Property Loss. If any Facility is damaged in excess of $250,000 as the result of any Property Loss, (a) Tenant shall give prompt notice thereof to Landlord and any Facility Mortgagee, in no event more than five Business Days after the occurrence of such Property Loss and (b) within 15 days after the occurrence of such Property Loss, or as soon thereafter as such information is reasonably available to Tenant, Tenant shall provide Landlord the following information: (1) the date of the Property Loss and the identity of the Facility experiencing the Property Loss; (2) the nature of the Property Loss; (3) a description of the damage or destruction caused by the Property Loss, the area of such Facility damaged and the general extent of such damage; (4) a preliminary estimate of the cost to repair, rebuild, restore or replace such Facility; (5) a preliminary estimate of the schedule to complete the repair, rebuilding, restoration or replacement of such Facility; (6) a description of the anticipated property insurance claim, including the name of the insurer, the insurance coverage limits, the deductible amounts, the expected settlement amount and the expected settlement date; and (7) a description of the business interruption claim, including the name of the insurer, the insurance coverage limits, the deductible amounts, the expected settlement amount and the expected settlement date. Tenant shall provide Landlord with copies of any and all material correspondence to and from the insurance provider(s) within five Business Days after Tenant’s receipt or submission thereof and provide any other information reasonably requested by Landlord.

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11.2. Substantial Destruction. Except as otherwise set forth in this Lease, if a Facility is Substantially Destroyed or rendered Unsuitable For Its Primary Intended Use by a Property Loss at any time during the Term, Landlord may elect to terminate this Lease with respect to such Facility by providing notice to Tenant within 90 days after the date upon which Tenant notifies Landlord of the Property Loss, which termination shall be effective as of the termination date specified by Landlord in its notice, which date shall be not later than 30 days after Landlord’s delivery of such notice of termination to Tenant. If Landlord elects to terminate this Lease with respect to such Facility, then (a) Landlord shall receive any and all insurance proceeds payable by reason of the Property Loss (the “Property Loss Insurance Proceeds”), (b) Tenant shall immediately pay to Landlord an amount equal to any uninsured deductible or other uninsured Losses in connection with the Property Loss, and (c) as of the date of such termination, the applicable Facility shall be deleted from this Lease and the provisions of Section 7.4.12 governing a deletion of a Facility after Property Loss shall be applicable. If Landlord does not elect to terminate this Lease with respect to such Facility, then, Tenant shall promptly rebuild and restore the Facility in accordance with Section 11.4 below, and Landlord shall make the Property Loss Insurance Proceeds available to Tenant for such restoration only pursuant to, and in accordance with, Section 11.5. The term “Substantially Destroyed” means any Property Loss resulting in the loss of use of 50% or more of the licensed Units at the affected Facility or that would cost more than 50% of the value of such Facility to restore.

11.3. Partial Destruction. If a Facility is damaged by a Property Loss but is not Substantially Destroyed or rendered Unsuitable For Its Primary Intended Use, then, Tenant shall restore such Facility in accordance with the requirements of Section 11.4, and Landlord shall make the Property Loss Insurance Proceeds available to Tenant for such restoration pursuant to Section 11.5. Notwithstanding anything in the immediately preceding sentence to the contrary, if such Property Loss shall occur during the final two Lease Years of the Term, then Landlord shall have the right to terminate this Lease with respect to such Facility and retain any Property Loss Insurance Proceeds by delivering notice of such election to Tenant within 90 days after delivery of notice from Tenant of such Property Loss, such termination shall be effective as of the termination date specified by Landlord in its notice, which date shall be not later than 30 days after Landlord’s delivery of such notice of termination to Tenant, whereupon Tenant shall immediately pay to Landlord the amount of any uninsured deductible or other uninsured Losses in connection with the Property Loss and the applicable Facility shall be deleted herefrom pursuant to Section 7.4.12 governing the deletion of a Facility in connection with a Property Loss.

11.4. Restoration.

11.4.1. Commencement of Restoration. Within 120 days (or 240 days if a Facility is Substantially Destroyed or rendered Unsuitable For Its Primary Intended Use) after the earliest to occur of (1) Landlord’s delivery of notice to Tenant directing Tenant to restore a Facility damaged or destroyed by a Property Loss, (2) in the case of a Property Loss that results in Landlord having the option to terminate this Lease as to the affected Facility pursuant to Section 11.2 or Section 11.3, the expiration of the period in

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which Landlord may exercise such option to terminate if Landlord fails to affirmatively elect to terminate this Lease with respect to such Facility, or (3) in the case of damage to a Facility by Property Loss that does not result in such Facility being Substantially Destroyed or rendered Unsuitable For Its Primary Intended Use and that does not result in a termination of this Lease with respect to the affected Facility as provided in Section 11.3, the date of the Property Loss, Tenant shall furnish to Landlord complete plans and specifications (the “Restoration Plans and Specifications”) describing the work Tenant intends to undertake to restore the applicable Facility (the “Work”) for Landlord’s approval, which approval shall not be unreasonably withheld. The Restoration Plans and Specifications shall be prepared in accordance with good and customary construction and design practices and bear the signed approval thereof by an architect licensed to do business in the state where the applicable Facility is located and shall be accompanied by a written estimate from Tenant’s architect containing the projected cost of completing the Work. The Restoration Plans and Specifications shall describe Work of such nature, quality and extent that, upon the completion thereof, the Facility shall be at least equal in value and general utility to its value and general utility prior to the Property Loss and shall be adequate to operate the applicable Facility for its Primary Intended Use. Tenant shall satisfy all of the terms and conditions relative to Alterations as to the Work and the Restoration Plans and Specifications.

11.4.2. Permits. Prior to the commencement of the Work, Tenant shall furnish to Landlord complete copies of all permits required by any and all applicable Legal Requirements or Insurance Requirements in connection with the commencement and conduct of the Work and all contracts between Tenant and its general contractor, architects, engineers and construction manager related to the Work.

11.4.3. Conduct of Work. Tenant shall perform the Work diligently and in a good, workmanlike and lien-free fashion, in accordance with the Restoration Plans and Specifications and all applicable Legal Requirements and Insurance Requirements and other requirements of this Lease.

11.5. Disbursement of Insurance Proceeds. All Property Loss Insurance Proceeds received under any policy of insurance required to be carried hereunder shall be paid to Landlord. Tenant shall use reasonable efforts to complete the Work on or prior to the estimated completion date set forth in its agreement with the general contractor. If Landlord is required or elects to apply any Property Loss Insurance Proceeds toward repair or restoration of the applicable Facility, provided Tenant is diligently performing the Work in accordance with this Lease, Landlord shall disburse such Property Loss Insurance Proceeds as and when required by Tenant in accordance with normal and customary practice for the payment of a general contractor in connection with construction projects similar in scope and nature to the Work, including, at Landlord’s option, the withholding of 10% of the value of the Work described in each Property Loss Insurance Proceeds disbursement request until the Work is completed (as evidenced by a certificate of occupancy or similar evidence issued upon an inspection by the applicable Governmental Authority) and proof

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has been furnished to Landlord that no Lien has attached or will attach to the applicable Facility or to Landlord in connection with the Work. Prior to any final disbursement of Property Loss Insurance Proceeds, Tenant shall satisfy all of the conditions relative to Alterations as to the Work, as well as provide evidence reasonably satisfactory to Landlord that any amounts required to be paid by Tenant in connection with such Work pursuant to Section 11.6 have been paid in full. Notwithstanding anything in this Lease to the contrary, any Facility Mortgagee may retain and disburse the Property Loss Insurance Proceeds, and Tenant shall comply with the requests and requirements of such Facility Mortgagee in connection with the Work and the disbursement of Property Loss Insurance Proceeds.

11.6. Insufficient Proceeds/Risk of Loss. If the Property Loss Insurance Proceeds are not sufficient to pay the costs of the Work in full, Tenant shall nevertheless remain responsible, at its sole cost and expense, to complete the Work. Tenant expressly assumes all risk of loss, including a decrease in the use, enjoyment or value of the Facility from any Property Loss whatsoever, whether or not insurable or insured against. Tenant shall pay any insurance deductible and any other uninsured Losses.

11.7. Landlord’s Inspection. While the Work is being performed, Landlord and Landlord’s representatives may, from time to time, inspect the Work and the Facility upon reasonable prior notice to Tenant, provided Tenant’s representative may accompany Landlord during such inspection.

11.8. Not Trust Funds. Notwithstanding anything in this Lease or at law or in equity to the contrary, none of the Property Loss Insurance Proceeds, or Award on account of any Condemnation, that may be paid to Landlord as provided by this Lease shall be deemed trust funds, and Landlord shall be entitled to dispose of such Property Loss Insurance Proceeds or Award as provided in this Section 11 or in Section 12, as applicable.

11.9. Waiver. Tenant waives all statutory or common law rights to vacate the Premises, abate Rent or terminate this Lease that may arise by reason of any Property Loss or other circumstance that affects the health and safety of Tenant or any of the occupants of the Facilities.

11.10. Facility Mortgagee. Notwithstanding anything in this Lease to the contrary, if any Facility Mortgagee elects to require that any Property Loss Insurance Proceeds in connection with any Property Loss, or the Award in connection with any Condemnation, be applied by Landlord to reduce the outstanding principal balance of any loan secured by any of the Premises, Landlord may elect, in its sole discretion and by notice to Tenant delivered promptly after the receipt by Landlord of notice of such election from Facility Mortgagee, to disburse its own funds in replacement for any Property Loss Insurance Proceeds or Award so applied by the Facility Mortgagee, and, in such event, Landlord’s own funds shall be disbursed to Tenant from time to time as, when and subject to the satisfaction of the same terms, conditions and requirements as would have governed the disbursement of the Property Loss Insurance Proceeds or Award that Landlord’s funds

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replace (e.g., the requirements of Section 11.5 shall continue to be required to be satisfied as a pre-condition to any disbursement of Landlord’s funds) and Tenant shall remain liable for any portion of any Property Loss or the cost of any restoration not covered by the amount of Landlord’s own funds. To the extent Landlord does not elect to fund such restoration, Tenant shall be released from all restoration obligations in connection with such Property Loss or Condemnation.

12.Condemnation.

12.1. Total Taking. If any Facility is totally taken by Condemnation, this Lease shall terminate as to such Facility on the Date of Taking, in which event the provisions of Section 7.4.12 governing the deletion of one or more Facilities from this Lease upon a Condemnation shall apply. Upon any total taking by Condemnation of any Facility, the Award shall be solely the property of Landlord, whether such damages shall be awarded as compensation for diminution in value of the leasehold or the fee estate of the affected Facility; provided, however, Tenant shall be entitled to any damages specifically attributable to reasonable removal and relocation costs included in the Award, the value of Tenant’s Property and damages resulting from Tenant’s loss of business income.

12.2. Partial Taking. If any portion of any Facility is taken by Condemnation, this Lease shall remain in effect as to such Facility if the Facility located thereon is not thereby rendered Unsuitable For Its Primary Intended Use as reasonably determined by Landlord, but if the Facility is thereby rendered Unsuitable For Its Primary Intended Use, this Lease shall terminate as to such Facility on the Date of Taking, in which event the provisions of Section 7.4.12 governing the deletion of one or more Facilities from this Lease upon a Condemnation shall apply. If, as a result of any such partial taking by Condemnation, this Lease is not terminated as provided above, Tenant’s obligation to make payments of Rent and to pay all other charges required under this Lease shall remain unabated during the Term notwithstanding such Condemnation. Upon any partial taking by Condemnation of any Facility, the entire Award shall belong to and be paid to Landlord, except that Tenant shall be entitled to receive from the Award, if and to the extent such Award specifically includes such items, amounts specifically attributable to the following: (a) Tenant Property; (b) the cost of restoring the Facility or Facilities in accordance with Section 12.3; and (c) the interruption of business operations, which sum, if and to the extent received by Landlord, shall be credited against payments of Rent and other charges due from Tenant to Landlord under this Lease.

12.3. Restoration. If there is a partial taking by Condemnation of any Facility and this Lease remains in full force and effect, Tenant, at its cost, shall complete all necessary restoration, which restoration activities shall be performed in accordance with the terms and conditions applicable to the Work under Section 11.

12.4. Temporary Taking. During any non-permanent or temporary taking, all the provisions of this Lease shall remain in full force and effect and Rent shall continue without abatement or reduction.

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12.5. Waiver. Section 12 exclusively governs Landlord’s and Tenant’s rights and obligations in the event of any Condemnation, and Tenant waives any statutory rights of termination that may arise by reason of any Condemnation.

13.Indemnification by Tenant.

13.1. Indemnity. To the maximum extent permitted by applicable Legal Requirements, and without regard to the existence of any insurance provided for herein or the policy limits of any such insurance, Tenant shall protect, indemnify, defend and save harmless Landlord, its Affiliates, and each of their directors, officers, shareholders, members, agents and employees (collectively, the “Landlord Indemnified Parties”) for, from, against and regarding any and all foreseeable or unforeseeable liability, expense, loss, cost, deficiency, fine, penalty or damage (including consequential or punitive damages) of any kind or nature, (including reasonable attorneys’ fees, and including from any suits, claims or demands) on account of any matter or thing, action or failure to act arising out of or in connection with this Lease, the Premises or the operations of Tenant on any portion of the Premises, including the following:

13.1.1. any accident, injury to, or death of, persons or loss of, or damage to, property occurring on or about any Premises;

13.1.2. any negligence or misconduct on the part of Tenant or any of Tenant’s Affiliates or their respective directors, officers, shareholders, members, contractors, subcontractors, agents and employees;

13.1.3. the breach by Tenant of any of its representations, warranties, covenants or other obligations in this Lease;

13.1.4. any Protest brought by or at the request of Tenant;

13.1.5. subject to the limitations set forth in Section 5.7.5, all known and unknown Environmental Activities on, or related to Tenant’s use of, any portion of the Premises, Hazardous Materials Claims or violations by Tenant of any Hazardous Materials Law with respect to any portion of the Premises;

13.1.6. subject to the provisions on Schedule 2.3.5 related to Seasons of Glenview/Brookdale Northbrook, any matters arising or accruing during the period in which Tenant or its Affiliates (whether past, current, or future) owned, operated or managed any of the Premises; and

13.1.7. the violation of any Legal Requirement or the terms of any Authorization by Tenant or any of Tenant’s Affiliates or their respective directors, officers, shareholders, members, contractors, subcontractors, agents and employees.

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Notwithstanding anything in this Lease to the contrary, Tenant’s indemnification obligations under this Lease shall include, and extend to, any and all Losses regardless of whether the possibility of any such Losses has been disclosed to Tenant in advance or whether the possibility of any such Losses could have been reasonably foreseen by Tenant.

13.2. Indemnity Claims Process. Tenant shall pay any amounts that become due to Landlord under this Section 13 within 10 days after Landlord’s demand, and if not timely paid, such amounts shall bear interest at the Agreed Rate from the date of such demand until paid. Tenant, at its expense, shall contest, resist and defend any such claim, action or proceeding asserted or instituted against Landlord or any Landlord Indemnified Parties, with counsel acceptable to Landlord, in its sole discretion, and shall not, under any circumstances, compromise or otherwise dispose of any suit, action or proceeding without obtaining Landlord’s prior consent. Tenant shall have the right to control the defense or settlement of any claim provided that (a) Tenant shall first confirm in writing to Landlord that Tenant is obligated under this Section 13 to indemnify Landlord, (b) Tenant shall pay any and all amounts required to be paid in respect of such claim, and (c) any compromise or settlement shall require the prior approval of Landlord, which approval shall not be unreasonably withheld provided Landlord (or the applicable Landlord Indemnified Parties) are irrevocably released from all Losses in connection with such claim as part of such settlement or compromise. Landlord, at its election and sole cost and expense, shall have the right, but not the obligation, to participate in the defense of any claim. If Tenant does not act promptly and completely to satisfy its indemnification obligations hereunder, Landlord may resist and defend any such claims against Landlord or any Landlord Indemnified Party at Tenant’s sole cost.

13.3. Survival of Indemnity. The terms of this Section 13 shall survive the expiration or earlier termination of this Lease.

13.4. Waiver or Subrogation. Landlord and Tenant agree that with respect to any property loss which is covered by insurance then being carried by Landlord or Tenant, respectively, the party carrying such insurance and suffering said loss releases the other of and from any and all claims with respect to such loss; and they further agree that their respective insurance companies shall have no right of subrogation against the other on account thereof.

14.Combination of Leases and New Leases.

14.1. Combination of Leases. If Landlord or any Affiliate of Landlord is the landlord under any Other Lease, Landlord shall have the right, at any time during the Term, by notice to Tenant, to require that this Lease and such Other Lease (the “Combination Lease”) be combined into a single lease pursuant to the terms of Exhibit H. In such regard, Landlord and Tenant acknowledge and agree that, as provided, and on the terms set forth, in the Ventas/Brookdale Side Letter, certain additional landlords, tenants and properties, and certain other existing leases, are to be combined into this Lease upon the occurrence of certain events.

14.2. New Lease. Landlord shall have the right, at any time and from time to time during the Term, by notice to Tenant, to require that Tenant execute an amendment to this

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Lease pursuant to which one or more Facilities (individually, a “Transferred Facility” or collectively, “Transferred Facilities”) are separated and removed from this Lease, and, in such event, simultaneously with the execution of such amendment, Landlord and Tenant shall execute a substitute lease with respect to such Transferred Facilities pursuant to the terms of Exhibit H (a “New Lease”).

15.Miscellaneous.

15.1. Attorneys’ Fees. If any party brings any action to interpret or enforce this Lease, or for damages for any alleged breach, the prevailing party shall be entitled to recover from the non-prevailing party on demand the prevailing party’s reasonable attorneys’ fees and costs as awarded by the court in addition to all other recovery, damages and costs.

15.2. Non-Recourse. Tenant specifically agrees to look solely to Landlord’s and any successor owner’s interest in the then applicable Facilities for recovery of any judgment from Landlord, it being specifically agreed that neither Landlord, any such successor owner, nor any officer, director, member, employee, lender, agent or Affiliate of Landlord or any such successor owner shall ever be personally liable for any such judgment or for the payment of any monetary obligation to Tenant. Tenant shall have no recourse against any other property or assets of Landlord or any successor owner, or against any property or assets of any officer, director, member, employee, lender, agent or Affiliate of Landlord or any successor owner. Furthermore, in no event shall Landlord (original or successor) ever be liable to Tenant for any punitive, special, indirect or consequential damages suffered by Tenant from whatever cause.

15.3. General REIT Provisions. Tenant understands that, in order for Landlord, or any Affiliate of Landlord that is a real estate investment trust, to qualify as a real estate investment trust, certain requirements must be satisfied, including the provisions of Section 856 of the Code. Accordingly, Tenant agrees, and agrees to cause its Affiliates, permitted subtenants, if any, and any other parties subject to its control by ownership or contract, to reasonably cooperate with Landlord to ensure that such requirements are satisfied, including providing Landlord or any of its Affiliates with information about the ownership of Tenant and its Affiliates. Tenant agrees, and agrees to cause its Affiliates, upon request by Landlord or any of its Affiliates, to take all action reasonably necessary to ensure compliance with such requirements. Notwithstanding anything to the contrary in this Agreement, nothing in this Section 15.3 or in Section 15.5 or 15.6 shall require Tenant to provide any cooperation or take any other action that would (i) adversely affect Tenant’s monetary rights or obligations (including by imposing on Tenant any unreimbursed cost or liability) or (ii) adversely affect (to a more than de minimis extent) Tenant’s non-monetary rights or obligations.

15.4. Prohibited Transactions. Notwithstanding anything to the contrary herein, Tenant shall not (a) sublet, assign or enter into a management arrangement for any Facility on any basis such that the rental or other amounts to be paid by the subtenant, assignee or manager thereunder would be based, in whole or in part, on either (x) the income or profits derived by the business activities of the subtenant, assignee or manager or (y) any other formula

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such that any portion of any amount received by Landlord would fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code, or any similar or successor provision thereto; (b) sublet, assign or enter into a management arrangement for any Facility to any Person (other than a taxable REIT subsidiary of Landlord) in which Landlord, to Tenant’s actual knowledge, owns a 10% or greater interest, directly or indirectly (by applying constructive ownership rules set forth in Section 856(d)(5) of the Code); or (c) sublet, assign or enter into a management arrangement for any Facility in any other manner which could cause any portion of the amounts received by Landlord pursuant to this Lease to fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code, or any similar or successor provision thereto, or which could cause any other income of Landlord to fail to qualify as income described in Section 856(c)(2) of the Code. The requirements of this Section 15.4 shall likewise apply to any further subleasing by any subtenant.

15.5. Personal Property REIT Requirements. Notwithstanding anything to the contrary herein, upon the reasonable written request of Landlord at Landlord’s expense, Tenant shall cooperate with Landlord in good faith and provide such documentation and/or information as may be in Tenant’s possession or under Tenant’s control and otherwise readily available to Tenant regarding the valuation of the Premises to assist Landlord in its determination that Rent allocable for purposes of Section 856 of the Code to the Landlord Personal Property at the beginning and end of a calendar year does not exceed 15% of the total Rent due hereunder (the “Personal Property REIT Requirement”). Tenant shall take such reasonable action as may be reasonably requested by Landlord in writing from time to time to ensure compliance with the Personal Property REIT Requirement. Accordingly, if reasonably requested by Landlord in writing and at Landlord’s expense, Tenant shall cooperate with Landlord as may be necessary from time to time to more specifically identify and/or value the Landlord Personal Property in connection with the compliance with the Personal Property REIT Requirement.

15.6. Impermissible Services REIT Requirements.Any services that Landlord is required to furnish pursuant to the provisions of this Lease may, at Landlord’s option, be furnished from time to time, in whole or in part, by employees of Landlord or Landlord’s Affiliates or by one or more third parties hired by Landlord or Landlord’s Affiliates. Tenant agrees that, upon reasonable Landlord’s written request it will enter into direct agreements with the parties designated by Landlord to provide such services, provided that no such contract shall result in Tenant having to pay, in the aggregate, more money for the occupancy of the Premises under the terms of this Lease, or Tenant’s receiving fewer services or services of a lesser quality than it is otherwise entitled to receive under this Lease.

15.7. Waiver of Jury Trial. Each party hereby waives any rights to trial by jury in any action, proceeding or counterclaim brought by either party against the other in connection with any matter whatsoever arising out of or in any way connected with this Lease, including the relationship of the parties, Tenant’s use and occupancy of any portion of the Premises or any claim of injury or damage relating to the foregoing or the enforcement of any remedy.

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15.8. Notices. All notices and demands, consents, approvals, requests or other commitments required or permitted to be to be given under this Lease shall be in writing (and if not in writing shall not be deemed effective) and shall be given to Landlord and Tenant at the addresses set forth below, or at such other addresses as Landlord and Tenant may hereafter specify in writing:

If to Tenant: c/o Brookdale Senior Living Inc. 111 Westwood Place, Suite 400 Brentwood, Tennessee 37027 Attention: General Counsel	If to Landlord: c/o Ventas, Inc. 500 North Hurstbourne Parkway, Suite 200 Louisville, Kentucky 40222 Attention: Lease Administration Telephone: (502) 357-9000 Fax No.: (502) 357-9001
With a copy to: c/o Brookdale Senior Living Inc. 6737 W. Washington Street, Suite 2300 Milwaukee, WI 53214 Attention: Legal Department	With a copy to: c/o Ventas, Inc. 353 N. Clark Street, Suite 3300 Chicago, Illinois 60654 Attention: Legal Department Telephone: (312) 660-3800 Fax No.: (312) 660-3850 With a copy to: Barack Ferrazzano Kirschbaum & Nagelberg LLP 200 W. Madison Street, Suite 3900 Chicago, Illinois 60606 Attention: Joseph D. Lambert Telephone: (312) 984-3143 Fax No.: (312) 984-3150

A party may designate a different address by notice as provided above. Any notice or other instrument so delivered (whether accepted or refused) shall be deemed to have been delivered on the date of delivery established by U.S. Post Office return receipt or the carrier’s proof of delivery or, if not so delivered, upon its receipt. Delivery to any officer, general partner or

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principal of a party shall be deemed delivery to such party. Notice to any one co-Tenant shall be deemed notice to all co-Tenants.

15.9. Interpretation. Because each party has been represented by counsel and this Lease has been freely and fairly negotiated, all provisions shall be interpreted according to their fair meaning and shall not be strictly construed against any party. Whenever the words “including”, “include” or “includes” are used in this Lease, they shall be interpreted in a non-exclusive manner as though the words “without limitation” immediately followed. Whenever the words “day” or “days” are used in this Lease, they shall mean “calendar day” or “calendar days” unless expressly provided to the contrary. The titles and headings in this Lease are for convenience of reference only and shall not in any way affect the meaning or construction of any provision. Unless otherwise expressly provided, references to any “Section” mean a Section of this Lease (including all subsections) and to any “Exhibit” or “Schedule” mean an exhibit or schedule attached hereto.

15.10 Time of the Essence. Time is of the essence, and whenever action must be taken (including the giving of notice or the delivery of documents) hereunder during a certain period of time or by a particular date that ends or occurs on a Saturday, Sunday or federal holiday, then such period or date shall be extended until the immediately following Business Day.

15.11. Severability. If any part of this Lease shall be determined to be invalid or unenforceable, the remainder shall nevertheless continue in full force and effect, it being agreed by Landlord and Tenant, however, that nothing contained in this Section shall limit, or is intended to limit, the parties’ intention, as more fully set forth in Section 2.2 hereof, that Lease is and constitutes a single, indivisible lease of all of the Premises and a single and inseparable transaction. If more than one Person is included within the term “Tenant” hereunder, the liabilities and obligations of “Tenant” under this Lease (including, without limitation, the obligation to timely pay the entire Minimum Rent owing under this Lease) shall, for all purposes of this Lease, be the joint and several liabilities and obligations of each Person included within the term “Tenant” under this Lease.

15.12. General Terms. This Lease (a) contains the entire agreement of the parties as to the subject matter hereof and supersedes all prior written or oral agreements or understandings and contemporaneous oral agreements or understandings, (b) may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document, (c) may only be amended by a writing executed by all of the parties, (d) shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties, and I incorporates by this reference any Exhibits and Schedules attached to this Lease.

15.13. Governing Law. This Lease shall be governed by and construed and enforced in accordance with the internal Legal Requirements of the State of Illinois, without regard to the conflict of laws rules thereof, provided that the Legal Requirements of the State

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in which each Facility is located (each a “Situs State”) shall govern procedures for enforcing, in the respective Situs State, provisional and other remedies directly related to such Facility and related personal property as may be required pursuant to the Legal Requirements of such Situs State, including the appointment of a receiver; and further provided that the Legal Requirements of the Situs State also apply to the extent, but only to the extent, necessary to create, perfect and foreclose the security interests and liens created under this Lease.

15.14. Anti-Terrorism Representations. Tenant hereby represents and warrants that neither Tenant, nor any persons or entities holding any legal or beneficial interest whatsoever in Tenant, are (a) the target of any sanctions program that is established by Executive Order of the President or published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”), (b) designated by the President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App. § 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of the President issued pursuant to such statutes, or (c) named on the following list that is published by OFAC: “List of Specially Designated Nationals and Blocked Persons” (collectively, “Prohibited Persons”). Tenant hereby represents and warrants to Landlord that no funds tendered to Landlord by Tenant under the terms of this Lease are or will be directly or indirectly derived from activities that may contravene U.S. federal, state or international Legal Requirements, including anti-money laundering laws. If the foregoing representations are untrue at any time during the Term, an Event of Default will be deemed to have occurred, without the necessity of notice to Tenant. Tenant will not during the Term of this Lease engage in any transactions or dealings, or be otherwise associated with, any Prohibited Persons in connection with the use or occupancy of the Premises. A breach of the representations contained in this Section 15.14 by Tenant shall constitute a material breach of this Lease and shall entitle Landlord to any and all remedies available hereunder, or at law or in equity.

15.15. Notice to the Department of Health. Notwithstanding anything in this Lease to the contrary, Landlord acknowledges that its right to re-enter any Facility(ies) located in the State of New York does not confer upon it the authority to operate an Adult Care Facility, as defined in the Social Services Law, on such Facilities and agrees that it will give the New York State Department of Health (the “NY DOH”), Division of Adult Care Facility & Assisted Living Surveillance, Bureau of Licensure and Certification, 875 Central Ave., Albany, NY 12206, notification by certified mail of its intent to re-enter such Facility(ies) or to initiate dispossess proceedings or that this Lease is due to expire relative to any such Facility(ies), at least 30 days prior to the date on which Landlord intends to exercise its right of re-entry or to initiate such proceedings or at least 60 days before any such expiration of this Lease. Upon receipt of any notice from Landlord of its intent to exercise its right of re‑entry or upon the service of process and dispossess proceedings and 60 days prior to the expiration of this Lease as it relates to any such Facility(ies), Tenant agrees to immediately notify the NY DOH by certified mail of the receipt of such notice or service of such notice or that this Lease is about to expire relative to any such Facility(ies), and shall further notify the NY DOH of its anticipated response to said notice. Each party further agrees to comply with all additional regulations of

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the NY DOH and any other agency having regulatory control over either party. A copy of all such notices shall also be sent to the NY DOH’s applicable regional offices.

15.16. Confidentiality. Each of Landlord and Tenant hereby acknowledges and agrees that any information provided by any party to the other pursuant to this Lease is confidential and shall not be shared by the receiving party with any other Person, except for disclosures: (a) to, so long as such Persons agree to maintain the confidential nature thereof, Landlord’s or Tenant’s, as applicable, actual or prospective (i) financing sources, (ii) purchasers or assignees, (iii) partners, (iv) investors and (v) replacement tenants (provided that Landlord shall not disclose any Proprietary Information to replacement tenants without Tenant’s prior written consent); (b) to legal counsel, accountants and other professional advisors to Landlord or Tenant, as applicable, so long as such Persons agree to maintain the confidential nature thereof; (c) pursuant to the order of any court or administrative agency or in any pending legal or administrative proceeding, to the extent necessary in support of motions, filings, or other proceedings in court as required to be undertaken pursuant to this Lease, or otherwise as required by applicable Legal Requirements, provided that any party is given a reasonable opportunity to obtain a protective order in connection with such disclosure; (d) in connection with reporting of Facility portfolio based performance and other Facility portfolio information in filings with the Securities and Exchange Commission by Landlord and its Affiliates; (e) of the type customarily publicly disclosed by publicly traded healthcare real estate investment trusts; (f) in compliance with any filing requirements, regulations or other requirements of, or upon the request or demand of, any stock exchange (or other similar entity) on which Landlord’s or Tenant’s (or any Person Controlling any of the foregoing, as applicable) shares (or other equity interests) are listed, or of any other Governmental Authority having jurisdiction over either Landlord or Tenant; and (g) in connection with reporting and/or filings with the Securities and Exchange Commission by Tenant and its Affiliates or Landlord and its Affiliates. For the avoidance of doubt and notwithstanding the foregoing, Landlord and Tenant acknowledge and agree that this Lease itself may be a publicly filed document. In connection with any disclosures made pursuant to item (a) above, Landlord shall use commercially reasonable efforts to obtain confidentiality agreements from any parties to whom it discloses financial information or other sensitive business information regarding Tenant.

15.17. Permitted Contests. Tenant, on its own or in Landlord’s name, at Tenant’s expense, may contest, by appropriate legal proceedings conducted in good faith and with due diligence, the amount, validity or application, in whole or in part, of any licensure or certification decision, Legal Requirement, Insurance Requirement, lien, attachment, levy, encumbrance, charge or claim; subject, however, to the further requirement that (i) in the case of an unpaid Imposition, lien, attachment, levy, encumbrance, charge or claim, the commencement and continuation of such proceedings shall suspend the collection thereof from Landlord and from the Premises; (ii) neither the Premises, the Rent therefrom nor any part or interest in either thereof would be in any danger of being sold, forfeited, attached or lost pending the outcome of such proceedings; (iii) in the case of a Legal Requirement, neither Landlord nor Tenant would be in any danger of criminal liability for failure to comply therewith pending the outcome of such proceedings and Landlord would not be in danger of civil liability for any

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such failure; (iv) in the case of a Legal Requirement, Tax, lien, encumbrance or charge, Tenant shall give such reasonable security as may be required by Landlord to insure ultimate payment of the same and to prevent any sale or forfeiture of all or any portion of the Premises or the Rent by reason of such nonpayment or noncompliance; and (v) in the case of an Insurance Requirement, the coverage required by Section 5.1 shall be maintained; provided however, that Tenant shall provide Landlord with prior written notice of any such contest if such contest relates to (a) a material claim against real property, (b) any matter that could, if adversely determined, reasonably be expected to result in a denial, suspension, revocation or loss of license or certification for any Facility, or (c) in addition to (and not in limitation of) the foregoing (a) and (b), any matter that could reasonably be expected to have a material adverse effect on Tenant’s Primary Intended Use of the subject Facility. If any such contest is finally resolved against Landlord or Tenant, Tenant shall promptly pay the amount required to be paid, together with all interest and penalties accrued thereon, or comply with the applicable Legal Requirement or Insurance Requirement. Landlord, at Tenant’s expense, shall execute and deliver to Tenant such authorizations and other documents as may reasonably be required in any such contest, and, if reasonably requested by Tenant or if Landlord so desires, Landlord shall join as a party therein. The provisions of this Section 15.17 shall not be construed to permit Tenant to contest the payment of Rent or any other amount payable by Tenant to Landlord hereunder. Tenant shall indemnify, defend, protect and save Landlord and its Affiliates harmless from and against any liability, cost or expense of any kind that may be imposed upon Landlord or any of its Affiliates in connection with any such contest and any loss resulting therefrom.

15.18. Landlord Restructuring Right. Commencing on the earliest of (i) the first (1^st) anniversary of the Effective Date, (ii) the occurrence of a Master Lease Event of Default, (iii) solely with respect to any Facility, the occurrence of a Facility Default relating to such Facility, and (iv) solely with respect to any Facility, the date on which Landlord (or its Affiliate) delivers a notice of Landlord’s intention to transition such Facility to a management arrangement pursuant to the terms of Section 16 of the Guaranty and/or Section 2.7 of the Omnibus Agreement, Landlord may elect in its sole discretion to restructure the ownership of the operating license(s) of the applicable Facility(ies) to be held by an Affiliate of Ventas, Inc. (in each instance, a “Restructuring”), subject to, and in accordance with, the terms of this Section 15.18. In the event that Landlord shall notify Tenant of Landlord’s intention to undertake any such Restructuring as permitted herein, Tenant agrees, and agrees to cause its Affiliates, to reasonably cooperate with Landlord in implementing any such Restructuring (including, without limitation, by entering into any amendment(s) to this Lease, entry into a sublease, management agreement and/or other documentation, in each case on terms reasonably satisfactory to Tenant, and reasonably cooperating with any related requests for lender consent to any such Restructuring), provided that in all instances any such Restructuring (a) shall be implemented in accordance with applicable law, (b) shall be accomplished at the sole expense of Landlord (and Landlord shall promptly pay all documented out-of-pocket costs and expenses of Tenant (including all reasonable attorneys’ fees and costs) incurred in connection with the Restructuring) whether or not the Restructuring is consummated), (b) shall not reduce the rights of Tenant and/or its Affiliates pursuant to this Lease and/or the Crossed Agreements or increase the liabilities, responsibilities and/or obligations of Tenant (including,

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without limitation, the economics of this Lease) pursuant to this Lease and/or the Crossed Agreements, and (c) shall not require (and Tenant’s cooperation shall not include) Tenant or its Affiliates making any material change or modification to Tenant’s internal systems, policies, practices or operating procedures or judgement determinations at any of the Facilities.

15.19. State Specific Provisions.

15.19.1. Arizona

15.19.1.1. With respect to any of the Premises located in the State of Arizona, Landlord and Tenant hereby agree as follows:

15.19.1.1.1. Tenant hereby waives the provisions of any statutes which relate to termination of leases when real property is destroyed, including, without limitation, A.R.S. §33-343, or any successor statute, and agrees that in such event its rights, obligations and duties shall be governed by the terms of this Lease.

15.19.2. California

15.19.2.1. With respect to any of the Premises located in the State of California, Landlord and Tenant hereby agree as follows:

15.19.2.1.1. Waiver of Statutory Rights Concerning Damage or Destruction. The provisions of this Lease, including, without limitation, Section 11 hereof, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, and any statute or regulation of the State in which such Premises is located, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, shall have no application to this Lease or any damage or destruction to all or any part of the Premises and Tenant hereby waives any and all rights it might otherwise have pursuant to any such statute or regulation, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code.

15.19.2.1.2. Waiver of Statutory Rights Concerning Condemnation. The provisions of this Lease, including, without limitation, Section 12 hereof, constitute an express agreement between Landlord and Tenant with respect to any taking by power of eminent domain or condemnation (or deed in lieu thereof) and any statute or regulation of the State in which the Premises is located, including, without limitation, Section 1265.130 of the California Code of Civil Procedure, with respect to any rights or obligations concerning any such taking or condemnation (or deed in lieu thereof) shall have no application to this Lease and Tenant hereby waives any and all rights it might otherwise have pursuant to any such statute or regulation, including, without limitation, Section 1265.130 of the California Code of Civil Procedure.

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15.19.2.1.3. Waiver of Statutory Rights to Make Repairs. Tenant acknowledges that Landlord has no obligations under this Lease or otherwise to make any repairs, replacements, alterations, restorations or renewals of any nature to the Premises. Accordingly, Tenant hereby waives and releases its right to make repairs at Landlord’s expense under Sections 1941 and 1942 of the California Civil Code or under any similar law, statute, or ordinance now or hereafter in effect.

15.19.2.1.4. California Remedies. Landlord shall have the remedy described in California Civil Code Section 1951.4 (Landlord may continue Lease in effect after Tenant’s breach and abandonment and recover rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any Event of Default by Tenant as provided in Section 7 hereof, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due.

15.19.2.1.5. California Civil Code Section 1938. Pursuant to California Civil Code Section 1938, Landlord hereby notifies Tenant that, to Landlord’s actual (as opposed to imputed) knowledge, without any duty of inquiry or investigation, none of the Facilities located in the State of California have undergone an inspection by a certified access specialist.

15.19.3. Connecticut

15.19.3.1. With respect to any of the Premises located in the State of Connecticut, Landlord and Tenant hereby agree as follows:

15.19.3.1.1. Commercial Transaction. TENANT, FOR ITSELF AND ALL PERSONS CLAIMING BY, THROUGH OR UNDER IT, HEREBY ACKNOWLEDGES THAT THIS LEASE CONSTITUTES A COMMERCIAL TRANSACTION, AS SUCH TERM IS USED AND DEFINED IN SECTION 52-278a(a) OF THE CONNECTICUT GENERAL STATUTES, AND HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO ANY NOTICE OR HEARING PRIOR TO A PREJUDGMENT REMEDY WHICH RIGHTS ARE OR MAY BE CONFERRED UPON TENANT PURSUANT TO CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES.

15.19.3.1.2. Waiver of Notice to Quit. Tenant, for itself and all Persons claiming by, through, or under it, hereby expressly waives notice to quit possession in the event this Lease terminates by lapse of time.

15.19.4. Florida

15.19.4.1. With respect to any of the Premises located in the State of Florida, Landlord and Tenant hereby agree as follows:

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15.19.4.1.1. Radon Gas Disclosure. Landlord hereby notifies Tenant as follows: “Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county health department.”

15.19.4.1.2. Construction-Related Liens. The interest of Landlord in the Premises shall not be subject to liens for improvements made by Tenant. Any lien filed by any contractor, materialman, laborer or supplier performing work for Tenant shall attach only to Tenant’s interest in the Premises. Tenant shall notify in writing any and all Persons contracting or otherwise dealing with Tenant relative to the Premises of the provisions of this paragraph prior to commencement of any work in the Premises. All persons and entities contracting or otherwise dealing with Tenant relative to the Premises are hereby placed on notice of the provisions of this Section 15.19.4.

15.19.5. Illinois

15.19.5.1. With respect to any of the Premises located in the State of Illinois, Landlord and Tenant hereby agree as follows:

15.19.5.1.1. Tenant expressly waives the service of any statutory demand or notice which is a prerequisite to Landlord’s commencement of eviction proceedings against Tenant, including, without limitation, the demands and notices specified in 735 ILCS §§ 5/9-209 and 5/9-210.

15.19.6. Massachusetts

15.19.6.1. With respect to any of the Premises located in the Commonwealth of Massachusetts, Landlord and Tenant agree as follows:

15.19.6.1.1. Mechanics Liens. Landlord’s consent and approval in connection with Tenant’s alterations and improvements are given solely for the benefit of Landlord and neither Tenant nor any third party shall have the right to rely upon such approval of Tenant’s plans for any purpose whatsoever. Without limiting the foregoing, in no event shall such consent or approval be deemed to be consent of the Landlord within the meaning of Section 2 of Chapter 254 of the General Laws of Massachusetts.

15.19.6.1.2. Independent Covenants. Landlord and Tenant each acknowledges and agrees that the independent nature of the obligations of Tenant hereunder represents fair, reasonable and accepted commercial practice with respect to the type of property subject to this Lease, and that this agreement is the product of free and informed negotiation during which both Landlord and Tenant were represented by counsel skilled in negotiating and drafting commercial leases in Massachusetts, and that the acknowledgements and agreements contained herein are made with full knowledge of the

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holding in Wesson v. Leone Enterprises, Inc., 437 Mass. 708 (2002). Such acknowledgements, agreements and waivers by Tenant are a material inducement to Landlord entering into this Lease.

15.19.6.1.3. Waiver of Subrogation. The following shall be added at the beginning of Section 13.4: “To the maximum extent permitted by law,”.

15.19.7. Minnesota

15.19.7.1 With respect to any of the Premises located in the State of Minnesota, Landlord and Tenant agree as follows:

15.19.7.1.1. Landlord and Tenant agree that this Lease is not a “residential” lease, that Tenant is not a “residential tenant” and that the Premises are not “residential premises” within the meaning of or for the purposes of Minnesota Statutes Chapter 504B. Landlord’s rights to access the Premises pursuant to this Lease, including pursuant to Section 9.2 and Section 11.7 hereof, may be limited by Minnesota Statutes Section 504B.211 as to the rights of Tenant’s tenants and residents.

15.19.7.1.2. Landlord and Tenant agree that, notwithstanding the possibility of Renewal Terms, this Lease is not considered to have a term in excess of twenty (20) years within the scope of Minnesota Statutes Section 504B.291, subdivision 2.

15.19.7.1.3. Prior to the commencement of any work of improvement which may be the subject of a lien under the provisions of Minnesota Statutes Chapter 514, Tenant shall (i) serve each person performing work or contributing to such improvements, within five (5) days after identification of each such person, written notice that such improvements are not being made at Landlord’s instance, and provide Landlord with proof of such service, and (ii) conspicuously post for the duration of the work on such improvements notice that such improvements are not being made at Landlord’s instance, and provide Landlord with proof of such continuous posting, in each case in accordance with Minnesota Statutes Section 514.06.

15.19.7.1.4. In addition to the requirements set forth in Section 5.15 hereof, in the event a mechanics’ lien is filed against any of the Premises located in the State of Minnesota, Tenant shall within thirty (30) days after such filing (if not sooner released of record), commence an action in the district court in which the Premises is located to determine adverse claims and apply to the court to have such mechanics lien released from such Premises upon the deposit of such funds as the court may require, in accordance with Minnesota Statutes Section 514.10.

15.19.7.1.5. Pursuant to Section 7.4 hereof, in addition to the other remedies described therein, Landlord may proceed with summary or

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eviction proceedings to remove Tenant and all other Persons and any and all property from any of the Premises located in the State of Minnesota, and the exercise of such rights will not require that the Lease be previously terminated with respect to such Premises.

15.19.8. New Jersey

1.a.i.1.With respect to any of the Premises located in the State of New Jersey, Landlord and Tenant agree as follows:

15.19.8.1.1. Environmental Laws.

(i) Notwithstanding anything contained in this Lease to the contrary, Hazardous Materials Laws, in addition to all specific laws referenced in Exhibit A hereof as Hazardous Materials Laws, shall include the New Jersey Spill Compensation and Control Act (N.J.S.A. 58:10-23.11 et seq.) (for purposes of this Section 15.19.8, the “Spill Act”) and the New Jersey Industrial Site Recovery Act (N.J.S.A. 13:1K-6 et seq.) (for purposes of this Section 15.19.8, “ISRA”), if and to the extent they apply to the Premises or the use thereof at any time during the Term. The term “Authority” as used in this Section 15.19.8 shall mean governmental and quasi-governmental authorities, bodies or boards having jurisdiction over the Premises and compliance with the Hazardous Materials Laws with respect thereto, including, but not limited to, the New Jersey Department of Environmental Protection. More than one Authority shall be collectively referred to as the “Authorities.” The term “Hazardous Substances,” as used in this Lease with respect to the Premises within the State of New Jersey and compliance with the Spill Act and/or ISRA, shall mean any and all “hazardous chemicals,” “hazardous substances” or similar material or substance, including, but not limited to, flammables, explosives, radioactive materials, asbestos, polychlorinated biphenyls (PCB’s), chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic substances or related materials, petroleum and petroleum products, and substances declared to be hazardous or toxic under any Hazardous Materials Law now or hereafter enacted or promulgated by any Authority.

(ii) If at any time during the Term of this Lease, the Premises shall be determined to be an industrial establishment under ISRA as a result of the North American Industrial Classification System code applicable to Tenant’s operations, Tenant, at Tenant’s sole cost and expense, shall comply with the provisions of ISRA, or other similar applicable laws, if Tenant takes any action which would be a “triggering event” under ISRA.

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(iii) Should any Authority or any third party demand that a clean-up plan be prepared and that a clean-up be undertaken at the Premises because of any deposit, spill, discharge, or other release of Hazardous Substances in violation of the Spill Act that occurs during the Term, at or from the Premises, or which arises at any time from Tenant’s use or occupancy of the Premises, then Tenant shall, at Tenant’s sole expense, prepare and submit the required plans and all related bonds and other financial assurances; and Tenant shall carry out all such clean-up plans.

(iv) Tenant shall indemnify, defend, and hold harmless Landlord, the manager of the property, and their respective officers, directors, beneficiaries, shareholders, partners, agents, and employees from all fines, suits, procedures, claims and actions of every kind, and all costs associated therewith (including attorneys’ and consultants’ fees) arising out of or in any way connected with any deposit, spill, discharge, or other release of Hazardous Substances that occurs during the Term, at or from the Premises, or which arises at any time from Tenant’s use or occupancy of the Premises, or from Tenant’s failure to provide all information, make all submissions, and take all steps required by all Authorities under the Hazardous Materials Laws and all other environmental laws, including any lien assessed to the Premises.

(v) Tenant’s obligations and liabilities under this Section 15.18.8 shall survive the termination or expiration of this Lease.

15.19.8.1.2. New Jersey Premises Not in Flood Zone. Landlord represents to Tenant that, to the best knowledge, information and belief of Landlord, the Premises located in the State of New Jersey has not been determined to be located in a special flood hazard area. If Landlord subsequently learns that such Premises has been determined to be located in a special flood hazard area, Landlord shall, to the extent required by applicable law, notify Tenant of such change in determination within a reasonable time after Landlord learns of such change in determination.

15.19.9. New Mexico

15.19.9.1. With respect to any of the Premises located in the State of New Mexico, Landlord and Tenant agree as follows:

15.19.9.1.1. Limitation on Indemnification. The parties reaffirm their intent that this Lease be governed by, and construed in accordance with, the law chosen in Section 15.13 above. Nevertheless, to the extent, if at all, that any provision contained in this Lease or in any related documents requiring one party to indemnify, hold harmless, insure, or defend another party (including such other party’s employees or agents) is found to be within the scope of NMSA 1978, § 56-7-1 (2005), as amended from time to time, or in any way subject to, or conditioned upon consistency with, the provisions of NMSA 1978, § 5-67-1 (2005), as amended from time to time, for its enforceability, then such provision,

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regardless of whether it makes reference to this or any other limitation provision, is intended to and shall: (a) not extend to liability, claims, damages, losses or expenses, including attorney fees, arising out of bodily injury to persons or damage to property caused by or resulting from, in whole or in part, the negligence, act or omission of the indemnitee or additional insured, as the case may be, its officers, employees or agents; (b) be enforced only to the extent that the liability, damages, losses or costs are caused by, or arise out of, the acts or omissions of the indemnitor or its officers, employees or agents; and (c) be further modified, if required, by the provisions of NMSA 1978, § 56-7-1(B) (2005), as amended from time to time, and Mew Mexico court decisions interpreting NMSA 1978, § 56-7-1 (2005), as amended from time to time. Further, notwithstanding any other term or condition of this Lease or any related document, to the extent, if at all, that any agreement, covenant, or promise to indemnify another party (including such party’s employees or agents) contained herein or in any related documents, is found to be within the scope of NMSA 1978, § 56-7-2 (2003), as amended from time to time, or in any way subject to, or conditioned upon consistency with, the provisions of NMSA 1978, § 56-7-2 (2003), as amended from time to time, for its enforceability, then, regardless of whether it makes reference to this or any other limitation provision, such agreement is not intended to, and it shall not and does not, indemnify such indemnitee against loss or liability for damages arising from: (i) the sole or concurrent negligence of such indemnitee or the agents or employees of such indemnitee; (ii) the sole or concurrent negligence of an independent contractor who is directly responsible to such indemnitee; or (iii) an accident that occurs in operations carried on at the direction or under the supervision of such indemnitee, an employee or representative of such indemnitee or in accordance with methods and means specified by such indemnitee or the employees or representatives of such indemnitee. The parties’ intent is for their indemnity agreements to be enforced pursuant to their terms and limited only to the extent necessary to conform with and survive New Mexico’s anti-indemnity statutes.

15.19.9.1.2. Permitted Contest under Article XII of Mechanic’s or Materialmen’s Lien in New Mexico. If, under Section 5.15 hereof, Tenant desires in good faith to contest the validity or correctness of any mechanic’s or materialmen’s lien on the Premises in New Mexico, it may do so with diligence pursuant to NMSA 1978, § 48-2-9 (2007), as amended from time to time, or any successor statute, by filing in the New Mexico state district court for the judicial district in which the Premises is located a petition to cancel lien, depositing such security with the court as may be ordered and thereafter obtaining and filing in the court action, as well as recording in the real property records of the county in which the Premises is located, the court’s order canceling the lien, and Landlord shall cooperate to whatever extent may be necessary, provided only that Tenant shall indemnify, defend and hold Landlord, its Affiliates, and the Premises harmless against any costs, loss, liability or damage on account thereof, including reasonable attorneys’ fees.

15.19.9.1.3. Notice of Non-Responsibility of Landlord for Construction on Premises by Tenant. To the maximum extent permitted by law, the interest of Landlord in the Premises shall not be subject to liens for improvements made by or for the account of Tenant, for and as to which Tenant shall provide due notice to all parties who provide any services or materials with respect to any work on the Premises.

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Tenant’s written notice shall reference this Lease provision and Landlord’s rights to post a notice of non-responsibility hereunder and under applicable New Mexico law. Further, Tenant shall use commercially reasonable efforts to send to Landlord at least ten (10) days prior to the commencement of any construction on the Premises a written notice of the work to be done and the date of commencement of such construction work, and, in order to seek to avoid responsibility therefor, Landlord shall, within three (3) days after having obtained knowledge of the construction, alteration or repair, or the intended construction, alteration or repair, give notice that Landlord will not be responsible for the same, by posting a notice in writing to such effect, in some conspicuous place upon the Premises, or upon any building or other improvement situated thereon, consistent with the provisions of NMSA 1978, §48-2-11 (1953), as amended from time to time, and any other applicable provisions of New Mexico law relating to exempting the Landlord’s interest under the Lease from any claim of lien arising out of Tenant’s construction on such Premises. Tenant consents to Landlord’s entry upon the Premises, from the time Landlord learns of any planned or actual construction on, or planned or actual delivery of materials to, the Premises, and extending continuously throughout the duration of the construction, for purposes of posting the above-described notice of non-responsibility, inspecting to assure the continuation of the posting and/or reposting of the notice, as advisable, and for purposes of documenting the initial posting and its subsequent continued posting or reposting, for example, without limitation, by photography or digital or other imaging of the posted notice, in the context of identifiable background landmarks establishing the location of the posting, and including a reflection on each photograph, digital or other image of any kind, of the date and time of the photograph or other image.

15.19.9.1.4. Landlord’s Lien. Upon the occurrence of an Event of Default, Landlord’s remedies shall include, in addition to those provided for in the Lease, all other rights and remedies provided by law or equity, including, without limitation, a landlord’s lien under NMSA 1978, § 48-3-5 (1995), as amended, and under any other applicable law, to which Landlord may resort cumulatively or in the alternative.

15.19.9.1.5. Supplement to Provision for a Receiver in Section 7.4.4. Section 7.4.4 hereof is supplemented with the addition of this provision. Upon the occurrence and during the continuance of an Event of Default, subject to the provisions of NMSA 1978, §§44-8-1 through 44-8-10 (1995 & 1996), as amended from time to time, and Rule 1-066 NMRA, to the extent applicable, as well as any other applicable law, Landlord shall have the right to apply to a court of competent jurisdiction for and obtain appointment of a receiver of the Premises as a matter of strict right and without regard to the adequacy of the security for the repayment of Tenant’s obligations under the Lease, the issuance or declaration of a notice of default, and Tenant hereby consents to such appointment.

15.19.9.1.6. Grant of Security Interest in Rents Under Section 9.1. Subject to Assignment of Rents Act, Landlord shall have all the rights and powers provided for under the Uniform Assignment of Rents Act, NMSA 1978, §§56-15-1 through 56-15-19 (2012), as amended from time to time, and the provisions in this Lease including Tenant’s grant to Landlord of a security interest in rents and leases of the Premises

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are subject to the terms of such act (including those provisions of such act acknowledging the rights of the parties to bind themselves to their own agreements on certain matters covered by such act), to the extent applicable, as well as any other applicable law.

15.19.10. New York

15.19.10.1. With respect to any of the Premises located in the State of New York, Landlord and Tenant agree as follows:

15.19.10.1.1. The following sentence is hereby added as the final sentence of the definition of “Agreed Rate” in Exhibit A of the Lease: “The Agreed Rate shall apply on all amounts, including those owing after judgment.”

15.19.10.1.2. The following is hereby added as a new Section 12.6 to the Lease:

(vi) Express Agreement. The parties acknowledge and agree that the provisions of this Section 12 constitute an express agreement pursuant to the New York Real Property Law, Section 227, as the same may be amended or re-codified or any similar or successor law.

15.19.10.1.3. Section 7.4.10 of the Lease is hereby replaced in its entirety with the following:

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(vii) Tenant’s Waiver; Mitigation. In connection with the exercise by Landlord of any of its remedies under this Section 7.4, including the termination of this Lease, in whole or in part, Tenant waives, to the maximum extent permitted by applicable Legal Requirements, (1) any right of redemption, re-entry or repossession under present or future laws, including without limitation, Section 761 of the New York Real Property Actions and Proceeding Law, (2) the benefit of any moratorium laws or any laws now or hereafter in force exempting property from liability for rent or for debt, (3) any duty on the part of Landlord to mitigate the damages recoverable from Tenant on account of any Default Event or Event of Default by Tenant, except that, notwithstanding the foregoing or anything in this Lease to the contrary, Landlord agrees to comply with any duty to mitigate damages where applicable Legal Requirements do not allow Tenant to waive such right, (4) the right to interpose any counterclaim (other than compulsory counterclaims) in any summary proceeding instituted by Landlord against Tenant in any court or in any action instituted by Landlord in any court for unpaid Rent under this Lease, and (5) any other right provided to Tenant under applicable Legal Requirements relating to a breach of or Event of Default under this Lease, including any rights to cure such breach or Event of Default. Tenant waives for itself and all those claim under Tenant: (a) any and all rights to restore the operation of this Lease; (b) any rights under Article 63 of the New York Civil Practice Law and Rules, including, without limitation, the right to obtain a so-called “Yellowstone” injunction in connection with any financial Default; (c) any right now or hereafter existing to petition a court to issue a stay in connection with any holdover proceeding or other summary proceeding instituted by Landlord under this Lease, including, without limitation, a stay under the provisions of New York Civil Practice Law and Rules Section 2201.

15.19.11. Ohio

2.a.i.2.With respect to any of the Premises located in the State of Ohio, Landlord and Tenant agree as follows:

15.19.11.1. The following sentence is hereby added as the final sentence of the definition of “Agreed Rate” in Exhibit A of the Lease: “Taxes shall include any commercial activity tax.”

15.19.12. South Carolina

15.19.12.1.1. “Tenant will not allow anything to be stored that will violate any rules or regulations of the South Carolina Department of Health and Environmental Control (“SCDHEC Rules”). If Tenant does store goods that violate any SCDHEC Rules, Tenant will clean the Demised Premises to the reasonable satisfaction of an environmental engineer so that a clean letter can be issued by said engineer.”

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15.19.13. Texas

15.19.13. With respect to any of the Premises located in the State of Texas, Landlord and Tenant agree as follows:

15.19.13.1.1. Waiver of Texas Consumer Rights Statute. The Texas Deceptive Trade Practices Consumer Protection Act, subchapter E of Chapter 17 of the Texas Business and Commerce Code (for purposes of this Section 15.19.13, “DTPA”), as amended, is not applicable to this Lease. Accordingly, the rights and remedies of Landlord and Tenant with respect to all acts or practices of the other, past, present, or future, in connection with this Lease shall be governed by legal principles other than the DTPA. Landlord and Tenant each hereby waives its rights under the DTPA, a law that gives consumers special rights and protections. After consultation with an attorney of its own selection, each of Landlord and Tenant voluntarily consents to this waiver.

15.19.13.1.2. Waiver of Tenant Lien. Tenant waives any right which it may have to a lien against any portion of the interest of Landlord in the Premises pursuant to Section 91.004 of the Texas Property Code.

15.19.13.1.3. Tenant acknowledges and agrees that the provisions of this Lease for determining charges and amounts payable by Tenant are commercially reasonable and constitute satisfactory methods for determining such charges and amounts as required by Section 93.012 of the Texas Property Code. Tenant waives (to the fullest extent permitted by applicable law) all rights and benefits of Tenant under such section, as it now exists or as it may be hereafter amended or succeeded.

15.19.13.1.4. Tenant has not relied on any warranties, representations or promises made by Landlord or Landlord’s agents (express or implied) with respect to the Premises (including, without limitation, the condition, use or suitability of the Premises) that are not expressly set forth in this Lease.

15.19.13.1.5. Subject to Tenant’s rights under Section 4.2.1 regarding permitted contests, Tenant waives all rights pursuant to applicable law (including without limitation Section 41.413 of the Texas Tax Code) to protest appraised values or receive notice of reappraisal regarding any of the Premises, irrespective of whether Landlord contests same.

15.19.13.1.6. The parties reaffirm their intent that this Lease be governed by, and construed in accordance with, the law chosen in Section 15.13 herein. Nevertheless, to the extent that any provision contained in this Lease requiring Tenant to protect, indemnify, hold harmless or defend Landlord or its Affiliates is found to be governed by, or construed in accordance with, the laws of the State of Texas, TENANT IS HEREBY NOTIFIED AS FOLLOWS: TENANT’S INDEMNITY OBLIGATIONS UNDER THIS LEASE MAY APPLY TO INDEMNIFIED LIABILITIES CAUSED BY OR ARISING OUT OF THE NEGLIGENCE OF LANDLORD OR ITS AFFILIATES.

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15.19.14. Virginia

15.19.14.1. With respect to any of the Premises located in the State of Virginia, the parties agree that this Lease shall be deemed a “deed of lease” for the purposes of Section 55.2 of the Code of Virginia (1950), as amended.

15.19.15. Washington

15.19.15.1. With respect to any of the Premises located in the State of Washington, Landlord and Tenant agree as follows:

15.19.15.1.1. Indemnification Modifications. The parties reaffirm their intent that this Lease be governed by, and construed in accordance with, the law chosen in Section 15.13 above. Nevertheless, in compliance with RCW 4.24.115 as in effect on the date of this Lease, to the extent, if at all, that any provisions of this Lease pursuant to which Landlord or Tenant (for purposes of this Section, the “Indemnitor”) agrees to indemnify (including any provision, or payment of costs, of any defense of) the other (for purposes of this, the “Indemnitee”) against liability for damages arising out of bodily injury to persons or damage to property relative to the construction, alteration or repair of, addition to, subtraction from, improvement to, or maintenance of, any building, road, or other structure, project, development or improvement attached to real estate, including the Premises, is found to be within the scope of RCW 4.24.115, or in any way subject to, or conditioned upon consistency with, the provisions of RCW 4.24.115 for its enforceability, then such provision (regardless of whether it makes reference to this or any other limitation provision): (i) shall not apply to damages caused by or resulting from the sole negligence of the Indemnitee, its agents or employees and (ii) to the extent caused by or resulting from the concurrent negligence of (x) the Indemnitee or the Indemnitee’s agents or employees, and (y) the Indemnitor or the Indemnitor’s agents or employees, shall apply only to the extent of the Indemnitor’s negligence; provided, however, the limitations on indemnity set forth in this Section shall automatically and without further act by either Landlord or Tenant be deemed amended so as to remove any of the restrictions contained in this Section no longer required by then applicable law.

15.19.15.1.2. Waiver of Worker’s Compensation Immunity. Solely for the purpose of effectuating Tenant’s indemnification obligations under this Lease, and not for the benefit of any third parties (including but not limited to employees of Tenant), Tenant specifically and expressly waives any immunity that may be granted it under the Washington State Industrial Insurance Act, Title 51 RCW, if applicable. Furthermore, the indemnification obligations under this Lease shall not be limited in any way by any applicable limitation on the amount or type of damages, compensation or benefits payable to or for any third party under worker compensation acts, disability benefit acts or other employee benefit acts now or hereafter in effect in the State of Washington. The parties acknowledge that the foregoing provisions of this paragraph have been specifically and mutually negotiated between the parties.

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15.19.15.1.3. Reentry of Premises. Should Landlord reenter any Facility under any provisions of this Lease relating to an Event of Default by Tenant hereunder, Landlord shall not be deemed to have terminated this Lease, or the liability of Tenant to pay the Rent thereafter accruing, or to have terminated Tenant’s liability for damages under any of the provisions of this Lease, by any such reentry or by any action, in unlawful detainer or otherwise, to obtain possession of such Facility, unless Landlord shall have notified Tenant in writing that Landlord had elected to terminate this Lease. Tenant further covenants that the service by Landlord of any notice pursuant to the unlawful detainer statutes of the State of Washington and/or the surrender of possession pursuant to such notice shall not (unless Landlord elects to the contrary at the time of or at any time subsequent to the serving of such notices and such election is evidenced by a written notice to Tenant) be deemed to be a termination of this Lease.

15.19.15.1.4. No Authority to Cause Liens. Notwithstanding anything to the contrary contained elsewhere in this Lease, Tenant shall have no right or authority to cause or allow any of the Premises or the Landlord’s estate or interest therein or in and to this Lease to be subjected to any such lien.

15.19.16. Wisconsin

15.19.16.1. With respect to any of the Premises located in the State of Wisconsin, Landlord hereby notifies Tenant, pursuant to Wisconsin Statutes Section 704.05(5)(bf), that Landlord does not intend to store personal property left behind by Tenant when Tenant removes from the Premises for any reason.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, this Lease has been executed by Landlord and Tenant as of the date first written above.

TENANT:

BLC-THE HALLMARK, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

BLC-KENWOOD OF LAKE VIEW, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

[Signature Page to Amended and Restated Master Lease and Security Agreement]

BROOKDALE SENIOR LIVING COMMUNITIES, INC. a Delaware corporation (f/k/a Alterra Healthcare Corporation and Alternative Living Services, Inc.)

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

ACKNOWLEDGEMENT

STATE OF TENNESSEE        )

) :ss.:

COUNTY OF WILLIAMSON    )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared Brookdale Senior Living Communities, Inc., a Delaware corporation (“Company”), by George T. Hicks, its Executive Vice President – Finance and Treasurer, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Brentwood, Tennessee, this 25^th day of July, 2020.

(SEAL) /s/ Linda B. DeVault                 Notary Public

Print Name: Linda B. DeVault        

My commission expires: October 23, 2023    

Acting in the County of: Williamson        

BLC-GABLES AT FARMINGTON, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

[Signature Page to Amended and Restated Master Lease and Security Agreement]

BLC-DEVONSHIRE OF HOFFMAN ESTATES, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

BLC-SPRINGS AT EAST MESA, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

BLC-RIVER BAY CLUB, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

BLC-WOODSIDE TERRACE, L.P., a Delaware limited partnership

By: BLC-Woodside Terrace, LLC, a Delaware limited liability company, its general partner

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

[Signature Page to Amended and Restated Master Lease and Security Agreement]

BLC-ATRIUM AT SAN JOSE, L.P., a Delaware limited partnership

By: BLC-Atrium at San Jose, LLC, a Delaware limited liability company, its general partner

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

BLC-BROOKDALE PLACE OF SAN MARCOS, L.P., a Delaware limited partnership

By: BLC-Brookdale Place of San Marcos, LLC, a Delaware limited liability company, its general partner

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

BLC-PONCE DE LEON, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

BLC-PARK PLACE, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

[Signature Page to Amended and Restated Master Lease and Security Agreement]

BLC-HAWTHORNE LAKES, LLC, a Delaware limited liability company

By:/s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

BLC-THE WILLOWS, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

BLC-BRENDENWOOD, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

[Signature Page to Amended and Restated Master Lease and Security Agreement]

BLC- CHATFIELD, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

Treasurer

BROOKDALE LIVING COMMUNITIES OF FLORIDA, INC. a Delaware corporation

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

[Signature Page to Amended and Restated Master Lease and Security Agreement]

BROOKDALE LIVING COMMUNITIES OF ILLINOIS-GV, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

BROOKDALE LIVING COMMUNITIES OF ILLINOIS-DNC, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

SW ASSISTED LIVING, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

SUMMERVILLE AT FAIRWOOD MANOR, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

[Signature Page to Amended and Restated Master Lease and Security Agreement]

SUMMERVILLE AT HERITAGE PLACE, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

SUMMERVILLE 5 LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

SUMMERVILLE 4 LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

[Signature Page to Amended and Restated Master Lease and Security Agreement]

SUMMERVILLE 14 LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and Treasurer

SUMMERVILLE 15 LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and Treasurer

SUMMERVILLE 16 LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and Treasurer

SUMMERVILLE 17 LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and Treasurer

SUMMERVILLE AT RIDGEWOOD GARDENS LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and Treasurer

[Signature Page to Amended and Restated Master Lease and Security Agreement]

ALS PROPERTIES TENNANT I, LLC,

a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

ACKNOWLEDGEMENT

STATE OF TENNESSEE        )

) :ss.:

COUNTY OF WILLIAMSON    )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared ALS Properties Tenant I, LLC, a Delaware limited liability company (“Company”), by George T. Hicks, its Executive Vice President – Finance and Treasurer, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Brentwood, Tennessee, this 25^th day of July, 2020.

(SEAL)     /s/ Linda B. DeVault                

Notary Public

Print Name: Linda B. DeVault        

My commission expires: October 23, 2023    

Acting in the County of: Williamson        

[Signature Page to Amended and Restated Master Lease and Security Agreement]

ALS PROPERTIES TENANT II, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

ALS LEASING, Inc., a Delaware corporation

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

ACKNOWLEDGEMENT

STATE OF TENNESSEE        )

) :ss.:

COUNTY OF WILLIAMSON    )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared ALS Leasing, Inc., a Delaware corporation (“Company”), by George T. Hicks, its Executive Vice President – Finance and Treasurer, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Brentwood, Tennessee, this 25^th day of July, 2020.

(SEAL) /s/ Linda B. DeVault                

Notary Public

Print Name: Linda B. DeVault        

My commission expires: October 23, 2023    

Acting in the County of: Williamson        

[Signature Page to Amended and Restated Master Lease and Security Agreement]

ASSISTED LIVING PROPERTIES, INC., a Kansas corporation

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

BLC-THE HERITAGE OF DES PLAINES, LLC, a Delaware limited liability company

By: /s/ George T. Hicks

Name: George T. Hicks

Title: Executive Vice President – Finance and

            Treasurer

[Signature Page to Amended and Restated Master Lease and Security Agreement]

LANDLORD:

VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited partnership

By: Ventas, Inc., a Delaware corporation, its general partner

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Executive Vice President

Signature Page to Master Lease and Security Agreement

PSLT-ALS PROPERTIES I, LLC, a Delaware limited liability company

By: PSLT-ALS Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

ACKNOWLEDGEMENT

STATE OF ILLINOIS            )

) :ss.:

COUNTY OF COOK            )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared Ventas Provident, LLC, a Delaware limited liability company (“Company”), the sole member of PSLT GP, LLC, the general partner of PSLT OP, L.P., the sole member of PSLT-ALS Properties Holdings, LLC, the sole member of PSLT-ALS Properties I, LLC, by J. Justin Hutchens, its Authorized Signatory, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Chicago, Illinois, this 24^th day of July, 2020.

(SEAL)                    /s/ Theresa M. Kwasinski        

Notary Public

Print Name: Theresa M. Kwasinski        

My commission expires: August 5, 2022    

Acting in the County of: Cook        

S-2

PSLT-ALS PROPERTIES II, LLC, a Delaware limited liability company

By: PSLT-ALS Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

PSLT-ALS PROPERTIES IV, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-3

PSLT-ALS PROPERTIES III, LLC, a Delaware limited liability company By: /s/ J. Justin Hutchens Name: J. Justin Hutchens Title: Authorized Signatory

ACKNOWLEDGEMENT STATE OF ILLINOIS )                                             ) :ss.: COUNTY OF COOK )    Before me, the undersigned, a Notary Public in and for said County and State, personally appeared PSLT-ALS PROPERTIES III, LLC, a Delaware limited liability company (“Company”), which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company. IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Chicago, Illinois, this 24th day of July, 2020. (SEAL) /s/ Theresa M. Kwasinski                                                                                         Notary Public                                                                                        Print Name: Theresa M. Kwasinski                                                                                            My commission expires: August 5, 2022                                                                                        Acting in the County of: Cook

S-4

BROOKDALE LIVING COMMUNITIES OF ILLINOIS-2960, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF ILLINOIS-HV, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-5

RIVER OAKS PARTNERS, an Illinois general partnership

By: Brookdale Holdings, LLC, its managing partner

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF MINNESOTA, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-6

BROOKDALE LIVING COMMUNITIES OF CONNECTICUT, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

PSLT-BLC PROPERTIES HOLDINGS, LLC, a Delaware limited liability company

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-7

THE PONDS OF PEMBROKE LIMITED PARTNERSHIP, an Illinois general partnership

By: Brookdale Holdings, LLC, its general partner

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF ARIZONA-EM, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-8

BROOKDALE LIVING COMMUNITIES OF MASSACHUSETTS-RB, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF CALIFORNIA-RC, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-9

BROOKDALE LIVING COMMUNITIES OF CALIFORNIA, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

BLC OF CALIFORNIA-SAN MARCOS, L.P., a Delaware limited partnership

By: Brookdale Living Communities of California-San Marcos, LLC, its general partner

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-10

BROOKDALE LIVING COMMUNITIES OF WASHINGTON-PP, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF ILLINOIS-II, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-11

BROOKDALE LIVING COMMUNITIES OF NEW JERSEY, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF FLORIDA-CL, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-12

NATIONWIDE HEALTH PROPERTIES, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

ACKNOWLEDGEMENT

STATE OF ILLINOIS            )

) :ss.:

COUNTY OF COOK            )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared Nationwide Health Properties, LLC, a Delaware limited liability company corporation (“Company”), by J. Justin Hutchens, its Authorized Signatory, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Chicago, Illinois, this 24^th day of July, 2020.

(SEAL)                    /s/ Theresa M. Kwasinski        

Notary Public

Print Name: Theresa M. Kwasinski        

My commission expires: August 5, 2022    

Acting in the County of: Cook        

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2010 UNION LIMITED PARTNERSHIP, a Washington limited partnership

By: Nationwide Health Properties, LLC, its general partner

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

NH TEXAS PROPERTIES LIMITED PARTNERSHIP, a Texas limited partnership

By: MLD Texas Corporation, its general partner

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

MLD PROPERTIES, INC., a Delaware corporation

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-14

JER/NHP SENIOR LIVING ACQUISITION, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

ACKNOWLEDGEMENT

STATE OF ILLINOIS            )

) :ss.:

COUNTY OF COOK            )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared JER/NHP Senior Living Acquisition, LLC, a Delaware limited liability company (“Company”), by J. Justin Hutchens, its Authorized Signatory, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Chicago, Illinois, this 24^th day of July, 2020.

(SEAL)                    /s/ Theresa M. Kwasinski        

Notary Public

Print Name: Theresa M. Kwasinski        

My commission expires: August 5, 2022    

Acting in the County of: Cook        

S-15

JER/NHP SENIOR LIVING KANSAS, INC., a Kansas corporation

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

JER/NHP SENIOR LIVING TEXAS, L.P., a Texas limited partnership

By: JER/NHP Management Texas, LLC, its general partner

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

MLD PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership

By: MLD Properties II, Inc., its general partner

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-16

NHP MCCLAIN, LLC, a Delaware limited liability company By: /s/ J. Justin Hutchens Name: J. Justin Hutchens Title: Authorized Signatory

ACKNOWLEDGEMENT STATE OF ILLINOIS )                                             ) :ss.: COUNTY OF COOK )    Before me, the undersigned, a Notary Public in and for said County and State, personally appeared NHP MCCLAIN, LLC, a Delaware limited liability company (“Company”), by J. Justin Hutchens, its Authorized Signatory, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company. IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Chicago, Illinois, this 24th day of July, 2020. (SEAL) /s/ Theresa M. Kwasinski                                                                        Notary Public                                                                       Print Name: Theresa M. Kwasinski                                                                       My commission expires: August 5, 2022                                                                       Acting in the County of: Cook

S-17

VENTAS FAIRWOOD, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

VENTAS FRAMINGHAM, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

VENTAS WHITEHALL ESTATES, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-18

VTR-EMRTS HOLDINGS, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens

Name: J. Justin Hutchens

Title: Authorized Signatory

S-19

EXHIBIT A

DEFINED TERMS

“Affiliate” shall mean, with respect to any Person, any other Person which Controls, is Controlled by or is under common Control with the first Person.

“Agreed Rate” shall mean, for any month, a rate per annum equal to 4% per annum plus the highest prime rate reported in the Money Rates column or section of The Wall Street Journal published on the first Business Day of that month, as having been the prime rate in effect for corporate loans at large U.S. money center commercial banks (whether or not such rate has actually been charged by any such bank) as of the first Business Day of such month. If The Wall Street Journal ceases publication of the prime rate, the “Agreed Rate” shall mean the prime rate (or base rate) announced by JP Morgan Chase Bank, N.A., New York, New York, or its successors (whether or not such rate has actually been charged by such bank). If such bank discontinues the practice of announcing the prime rate, the “Agreed Rate” shall mean 4% per annum plus the highest rate charged by such bank on short-term, unsecured loans to its more creditworthy large corporate borrowers.

“Ancillary Services” shall mean services provided by Tenant, any Affiliate of Tenant or Guarantor, or a third party at or from a Facility that are complementary or supplemental to services provided at such Facility.

“Authorizations” shall mean, with respect to any Facility or Facilities, any and all licenses, permits, certifications, registrations, accreditations, Facility Provider Agreements certificates of need, certificates of exemption, approvals, waivers, variances and other authorizations issued by any Governmental Authority necessary for the use of such Facility(ies) for its Business. Schedule 1A attached hereto lists the primary healthcare operating licenses for each Facility having such Authorizations and the number of Units (or beds, as applicable) permitted under each such license(s) as of the Effective Date.

“Award” shall mean all compensation, sums or anything of value awarded, paid or received in respect of a total or partial Condemnation.

“Brookdale Guaranty” shall mean that certain Amended and Restated Guaranty dated as of the Effective Date by and among the BKD Parties and the Ventas Parties party thereto (each as defined therein), as such guaranty may at any time be amended, amended and restated, replaced, extended or joined in from time to time.

“Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which national banks in Chicago, Illinois and New York, New York are authorized, or obligated, by Legal Requirements or executive order, to close.

“CC&R’s” shall mean covenants, conditions and restrictions or similar use, maintenance or ownership obligations encumbering or binding upon the real property underlying any Facility that are Permitted Encumbrances.

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“Condemnation” shall mean, as to any Facility, (a) the exercise of any governmental power on such Facility, whether by legal proceedings or otherwise, by a Condemnor, (b) a voluntary sale or transfer by Landlord to any Condemnor, either under threat of condemnation or while legal proceedings for condemnation are pending, and (c) a taking or voluntary conveyance of all or part of such Facility, or any interest therein, or right accruing thereto or use thereof, as the result or in settlement of any condemnation or other eminent domain proceeding affecting such Facility, whether or not the same shall have been actually commenced.

“Condemnor” shall mean any public or quasi-public authority, or private corporation or individual, having the power of condemnation.

“Control” shall mean, as applied to any Person, the possession, directly or indirectly, of the power to direct the management and policies of that Person, whether through ownership, voting control, by contract or otherwise.

“Controlling” shall mean, as applied to any Person, having Control over that Person.

“CPI” shall mean the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index for All Urban Wage Earners and Clerical Workers, United States Average, Subgroup “All Items” (1982 – 1984 = 100). If the foregoing index is discontinued or revised during the Term, the governmental index or computation with which it is replaced shall be used to obtain substantially the same result as if such index had not been discontinued or revised.

“CPI Increase” shall mean, for a particular Lease Year, the percentage increase (rounded to two decimal places), if any, in (a) the CPI published for the month two months prior to the month containing the day immediately preceding the commencement of such Lease Year over (b) the CPI published for the month that is two months prior to the month containing the day immediately preceding the commencement of the Lease Year immediately preceding such particular Lease Year. In the case of any Lease Year as to which the CPI referenced in subsection (b) above is greater than the CPI referenced in subsection (a) above, the “CPI Increase” for such Lease Year shall be deemed to equal zero.

“Date of Taking” shall mean, as to the applicable Facility, the date the Condemnor has the right to possession of such Facility, or any portion thereof, in connection with a Condemnation.

“Environmental Activities” shall mean the use, generation, transportation, handling, discharge, production, treatment, storage, release, investigation, monitoring, remediation, or disposal of any Hazardous Materials at any time to or from any portion of the Premises or located on or present on or under any portion of the Premises.

“Facility Accounts Receivable” shall mean all accounts receivable, notes receivable, trade accounts receivables and other rights to receive rents from, and payments for services rendered to, customers, residents or patients of any Facility.

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“Facility Mortgage” shall mean any mortgage, deed of trust or other security agreement or lien encumbering the Premises or any portion thereof and securing an indebtedness of Landlord to which the Premises or any portion thereof is subject from time to time.

“Facility Mortgagee” shall mean the holder or beneficiary of a Facility Mortgage and any other rights of the lender or credit party under the applicable Facility Mortgage Documents.

“Facility Mortgage Documents” shall mean, with respect to each Facility Mortgage and Facility Mortgagee, the applicable Facility Mortgage, loan or credit agreement, lease, note, collateral assignment instruments, guarantees, indemnity agreements and other documents or instruments evidencing, securing or otherwise relating to the loan made, credit extended or lease or other financing vehicle relating to such Facility Mortgage.

“Facility Provider Agreements” shall mean provider agreements issued to or held by Tenant pursuant to which any Facility(ies) are licensed, certified, approved or eligible to receive reimbursement under any Third Party Payor Program.

“GAAP” shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by such entity as may be in general use by significant segments of the U.S. accounting profession, consistently applied.

“Governmental Authority” shall mean any court, board, agency, licensing agency, certifying entity, commission, office or authority of any governmental unit (federal, state, county, district, municipal, city or otherwise) and any regulatory, administrative or other subdivision, department or branch of the foregoing, whether now or hereafter in existence, including any state licensing or certifying agency, accreditation agency or any other quasi-governmental authority.

“Governmental Payor” shall mean any state or federal health care program providing medical assistance, health care insurance of other coverage of health care items or services for eligible individuals, including the Medicare program more fully described in Title XVIII of the Social Security Act (42 U.S.C. §§ 1395 et seq.) and the Medicaid program more fully described in Title XIX of the Social Security Act (42 U.S.C. §§ 1396 et seq.) and the regulations promulgated thereunder.

“Ground Leases” shall mean (a) that certain Ground Lease dated March 6, 1989, relating to the Facility commonly known as Brookdale Mt. Hood, between Crossings International Corporation, predecessor-in-interest to Nationwide Health Properties, LLC, and Legacy Health System, formerly known as Healthlink, as the same may have been or may hereafter be amended or modified in writing, (b) that certain Lease Agreement dated as of December 2, 1985 relating to the Facility commonly known as Brookdale Allenmore (AL), between Wild West Post No. 91 Veterans of Foreign Wars of the United States and 2010 Union Limited Partnership as the same may have been or may hereafter be amended or modified in writing, and (c) that certain Lease

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Agreement dated as of November 1, 1985 relating to the Facility commonly known as Brookdale Santa Fe between the Board of Education of the Santa Fe Public Schools and Ponce de Leon Limited Partnership, predecessor-in-interest to PSLT-BLC Properties Holdings, LLC, as the same may have been or may hereafter be amended or modified in writing. If any Facility to which any such Ground Lease relates ceases to be a Facility under this Lease, then such Ground Lease shall correspondingly cease to be a “Ground Lease” under this Lease; provided that removal of any such Ground Lease from this definition shall not limit Tenant’s obligations under this Lease with respect to such Ground Lease that accrued prior to such removal or that survive the removal of the affected Facility from this Lease.

“Guarantor” shall mean, individually and collectively, Brookdale Senior Living Inc. and any other guarantor which hereafter delivers a Lease Guaranty.

“Hazardous Materials” shall mean any of the following: (a) petroleum products and/or by-products (including any fraction thereof), flammable substances, explosives, radioactive materials, hazardous or toxic wastes, substances or materials, known carcinogens or any other materials, contaminants or pollutants which could pose a hazard to any portion of the Premises or to Persons on or about any portion of the Premises or cause any portion of the Premises to be in violation of any Hazardous Materials Laws; (b) asbestos in any form which is friable; (c) urea formaldehyde in foam insulation or any other form; (d) transformers or other equipment which contain dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million or any other more restrictive standard then prevailing; I medical wastes and biohazards; (f) radon gas; (g) mold and (h) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority or could pose a hazard to the health and safety of the occupants of any portion of the Premises or the owners and/or occupants of property adjacent to or surrounding any portion of the Premises, including any materials or substances that are listed in the United States Department of Transportation Hazardous Materials Table (49 CFR 172.101), as amended from time to time; provided, however, “Hazardous Materials” do not include cleaning solvents, copier or other equipment supplies or materials or medical supplies customarily used in the operation of the Facilities and held, stored and disposed in accordance with applicable Legal Requirements.

“Hazardous Materials Claims” shall mean any and all enforcement, investigation, monitoring, clean-up, removal or other actions or orders threatened, instituted or completed pursuant to any Hazardous Material Laws by any Governmental Authority, together with all claims made or threatened by any third party related to the use of any portion of the Premises, Landlord or Tenant relating to damage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous Materials.

“Hazardous Materials Laws” shall mean any Legal Requirements, guidelines or policies relating to the environment, health and safety, Environmental Activities, Hazardous Materials, air and water quality, waste disposal and other environmental matters.

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“Insurance Premium Impound Account Trigger Event” shall mean any failure by any Tenant to pay insurance premiums as and when required by Section 5.1 of this Lese more than two (2) times during any 24 month period. Any Insurance Premium Impound Account Trigger Event shall continue for a period of 24 months (provided that, if any additional failure to pay any such insurance premiums occurs in such 24 month period, such period will restart upon the occurrence of such additional failure to pay such insurance premiums).

“Insurance Requirements” shall mean all material terms of any insurance policy required by this Lease with respect to any portion of the Premises and all material requirements of the issuer of any such policy.

“Key Provisions Event of Default” shall mean (i) subject to the terms of clause (ii) of this definition, (A) any Master Lease Event of Default described in Section 7.1.1, (B) any Facility Default described in Section 7.2.1, or (C) any Facility Default resulting from a failure of Tenant to comply with any Facility Loan Documents encumbering the applicable Facility with which Tenant is obligated to comply, (ii) solely with respect to any failure by any Tenant to pay insurance premiums as and when required by Section 5.1 of this Lease, any Insurance Premium Impound Account Trigger Event, and (iii) any “Event of Default” under any Other Leases pursuant to comparable terms set forth in such Other Leases; provided, however, following any Key Provision Event of Default described in clause (i)(B), clause (i)(C) and clause (iii), Tenant shall be required to post Escrow Deposits in accordance with Section 4.4 only with respect to the Facility that is the subject of such Key Provision Event of Default .

“Landlord Funds Rate” means, as of any given time, (i) with respect to any Approved Project, a per annum rate equal to the product of (a) the sum of (1) the then current rate on Ten-Year United States Treasury Notes plus (2) 4.5%, multiplied by (b) fifty percent (50%), and (ii) [***].

“Lease Guaranty” shall mean, individually and collectively, the Brookdale Guaranty, and any other guaranty of any or all of the obligations of Tenant under this Lease delivered after the Effective Date, as any of such guaranties may at any time be amended, amended and restated, replaced, extended or joined in from time to time.

“Lease Year” shall mean the period from January 1, 2018 through December 31, 2018 and each 12 consecutive month period thereafter.

“Legal Requirements” shall mean all statutes, laws, rules, orders, regulations, constitutions, guidelines, ordinances, principles of common law, judgments, decrees, injunctions and other restrictions or requirements of any Governmental Authority applicable to Tenant, the Premises or the Business, whether now or hereafter enacted and in force, including, but not limited to, (a) healthcare facility, hospital, pharmaceutical, laboratory, professional and practitioner and related Authorizations, licensure, certification and accreditation, (b) building codes and zoning regulations, (c) restrictions or requirements relating to required repairs, modifications or alterations in or to the Premises, (d) restrictions or requirements relating to the use of Premises, I restrictions or requirements relating to the transport, handling, use, storage or disposal, or the cleanup or other

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treatment, of any Hazardous Materials, (f) all laws, regulations and rules related to the provision of healthcare items and services, (g) restrictions or requirements relating to false claims, false representations, physician self-referrals, fee-splitting, kickbacks or payment of remuneration to induce business or referrals, and (h) the applicable privacy, security, transaction standards, breach notification and other provisions and requirements of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. §§ 1320d-1329d-8), the Health Information Technology for Economic and Clinical Health Act (42 U.S.C. §§ 3000 et seq.; Pub. Law 111-5, Division A Title XIII and Division B, Title IV), (i) all professional, ethical and conflict of interest related laws, regulations and rules, and (j) all applicable standards of care, including the Emergency Medical Treatment and Labor Act (42 U.S.C. § 1395dd).

“Lien” shall mean any charge, claim, deed of trust, lien, mortgage or security interest.

“Losses” shall mean all expenses, judgments, damages, penalties, fines, liabilities, losses of every kind and nature and related costs and fees, including reasonable attorneys’ and reasonable consultants’ fees and expenses, and environmental costs.

“Omnibus Agreement” shall mean that certain Second Amended and Restated Omnibus Agreement dated as of the Effective Date by and among Ventas, Inc., for itself and on behalf of its Affiliates, and Brookdale Senior Living Inc., for itself and on behalf of its Affiliates, as such agreement may at any time hereafter be amended, amended and restated, replaced, extended or joined in from time to time.

“Other Charges” shall mean any utilities and other costs and expenses of the Business or any portion of the Premises and all other charges, obligations or deposits assessed against any portion of the Premises during the Term.

“Other Lease” shall mean any lease or mortgage loan (other than this Lease), between Tenant, Guarantor, or any Affiliate of Tenant or any Guarantor, on the one hand, and Landlord or any of its Affiliates, on the other hand, that is in existence from time to time, including without limitation, (a) any lease that is derivative from this Lease, (b) any New Lease entered into pursuant to Section 14.2 and Exhibit H of this Lease or (c) any lease derived from a previously entered into New Lease, but “Other Lease” shall specifically exclude any and all leases or agreements between NHPMS, LLC, on the one hand, and Tenant or any of its Affiliates, on the other hand for so long as Ventas, Inc. or its Affiliate does not have the exclusive power to control and direct the Landlord under such lease.

“Permitted Encumbrances” shall mean all of the following: (a) all easements, covenants, conditions, restrictions, agreements and other matters with respect to the Premises that are of record in the deed records of the jurisdiction in which the portion of the Premises are located as of the Effective Date; (b) all easements, covenants, conditions, restrictions, agreements and other matters with respect to the Premises, whether or not of record, that are executed by Tenant or approved or consented to by Tenant; (c) any easements, covenants, conditions, restrictions or utility agreements entered into by Landlord with respect to the Premises after the Effective Date in accordance with the terms of this Agreement so long as a copy of such instrument is promptly provided to Tenant;

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(d) any agreement required pursuant to any Legal Requirement entered into by Landlord with respect to the Premises after the Effective Date in accordance with the terms of this Agreement so long as a copy of such instrument is promptly provided to Tenant; I any real estate taxes, assessments and other governmental levies, fees or charges imposed with respect to the Premises that are not yet due and payable; (f) any zoning or building codes and other land use laws regulating the use or occupancy of the Premises; (g) occupancy rights of residents and patients of the Facilities; and (h) any other matters affecting title to the Premises or any portion thereof caused by Tenant or its assignees or sublessees or their respective agents or employees.

“Person” shall mean any individual, partnership, association, corporation, limited liability company, business trust, trust or other entity.

“Primary Intended Use” shall mean, as to each Facility, the type of health care facility corresponding to such Facility on Schedule 1, as the same may be modified or amended pursuant to the provisions of this Lease.

“Property Loss” shall mean damage to the Premises by fire, flood, windstorm, earthquake, act of God or other natural or manmade occurrence that results in damage to the Premises.

“Proprietary Information” shall mean (i) all proprietary information or intellectual property of Tenant or any of its Affiliates, except for (x) the specific information and property that pertain exclusively to a Facility or those served at such Facility and (y) the books and records which relate exclusively to such Facility, (ii) all computer software and accompanying documentation (including all future upgrades, enhancements, additions, substitutions and modifications thereof), other than that which is commercially available, which are used by Tenant or any of its Affiliates in connection with the property management system and all future electronic systems developed by Tenant or any of its Affiliates for use with respect to a Facility or Tenant and its Affiliates, (iii) all manuals, brochures and directives used by Tenant or any of its Affiliates with respect to the procedures and techniques to be used in operating a Facility, and (iv) employee records which must remain confidential either under applicable legal requirements or under reasonable corporate policies of Tenant and its Affiliates.

“Rent” shall mean any and all payments due to Landlord under this Lease including without limitation, Minimum Rent and Additional Rent.

“Taxes” shall mean any property (real and personal) and other taxes and assessments levied or assessed with respect to this Lease, any portion of the Premises or Landlord, that are attributable, on an accrual basis, to the Term. “Taxes” shall include (a) any federal, state or county occupation tax, transaction privilege tax, franchise tax, margin taxes (including any taxes imposed on Landlord on taxable margin pursuant to Chapter 171 of the Texas Tax Code, as the same may be hereafter modified, amended or superseded), gross receipts tax, business privilege tax, rental tax or other excise taxes, and any other assessments levied or assessed against any portion of the Premises, Tenant’s interest therein or Landlord, and (b) the amount of any costs and expenses incurred by Landlord in prosecuting any Protest relating to any Taxes (but, in the event of a Protest initiated at the sole request of Landlord, not to exceed the amount of any tax reduction obtained by Landlord

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as a result of such Protest). Notwithstanding the foregoing, “Taxes” shall exclude any local, state or federal income tax based upon the net income of Landlord (or other similar basis of measurement), any transfer tax, documentary tax, stamp tax, recording tax or other tax or assessment arising out of Landlord’s transfer of any interest in any portion of the Premises to any Person other than Tenant or any of its Affiliates, and any mortgage tax, intangible tax, recording tax or other tax or assessment arising out of any sale/leaseback, ground lease, Facility Mortgage, Facility Mortgage Documents or other financing or indebtedness of Landlord or its Affiliates.

“Tenant Intangible Property” shall mean all of the following at any time owned by Tenant in connection with its use of any portion of the Premises: (a) accounts receivable and proceeds therefrom; (b) rents, profits, income or revenue of Tenant derived from the operation or use of the Premises; (c) all documents, chattel paper, instruments and contract rights (including contracts with residents, employees and Third Party Payors); (d) deposit accounts, general intangibles and choses in action; I refunds of any Taxes or Other Charges applicable to periods of time during the Term (until such time as such refunds are delivered to Landlord in accordance with Section 4.2.1, at which time such refunds; and (f) Authorizations necessary or desirable for Tenant’s use of any portion of the Premises, including Governmental Payor’s certifications, any applicable certificate of need or other similar certificate and the exclusive right to transfer, move or apply for the foregoing and manage the Business conducted at any portion of the Premises (including the right to make any change of any nature to the Authorizations); provided, however, “Tenant Intangible Property” shall not include the Excluded Property.

“Tenant Organizational Documents” shall mean the documents, certificates and agreements pursuant to which each Tenant was established and is organized to do business, as amended or restated from time to time.

“Tenant Property” shall mean Tenant Personal Property and Tenant Intangible Property, but expressly excluding the Excluded Property.

“Third Party Payor Programs” shall mean any third party payor programs pursuant to which healthcare facilities qualify for payment or reimbursement for medical or therapeutic care or other goods or services rendered, supplied or administered to any admittee, occupant, resident or patient by or from any Governmental Authority, Governmental Payor, bureau, corporation, agency, commercial insurer, non-public entity, “HMO,” “PPO” or other comparable party.

“Units” means a unit in a Facility, or “beds” for any Facility that has “beds”.

“Unsuitable For Its Primary Intended Use” shall mean a state or condition of a Facility such that, by reason of Property Loss or Condemnation, in the reasonable judgment of Landlord, such Facility cannot be operated for its Primary Intended Use taking into account, among other relevant factors, the number of usable Unitsaffected by such Property Loss or Condemnation; provided, however that a Facility shall not be deemed to be “Unsuitable For Its Primary Intended Use” if such Facility can, within 18 months after the occurrence of such Property Loss or Condemnation, be restored to substantially the same state and condition as existed immediately

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prior to such Property Loss or Condemnation and insurance proceeds and awards are made available to Tenant for such restoration.

“Ventas/Brookdale Side Letter” shall mean that certain amended and restated side letter agreement dated as of the Effective Date between Brookdale Senior Living Inc., for itself and on behalf of its Affiliates, and Ventas, Inc., for itself and on behalf of its Affiliates, as such letter agreement may at any time be amended, amended and restated, replaced, extended or joined in from time to time.

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INDEX OF ADDITIONAL DEFINED TERMS

Additional Properties...................................................................................................... Exhibit H-1

Additional Rent ................................................................................................................................5

Additional Sale Facility ...................................................................................................Exhibit L-1

Affiliate Manager ...........................................................................................................................19

Alterations ......................................................................................................................................26

Approved Project ...........................................................................................................................25

AR Financing .................................................................................................................................20

Business ..........................................................................................................................................2

Cash Sale Proceeds ..........................................................................................................Exhibit L-2

Code .................................................................................................................................................5

Combination Lease .......................................................................................................................51

Condition Standard ........................................................................................................................22

Deleted Facility .............................................................................................................................36

Deleted Facility or Facilities .........................................................................................................36

Effective Date ..................................................................................................................................1

Escrow Deposits ...............................................................................................................................7

Event of Default .............................................................................................................................29

Excluded Property ........................................................................................................Schedule 5.3

Excluded Vehicles ..........................................................................................................................15

Executed OTA ................................................................................................................................38

Facilities ...........................................................................................................................................1

Facility .............................................................................................................................................1

Facility Actual Upgrade Expenditures Amount .............................................................................23

Facility Default ..............................................................................................................................31

Facility Proprietary Marks ............................................................................................Schedule 5.3

Facility Required Upgrade Expenditures Amount .........................................................................23

Facility Termination .......................................................................................................................38

Facility Upgrade Deposit ...............................................................................................................22

Facility Upgrade Reimbursement Amount ....................................................................................23

Fair Market Rental ..........................................................................................................Exhibit D-1

Form OTA ......................................................................................................................................38

Individually Identifiable Health Information ..................................................................Exhibit C-1

Initial Term .......................................................................................................................................3

Insurance Captive ...........................................................................................................................13

Landlord ...........................................................................................................................................1

Landlord Funded Upgrade Expenditures .......................................................................................25

Landlord Funds Rent Increase .......................................................................................................27

Landlord Indemnified Parties ........................................................................................................49

Landlord Insured Parties ............................................................................................................10

Landlord Personal Property .............................................................................................................1

Landlord Seller ................................................................................................................Exhibit L-1

Landlord UE Funds ........................................................................................................................25

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Lease ................................................................................................................................................1

Limited Termination Election ........................................................................................................33

Listed Sale Facility ..........................................................................................................Exhibit L-1

MAI Appraiser ................................................................................................................Exhibit D-2

Marketing End Date ........................................................................................................Exhibit L-1

Marketing Notice .............................................................................................................Exhibit L-1

Master Lease Event of Default ......................................................................................................29

Minimum Rent .................................................................................................................................4

New Guaranty .................................................................................................................Exhibit H-4

New Lease ......................................................................................................................................51

NY DOH ........................................................................................................................................56

OFAC .............................................................................................................................................55

OTA .................................................................................................................................Exhibit L-1

Other Landlord Expenses .................................................................................................................6

Patient Information ..........................................................................................................Exhibit C-1

Penalty ..............................................................................................................................................5

Permitted Transfer ..........................................................................................................................43

Personal Property REIT Requirement ...........................................................................................53

Premises ...........................................................................................................................................1

Prohibited Persons .........................................................................................................................55

Property Loss Insurance Proceeds .................................................................................................45

Property Removal Date ..................................................................................................................36

Property Transfer Date ....................................................................................................Exhibit H-3

Proportionate Share ..........................................................................................................................4

Protest ..............................................................................................................................................5

Real Property Taxes .........................................................................................................................7

Receivership ...................................................................................................................................34

Reimbursement Period ...................................................................................................................39

Renewal Notice ................................................................................................................................4

Renewal Term ..................................................................................................................................3

Renewal Terms .................................................................................................................................3

Requested Landlord UE Funds ......................................................................................................25

Required Escrow Deficiency Payment ............................................................................................8

Restoration Plans and Specifications .............................................................................................46

Restrictive Covenants ....................................................................................................................17

Restructuring ..................................................................................................................................58

Sale Facility .....................................................................................................................Exhibit L-1

Sale Facility Rent Reduction .......................................................................Exhibit L-2, Exhibit L-3

Sale Notice .......................................................................................................................................2

Section 8.3 Premises ......................................................................................................................40

Service Provider .............................................................................................................................14

SF Purchase Contract ......................................................................................................Exhibit L-1

Situs State ......................................................................................................................................55

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Subject Facility ................................................................................................................Exhibit L-1

Subject Project ...............................................................................................................................25

Substantially Destroyed .................................................................................................................45

Surviving Lease ..............................................................................................................Exhibit H-1

Surviving Lease Date ......................................................................................................Exhibit H-1

Tenant ...............................................................................................................................................1

Tenant Personal Property ...............................................................................................................14

Tenant Seller ....................................................................................................................Exhibit L-1

Tenant’s Proportionate Share ..........................................................................................Exhibit H-4

Term .................................................................................................................................................4

Terminated/Dispossessed Premises ...............................................................................................37

Termination/Dispossession Date ....................................................................................................37

Third Party ......................................................................................................................Exhibit H-4

Transfer ..........................................................................................................................................44

Transferred Facilities .....................................................................................................................51

Transferred Facility ........................................................................................................................51

Unpermitted Transfer .....................................................................................................................43

Upgrade Expenditures ....................................................................................................................26

Upgrade Expenditures Report ........................................................................................................24

Upgrade Expenditures Test Period .................................................................................................22

Work ...............................................................................................................................................46

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EX-10.3

Exhibit 10.3

Portions of this exhibit that have been marked by [***] have been omitted because the Registrant has determined they are not material and would likely cause competitive harm to the Registrant if publicly disclosed.

EXECUTION VERSION

AMENDED AND RESTATED GUARANTY

This Amended and Restated Guaranty (as it may be further amended, modified, amended and restated or divided from time to time in accordance with the terms hereof, this “Agreement”), dated as of July 26, 2020 (the “Effective Date”), is made by and among (i) Brookdale Senior Living Inc., a Delaware corporation (or any entity succeeding thereto by consolidation, merger or acquisition of all or substantially all of its assets, “Guarantor”), (ii) each of the parties identified as “Tenant” on the signature pages hereto (each such party identified as a Tenant on the signature pages hereto, together with its respective successors and permitted assigns, a “Tenant” and, collectively, the “Tenants”, and together with Guarantor and its Affiliates who are party to any BKD/VTR Document (as defined below), the “BKD Parties”), (iii) Ventas, Inc., a Delaware corporation (“Ventas”), acting for and on behalf of itself and each of its Affiliates who are party to any BKD/VTR Document, and (iv) each of the parties identified as “Landlord” on the signature pages hereto (each such party identified as a Landlord on the signature pages hereto, together with its respective successors and permitted assigns, a “Landlord” and, collectively, the “Landlords”, and together with Ventas and their respective Affiliates who are party to this Agreement and/or any BKD/VTR Document, the “Ventas Parties”).

The parties hereto previously entered into that certain Guaranty dated as of April 26, 2018 (the “Original Lease Guaranty”), which Original Lease Guaranty superseded, as to each of the Ventas Parties (other than any Ventas Party that is a party to the ARC Pool 2 Documents (as defined in the Original Omnibus Agreement) and only with respect to the ARC Pool 2 Documents, subject to the terms of the Original Omnibus Agreement), that certain Guaranty (Parent Guaranty) dated as of February 11, 2009 and executed and delivered by Guarantor. In consideration of the mutual covenants, conditions and agreements set forth herein, the parties hereto do hereby amend and restate the Original Lease Guaranty as follows:

Landlords have previously acquired a fee simple or ground leased interest in the parcels of land described in the lease agreements identified on Exhibit A (as the same may be amended, modified, amended and restated or divided from time to time, the “Leases”) and the improvements located on said land (each a “Property” and, collectively, the “Properties”). Landlords lease the Properties to the Tenants. Any Ventas Party may update Exhibit A from time to time to incorporate (i) any lease and property that is or becomes the subject of a lease, and (ii) any loan or other agreement, in each case by, between and/or among Guarantor and/or any of its Affiliates, on the one hand, and Ventas, any Landlord, and/or any of their respective Affiliates, on the other hand (including any amendments, restatements, replacements, substitutions, divisions or other alterations of any such documents from time to time). Such update to Exhibit A shall be effective immediately upon the delivery to Guarantor of (x) written notice of such update, and (y) a joinder agreement executed by each Affiliate of Ventas that is party to such lease or loan or other agreement. In addition, Exhibit A shall be deemed automatically amended and modified to exclude any lease, loan or other agreement that expires by its terms or is terminated or, subject to Section 27, is assigned by any Ventas Party to a third party (in which event the terms of Section 27 shall apply).

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Subject to the foregoing, each of the leases and loans or other agreements identified from time to time on Exhibit A and ancillary documents relating thereto to which Guarantor, Tenant, or any of their Affiliates, on the one hand, and Ventas or any of its Affiliates, on the other hand, are party, including any Additional Lease (as defined in the A&R Omnibus Agreement),is referred to herein as a “BKD/VTR Document” and collectively such documents are referred to herein as the “BKD/VTR Documents.” Each of Ventas and Guarantor, for itself and its respective Affiliates, agrees and acknowledges that, as of the Effective Date, there are no agreements, instruments or other arrangements by, between and/or among any of Ventas and/or its Affiliates, on the one hand, and Guarantor and/or its Affiliates, on the other hand, that are effective as of the Effective Date other than the Existing BKD/VTR Documents (as defined in the A&R Omnibus Agreement), and any agreements, instruments or other arrangements by, between and/or among any of Ventas and/or its Affiliates, on the one hand, and Guarantor and/or its Affiliates, on the other hand, that are effective at or prior to the Effective Date (other than the Existing BKD/VTR Documents) shall no longer be effective or enforceable.

Terms set forth in Section 25 of this Agreement shall have the meanings set forth therein. Initially capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the lease identified on Exhibit A as the “A&R Master Lease” (as the same may have been, and hereafter may be, amended, modified, amended and restated, or divided from time to time, the “A&R Master Lease”).

Except as otherwise expressly provided or unless the context otherwise requires, all accounting terms not otherwise defined in this Agreement have the meanings assigned to them under GAAP. Notwithstanding anything to the contrary contained in this Agreement, each and any of the financial covenants herein (and the defined terms used for calculating such financial covenants) will be equitably adjusted by the parties to reflect the original intention of the parties to the extent the same is impacted by changes to GAAP and is required to apply GAAP on a consistent basis. If Landlord notifies Guarantor that Landlord requests, or if Guarantor notifies Landlord that Guarantor requests, in each case, an amendment to any provision hereof to effect such equitable adjustment, then such equitable adjustment shall be applied immediately (and, as applicable, for any previous period), and the parties hereto shall cooperate in good faith to document such amendment (although such amendment shall not be required to give effect to such equitable adjustment), and such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before the applicable change to GAAP became effective (to reflect the original intention of the parties) until such notice shall have been withdrawn.

As of the Effective Date, Guarantor directly or indirectly owns all the stock, partnership interests or membership interests, as the case may be, of each Tenant, and Guarantor has derived or expects to derive financial and other advantages and benefits, directly or indirectly, from the making of this Agreement and the Guaranteed Obligations. In conjunction with the execution and delivery of this Agreement by the parties hereto, (a) the Landlords and the Tenants have agreed to enter into the A&R Master Lease, and (b) each of Guarantor and Ventas have agreed to enter into (i) that certain Second Amended and Restated Omnibus Agreement, dated as of the Effective Date (the “A&R Omnibus Agreement”) (which amends and restates that certain Amended and Restated

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Omnibus Agreement, dated as of April 26, 2018 (the “Original Omnibus Agreement”)), (ii) that certain amended and restated letter agreement, dated as of the Effective Date (the “A&R Side Letter”) (which amends and restates that certain letter agreement, dated as of April 26, 2018 (the “Original Letter Agreement”), and (iii) that certain Letter Agreement, dated as of the Effective Date (the “Restructuring Letter Agreement”). Each of theparties hereto is unwilling to enter into this Agreement, the A&R Master Lease, the A&R Omnibus Agreement, the A&R Side Letter, the Restructuring Letter Agreement, or the documents contemplated to be delivered under any such agreement to which it is a party unless the other parties hereto enter into this Agreement. The execution and delivery of this Agreement will benefit, directly or indirectly, each of the parties hereto, including Guarantor.

NOW, THEREFORE, in consideration of $10 and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the parties hereto, intending to be legally bound, covenants and agrees as follows:

1.Guaranty. Guarantor unconditionally and irrevocably guarantees to Landlords (the “Guaranty”) that (a) all Rent and all other sums due under the BKD/VTR Documents, whether due by acceleration or otherwise, including costs and expenses of collection (collectively, the “Monetary Obligations”) will be promptly and indefeasibly paid in full when due, in accordance with the provisions of the BKD/VTR Documents and (b) without limiting the foregoing, each of the Tenants and Affiliates of Tenants (each, an “Obligor”) that is a party to any BKD/VTR Document will perform and observe each and every covenant, agreement, term and condition of such party(ies) in the applicable BKD/VTR Documents (the “Performance Obligations” and together with the Monetary Obligations, the “Guaranteed Obligations”). If, for any reason, any of the Monetary Obligations shall not be paid promptly when due after receipt of required notice (if any) to the applicable Tenant under the applicable BKD/VTR Document, and after the expiration of any applicable grace period therefor (if any), Guarantor shall, immediately upon demand, pay the same to the applicable Landlord or Affiliate of a Landlord with interest and penalty due thereon (if any), as stated in the applicable BKD/VTR Document. In addition to the foregoing, Guarantor hereby becomes surety to Landlords for the due and punctual payment and performance of the Guaranteed Obligations, and, to the extent permitted by law, Guarantor hereby waives all defenses that may be available to Guarantor as a surety and guarantor, but shall have available the defense of payment of the Monetary Obligations, performance of the Performance Obligations and any defense pursuant to the terms of the BKD/VTR Documents. Guarantor assumes all responsibility for being and keeping itself informed of all facts, events or circumstances that might in any way affect Guarantor’s risks under this Agreement and agrees that no Ventas Party or any other Person will have any duty to advise Guarantor of information known to it or any of them regarding any such facts, events or circumstances, or to disclose to Guarantor any information or documents (financial or otherwise) heretofore or hereafter acquired by any Ventas Party in the course of its relationship with any Obligor.

2.Nature of Guaranty. Each Landlord may enforce the Guaranty without first having recourse against any Obligor or exhausting its rights or remedies under any BKD/VTR Document; provided, however, that nothing herein shall prohibit any Landlord from exercising its rights

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against any or all Obligors simultaneously. The Guaranty and the obligations of Guarantor with respect to the Guaranty are present, primary, direct, continuing, unconditional, irrevocable and absolute. The Guaranty is a guaranty of payment and performance and not of collection.

3.Representations, Warranties, and Covenants.

3.1 Guarantor hereby represents and warrants to Ventas Parties, as of the Effective Date, that:

3.1.1.    no representations or agreements of any kind have been made by any Ventas Party to Guarantor that would limit or qualify in any way the terms of this Agreement;

3.1.2.    no Ventas Party has made any representation to Guarantor as to the creditworthiness of any Obligor;

3.1.3.    Guarantor has established adequate means of obtaining from each Obligor, on a continuing basis, information regarding such Obligor’s financial condition (but Guarantor’s failure to do so will not affect its obligations hereunder);

3.1.4.    Guarantor is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware;

3.1.5.    Guarantor has the power and authority to execute, deliver and perform this Agreement and to incur the obligations herein provided for;

3.1.6.    Guarantor has taken all requisite actions necessary to authorize the execution, delivery and performance of this Agreement by Guarantor;

3.1.7.    this Agreement constitutes a legal, valid and binding obligation of Guarantor enforceable against Guarantor in accordance with its terms, subject to (1) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally and (2) general principles of equity;

3.1.8.    the execution, delivery and performance of this Agreement by Guarantor will not require any consent, approval, authorization, order or declaration of or filing or registration with any court, any Governmental Authority or any other Person;

3.1.9.    the execution, delivery and performance of this Agreement by Guarantor do not and will not conflict with, and do not and will not result in a breach of, any organizational document of Guarantor or any order, writ, injunction, decree, statute, rule or regulation applicable to Guarantor;

3.1.10.    Guarantor is an Affiliate of each Obligor; and

3.1.11.    there is no litigation pending or, to the knowledge of Guarantor, threatened against Guarantor that has not been disclosed in writing to Landlords, which, if adversely

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determined, could reasonably be expected to have a material adverse effect on the ability of Guarantor to perform its obligations under this Agreement.

3.2.    Each of the Tenants hereby represents and warrants to the Ventas Parties, as of the Effective Date, that:

3.2.1.    such Person is duly organized, validly existing and in good standing under the laws of the State of its formation;

3.2.2.    such Person has the power and authority to execute, deliver and perform this Agreement and to incur the obligations herein provided for;

3.2.3.    such Person has taken all requisite actions necessary to authorize the execution, delivery and performance of this Agreement;

3.2.4.    this Agreement constitutes a legal, valid and binding obligation of such Person enforceable against such Person in accordance with its terms, subject to (1) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally and (2) general principles of equity;

3.2.5.    the execution, delivery and performance of this Agreement by such Person will not require any consent, approval, authorization, order or declaration of or filing or registration with any court, any Governmental Authority or any other Person;

3.2.6.    the execution, delivery and performance of this Agreement by such Person do not and will not conflict with, and do not and will not result in a breach of, any organizational document of such Person or any order, writ, injunction, decree, statute, rule or regulation applicable to such Person; and

3.2.7.    there is no litigation pending or, to the knowledge of such Person, threatened against such Person that has not been disclosed in writing to Guarantor which, if adversely determined, could reasonably be expected to have a material adverse effect on the ability of such Person to perform its obligations under this Agreement.

3.3.    Each of the Ventas Parties hereby represents and warrants to the BKD Parties, as of the Effective Date, that:

3.3.1.    such Person is duly organized, validly existing and in good standing under the laws of the State of Delaware;

3.3.2.    such Person has the power and authority to execute, deliver and perform this Agreement and to incur the obligations herein provided for;

3.3.3.    such Person has taken all requisite actions necessary to authorize the execution, delivery and performance of this Agreement;

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3.3.4.    this Agreement constitutes a legal, valid and binding obligation of such Person enforceable against such Person in accordance with its terms, subject to (1) applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally and (2) general principles of equity;

3.3.5.    the execution, delivery and performance of this Agreement by such Person will not require any consent, approval, authorization, order or declaration of or filing or registration with any court, any Governmental Authority or any other Person;

3.3.6.    the execution, delivery and performance of this Agreement by such Person do not and will not conflict with, and do not and will not result in a breach of, any organizational document of such Person or any order, writ, injunction, decree, statute, rule or regulation applicable to such Person;

3.3.7.    there is no litigation pending or, to the knowledge of such Person, threatened against such Person that has not been disclosed in writing to Guarantor which, if adversely determined, could reasonably be expected to have a material adverse effect on the ability of such Person to perform its obligations under this Agreement; and

3.3.8.    Ventas has (or will have) the power and authority to execute and deliver any Reaffirmation/Assumption Certificate for itself and each of the other Ventas Parties, and each of the Ventas Parties has taken (or will take) all requisite actions necessary to authorize the execution and delivery and performance of any Reaffirmation/Assumption Certificate.

4.Change of Control. Notwithstanding any restriction, prohibition or other limitation on any change of control, transfers, assignments, sales, dispositions, dividends, distributions, and other similar transactions pursuant to any BKD/VTR Document (including, without limitation, any agreement by, between and/or among Guarantor, Tenant, or any of their respective Affiliates, on the one hand, and Ventas or any of its Affiliates, on the other hand, added to Exhibit A as a “BKD/VTR Document” after the Effective Date, and any Additional Lease), each of the Ventas Parties agrees, for itself and its Affiliates, that a Change of Control shall be permitted if the conditions set forth in Section 4.1 – Section 4.9, inclusive, are satisfied, without any further notice to, or consent by, any Ventas Party or any of its Affiliates. Except as permitted by the terms of this Section 4, Guarantor shall not permit any Change of Control to occur.

4.1.    Guarantor on a pro forma basis, after giving effect to such Change of Control and any related transaction(s), has a Tangible Net Worth equal to or greater than $600,000,000;

4.2.    Guarantor shall deliver to Ventas a duly executed Officer’s Certificate in form attached hereto as Exhibit B certifying that the condition set forth in Section 4.1 above has been satisfied as of the date of the consummation of such Change of Control;

4.3.    Guarantor or its successor or transferee as a result of such Change of Control (the “Successor”), as applicable, shall execute and deliver to Ventas an instrument pursuant to which Guarantor or Successor, as applicable, has reaffirmed or assumed, as applicable, all obligations and

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liabilities of Guarantor under this Agreement in the form attached hereto as Exhibit C (the “Reaffirmation/Assumption Certificate”);

4.4.    none of the BKD Parties has received written notice of any monetary “Event of Default” (or similar concept, however defined) under, and as defined in, any BKD/VTR Document that remains outstanding and has not been cured;

4.5.    such Change of Control will not result in Guarantor ceasing to Control any Tenant or any manager of any Property, or any obligor under any BKD/VTR Document that relates to a loan obligation of Guarantor or an Affiliate of Guarantor; provided, however, if such Change of Control is structured as, or results in, a Restructuring Transaction and any subtenant or manager of the Properties proposed thereunder would not be Controlled by Guarantor, Landlords shall not unreasonably withhold, condition or delay approval of (i) such subtenant or manager and (ii) such Restructuring Transaction;

4.6.    such Change of Control will not result in any Person directly or indirectly owning (beneficially or of record) more than 50% of the voting power of the Voting Stock of, or otherwise Controlling, Guarantor or any Tenant or manager of any Property, in each case if such Person or any member of its Senior Management (A) has been barred from any Third Party Payor Programs, (B) in the 10 years preceding the date of such Change of Control, has taken any action described in Section 9.6 or been the subject of any action described in Section 9.7 or Section 9.9, or (C) has been convicted of or pled guilty or no contest to (or a final order has been issued determining that such Person or member of its Senior Management committed or engaged in) any (x) willful misconduct involving financial or commercial dishonesty, (y) misdemeanor involving moral turpitude or financial crimes, or (z) felony;

4.7.    either (A) the Senior Management that will manage each of the Tenants and the Properties immediately following the effectiveness of such Change of Control has an average of not less than three years’ operating experience with respect to the operation and management of senior living or health care facilities and has at least two executive officers who are or have been a senior executive with one of the top 50 largest managers on the then most recent “50 Largest Senior Housing Managers” list maintained by the American Seniors Housing Association, or (B) the Tenants or managers of the Properties immediately following the effectiveness of such Change of Control have retained, in the same or more senior roles as immediately prior to the effectiveness of such Change of Control, for a minimum of one year after the occurrence of such Change of Control, the chief executive officer, chief financial officer, and a majority of the Senior Management of Guarantor who were in the employment of Guarantor immediately prior to the effectiveness of such Change of Control;

4.8.    (A) after giving effect to any approvals or consents obtained in connection with such Change of Control, such Change of Control will not result in any violation of any regulatory, licensing, or mortgage requirements with respect to any Tenant or Property other than any such violations that, individually and in the aggregate, are not material to the Tenants and the Properties, taken as a whole (it being understood that notwithstanding the foregoing, the applicable

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Ventas Parties shall retain all rights and remedies in respect of any violation of any regulatory, licensing, or mortgage requirements with respect to any Tenant or Property set forth in any BKD/VTR Document, including without limitation in respect of any resulting breach, default, event of default, or similar concept with respect to any BKD/VTR Document) and (B) after giving effect to such Change of Control, (1) Guarantor (or its successor or transferee) and each Person directly or indirectly owning (beneficially of record) or Controlling Guarantor (or such successor or transferee) shall be in compliance with the requirements of Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (the “OFAC Order”) and other similar requirements contained in the rules and regulations in respect thereof (the OFAC Order and such other rules, regulations, legislation or orders, collectively, the “Orders”), and (2) neither Guarantor (or its successor or transferee) nor any Person directly or indirectly owning (beneficially or of record) or Controlling Guarantor (or such successor or transferee) shall (x) be listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Asset Control, Department of Treasury (“OFAC”) pursuant to the Orders and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Orders (such lists, collectively, the “Lists”), (y) be a Person (as defined in the Orders) who has been determined by competent authority to be subject to the prohibitions contained in the Orders, or (z) be directly or indirectly owned (to its knowledge, in the case of any indirect owner with less than a twenty-five percent (25%) indirect ownership interest) or Controlled by, or acts for or on behalf of, any Person on the Lists or any other Person who has been determined by competent authority to be subject to the prohibitions contained in the Orders; and

4.9.    Concurrently with or prior to the consummation of such Change of Control, Guarantor shall have paid or caused to be paid to Ventas a fee in the amount of Twenty-five Million Dollars ($25,000,000) (the “COC Fee”).

Upon Ventas’ written request (but not as a condition that must be satisfied prior to the consummation of the Change of Control), Guarantor will deliver to Ventas reasonably appropriate backup information as to the matters certified in the Officer’s Certificate described in Section 4.2 above.

For the avoidance of doubt, in connection with any Change of Control that is permitted by the terms of this Section 4, each of Guarantor and the other BKD Parties shall have the right to distribute all or any portion of any cash or other consideration received by any of Guarantor or any of the other BKD Parties or otherwise generated in connection with the transaction to any Person (including, without limitation, any direct or indirect parent(s)) without limitation or restriction.

In the event Guarantor (at its sole election) delivers written notice to Ventas that it proposes to engage in any transaction that would result in the occurrence of a Change of Control, Ventas shall (and shall cause its Affiliates to) use reasonable, diligent and good faith efforts to obtain, at the sole expense of Guarantor (provided such expense must be approved by Guarantor, in its reasonable discretion), any consent to such transaction required pursuant to the applicable mortgage loan documents. For the avoidance of doubt, nothing in this Agreement shall require any Ventas Party to incur any out-of-pocket cost or expense in connection with obtaining any such consent.

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Promptly following the consummation of any Change of Control, Ventas, for itself and on behalf of each of the Ventas Parties, shall countersign (and acknowledge) and deliver to Guarantor the Reaffirmation/Assumption Certificate delivered by Guarantor.

5.Guaranty Not Affected by Other Matters. The obligations, covenants, agreements and duties of Guarantor with respect to the Guaranty shall in no way be discharged, affected or impaired by any of the following and any Landlord may at any time and from time to time, with or without consideration, without prejudice to any claim against Guarantor hereunder, without in any way changing, releasing or discharging Guarantor from its liabilities and obligations hereunder and without notice to or the consent of Guarantor, waive, release or consent to any of the following:

5.1.    the waiver of the performance or observance by any Obligor to any of the agreements, covenants, terms or conditions contained in any BKD/VTR Document;

5.2.    the extension, in whole or in part, of the time for payment by any Obligor of any sums owing or payable under any BKD/VTR Document, or of any other sums or obligations under or arising out of or on account of any BKD/VTR Document, or the renewal or extension of any BKD/VTR Document;

5.3.    any sublease of any or all of any Property by any Tenant to any other Person;

5.4.    any assumption by any Person of any or all of any Obligor’s obligations under, or any Obligor’s assignment of any or all of its interest in, the applicable BKD/VTR Documents;

5.5.    the waiver or release or modification or amendment (whether material or otherwise) of any provision of any BKD/VTR Document;

5.6.    any failure, omission or delay on the part of Landlords to enforce, assert or exercise any right, power or remedy conferred on or available to Landlords in or by the BKD/VTR Documents, or any action on the part of Landlords granting indulgence or extension in any form whatsoever;

5.7.    the voluntary or involuntary liquidation, dissolution, sale of all or substantially all of the assets, marshaling of assets and liabilities, receivership, conservatorship, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization or other similar proceeding affecting any Obligor or Guarantor or any of their assets or any impairment, modification, release or limitation of liability of any Landlord, any Obligor or Guarantor or any of their estates in bankruptcy or of any remedy for the enforcement of such liability resulting from the operation of any present or future provision of the U.S. Bankruptcy Code or other similar statute of any other state or nation or from the decision of any court;

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5.8.    the release of any Obligor from the performance or observance of any of the agreements, covenants, terms or conditions contained in any BKD/VTR Documents by operation of law;

5.9.    the power or authority or lack thereof of any Obligor to execute, acknowledge or deliver any BKD/VTR Document;

5.10.    the legality, validity or invalidity of any BKD/VTR Document;

5.11.    the existence or non-existence of any Obligor as a legal entity or the existence or non-existence of any corporate or other business relationship between any Obligor and Guarantor;

5.12.    any sale or assignment by any Landlord of this Agreement and/or BKD/VTR Document (including any assignment by any Landlord to any mortgagee);

5.13.    any default by Guarantor with respect to the Guaranty or any right of setoff, counterclaim or defense that Guarantor may or might have to its undertakings, liabilities and obligations hereunder, each and every such defense being hereby waived by Guarantor (other than the defense of payment of the Monetary Obligations, performance of the Performance Obligations and any defense pursuant to the terms of the BKD/VTR Documents);

5.14.    any other cause, whether similar or dissimilar to any of the foregoing, that would or could constitute a legal or equitable discharge of Guarantor (whether or not Guarantor shall have knowledge or notice thereof) other than payment in full of the Monetary Obligations and performance of the Performance Obligations; or

5.15.    any default or event of default in connection with any loan transaction in which any Landlord (or any Affiliate of any Landlord) provides financing to any Tenant, Guarantor, or any of their respective Affiliates.

Without in any way limiting the generality of the foregoing, Guarantor specifically agrees that if any Obligor’s obligations under the applicable BKD/VTR Documents are modified or amended with the express written consent of such Obligor(s) and the applicable Landlord(s), the Guaranty shall extend to such obligations as so amended or modified.

6.General Waivers. Guarantor hereby waives notice of (a) any Landlord’s acceptance of the Guaranty or its intention to act or its actions in reliance hereon; (b) the present existence or future incurring of any Guaranteed Obligations or any terms or amounts thereof or any change therein; (c) any default by any Obligor or any surety or guarantor; (d) the obtaining of any guaranty or surety agreement (in addition to the Guaranty); (e) the obtaining of any pledge, assignment or other security for any Guaranteed Obligations; (f) the release of any Obligor or any surety or guarantor; (g) the release of any collateral; (h) any other demands or notices whatsoever with respect to the Guaranteed Obligations or the Guaranty; and (i) presentment, demand, protest, nonpayment, intent to accelerate, and protest in relation to any instrument or agreement evidencing any Guaranteed Obligations. Guarantor hereby further waives (x) promptness and diligence; (y)

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all other notices, demands and protests, and all other formalities of every kind, in connection with the enforcement of any BKD/VTR Document or of the obligations of Guarantor with respect to the Guaranty, the omission of, or delay in, which, but for the provisions of this Section 6, would or could constitute grounds for relieving Guarantor of its obligations with respect to the Guaranty; and (z) any requirement that any Landlord protect, secure, perfect or insure any lien or security interest or other encumbrance or any property subject thereto or pursue or exhaust any right or take any action against or, with respect to, any Obligor or any other Person or any collateral (including any rights relating to marshalling of assets).

7.Waiver of Defenses. Without limiting the provisions of Section 5, Guarantor expressly waives any and all rights to defenses arising by reason of (a) if applicable, any “one-action” or “anti-deficiency” law or any other law that may prevent any Landlord from bringing any action, including a claim for deficiency against Guarantor, before or after such Landlord’s commencement or completion of any action against any Obligor; (b) ANY ELECTION OF REMEDIES BY ANY LANDLORD (INCLUDING WITHOUT LIMITATION ANY TERMINATION OF ANY BKD/VTR DOCUMENT) THAT DESTROYS OR OTHERWISE ADVERSELY AFFECTS GUARANTOR’S SUBROGATION RIGHTS OR GUARANTOR’S RIGHTS TO PROCEED AGAINST ANY OBLIGOR FOR REIMBURSEMENT; (c) any disability or other defense of any Obligor or of any other guarantor, or by reason of the cessation of any Obligor’s liability from any cause whatsoever, (other than the defense of payment of the Monetary Obligations, performance of the Performance Obligations and any defense pursuant to the terms of the BKD/VTR Documents); (d) any right to claim discharge of the Guaranteed Obligations on the basis of unjustified impairment of any collateral for the Guaranteed Obligations; (e) any change in the corporate relationship between Guarantor and any Obligor or any termination of such relationship; (f) any irregularity, defect or unauthorized action by any Landlord, any Obligor or any other guarantor or surety or any of their respective officers, directors or other agents in executing and delivering any instrument or agreements relating to the Guaranteed Obligations or in carrying out or attempting to carry out the terms of any such agreements; (g) any receivership, insolvency, bankruptcy, reorganization or similar proceeding by or against any Obligor, any Landlord or any other surety or guarantor; (h) any setoff, counterclaim, recoupment, deduction, or other right that Guarantor may have against any Ventas Party, any Obligor or any other Person for any reason whatsoever whether related to the Guaranteed Obligations or otherwise; (i) any assignment, endorsement or transfer; in whole or in part, of the Guaranteed Obligations, whether made with or without notice to or consent of Guarantor; (j) if the recovery from any Obligor or any other guarantor becomes barred by any statute of limitations or is otherwise prevented; or (k) any neglect, delay, omission, failure or refusal of Landlord to take or prosecute any action for the collection of any of the Guaranteed Obligations or to foreclose or take or prosecute any action in connection with any lien or right of security (including perfection thereof) existing or to exist in connection with, or as security for, any of the Guaranteed Obligations, it being the intention hereof that Guarantor shall remain liable as a principal on the Guaranteed Obligations notwithstanding any act, omission or event that might, but for the provisions hereof, otherwise operate as a legal or equitable discharge of Guarantor.

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8.Rejection of BKD/VTR Document. Guarantor agrees that, in the event of the rejection or disaffirmance of a BKD/VTR Document by any Obligor or any Obligor’s trustee in bankruptcy pursuant to any bankruptcy law or any other law affecting creditors rights, Guarantor will, if the applicable Landlord(s) so requests, assume all obligations and liabilities of such Obligor under the applicable BKD/VTR Document, to the same extent as if Guarantor was a party to such document and there had been no such rejection or disaffirmance; and Guarantor will confirm such assumption in writing at the request of such Landlord(s) upon or after such rejection or disaffirmance and such assumption will be without limitation upon Guarantor’s obligations under the Guaranty. Guarantor, upon such assumption, shall have all rights of the applicable Obligor under the applicable BKD/VTR Document to the fullest extent permitted by law.

9.Events of Default. The following events, following the expiration of all notice and cure periods (as applicable), are referred to in this Agreement as an “Event of Default”:

9.1.    If Guarantor fails to timely pay, observe or perform any of the Guaranteed Obligations;

9.2.    If Guarantor fails to deliver a Financial Covenant Report in the form and at the times required by Section 13, and such failure continues for a period of [***] ([***]) Business Days after receipt of notice from any Ventas Party of such failure;

9.3.    If a Change of Control occurs in violation of Section 4;

9.4.    If Guarantor fails to observe or perform, in any material respect, any of the other covenants in this Agreement which Guarantor is required to observe and perform (and not otherwise contemplated by this Section 9), in each case if not remedied within [***] ([***]) Business Days’ after receipt of notice thereof for any failure to timely make any monetary payment and [***] ([***]) days after receipt of notice thereof for any other default;

9.5.    Any intentional and material misrepresentation made by Guarantor to any Ventas Party in this Agreement or in any certificate or written report delivered by Guarantor pursuant to Section 13 of this Agreement;

9.6.    If Guarantor (i) admits in writing (other than to Ventas and its Affiliates) its inability to pay its debts generally as they become due; (ii) files a petition in bankruptcy or a petition to take advantage of any bankruptcy, reorganization or insolvency act; (iii) makes an assignment for the benefit of its creditors; (iv) consents to the appointment of a receiver for itself or for the whole or any substantial part of its property; or (v) files a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state thereof;

9.7.    If any petition is filed by or against Guarantor under federal bankruptcy laws, or any other proceeding is instituted by or against Guarantor seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or

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seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for Guarantor and such proceeding is not dismissed within ninety (90) days after institution thereof, or Guarantor or shall take any action to authorize or effect any of the actions set forth above in this Section 9.7;

9.8.    Guarantor shall fail to maintain, as of the last day of any calendar quarter following the consummation of a Change of Control in accordance with Section 4, a Tangible Net Worth greater than or equal to $600,000,000;

9.10.    If any receiver, trustee, custodian or other similar official shall be appointed for Guarantor and any such appointment is not dismissed within ninety (90) days after the date of such appointment and prior to the entry of a final, non-appealable order approving such appointment; or

a.a.If Guarantor is liquidated or dissolved, except in connection with a transaction permitted by the terms of this Agreement.

10.Subordination. Guarantor agrees that any claim or claims or liens or security interests it may now have or may in the future have against any Obligor are or shall be subordinate to such Obligor’s obligations to the applicable Landlords under the applicable BKD/VTR Documents until such Obligor’s obligations under such BKD/VTR Documents have been fully and indefeasibly performed and any payments thereunder are not subject to recovery by or on behalf of a trustee in bankruptcy. Guarantor waives all rights of subrogation against any Obligor for any amounts expended by Guarantor under this Agreement until such Obligor’s obligations under the applicable BKD/VTR Documents have been fully performed and any payments thereunder are not subject to recovery by or on behalf of a trustee in bankruptcy.

11.Reimbursement of Landlord. If any Landlord incurs any (i) reasonable out-of-pocket expenses in the enforcement of this Agreement or (ii) reasonable out-of-pocket expenses in the administration of this Agreement, in each case including but not limited to actual third party administrative costs and reasonable attorneys’ fees and disbursements, whether or not legal action is instituted, Guarantor shall pay the same within ten (10) Business Days of demand therefor by such Landlord, which shall be accompanied by reasonably detailed evidence of such expenses.

12.Waiver in Writing. None of the Landlords shall, by any act of omission or commission, be deemed to waive any of its rights or remedies hereunder unless such waiver be in writing and signed by such Landlord, and then only to the extent specifically set forth therein; a waiver of one event shall not be construed as continuing or as a bar to or waiver of such right or remedy on a subsequent event.

13.Reporting. Guarantor shall deliver to Ventas the following information:

13.1.    As soon as available, and in any event within forty-five (45) days after the end of each fiscal quarter, other than the fourth fiscal quarter of each fiscal year of Guarantor:

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13.1.1.    In electronic format, and presented on a consolidated basis, quarterly and year-to-date unaudited financial statements prepared for such fiscal quarter with respect to Guarantor, including a balance sheet, operating statement and cash flow statement as of the end of such fiscal quarter, for such fiscal quarter and for the portion of such fiscal year ending with such fiscal quarter;

13.1.2.    (i) An Officer’s Certificate substantially in the form of Exhibit B certifying as of the date thereof (A) that the items provided to Ventas under Section 13.1.1 are true and correct, in all material respects, and were prepared in accordance with GAAP, applied on a consistent basis, subject to changes resulting from audit and normal year-end audit adjustments, and (B) as of the date thereof whether, to Guarantor’s knowledge, there exists an Event of Default, and if such Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same, and (ii) from and after the occurrence of a Change of Control and/or during the Landlord Termination Right Period, a Financial Covenant Report for the applicable Trailing Four Quarter Period.

13.2.    As soon as available, and in any event within ninety (90) daysafter the end of each fiscal year of Guarantor:

13.2.1.    In electronic format, and presented on a consolidated basis, financial statements prepared for such fiscal year with respect to Guarantor, including a balance sheet, operating statement and cash flow statement as of the end of such fiscal year, for such fiscal year, audited by a “Big Four” accounting firm or other nationally recognized independent certified public accounting firm, in each case whose opinion shall be to the effect that such financial statements have been prepared in accordance with GAAP, applied on a consistent basis;

13.2.2.    (i) An Officer’s Certificate substantially in the form of Exhibit B certifying as of the date thereof whether, to Guarantor’s knowledge, there exists an Event of Default, and if such Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same, and (ii) from and after the occurrence of a Change of Control and/or during the Landlord Termination Right Period, a Financial Covenant Report for the applicable Trailing Four Quarter Period.

13.3.    Notwithstanding the foregoing, Guarantor shall be deemed to have delivered such reports described in Section 13.1.1 and Section 13.2.1 if Guarantor has filed or furnished reports with the SEC and such reports are publicly available on the SEC’s website.

14.Public Company Reporting. Guarantor shall deliver to Ventas in accordance with Section 18 (i) as soon as reasonably available copies of all Forms 10-K, 10-Q and 8-K, and any other annual, quarterly, monthly or other reports, notices, proxy statements, registration statements or other information that Guarantor or Affiliate of Guarantor files publicly with the SEC, and (ii) whether or not Guarantor is subject to Section 13(a) or 15(d) of the Exchange Act, at or prior to such time as required to be filed with the SEC, if Guarantor were subject to Section 13(a) or 15(d) of the Exchange Act, all Forms 10-K and 10-Q that Guarantor is required (or would be required, if Guarantor were subject to Section 13(a) or 15(d) of the Exchange Act) to file pursuant thereto.

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Notwithstanding the foregoing, Guarantor shall be deemed to have delivered such reports described in this Section 14 if Guarantor has filed or furnished reports with the SEC and such reports are publicly available on the SEC’s website.

15.Discussion of Financial Matters. Periodically, upon request by Ventas, Guarantor shall discuss with Ventas the deliveries made by Guarantor hereunder and other reasonable matters relating to Guarantor, the Tenant and the Properties, and Guarantor shall designate the appropriate representative for any such discussion. Without limitation of the foregoing, from time to time promptly following receipt of written notice from any Ventas Party to Guarantor (and in any event within thirty (30) days of such receipt), Guarantor shall permit and make arrangements for appropriate personnel of Guarantor, and of any manager of a Property as requested by such Ventas Party, to discuss with any Ventas Party’s representatives the business and operations of Guarantor, the Tenants and the Properties and to review, and make abstracts from and copies of, the books, accounts and records of Guarantor, Obligors and/or their respective Affiliates relative to any such Property(ies), and, unless an Event of Default has occurred and is continuing, conducted at such Ventas Party’s sole cost and expense (but only as to costs and expenses of such Ventas Party), in each case provided, and on the condition, that any such discussions shall not interfere with business operations. Unless otherwise agreed in writing by the applicable Ventas Party and Guarantor, all of the discussions referenced in this Section 15 shall occur during normal business hours.

16.Landlord Termination Right.

16.1.    During the Landlord Termination Right Period, Landlord shall have the right to market and sell, and/or to market and transition operations without a sale (e.g., a transaction pursuant to which Landlord retains its ownership of, and the applicable Lease terminates relative to, a particular Property and Landlord and a successor operator enter into a lease or management arrangement with respect to such Property), any Property or Properties; provided, notwithstanding the foregoing, (x) that in the case of a sale or transition without a sale, in one or a series of related transactions, of fewer than all the Properties, Landlord shall not have the right to terminate the applicable Leases with respect to such Property or Properties pursuant to this Section 16.1 if the Portfolio Coverage Ratio for the Trailing Four Quarter Period calculated with respect to all of the Properties (excluding such Property or Properties to be sold or transitioned without a sale) shall be less than the Portfolio Coverage Ratio for the Trailing Four Quarter Period calculated with respect to all of the Properties (including such Property or Properties to be sold or transitioned without a sale), in each case based on the most recent Financial Covenant Report delivered immediately prior to the date the binding agreement(s) for such proposed transaction become so binding and effective, and (y) Landlord may not exercise the termination right pursuant to this Section 16.1 except with respect to a Qualified Property. In the event Landlord elects to market and sell and/or to market and transition without a sale any Property or Properties pursuant to this Section 16.1, the following provisions shall apply with respect to such Property or Properties:

16.1.1.    In connection with the sale, or the transition without a sale, of any Property, Tenant shall comply with its obligations set forth in Section 8.2 of the A&R Master Lease;

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16.1.2.    Tenant shall use commercially reasonable efforts (i) to cooperate with Landlord and its Affiliates and any applicable potential purchaser and/or successor operator, and (ii) to assist Landlord and its Affiliates and any applicable potential purchaser and/or successor operator, in connection with the marketing and sale and/or marketing and transition without a sale process as reasonably requested by Landlord; and

16.1.3.    Upon the consummation of any sale or any transition without a sale of a Property(ies) as provided in this Section 16.1:

16.1.3.1.    the applicable Lease shall terminate with respect to any such Property(ies) in the manner described in Section 7.4.12 of the A&R Master Lease as of the applicable closing date of such sale or transition without a sale, as applicable; and

16.1.3.2.    Landlord shall be entitled to receive and retain all proceeds from any such sale or transition without a sale.

16.2.    Notwithstanding anything to the contrary contained in this Agreement or in any BKD/VTR Document, no sale or transition without a sale shall include any conveyance by any Tenant (or its Affiliates) of the Excluded Property (which assets shall remain the sole property to the Tenant(s) and their Affiliates).

17.Restrictive Covenants.

17.1.    Guarantor and its Affiliates shall be subject to the restrictive covenants contained in Section 5.6, and Exhibit G, of the A&R Master Lease.

17.2.    If Guarantor or any of its Affiliates fails to timely satisfy any Monetary Obligation (after all applicable notice and cure periods have expired) under any BKD/VTR Document and for so long as such failure is continuing, Guarantor shall not, directly or indirectly, declare, pay, or make any dividend or other distribution (whether in cash, securities or other property) with respect to any Capital Stock or other Equity Interest of Guarantor, or any payment (whether in cash, securities, or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, defeasance, cancellation or termination of any such Capital Stock or other Equity Interest, or on account of any return of capital to Guarantor’s stockholders, partners or members (or the equivalent Person thereof) or any option, warrant or other right to acquire any such dividend or other distribution or payment.

18.Notice. All notices, demands, requests, consents, approvals and other communications hereunder shall be in writing and delivered by hand, in which case such notice shall be deemed received upon delivery, or by reputable nationally recognized overnight courier service, in which case such notice shall be deemed received the next Business Day, addressed to the respective parties, as follows:

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To Guarantor:

Brookdale Senior Living Inc.

111 Westwood Place, Suite 200

Brentwood, TN 37027

Attention: General Counsel

With a copy to:

Brookdale Senior Living Inc.

6737 W. Washington Street, Suite 2300

Milwaukee, WI 53214

Attention: Legal Department

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

One Manhattan West

New York, New York 10001

Attn: Joseph A. Coco

To Landlord:

c/o Ventas, Inc.

500 North Hurstbourne Parkway

Suite 200

Lousiville, KY 40222

Attention: Lease Administration

With a copy to:

c/o Ventas, Inc.

353 North Clark Street

Suite 3300

Chicago, IL 60654

Attention: Legal Department

or to such other address as the parties hereto may hereunder designate in writing.

19.Termination and Reinstatement. The obligations of Guarantor with respect to the Guaranty shall automatically terminate after each Landlord has received, and not been required to disgorge any part of, indefeasible payment of all Monetary Obligations and all other sums due and owing with respect to the Guaranty. If payment is made by any Obligor or Guarantor, or by

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any third party, on the Monetary Obligations and thereafter any Landlord is forced to remit, rescind or restore the amount of that payment under any federal or state bankruptcy law or law for the relief of debtors or for any other reason, (a) the Guaranty shall be automatically reinstated to the extent of such amounts; (b) the amount of such payment shall be considered to have been unpaid at all times for the purposes of enforcement of this Agreement; (c) the obligations of the applicable Obligor guaranteed herein pursuant to the Guaranty shall be automatically reinstated to the extent of such payment, and (d) the other obligations of Guarantor pursuant to this Agreement shall be automatically reinstated with respect to such amounts.

20.Mortgage of Properties. If any Landlord proposes to grant a mortgage on or refinance any mortgage of any Property, Guarantor agrees to reasonably cooperate in the process, and cause its Affiliates (including Tenant) to reasonably cooperate in such process (in each case at no cost to Guarantor or its Affiliates), and shall permit such Landlord and the proposed mortgagee, at such Landlord’s expense, to meet with representatives of Guarantor reasonably designated by Guarantor at Guarantor’s offices to discuss Guarantor’s business and the operations of the Property(ies) on the condition that any such meetings shall not interfere with business operations. Guarantor’s and such Affiliates’ cooperation shall include agreeing to be bound by and comply with such terms as are reasonably requested by the mortgage lender or its servicer, provided that (i) the terms do not materially decrease the rights, or materially increase the liabilities of, Guarantor and/or its Affiliates, under any Lease or Guarantee (or loan document or other ancillary agreement) and are otherwise usual and customary for the same or similar financing transactions for that or similar mortgage lenders or agencies and (ii) neither Guarantor nor any of its Affiliates are required to pledge any of its assets or property in favor of any lender, servicer or any of their agents or representatives. On the reasonable request of such Landlord, Guarantor agrees to provide any such prospective mortgagee the information to which such Landlord is entitled hereunder, provided that if any such information is not publicly available, such nonpublic information shall be made available only on a confidential basis.

21.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, other than its doctrine regarding conflicts of laws. Each of Ventas and Guarantor, for itself and each of its respective Affiliates, (i) irrevocably submits to the personal jurisdiction of any federal or state court sitting in the State of Illinois with respect to any matter arising under this Agreement, (ii) consents to the exclusive jurisdiction of the courts of the State of Illinois and of the Federal courts sitting in the State of Illinois, (iii) consents to venue in the State of Illinois, and (iv) waives any right to stay, remove, or otherwise directly or indirectly interfere with such action based on such jurisdiction.

22.Miscellaneous.

22.1.    This Agreement may not be modified or amended except by a written agreement duly executed by the BKD Parties and the Ventas Parties; provided, however, that the Ventas Parties may, in their sole discretion, elect to waive any Event of Default, prospective or otherwise, by giving written notice to Guarantor.

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22.2.    Subject to the terms of Section 27, this Agreement shall be binding upon, and inure to the benefit of, each of the parties hereto and their respective successors and assigns as permitted hereunder; and the Guaranty shall be binding upon Guarantor, and shall inure to the benefit of each Landlord and its successors and assigns as permitted hereunder.

22.3.    If any term or provision of this Agreement is held to be illegal, invalid or unenforceable for any reason whatsoever, such term or provision will be enforced to the maximum extent permitted by applicable law and, in any event, such illegality, invalidity or unenforceability shall not affect the legality, validity or enforceability of the remainder of this Agreement; provided, however, that the parties hereto shall negotiate in good faith to amend this Agreement to modify any such illegal, invalid or unenforceable provision in order to carry out the intent and agreement of the parties as embodied herein to the maximum extent permitted by applicable law.

22.4.    As used herein, the terms “Tenant” and “Obligor” both include any successors and assigns with respect to the Leases. Whenever the words “including”, “include” or “includes” are used in this Agreement, they shall be interpreted in a non-exclusive manner as though the words “without limitation” immediately followed.

23.[Intentionally Deleted].

24.Certificate of Confirmation. Within ten (10) Business Days after request by any Landlord (which shall not be made more than three (3) times in any 365 day period), Guarantor shall deliver a certificate confirming that this Agreement is in full force and effect and unamended (or, if amended, specifying such amendment).

25.Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

“Capital Lease”, as applied to any Person, shall mean any lease of any property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, applied on a consistent basis, is required to be accounted for as a capital lease or financing lease on the balance sheet of that Person.

“Capital Stock” shall mean, with respect to any entity, any capital stock (including preferred stock), shares, interests, participation or other ownership interests (however designated) of such entity and any rights (other than debt securities convertible into or exchangeable for capital stock), warrants or options to purchase any thereof; provided, however, that leases of real property that provide for contingent rent based on the financial performance of the tenant shall not be deemed to be Capital Stock.

“Change of Control” shall mean the occurrence of any of the following:

(1) any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under

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the Exchange Act, or any successor provision) becomes the owner or acquires, directly or indirectly, in one transaction or a series of related transactions, by purchase, merger, issuance or otherwise, beneficially (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) or of record, in the aggregate more than fifty percent (50%) of the total voting power of the Voting Stock of Guarantor or obtains or possesses, directly or indirectly, Control of Guarantor;

(2) any dissolution, merger, consolidation, amalgamation, and/or other extraordinary transaction of or involving Guarantor with or into any other Person if Guarantor is not the surviving entity; or

(3) any disposition, in one or a series of related transactions, of all or substantially all of the assets of Guarantor and its Subsidiaries, taken as a whole.

Notwithstanding the foregoing or anything to the contrary contained in any BKD/VTR Document, (i) a “Change of Control” shall not include (a) any change in the composition of the board of directors of Guarantor not in connection with any of the transactions described in clauses (1)-(3) above, or (b) entering into or permitting to be entered into any agreement or arrangement to do or engage in any of the transactions described in clauses (1)-(3) above or to grant any option or other right to any Person to do or engage in any of the transactions described in clauses (1)-(3) above, (ii) the parties hereto agree and acknowledge that, as between and among the Ventas Parties and the BKD Parties and after giving full effect to the terms and conditions of the Original Letter Agreement (and the A&R Side Letter), the terms of the A&R Master Lease and the definition of Change of Control set forth in this Agreement shall supersede and replace in all respects each and every definition of “Change of Control” or “change of control”, or any restriction, prohibition or other limitation on any change of control, transfers, assignments, sales, dispositions, dividends, distributions, and other similar transactions that would result in a default or “Event of Default” under any BKD/VTR Document to the extent involving, prohibiting, restricting or limiting Guarantor or its subsidiaries, and (iii) for the purposes of the definition of Change of Control in this Agreement, all references to Guarantor shall be deemed to include Guarantor and any direct or indirect parent, and any direct or indirect subsidiary, individually and/or collectively, that owns, directly or indirectly, all or substantially all of the assets of Brookdale Senior Living Inc. or its successor.

“Consolidated Interest Expense” shall mean, for any period, all interest expense for Guarantor and its Consolidated Subsidiaries during such period determined on a consolidated basis for such period taken as a single accounting period in accordance with GAAP, including amortization of debt discount and premium, the interest component under Capital Leases (and also including, to the extent required under GAAP, the implied interest component under a Securitization) and all payments due under Interest Rate Protection Agreements by Guarantor and its Consolidated Subsidiaries determined on a consolidated basis (net of payments to such parties by any counter party thereunder). The applicable period of determination shall be the Trailing Four Quarter Period.

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“Consolidated Subsidiary” shall mean, as to any Person, at any date, any Subsidiary or other entity the accounts of which would be consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date.

“Control” shall mean, with respect to a Person, possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, through board representation, by contract or otherwise.

“Coverage Ratio” shall mean, for any Property and as of the applicable date of determination, the ratio of (A) the portion of the Portfolio Cash Flow allocable to such Property for the Trailing Four Quarter Period, to (B) the Lease Rent allocable to such Property for the Trailing Four Quarter Period.

“Entity” shall mean any Person other than an individual.

“Equity Interest” shall mean Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

“Financial Covenant Report” shall mean, with respect to a fiscal quarter or fiscal year of Guarantor, an Officer’s Certificate in substantially the form of Exhibit B setting forth (i) after the occurrence of a Change of Control, the Tangible Net Worth of Guarantor and its Consolidated Subsidiaries as of the last day of each calendar quarter end, (ii) during the Landlord Termination Right Period, (a) the Portfolio Coverage Ratio of Guarantor and its Consolidated Subsidiaries as of the last day of each calendar quarter end, and (b) the Coverage Ratio associated with each Property, (iii) the calculations on which such determinations were made, and (iv) supporting documentation for the calculations on which such determinations were made, which Officer’s Certificate shall certify that the calculations constitute a true and correct, in all material respects, statement of such information as of the date indicated therein.

“GAAP” shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by any such entity as may be in general use by significant segments of the U.S. accounting profession, consistently applied.

“Interest Rate Protection Agreements” shall mean any interest rate swap agreement, interest rate cap agreement, synthetic cap, collar or floor or other financial agreement or arrangement designed to protect Guarantor or any Consolidated Subsidiary against fluctuations in interest rates or to reduce the effect of any such fluctuations.

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“Landlord Termination Right Period” shall mean the period commencing on January 1, 2024 and ending on the date that Tenant delivers a binding Renewal Notice pursuant to Section 3.2 of the A&R Master Lease.

“Lease Rent” shall mean, (A) the monthly amount of Minimum Rent (as defined in the A&R Master Lease) then due under the A&R Master Lease, plus (B) the total Hypothetical Minimum Rent under the Separate Leases (each, as defined in the A&R Side Letter), plus (C) without duplication, the monthly amount of minimum rent under all other Leases.

“Officer’s Certificate” shall mean a certificate of Guarantor signed by the chairman of the board of directors, the president, any vice president, the secretary, the treasurer, the chief operating officer, the chief financial officer, the general counsel or any other officer authorized by the board of directors or by-laws of Guarantor, or the general partner or managing member of Guarantor.

“Person” shall mean any individual or entity, and the heirs, executors, administrators, legal representatives, successors and assigns of such Person where the context so requires.

“Portfolio Cash Flow” shall mean, for any period, the net income or loss of any Tenant arising from the applicable Property, as shown on the income statement of such Tenant prepared in accordance with GAAP, plus (a) the following, in each case without duplication, to the extent deducted in determining such net income or loss arising from the applicable Property: (i) depreciation and amortization, (ii) straight-line lease expense, net of amortization of below market rents, (iii) the amount of federal, state, local and foreign income taxes paid or payable; (iv) Consolidated Interest Expense, (v) Rent Expense, (vi) cash Capital Lease payments, (vii) non-cash impairment charges incurred, (viii) any other non-cash charges incurred as are reasonably acceptable to Landlords and in such amounts as are reasonably acceptable to Landlords, and (ix) provision for management fees; minus (b) the following, in each case without duplication, to the extent included in determining such net income or loss arising from the applicable Property: (i) interest income, (ii) straight-line lease income, net of amortization of above market rents and (iii) all non-cash items increasing such net income for such period; minus (c) an imputed management fee equal to five percent (5%) of gross revenues of such Property (net of contractual allowances). For the avoidance of doubt, income from Ancillary Services (as defined in the A&R Master Lease) (and the equivalent with respect to any Property under any Other Lease) shall be excluded in determining Portfolio Cash Flow. In calculating Portfolio Cash Flow, revenue and expenses shall be allocated among the Tenants and their Affiliates on a consistent basis during the term of this Agreement.

“Portfolio Coverage Ratio” shall mean, as of the applicable date of determination, the ratio of (A) the Portfolio Cash Flow for all of the Properties for the Trailing Four Quarter Period, to (B) the Lease Rent for the Trailing Four Quarter Period.

“Qualified Property” means any Property identified in writing by Landlord to Tenant for sale or transition pursuant to Section 16.1 with a Coverage Ratio for the Trailing Four

22

Quarter Period based on the most recent Financial Covenant Report, of less than 0.9x (so long as such notice if delivered to Tenant prior to the expiration of the Landlord Termination Right Period); provided, however, with respect to the Facilities located in Lisle, Illinois, (i) for the purposes of determining the satisfaction of the foregoing Coverage Ratio test, the IL/AL/SNF Facilities shall be deemed to be a one single Facility, and (ii) any exercise by Landlord of its termination right pursuant to Section 16 must result in a termination of the applicable Leases solely with respect to the IL/AL/SNF Facilities.

“Rent Expense” shall mean, for any period, for Guarantor and its Consolidated Subsidiaries, cash component of property rent expense under operating leases computed in accordance with GAAP.

“Restructuring Transaction” shall mean Guarantor and/or any Affiliates of Guarantor (a) leasing owned facilities and subleasing leased facilities to an Affiliate of Guarantor, (b) transferring management of owned and leased facilities to any third party (whether or not an Affiliate of Guarantor), whether by entering into management agreements or by the distribution, sale, or other assignment of management entities or management agreements and/or other transfers or dispositions, (c) causing the owned facilities or the leasehold interests in the leased facilities, and/or the management related thereto, to be owned directly or indirectly by any joint venture in which Guarantor or any Affiliate of Guarantor is a direct or indirect member and/or (d) otherwise restructuring the ownership or management of any one or more facilities or taking any other actions reasonably necessary or appropriate to permit Guarantor, any Affiliate of Guarantor, or any joint venture partner of Guarantor or such Affiliate to qualify for taxation as a REIT; provided, however, that none of the foregoing shall involve (i) the direct assignment of any interest in any Lease or a direct transfer of any facility subject to a Lease other than an assignment to an Affiliate of Guarantor (it being understood that subleases are not deemed to be an assignment of an interest in a lease for purposes of this clause (i)) or (ii) a transfer of any of any Landlord’s Personal Property or other property in which any Landlord is granted a security interest in accordance with the provisions of any Lease (except transfers (x) to an Affiliate of Guarantor, or (y) pursuant to a sublease to a subtenant, or (with respect to management related personalty) pursuant to an agreement with a manager who grants a security interest solely in respect of any such transferred property and, in the case of the subtenant and the manager, agrees at the end of the term of a Lease to turn such transferred property over to any Landlord in a manner consistent with that in which any Tenant would have been obligated to do so pursuant to the terms of any Lease.

“Securitization” shall mean a securitization of any assets in a single asset securitization or a pooled loan securitization.

“Senior Management” shall mean (i) with respect to Guarantor, those officers with a title of Division President, Executive Vice President, or higher, and (ii) with respect to any other Entity, those officers with authority and responsibilities in the management of such Entity substantially equivalent to those of the officers described in the foregoing clause (i).

23

“Subsidiary” shall mean, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other Entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the Capital Stock or more than 50% of the voting power of the Voting Stock are, as of such date, controlled or held, or (b) that is, as of such date, Controlled by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“Tangible Net Worth” shall mean, as of any date of determination, an amount equal to, as determined in accordance with GAAP, (i) the total stockholders’ equity of Guarantor, minus (ii) total consolidated net intangible assets of Guarantor and its Consolidated Subsidiaries, in each case as shown on Guarantor’s balance sheet as of the last day of the fiscal quarter most recently ended on or prior to such date of determination.

“Trailing Four Quarter Period” shall mean, with respect to the applicable date of determination, the most recent period of four consecutive full fiscal quarters of Guarantor and its Consolidated Subsidiaries ending on or prior to such date.

“Voting Stock” of any Person as of any date shall mean the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors or managers of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

26.Confidentiality; Suspension Right. Each Ventas Party and each BKD Party hereby acknowledges and agrees that any information provided by any party to the other pursuant to this Agreement is confidential and shall not be shared by the receiving party with any other Person, except for disclosures: (a) to, so long as such Persons agree to maintain the confidential nature thereof, any Ventas Party’s or BKD Party’s, as applicable, actual or prospective (i) financing sources, (ii) purchasers or assignees, (iii) partners, (iv) investors and (v) replacement tenants (provided that the Ventas Parties shall not disclose any Proprietary Information to replacement tenants without Tenant’s prior written consent); (b) to legal counsel, accountants and other professional advisors to any Ventas Party or BKD Party, as applicable, so long as such Persons agree to maintain the confidential nature thereof; (c) pursuant to the order of any court or administrative agency or in any pending legal or administrative proceeding, to the extent necessary in support of motions, filings, or other proceedings in court as required to be undertaken pursuant to this Agreement, or otherwise as required by applicable Legal Requirements, provided that any party is given a reasonable opportunity to obtain a protective order in connection with such disclosure; (d) in connection with reporting of Facility portfolio based performance and other Facility portfolio information in filings with Securities and Exchange Commission by Landlord and its Affiliates of the type customarily publicly disclosed by publicly traded healthcare real estate investment trusts; (f) in compliance with any filing requirements, regulations or other requirements of, or upon the request or demand of, any stock exchange (or other similar entity) on which any Ventas Party’s or BKD Party’s (or any

24

Person Controlling any of the foregoing, as applicable) shares (or other equity interests) are listed, or of any other Governmental Authority having jurisdiction over any Ventas Party or BKD Party; and (g) in connection with reporting and/or filings with the Securities and Exchange Commission by the BKD Parties and their Affiliates or the Ventas Parties and their Affiliates. For the avoidance of doubt and notwithstanding the foregoing, each Ventas Party and BKD Party acknowledges and agrees that this Agreement itself may be a publicly filed document. In connection with any disclosures made pursuant to item (a) above, the Ventas Parties shall use commercially reasonable efforts to obtain confidentiality agreements from any parties to whom it discloses financial information or other sensitive business information regarding any BKD Party. Any Ventas Party shall have the right, by written notice to Guarantor, to temporarily suspend the BKD Parties’ obligation to provide the Ventas Parties with Information pursuant to the terms of this Agreement, the A&R Master Lease or otherwise for a specified period of time or for a period of time terminating upon the occurrence of a specified event, including notice from a Ventas Party (the “Suspension Period”, and the Information identified by a Ventas Party in any such notice as being subject to the Suspension Period, the “Suspended Information”). During the Suspension Period, the BKD Parties shall not deliver Suspended Information to any Ventas Party and shall, if requested by a Ventas Party, deliver such Suspended Information to a third party in a confidential relationship with such Ventas Party (provided Ventas shall be responsible and obligated hereunder for any disclosure of Suspended Information by such third party that, if disclosed by Ventas, would constitute or result in a violation of the terms of this Agreement). Upon expiration or termination of the Suspension Period and written request from Ventas, the BKD Parties will deliver to the Ventas Parties within three Business Days all Suspended Information that the BKD Parties otherwise would have been required to deliver (and not previously delivered to any third party pursuant to Ventas’ direction) during the Suspension Period and shall immediately, once again, be subject to all of the information delivery requirements set forth in this Agreement, the A&R Master Lease and any other documents between or among the Ventas Parties and the BKD Parties. The term “Information” means all and any data, reports, forecasts, records, agreements and other information that is material or proprietary and required to be furnished after the Effective Date by the BKD Parties or by any of their representatives or advisors to the Ventas Parties.

27.Assignment of Landlord Interests. Notwithstanding anything to the contrary contained in this Agreement or in any Lease or other agreement by, between and/or among any of the Ventas Parties, on the one hand, and any of the BKD Parties, on the other hand, none of the Ventas Parties shall have the right to sell, assign, transfer or otherwise dispose of any of its interest in any Lease unless the transferee agrees to be bound by the terms and conditions of Section 4 of this Agreement. In addition, and subject to the foregoing, if any Ventas Party intends to sell, assign, transfer or otherwise dispose of its interest in any Lease or other agreement that is guaranteed pursuant to the terms of this Agreement (each, an “Assigned Agreement”) to any Person that is not an Affiliate of Ventas (an “Assigned Agreement Transferee”), Landlord shall have the right to assign its rights and obligations under this Agreement with respect to the Assigned Agreement, but only if the following conditions are satisfied: (A) the COC Fee shall be split proportionately (or as otherwise determined by Landlord, provided the total COC Fee is not increased) among the Ventas Parties and the Assigned Agreement Transferee based on the minimum or base rents payable with respect to the Facilities, and (B) the Assigned Agreement Transferee shall join as a party to this

25

Agreement and be bound by all terms and conditions of this Agreement. In lieu of assigning its rights and obligations under this Agreement with respect to any Assigned Agreement, Guarantor shall execute and deliver to the Assigned Agreement Transferee a guaranty in the same form and substance with respect to the Assigned Agreement and the duties, liabilities and other obligations of the Assigned Agreement Transferee under the Assigned Agreement as this Agreement with respect to the duties, liabilities and other obligations of the Obligors under the BKD/VTR Documents, subject to the foregoing clauses (A) and (B).

[SIGNATURE PAGE FOLLOWS]

26

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and its corporate seals to be hereunto affixed and attested by its officers thereunto duly authorized.

BROOKDALE SENIOR LIVING INC.,

a Delaware corporation

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

[Signature Page to Amended and Restated Guaranty]

TENANTS

BROOKDALE LIVING COMMUNITIES OF ILLINOIS-GV, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-THE HALLMARK, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-KENWOOD OF LAKE VIEW, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-GABLES AT FARMINGTON, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-DEVONSHIRE OF HOFFMAN ESTATES, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

[Signature Page to Amended and Restated Guaranty]

BLC-SPRINGS AT EAST MESA, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-RIVER BAY CLUB, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-WOODSIDE TERRACE, L.P., a Delaware limited partnership

By: BLC-Woodside Terrace, LLC, a Delaware limited liability company, its general partner

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-ATRIUM AT SAN JOSE, L.P., a Delaware limited partnership

By: BLC-Atrium at San Jose, LLC, a Delaware limited liability company, its general partner

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

[Signature Page to Amended and Restated Guaranty]

BLC-BROOKDALE PLACE OF SAN MARCOS, L.P., a Delaware limited partnership

By: BLC-Brookdale Place of San Marcos, LLC, a Delaware limited liability company, its general partner

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-PONCE DE LEON, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-PARK PLACE, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-HAWTHORNE LAKES, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

[Signature Page to Amended and Restated Guaranty]

BLC-THE WILLOWS, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-BRENDENWOOD, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-CHATFIELD, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BROOKDALE LIVING COMMUNITIES OF FLORIDA, INC., a Delaware corporation

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BROOKDALE LIVING COMMUNITIES OF ILLINOIS-DNC, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

[Signature Page to Amended and Restated Guaranty]

SW ASSISTED LIVING, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

SUMMERVILLE AT FAIRWOOD MANOR, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

SUMMERVILLE AT HERITAGE PLACE, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

ALS LEASING, INC., a Delaware corporation

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

[Signature Page to Amended and Restated Guaranty]

ASSISTED LIVING PROPERTIES, INC., a Kansas corporation

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

ACKNOWLEDGEMENT

STATE OF TENNESSEE        )

) :ss.:

COUNTY OF WILLIAMSON    )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared Assisted Living Properties, Inc., a Kansas corporation (“Company”), by George T. Hicks, its Executive Vice President and Treasurer, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Brentwood, Tennessee, this 25^th day of July, 2020.

(SEAL) /s/ Linda B. DeVault                

Notary Public

Print Name: Linda B. DeVault        

My commission expires: October 23, 2023    

Acting in the County of: Williamson        

[Signature Page to Amended and Restated Guaranty]

ALS PROPERTIES TENANT I, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

ACKNOWLEDGEMENT

STATE OF TENNESSEE        )

) :ss.:

COUNTY OF WILLIAMSON    )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared ALS Properties Tenant I, LLC, a Delaware limited liability company (“Company”), by George T. Hicks, its Executive Vice President and Treasurer, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Brentwood, Tennessee, this 25^th day of July, 2020.

(SEAL) /s/ Linda B. DeVault                

Notary Public

Print Name: Linda B. DeVault        

My commission expires: October 23, 2023    

Acting in the County of: Williamson        

[Signature Page to Amended and Restated Guaranty]

BROOKDALE SENIOR LIVING COMMUNITIES, INC., a Delaware corporation (f/k/a Alterra Healthcare Corporation and Alternative Living

Services, Inc.)

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

ACKNOWLEDGEMENT

STATE OF TENNESSEE        )

) :ss.:

COUNTY OF WILLIAMSON    )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared Brookdale Senior Living Communities, Inc., a Delaware corporation (“Company”), by George T. Hicks, its Executive Vice President and Treasurer, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Brentwood, Tennessee, this 25^th day of July, 2020.

(SEAL) /s/ Linda B. DeVault                

Notary Public

Print Name: Linda B. DeVault        

My commission expires: October 23, 2023    

Acting in the County of: Williamson        

[Signature Page to Amended and Restated Guaranty]

SUMMERVILLE 14 LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

SUMMERVILLE 15 LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

SUMMERVILLE 16 LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-THE HERITAGE OF DES PLAINES, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

BLC-DEVONSHIRE OF LISLE, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

[Signature Page to Amended and Restated Guaranty]

BLC-EDINA PARK PLAZA, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

SUMMERVILLE 5 LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

SUMMERVILLE 4 LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

SUMMERVILLE 17 LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

SUMMERVILLE AT RIDGEWOOD GARDENS LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

[Signature Page to Amended and Restated Guaranty]

ALS PROPERTIES TENANT II, LLC, a Delaware limited liability company

By: /s/ George T. Hicks            

Name: George T. Hicks

Title: Executive Vice President - Finance and Treasurer

[Signature Page to Amended and Restated Guaranty]

VENTAS:                    VENTAS, INC.

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Its: Executive Vice President

LANDLORDS: VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited partnership

By: Ventas, Inc., a Delaware corporation, its general partner

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Executive Vice President

PSLT-ALS PROPERTIES I, LLC, a Delaware limited liability company

By: PSLT-ALS Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

ACKNOWLEDGEMENT

STATE OF ILLINOIS            )

) :ss.:

COUNTY OF COOK            )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared Ventas Provident, LLC, a Delaware limited liability company (“Company”), the sole member of PSLT GP, LLC, the general partner of PSLT OP, L.P., the sole member of PSLT-ALS Properties Holdings, LLC, the sole member of PSLT-ALS Properties I, LLC, by J. Justin Hutchens, its Authorized Signatory, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Chicago, Illinois, this 24^th day of July, 2020.

(SEAL)                    /s/ Theresa M. Kwasinski        

Notary Public

Print Name: Theresa M. Kwasinski        

My commission expires: August 5, 2022    

Acting in the County of: Cook        

PSLT-ALS PROPERTIES II, LLC, a Delaware limited liability company

By: PSLT-ALS Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

PSLT-ALS PROPERTIES IV, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

PSLT-ALS PROPERTIES III, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

ACKNOWLEDGEMENT

STATE OF ILLINOIS            )

) :ss.:

COUNTY OF COOK            )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared PSLT-ALS PROPERTIES III, LLC, a Delaware limited liability company (“Company”), by J. Justin Hutchens, its Authorized Signatory, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Chicago, Illinois, this 24^th day of July, 2020.

(SEAL)                    /s/ Theresa M. Kwasinski        

Notary Public

Print Name: Theresa M. Kwasinski        

My commission expires: August 5, 2022    

Acting in the County of: Cook        

BROOKDALE LIVING COMMUNITIES OF ILLINOIS-2960, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF ILLINOIS-HV, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

RIVER OAKS PARTNERS, an Illinois general partnership

By: Brookdale Holdings, LLC, its managing partner

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF MINNESOTA, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF CONNECTICUT, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

PSLT-BLC PROPERTIES HOLDINGS, LLC, a Delaware limited liability company

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

THE PONDS OF PEMBROKE LIMITED PARTNERSHIP, an Illinois general partnership

By: Brookdale Holdings, LLC, its general partner

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF ARIZONA-EM, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF MASSACHUSETTS-RB, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF CALIFORNIA-RC, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF CALIFORNIA, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BLC OF CALIFORNIA-SAN MARCOS, L.P., a Delaware limited partnership

By: Brookdale Living Communities of California-San Marcos, LLC, its general partner

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF WASHINGTON-PP, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF ILLINOIS-II, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF NEW JERSEY, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

BROOKDALE LIVING COMMUNITIES OF FLORIDA-CL, LLC, a Delaware limited liability company

By: PSLT-BLC Properties Holdings, LLC, its sole member

By: PSLT OP, L.P., its sole member

By: PSLT GP, LLC, its general partner

By: Ventas Provident, LLC, its sole member

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

NATIONWIDE HEALTH PROPERTIES, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

ACKNOWLEDGEMENT

STATE OF ILLINOIS            )

) :ss.:

COUNTY OF COOK            )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared Nationwide Health Properties, LLC, a Delaware limited liability company corporation (“Company”), by J. Justin Hutchens, its Authorized Signatory, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Chicago, Illinois, this 24^th day of July, 2020.

(SEAL)                    /s/ Theresa M. Kwasinski        

Notary Public

Print Name: Theresa M. Kwasinski        

My commission expires: August 5, 2022    

Acting in the County of: Cook        

2010 UNION LIMITED PARTNERSHIP, a Washington limited partnership

By: Nationwide Health Properties, LLC, its general partner

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

NH TEXAS PROPERTIES LIMITED PARTNERSHIP, a Texas limited partnership

By: MLD Texas Corporation, its general partner

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

MLD PROPERTIES, INC., a Delaware corporation

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

JER/NHP SENIOR LIVING ACQUISITION, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

ACKNOWLEDGEMENT

STATE OF ILLINOIS            )

) :ss.:

COUNTY OF COOK            )

Before me, the undersigned, a Notary Public in and for said County and State, personally appeared JER/NHP Senior Living Acquisition, LLC, a Delaware limited liability company (“Company”), by J. Justin Hutchens, its Authorized Signatory, which Company executed the foregoing instrument, who acknowledged that she/he did sign the foregoing instrument for and on behalf of the Company, being thereunto duly authorized and that the same is her/his free act and deed individually and in said capacity and the free and deed of the Company.

IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Chicago, Illinois, this 24^th day of July, 2020.

(SEAL)                    /s/ Theresa M. Kwasinski        

Notary Public

Print Name: Theresa M. Kwasinski        

My commission expires: August 5, 2022    

Acting in the County of: Cook        

JER/NHP SENIOR LIVING KANSAS, INC., a Kansas corporation

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

JER/NHP SENIOR LIVING TEXAS, L.P., a Texas limited partnership

By: JER/NHP Management Texas, LLC, its general partner

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

MLD PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership

By: MLD Properties II, Inc., its general partner

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

VENTAS FAIRWOOD, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

VENTAS FRAMINGHAM, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

VENTAS WHITEHALL ESTATES, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

VTR-EMRTS HOLDINGS, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

NHPMS, LLC, a Delaware limited liability company

By: /s/ J. Justin Hutchens            

Name: J. Justin Hutchens

Title: Authorized Signatory

Exhibits listed below have been omitted pursuant to Item 601(a)(5) of Regulation S-K:

Exhibit A: Landlord Parties, Tenant Parties and Leases

Exhibit B: Form of Officer’s Certificate

Exhibit C: Form of Reaffirmation/Assumption Certificate

EX-10.4

Exhibit 10.4

EXECUTION VERSION

WARRANT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR QUALIFIED UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE LAW.

Warrant Certificate No.: W-1

Original Issue Date: July 26, 2020

FOR VALUE RECEIVED, Brookdale Senior Living Inc., a Delaware corporation (the “Company”), hereby certifies that Ventas, Inc., a Delaware corporation, or its registered assigns (the “Holder”) is entitled to purchase from the Company 16,300,000 (subject to adjustment as provided herein) duly authorized, validly issued, fully paid and nonassessable shares of Common Stock at a purchase price per share of $3.00 (subject to adjustment as provided herein, the “Exercise Price”), all subject to the terms, conditions and adjustments set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.

This Warrant has been issued pursuant to the terms of the Letter Agreement, dated as of July 26, 2020 (the “Letter Agreement”), between the Company and the Holder.

1.Definitions. As used in this Warrant, the following terms have the respective meanings set forth below:

“Affiliates” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of that Person, whether through the ability to exercise voting power, by contract or otherwise.

“Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price in effect as of the Exercise Date in accordance with the terms of this Warrant.

“Board” means the board of directors of the Company.

“Business Day” means any day, except a Saturday, Sunday or legal holiday, on which banking institutions in New York City are authorized or obligated by law or executive order to close.

“Cash Settlement Election” has the meaning set forth in the Letter Agreement.

“Code” has the meaning set forth in Section 3(b).

“Common Stock” means the common stock, par value $0.01 per share, of the Company, and any capital stock into which such Common Stock shall have been converted, exchanged or reclassified following the date hereof.

“Company” has the meaning set forth in the preamble.

“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.

“Distribution Fair Market Value” means, with respect to any security or other assets, the fair market value of such security or other assets as determined by the Board of Directors of the Company in good faith; provided, that in the event of any dividend or distribution of securities which become publicly traded upon completion of the dividend or distribution, the Distribution Fair Market Value of such securities shall be the volume weighted average of the closing sales prices of such securities on all domestic securities exchanges on which such securities may at the time be listed, for the five trading days following the effective date of such dividend or distribution. For the avoidance of doubt, the Distribution Fair Market Value of cash shall be the amount of such cash.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“Exercise Date” means, for any given exercise of this Warrant, the date on which the Holder has delivered the Exercise Agreement, the Warrant and the Aggregate Exercise Price as set forth in Section 3(a), provided that such deliveries shall have been made at or prior to 5:00 p.m., New York City time, on such date and such date is a Business Day. If such date is not a Business Day, the Exercise Date shall be the Business Day immediately following such date.

“Exercise Agreement” has the meaning set forth in Section 3(a)(i).

“Exercise Period” has the meaning set forth in Section 2.

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“Exercise Price” has the meaning set forth in the preamble.

“Fair Market Value” means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Common Stock for such day on all domestic securities exchanges on which the Common Stock may at the time be listed; (b) if there have been no sales of the Common Stock on any such exchange on any such day, the average of the highest bid and lowest asked prices for the Common Stock on all such exchanges at the end of such day; (c) if on any such day the Common Stock is not listed on a domestic securities exchange, the closing sales price of the Common Stock as quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association for such day; or (d) if there have been no sales of the Common Stock on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest asked prices for the Common Stock quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Common Stock is listed on any domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Stock is not listed on any domestic securities exchange or quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association, the “Fair Market Value” of the Common Stock shall be the fair market value per share as determined by the Board in good faith.

“Holder” has the meaning set forth in the preamble.

“Letter Agreement” has the meaning set forth in the preamble.

“Options” means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.

“Original Issue Date” means July 26, 2020, the date on which the Warrant was issued by the Company pursuant to the Letter Agreement.

“OTC Bulletin Board” means the Financial Industry Regulatory Authority OTC Bulletin Board electronic inter-dealer quotation system.

“Ownership Limit” has the meaning set forth in the Letter Agreement.

“Person” means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization or government or department or agency thereof.

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“Pink OTC Markets” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB and OTC Pink.

“Pro Rata Repurchase” means any purchase of shares of Common Stock by the Company or any Affiliate thereof pursuant to (A) any tender offer or exchange offer subject to Section 13(e) of the Exchange Act, or (B) pursuant to any other offer available to substantially all holders of Common Stock, in each case whether for cash, shares of capital stock, other securities (including rights), evidences of indebtedness or any other assets (whether of the Company, any subsidiary thereof or any other Person), or any combination thereof, effected while this Warrant is outstanding; provided, however, that “Pro Rata Repurchase” shall not include any purchase of shares by the Company or any Affiliate thereof made (i) in accordance with the requirements of Rule 10b-18 as in effect under the Exchange Act, or (ii) pursuant to an open-market share repurchase program or a negotiated derivative transaction with one or more bank counterparties. The “Pro Rata Repurchase Effective Date” shall mean the date of acceptance of shares for purchase or exchange under any tender or exchange offer which is a Pro Rata Repurchase or the date of purchase with respect to any Pro Rata Repurchase that is not a tender or exchange offer.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.

“Warrant Shares” means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.

2.Term of Warrant. Subject to the terms and conditions hereof, at any time or from time to time after the date hereof and prior to 5:00 p.m., New York City time, on December 31, 2025 or, if such day is not a Business Day, on the next preceding Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).

3.Exercise of Warrant. 

(a)Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:

4

(i)surrender of this Warrant to the Company at its then principal executive offices (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A (each, an “Exercise Agreement”), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and

(ii)payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b). Notwithstanding anything to the contrary set forth in this Warrant, if the Warrant is exercised, in whole or in part, in connection with the exercise of the Holder’s registration rights in accordance with the Registration Rights Agreement between the Holder and the Company, dated as of the date of this Warrant, this Warrant shall not be deemed to have been exercised to the extent that the applicable Warrant Shares are not sold in the applicable offering.

(b)Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made, at the option of the Holder as expressed in the Exercise Agreement, by the following methods:

(i)by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price;

(ii)by instructing the Company to withhold a number of Warrant Shares then issuable upon exercise of this Warrant with an aggregate Fair Market Value as of the Exercise Date equal to such Aggregate Exercise Price; or

(iii)any combination of the foregoing.

In the event of any withholding of Warrant Shares pursuant to clause (ii) or (iii) above where the number of shares whose value is equal to the Aggregate Exercise Price is not a whole number, the number of shares withheld by or surrendered to the Company shall be rounded up to the nearest whole shares and the Company shall make a cash payment to the Holder (by delivery of a certified or official bank check or by wire transfer of immediately available funds) based on the incremental fraction of a share being so withheld by or surrendered to the Company in an amount equal to the product of (x) such incremental fraction of a share being so withheld or surrendered multiplied by (y) the Fair Market Value per Warrant Share as of the Exercise Date. In the event of any withholding of Warrant Shares pursuant to clause (ii) or (iii) above, the Company and the Holder agree (x) that the surrender of this Warrant or portion thereof in exchange for the receipt of Warrant Shares is intended to be treated as a recapitalization under Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended (the “Code”), and (y) not to file any tax return inconsistent with the foregoing except to the extent otherwise

5

required by a change in law or a “determination” within the meaning of Section 1313(a) of the Code.

(c)Delivery of Warrant Shares. Upon receipt by the Company of the Exercise Agreement, surrender of this Warrant and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within two (2) Business Days thereafter, at the option of the Holder, either (A) execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, (B) cause to be issued to the Holder by entry on the books of the Company (or the Company’s transfer agent, if any) or (C) credit the account of the Holder’s prime broker with the Depository Trust Company through its Deposit/Withdrawal at Custodian system if the Company is then a participant in such system, the Warrant Shares issuable upon such exercise, in each case, together with cash in lieu of any fraction of a share, as provided in Section 3(d) hereof. The Warrant Shares so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Agreement and shall be registered in the name of the Holder or, subject to compliance with Section 5 below, such other Person’s name as shall be designated in the Exercise Agreement. This Warrant shall be deemed to have been exercised and such Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date. Notwithstanding the foregoing, the Company shall not be required to deliver Warrant Shares through the system of the Depositary Trust Company if it determines that pursuant to Section 8 a legend is required to be included on such Warrant Shares being delivered.

(d)Limitation on delivery of Warrant Shares. Notwithstanding anything contained herein to the contrary, if the Holder has made a Cash Settlement Election pursuant to the Letter Agreement and at the time of issuance of Warrant Shares pursuant to an exercise of this Warrant, the Company would be obligated to issue to the Holder a number of Warrant Shares that would, in the absence of the Cash Settlement Election, cause the Ownership Condition to not be met, the Company shall instead (i) issue to the Holder the maximum number of Warrant Shares that would allow the Ownership Condition to continue to be met, and (ii) pay cash in lieu of the remaining Warrant Shares that would otherwise be issued to the Holder pursuant to such exercise (calculated based on the Fair Market Value on the Exercise Date). For the avoidance of doubt, any Cash Settlement Election shall not affect the determination of the number of Warrant Shares issuable upon exercise of this Warrant for purposes of determining any adjustments pursuant to Section 4, or for any other purpose other than whether this Section 3(d) limits the number of Warrant Shares to be issued in connection with an actual exercise of this Warrant.

(e)Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that

6

the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.

(f)Delivery of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates, entry on the books or credit representing the Warrant Shares being issued in accordance with Section 3(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.

(g)Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this Warrant, the Company hereby represents, covenants and agrees:

(i)This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued. This Warrant constitutes, and any Warrant issued in substation for or replacement of this Warrant shall constitute, a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

(ii)All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of (and do not trigger) any preemptive or similar rights of any stockholder of the Company and are free and clear of all taxes, liens and charges.

(iii)The Company shall (a) take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance)and (b), if applicable, use reasonable best efforts to obtain clearance under the Hart-Scott-Rodino Antitrust Improvements Act as expeditiously as possible, including but not limited to, filing the

7

notification form and cooperating in responding to any questions or information requests from any governmental authority.

(iv)The Company shall use its best efforts to cause the Warrant Shares, immediately upon such exercise, to be listed on any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares are listed at the time of such exercise.

(v)The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.

(h)Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a sale of the Company (pursuant to a merger, sale of stock, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.

(i)Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

4.Adjustment to Exercise Price and Number of Warrant Shares. The Exercise Price, the number of Warrant Shares issuable upon exercise of this Warrant and the consideration this Warrant is exercisable into shall be subject to adjustment from time to time as provided in this Section 4 (in each case, after taking into consideration any prior adjustments pursuant to this Section 4).

(a)Adjustment to Exercise Price and Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, (i) declare, order, pay or make a dividend

8

or any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, (ii) subdivide (by any stock split, recapitalization, reclassification or otherwise) its outstanding shares of Common Stock into a greater number of shares, or (iii) combine (by combination, reverse stock split, recapitalization, reclassification or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the number of Warrant Shares issuable upon exercise of this Warrant in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision or combination shall be proportionately adjusted so that the Holder shall be entitled to purchase the number of shares of Common Stock which such Holder would have owned or been entitled to receive in respect of the shares of Common Stock subject to this Warrant after such date had this Warrant been exercised in full immediately prior to such record date or effective date, as the case may be. In the event of such adjustment, the Exercise Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision or combination shall be immediately adjusted to the number obtained by dividing (x) the product of (1) the number of Warrant Shares issuable upon the exercise of this Warrant in full before the adjustment determined pursuant to the immediately preceding sentence and (2) the Exercise Price in effect immediately prior to the record or effective date, as the case may be, for the dividend, distribution, split, subdivision, combination or reclassification giving rise to such adjustment by (y) the new number of Warrant Shares issuable upon exercise of the Warrant in full determined pursuant to the immediately preceding sentence. Any adjustment under this Section 4(a) shall become effective at the close of business on the record date for such dividend or distribution or the date such subdivision or combination becomes effective, as the case may be. In the event that such dividend or distribution is not so made, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant then in effect shall be readjusted, effective as of the date when the Board determines not to pay or make such dividend or distribution payable in shares of Common Stock or in Options or Convertible Securities, as the case may be, to the Exercise Price that would then be in effect and the number of Warrant Shares that would then be issuable upon exercise of this Warrant if such record date had not been fixed.

(b)Adjustment to Exercise Price Upon Cash and Non-Cash Dividends. If the Company shall, at any time or from time to time after the Original Issue Date, declare, order, pay or make a dividend or other distribution (by spin-off or otherwise) on shares of Common Stock in cash, shares of capital stock, other securities (including rights), evidences of indebtedness or any other assets (whether of the Company, any subsidiary thereof or any other Person), or any combination thereof, excluding (i) dividends or distributions subject to adjustment pursuant to Section 4(a) or (ii) dividends or distributions of rights in connection with the adoption of a stockholder rights plan in customary form (including with respect to the receipt of such rights in respect of shares of Common Stock (including Warrant Shares) issued subsequent to the initial dividend or distribution of such rights), then in each such case, the Exercise Price in effect immediately prior thereto shall be reduced by the Distribution Fair Market Value of the

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cash, securities and/or any other assets, as applicable, to be so paid or distributed in such dividend or distribution in respect of one share of Common Stock (in each case as of the record date of such dividend or distribution). Any adjustment under this Section 4(b) shall become effective at the close of business on the record date for the dividend or distribution. Notwithstanding the foregoing, in the event that the Distribution Fair Market Value of the cash, securities and/or any other assets, as applicable, to be so paid or distributed in such dividend or distribution in respect of one share of Common Stock (in each case as of the record date of such dividend or distribution) is equal to or greater than the Exercise Price on such record date, then, in lieu of any adjustment to the Exercise Price under the foregoing provisions of this Section 4(b) in respect of such dividend or distribution, proper provision shall be made such that upon exercise of this Warrant, the Holder shall receive, in addition to the applicable Warrant Shares, the amount and kind of such cash, securities and/or any other assets such Holder would have received had such Holder exercised this Warrant immediately prior to such record date. In the event that such dividend or other distribution is not so made, the Exercise Price then in effect shall be readjusted, effective as of the date when the Board determines not to distribute such cash, shares of capital stock, other securities (including rights), evidences of indebtedness or any other assets (whether of the Company, any subsidiary thereof or any other Person), or any combination thereof, as the case may be, to the Exercise Price that would then be in effect if such record date had not been fixed.

(c)Certain Repurchases of Common Stock. In case the Company effects a Pro Rata Repurchase of Common Stock, then the Exercise Price shall be reduced to the price determined by multiplying the Exercise Price in effect immediately prior to the Pro Rata Repurchase Effective Date by a fraction of which the numerator shall be (i) the product of (x) the number of shares of Common Stock outstanding immediately prior to such Pro Rata Repurchase and (y) the Fair Market Value of a share of Common Stock on the trading day immediately preceding the first public announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata Repurchase, minus (ii) the aggregate purchase price of the Pro Rata Repurchase, and of which the denominator shall be the product of (x) the number of shares of Common Stock outstanding immediately prior to such Pro Rata Repurchase minus the number of shares of Common Stock so repurchased and (y) the Fair Market Value per share of Common Stock on the trading day immediately preceding the first public announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata Repurchase. In such event, the number of shares of Common Stock issuable upon the exercise of this Warrant in full shall be increased to the number obtained by dividing (i) the product of (x) the number of shares of Common Stock issuable upon the exercise of this Warrant before such adjustment, and (y) the Exercise Price in effect immediately prior to the Pro Rata Repurchase giving rise to this adjustment by (ii) the new Exercise Price determined in accordance with the immediately preceding sentence. Any adjustment under this Section 4(c) shall become effective at the close of business on the Pro Rata Repurchase Effective Date.

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(d)Adjustment to Warrant Shares Upon Reorganization, Reclassification, Consolidation or Merger. In the event of any (i) capital reorganization or recapitalization of the Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company’s assets to another Person or (v) other similar transaction (other than any transaction covered by Section 4(a)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock, this Warrant shall, immediately after such reorganization, recapitalization, reclassification, consolidation, merger, sale or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets (including cash) of the Company or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, recapitalization, reclassification, consolidation, merger, sale or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise; and in any such case, if applicable, the provisions set forth herein with respect to the rights and interests thereafter of the Holder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to the Holder’s right to exercise this Warrant in exchange for any shares of stock or other securities or assets pursuant to this paragraph. In determining the kind and amount of stock, securities or the assets receivable upon exercise of this Warrant upon and following adjustment pursuant to this paragraph, if the holders of Common Stock have the right to elect the kind or amount of consideration receivable upon consummation of such reorganization, recapitalization, reclassification, consolidation, merger, sale or similar transaction, then the Holder shall have the right to make the same election upon exercise of this Warrant with respect to the number of shares of stock or other securities or assets which the Holder will receive upon exercise of this Warrant. The provisions of this Section 4(d) shall similarly apply to successive reorganizations, recapitalizations, reclassifications, consolidations, mergers, sales or similar transactions.

(e)Certificate as to Adjustment.

(i)As promptly as reasonably practicable following any adjustment of the Exercise Price, but in any event not later than five (5) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.

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(ii)As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than five (5) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other shares of stock, securities or assets then issuable upon exercise of the Warrant.

(f)Notices. In the event:

(i)that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

(ii)of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person, or sale of all or substantially all of the Company’s assets to another Person, or any other transaction referred to in Section 4(d); or

(iii)of the voluntary or involuntary dissolution, liquidation or winding-up of the Company;

(iv) then, and in each such case, the Company shall send or cause to be sent to the Holder at least ten (10) days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent or other right or action, and a description of such dividend, distribution or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, other similar transaction, dissolution, liquidation or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other assets deliverable upon such reorganization, reclassification, consolidation, merger, sale, other similar transaction, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.

(g)Proceedings Prior to any Action Requiring Adjustment. As a condition precedent to the taking of any action which would require an adjustment pursuant to this

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Section 4, the Company shall take any action which may be necessary, including obtaining regulatory, stock exchange or stockholder approvals or exemptions, in order that the Company may thereafter validly and legally issue as fully paid and nonassessable all shares of Common Stock that the Holder is entitled to receive upon exercise of this Warrant pursuant to this Section 4.

(h)Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any case in which the provisions of this Section 4 shall require that an adjustment shall become effective at the close of business on a record date for an event, the Company may defer until the occurrence of such event (or, if later, the calculation of the Distribution Fair Market Value, if applicable) (i) issuing to the Holder of this Warrant exercised after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such exercise by reason of the adjustment required by such event over and above the shares of Common Stock issuable upon such exercise before giving effect to such adjustment and (ii) paying to such Holder any amount of cash in lieu of a fractional share of Common Stock; provided, however, that the Company upon request shall deliver to such Holder a due bill or other appropriate instrument evidencing such Holder’s right to receive such additional shares (or other assets, as applicable), and such cash, upon the occurrence of the event requiring such adjustment (or completion of such calculation).

5.Transfer of Warrant. Subject to applicable federal and state securities laws and the transfer conditions referred to in the legend endorsed hereon and in Section 8, this Warrant may only be transferred by the Holder to a controlled subsidiary of the Ventas, Inc. For a transfer of this Warrant as an entirety by the Holder, upon surrender of this Warrant to the Company at its then principal executive offices, the Company shall issue a new Warrant of the same denomination to the assignee. For a transfer of this Warrant with respect to a portion of the Warrant Shares, upon surrender of this Warrant to the Company at its then principal executive offices, the Company shall issue a new Warrant to the assignee, in such denomination as shall be requested by the Holder, and shall issue to the Holder a new Warrant covering the number of shares in respect of which this Warrant shall not have been transferred. For the avoidance of doubt, there are no contractual restrictions on transfer of any Warrant Shares.

6.Holder Not Deemed a Stockholder; Limitations on Liability. Except as otherwise specifically provided herein, prior to the issuance to the Holder of the Warrant Shares to which the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any

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securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

7.Replacement on Loss; Division and Combination.

(a)Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu of the Warrant so lost, stolen, mutilated or destroyed, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

(b)Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, including the provisions of Section 8, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.

8.Compliance with the Securities Act.

(a)Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 8 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act. This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

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“THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE LAW.”

(b)Upon request of the Holder and receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that such legend is no longer required under the Act and applicable state securities laws, the Company shall promptly cause the legend to be removed from any certificate or other instrument for this Warrant or Warrant Shares to be transferred in accordance with the terms of this Warrant.

(c)Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

(i)The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with any present intention to distribute this Warrant or the Warrant Shares, except in compliance with the Securities Act.

(ii)The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

(iii)The Holder acknowledges that it has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the Warrant and the Warrant Shares. The Holder has had an opportunity to discuss with the Company the terms and conditions of the Warrant and the business, properties, prospects and financial condition of the Company.

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9.Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of the Warrant effected in accordance with the provisions of this Warrant.

10.Frustration of Purpose. The Company shall not, by amendment of its certificate of incorporation, bylaws or any of its other organizational or governance documents, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder, consistent with the terms of this Warrant.

11.Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11).

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If to the Company:	Brookdale Senior Living Inc. 111 Westwood Place, Suite 400 Brentwood, Tennessee 37027 Attention: General Counsel
with a copy to:	Skadden, Arps, Slate, Meagher & Flom LLP One Manhattan West New York, New York 10001 Facsimile: (917) 777-3050 E-mail: joseph.coco@skadden.com Attention: Joseph Coco
If to the Holder:	Ventas, Inc. 353 N. Clark Street, Suite 3300 Chicago, Illinois 60654 Attention: Lease Administration
with a copy to:	Ventas, Inc. 353 N. Clark Street, Suite 3300 Chicago, Illinois 60654 Attn: Legal Department
with a copy to (which copy alone shall not constitute notice):	Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attn: Robin Panovka & Victor Goldfeld Phone: (212) 403-1000 Fax: (212) 403-2000 Email: RPanovka@wlrk.com & VGoldfeld@wlrk.com

12.Cumulative Remedies. Except to the extent expressly provided in the last sentence of Section 6 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.

13.Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief,

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including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.

14.Entire Agreement. This Warrant and the forms attached hereto, together with the Letter Agreement, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant and the Letter Agreement, the statements in the body of this Warrant shall control.

15.Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors and permitted assigns of the Holder. Such successors and/or permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.

16.No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.

17.Headings. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.

18.Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

19.Severability. If any term or provision of this Warrant is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.

20.Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.

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21.Submission to Jurisdiction. Each party hereby irrevocably agrees and consents to be subject to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, or, if the Court of Chancery lacks jurisdiction, the United States District Court for the District of Delaware or the Superior Court of the State of Delaware, in any suit, action or proceeding described in the immediately preceding sentence. Each party hereby irrevocably consents to the service of any and all process in any such suit, action or proceeding by the delivery of such process to such party at the address and in the manner provided in this Warrant. Each of the parties hereto irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Warrant or the transactions contemplated hereby in (i) the Court of Chancery of the State of Delaware, (ii) the United States District Court for the District of Delaware or (iii) the Superior Court of the State of Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

22.Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.

23.Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.

24.No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.

BROOKDALE SENIOR LIVING INC.

By: /s/ George Hicks

Name: George Hicks

Title: Executive Vice President – Finance and Treasurer

Accepted and agreed,

VENTAS, INC.

By: /s/ Brian Wood

Name: Brian Wood

Title: Senior Vice President

and Chief Tax Officer

[Signature Page to Warrant]

Exhibit A

Form of Exercise Agreement

Date: _________

TO: Brookdale Senior Living Inc.

RE: Election to Exercise Warrant

The undersigned, pursuant to the provisions set forth in the attached Warrant, hereby irrevocably (except as otherwise provided in the Warrant) elects to exercise such Warrant and notifies you of such election to purchase [●] Warrant Shares. The undersigned, in accordance with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise Price for such shares of Common Stock by means of the manner specified below. In the event that the undersigned desires to use a combination of such methods, such intent should be described in detail below. A new Warrant evidencing the remaining shares of Common Stock covered by such Warrant, but not yet subscribed for and purchased, if any, should be issued in the name set forth below.

Number of Shares of Common Stock: ____________________

Aggregate Exercise Price: ___________________________

Cashless Exercise:☐ ___________________________

Conditional Exercise:☐ ___________________________

Method of Delivery:    ☐    Book Entry

☐    Certificated

☐    Electronic

If to Prime Broker please provide Prime Broker account information:

__________________________________________________

Warrantholder:

By:

Name:

Title:

EX-10.5

Exhibit 10.5

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

by and between

BROOKDALE SENIOR LIVING INC.

and

VENTAS, INC.

Dated as of July 26, 2020

Table of Contents

Page

Section 1.Definitions.......................................................................................................	1
Section 2.Registration Rights..........................................................................................	4
(a)Shelf Registration Statement.......................................................................................	4
(b)Right to Request Shelf Take-Down.............................................................................	5
(c)Demand Registration Statement If Shelf Registration Statement Unavailable...........	6
(d)Limitations on Demand Registrations.........................................................................	6
(e)Piggyback Registration................................................................................................	6
(f)Selection of Underwriters; Right to Participate...........................................................	7
(g)Priority of Securities Offered Pursuant to Demand Registrations and Underwritten Shelf Take-Downs..............................................................................................................	7
(h)Priority of Securities Offered Pursuant to Piggyback Registration.............................	7
(i)Postponement; Suspensions; Blackout Period.............................................................	8
(j)Supplements and Amendments....................................................................................	9
(k)Subsequent Holder Notice...........................................................................................	9
Section 3.Registration Procedures...................................................................................	10
Section 4.Indemnification................................................................................................	14
(a)Indemnification by the Company................................................................................	14
(b)Indemnification by the Stockholders..........................................................................	14
(c)Notices of Claims, etc.................................................................................................	15
(d)Contribution................................................................................................................	16
(e)No Exclusivity.............................................................................................................	16
Section 5.Covenants Relating to Rule 144......................................................................	16
Section 6.Miscellaneous..................................................................................................	17
(a)Termination; Survival..................................................................................................	17
(b)Governing Law............................................................................................................	17
(c)Submission to Jurisdiction...........................................................................................	17
(d)Waiver of Jury Trial.....................................................................................................................................	17
(e)Entire Agreement.........................................................................................................	17
(f)Amendments and Waivers...........................................................................................	18
(g)Successors and Assigns...............................................................................................	18
(h)Expenses......................................................................................................................	18
(i)Counterparts; Electronic Signature..............................................................................	18
(j)Severability...................................................................................................................	18
(k)Notices.........................................................................................................................	19
(l)Specific Performance...................................................................................................	20

Exhibit 10.5

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT, dated as of July 26, 2020 (this “Agreement”), is by and between Brookdale Senior Living Inc., a Delaware corporation (the “Company”) and Ventas, Inc., a Delaware corporation (“Ventas”).

RECITALS

WHEREAS, on July 26, 2020, the Company issued to Ventas a warrant (the “Warrant”) to purchase 16.3 million shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”), upon the terms and conditions set forth in that certain letter agreement, dated as of July 26, 2020, by and between the Company and Ventas (the “Letter Agreement”); and

WHEREAS, the parties hereto desire to enter into this Agreement in order to grant the Stockholders the registration rights described herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and obligations hereinafter set forth, and for other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1.Definitions.

As used in this Agreement, the following terms shall have the following meanings:

“Affiliate” shall mean a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified. For purposes of this definition, “control” (including the terms “controlling,” “controlled by” and “under common control with”) shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

“Agreement” has the meaning set forth in the Preamble.

“Block Trade” shall mean a registered securities offering in which an underwriter agrees to purchase Registrable Securities at an agreed price or pricing formula without a prior marketing process.

“Board” shall mean the Board of Directors of the Company.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law or executive order to close.

“Common Stock” has the meaning set forth in the Recitals.

“Company” has the meaning set forth in the Preamble.

“Demand Registration” shall have the meaning set forth in Section 2(c).

“Demand Registration Statement” shall have the meaning set forth in Section 2(c).

“End of Suspension Notice” shall have the meaning set forth in Section 2(i)(1).

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended (or any corresponding provision of succeeding law), and the rules and regulations thereunder.

“Holdback Period” shall mean, with respect to any registered offering of equity securities of the Company, the period beginning ten (10) days before the anticipated effective date of the related Registration Statement and continuing until the expiration of ninety (90) days (or such shorter period as the managing underwriter(s) permit) after the effective date of the related Registration Statement (except that, in the case of any such registered offering that is a Shelf Take-Down from a Shelf Registration Statement, the Holdback Period shall be the period beginning ten (10) days before the anticipated pricing date in connection with such takedown and continuing until the expiration of ninety (90) days (or such shorter period as the managing underwriter(s) permit) after such pricing date).

“Minimum Amount” shall mean $35 million (or, in the case of a Block Trade, $25 million).

“Permitted Reg Rights Holders” shall mean (i) Ventas and its controlled subsidiaries and (ii) any Person to whom Registrable Securities representing at least three (3)% of the then outstanding shares of Common Stock are transferred other than in a transaction pursuant to a registration statement or Rule 144 that results in such securities ceasing to be Registrable Securities.

“Person” shall mean any natural person, corporation, limited partnership, general partnership, limited liability company, joint stock company, joint venture, association, company, estate, trust, bank trust company, land trust, business trust, or other organization, whether or not a legal entity, custodian, trustee-executor, administrator, nominee or entity in a representative capacity and any government or agency or political subdivision thereof.

“Piggyback Registration” shall have the meaning set forth in Section 2(e).

“Piggyback Stockholder” shall have the meaning set forth in Section 2(e).

“Prospectus” shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A under the Securities Act), as amended or supplemented by any prospectus supplement or any issuer free writing prospectus (as defined in Rule 433 under the Securities Act), with respect to the terms of

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the offering of any portion of the Registrable Securities covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such prospectus.

“Public Offering” shall mean a public offering and sale of equity securities for cash pursuant to an effective registration statement under the Securities Act.

“Registrable Securities” shall mean any shares of Common Stock issued or issuable upon exercise of the Warrant, including any securities acquired as a result of any reclassification, recapitalization, stock split or combination, exchange or readjustment of such shares of Common Stock, or any stock dividend or stock distribution in respect of such share of Common Stock; provided, however, such securities shall cease to be Registrable Securities on the earliest to occur of (i) a Registration Statement with respect to the sale of such Registrable Securities shall have become effective under the Securities Act and such Registrable Securities shall have been disposed of in accordance with such Registration Statement; (ii) such Registrable Securities shall have been sold in accordance with Rule 144; (iii) such securities have been transferred in a transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of the securities in accordance with the terms of this Agreement; (iv) with respect to a Stockholder, such securities are eligible for resale by such Stockholder pursuant to Rule 144 under the Securities Act without any volume, manner of sale or other limitations and such Stockholder owns less than 3% of the then outstanding shares of Common Stock (assuming the Warrant has been exercised in full); or (v) such Registrable Securities have ceased to be outstanding.

“Registration Expenses” shall mean all expenses incurred in effecting any registration or any offering and sale pursuant to this Agreement, including registration, qualification, listing and filing fees (including, without limitation, all SEC, stock exchange and Financial Industry Regulatory Authority filing fees), printing expenses, messenger, telephone and delivery expenses, all transfer agent and registrar fees and expenses, fees and disbursements of all law firms of the Company and all accountants and other persons retained by the Company (including any comfort letters), any reasonable fees and disbursements of underwriters customarily paid by issuers or sellers of securities, all fees and expenses of any special experts or other persons retained by the Company in connection with any registration, all expenses related to the “road show” for any underwritten offering, including all travel, meals and lodging, and any blue sky (including reasonable fees and disbursements of counsel to any underwriter incurred in connection with blue sky qualifications of the Registrable Securities as may be set forth in any underwriting agreement) and other securities laws fees and expenses, as well as all internal fees and expenses of the Company. Registration Expenses shall not include Selling Expenses. In addition, in connection with an underwritten offering or other registration, offering or related action for which services of outside counsel would customarily be required pursuant to this Agreement, the Company shall pay or reimburse the Stockholders for the reasonable and documented fees and expenses of one nationally recognized law firm, chosen by the Stockholders as their counsel; provided that, (i) the Company shall not be responsible for any

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such fees and expenses that exceed $75,000 for the first offering and $50,000 for any subsequent offering and (ii) the Company shall not be obligated to pay or reimburse the Stockholders for the fees and expenses of any law firm chosen by the Stockholders as the counsel in connection with the filing and effectiveness of the initial Shelf Registration Statement. Nothing in this definition shall impact any agreement on expenses solely between the Company and any underwriter.

“Registration Statement” shall mean any registration statement (including any Demand Registration Statement or Shelf Registration Statement) of the Company under the Securities Act which permits the Public Offering of any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

“Rule 144” shall mean Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” shall mean the Securities Act of 1933, as amended (or any corresponding provision of succeeding law), and the rules and regulations thereunder.

“Selling Expenses” shall mean all underwriting discounts and selling commissions associated with effecting any sales of Registrable Securities under any Registration Statement by the Stockholders and all stock transfer taxes applicable to the sale or transfer by the Stockholders of Registrable Securities to the underwriter(s) pursuant to this Agreement.

“Shelf Period” shall have the meaning set forth in Section 2(a).

“Shelf Registration” shall have the meaning set forth in Section 2(a).

“Shelf Registration Statement” shall have the meaning set forth in Section 2(a).

“Shelf Take-Down” shall have the meaning set forth in Section 2(b).

“Special Registration” shall mean the registration of equity securities, options or similar rights registered on Form S-4, Form S-8 or any successor forms thereto or any other form for the registration of securities issued or to be issued in connection with a merger, acquisition, employee benefit plan or equity compensation or incentive plan.

“Suspension” shall have the meaning set forth in Section 2(i)(1).

“Suspension Notice” shall have the meaning set forth in Section 2(i)(1).

“Stockholder” means Ventas and any other Permitted Reg Rights Holder that holds Registrable Securities.

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“Underwritten Shelf Take-Down” shall have the meeting set forth in Section 2(b)(1).

“Underwritten Shelf Take-Down Notice” shall have the meeting set forth in Section 2(b).

“Warrant” has the meaning set forth in the Preamble.

Section 2.Registration Rights.

(a)Shelf Registration Statement. The Company will use its reasonable best efforts to file with the SEC, as promptly as practicable, but no later than the close of business on the fifth day following the date on which the Company files its Quarterly Report on Form 10-Q for the period ended June 30, 2020 (and if the SEC is not open on such day, the next day that the SEC is open) (or if a later time for filing is requested by Ventas, at such later time), a shelf registration statement on Form S-3 (or successor form) pursuant to Rule 415 under the Securities Act (which registration statement, if the Company is eligible to file such, shall be as an automatic shelf registration as defined in Rule 405 under the Securities Act) (a “Shelf Registration Statement”) relating to the offer and resale of Registrable Securities by any Stockholder at any time and from time to time following the date on which the Shelf Registration Statement is filed in accordance with the methods of distribution set forth in the Plan of Distribution section of the Shelf Registration Statement, and, if such Shelf Registration Statement is not immediately effective, the Company shall use reasonable best efforts to cause such Shelf Registration Statement to promptly be declared or otherwise become effective under the Securities Act. Any such registration pursuant to the Shelf Registration Statement shall hereinafter be referred to as a “Shelf Registration.” For so long as the Company is eligible to use Form S-3 (or successor form), the Company shall maintain the continuous effectiveness of the Shelf Registration Statement for the maximum period permitted by SEC rules, and shall replace any Shelf Registration Statement at or before expiration, if applicable, with a successor effective Shelf Registration Statement to the extent any Registrable Securities remain outstanding (such period of effectiveness, the “Shelf Period”).

(b)Right to Request Shelf Take-Down. At any time and from time to time during the Shelf Period, one or more of the Stockholders may, by written notice to the Company, request an offering of all or part of the Registrable Securities held by the Stockholders (a “Shelf Take-Down”). Any Stockholder may, after any Shelf Registration Statement becomes effective, deliver a written notice to the Company (the “Underwritten Shelf Take-Down Notice”) specifying that a Shelf Take-Down is intended to be conducted through an underwritten offering (such underwritten offering, an “Underwritten Shelf Take-Down”), which shall specify the number of Registrable Securities intended to be included in such Underwritten Shelf Take-Down; provided, however, that the Stockholders may not, without the Company’s prior written consent, (i) launch an Underwritten Shelf Take-Down the anticipated gross proceeds of which shall be less than the Minimum Amount, unless the number of Registrable Securities to be sold in such offering represents all of such Stockholder’s remaining Registrable Securities or (ii) launch an Underwritten Shelf Take-Down within the period commencing twenty (20) days prior

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to the date of the Company’s scheduled earnings release for any fiscal quarter or year and ending one (1) day following the Company’s filing of its annual report on Form 10-K or quarterly reports on Form 10-Q for such fiscal year or quarter, respectively (or such shorter period as is the Company’s customary “blackout window” applicable to directors and officers). In the event of an Underwritten Shelf Take-Down, the Company shall select the managing underwriter(s) to administer the Underwritten Shelf Take-Down; provided that such managing underwriter(s) are reasonably acceptable to the Stockholder delivering the related Underwritten Shelf Take-Down Notice. The Stockholders shall be entitled to deliver a maximum of four (4) notices in the aggregate to the Company of its intention to effect a sale or distribution of all or part of its Registrable Securities in an Underwritten Shelf Take-Down pursuant to this Section 2(b); provided that the Stockholders may also elect to use any Demand Registration to which such Stockholders are entitled pursuant to Section 2(d) for an Underwritten Shelf-Take Down; provided further that the Company shall not be required to file a prospectus supplement with respect to an Underwritten Shelf Take-Down pursuant to this Section 2(b) within sixty (60) days following the effective date of any prior Underwritten Shelf Take-Down or Demand Registration Statement by any Stockholder. The Company and the Stockholder or Permitted Reg Rights Holder participating in an Underwritten Shelf Take-Down will enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such offering. The Company will not include in any Underwritten Shelf Take-Down pursuant to this Section 2(b) any securities that are not Registrable Securities without the prior written consent of the Stockholders participating in such Underwritten Shelf Take-Down.

(c)Demand Registration Statement If Shelf Registration Statement Unavailable. If the Company is ineligible to file with the SEC a shelf registration statement on Form S-3 (or successor form) in accordance with Section 2(a), upon the written request of one or more Stockholders (a “Demand Registration”), the Company shall use reasonable best efforts to file promptly a registration statement on Form S-1 (or successor form) (a “Demand Registration Statement”) registering for resale such number of shares of Registrable Securities requested to be included in the Demand Registration Statement and have the Demand Registration Statement declared effective under the Securities Act as promptly as practicable. After any Demand Registration Statement has become effective, the Company shall use reasonable best efforts to keep such Demand Registration Statement continuously effective until all of the Registrable Securities covered by such Demand Registration Statement have been sold in accordance with the plan of distribution set forth therein or are no longer outstanding.

(d)Limitations on Demand Registrations. The Stockholders shall be entitled to request a maximum of two (2) Demand Registrations in the aggregate; provided that the Company shall not be required to file a registration statement pursuant to Section 2(c) (i) within sixty (60) days following the effective date of any prior Demand Registration Statement for the same class of Registrable Securities by any Stockholder or (ii) if the anticipated gross proceeds of an underwritten offering conducted pursuant to such Demand Registration Statement does not equal or exceed the Minimum Amount, unless the number of Registrable Securities to be sold in such offering represents all of such Stockholder’s remaining Registrable Securities. A

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registration shall not count as a Demand Registration until the related Demand Registration Statement has been declared effective by the SEC.

(e)Piggyback Registration. If, at any time the Company proposes or is required to file a Registration Statement under the Securities Act with respect to an offering of Common Stock or similar equity securities of the Company, whether or not for sale for its own account, on a form and in a manner that would permit registration of the Registrable Securities, which, for the avoidance of doubt, shall exclude any Special Registration, the Company shall give written notice as promptly as practicable, but not later than ten (10) days prior to the anticipated date of filing of such Registration Statement, to the Stockholders of its intention to effect such registration and, in the case of each Stockholder, shall include in such registration all of such Stockholder’s Registrable Securities with respect to which the Company has received a written request from such Stockholder for inclusion therein (a “Piggyback Registration” and any such requesting Stockholder that has not withdrawn its Registrable Securities from such Piggyback Registration a “Piggyback Stockholder” with respect to such Piggyback Registration). In the event that a Stockholder makes such written request, such Stockholder may withdraw its Registrable Securities from such Piggyback Registration by giving written notice to the Company and the managing underwriter(s), if any, at any time at least two (2) Business Days prior to the effective date of the Registration Statement relating to such Piggyback Registration. The Company may terminate or withdraw any Piggyback Registration under this Section 2(e), whether or not any Stockholder has elected to include Registrable Securities in such registration. No Piggyback Registration shall count as a Demand Registration or Underwritten Shelf Take-Down to which the Stockholders are entitled.

(f)Selection of Underwriters; Right to Participate. The Company shall have the right to select the managing underwriter(s) to administer an offering pursuant to a Demand Registration Statement or Underwritten Shelf Take-Down; provided that such managing underwriter(s) are reasonably acceptable to the Stockholders delivering the Demand Registration request or the Underwritten Shelf Take-Down Notice. If a Piggyback Registration under Section 2(e) is proposed to be underwritten, the Company shall so advise the Stockholders as a part of the written notice given pursuant to Section 2(e). In such event, the managing underwriter(s) to administer the offering shall be chosen by the Company in its sole discretion. A Stockholder may participate in a registration or offering hereunder only if such Stockholder (i) agrees to sell such Registrable Securities on the basis provided in any underwriting agreement with the underwriters and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up agreements and other documents reasonably requested under the terms of such underwriting arrangements customary for selling stockholders to enter into in secondary underwritten public offerings, provided, however, that the Stockholders shall not be required to make any representations or warranties to the Company or the underwriters (other than representations and warranties regarding such holder, such holder’s ownership of its shares of Common Stock to be sold in the offering and such holder’s intended method of distribution) or to undertake any indemnification obligations to the Company with respect thereto. Notwithstanding anything to the contrary herein, any underwriting agreement shall contain such representations and warranties by, and the other agreements on the part of, the Company to and

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for the benefit of the Stockholders as are customarily made by issuers to selling stockholders in secondary underwritten public offerings.

(g)Priority of Securities Offered Pursuant to Demand Registrations and Underwritten Shelf Take-Downs. If the managing underwriter(s) of a Demand Registration or Underwritten Shelf Take-Down shall advise the Company and the Stockholders in writing that, in its good faith opinion, the total number or dollar amount of shares of Common Stock requested to be included in such Demand Registration or Underwritten Shelf Take-Down exceeds the number or dollar amount that can be sold in such offering without having an adverse effect on such offering, including the price at which such shares can be sold, then the Company shall include in such Demand Registration or Underwritten Shelf Take-Down the maximum number of shares that such underwriter or agent, as applicable, advises can be so sold without having such adverse effect, allocated (i) first, to Registrable Securities requested by the Stockholders to be included in such Demand Registration or Underwritten Shelf Take-Down, pro rata among all such Stockholders on the basis of the number of Registrable Securities held by such Stockholders, and (ii) second, to any securities requested to be included therein by any other Persons (including the Company), allocated among such Persons on a pro rata basis or in such other manner as they may agree.

(h)Priority of Securities Offered Pursuant to Piggyback Registration. If the managing underwriter(s) of a registration of shares of Common Stock giving rise to a right to Piggyback Registration shall advise the Company and the Piggyback Stockholders with respect to such Piggyback Registration in writing that, in its good faith opinion, the total number or dollar amount of shares of Common Stock proposed to be sold in such offering and Registrable Securities requested by such Piggyback Stockholders to be included therein, in the aggregate, exceeds the number or dollar amount that can be sold in such offering without having an adverse effect on such offering, including the price at which such shares can be sold, then the Company shall include in such registration the maximum number of shares that such underwriter or agent, as applicable, advises can be so sold without having such adverse effect, allocated (i) first, to shares of Common Stock requested to be included by the Company, (ii) second, to Registrable Securities requested by the Stockholders to be included in such Piggyback Registration, pro rata among all such Stockholders on the basis of the number of Registrable Securities held by all such Stockholders, and (iii) third, any shares requested to be included therein by any other Persons (other than the Company), allocated among such Persons on a pro rata basis or in such other many as they may agree.

(i)Postponement; Suspensions; Blackout Period

(1) The Company may postpone the filing or the effectiveness of a Demand Registration Statement or commencement of a Shelf Take-Down (or suspend the continued use of an effective Demand Registration Statement or Shelf Registration Statement), including requiring the Stockholders to suspend any offerings of Registrable Securities pursuant to this Agreement, (i) during the pendency of a stop order issued by the SEC suspending the use of any registration statement of the Company or proceedings initiated by the SEC with respect to

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any such registration statement under Section 8(d) or 8(e) of the Securities Act (subject to the Company’s compliance with its obligations under Section 3(a)(x) herein) or (ii) if, based on the good faith judgment of the Board, such postponement or suspension is necessary in order to avoid materially detrimental disclosure of material non-public information that the Board, after consultation with outside counsel to the Company, has in good faith determined (A) would be required to be made in any Demand Registration Statement or Shelf Registration Statement so that such Registration Statement does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading if such information is not included, (B) such disclosure would not be required to be made at such time but for the filing or continued use of such Registration Statement and (C) the Company has a bona fide business purpose for not disclosing publicly, and the Company delivers to the Stockholders participating in such registration an officers’ certificate executed by the Company’s principal executive officer and principal financial officer stating the Company may, upon giving prompt written notice (a “Suspension Notice”) of such action to the Stockholders participating in such registration, postpone or suspend use of the Demand Registration Statement or Shelf Registration Statement, as applicable (any such postponement or suspension pursuant to Section 2(i)(1)(i), (ii) or (iii), a “Suspension”); provided, however, in each case, that the Stockholder requesting a Demand Registration Statement or Shelf Take-Down shall be entitled, at any time after receiving a Suspension Notice or similar notice and before such Demand Registration Statement becomes effective or before such Shelf Take-Down is commenced, to withdraw such request and, if such request is withdrawn, the Company shall pay all expenses incurred by the Stockholders in connection with such withdrawn registration and such Demand Registration or Shelf Take-Down shall not count as a Demand Registration or, if applicable, an Underwritten Shelf Take-Down. The Company shall provide prompt written notice to the Stockholders (an “End of Suspension Notice”) of (i) the Company’s decision to file or seek effectiveness of such Demand Registration Statement or commence such Shelf Take-Down following such Suspension and (ii) the effectiveness of such Demand Registration Statement or commencement of such Shelf Take-Down. Notwithstanding the provisions of this Section 2(i), with respect to Section 2(i)(1)(ii), the Company shall not effect a Suspension of the filing or effectiveness of a Demand Registration Statement or the commencement of a Shelf Take-Down more than twice during any twelve-month period or for a period exceeding ninety (90) days in the aggregate in any twelve-month period. No Stockholder shall effect any sales of shares of Common Stock pursuant to a Demand Registration Statement or Shelf Registration Statement at any time after it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice.

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(2) Each Stockholder agrees that, except as required by applicable law, it shall treat as confidential the receipt of any Suspension Notice (provided, however, that in no event shall such notice contain any material nonpublic information of the Company) hereunder and shall not disclose or use the information contained in such Suspension Notice without the prior written consent of the Company until such time as the information contained therein is or becomes public, other than as a result of disclosure by such Stockholder in breach of the terms of this Agreement.

(j)Supplements and Amendments. The Company shall supplement and amend any Shelf Registration Statement if required by the Securities Act or the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement.

(k)Subsequent Holder Notice

. If a Person becomes entitled to the benefits of this Agreement pursuant to Section 6 after a Shelf Registration Statement becomes effective under the Securities Act, the Company shall, as promptly as practicable, following delivery of written notice to the Company and request for such Person’s name to be included as a selling securityholder in the prospectus related to the Shelf Registration Statement (a “Subsequent Holder Notice”):

(1) if required and permitted by applicable law, file with the SEC a supplement to the related prospectus or a post-effective amendment to the Shelf Registration Statement so that such Person is named as a selling securityholder in the Shelf Registration Statement and the related prospectus in such a manner as to permit such Person to deliver a prospectus to purchasers of the Registrable Securities in accordance with applicable law;

(2) if, pursuant to Section 3(a)(ii), the Company shall have filed a post-effective amendment to the Shelf Registration Statement that is not automatically effective, use its reasonable best efforts to cause such post-effective amendment to become promptly effective under the Securities Act; and

(3) promptly notify such Permitted Reg Rights Holder after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 3(a)(ii); provided, however, that the Company shall not be required to file more than one (1) post-effective amendment or supplement to the related prospectus pursuant to this clause (k) of Section 2 for any fiscal quarter.

Section 3.Registration Procedures.

(a)    If and whenever the Company is required to use its reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Section 2 hereof, the Company shall effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof,

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and pursuant thereto the Company shall cooperate in the sale of the securities and shall, as promptly as practicable:

(i) prepare and file with the SEC (as promptly as reasonably practicable, but no later than forty-five (45) days after a request for a Demand Registration, subject to the postponement provisions herein) the Demand Registration Statement (including a Prospectus therein and any supplement thereto and all exhibits and financial statements required by the SEC to be filed therewith) to effect such registration and, subject to the efforts standard herein, cause such Registration Statement to become effective, and provide copies of all such documents proposed to be filed or furnished, including documents incorporated by reference, to (x) counsel of the Stockholder, and provide such legal counsel a reasonable opportunity to review and comment on such documents, and (y) the other representative(s) on behalf of the Stockholders included in such Registration Statement (to be chosen by the Stockholders) and any managing underwriter(s), and the representative(s) and the managing underwriter(s) and their respective counsel shall have the reasonable opportunity to review and comment thereon, and the Company will make such changes and additions thereto as may reasonably be requested by such counsel and the representative(s) and the managing underwriter(s) and their respective counsel prior to such filing, unless the Company reasonably objects to such changes or additions;

(ii) prepare and file with the SEC such pre- and post-effective amendments and supplements to a Shelf Registration Statement or Demand Registration Statement, and the Prospectus used in connection therewith or any free writing prospectus (as defined in SEC rules) as may be required by applicable securities laws or reasonably requested by the Stockholder or any managing underwriter(s) to maintain the effectiveness of such registration and to comply with the provisions of applicable securities laws with respect to the disposition of all securities covered by such registration statement during the period in which such Registration Statement is required to be kept effective, and before filing such amendments or supplements, provide copies of all such documents proposed to be filed or furnished, including documents incorporated by reference, to counsel of the Stockholder, which documents shall be subject to the review and comment of such counsel;

(iii) furnish to each Stockholder of the securities being registered and each managing underwriter without charge, such reasonable number of conformed copies of such Registration Statement and of each such amendment and supplement thereto (in each case including all exhibits other than those which are being incorporated into such Registration Statement by reference and that are publicly available), such reasonable number of copies of the Prospectus contained in such Registration Statement and any other Prospectus filed under Rule 424 under the Securities Act in conformity with the requirements of the Securities Act, and such other documents, as the Stockholders and any managing underwriter(s) may reasonably request;

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(iv) use its reasonable best efforts to register or qualify all Registrable Securities under such other securities or “blue sky” laws of such jurisdictions as the Stockholders and any managing underwriter(s) may reasonably request; provided, however, that the Company shall not for any such purpose be required to qualify generally to do business as a foreign company in any jurisdiction where it would not otherwise be required to qualify but for this Section 3, or to consent to general service of process in any such jurisdiction, or to be subject to any material tax obligation in any such jurisdiction where it is not then so subject;

(v) as promptly as is reasonably practicable, notify the Stockholders and any managing underwriter(s) at any time when the Company becomes aware that a Prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made, and, to, as promptly as is reasonably practicable, prepare and furnish without charge to the Stockholders and any managing underwriter(s) a reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made;

(vi) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such Registration Statement not later than the effective date of such Registration Statement;

(vii) use its reasonable best efforts to list all Registrable Securities covered by such Registration Statement on any securities exchange on which any such class of securities is then listed and cause to be satisfied all requirements and conditions of such securities exchange to the listing of such securities that are reasonably within the control of the Company;

(viii) notify each Stockholder and any managing underwriter(s), as soon as is reasonably practicable, after it shall receive notice thereof, of the time when such Registration Statement, or any post-effective amendments to the Registration Statement, shall have become effective;

(ix) to make available to each Stockholder whose Registrable Securities are included in such Registration Statement and any managing underwriter(s) as soon as reasonably practicable after the same is prepared and distributed, filed with the SEC, or received by the Company, an executed copy of each letter written by or on behalf of the Company to the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), and any item of correspondence received from the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign

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securities exchange), in each case relating to such Registration Statement, it being understood that each Stockholder receiving such material from the Company that is confidential shall and shall cause its representatives to keep such materials confidential. The Company will as soon as reasonably practicable notify the Stockholders and any managing underwriter(s) of the effectiveness of such Registration Statement or any post-effective amendment or the filing of the Prospectus supplement contemplated herein. The Company will as soon as reasonably practicable respond reasonably and completely to any and all comments received from the SEC or the staff of the SEC, with a view towards causing such Registration Statement or any amendment thereto to be declared effective by the SEC as soon as reasonably practicable and shall file an acceleration request as soon as reasonably practicable following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such Registration Statement or any amendment thereto will not be subject to review;

(x) advise each Stockholder and any managing underwriter(s), promptly after it shall receive notice or obtain knowledge thereof, of (A) the issuance of any stop order, injunction or other order or requirement by the SEC suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and use its reasonable best efforts to prevent the issuance of any stop order, injunction or other order or requirement or to obtain its withdrawal if such stop order, injunction or other order or requirement should be issued, (B) the suspension of the registration of the subject shares of the Registrable Securities in any state jurisdiction and (C) the removal of any such stop order, injunction or other order or requirement or proceeding or the lifting of any such suspension;

(xi) in connection with a customary due diligence review, make available for inspection by the Stockholders whose Registrable Securities are included in such registration statement and any managing underwriter(s), and any attorney, accountant or other agent retained by, or other representative of, any such Stockholder or underwriters, at reasonable times and in a reasonable manner, all pertinent financial and other records and corporate documents of the Company, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such Stockholder, managing underwriter, attorney, accountant or agent to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act that is customary for a participant in a securities offering in connection with such registration statement; provided, however, that the foregoing investigation and information gathering shall be coordinated on behalf of such parties by one firm of counsel designated by and on behalf of such parties, and that any information that is not generally publicly available at the time of delivery of such information shall be kept confidential by such parties pursuant to customary confidentiality agreements;

(xii) if requested by any Stockholder or any managing underwriter(s), as promptly as is reasonably practicable, incorporate in a Prospectus supplement or post-effective amendment such information as such Stockholder or managing underwriter(s) reasonably requests to be included therein, including, without limitation, with respect to the Registrable Securities being sold by such Stockholder, the purchase price being paid therefor by any underwriters and with respect to any other terms of an underwritten offering of the Registrable

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Securities to be sold in such offering, and as promptly as is reasonably practicable, make all required filings of such prospectus supplement or post-effective amendment;

(xiii) reasonably cooperate with each Stockholder and any managing underwriter(s) participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the Financial Industry Regulatory Authority;

(xiv) in the case of an underwritten offering, (A) enter into such customary agreements (including an underwriting agreement in customary form), (B) take all such other customary actions as the managing underwriter(s) reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including, without limitation, causing senior management and other Company personnel to reasonably cooperate with the Stockholder(s) whose Registrable Securities are included in a Registration Statement and the underwriter(s) in connection with performing due diligence) and (C) cause its counsel to issue opinions of counsel addressed and delivered to the Stockholder and underwriter(s) in form, substance and scope as are customary in underwritten offerings, subject to customary limitations, assumptions and exclusions; and

(xv) if requested by the managing underwriter(s) of an underwritten offering, use reasonable best efforts to cause to be delivered, upon the pricing of any underwritten offering, and at the time of closing of a sale of Registrable Securities pursuant thereto, “comfort” letters from the Company’s independent registered public accountants addressed to the underwriter(s) and, with respect to an offering by the Stockholders pursuant to this Agreement, request the delivery of such “comfort” letters at such times addressed to the Stockholders stating that such accountants are independent public accountants within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC thereunder, and otherwise in customary form and covering such financial and accounting matters as are customarily covered by “comfort” letters of the independent registered public accountants delivered in connection with primary underwritten public offerings; provided, however, that such recipients furnish such written representations or acknowledgement as are customarily required to receive such comfort letters.

(b)    Subject to the last sentence of this Section 3(b), as a condition precedent to the obligations of the Company to file any Registration Statement, each Stockholder shall furnish in writing to the Company such information regarding such Stockholder (and any of its Affiliates), the Registrable Securities to be sold and the intended method of distribution of such Registrable Securities reasonably requested by the Company as is reasonably necessary or advisable for inclusion in the Registration Statement relating to such offering pursuant to the Securities Act. Notwithstanding the foregoing, in no event will any party be required to disclose to any other party any personally identifiable information or personal financial information in respect of any individual, or confidential information of any Person.

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Each Stockholder agrees by acquisition of the Registrable Securities that (i) upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(a)(v), such Stockholder shall forthwith discontinue its disposition of Registrable Securities pursuant to the registration statement relating to such Registrable Securities until such Stockholder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(a)(v); (ii) upon receipt of any notice from the Company of the happening of any event of the kind described in clause (A) of Section 3(a)(x), such Stockholder shall discontinue its disposition of Registrable Securities pursuant to such registration statement until such Stockholder’s receipt of the notice described in clause (C) of Section 3(a)(x); and (iii) upon receipt of any notice from the Company of the happening of any event of the kind described in clause (B) of Section 3(a)(x), such Stockholder shall discontinue its disposition of Registrable Securities pursuant to such registration statement in the applicable state jurisdiction(s) until such Stockholder’s receipt of the notice described in clause (C) of Section 3(a)(x). The length of time that any registration statement is required to remain effective shall be extended by any period of time that such registration statement is unavailable for use pursuant to this paragraph, provided, however, in no event shall any Registration Statement be required to remain effective after the date on which all Registrable Securities cease to be Registrable Securities.

Section 4.Indemnification.

(a)Indemnification by the Company. The Company agrees to indemnify, hold harmless and reimburse, to the fullest extent permitted by law, each Stockholder, its Affiliates, partners, officers, directors, employees, advisors, representatives and agents, and each Person, if any, who controls such Stockholder within the meaning of the Securities Act or the Exchange Act, against any and all losses, penalties, liabilities, claims, damages and expenses, joint or several (including, without limitation, reasonable attorneys’ fees and any expenses and reasonable costs of investigation), as incurred, to which the Stockholders or any such indemnitees may become subject under the Securities Act or otherwise, insofar as such losses, penalties, liabilities, claims, damages and expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement under which such Registrable Securities were registered and sold under the Securities Act, any Prospectus contained therein, or any amendment or supplement thereto, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or any violation of the Securities Act or state securities laws or rules thereunder by the Company relating to any action or inaction by the Company in connection with such registration (provided, however, that the Company shall not be liable in any such case to the extent that any such loss, penalty, liability, claim, damage (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged statement or omission or alleged omission made in such Registration Statement, any such Prospectus, amendment or supplement in reliance upon and in conformity with written information about a Stockholder which is furnished to the Company by such Stockholder specifically for use in such registration statement). Such indemnity shall remain in full force and

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effect regardless of any investigation made by or on behalf of such Stockholder or any indemnified party and shall survive the transfer of such securities by such Stockholder.

(b)Indemnification by the Stockholders. Each Stockholder agrees to indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 4(a)) the Company, each member of the Board, each officer, employee and agent of the Company and each other person, if any, who controls any of the foregoing within the meaning of the Securities Act or the Exchange Act, with respect to any untrue statement or alleged untrue statement of a material fact in or omission or alleged omission to state a material fact from such Registration Statement, any Prospectus contained therein, or any amendment or supplement thereto, to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information about such Stockholder furnished to the Company by such Stockholder specifically for inclusion in such Registration Statement, Prospectus, amendment or supplement and has not been corrected in a subsequent Registration Statement, any Prospectus contained therein, or any amendment or supplement thereto prior to or concurrently with the sale of the Registrable Securities to the person asserting the claim; provided, however, that the Stockholder shall not be liable for any amounts in excess of the net proceeds received by such Stockholder from sales of Registrable Securities pursuant to the registration statement to which the claims relate, and provided, further, that the obligations of the Stockholders shall be several and not joint and several. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any indemnified party and shall survive the transfer of such securities by the Company.

(c)Notices of Claims, etc. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in the preceding paragraphs of this Section 4, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party, give written notice to such indemnifying party of the commencement of such action; provided, however, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under the preceding paragraphs of this Section 4, except to the extent that the indemnifying party is materially prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, such indemnified party shall permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (A) the indemnifying party has agreed to pay such fees or expenses or (B) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person within a reasonable time after receipt of notice of such claim from the person entitled to indemnification hereunder. If such defense is not assumed by the indemnifying party as permitted hereunder, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent. If

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such defense is assumed by the indemnifying party pursuant to the provisions hereof, such indemnifying party shall not settle or otherwise compromise the applicable claim unless (i) such settlement or compromise contains a full and unconditional release of the indemnified party of all liability in respect to such claim or litigation or (ii) the indemnified party otherwise consents in writing. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel (plus local counsel) for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party, a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the reasonable fees and disbursements of such additional counsel or counsels. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment.

The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party and shall survive the transfer of securities.

(d)Contribution. If the foregoing indemnity is held by a governmental authority of competent jurisdiction to be unavailable to the Company or any Stockholder, or is insufficient to hold harmless an indemnified party, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of the loss, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, and the relative benefits received by the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. No indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party who was not guilty of such fraudulent misrepresentation. In connection with any registration statement filed with the SEC by the Company, the relative fault of the indemnifying party on the one hand and of the indemnified person on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, and by such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Notwithstanding the provisions of this Section 4, no Stockholder shall be required to contribute an amount greater than the net proceeds received by such Stockholder from sales of Registrable Securities pursuant to the Registration Statement to which the claims relate (after taking into account the amount of damages which such Stockholder has otherwise been required to pay by reason of any and all untrue or alleged untrue statements of material fact or omissions or alleged omissions of material fact made in any Registration Statement or Prospectus or any amendment thereof or supplement thereto related to such sale of Registrable Securities).

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(e)No Exclusivity. The remedies provided for in this Section 4 are not exclusive and shall not limit any rights or remedies which may be available to any indemnified party at law or in equity or pursuant to any other agreement.

Section 5.Covenants Relating to Rule 144. The Company shall use its reasonable best efforts to file any reports required to be filed by it under the Securities Act and the Exchange Act and to take such further action as any Stockholder may reasonably request to enable the Stockholders to sell Registrable Securities without registration under the Securities Act from time to time within the limitation of the exemptions provided by Rule 144. The Company shall, in connection with any request by any Stockholder in connection with a sale, transfer or other disposition by any Stockholder of any Registrable Securities pursuant to Rule 144 either currently or prospectively with unspecified timing, promptly cause (and in no event longer than five (5) Business Days after such request) the removal of any restrictive legend or similar restriction on the Registrable Securities, and, in the case of book-entry shares, make or cause to be made appropriate notifications on the books of the Company’s transfer agent for such number of shares and registered in such names as the Stockholders may reasonably request and to provide a customary opinion of counsel and instruction letter required by the Company’s transfer agent.

Section 6.Miscellaneous.

(a)Termination; Survival. The rights of each Stockholder under this Agreement shall terminate upon the date that all of the Registrable Securities held by such Stockholder cease to be Registrable Securities. Notwithstanding the foregoing, the obligations of the parties under Sections 3(a)(viii), 4, 5 and this Section 6 shall survive the termination of this Agreement.

(b)Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware.

(c)Submission to Jurisdiction. Each party hereby irrevocably agrees and consents to be subject to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, or, if the Court of Chancery lacks jurisdiction, the United States District Court for the District of Delaware or the Superior Court of the State of Delaware, in any suit, action or proceeding described in the immediately preceding sentence. Each party hereby irrevocably consents to the service of any and all process in any such suit, action or proceeding by the delivery of such process to such party at the address and in the manner provided in this Agreement. Each of the parties hereto irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Court of Chancery of the State of Delaware, (ii) the United States District Court for the District of Delaware or (iii) the Superior Court of the State of Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or

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claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

(d)Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.

(e)Entire Agreement. This Agreement (including the documents and the instruments referred to herein), together with the Letter Agreement and the Warrant, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings, and agreements (including any draft agreements) with respect thereto, whether written or oral, none of which shall be used as evidence of the parties’ intent.

(f)Amendments and Waivers. No amendment of any provision of this Agreement shall be valid and binding unless it is in writing and signed by the Company and the Stockholders representing at least 50% (by number) of the Registrable Securities (with each share of Common Stock to be received upon exercise of a Warrant counting as one Registrable Security for this purpose). No waiver of any right or remedy hereunder, to the extent legally allowed, shall be valid unless the same shall be in writing and signed by the party making such waiver. No waiver by any party of any breach or violation of, default under, or inaccuracy in any representation, warranty, covenant, or agreement hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent breach, violation, default of, or inaccuracy in, any such representation, warranty, covenant, or agreement hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No delay or omission on the part of any party in exercising any right, power, or remedy under this Agreement shall operate as a waiver thereof. Notwithstanding the foregoing, no amendments may be made to this Agreement that adversely affect Ventas or any of its subsidiaries without the prior written consent of Ventas.

(g)Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective successors and permitted assignee. Any Stockholder may transfer or assign any of its rights hereunder to a Permitted Reg Rights Holder (such Person to be deemed a “Stockholder” under this Agreement); provided, however, that, in each case, (i) prior written notice of such assignment of rights is given to the Company and (ii) such transferee agrees in writing to be bound by, and subject to, this Agreement pursuant to a written instrument in form and substance reasonably acceptable to the Company.

(h)Expenses. All Registration Expenses incurred in connection with any Registration Statement under this Agreement shall be borne by the Company. Except as expressly set forth herein, all Selling Expenses relating to securities registered on behalf of the Stockholders shall be borne by the Stockholders of the Registrable Securities included in such registration. The obligation of the Company to bear the expenses provided for in this paragraph

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shall apply irrespective of whether a Registration Statement becomes effective, is withdrawn or suspended, or converted to any other form of registration and irrespective of when any of the foregoing shall occur.

(i)Counterparts; Electronic Signature. This Agreement may be executed and delivered in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. This Agreement may be executed by facsimile or .pdf signature by any party and such signature shall be deemed binding for all purposes hereof without delivery of an original signature being thereafter required.

(j)Severability. Any term or provision of this Agreement that is illegal, invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such illegality, invalidity or unenforceability without rendering illegal, invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the legality, validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. In the event that any provision hereof would, under applicable law, be illegal, invalid or unenforceable in any respect, each party hereto intends that such provision shall be reformed and construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable laws and to otherwise give effect to the intent of the parties hereto.

(k)Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly delivered (i) four (4) Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, (ii) one (1) Business Day after being sent for next Business Day delivery, fees prepaid, via a reputable nationwide overnight courier service or (iii) on the date of confirmation of receipt (or, the first Business Day following such receipt if the date of such receipt is not a Business Day) of transmission by email, in each case to the intended recipient as set forth below:

If to the Stockholder, as follows:

Ventas, Inc.
353 N. Clark Street, Suite 3300 Chicago, Illinois 60654
Attention:	Carey Roberts
Email:	carey.roberts@Ventasreit.com

with a copy (which shall not constitute notice) to:

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Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention:	Robin Panovka & Victor Goldfeld
Email:	RPanovka@wlrk.com & VGoldfeld@wlrk.com

If to the Company, as follows:

Brookdale Senior Living Inc.
111 Westwood Place, Suite 400
Brentwood, TN 37027
Attention:	Chad White
Email:	CWhite@brookdale.com

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York, NY 10001
Attention:	Joseph Coco
Email:	joseph.coco@skadden.com

Any party may, from time to time, by written notice to the other parties, designate a different address, which shall be substituted for the one specified above for such party.

(l)Specific Performance. The parties agree that irreparable damage may occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above.

BROOKDALE SENIOR LIVING INC.
By:	/s/ George T. Hicks
	Name: George T. Hicks
	Title: Executive Vice President – Finance and Treasurer

VENTAS, INC.
By:	/s/ Brian Wood
	Name: Brian Wood
	Title: Senior Vice President and Chief Tax Officer

[Signature Page to Registration Rights Agreement]

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lucinda M. Baier, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Brookdale Senior Living 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:	August 10, 2020	/s/ Lucinda M. Baier
		Lucinda M. Baier
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven E. Swain, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Brookdale Senior Living 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:	August 10, 2020	/s/ Steven E. Swain
		Steven E. Swain
		Executive Vice President and Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL

OFFICER PURSUANT TO 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 on Form 10-Q of Brookdale Senior Living Inc. (the “Company”) for the period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Lucinda M. Baier, as President and Chief Executive Officer of the Company, and Steven E. Swain, as Executive Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Lucinda M. Baier

Name: Lucinda M. Baier

Title: President and Chief Executive Officer

Date: August 10, 2020

/s/ Steven E. Swain

Name: Steven E. Swain

Title: Executive Vice President and Chief Financial Officer

Date: August 10, 2020

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2020	Aug. 06, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	001-32641
Entity Registrant Name	BROOKDALE SENIOR LIVING INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-3068069
Entity Address, Address Line One	111 Westwood Place,
Entity Address, Address Line Two	Suite 400,
Entity Address, City or Town	Brentwood,
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37027
City Area Code	615
Local Phone Number	221-2250
Title of 12(b) Security	Common Stock, $0.01 Par Value Per Share
Entity Trading Symbol	BKD
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		183,240,758
Entity Central Index Key	0001332349
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 452,441	$ 240,227
Marketable securities	109,873	68,567
Restricted cash	28,397	26,856
Accounts receivable, net	120,503	133,613
Assets held for sale	37,397	42,671
Prepaid expenses and other current assets, net	89,416	84,241
Total current assets	838,027	596,175
Property, plant and equipment and leasehold intangibles, net	5,256,368	5,109,834
Operating lease right-of-use assets	1,030,505	1,159,738
Restricted cash	41,292	34,614
Investment in unconsolidated ventures	5,601	21,210
Goodwill	154,131	154,131
Other assets, net	98,619	118,731
Total assets	7,424,543	7,194,433
Current liabilities
Current portion of long-term debt	222,572	339,413
Current portion of financing lease obligations	44,667	63,146
Current portion of operating lease obligations	183,300	193,587
Trade accounts payable	61,780	104,721
Accrued expenses	259,499	266,703
Refundable fees and deferred revenue	158,608	79,402
Total current liabilities	930,426	1,046,972
Long-term debt, less current portion	3,469,793	3,215,710
Financing lease obligations, less current portion	558,307	771,434
Operating lease obligations, less current portion	1,226,242	1,277,178
Line of credit	166,381	0
Deferred tax liability	144	15,397
Other liabilities	133,361	169,017
Total liabilities	6,484,654	6,495,708
Preferred stock, $0.01 par value, 50,000,000 shares authorized at June 30, 2020 and December 31, 2019; no shares issued and outstanding	0	0
Common stock, $0.01 par value, 400,000,000 shares authorized at June 30, 2020 and December 31, 2019; 198,447,200 and 199,593,343 shares issued and 187,919,675 and 192,128,586 shares outstanding (including 4,733,385 and 7,252,459 unvested restricted shares), respectively	1,984	1,996
Additional paid-in-capital	4,180,436	4,172,099
Treasury stock, at cost; 10,527,525 and 7,464,757 shares at June 30, 2020 and December 31, 2019, respectively	(102,774)	(84,651)
Accumulated deficit	(3,142,089)	(3,393,088)
Total Brookdale Senior Living Inc. stockholders' equity	937,557	696,356
Noncontrolling interest	2,332	2,369
Total equity	939,889	698,725
Total liabilities and equity	$ 7,424,543	$ 7,194,433

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Equity, Number of Shares, Par Value and Other Disclosures [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	400,000,000	400,000,000
Common stock, shares issued (in shares)	198,447,200	199,593,343
Common stock, shares outstanding (in shares)	187,919,675	192,128,586
Treasury stock, shares (in shares)	10,527,525	7,464,757
Unvested Restricted Stock
Equity, Number of Shares, Par Value and Other Disclosures [Abstract]
Common stock, shares outstanding (in shares)	4,733,385	7,252,459

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenue and other operating income
Revenue	$ 865,909	$ 1,019,457	$ 1,880,048	$ 2,061,501
Expense
General and administrative expense (including non-cash stock-based compensation expense of $6,119, $6,030, $12,076, and $12,386, respectively)	52,518	57,576	107,113	113,887
Facility operating lease expense	62,379	67,689	126,860	136,357
Depreciation and amortization	93,154	94,024	183,892	190,912
Asset impairment	10,290	3,769	88,516	4,160
Loss (gain) on facility lease termination and modification, net	0	1,797	0	2,006
Total operating expense	925,886	1,017,246	1,925,125	2,042,629
Income (loss) from operations	(59,977)	2,211	(45,077)	18,872
Interest income	2,243	2,813	3,698	5,897
Interest expense:
Debt	(38,974)	(45,193)	(80,737)	(90,836)
Financing lease obligations	(11,892)	(16,649)	(25,174)	(33,392)
Amortization of deferred financing costs and debt discount	(1,556)	(986)	(2,871)	(1,965)
Gain (loss) on debt modification and extinguishment, net	(157)	(2,672)	19,024	(2,739)
Equity in earnings (loss) of unconsolidated ventures	438	(991)	(570)	(1,517)
Gain (loss) on sale of assets, net	(1,029)	2,846	371,810	2,144
Other non-operating income (loss)	988	3,199	3,650	6,187
Income (loss) before income taxes	(109,916)	(55,422)	243,753	(97,349)
Benefit (provision) for income taxes	(8,504)	(633)	7,324	(1,312)
Net income (loss)	(118,420)	(56,055)	251,077	(98,661)
Net (income) loss attributable to noncontrolling interest	19	585	37	596
Net income (loss) attributable to Brookdale Senior Living Inc. common stockholders	$ (118,401)	$ (55,470)	$ 251,114	$ (98,065)
Net income (loss) per share attributable to Brookdale Senior Living Inc. common stockholders:
Basic (in dollars per share)	$ (0.65)	$ (0.30)	$ 1.37	$ (0.53)
Diluted (in dollars per share)	$ (0.65)	$ (0.30)	$ 1.37	$ (0.53)
Weighted average common shares outstanding:
Basic (in shares)	183,178	186,140	183,682	186,442
Diluted (in shares)	183,178	186,140	183,862	186,442
Resident fees
Revenue and other operating income
Revenue	$ 731,629	$ 801,863	$ 1,514,336	$ 1,611,342
Management fees
Revenue and other operating income
Revenue	6,076	15,449	114,791	31,192
Reimbursed costs incurred on behalf of managed communities
Revenue and other operating income
Revenue	101,511	202,145	224,228	418,967
Expense
Costs of services	101,511	202,145	224,228	418,967
Other operating income
Revenue and other operating income
Revenue	26,693	0	26,693	0
Facility operating expense
Expense
Costs of services	$ 606,034	$ 590,246	$ 1,194,516	$ 1,176,340

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Depreciation and amortization	$ 86,971	$ 86,070	$ 171,272	$ 174,897
Non-cash stock-based compensation expense	$ 6,119	$ 6,030	$ 12,076	$ 12,386

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In- Capital	Treasury Stock	Accumulated Deficit	Noncontrolling Interest	Cumulative Effect Period Of Adoption Adjustment Accumulated Deficit
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect change in accounting principle	$ 1,018,413	$ 1,968	$ 4,151,147	$ (64,940)	$ (3,069,272)	$ (490)	$ (55,885)
Balances at beginning of period at Dec. 31, 2018	1,018,413	1,968	4,151,147	(64,940)	(3,069,272)	(490)	(55,885)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under Associate Stock Purchase Plan		2	597
Restricted stock, net		32	(32)
Shares withheld for employee taxes		(4)	(3,101)
Other, net			48
Compensation expense related to restricted stock grants			12,386
Purchase of treasury stock				(14,157)
Net income (loss)	(98,661)				(98,065)	(596)
Noncontrolling interest contribution						6,566
Cumulative effect change in accounting principle	866,204	1,998	4,161,045	(79,097)	(3,223,222)	5,480	(55,885)
Balances at end of period at Jun. 30, 2019	866,204	$ 1,998	4,161,045	(79,097)	(3,223,222)	5,480
Balances at beginning of period (in shares) at Dec. 31, 2018		192,356,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under Associate Stock Purchase Plan (in shares)		96,000
Restricted stock grants, net (in shares)		3,320,000
Shares withheld for employee taxes (in shares)		(450,000)
Purchase of treasury stock (in shares)		(2,211,000)
Balances at end of period (in shares) at Jun. 30, 2019		193,111,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect change in accounting principle	917,597	$ 2,000	4,154,790	(70,940)	(3,167,752)	(501)	0
Balances at beginning of period at Mar. 31, 2019	917,597	2,000	4,154,790	(70,940)	(3,167,752)	(501)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under Associate Stock Purchase Plan		1	299
Restricted stock, net		(3)	3
Shares withheld for employee taxes		0	(108)
Other, net			31
Compensation expense related to restricted stock grants			6,030
Purchase of treasury stock				(8,157)
Net income (loss)	(56,055)				(55,470)	(585)
Noncontrolling interest contribution						6,566
Cumulative effect change in accounting principle	866,204	1,998	4,161,045	(79,097)	(3,223,222)	5,480	0
Balances at end of period at Jun. 30, 2019	866,204	$ 1,998	4,161,045	(79,097)	(3,223,222)	5,480
Balances at beginning of period (in shares) at Mar. 31, 2019		194,573,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under Associate Stock Purchase Plan (in shares)		46,000
Restricted stock grants, net (in shares)		(214,000)
Shares withheld for employee taxes (in shares)		(16,000)
Purchase of treasury stock (in shares)		(1,278,000)
Balances at end of period (in shares) at Jun. 30, 2019		193,111,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect change in accounting principle	866,204	$ 1,998	4,161,045	(79,097)	(3,223,222)	5,480
Cumulative effect change in accounting principle	698,725	1,996	4,172,099	(84,651)	(3,393,088)	2,369	(115)
Balances at beginning of period at Dec. 31, 2019	698,725	1,996	4,172,099	(84,651)	(3,393,088)	2,369	(115)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under Associate Stock Purchase Plan		1	168
Restricted stock, net		(7)	7
Shares withheld for employee taxes		(6)	(3,951)
Other, net			37
Compensation expense related to restricted stock grants			12,076
Purchase of treasury stock				(18,123)
Net income (loss)	251,077				251,114	(37)
Noncontrolling interest contribution						0
Cumulative effect change in accounting principle	939,889	1,984	4,180,436	(102,774)	(3,142,089)	2,332	(115)
Balances at end of period at Jun. 30, 2020	$ 939,889	$ 1,984	4,180,436	(102,774)	(3,142,089)	2,332
Balances at beginning of period (in shares) at Dec. 31, 2019	192,128,586	192,129,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under Associate Stock Purchase Plan (in shares)		61,000
Restricted stock grants, net (in shares)		(579,000)
Shares withheld for employee taxes (in shares)		(628,000)
Purchase of treasury stock (in shares)		(3,063,000)
Balances at end of period (in shares) at Jun. 30, 2020	187,919,675	187,920,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect change in accounting principle	$ 1,052,230	$ 1,985	4,174,356	(102,774)	(3,023,688)	2,351	0
Balances at beginning of period at Mar. 31, 2020	1,052,230	1,985	4,174,356	(102,774)	(3,023,688)	2,351	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under Associate Stock Purchase Plan		0	0
Restricted stock, net		(1)	1
Shares withheld for employee taxes		0	(59)
Other, net			19
Compensation expense related to restricted stock grants			6,119
Purchase of treasury stock				0
Net income (loss)	(118,420)				(118,401)	(19)
Noncontrolling interest contribution						0
Cumulative effect change in accounting principle	939,889	1,984	4,180,436	(102,774)	(3,142,089)	2,332	$ 0
Balances at end of period at Jun. 30, 2020	$ 939,889	$ 1,984	4,180,436	(102,774)	(3,142,089)	2,332
Balances at beginning of period (in shares) at Mar. 31, 2020		188,012,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under Associate Stock Purchase Plan (in shares)		0
Restricted stock grants, net (in shares)		(75,000)
Shares withheld for employee taxes (in shares)		(17,000)
Purchase of treasury stock (in shares)		0
Balances at end of period (in shares) at Jun. 30, 2020	187,919,675	187,920,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect change in accounting principle	$ 939,889	$ 1,984	$ 4,180,436	$ (102,774)	$ (3,142,089)	$ 2,332

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash Flows from Operating Activities
Net income (loss)	$ 251,077	$ (98,661)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss (gain) on debt modification and extinguishment, net	(19,024)	2,739
Depreciation and amortization, net	186,763	192,877
Asset impairment	88,516	4,160
Equity in (earnings) loss of unconsolidated ventures	570	1,517
Distributions from unconsolidated ventures from cumulative share of net earnings	0	1,530
Amortization of entrance fees	(925)	(772)
Proceeds from deferred entrance fee revenue	85	1,739
Deferred income tax (benefit) provision	(15,253)	470
Operating lease expense adjustment	(14,954)	(8,812)
Loss (gain) on sale of assets, net	(371,810)	(2,144)
Loss (gain) on facility lease termination and modification, net	0	2,006
Non-cash stock-based compensation expense	12,076	12,386
Non-cash management contract termination gain	0	(640)
Other	(1,800)	(4,401)
Changes in operating assets and liabilities:
Accounts receivable, net	12,995	(3,997)
Prepaid expenses and other assets, net	20,162	30,823
Prepaid insurance premiums financed with notes payable	(11,664)	(12,090)
Trade accounts payable and accrued expenses	(18,692)	(43,385)
Refundable fees and deferred revenue	80,688	(17,226)
Operating lease assets and liabilities for lessor capital expenditure reimbursements	10,509	1,000
Net cash provided by (used in) operating activities	209,319	59,119
Cash Flows from Investing Activities
Change in lease security deposits and lease acquisition deposits, net	3,304	(83)
Purchase of marketable securities	(149,236)	(98,059)
Sale and maturities of marketable securities	108,750	55,000
Capital expenditures, net of related payables	(112,863)	(122,297)
Acquisition of assets, net of related payables and cash received	446,688	0
Investment in unconsolidated ventures	(356)	(4,204)
Distributions received from unconsolidated ventures	0	5,305
Proceeds from sale of assets, net	300,539	52,430
Proceeds from notes receivable	1,140	31,609
Net cash provided by (used in) investing activities	(295,410)	(80,299)
Cash Flows from Financing Activities
Proceeds from debt	473,460	158,231
Repayment of debt and financing lease obligations	(303,920)	(238,036)
Proceeds from line of credit	166,381	0
Purchase of treasury stock, net of related payables	(18,123)	(18,401)
Payment of financing costs, net of related payables	(7,469)	(3,342)
Payments of employee taxes for withheld shares	(3,951)	(3,105)
Other	146	574
Net cash provided by (used in) financing activities	306,524	(104,079)
Net increase (decrease) in cash, cash equivalents, and restricted cash	220,433	(125,259)
Cash, cash equivalents, and restricted cash at beginning of period	301,697	450,218
Cash, cash equivalents, and restricted cash at end of period	$ 522,130	$ 324,959

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Description of Business

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

Description of BusinessBrookdale Senior Living Inc. ("Brookdale" or the "Company") is an operator of senior living communities throughout the United States. The Company is committed to providing senior living solutions primarily within properties that are designed, purpose-built, and operated to provide quality service, care, and living accommodations for residents. The Company operates and manages independent living, assisted living, memory care, and continuing care retirement communities ("CCRCs"). The Company also offers a range of home health, hospice, and outpatient therapy services to residents of many of its communities and to seniors living outside of its communities.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q. In the opinion of management, these financial statements include all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position, results of operations, and cash flows of the Company for all periods presented. Certain information and footnote disclosures included in annual financial statements have been condensed or omitted. The Company believes that the disclosures included are adequate and provide a fair presentation of interim period results. Interim financial statements are not necessarily indicative of the financial position or operating results for an entire year. These interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 19, 2020. Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's condensed consolidated financial position or results of operations.

Except for the changes for the impact of the recently adopted accounting pronouncements discussed in this Note, the Company has consistently applied its accounting policies to all periods presented in these condensed consolidated financial statements.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Brookdale and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Investments in affiliated companies that the Company does not control, but has the ability to exercise significant influence over governance and operations, are accounted for by the equity method. The ownership interest of consolidated entities not wholly-owned by the Company are presented as noncontrolling interests in the accompanying condensed consolidated financial statements. Noncontrolling interest represents the share of consolidated entities owned by third parties. Noncontrolling interest is adjusted for the noncontrolling holder's share of additional contributions, distributions, and the proportionate share of the net income or loss of each respective entity.

Use of Estimates

The preparation of the condensed consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, revenue and other operating income, asset impairments, self-insurance reserves, performance-based compensation, the allowance for credit losses, depreciation and amortization, leasing transactions, income taxes, and other contingencies. Although these estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from the original estimates.

Lease Accounting

The Company, as lessee, recognizes a right-of-use asset and a lease liability on the Company's condensed consolidated balance sheet for its community, office, and equipment leases. As of the commencement date of a lease, a lease liability and corresponding right-of-use asset is established on the Company's condensed consolidated balance sheet at the present value of future minimum lease payments. The Company's community leases generally contain fixed annual rent escalators or annual rent escalators based on an index, such as the consumer price index. The future minimum lease payments recognized on the condensed consolidated balance sheet include fixed payments (including in-substance fixed payments) and variable payments estimated utilizing the index

or rate on the lease commencement date. The Company recognizes lease expense as incurred for additional variable payments. For the Company's leases that do not contain an implicit rate, the Company utilizes its estimated incremental borrowing rate to determine the present value of lease payments based on information available at commencement of the lease. The Company's estimated incremental borrowing rate reflects the fixed rate at which the Company could borrow a similar amount for the same term on a collateralized basis. The Company elected the short-term lease exception policy which permits leases with an initial term of 12 months or less to not be recorded on the Company's consolidated balance sheet and instead to be recognized as lease expense as incurred.

The Company, as lessee, makes a determination with respect to each of its community, office, and equipment leases as to whether each should be accounted for as an operating lease or financing lease. The classification criteria is based on estimates regarding the fair value of the leased asset, minimum lease payments, effective cost of funds, economic life of the asset, and certain other terms in the lease agreements.

Lease right-of-use assets are reviewed for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of right-of-use assets are assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset, calculated utilizing the lowest level of identifiable cash flows. If estimated future undiscounted net cash flows are less than the carrying amount of the asset then the fair value of the asset is estimated. The impairment expense is determined by comparing the estimated fair value of the asset to its carrying amount, with any amount in excess of fair value recognized as an expense in the current period. Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates and estimated lease coverage ratios (Level 3).

Operating Leases

The Company recognizes operating lease expense for actual rent paid, generally plus or minus a straight-line adjustment for estimated minimum lease escalators if applicable. The right-of-use asset is generally reduced each period by an amount equal to the difference between the operating lease expense and the amount of expense on the lease liability utilizing the effective interest method. Subsequent to the impairment of an operating lease right-of-use asset, the Company recognizes operating lease expense consisting of the reduction of the right-of-use asset on a straight-line basis over the remaining lease term and the amount of expense on the lease liability utilizing the effective interest method.

Financing Leases

Financing lease right-of-use assets are recognized within property, plant and equipment and leasehold intangibles, net on the Company's consolidated balance sheets. The Company recognizes interest expense on the financing lease liabilities utilizing the effective interest method. The right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term unless the lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise. If the Company is reasonably certain to exercise the purchase option, the asset is amortized over the useful life.

Sale-Leaseback Transactions

For transactions in which an owned community is sold and leased back from the buyer (sale-leaseback transactions), the Company recognizes an asset sale and lease accounting is applied if the Company has transferred control of the community. For such transactions, the Company removes the transferred assets from the consolidated balance sheet and a gain or loss on the sale is recognized for the difference between the carrying amount of the asset and the transaction price for the sale transaction.

For sale‑leaseback transactions in which the Company has not transferred control of the underlying asset, the Company does not recognize an asset sale or derecognize the underlying asset until control is transferred. For such transactions, the Company continues to recognize the assets within property, plant and equipment and leasehold intangibles, net and continues to depreciate the asset over its useful life. Additionally, the Company accounts for any amounts received as a financing lease liability and the Company recognizes interest expense on the financing lease liability utilizing the effective interest method with the interest expense limited to an amount that is not greater than the cash payments on the financing lease liability over the term of the lease.

Gain (Loss) on Sale of Assets

The Company regularly enters into real estate transactions which may include the disposition of certain communities, including the associated real estate. The Company recognizes gain or loss from real estate sales when the transfer of control is complete.

The Company recognizes gain or loss from the sale of equity method investments when the transfer of control is complete and the Company has no continuing involvement with the transferred financial assets.

Property, Plant and Equipment and Leasehold Intangibles, Net

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset group may not be recoverable. Recoverability of an asset group is assessed by comparing its carrying amount to the estimated future undiscounted net cash flows expected to be generated by the asset group through operation or disposition, calculated utilizing the lowest level of identifiable cash flows. If this comparison indicates that the carrying amount of an asset group is not recoverable, the Company is required to recognize an impairment loss. The impairment loss is measured by the amount by which the carrying amount of the asset exceeds its estimated fair value, with any amount in excess of fair value recognized as an expense in the current period. Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates, estimated holding periods, and estimated capitalization rates (Level 3).

Goodwill

The Company tests goodwill for impairment annually during the fourth quarter or more frequently if indicators of impairment arise. Factors the Company considers important in its analysis of whether an indicator of impairment exists include a significant decline in the Company's stock price or market capitalization for a sustained period since the last testing date, significant underperformance relative to historical or projected future operating results, and significant negative industry or economic trends. The Company first assesses qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If so, the Company performs a quantitative goodwill impairment test based upon a comparison of the estimated fair value of the reporting unit to which the goodwill has been assigned with the reporting unit's carrying amount. The fair values used in the quantitative goodwill impairment test are estimated using Level 3 inputs based upon discounted future cash flow projections for the reporting unit. These cash flow projections are based upon a number of estimates and assumptions such as revenue and expense growth rates, capitalization rates, and discount rates. The Company also considers market-based measures such as earnings multiples in its analysis of estimated fair values of its reporting units. If the quantitative goodwill impairment test results in a reporting unit's carrying amount exceeding its estimated fair value, an impairment charge will be recorded based on the difference, with the impairment charge limited to the amount of goodwill allocated to the reporting unit.

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 replaces the current incurred loss impairment methodology for credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted this standard effective January 1, 2020 and recognized the cumulative effect of the adoption as an immaterial adjustment to beginning accumulated deficit as of January 1, 2020 for the cumulative effect of adopting ASU 2016-13.

In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"), which amends the former accounting principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and lessors. The Company adopted these lease accounting standards effective January 1, 2019 and recognized the cumulative effect of the adoption as a $55.9 million adjustment to beginning accumulated deficit as of January 1, 2019. See Footnote 2, Summary of Significant Accounting Policies, in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 for more details regarding the adoption of this accounting pronouncement.

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COVID-19 Pandemic

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

COVID-19 Pandemic

 COVID-19 Pandemic

The United States broadly continues to experience the COVID-19 pandemic, which has significantly disrupted, and likely will continue to significantly disrupt for some period, the nation’s economy, the senior living industry, and the Company’s business. Although a significant portion of the Company’s corporate support associates began working from home in March 2020, the Company continues to serve and care for seniors through the pandemic. Due to the average age and prevalence of chronic medical conditions among the Company’s residents and patients, they generally are at disproportionately higher risk of hospitalization and adverse outcomes if they contract COVID-19.

Due to the pandemic, in March 2020 the Company began restricting visitors at all its communities to essential healthcare personnel and certain compassionate care situations, screening associates and permitted visitors, suspending group outings, modifying communal dining and programming to comply with social distancing guidelines and, in most cases, implementing in-room only dining and activities programming, requesting that residents refrain from leaving the community unless medically necessary, and

requiring new residents and residents returning from a hospital or nursing home to isolate in their apartment for fourteen days. Upon confirmation of positive COVID-19 exposure at a community, the Company follows government guidance regarding minimizing further exposure, including associates’ adhering to personal protection protocols, restricting new resident admissions, and in some cases isolating residents. These restrictions were in place across the Company’s portfolio for the three months ended June 30, 2020.

The pandemic and response efforts of senior living communities have significantly disrupted demand for senior living communities and the sales process. The Company cannot predict with reasonable certainty whether or when demand for senior living communities will return to pre-COVID-19 levels or the extent to which the pandemic’s effect on demand may adversely affect the amount of resident fees the Company is able to collect from its residents.

The pandemic and the Company’s response efforts began to adversely impact the Company’s occupancy and resident fee revenue significantly during March 2020, as new resident leads, visits (including virtual visits), and move-in activity declined significantly compared to typical levels. Further deterioration of the Company's resident fee revenue will result from lower move-in activity and the resident attrition inherent in its business, which may increase due to the impacts of COVID-19. The Company’s home health average daily census also began to decrease in March 2020 due to lower occupancy in its communities and fewer elective medical procedures and hospital discharges.

Facility operating expense for the three and six months ended June 30, 2020 includes $60.6 million and $70.6 million, respectively, of incremental direct costs to prepare for and respond to the pandemic, including costs for acquisition of additional personal protective equipment ("PPE"), medical equipment, and cleaning and disposable food service supplies, enhanced cleaning and environmental sanitation costs, increased labor expense, increased workers compensation and health plan expense, increased insurance premiums and retentions, consulting and professional services costs, and costs for COVID-19 testing of residents and associates where not otherwise covered by government payor or third-party insurance sources. The Company is not able to reasonably predict the total amount of costs it will incur related to the pandemic, and such costs are likely to be substantial. As described further in Note 6, the Company also recorded non-cash impairment charges in its operating results of $10.3 million and $87.0 million for the three and six months ended June 30, 2020, respectively, for its operating lease right-of-use assets and property, plant and equipment and leasehold intangibles, primarily due to the COVID-19 pandemic and lower than expected operating performance at communities for which assets were impaired.

The Company has taken, and continues to take, actions to enhance and preserve its liquidity in response to the pandemic. The Company drew $166.4 million on its revolving credit facility in March 2020, and suspended repurchases under the Company’s existing share repurchase program. During the three months ended June 30, 2020, the Company accepted $33.5 million of cash for grants under the Public Health and Social Services Emergency Fund (the “Emergency Fund”) and $85.0 million of accelerated/advanced Medicare payments, and the Company deferred $26.5 million of the employer portion of social security payroll taxes. Each of these programs were created or expanded under the Coronavirus Aid, Relief, and Economic Security Act of 2020 ("CARES Act"), as described below. The Company also has delayed or canceled a number of elective capital expenditure projects resulting in an approximate $50 million reduction to its pre-pandemic full-year 2020 capital expenditure plans. On July 26, 2020, the Company entered into definitive agreements with Ventas, Inc. ("Ventas") to restructure its 120 community triple-net master lease arrangements as further described in Note 17. Pursuant to the multi-part transaction, among other things, the Company paid a $119.2 million one-time cash payment to Ventas, reduced its initial annual minimum rent under the amended and restated master lease to $100 million effective July 1, 2020, and removed the prior requirements that the Company satisfy financial covenants and that the Company maintain a security deposit with Ventas. The annual minimum rent under the amended and restated master lease reflects a reduction of approximately $86 million over the next twelve months.

As of June 30, 2020, the Company’s total liquidity was $600.2 million, consisting of $452.4 million of unrestricted cash and cash equivalents, $109.9 million of marketable securities, and $37.9 million of additional availability on its revolving credit facility. As of June 30, 2020, $166.4 million of borrowings were outstanding on the revolving credit facility. The Company continues to seek opportunities to enhance and preserve its liquidity, including through reducing expenses and elective capital expenditures, continuing to evaluate its financing structure and the state of debt markets, and seeking further government-sponsored financial relief related to the COVID-19 pandemic.

During March 2020, the Company completed its financing plans in the regular course of business, including closing three non-recourse mortgage debt financing transactions totaling $208.5 million with the proceeds used to refinance the majority of the Company’s 2020 maturities and to partially fund the Company’s acquisitions of 26 communities completed during the three months ended March 31, 2020. As of June 30, 2020, the Company’s remaining 2020 and 2021 maturities (after giving effect to the multi-part transaction with Ventas on July 26, 2020) are $36.4 million and $254.1 million, respectively, which are primarily non-recourse mortgage debt maturities.

As described further in Note 10, availability under the Company’s revolving credit facility will vary from time to time based on borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and the Company's consolidated fixed charge coverage ratio. To the extent the outstanding borrowings on the credit facility exceed future borrowing base calculations, the Company would be required to repay the difference to restore the outstanding balance to the new borrowing base. Due primarily to the impacts of the COVID-19 pandemic, and based upon the Company’s current estimate of cash flows, the Company has determined that it is probable that it will not satisfy the minimum consolidated fixed charge coverage ratio covenant under the credit facility for one or more quarterly determination dates in the first half of 2021 without further action on the Company’s part. Failure to satisfy the minimum ratio would result in the availability under the revolving credit facility being reduced to zero and the Company being required to repay the $166.4 million of borrowings outstanding on the revolving credit facility.

Based upon the Company’s current liquidity and estimated cash flows, the Company has estimated that it would be unable to repay a portion of the 2021 maturities and the borrowings outstanding on the revolving credit facility as they become due without refinancing these maturities or obtaining additional financing proceeds. The Company has continued efforts on its plan to refinance the assets currently securing the credit facility and to refinance the substantial majority of the remaining 2020 and 2021 maturities with non-recourse mortgage debt. The Company currently anticipates that it is probable that such refinancings will be completed and the proceeds of such refinancings, together with cash on hand, will be sufficient to repay the $166.4 million balance on its revolving credit facility and terminate the facility without payment of a premium or penalty and to pay the Company’s contractual obligations as they come due over the next twelve months. However, there is no assurance that debt financing will continue to be available on terms consistent with the Company’s expectations or at all, in which case the Company would expect to take other mitigating actions prior to the maturity dates.

In response to the pandemic, on March 27, 2020, the President signed the CARES Act into law, which was amended and expanded by the Paycheck Protection Program and Health Care Enhancement Act signed into law on April 24, 2020. The legislation provides liquidity and financial relief to certain businesses, among other things. The impacts to the Company of certain provisions of the CARES Act are summarized below.

• During the three months ended June 30, 2020, the Company accepted $33.5 million of cash for grants from the Emergency Fund, which was expanded by the CARES Act to provide grants or other funding mechanisms to eligible healthcare providers for healthcare related expenses or lost revenues attributable to COVID-19. Approximately $28.8 million of the grants were made available pursuant to the Emergency Fund's general distribution, with grant amounts based primarily on the Company's relative share of aggregate 2019 Medicare fee-for-service reimbursements and generally related to home health, hospice, outpatient therapy, and skilled nursing care provided through the Company's Health Care Services and CCRCs segments. Approximately $4.7 million of the grants were made available pursuant to the Emergency Fund's targeted allocation for certified skilled nursing facilities, with amounts determined using a per-facility and per-bed model. During July 2020, the Company applied for additional grants pursuant to the Emergency Fund's Medicaid and CHIP allocation. The amount of such grants are expected to be based on 2% of a portion of the Company's 2018 gross revenues from patient care.

The grants are subject to the terms and conditions of the program, including that such funds may only be used to prevent, prepare for, and respond to COVID-19 and will reimburse only for healthcare related expenses or lost revenues that are attributable to COVID-19. During the three months ended June 30, 2020, the Company recognized $26.4 million of the grants as other operating income based upon the Company’s estimates of its satisfaction of the conditions of the grants during such period. As of June 30, 2020, $7.1 million of unrecognized grants were included in refundable fees and deferred revenue within the Company's condensed consolidated balance sheets. The $33.5 million of grants accepted from the Emergency Fund during the six months ended June 30, 2020 has been presented within net cash provided by (used in) operating activities within the Company’s condensed consolidated statement of cash flows.

• During three months ended June 30, 2020, the Company received $85.0 million under the Accelerated and Advance Payment Program administered by CMS, which was temporarily expanded by the CARES Act. Under the program, the Company requested acceleration/advancement of 100% of its Medicare payment amount for a three-month period. Recoupment of accelerated/advanced payments are required to begin 120 days after their issuance through offsets of new Medicare claims, and all accelerated/advanced payments are due 210 days following their issuance. Such amount has been presented within net cash provided by operating activities within the Company’s condensed consolidated statement of cash flows.

• Under the CARES Act, the Company has elected to defer payment of the employer portion of social security payroll taxes incurred from March 27, 2020 to December 31, 2020. One-half of such deferral amount will become due on each of December 31, 2021 and December 31, 2022. As of June 30, 2020, the Company has deferred payment of $26.5 million of payroll taxes and presented such amount within other liabilities within the Company's condensed consolidated balance sheets.

• The CARES Act temporarily suspended the 2% Medicare sequestration for the period May 1, 2020 to December 31, 2020, which primarily benefits the Company’s Health Care Services segment.

The Company cannot predict with reasonable certainty the impacts that COVID-19 ultimately will have on its business, results of operations, cash flow, and liquidity, and the Company’s response efforts may continue to delay or negatively impact its strategic initiatives, including plans for future growth. The ultimate impacts of COVID-19 will depend on many factors, some of which cannot be foreseen, including the duration, severity, and breadth of the pandemic and any resurgence of the disease; the impact of COVID-19 on the nation’s economy and debt and equity markets and the local economies in the Company’s markets; the development and availability of COVID-19 testing, therapeutic agents, and vaccines and the prioritization of such resources among businesses and demographic groups; government financial and regulatory relief efforts that may become available to business and individuals, including the Company's ability to qualify for and satisfy the terms and conditions of financial relief; perceptions regarding the safety of senior living communities during and after the pandemic; changes in demand for senior living communities and the Company’s ability to adapt its sales and marketing efforts to meet that demand; the impact of COVID-19 on the Company’s residents’ and their families’ ability to afford its resident fees, including due to changes in unemployment rates, consumer confidence, and equity markets caused by COVID-19; changes in the acuity levels of the Company’s new residents; the disproportionate impact of COVID-19 on seniors generally and those residing in the Company’s communities; the duration and costs of the Company’s response efforts, including increased equipment, supplies, labor, litigation, testing, and other expenses; the impact of COVID-19 on the Company’s ability to complete financings, refinancings, or other transactions (including dispositions) or to generate sufficient cash flow to cover required interest and lease payments and to satisfy financial and other covenants in the Company’s debt and lease documents; increased regulatory requirements, including unfunded, mandatory testing; increased enforcement actions resulting from COVID-19, including those that may limit the Company’s collection efforts for delinquent accounts; and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or the Company’s response efforts.

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Earnings Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic earnings per share ("EPS") is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. Under the treasury stock method, diluted EPS reflects the potential dilution that could occur if securities or other instruments that are convertible into common stock were exercised or could result in the issuance of common stock. Potentially dilutive common stock equivalents include unvested restricted stock and restricted stock units.

The following table summarizes the computation of basic and diluted earnings (loss) per share amounts presented in the condensed consolidated statements of operations:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020		2019
Income attributable to common shareholders:
Net income (loss)	$	(118,401	)	$	(55,470	)	$	251,114	$	(98,065	)
Weighted average shares outstanding - basic	183,178			186,140			183,682		186,442
Effect of dilutive securities - Unvested restricted stock and restricted stock units	—			—			180		—
Weighted average shares outstanding - diluted	183,178			186,140			183,862		186,442
Basic earnings (loss) per common share:
Net income (loss) per share attributable to common shareholders	$	(0.65	)	$	(0.30	)	$	1.37	$	(0.53	)
Diluted earnings (loss) per common share:
Net income (loss) per share attributable to common shareholders	$	(0.65	)	$	(0.30	)	$	1.37	$	(0.53	)

For the three months ended June 30, 2020, the Company reported a consolidated net loss. As a result of the net loss, unvested restricted stock and restricted stock units were antidilutive for the period and were not included in the computation of diluted weighted average shares. The weighted average restricted stock and restricted stock units excluded from the calculation of diluted net loss per share was 9.1 million for the three months ended June 30, 2020. For the six months ended June 30, 2020, the calculation

of diluted weighted average shares excludes 7.1 million of non-performance-based restricted stock and restricted stock units, as the inclusion of such award would have been antidilutive. Performance-based equity awards are included in the diluted earnings per share calculation based on the attainment of the applicable performance metrics to date. For the six months ended June 30, 2020, the calculation of diluted weighted average shares excludes 1.8 million of performance-based restricted stock and restricted stock units. During the three and six months ended June 30, 2019, the Company reported a consolidated net loss. As a result of the net loss, unvested restricted stock and restricted stock units were antidilutive for the periods and were not included in the computation of diluted weighted average shares. The weighted average restricted stock and restricted stock units excluded from the calculation of diluted net loss per share was 7.8 million and 7.5 million for the three and six months ended June 30, 2019, respectively.

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Acquisitions, Dispositions and Other Transactions

6 Months Ended

Jun. 30, 2020

Business Combinations [Abstract]

Acquisitions, Dispositions and Other Transactions

Acquisitions, Dispositions and Other Transactions

During the period from January 1, 2019 through June 30, 2020, the Company acquired 26 communities that the Company formerly leased, disposed of 15 owned communities, and sold its ownership interest in its unconsolidated entry fee CCRC Venture (the "CCRC Venture") with Healthpeak Properties, Inc. ("Healthpeak"), and the Company's triple-net lease obligations on 12 communities were terminated. The acquisitions of formerly leased communities include the 18 communities acquired from Healthpeak described below and eight communities acquired pursuant to the exercise of a purchase option for a purchase price of $39.3 million, all of which occurred during the three months ended March 31, 2020.

As of June 30, 2020, the Company owned 355 communities, leased 305 communities, managed 77 communities, and two unencumbered communities in the CCRCs segment were classified as held for sale, resulting in $37.4 million being recorded as assets held for sale. The closings of the various pending and expected transactions described within this note are, or will be, subject to the satisfaction of various closing conditions, including (where applicable) the receipt of regulatory approvals. However, there can be no assurance that the transactions will close or, if they do, when the actual closings will occur.

Dispositions of Owned Communities

During the six months ended June 30, 2020, the Company completed the sale of one owned community for cash proceeds of $5.5 million, net of transaction costs, and recognized a net gain on sale of assets of $0.2 million.

During the year ended December 31, 2019, the Company completed the sale of 14 owned communities for cash proceeds of $85.4 million, net of transaction costs, and recognized a net gain on sale of assets of $5.5 million. The Company utilized a portion of the cash proceeds from the asset sales to repay approximately $5.1 million of associated mortgage debt and debt prepayment penalties. These dispositions included the sale of eight communities during the six months ended June 30, 2019 for which the Company received cash proceeds of $44.1 million, net of transaction costs.

Healthpeak CCRC Venture and Master Lease Transactions

On October 1, 2019, the Company entered into definitive agreements, including a Master Transactions and Cooperation Agreement (the "MTCA") and an Equity Interest Purchase Agreement (the "Purchase Agreement"), providing for a multi-part transaction with Healthpeak. The parties subsequently amended the agreements to include one additional entry fee CCRC community as part of the sale of the Company's interest in the CCRC Venture (rather than removing the community from the CCRC Venture for joint marketing and sale). The components of the multi-part transaction include:

• CCRC Venture Transaction. Pursuant to the Purchase Agreement, on January 31, 2020, Healthpeak acquired the Company's 51% ownership interest in the CCRC Venture, which held 14 entry fee CCRCs, for a purchase price of $289.2 million, net of a $5.9 million post-closing net working capital adjustment paid to Healthpeak during the three months ended June 30, 2020 (representing an aggregate valuation of $1.06 billion less portfolio debt, subject to a net working capital adjustment). The $289.2 million of cash received from Healthpeak is presented within net cash used in investing activities for the six months ended June 30, 2020. The Company recognized a $369.8 million gain on sale of assets for the six months ended June 30, 2020, and the Company derecognized the net equity method liability for the sale of the ownership interest in the CCRC Venture. At the closing, the parties terminated the Company's existing management agreements with the 14 entry fee CCRCs, Healthpeak paid the Company a $100.0 million management agreement termination fee, and the Company transitioned operations of the entry fee CCRCs to a new operator. The Company recognized $100.0 million of management fee revenue for the three months ended March 31, 2020 for the management termination fee. Prior to the January 31, 2020 closing, the parties moved the remaining two entry fee CCRCs into a new unconsolidated venture on substantially the same terms as the CCRC Venture to accommodate the sale of such two communities expected to occur in 2021. Subsequent to these transactions, the Company will have exited substantially all of its entry fee CCRC operations.

•

Master Lease Transactions. Pursuant to the MTCA, on January 31, 2020, the parties amended and restated the existing master lease pursuant to which the Company continues to lease 25 communities from Healthpeak, and the Company acquired 18 formerly leased communities from Healthpeak, at which time the 18 communities were removed from the master lease. At the closing, the Company paid $405.5 million to acquire such communities and to reduce its annual rent under the amended and restated master lease. The $405.5 million of cash paid to Healthpeak and $1.7 million of direct acquisition costs are presented within net cash used in investing activities for the six months ended June 30, 2020. The Company funded the community acquisitions with $192.6 million of non-recourse mortgage financing and the proceeds from the multi-part transaction. In addition, Healthpeak has agreed to terminate the lease for one leased community. With respect to the continuing 24 communities, the Company's amended and restated master lease: (i) has an initial term to expire on December 31, 2027, subject to two extension options at the Company's election for ten years each, which must be exercised with respect to the entire pool of leased communities; (ii) the initial annual base rent for the 24 communities is $41.7 million and is subject to an escalator of 2.4% per annum on April 1st of each year; and (iii) Healthpeak has agreed to make available up to $35.0 million for capital expenditures for a five-year period related to the 24 communities at an initial lease rate of 7.0%. As a result of the community acquisition transaction, the Company recognized a $19.7 million gain on debt extinguishment and derecognized the $105.1 million carrying amount of financing lease obligations for eight communities which were previously subject to sale-leaseback transactions in which the Company was deemed to have continuing involvement.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

 Fair Value Measurements

Marketable Securities

As of June 30, 2020, marketable securities of $109.9 million are stated at fair value based on valuation provided by third-party pricing services and are classified within Level 2 of the valuation hierarchy.

Debt

The Company had outstanding long-term debt obligations, including $166.4 million of borrowings outstanding on the revolving credit facility as of June 30, 2020, with a carrying value of $3.9 billion and $3.6 billion as of June 30, 2020 and December 31, 2019, respectively. Fair value of the long-term debt approximates carrying value in all periods presented. The Company's fair value of long-term debt disclosure is classified within Level 2 of the valuation hierarchy.

Asset Impairment Expense

The following is a summary of asset impairment expense.

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Property, plant and equipment and leasehold intangibles, net	$	3.7	$	1.2	$	14.7	$	1.2
Operating lease right-of-use assets	6.6		—		72.3		—
Investment in unconsolidated ventures	—		—		1.5		—
Other intangible assets, net	—		2.6		—		2.6
Other assets, net	—		—		—		0.4
Asset impairment	$	10.3	$	3.8	$	88.5	$	4.2

Although the Company cannot predict with reasonable certainty the ultimate impacts of the COVID-19 pandemic, the Company concluded that the impacts of the pandemic have adversely affected the Company’s projections of revenue, expense, and cash flow for its senior housing community long-lived assets and constitute an indicator of potential impairment. Accordingly, the Company assessed its long-lived assets for recoverability. Refer to Note 3 for additional information on the COVID-19 pandemic.

In estimating the recoverability of asset groups for purposes of the Company’s long-lived asset impairment testing during the six months ended June 30, 2020, the Company utilized future cash flow projections that are generally developed internally. Any estimates of future cash flow projections necessarily involve predicting unknown future circumstances and events and require significant management judgments and estimates. In arriving at the cash flow projections, the Company considers its estimates of the impacts of the pandemic, historic operating results, approved budgets and business plans, future demographic factors, expected growth rates, estimated asset holding periods, and other factors.

As of March 31, 2020 and June 30, 2020, there was a wide range of possible outcomes as a result of the pandemic, as there was a high degree of uncertainty about its ultimate impacts. Management’s estimates of the impacts of the pandemic are highly dependent on variables that are difficult to predict, as further described in Note 3. Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments.

Operating Lease Right-of-Use Assets

As a result of the COVID-19 pandemic during the six months ended June 30, 2020, the Company evaluated operating lease right-of-use assets for impairment and identified communities with a carrying amount of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets. The Company compared the estimated fair value of the assets to their carrying amount for these identified communities and recorded an impairment charge for the excess of carrying amount over fair value. The Company recognized the right-of-use assets for the operating leases for 35 communities on the condensed consolidated balance sheets as of March 31, 2020 at the estimated fair value of $106.7 million. Additionally, during the three months ended June 30, 2020, the Company recognized the right-of-use assets for the operating leases for nine communities on the condensed consolidated balance sheets at the estimated fair value of $10.3 million. As a result, the Company recorded non-cash impairment charges for the operating lease right-of-use assets of $6.6 million and $72.3 million for the three and six months ended June 30, 2020, respectively.

The fair values of the operating lease right-of-use assets of these communities were estimated utilizing a discounted cash flow approach based upon historical and projected community cash flows and market data, including management fees and a market supported lease coverage ratio, all of which are considered Level 3 inputs within the valuation hierarchy. The estimated future cash flows were discounted at a rate that is consistent with a weighted average cost of capital from a market participant perspective. The range of discount rates utilized was 11.2% to 12.3%, depending upon the property type, geographical location, and the quality of the respective community. These impairment charges are primarily due to the COVID-19 pandemic and lower than expected operating performance at these communities and reflect the amount by which the carrying amounts of the assets exceeded their estimated fair value.

Property, Plant and Equipment and Leasehold Intangibles, Net

During the six months ended June 30, 2020, the Company evaluated property, plant and equipment and leasehold intangibles for impairment and identified communities with a carrying amount of the assets in excess of the estimated future undiscounted net cash flows expected to be generated by the assets. The Company compared the estimated fair value of the assets to their carrying amount for these identified communities and recorded an impairment charge for the excess of carrying amount over fair value. The Company recorded property, plant and equipment and leasehold intangibles non-cash impairment charges in its operating results of $3.7 million and $14.7 million for the three and six months ended June 30, 2020, respectively. The fair values of the property, plant and equipment of these communities were primarily determined utilizing a discounted cash flow approach considering stabilized facility operating income and market capitalization rates. These fair value measurements are considered Level 3 measurements within the valuation hierarchy. These impairment charges are primarily due to the COVID-19 pandemic and lower than expected operating performance at these communities and reflect the amount by which the carrying amounts of the assets exceeded their estimated fair value.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Grants of restricted stock units and stock awards under the Company's 2014 Omnibus Incentive Plan were as follows:

(in thousands, except for per share and unit amounts)	Restricted Stock Units and Stock Awards Granted	Weighted Average Grant Date Fair Value		Total Grant Date Fair Value
Three months ended March 31, 2020	4,438	$	7.06	$	31,341
Three months ended June 30, 2020	78	$	3.91	$	303

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Goodwill

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

The Company's Independent Living and Health Care Services segments had a carrying value of goodwill of $27.3 million and $126.8 million, respectively, as of both June 30, 2020 and December 31, 2019.

During the six months ended June 30, 2020, the Company identified indicators of impairment of goodwill, including the COVID-19 pandemic and a significant decline in the Company's stock price and market capitalization for a sustained period. Refer to Note 3 for additional information on the COVID-19 pandemic.

As a result of the COVID-19 pandemic, the Company performed an interim quantitative goodwill impairment test as of March 31, 2020. The Company’s quantitative goodwill impairment test as of March 31, 2020 included reduced estimates of projected future cash flows as a result of changes to significant assumptions using information known or knowable about the COVID-19 pandemic, including current industry and economic trends, changes in business plans, and changes in expected revenue and facility operating expense growth rates. Additionally, the Company considered the additional risk within the future cash flow estimates when selecting risk-adjusted discount rates. The Company determined no impairment of goodwill was necessary for the six months ended June 30, 2020.

Determining the fair value of the Company’s reporting units involves the use of significant estimates and assumptions that are unpredictable and inherently uncertain. These estimates and assumptions include revenue and expense growth rates and operating margins used to calculate projected future cash flows and risk-adjusted discount rates. Future events may indicate differences from management's current judgments and estimates which could, in turn, result in future impairments. Future events that may result in impairment charges include differences in the projected occupancy rates or monthly service fee rates, changes in the cost structure of existing communities, changes in reimbursement rates from Medicare for healthcare services, and changes in healthcare reform. Significant adverse changes in the Company’s future revenues and/or operating margins, significant changes in the market for senior housing or the valuation of the real estate of senior living communities, as well as other events and circumstances, including but not limited to increased competition, changes in reimbursement rates from Medicare for healthcare services, and changing economic or market conditions, including market control premiums, could result in changes in fair value and the determination that goodwill is impaired.

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Property, Plant and Equipment and Leasehold Intangibles, Net

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment and Leasehold Intangibles, Net

Property, Plant and Equipment and Leasehold Intangibles, Net

As of June 30, 2020 and December 31, 2019, net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following:

(in thousands)	June 30, 2020			December 31, 2019
Land	$	507,336		$	450,894
Buildings and improvements	5,257,530			4,790,769
Furniture and equipment	935,755			859,849
Resident and leasehold operating intangibles	316,704			317,111
Construction in progress	60,653			80,729
Assets under financing leases and leasehold improvements	1,548,305			1,847,493
Property, plant and equipment and leasehold intangibles	8,626,283			8,346,845
Accumulated depreciation and amortization	(3,369,915		)	(3,237,011		)
Property, plant and equipment and leasehold intangibles, net	$	5,256,368		$	5,109,834

Assets under financing leases and leasehold improvements includes $0.4 billion and $0.6 billion of financing lease right-of-use assets, net of accumulated amortization, as of June 30, 2020 and December 31, 2019, respectively. Refer to Note 11 for further information on the Company's financing leases.

The Company recognized depreciation and amortization expense on its property, plant and equipment and leasehold intangibles of $93.2 million for both the three months ended June 30, 2020 and 2019, and $183.9 million and $189.3 million for the six months ended June 30, 2020 and 2019, respectively.

Long-lived assets with definite useful lives are depreciated or amortized on a straight-line basis over their estimated useful lives (or, in certain cases, the shorter of their estimated useful lives or the lease term) and are tested for impairment whenever indicators of impairment arise. Refer to Note 6 for additional information on impairment expense for property, plant and equipment and leasehold intangibles.

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Debt

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Debt

Debt

Long-term debt as of June 30, 2020 and December 31, 2019 consists of the following:

(in thousands)	June 30, 2020		December 31, 2019
Mortgage notes payable due 2020 through 2047; weighted average interest rate of 4.08% for the six months ended June 30, 2020, less debt discount and deferred financing costs of $21.8 million and $17.0 million as of June 30, 2020 and December 31, 2019, respectively (weighted average interest rate of 4.72% in 2019)	$	3,681,795	$	3,496,735
Other notes payable, weighted average interest rate of 4.56% for the six months ended June 30, 2020 (weighted average interest rate of 5.77% in 2019) and maturity dates ranging from 2020 to 2021	10,570		58,388
Total long-term debt	3,692,365		3,555,123
Current portion	222,572		339,413
Total long-term debt, less current portion	$	3,469,793	$	3,215,710

The $166.4 million of borrowings outstanding on the revolving credit facility as of June 30, 2020 are excluded from the table above and are further described below.

Credit Facilities

The Company's Fifth Amended and Restated Credit Agreement with Capital One, National Association, as administrative agent, lender and swingline lender and the other lenders from time to time parties thereto (the "Credit Agreement"), provides commitments for a $250 million revolving credit facility with a $60 million sublimit for letters of credit and a $50 million swingline feature. The Company has a one-time right under the Credit Agreement to increase commitments on the revolving credit facility by an additional $100 million, subject to obtaining commitments for the amount of such increase from acceptable lenders. The Credit Agreement provides the Company a one-time right to reduce the amount of the revolving credit commitments, and the Company may terminate the revolving credit facility at any time, in each case without payment of a premium or penalty. The Credit Agreement matures on January 3, 2024. Amounts drawn under the facility bear interest at 90-day LIBOR plus an applicable margin. The applicable margin varies based on the percentage of the total commitment drawn, with a 2.25% margin at utilization equal to or lower than 35%, a 2.75% margin at utilization greater than 35% but less than or equal to 50%, and a 3.25% margin at utilization greater than 50%. A quarterly commitment fee is payable on the unused portion of the facility at 0.25% per annum when the outstanding amount of obligations (including revolving credit and swingline loans and letter of credit obligations) is greater than or equal to 50% of the revolving credit commitment amount or 0.35% per annum when such outstanding amount is less than 50% of the revolving credit commitment amount.

The credit facility is secured by first priority mortgages on certain of the Company's communities. In addition, the Credit Agreement permits the Company to pledge the equity interests in subsidiaries that own other communities and grant negative pledges in connection therewith (rather than mortgaging such communities), provided that not more than 10% of the borrowing base may result from communities subject to negative pledges. Availability under the revolving credit facility will vary from time to time based on borrowing base calculations related to the appraised value and performance of the communities securing the credit facility and the Company's consolidated fixed charge coverage ratio. To the extent the outstanding borrowings on the credit facility exceed future borrowing base calculations, the Company would be required to repay the difference to restore the outstanding balance to the new borrowing base.

During 2019, parties entered into an amendment to the Credit Agreement that provides for availability calculations to be made at additional consolidated fixed charge coverage ratio thresholds.

The Credit Agreement contains typical affirmative and negative covenants, including financial covenants with respect to minimum consolidated fixed charge coverage and minimum consolidated tangible net worth. Amounts drawn on the credit facility may be used for general corporate purposes.

As of June 30, 2020, $166.4 million of borrowings were outstanding on the revolving credit facility, $45.5 million of letters of credit were outstanding, and the revolving credit facility had $37.9 million of availability. The Company also had a separate unsecured letter of credit facility of up to $50.0 million of letters of credit as of June 30, 2020 under which $48.2 million had been issued as of that date.

Financings

During March 2020, the Company completed its financing plans in the regular course of business, including closing three non-recourse mortgage debt financing transactions totaling $208.5 million as described below. Refer to Note 3 for more information regarding the Company's planned financing activities.

On January 31, 2020, the Company obtained $238.2 million of debt secured by the non-recourse first mortgages on 14 communities, including $192.6 million of non-recourse first mortgage financing on 13 communities acquired from Healthpeak on such date. Seventy percent of the principal amount bears interest at a fixed rate of 3.62%, and the remaining thirty percent of the principal amount bears interest at a variable rate equal to 30-day LIBOR plus a margin of 209 basis points. The debt matures in February 2030. The proceeds from the financing were utilized to fund the acquisition of communities from Healthpeak and repay $33.1 million of outstanding mortgage debt maturing in 2020. Refer to Note 5 for more information about the Company's acquisition of communities from Healthpeak.

On March 19, 2020, the Company obtained $29.2 million of debt secured by the non-recourse first mortgages on seven communities, primarily communities acquired during the three months ended March 31, 2020. The loan bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 225 basis points and matures in April 2030.

On March 20, 2020, the Company obtained $30.0 million of debt secured by the non-recourse first mortgage on one community acquired from Healthpeak on January 31, 2020. The loan bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 250 basis points and matures in March 2022.

On March 31, 2020, the Company obtained $149.3 million of debt secured by the non-recourse first mortgages on 18 communities. Of the total principal, $73.1 million bears interest at a fixed rate of 3.55%, and the remaining $76.2 million bears interest at a variable rate equal to the 30-day LIBOR plus a margin of 210 basis points. The debt matures in April 2030. The $149.3 million of proceeds from the financing were primarily utilized to repay $136.3 million of outstanding mortgage debt maturing in 2020.

Financial Covenants

Certain of the Company's debt documents contain restrictions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders' equity levels and debt service ratios, and requiring the Company not to exceed prescribed leverage ratios, in each case on a consolidated, portfolio-wide, multi-community, single-community, and/or entity basis. In addition, the Company's debt documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements.

The Company's failure to comply with applicable covenants could constitute an event of default under the applicable debt documents. Many of the Company's debt documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors). Furthermore, the Company's debt is secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.

As of June 30, 2020, the Company is in compliance with the financial covenants of its debt agreements.

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Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

Leases

As of June 30, 2020, the Company operated 305 communities under long-term leases (237 operating leases and 68 financing leases). The substantial majority of the Company's lease arrangements are structured as master leases. Under a master lease, numerous communities are leased through an indivisible lease. The Company typically guarantees the performance and lease payment obligations of its subsidiary lessees under the master leases. An event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio.

The leases relating to these communities are generally fixed rate leases with annual escalators that are either fixed or based upon changes in the consumer price index or the leased property revenue. The Company is responsible for all operating costs, including repairs, property taxes, and insurance. The leases generally provide for renewal or extension options from 5 to 20 years and in some instances, purchase options.

The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders' equity levels and lease coverage ratios, in each case on a

consolidated, portfolio-wide, multi-community, single-community and/or entity basis. In addition, the Company's lease documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements.

The Company's failure to comply with applicable covenants could constitute an event of default under the applicable lease documents. Many of the Company's debt and lease documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors). Certain leases contain cure provisions, which generally allow the Company to post an additional lease security deposit if the required covenant is not met. Furthermore, the Company's leases are secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.

As of June 30, 2020, the Company is in compliance with the financial covenants of its long-term leases.

A summary of operating and financing lease expense (including the respective presentation on the condensed consolidated statements of operations) and cash flows from leasing transactions is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
Operating Leases (in thousands)	2020			2019			2020			2019
Facility operating expense	$	4,935		$	4,604		$	9,785		$	9,229
Facility lease expense	62,379			67,689			126,860			136,357
Operating lease expense	67,314			72,293			136,645			145,586
Operating lease expense adjustment (1)	8,221			4,429			14,954			8,812
Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements	(6,421		)	(1,000		)	(10,509		)	(1,000		)
Operating cash flows from operating leases	$	69,114		$	75,722		$	141,090		$	153,398

(1) Represents the difference between cash paid and expense recognized.

	Three Months Ended June 30,					Six Months Ended June 30,
Financing Leases (in thousands)	2020			2019		2020			2019
Depreciation and amortization	$	8,037		$	11,677	$	17,181		$	23,355
Interest expense: financing lease obligations	11,892			16,649		25,174			33,392
Financing lease expense	$	19,929		$	28,326	$	42,355		$	56,747
Operating cash flows from financing leases	$	11,892		$	16,649	$	25,174		$	33,392
Financing cash flows from financing leases	4,677			5,500		9,764			10,953
Changes in financing lease assets and liabilities for lessor capital expenditure reimbursement	(1,675		)	—		(3,414		)	—
Total cash flows from financing leases	$	14,894		$	22,149	$	31,524		$	44,345

The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of June 30, 2020 are as follows (in thousands):

Year Ending December 31,	Operating Leases			Financing Leases
2020 (six months)	$	149,099		$	33,263
2021	287,241			66,168
2022	286,171			66,808
2023	288,435			67,571
2024	289,829			68,814
Thereafter	578,012			168,527
Total lease payments	1,878,787			471,151
Purchase option liability and non-cash gain on future sale of property	—			437,356
Imputed interest and variable lease payments	(469,245		)	(305,533		)
Total lease obligations	$	1,409,542		$	602,974

Leases

Leases

As of June 30, 2020, the Company operated 305 communities under long-term leases (237 operating leases and 68 financing leases). The substantial majority of the Company's lease arrangements are structured as master leases. Under a master lease, numerous communities are leased through an indivisible lease. The Company typically guarantees the performance and lease payment obligations of its subsidiary lessees under the master leases. An event of default related to an individual property or limited number of properties within a master lease portfolio may result in a default on the entire master lease portfolio.

The leases relating to these communities are generally fixed rate leases with annual escalators that are either fixed or based upon changes in the consumer price index or the leased property revenue. The Company is responsible for all operating costs, including repairs, property taxes, and insurance. The leases generally provide for renewal or extension options from 5 to 20 years and in some instances, purchase options.

The community leases contain other customary terms, which may include assignment and change of control restrictions, maintenance and capital expenditure obligations, termination provisions and financial covenants, such as those requiring the Company to maintain prescribed minimum net worth and stockholders' equity levels and lease coverage ratios, in each case on a

consolidated, portfolio-wide, multi-community, single-community and/or entity basis. In addition, the Company's lease documents generally contain non-financial covenants, such as those requiring the Company to comply with Medicare or Medicaid provider requirements.

The Company's failure to comply with applicable covenants could constitute an event of default under the applicable lease documents. Many of the Company's debt and lease documents contain cross-default provisions so that a default under one of these instruments could cause a default under other debt and lease documents (including documents with other lenders and lessors). Certain leases contain cure provisions, which generally allow the Company to post an additional lease security deposit if the required covenant is not met. Furthermore, the Company's leases are secured by its communities and, in certain cases, a guaranty by the Company and/or one or more of its subsidiaries.

As of June 30, 2020, the Company is in compliance with the financial covenants of its long-term leases.

A summary of operating and financing lease expense (including the respective presentation on the condensed consolidated statements of operations) and cash flows from leasing transactions is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
Operating Leases (in thousands)	2020			2019			2020			2019
Facility operating expense	$	4,935		$	4,604		$	9,785		$	9,229
Facility lease expense	62,379			67,689			126,860			136,357
Operating lease expense	67,314			72,293			136,645			145,586
Operating lease expense adjustment (1)	8,221			4,429			14,954			8,812
Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements	(6,421		)	(1,000		)	(10,509		)	(1,000		)
Operating cash flows from operating leases	$	69,114		$	75,722		$	141,090		$	153,398

(1) Represents the difference between cash paid and expense recognized.

	Three Months Ended June 30,					Six Months Ended June 30,
Financing Leases (in thousands)	2020			2019		2020			2019
Depreciation and amortization	$	8,037		$	11,677	$	17,181		$	23,355
Interest expense: financing lease obligations	11,892			16,649		25,174			33,392
Financing lease expense	$	19,929		$	28,326	$	42,355		$	56,747
Operating cash flows from financing leases	$	11,892		$	16,649	$	25,174		$	33,392
Financing cash flows from financing leases	4,677			5,500		9,764			10,953
Changes in financing lease assets and liabilities for lessor capital expenditure reimbursement	(1,675		)	—		(3,414		)	—
Total cash flows from financing leases	$	14,894		$	22,149	$	31,524		$	44,345

The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of June 30, 2020 are as follows (in thousands):

Year Ending December 31,	Operating Leases			Financing Leases
2020 (six months)	$	149,099		$	33,263
2021	287,241			66,168
2022	286,171			66,808
2023	288,435			67,571
2024	289,829			68,814
Thereafter	578,012			168,527
Total lease payments	1,878,787			471,151
Purchase option liability and non-cash gain on future sale of property	—			437,356
Imputed interest and variable lease payments	(469,245		)	(305,533		)
Total lease obligations	$	1,409,542		$	602,974

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Litigation

6 Months Ended

Jun. 30, 2020

Litigation [Abstract]

Litigation

Litigation

The Company has been and is currently involved in litigation and claims incidental to the conduct of its business, which it believes are generally comparable to other companies in the senior living and healthcare industries, including, but not limited to, putative class action claims from time to time regarding staffing at the Company’s communities and compliance with consumer protection laws and the Americans with Disabilities Act. Certain claims and lawsuits allege large damage amounts and may require significant costs to defend and resolve. As a result, the Company maintains general liability, professional liability, and other insurance policies in amounts and with coverage and deductibles the Company believes are appropriate, based on the nature and risks of its business, historical experience, availability, and industry standards. The Company's current policies provide for deductibles for each claim and contain various exclusions from coverage. Accordingly, the Company is, in effect, self-insured for claims that are less than the deductible amounts and for claims or portions of claims that are not covered by such policies and/or exceed the policy limits.

Similarly, the senior living and healthcare industries are continuously subject to scrutiny by governmental regulators, which could result in reviews, audits, investigations, enforcement activities or litigation related to regulatory compliance matters. In addition, as a result of the Company's participation in the Medicare and Medicaid programs, the Company is subject to various governmental reviews, audits and investigations, including but not limited to audits under various government programs, such as the Recovery Audit Contractors (RAC), Zone Program Integrity Contractors (ZPIC), and Unified Program Integrity Contractors (UPIC) programs. The costs to respond to and defend such reviews, audits, and investigations may be significant, and an adverse determination could result in citations, sanctions and other criminal or civil fines and penalties, the refund of overpayments, payment suspensions, termination of participation in Medicare and Medicaid programs, and/or damage to the Company's business reputation.

In June 2020, the Company and several current and former executive officers were named as defendants in a putative class action lawsuit alleging violations of the federal securities laws filed in the federal court for the Middle District of Tennessee. The lawsuit asserts that the defendants made material misstatements and omissions concerning the Company's business, operational and compliance policies that caused the Company's stock price to be artificially inflated between August 2016 and April 2020. While the Company cannot predict with certainty the result of this or any other legal proceedings, the Company believes the allegations in the suit are without merit and does not expect this matter to have a material adverse effect on the Company's financial condition, results of operations, or cash flows.

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Supplemental Disclosure of Cash Flow Information

6 Months Ended

Jun. 30, 2020

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosure of Cash Flow Information

 Supplemental Disclosure of Cash Flow Information

	Six Months Ended June 30,
(in thousands)	2020			2019
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	107,854		$	124,647
Income taxes paid, net of refunds	1,388			1,916
Capital expenditures, net of related payables:
Capital expenditures - non-development, net	$	82,077		$	121,066
Capital expenditures - development, net	6,823			10,623
Capital expenditures - non-development - reimbursable	13,923			1,000
Trade accounts payable	10,040			(10,392		)
Net cash paid	$	112,863		$	122,297
Acquisition of communities from Healthpeak:
Property, plant and equipment and leasehold intangibles, net	$	286,734		$	—
Operating lease right-of-use assets	(63,285		)	—
Financing lease obligations	129,196			—
Operating lease obligations	74,335			—
Loss (gain) on debt modification and extinguishment, net	(19,731		)	—
Net cash paid	$	407,249		$	—
Acquisition of other assets, net of related payables and cash received:
Property, plant and equipment and leasehold intangibles, net	$	179		$	—
Financing lease obligations	39,260			—
Net cash paid	$	39,439		$	—
Proceeds from sale of CCRC Venture, net:
Investments in unconsolidated ventures	$	(14,848	)	$	—
Current portion of long-term debt	34,706			—
Other liabilities	60,748			—
Loss (gain) on sale of assets, net	(369,831		)	—
Net cash received	$	(289,225	)	$	—
Proceeds from sale of other assets, net:
Prepaid expenses and other assets, net	$	(1,261	)	$	(5,798	)
Assets held for sale	(5,274		)	(41,882		)
Property, plant and equipment and leasehold intangibles, net	(938		)	(688		)
Investments in unconsolidated ventures	—			(156		)
Other liabilities	(1,862		)	(1,762		)
Loss (gain) on sale of assets, net	(1,979		)	(2,144		)
Net cash received	$	(11,314	)	$	(52,430	)
Supplemental Schedule of Non-cash Operating, Investing, and Financing Activities:
Assets designated as held for sale:
Prepaid expenses and other assets, net	$	—		$	(5	)
Assets held for sale	—			(4,928		)
Property, plant and equipment and leasehold intangibles, net	—			4,933
Net	$	—		$	—

Healthpeak master lease modification:
Property, plant and equipment and leasehold intangibles, net	$	(57,462	)	$	—
Operating lease right-of-use assets	88,044			—
Financing lease obligations	70,874			—
Operating lease obligations	(101,456		)	—
Net	$	—		$	—
Other lease termination and modification, net:
Prepaid expenses and other assets, net	$	—		$	(648	)
Property, plant and equipment and leasehold intangibles, net	13,548			(1,666		)
Operating lease right-of-use assets	1,350			(5,009		)
Financing lease obligations	(15,483		)	—
Operating lease obligations	606			5,654
Other liabilities	(21		)	(337		)
Loss (gain) on facility lease termination and modification, net	—			2,006
Net	$	—		$	—

During the three months ended June 30, 2019, the Company and its joint venture partner contributed cash in an aggregate amount of $13.3 million to a consolidated joint venture which owned three senior housing communities. The Company obtained a $6.6 million promissory note receivable from its joint venture partner secured by a 50% equity interest in the joint venture in a non-cash exchange for the Company funding the $13.3 million aggregate contribution in cash.

Restricted cash consists principally of escrow deposits for real estate taxes, property insurance, and capital expenditures required by certain lenders under mortgage debt agreements and deposits as security for self-insured retention risk under workers' compensation programs and property insurance programs. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sums to the total of the same such amounts shown in the condensed consolidated statements of cash flows.

(in thousands)	June 30, 2020		December 31, 2019
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	452,441	$	240,227
Restricted cash	28,397		26,856
Long-term restricted cash	41,292		34,614
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$	522,130	$	301,697

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Income Taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The difference between the Company's effective tax rate for the three and six months ended June 30, 2020 and June 30, 2019 was primarily due to the tax impact of the multi-part transaction with Healthpeak that occurred in the three months ended March 31, 2020. The impact represented the tax expense recorded on the gain of the sale of the Company's interest in the CCRC Venture offset by a decrease in the valuation allowance that was a direct result of the multi-part transaction with Healthpeak. This was slightly offset by the adjustment for stock-based compensation, which was greater in the six months ended June 30, 2019 compared to the six months ended June 30, 2020.

The Company recorded an aggregate deferred federal, state, and local tax benefit of $26.7 million for the three months ended June 30, 2020 and an aggregate deferred federal, state, and local tax expense of $64.2 million for the six months ended June 30, 2020. The expense includes $93.1 million as a result of the gain on the sale of the Company's interest in the CCRC Venture offset by a benefit of $28.9 million as a result of the operating losses (exclusive of the CCRC Venture sale) for the six months ended June 30, 2020. The benefit for the three months ended June 30, 2020 is offset by additional valuation allowance of $33.2 million. The tax expense for the six months ended June 30, 2020 is offset by a reduction in valuation allowance of $79.5 million. The Company recorded an aggregate deferred federal, state, and local tax benefit of $13.0 million and $19.5 million for the three and six months ended June 30, 2019. The benefit includes $13.0 million and $21.2 million as a result of the operating losses for the three and six months ended June 30, 2019. The benefit was reduced by a $1.7 million reduction in the deferred tax asset related to employee stock compensation for the six months ended June 30, 2019.

The Company evaluates its deferred tax assets each quarter to determine if a valuation allowance is required based on whether it is more likely than not that some portion of the deferred tax asset would not be realized. The Company's valuation allowance as of June 30, 2020 and December 31, 2019 was $329.5 million and $408.9 million, respectively.

The change in the valuation allowance for the six months ended June 30, 2020 is primarily the result of a reduction in the Company’s valuation allowance of $117.6 million as a result of the Healthpeak transaction offset by the anticipated reversal of future tax liabilities offset by future tax deductions. The increase in the valuation allowance during the six months ended June 30, 2019 was comprised of multiple components. The increase included $13.8 million resulting from the adoption of Accounting Standards Codification ("ASC") 842, Leases ("ASC 842") recorded to equity, and the related addition of future timing differences recorded in the three months ended March 31, 2019. An additional $21.7 million of allowance was established against the current operating loss incurred during the six months ended June 30, 2019. Offsetting the increases was a decrease of $1.7 million of allowance as a result of removal of future timing differences related to employee stock compensation recorded in the three months ended March 31, 2019.

The Company recorded interest charges related to its tax contingency reserve for cash tax positions for the three and six months ended June 30, 2020 and 2019 which are included in income tax expense or benefit for the period. As of June 30, 2020, tax returns for years 2015 through 2018 are subject to future examination by tax authorities. In addition, the net operating losses from prior years are subject to adjustment under examination.

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Revenue

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Disaggregation of Revenue

The Company disaggregates its revenue from contracts with customers by payor source. The Company believes it best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. See details on a reportable segment basis in the tables below.

	Three Months Ended June 30, 2020
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	129,678	$	414,276	$	59,980	$	258	$	604,192
Government reimbursement	600		17,880		13,744		70,566		102,790
Other third-party payor programs	—		—		5,301		19,346		24,647
Total resident fee revenue	$	130,278	$	432,156	$	79,025	$	90,170	$	731,629
	Three Months Ended June 30, 2019
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	135,348	$	433,589	$	71,092	$	193	$	640,222
Government reimbursement	603		16,636		20,196		91,614		129,049
Other third-party payor programs	—		—		9,965		22,627		32,592
Total resident fee revenue	$	135,951	$	450,225	$	101,253	$	114,434	$	801,863
	Six Months Ended June 30, 2020
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	264,968	$	854,889	$	124,683	$	428	$	1,244,968
Government reimbursement	1,172		34,746		33,149		144,255		213,322
Other third-party payor programs	—		—		15,740		40,306		56,046
Total resident fee revenue	$	266,140	$	889,635	$	173,572	$	184,989	$	1,514,336

	Six Months Ended June 30, 2019
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	270,393	$	875,500	$	142,625	$	383	$	1,288,901
Government reimbursement	1,252		33,251		41,683		180,271		256,457
Other third-party payor programs	—		—		20,672		45,312		65,984
Total resident fee revenue	$	271,645	$	908,751	$	204,980	$	225,966	$	1,611,342

Contract Balances

The payment terms and conditions within the Company's revenue-generating contracts vary by contract type and payor source, although terms generally include payment to be made within 30 days.

Resident fee revenue for recurring and routine monthly services is generally billed monthly in advance under the Company's independent living, assisted living, and memory care residency agreements. Resident fee revenue for standalone or certain healthcare services is generally billed monthly in arrears. A portion of the Company's reimbursement from Medicare for certain healthcare services is billed near the start of each period of care, and cash is generally received before all services are rendered. The amount of revenue recognized for periods of care which are incomplete at period end is based on the Company's historical average percentage of days complete on each period of care and any unearned amounts are deferred and recognized when the service is performed. Additionally, non-refundable community fees are generally billed and collected in advance or upon move-in of a resident under the Company's independent living, assisted living, and memory care residency agreements. Amounts of revenue that are collected from residents in advance are recognized as deferred revenue until the performance obligations are satisfied. The Company had total deferred revenue (included within refundable fees and deferred revenue and other liabilities within the condensed consolidated balance sheets) of $154.7 million and $72.5 million, including $34.7 million and $38.9 million of monthly resident fees billed and received in advance, as of June 30, 2020 and December 31, 2019, respectively. Such amount of total deferred revenue as of June 30, 2020 also included $85.0 million received in April 2020 under a temporary expansion of the Accelerated and Advance Payment Program administered by the Centers for Medicare & Medicaid Services ("CMS"). Such amount of advance receipts is anticipated to either be recognized as revenue and retained by the Company during the recoupment period from August to November 2020 as services are provided or refunded by the Company at the conclusion of such period. Refer to Note 3 for additional information on such program. For the six months ended June 30, 2020 and 2019, the Company recognized $55.2 million and $72.7 million, respectively, of revenue that was included in the deferred revenue balance as of January 1, 2020 and 2019. The Company applies the practical expedient in ASC 606-10-50-14 and does not disclose amounts for remaining performance obligations that have original expected durations of one year or less.

For both the three months ended June 30, 2020 and 2019, the Company recognized $3.6 million and for both the six months ended June 30, 2020 and 2019, the Company recognized $7.6 million and $7.1 million, respectively, of charges within facility operating expense within the condensed consolidated statements of operations for additions to the allowance for credit losses.

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Segment Information

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company has five reportable segments: Independent Living; Assisted Living and Memory Care; CCRCs; Health Care Services; and Management Services. Operating segments are defined as components of an enterprise that engage in business activities from which it may earn revenues and incur expenses; for which separate financial information is available; and whose operating results are regularly reviewed by the chief operating decision maker to assess the performance of the individual segment and make decisions about resources to be allocated to the segment.

Independent Living. The Company's Independent Living segment includes owned or leased communities that are primarily designed for middle to upper income seniors who desire an upscale residential environment providing the highest quality of service. The majority of the Company's independent living communities consist of both independent and assisted living units in a single community, which allows residents to age-in-place by providing them with a continuum of senior independent and assisted living services.

Assisted Living and Memory Care. The Company's Assisted Living and Memory Care segment includes owned or leased communities that offer housing and 24-hour assistance with activities of daily life to mid-acuity frail and elderly residents. Assisted living and memory care communities include both freestanding, multi-story communities and freestanding, single story

communities. The Company also provides memory care services at freestanding memory care communities that are specially designed for residents with Alzheimer's disease and other dementias.

CCRCs. The Company's CCRCs segment includes large owned or leased communities that offer a variety of living arrangements and services to accommodate all levels of physical ability and health. Most of the Company's CCRCs have independent living, assisted living, and skilled nursing available on one campus or within the immediate market, and some also include memory care services.

Health Care Services. The Company's Health Care Services segment includes the home health, hospice, and outpatient therapy services, as well as education and wellness programs, provided to residents of many of the Company's communities and to seniors living outside of the Company's communities. The Health Care Services segment does not include the skilled nursing and inpatient healthcare services provided in the Company's skilled nursing units, which are included in the Company's CCRCs segment.

Management Services. The Company's Management Services segment includes communities operated by the Company pursuant to management agreements. In some of the cases, the controlling financial interest in the community is held by third parties and, in other cases, the community is owned in a venture structure in which the Company has an ownership interest. Under the management agreements for these communities, the Company receives management fees as well as reimbursed expenses, which represent the reimbursement of expenses it incurs on behalf of the owners.

The following table sets forth selected segment financial and operating data:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2020			2019		2020			2019
Revenue and other operating income:
Independent Living (1)	$	130,278		$	135,951	$	266,140		$	271,645
Assisted Living and Memory Care (1)	432,308			450,225		889,787			908,751
CCRCs (1)(2)	88,571			101,253		183,118			204,980
Health Care Services(1)(2)	107,165			114,434		201,984			225,966
Management Services(3)	107,587			217,594		339,019			450,159
Total revenue and other operating income	$	865,909		$	1,019,457	$	1,880,048		$	2,061,501
Segment operating income: (4)
Independent Living	$	41,038		$	51,459	$	92,452		$	104,335
Assisted Living and Memory Care	87,708			133,144		219,709			273,843
CCRCs	13,850			17,847		33,781			39,484
Health Care Services	9,692			9,167		571			17,340
Management Services	6,076			15,449		114,791			31,192
Total segment operating income	158,364			227,066		461,304			466,194
General and administrative expense (including non-cash stock-based compensation expense)	52,518			57,576		107,113			113,887
Facility operating lease expense	62,379			67,689		126,860			136,357
Depreciation and amortization	93,154			94,024		183,892			190,912
Asset impairment:
Independent Living	—			—		31,317			—
Assisted Living and Memory Care	10,290			1,180		43,088			1,537
CCRCs	—			—		12,173			—
Health Care Services	—			—		—			—
Management Services	—			2,589		1,938			2,623
Total asset impairment:	10,290			3,769		88,516			4,160
Loss (gain) on facility lease termination and modification, net	—			1,797		—			2,006
Income (loss) from operations	$	(59,977	)	$	2,211	$	(45,077	)	$	18,872

	As of
(in thousands)	June 30, 2020		December 31, 2019
Total assets:
Independent Living	$	1,510,783	$	1,441,652
Assisted Living and Memory Care	4,043,817		4,157,610
CCRCs	792,989		742,809
Health Care Services	248,702		256,715
Corporate and Management Services	828,252		595,647
Total assets	$	7,424,543	$	7,194,433

(1) All revenue and other operating income is earned from external third parties in the United States.

(2) The CCRCs and Health Care Services segments include $9.7 million and $17.0 million, respectively, of other operating income recognized for grants pursuant to the Emergency Fund described in Note 3 and other government sources. Allocations to the applicable segment reflect the segment's receipt and acceptance of the amounts and the Company's estimates of the segment's satisfaction of the conditions of grant during the period.

(3) Management services segment revenue includes management fees and reimbursements of costs incurred on behalf of managed communities.

(4)

Segment operating income is defined as segment revenues and other operating income less segment facility operating expense (excluding depreciation and amortization) and costs incurred on behalf of managed communities.

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Subsequent Events

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On July 26, 2020 (the “Effective Date”), the Company entered into definitive agreements with Ventas in connection with the restructuring of the Company’s lease arrangements with Ventas, including a Master Transaction Letter Agreement (the “Master Agreement”). Pursuant to the Master Agreement:

• On the Effective Date the parties entered into the Amended and Restated Master Lease and Security Agreement (the “Master Lease”) and Amended and Restated Guaranty (the “Guaranty”), which amended and restated the prior Master Lease and Security Agreement and prior Guaranty, each dated as of April 26, 2018 and as amended from time to time. Pursuant to the Master Lease, the Company continues to lease 120 communities for an aggregate initial annual minimum rent of approximately $100 million, which reflects a reduction of approximately $83 million of annual minimum rent in effect prior to the transaction. Effective on January 1 of each lease year, beginning January 1, 2022, the annual minimum rent will be subject to a 3% escalator. The initial term of the Master Lease ends December 31, 2025, with two 10-year extension options available to the Company. The annual minimum rent for the initial lease year of any such renewal term will be the greater of the fair market rental of the communities or the increased annual minimum rent for such lease year applying the foregoing 3% escalator. The Master Lease removed the prior provision that would have automatically extended the initial term in the event of the consummation of a change of control transaction by the Company. The Master Lease requires the Company to spend (or escrow with Ventas) a minimum of $1,500 per unit on a community-level basis and $3,600 per unit on an aggregate basis of all communities, in each case per 24-month period ending December 31 during the lease term, commencing with the 24-month period ending December 31, 2021. In addition, Ventas has agreed to fund costs associated with certain pre-approved capital expenditure projects in the aggregate amount of up to $37.8 million. Upon disbursement of such expenditures, the annual minimum rent under the Master Lease will increase by the amount of the disbursement multiplied by 50% of the sum of the then current 10-year treasury note rate and 4.5%. The transaction agreements with Ventas further provide that the Master Lease and certain other agreements between the parties will be cross-defaulted.

The Company’s subsidiaries’ obligations under the Master Lease are guaranteed at the parent level pursuant to the Guaranty. The Guaranty removed the prior requirements that the Company satisfy, at the parent level, financial covenants and that the Company maintain a security deposit with Ventas. The Guaranty also removed the prior right of Ventas to terminate the Master Lease on the basis of parent level financial covenants. Pursuant to the terms of the Guaranty, the Company may consummate a change of control transaction without the need for consent of Ventas so long as certain objective conditions are satisfied, including the post-transaction guarantor’s maintaining a minimum tangible net worth of at least $600 million, having minimum levels of operational experience and reputation in the senior living industry, and paying a change of control fee of $25 million to Ventas. The Guaranty removed the prior provisions that would have required that such post-transaction guarantor satisfy

a maximum leverage ratio level, that the Company fund additional capital expenditures, and that the Company extend the term upon the occurrence of the change in control transaction. Under the terms of the Guaranty, commencing January 1, 2024 (and until such time (if any) as the Company exercises its lease term extension option with respect to the Master Lease), Ventas shall have the right to terminate the Master Lease (with respect to one or more communities), provided that the trailing twelve month coverage ratio of each such community is less than 0.9x and provided further that the removal and termination of any such communities does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such removal and termination.

• On the Effective Date, the Company entered into a Second Amended and Restated Omnibus Agreement with Ventas, which provides that if a default occurs and is continuing under certain other material leases or under certain material financings and if the same continues beyond the permitted cure period or the applicable landlord or lender exercises any material remedies, Ventas shall have the right to transition all or a portion of the communities from the Master Lease to a management arrangement with the Company pursuant to a market management agreement (which is terminable by either party). Notwithstanding the foregoing, Ventas may only transition community(ies) from the Master Lease to a management arrangement if such transition does not result in a portfolio coverage ratio with respect to the remaining communities in the Master Lease that is less than the portfolio coverage ratio prior to such transition.

• On the Effective Date, the Company conveyed five owned communities to Ventas in full release and satisfaction of $78 million principal amount of indebtedness secured by the communities. Upon closing, the parties entered into new terminable, market rate management agreements pursuant to which the Company will manage the communities. The Company also paid to Ventas $115 million in cash, released all security deposits under the former guaranty (which included the release of a $42.4 million deposit held by Ventas and the payment of $4.2 million in cash as settlement of the amount of letters of credit), and issued a $45 million unsecured interest-only promissory note to Ventas. The initial interest rate of the promissory note is 9.0% per annum and will increase by 0.50% on each anniversary of the date of issuance. The Company may prepay the outstanding principal amount in whole or in part at any time without premium or penalty. The promissory note matures on the earlier of December 31, 2025 or the occurrence of a change of control transaction (as defined in the Guaranty).

•

On the Effective Date, the Company issued to Ventas a warrant (the “Warrant”) to purchase 16.3 million shares of the Company’s common stock, $0.01 par value per share, at a price per share of $3.00. The Warrant is exercisable at Ventas’ option at any time and from time to time, in whole or in part, until December 31, 2025. The exercise price and the number of shares issuable on exercise of the Warrant are subject to certain anti-dilution adjustments, including for cash dividends, stock dividends, stock splits, reclassifications, non-cash distributions, certain repurchases of common stock and business combination transactions. To the extent that the number of shares owned by Ventas (including shares underlying the Warrant) would be more than 9.6% of the total combined voting power of all the Company’s classes of capital stock or of the total value of shares of all the Company’s classes of capital stock (the “Ownership Cap”) (other than as a result of actions taken by Ventas), the Company would generally be required to repurchase the number of shares necessary to avoid Ventas exceeding the Ownership Cap unless Ventas makes an election to require the Company to pay Ventas cash in lieu of issuing shares pursuant to the Warrant in excess of the Ownership Cap. The Warrant and the shares issuable upon exercise thereof have not been registered under the Securities Act of 1933, as amended, and were issued in a private placement pursuant to Section 4(a)(2) thereof. On the Effective Date, the parties entered into a Registration Rights Agreement, pursuant to which Ventas and its permitted transferees are entitled to certain registration rights. Under the terms of the agreement, the Company is required to use reasonable best efforts to prepare and file a shelf registration statement with the SEC as promptly as practicable, but no later than the close of business on the fifth day following the date on which the Company files its Quarterly Report on Form 10-Q for the period ended June 30, 2020, with respect to the shares of common stock underlying the Warrant, and, if the registration statement is not automatically effective, to have the registration statement declared effective promptly thereafter. Ventas is entitled to customary underwritten offering, piggyback and additional demand registration rights with respect to the shares underlying the Warrant.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q. In the opinion of management, these financial statements include all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position, results of operations, and cash flows of the Company for all periods presented. Certain information and footnote disclosures included in annual financial statements have been condensed or omitted. The Company believes that the disclosures included are adequate and provide a fair presentation of interim period results. Interim financial statements are not necessarily indicative of the financial position or operating results for an entire year. These interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 19, 2020. Certain prior period amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's condensed consolidated financial position or results of operations.

Except for the changes for the impact of the recently adopted accounting pronouncements discussed in this Note, the Company has consistently applied its accounting policies to all periods presented in these condensed consolidated financial statements.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Brookdale and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Investments in affiliated companies that the Company does not control, but has the ability to exercise significant influence over governance and operations, are accounted for by the equity method. The ownership interest of consolidated entities not wholly-owned by the Company are presented as noncontrolling interests in the accompanying condensed consolidated financial statements. Noncontrolling interest represents the share of consolidated entities owned by third parties. Noncontrolling interest is adjusted for the noncontrolling holder's share of additional contributions, distributions, and the proportionate share of the net income or loss of each respective entity.

Use of Estimates

Use of Estimates

The preparation of the condensed consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, revenue and other operating income, asset impairments, self-insurance reserves, performance-based compensation, the allowance for credit losses, depreciation and amortization, leasing transactions, income taxes, and other contingencies. Although these estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from the original estimates.

Lease Accounting

Lease Accounting

The Company, as lessee, recognizes a right-of-use asset and a lease liability on the Company's condensed consolidated balance sheet for its community, office, and equipment leases. As of the commencement date of a lease, a lease liability and corresponding right-of-use asset is established on the Company's condensed consolidated balance sheet at the present value of future minimum lease payments. The Company's community leases generally contain fixed annual rent escalators or annual rent escalators based on an index, such as the consumer price index. The future minimum lease payments recognized on the condensed consolidated balance sheet include fixed payments (including in-substance fixed payments) and variable payments estimated utilizing the index

or rate on the lease commencement date. The Company recognizes lease expense as incurred for additional variable payments. For the Company's leases that do not contain an implicit rate, the Company utilizes its estimated incremental borrowing rate to determine the present value of lease payments based on information available at commencement of the lease. The Company's estimated incremental borrowing rate reflects the fixed rate at which the Company could borrow a similar amount for the same term on a collateralized basis. The Company elected the short-term lease exception policy which permits leases with an initial term of 12 months or less to not be recorded on the Company's consolidated balance sheet and instead to be recognized as lease expense as incurred.

The Company, as lessee, makes a determination with respect to each of its community, office, and equipment leases as to whether each should be accounted for as an operating lease or financing lease. The classification criteria is based on estimates regarding the fair value of the leased asset, minimum lease payments, effective cost of funds, economic life of the asset, and certain other terms in the lease agreements.

Lease right-of-use assets are reviewed for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of right-of-use assets are assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset, calculated utilizing the lowest level of identifiable cash flows. If estimated future undiscounted net cash flows are less than the carrying amount of the asset then the fair value of the asset is estimated. The impairment expense is determined by comparing the estimated fair value of the asset to its carrying amount, with any amount in excess of fair value recognized as an expense in the current period. Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates and estimated lease coverage ratios (Level 3).

Operating Leases

The Company recognizes operating lease expense for actual rent paid, generally plus or minus a straight-line adjustment for estimated minimum lease escalators if applicable. The right-of-use asset is generally reduced each period by an amount equal to the difference between the operating lease expense and the amount of expense on the lease liability utilizing the effective interest method. Subsequent to the impairment of an operating lease right-of-use asset, the Company recognizes operating lease expense consisting of the reduction of the right-of-use asset on a straight-line basis over the remaining lease term and the amount of expense on the lease liability utilizing the effective interest method.

Financing Leases

Financing lease right-of-use assets are recognized within property, plant and equipment and leasehold intangibles, net on the Company's consolidated balance sheets. The Company recognizes interest expense on the financing lease liabilities utilizing the effective interest method. The right-of-use asset is generally amortized to depreciation and amortization expense on a straight-line basis over the lease term unless the lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise. If the Company is reasonably certain to exercise the purchase option, the asset is amortized over the useful life.

Sale-Leaseback Transactions

For transactions in which an owned community is sold and leased back from the buyer (sale-leaseback transactions), the Company recognizes an asset sale and lease accounting is applied if the Company has transferred control of the community. For such transactions, the Company removes the transferred assets from the consolidated balance sheet and a gain or loss on the sale is recognized for the difference between the carrying amount of the asset and the transaction price for the sale transaction.

For sale‑leaseback transactions in which the Company has not transferred control of the underlying asset, the Company does not recognize an asset sale or derecognize the underlying asset until control is transferred. For such transactions, the Company continues to recognize the assets within property, plant and equipment and leasehold intangibles, net and continues to depreciate the asset over its useful life. Additionally, the Company accounts for any amounts received as a financing lease liability and the Company recognizes interest expense on the financing lease liability utilizing the effective interest method with the interest expense limited to an amount that is not greater than the cash payments on the financing lease liability over the term of the lease.

Gain (Loss) on Sale of Assets

Gain (Loss) on Sale of Assets

The Company regularly enters into real estate transactions which may include the disposition of certain communities, including the associated real estate. The Company recognizes gain or loss from real estate sales when the transfer of control is complete.

The Company recognizes gain or loss from the sale of equity method investments when the transfer of control is complete and the Company has no continuing involvement with the transferred financial assets.

Property, Plant and Equipment and Leasehold Intangibles, Net

Property, Plant and Equipment and Leasehold Intangibles, Net

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset group may not be recoverable. Recoverability of an asset group is assessed by comparing its carrying amount to the estimated future undiscounted net cash flows expected to be generated by the asset group through operation or disposition, calculated utilizing the lowest level of identifiable cash flows. If this comparison indicates that the carrying amount of an asset group is not recoverable, the Company is required to recognize an impairment loss. The impairment loss is measured by the amount by which the carrying amount of the asset exceeds its estimated fair value, with any amount in excess of fair value recognized as an expense in the current period. Undiscounted cash flow projections and estimates of fair value amounts are based on a number of assumptions such as revenue and expense growth rates, estimated holding periods, and estimated capitalization rates (Level 3).

Goodwill

Goodwill

The Company tests goodwill for impairment annually during the fourth quarter or more frequently if indicators of impairment arise. Factors the Company considers important in its analysis of whether an indicator of impairment exists include a significant decline in the Company's stock price or market capitalization for a sustained period since the last testing date, significant underperformance relative to historical or projected future operating results, and significant negative industry or economic trends. The Company first assesses qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If so, the Company performs a quantitative goodwill impairment test based upon a comparison of the estimated fair value of the reporting unit to which the goodwill has been assigned with the reporting unit's carrying amount. The fair values used in the quantitative goodwill impairment test are estimated using Level 3 inputs based upon discounted future cash flow projections for the reporting unit. These cash flow projections are based upon a number of estimates and assumptions such as revenue and expense growth rates, capitalization rates, and discount rates. The Company also considers market-based measures such as earnings multiples in its analysis of estimated fair values of its reporting units. If the quantitative goodwill impairment test results in a reporting unit's carrying amount exceeding its estimated fair value, an impairment charge will be recorded based on the difference, with the impairment charge limited to the amount of goodwill allocated to the reporting unit.

Recently Adopted Accounting Pronouncements/Recently Issued Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 replaces the current incurred loss impairment methodology for credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted this standard effective January 1, 2020 and recognized the cumulative effect of the adoption as an immaterial adjustment to beginning accumulated deficit as of January 1, 2020 for the cumulative effect of adopting ASU 2016-13.

In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"), which amends the former accounting principles for the recognition, measurement, presentation, and disclosure of leases for both lessees and lessors. The Company adopted these lease accounting standards effective January 1, 2019 and recognized the cumulative effect of the adoption as a $55.9 million adjustment to beginning accumulated deficit as of January 1, 2019. See Footnote 2, Summary of Significant Accounting Policies, in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 for more details regarding the adoption of this accounting pronouncement.

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table summarizes the computation of basic and diluted earnings (loss) per share amounts presented in the condensed consolidated statements of operations:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020		2019
Income attributable to common shareholders:
Net income (loss)	$	(118,401	)	$	(55,470	)	$	251,114	$	(98,065	)
Weighted average shares outstanding - basic	183,178			186,140			183,682		186,442
Effect of dilutive securities - Unvested restricted stock and restricted stock units	—			—			180		—
Weighted average shares outstanding - diluted	183,178			186,140			183,862		186,442
Basic earnings (loss) per common share:
Net income (loss) per share attributable to common shareholders	$	(0.65	)	$	(0.30	)	$	1.37	$	(0.53	)
Diluted earnings (loss) per common share:
Net income (loss) per share attributable to common shareholders	$	(0.65	)	$	(0.30	)	$	1.37	$	(0.53	)

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Summary of Goodwill and Asset Impairment Expense

The following is a summary of asset impairment expense.

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2020		2019		2020		2019
Property, plant and equipment and leasehold intangibles, net	$	3.7	$	1.2	$	14.7	$	1.2
Operating lease right-of-use assets	6.6		—		72.3		—
Investment in unconsolidated ventures	—		—		1.5		—
Other intangible assets, net	—		2.6		—		2.6
Other assets, net	—		—		—		0.4
Asset impairment	$	10.3	$	3.8	$	88.5	$	4.2

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Current year grants of restricted shares

Grants of restricted stock units and stock awards under the Company's 2014 Omnibus Incentive Plan were as follows:

(in thousands, except for per share and unit amounts)	Restricted Stock Units and Stock Awards Granted	Weighted Average Grant Date Fair Value		Total Grant Date Fair Value
Three months ended March 31, 2020	4,438	$	7.06	$	31,341
Three months ended June 30, 2020	78	$	3.91	$	303

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Property, Plant and Equipment and Leasehold Intangibles, Net (Tables)

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property, plant and equipment and leasehold intangibles, net

As of June 30, 2020 and December 31, 2019, net property, plant and equipment and leasehold intangibles, which include assets under financing leases, consisted of the following:

(in thousands)	June 30, 2020			December 31, 2019
Land	$	507,336		$	450,894
Buildings and improvements	5,257,530			4,790,769
Furniture and equipment	935,755			859,849
Resident and leasehold operating intangibles	316,704			317,111
Construction in progress	60,653			80,729
Assets under financing leases and leasehold improvements	1,548,305			1,847,493
Property, plant and equipment and leasehold intangibles	8,626,283			8,346,845
Accumulated depreciation and amortization	(3,369,915		)	(3,237,011		)
Property, plant and equipment and leasehold intangibles, net	$	5,256,368		$	5,109,834

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Debt (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of debt

Long-term debt as of June 30, 2020 and December 31, 2019 consists of the following:

(in thousands)	June 30, 2020		December 31, 2019
Mortgage notes payable due 2020 through 2047; weighted average interest rate of 4.08% for the six months ended June 30, 2020, less debt discount and deferred financing costs of $21.8 million and $17.0 million as of June 30, 2020 and December 31, 2019, respectively (weighted average interest rate of 4.72% in 2019)	$	3,681,795	$	3,496,735
Other notes payable, weighted average interest rate of 4.56% for the six months ended June 30, 2020 (weighted average interest rate of 5.77% in 2019) and maturity dates ranging from 2020 to 2021	10,570		58,388
Total long-term debt	3,692,365		3,555,123
Current portion	222,572		339,413
Total long-term debt, less current portion	$	3,469,793	$	3,215,710

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Leases (Tables)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Lease Costs

A summary of operating and financing lease expense (including the respective presentation on the condensed consolidated statements of operations) and cash flows from leasing transactions is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
Operating Leases (in thousands)	2020			2019			2020			2019
Facility operating expense	$	4,935		$	4,604		$	9,785		$	9,229
Facility lease expense	62,379			67,689			126,860			136,357
Operating lease expense	67,314			72,293			136,645			145,586
Operating lease expense adjustment (1)	8,221			4,429			14,954			8,812
Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements	(6,421		)	(1,000		)	(10,509		)	(1,000		)
Operating cash flows from operating leases	$	69,114		$	75,722		$	141,090		$	153,398

(1) Represents the difference between cash paid and expense recognized.

	Three Months Ended June 30,					Six Months Ended June 30,
Financing Leases (in thousands)	2020			2019		2020			2019
Depreciation and amortization	$	8,037		$	11,677	$	17,181		$	23,355
Interest expense: financing lease obligations	11,892			16,649		25,174			33,392
Financing lease expense	$	19,929		$	28,326	$	42,355		$	56,747
Operating cash flows from financing leases	$	11,892		$	16,649	$	25,174		$	33,392
Financing cash flows from financing leases	4,677			5,500		9,764			10,953
Changes in financing lease assets and liabilities for lessor capital expenditure reimbursement	(1,675		)	—		(3,414		)	—
Total cash flows from financing leases	$	14,894		$	22,149	$	31,524		$	44,345

Finance Lease, Liability, Maturity

The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of June 30, 2020 are as follows (in thousands):

Year Ending December 31,	Operating Leases			Financing Leases
2020 (six months)	$	149,099		$	33,263
2021	287,241			66,168
2022	286,171			66,808
2023	288,435			67,571
2024	289,829			68,814
Thereafter	578,012			168,527
Total lease payments	1,878,787			471,151
Purchase option liability and non-cash gain on future sale of property	—			437,356
Imputed interest and variable lease payments	(469,245		)	(305,533		)
Total lease obligations	$	1,409,542		$	602,974

Lessee, Operating Lease, Liability, Maturity

The aggregate amounts of future minimum lease payments, including community, office, and equipment leases recognized on the condensed consolidated balance sheet as of June 30, 2020 are as follows (in thousands):

Year Ending December 31,	Operating Leases			Financing Leases
2020 (six months)	$	149,099		$	33,263
2021	287,241			66,168
2022	286,171			66,808
2023	288,435			67,571
2024	289,829			68,814
Thereafter	578,012			168,527
Total lease payments	1,878,787			471,151
Purchase option liability and non-cash gain on future sale of property	—			437,356
Imputed interest and variable lease payments	(469,245		)	(305,533		)
Total lease obligations	$	1,409,542		$	602,974

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Supplemental Disclosure of Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2020

Supplemental Cash Flow Elements [Abstract]

Supplemental cash flow information

	Six Months Ended June 30,
(in thousands)	2020			2019
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	107,854		$	124,647
Income taxes paid, net of refunds	1,388			1,916
Capital expenditures, net of related payables:
Capital expenditures - non-development, net	$	82,077		$	121,066
Capital expenditures - development, net	6,823			10,623
Capital expenditures - non-development - reimbursable	13,923			1,000
Trade accounts payable	10,040			(10,392		)
Net cash paid	$	112,863		$	122,297
Acquisition of communities from Healthpeak:
Property, plant and equipment and leasehold intangibles, net	$	286,734		$	—
Operating lease right-of-use assets	(63,285		)	—
Financing lease obligations	129,196			—
Operating lease obligations	74,335			—
Loss (gain) on debt modification and extinguishment, net	(19,731		)	—
Net cash paid	$	407,249		$	—
Acquisition of other assets, net of related payables and cash received:
Property, plant and equipment and leasehold intangibles, net	$	179		$	—
Financing lease obligations	39,260			—
Net cash paid	$	39,439		$	—
Proceeds from sale of CCRC Venture, net:
Investments in unconsolidated ventures	$	(14,848	)	$	—
Current portion of long-term debt	34,706			—
Other liabilities	60,748			—
Loss (gain) on sale of assets, net	(369,831		)	—
Net cash received	$	(289,225	)	$	—
Proceeds from sale of other assets, net:
Prepaid expenses and other assets, net	$	(1,261	)	$	(5,798	)
Assets held for sale	(5,274		)	(41,882		)
Property, plant and equipment and leasehold intangibles, net	(938		)	(688		)
Investments in unconsolidated ventures	—			(156		)
Other liabilities	(1,862		)	(1,762		)
Loss (gain) on sale of assets, net	(1,979		)	(2,144		)
Net cash received	$	(11,314	)	$	(52,430	)
Supplemental Schedule of Non-cash Operating, Investing, and Financing Activities:
Assets designated as held for sale:
Prepaid expenses and other assets, net	$	—		$	(5	)
Assets held for sale	—			(4,928		)
Property, plant and equipment and leasehold intangibles, net	—			4,933
Net	$	—		$	—

Healthpeak master lease modification:
Property, plant and equipment and leasehold intangibles, net	$	(57,462	)	$	—
Operating lease right-of-use assets	88,044			—
Financing lease obligations	70,874			—
Operating lease obligations	(101,456		)	—
Net	$	—		$	—
Other lease termination and modification, net:
Prepaid expenses and other assets, net	$	—		$	(648	)
Property, plant and equipment and leasehold intangibles, net	13,548			(1,666		)
Operating lease right-of-use assets	1,350			(5,009		)
Financing lease obligations	(15,483		)	—
Operating lease obligations	606			5,654
Other liabilities	(21		)	(337		)
Loss (gain) on facility lease termination and modification, net	—			2,006
Net	$	—		$	—

During the three months ended June 30, 2019, the Company and its joint venture partner contributed cash in an aggregate amount of $13.3 million to a consolidated joint venture which owned three senior housing communities. The Company obtained a $6.6 million promissory note receivable from its joint venture partner secured by a 50% equity interest in the joint venture in a non-cash exchange for the Company funding the $13.3 million aggregate contribution in cash.

Restricted cash consists principally of escrow deposits for real estate taxes, property insurance, and capital expenditures required by certain lenders under mortgage debt agreements and deposits as security for self-insured retention risk under workers' compensation programs and property insurance programs. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sums to the total of the same such amounts shown in the condensed consolidated statements of cash flows.

(in thousands)	June 30, 2020		December 31, 2019
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	452,441	$	240,227
Restricted cash	28,397		26,856
Long-term restricted cash	41,292		34,614
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$	522,130	$	301,697

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Revenue (Tables)

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The Company disaggregates its revenue from contracts with customers by payor source. The Company believes it best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors. See details on a reportable segment basis in the tables below.

	Three Months Ended June 30, 2020
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	129,678	$	414,276	$	59,980	$	258	$	604,192
Government reimbursement	600		17,880		13,744		70,566		102,790
Other third-party payor programs	—		—		5,301		19,346		24,647
Total resident fee revenue	$	130,278	$	432,156	$	79,025	$	90,170	$	731,629
	Three Months Ended June 30, 2019
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	135,348	$	433,589	$	71,092	$	193	$	640,222
Government reimbursement	603		16,636		20,196		91,614		129,049
Other third-party payor programs	—		—		9,965		22,627		32,592
Total resident fee revenue	$	135,951	$	450,225	$	101,253	$	114,434	$	801,863
	Six Months Ended June 30, 2020
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	264,968	$	854,889	$	124,683	$	428	$	1,244,968
Government reimbursement	1,172		34,746		33,149		144,255		213,322
Other third-party payor programs	—		—		15,740		40,306		56,046
Total resident fee revenue	$	266,140	$	889,635	$	173,572	$	184,989	$	1,514,336

	Six Months Ended June 30, 2019
(in thousands)	Independent Living		Assisted Living and Memory Care		CCRCs		Health Care Services		Total
Private pay	$	270,393	$	875,500	$	142,625	$	383	$	1,288,901
Government reimbursement	1,252		33,251		41,683		180,271		256,457
Other third-party payor programs	—		—		20,672		45,312		65,984
Total resident fee revenue	$	271,645	$	908,751	$	204,980	$	225,966	$	1,611,342

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of segment reporting information

The following table sets forth selected segment financial and operating data:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2020			2019		2020			2019
Revenue and other operating income:
Independent Living (1)	$	130,278		$	135,951	$	266,140		$	271,645
Assisted Living and Memory Care (1)	432,308			450,225		889,787			908,751
CCRCs (1)(2)	88,571			101,253		183,118			204,980
Health Care Services(1)(2)	107,165			114,434		201,984			225,966
Management Services(3)	107,587			217,594		339,019			450,159
Total revenue and other operating income	$	865,909		$	1,019,457	$	1,880,048		$	2,061,501
Segment operating income: (4)
Independent Living	$	41,038		$	51,459	$	92,452		$	104,335
Assisted Living and Memory Care	87,708			133,144		219,709			273,843
CCRCs	13,850			17,847		33,781			39,484
Health Care Services	9,692			9,167		571			17,340
Management Services	6,076			15,449		114,791			31,192
Total segment operating income	158,364			227,066		461,304			466,194
General and administrative expense (including non-cash stock-based compensation expense)	52,518			57,576		107,113			113,887
Facility operating lease expense	62,379			67,689		126,860			136,357
Depreciation and amortization	93,154			94,024		183,892			190,912
Asset impairment:
Independent Living	—			—		31,317			—
Assisted Living and Memory Care	10,290			1,180		43,088			1,537
CCRCs	—			—		12,173			—
Health Care Services	—			—		—			—
Management Services	—			2,589		1,938			2,623
Total asset impairment:	10,290			3,769		88,516			4,160
Loss (gain) on facility lease termination and modification, net	—			1,797		—			2,006
Income (loss) from operations	$	(59,977	)	$	2,211	$	(45,077	)	$	18,872

	As of
(in thousands)	June 30, 2020		December 31, 2019
Total assets:
Independent Living	$	1,510,783	$	1,441,652
Assisted Living and Memory Care	4,043,817		4,157,610
CCRCs	792,989		742,809
Health Care Services	248,702		256,715
Corporate and Management Services	828,252		595,647
Total assets	$	7,424,543	$	7,194,433

(1) All revenue and other operating income is earned from external third parties in the United States.

(2) The CCRCs and Health Care Services segments include $9.7 million and $17.0 million, respectively, of other operating income recognized for grants pursuant to the Emergency Fund described in Note 3 and other government sources. Allocations to the applicable segment reflect the segment's receipt and acceptance of the amounts and the Company's estimates of the segment's satisfaction of the conditions of grant during the period.

(3) Management services segment revenue includes management fees and reimbursements of costs incurred on behalf of managed communities.

(4)

Segment operating income is defined as segment revenues and other operating income less segment facility operating expense (excluding depreciation and amortization) and costs incurred on behalf of managed communities.

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Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect change in accounting principle	$ 939,889	$ 1,052,230	$ 698,725	$ 866,204	$ 917,597	$ 1,018,413
Accumulated Deficit
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect change in accounting principle	$ (3,142,089)	(3,023,688)	(3,393,088)	$ (3,223,222)	(3,167,752)	(3,069,272)
Accumulated Deficit | Cumulative Effect Period Of Adoption Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect change in accounting principle		$ 0	$ (115)		$ 0	$ (55,885)

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COVID-19 Pandemic (Details) $ in Thousands		1 Months Ended	3 Months Ended	6 Months Ended
	Jul. 26, 2020 USD ($) community	Mar. 31, 2020 USD ($) transaction community	Jun. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Subsequent Event [Line Items]
Line of credit, borrowings outstanding			$ 166,381	$ 166,381	$ 0
Capital expenditures incurred but not yet paid				50,000
Aggregate minimum rent amount			1,878,787	1,878,787
Rent reduced the next twelve months			287,241	287,241
Total liquidity			600,200	600,200
Unrestricted cash and cash equivalents			452,441	452,441	$ 240,227
Marketable securities			109,900	109,900
Number of non-recourse mortgage debt financing transactions | transaction		3
Payments of financing costs		$ 208,500
Number of communities acquired | community		26
Debt remaining 2020			36,400	36,400
Debt remaining 2021			254,100	254,100
CARES Act
Subsequent Event [Line Items]
Facility operating expense			60,600	70,600
Non-cash asset impairment charges			10,300	87,000
Employer portion of payroll taxes delayed			26,500	26,500
Income recognized from Emergency Fund grant			26,400
Unrecognized grants			7,100	7,100
Net grants received from Emergency Fund			33,500	33,500
CARES Act | Accelerated and Advance Payment Program
Subsequent Event [Line Items]
Amount received from Accelerated and Advance Payment Program			$ 85,000	$ 85,000
Percent of Medicare advanced payment			100.00%	100.00%
Repayment period start (in days)				120 days
Repayment period (in days)				210 days
Health Care Services and CCRCs | CARES Act
Subsequent Event [Line Items]
Cash made available for Emergency Fund			$ 28,800
Nursing Facilities | CARES Act
Subsequent Event [Line Items]
Cash made available for Emergency Fund			4,700
Line of Credit | Fifth Amended and Restated Credit Agreement
Subsequent Event [Line Items]
Line of credit, borrowings outstanding		$ 166,400	166,400	$ 166,400
Line of Credit | Fifth Amended and Restated Credit Agreement | Revolving Credit Facility
Subsequent Event [Line Items]
Line of credit facility, remaining borrowing capacity			37,900	$ 37,900
Subsequent Event | Ventas, Inc
Subsequent Event [Line Items]
Capital expenditures incurred but not yet paid	$ 37,800
Number of communities leased | community	120
Payments for Advance to Affiliate	$ 119,200
Aggregate minimum rent amount	100,000
Rent reduced the next twelve months	$ 86,000
Loans Insured or Guaranteed by US Government Authorities | CARES Act
Subsequent Event [Line Items]
Relief received from the Emergency Fund			$ 33,500

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income (loss)	$ (118,401)	$ (55,470)	$ 251,114	$ (98,065)
Weighted average common shares outstanding:
Basic (in shares)	183,178	186,140	183,682	186,442
Effect of dilutive securities - Unvested restricted stock and restricted stock units	$ 0	$ 0	$ 180	$ 0
Diluted (in shares)	183,178	186,140	183,862	186,442
Earnings Per Share, Basic and Diluted [Abstract]
Basic (in dollars per share)	$ (0.65)	$ (0.30)	$ 1.37	$ (0.53)
Diluted (in dollars per share)	$ (0.65)	$ (0.30)	$ 1.37	$ (0.53)
Performance-Based Restricted Shares
Weighted average common shares outstanding:
Diluted (in shares)	1,800
Unvested Restricted Stock
Weighted average common shares outstanding:
Diluted (in shares)	9,100		7,100
Earnings Per Share, Basic and Diluted [Abstract]
Antidilutive securities (shares)		7,800		7,500

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Acquisitions, Dispositions and Other Transactions - Additional Information (Details) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2020 community	Jun. 30, 2020 USD ($) community	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) community	Jun. 30, 2019 USD ($) community	Dec. 31, 2019 USD ($) community
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of communities acquired	26
Number of communities disposed of					8
Operating and financing leases, number of communities		305		305
Assets held for sale | $		$ 37,397		$ 37,397		$ 42,671
Gain (loss) on sale of assets, net | $		$ (1,029)	$ 2,846	$ 371,810	$ 2,144
Communities Disposed of Through Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of communities disposed of				15
Communities Disposed of Through Lease Terminations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of communities disposed of				12
Sale of 8 communities
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net cash proceeds | $						44,100
Mortgage notes payable
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Payment for debt extinguishment or debt prepayment cost | $						$ 5,100
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Communities Disposed of Through Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of communities disposed of				1		14
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Two Communities Held For Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of communities classified as held for sale		2
Assets held for sale | $		$ 37,400		$ 37,400
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Sale of 1 Community
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net cash proceeds | $				5,500
Gain (loss) on sale of assets, net | $				$ 200
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Sale of 14 Communities
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net cash proceeds | $						$ 85,400
Gain (loss) on sale of assets, net | $						$ 5,500
Current Property Ownership Status
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of communities owned		355		355
Operating and financing leases, number of communities		305		305
Number of communities managed by third party		77		77
Communities Acquired Previously Leased Or Managed
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of communities acquired				26
Healthpeak
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of communities acquired				8
Purchase price | $				$ 39,300
Healthpeak | Communities Acquired Previously Leased Or Managed
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of communities acquired				18

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Acquisitions, Dispositions and Other Transactions - Healthpeak CCRC Venture and Master Lease Transactions (Details)		3 Months Ended			6 Months Ended
	Oct. 01, 2019 USD ($) entry_fee extension_option community	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) community	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Business Acquisition [Line Items]
Number of additional entry fee | entry_fee	1
Gain (loss) on sale of assets, net		$ (1,029,000)		$ 2,846,000	$ 371,810,000	$ 2,144,000
Payments (proceeds) for management agreement termination fee			$ 100,000,000.0
Marketable securities		109,873,000			109,873,000		$ 68,567,000
Gain (loss) on extinguishment of debt		(157,000)		$ (2,672,000)	$ 19,024,000	$ (2,739,000)
Number of communities previously subject to sale leaseback transactions | community					8
HCP, Inc. | CCRCs
Business Acquisition [Line Items]
Business acquisition, percentage of voting interests acquired	51.00%
Number of entry fee | entry_fee	14
Purchase price	$ 289,200,000
Working capital adjustment		$ 5,900,000
Payments to acquire interest in joint venture	1,060,000,000.00
Gain (loss) on sale of assets, net					$ 369,800,000
Payments (proceeds) for management agreement termination fee	$ 100,000,000.0
Master Lease Transactions
Business Acquisition [Line Items]
Number of continuing communities | community	24
Operating leases, rent expense	$ 41,700,000
Annual escalator rate	2.40%
Operating lease, initial lease rate	7.00%
Gain (loss) on extinguishment of debt					19,700,000
Financing lease obligations, carrying value					$ 105,100,000
Master Lease Transactions | HCP, Inc.
Business Acquisition [Line Items]
Payments to acquire interest in joint venture	$ 405,500,000
Direct acquisition costs	$ 1,700,000
Number of communities leased | community	25
Number of communities, acquired, previously leased or managed | community	18
Number of leases communities transferred to successor operator | community	1
Number of continuing communities | community	24
Number of extensions | extension_option	2
Term of extensions	10 years
Operating lease, capital expenditures, availability	$ 35,000,000.0
Non-Recourse First Mortgages | Master Lease Transactions
Business Acquisition [Line Items]
Proceeds from issuance of debt	$ 192,600,000

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Fair Value Measurements - Additional Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020 USD ($) community lease	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) community lease	Jun. 30, 2019 USD ($)	Mar. 31, 2020 USD ($) community	Dec. 31, 2019 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 109,873		$ 109,873			$ 68,567
Line of credit, borrowings outstanding	166,381		166,381			0
Debt	$ 3,692,365		$ 3,692,365			3,555,123
Number of communities leased | lease	237		237
Operating lease, right of use assets impairment charge	$ 6,600		$ 72,300
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	109,900		109,900
Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Operating lease, right of use assets impairment charge	6,600	$ 0	72,300	$ 0
Property, plant and equipment and leasehold intangibles impairment charge	$ 3,700	$ 1,200	$ 14,700	$ 1,200
Condensed Consolidated Balance Sheet
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Number of communities leased | community	9		9		35
Estimated fair value	$ 10,300		$ 10,300		$ 106,700
Minimum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate	11.20%		11.20%
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rate	12.30%		12.30%
Long-term debt and lines of credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	$ 3,900,000		$ 3,900,000			$ 3,600,000
Fifth Amended and Restated Credit Agreement | Line of Credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Line of credit, borrowings outstanding	$ 166,400		$ 166,400		$ 166,400

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Fair Value Measurements - Goodwill and Asset Impairment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Operating lease right-of-use assets	$ 6,600		$ 72,300
Goodwill and asset impairment	10,290	$ 3,769	88,516	$ 4,160	$ 88,516	$ 4,160
Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Property, plant and equipment and leasehold intangibles, net	3,700	1,200	14,700	1,200
Operating lease right-of-use assets	6,600	0	72,300	0
Investment in unconsolidated ventures	0	0	1,500	0
Other intangible assets, net	0	2,600	0	2,600
Other assets, net	0	0	0	400
Goodwill and asset impairment	$ 10,300	$ 3,800	$ 88,500	$ 4,200

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Stock-Based Compensation (Details) - Unvested Restricted Stock - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock Units and Stock Awards Granted (in shares)	78	4,438
Weighted Average Grant Date Fair Value (in dollars per share)	$ 3.91	$ 7.06
Total grant date fair value of restricted shares granted	$ 303	$ 31,341

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Goodwill - Additional Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Goodwill [Line Items]
Goodwill	$ 154,131,000	$ 154,131,000
Amortization expense related to definite-lived intangible assets	0
Independent Living
Goodwill [Line Items]
Goodwill	$ 27,300,000
Health Care Services
Goodwill [Line Items]
Goodwill		$ 126,800,000

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Property, Plant and Equipment and Leasehold Intangibles, Net (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property, plant and equipment and leasehold intangibles	$ 8,626,283		$ 8,626,283		$ 8,346,845
Accumulated depreciation and amortization	(3,369,915)		(3,369,915)		(3,237,011)
Property, plant and equipment and leasehold intangibles, net	5,256,368		5,256,368		5,109,834
Finance lease, right-of-use asset	400,000		400,000		600,000
Depreciation and amortization expense	93,200	$ 93,200	183,900	$ 189,300
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment and leasehold intangibles	507,336		507,336		450,894
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment and leasehold intangibles	5,257,530		5,257,530		4,790,769
Furniture and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment and leasehold intangibles	935,755		935,755		859,849
Resident and leasehold operating intangibles
Property, Plant and Equipment [Line Items]
Property, plant and equipment and leasehold intangibles	316,704		316,704		317,111
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment and leasehold intangibles	60,653		60,653		80,729
Assets under financing leases and leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment and leasehold intangibles	$ 1,548,305		$ 1,548,305		$ 1,847,493

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Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items]
Total long-term debt	$ 3,692,365	$ 3,555,123
Current portion	222,572	339,413
Total long-term debt, less current portion	3,469,793	3,215,710
Mortgage notes payable
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items]
Total long-term debt	3,681,795	3,496,735
Unamortized debt discount	$ 21,800	$ 17,000
Weighted average interest rate	4.08%	4.72%
Other notes payable
Long-Term Debt, Capital and Financing Leases and Financing Obligations [Line Items]
Total long-term debt	$ 10,570	$ 58,388
Weighted average interest rate	4.56%	5.77%

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Debt - Credit Facilities (Details) - USD ($)	Dec. 05, 2018	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019
Credit Facilities [Line Items]
Line of credit, borrowings outstanding		$ 166,381,000		$ 0
Fifth Amended and Restated Credit Agreement | Line of Credit
Credit Facilities [Line Items]
Percentage of loan availability from pledged assets that cannot exceed availability from mortgaged assets	10.00%
Line of credit, borrowings outstanding		166,400,000	$ 166,400,000
Letters of credit issued		48,200,000
Fifth Amended and Restated Credit Agreement | Line of Credit | Applicable Margin, Less Than Or Equal To 35% Utilization
Credit Facilities [Line Items]
Percentage of utilization	35.00%
Fifth Amended and Restated Credit Agreement | Line of Credit | Applicable Margin, Greater Than 50% Utilization
Credit Facilities [Line Items]
Percentage of utilization	50.00%
Fifth Amended and Restated Credit Agreement | Line of Credit | Unused Commitment Fee, Outstanding Debt Percentage Greater Than Or Equal To 50%
Credit Facilities [Line Items]
Quarterly commitment fee	0.25%
Outstanding debt percentage	50.00%
Fifth Amended and Restated Credit Agreement | Line of Credit | Unused Commitment Fee, Outstanding Debt Percentage Less Than 50%
Credit Facilities [Line Items]
Quarterly commitment fee	0.35%
Outstanding debt percentage	50.00%
Fifth Amended and Restated Credit Agreement | Line of Credit | Minimum | Applicable Margin, Greater Than 35% But Less Than Or Equal To 50% Utilization
Credit Facilities [Line Items]
Percentage of utilization	35.00%
Fifth Amended and Restated Credit Agreement | Line of Credit | Maximum | Applicable Margin, Greater Than 35% But Less Than Or Equal To 50% Utilization
Credit Facilities [Line Items]
Percentage of utilization	50.00%
Revolving Credit Facility | Fifth Amended and Restated Credit Agreement | Line of Credit
Credit Facilities [Line Items]
Credit facility, maximum borrowing capacity	$ 250,000,000
Line of credit facility, remaining borrowing capacity		37,900,000
Letter of Credit Sublimit | Fifth Amended and Restated Credit Agreement | Line of Credit
Credit Facilities [Line Items]
Credit facility, maximum borrowing capacity	60,000,000
Letters of credit issued		45,500,000
Swingline Line of Credit | Fifth Amended and Restated Credit Agreement | Line of Credit
Credit Facilities [Line Items]
Credit facility, maximum borrowing capacity	50,000,000
Option to Increase Maximum Borrowing Capacity | Fifth Amended and Restated Credit Agreement | Line of Credit
Credit Facilities [Line Items]
Credit facility, maximum borrowing capacity	$ 100,000,000
Letter of Credit | Fifth Amended and Restated Credit Agreement | Line of Credit
Credit Facilities [Line Items]
Credit facility, maximum borrowing capacity		$ 50,000,000.0
LIBOR | Fifth Amended and Restated Credit Agreement | Line of Credit | Applicable Margin, Less Than Or Equal To 35% Utilization
Credit Facilities [Line Items]
Basis spread on variable rate basis	2.25%
LIBOR | Fifth Amended and Restated Credit Agreement | Line of Credit | Applicable Margin, Greater Than 35% But Less Than Or Equal To 50% Utilization
Credit Facilities [Line Items]
Basis spread on variable rate basis	2.75%
LIBOR | Fifth Amended and Restated Credit Agreement | Line of Credit | Applicable Margin, Greater Than 50% Utilization
Credit Facilities [Line Items]
Basis spread on variable rate basis	3.25%

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Debt - Financings (Details) $ in Millions	Mar. 31, 2020 USD ($) community	Mar. 20, 2020 USD ($) community	Mar. 19, 2020 USD ($) community	Jan. 31, 2020 USD ($) community
Mortgage notes payable
Debt Instrument [Line Items]
Debt face amount	$ 73.1
Percentage of principal bearing fixed rate				70.00%
Interest rate, stated percentage	3.55%			3.62%
Amount bearing variable interest	$ 76.2
Amount bearing fixed interest	149.3
Mortgage notes payable | Non-Recourse Supplemental Loan
Debt Instrument [Line Items]
Debt face amount	149.3	$ 30.0	$ 29.2	$ 238.2
Mortgage notes payable | Mortgage Debt Due 2020
Debt Instrument [Line Items]
Debt face amount	$ 136.3
Extinguishment of debt				$ 33.1
Secured debt | Non-Recourse First Mortgages
Debt Instrument [Line Items]
Number of communities securing debt | community	18	1	7	14
LIBOR | Mortgage notes payable
Debt Instrument [Line Items]
Percentage of principal bearing fixed rate				30.00%
Basis spread on variable rate basis	210.00%	250.00%	225.00%	209.00%
Healthpeak | Mortgage notes payable | Non-Recourse Supplemental Loan
Debt Instrument [Line Items]
Debt face amount				$ 192.6
Healthpeak | Secured debt | Non-Recourse First Mortgages
Debt Instrument [Line Items]
Number of communities securing debt | community				13

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Leases (Details)	3 Months Ended
	Jun. 30, 2020 community lease
Leases [Abstract]
Operating and financing leases, number of communities | community	305
Operating lease, number of communities	237
Financing leases, number of communities	68
Minimum
Lessee, Lease, Description [Line Items]
Finance and operating lease, renewal term	5 years
Maximum
Lessee, Lease, Description [Line Items]
Finance and operating lease, renewal term	20 years

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Leases - Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Facility operating expense	$ 4,935	$ 4,604	$ 9,785	$ 9,229
Facility lease expense	62,379	67,689	126,860	136,357	$ 126,860	$ 136,357
Operating lease expense	67,314	72,293	136,645	145,586
Operating lease expense adjustment	8,221	4,429	14,954	8,812
Changes in operating lease assets and liabilities for lessor capital expenditure reimbursements	(6,421)	(1,000)	(10,509)	(1,000)
Operating cash flows from operating leases	69,114	75,722	141,090	153,398
Depreciation and amortization	8,037	11,677	17,181	23,355
Interest expense: financing lease obligations	11,892	16,649	25,174	33,392
Financing lease expense	19,929	28,326	42,355	56,747
Operating cash flows from financing leases	11,892	16,649	25,174	33,392
Financing cash flows from financing leases	4,677	5,500	9,764	10,953
Changes in financing lease assets and liabilities for lessor capital expenditure reimbursement	(1,675)	0	(3,414)	0
Total cash flows from financing leases	$ 14,894	$ 22,149	$ 31,524	$ 44,345

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Leases - Maturity ASC 842 (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Operating Leases
2020 (six months)	$ 149,099
2021	287,241
2022	286,171
2023	288,435
2024	289,829
Thereafter	578,012
Total lease payments	1,878,787
Purchase option liability and non-cash gain on future sale of property	0
Imputed interest and variable lease payments	(469,245)
Total lease obligations	1,409,542
Financing Leases
2020 (six months)	33,263
2021	66,168
2022	66,808
2023	67,571
2024	68,814
Thereafter	168,527
Total lease payments	471,151
Purchase option liability and non-cash gain on future sale of property	437,356
Imputed interest and variable lease payments	(305,533)
Total lease obligations	$ 602,974

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Supplemental Disclosure of Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Supplemental Cash Flow Information [Abstract]
Interest paid			$ 107,854	$ 124,647
Income taxes paid, net of refunds			1,388	1,916
Net cash paid			112,863	122,297
Operating lease right-of-use assets	$ 6,600		72,300
Loss (gain) on debt modification and extinguishment, net	(157)	$ (2,672)	19,024	(2,739)
Investments in unconsolidated ventures			(356)	(4,204)
Loss (gain) on sale of assets, net	(1,029)	2,846	371,810	2,144
Prepaid expenses and other assets, net			20,162	30,823
Loss (gain) on facility lease termination and modification, net	$ 0	$ 1,797	0	2,006	$ 0	$ 2,006
Additions to property, plant and equipment and leasehold improvements
Supplemental Cash Flow Information [Abstract]
Net cash paid			112,863	122,297
Trade accounts payable			10,040	(10,392)
Acquisition of communities from Healthpeak
Supplemental Cash Flow Information [Abstract]
Property, plant and equipment and leasehold intangibles, net			286,734	0
Operating lease right-of-use assets			(63,285)	0
Financing lease obligations			129,196	0
Operating lease obligations			74,335	0
Loss (gain) on debt modification and extinguishment, net			(19,731)	0
Net cash paid			407,249	0
Acquisition of assets, net of related payables and cash received
Supplemental Cash Flow Information [Abstract]
Property, plant and equipment and leasehold intangibles, net			179	0
Financing lease obligations			39,260	0
Net cash paid			39,439	0
Proceeds from sale of CCRC Venture, net:
Supplemental Cash Flow Information [Abstract]
Investments in unconsolidated ventures			(14,848)	0
Current portion of long-term debt			34,706	0
Other liabilities			60,748	0
Loss (gain) on sale of assets, net			(369,831)	0
Net cash received			(289,225)	0
Proceeds from sale of assets, net
Supplemental Cash Flow Information [Abstract]
Property, plant and equipment and leasehold intangibles, net			(938)	(688)
Investments in unconsolidated ventures			0	(156)
Other liabilities			(1,862)	(1,762)
Loss (gain) on sale of assets, net			(1,979)	(2,144)
Prepaid expenses and other assets, net			(1,261)	(5,798)
Assets held for sale			(5,274)	(41,882)
Net cash received			(11,314)	(52,430)
Assets designated as held for sale
Supplemental Cash Flow Information [Abstract]
Property, plant and equipment and leasehold intangibles, net			0	4,933
Prepaid expenses and other assets, net			0	(5)
Assets held for sale			0	(4,928)
Net			0	0
Healthpeak master lease modification:
Supplemental Cash Flow Information [Abstract]
Property, plant and equipment and leasehold intangibles, net			(57,462)	0
Operating lease right-of-use assets			88,044	0
Financing lease obligations			70,874	0
Operating lease obligations			(101,456)	0
Net			0	0
Noncash lease termination and modification, net
Supplemental Cash Flow Information [Abstract]
Property, plant and equipment and leasehold intangibles, net			13,548	(1,666)
Operating lease right-of-use assets			1,350	(5,009)
Financing lease obligations			(15,483)	0
Operating lease obligations			606	5,654
Other liabilities			(21)	(337)
Prepaid expenses and other assets, net			0	(648)
Loss (gain) on facility lease termination and modification, net			0	2,006
Net			0	0
Non-development | Additions to property, plant and equipment and leasehold improvements
Supplemental Cash Flow Information [Abstract]
Net cash paid			82,077	121,066
Development | Additions to property, plant and equipment and leasehold improvements
Supplemental Cash Flow Information [Abstract]
Net cash paid			6,823	10,623
Non-development - reimbursable | Additions to property, plant and equipment and leasehold improvements
Supplemental Cash Flow Information [Abstract]
Net cash paid			$ 13,923	$ 1,000

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Supplemental Disclosure of Cash Flow Information - Cash and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Supplemental Cash Flow Elements [Abstract]
Cash and cash equivalents	$ 452,441	$ 240,227
Restricted cash	28,397	26,856
Long-term restricted cash	41,292	34,614
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$ 522,130	$ 301,697	$ 324,959	$ 450,218

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Supplemental Disclosure of Cash Flow Information - Additional Information (Details) - Joint venture $ in Millions	3 Months Ended
	Jun. 30, 2019 USD ($) community
Related Party Transaction [Line Items]
Payments to acquire interest in joint venture	$ 13.3
Number of communities owned | community	3
Notes receivable	$ 6.6
Percentage ownership	50.00%

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Mar. 31, 2019
Valuation Allowance [Line Items]
Gross deferred federal, state and local tax expense (benefit)	$ 26,700		$ 64,200
Gain (loss) on sale of assets, net	(1,029)	$ 2,846	371,810	$ 2,144
Deferred federal, state and local tax expense (benefit)	(28,900)
Change in valuation allowance	33,200		79,500
Deferred tax asset related to employee compensation		1,700		1,700		$ 1,700
Valuation allowance	329,500		329,500		$ 408,900
Federal and State
Valuation Allowance [Line Items]
Deferred federal, state and local tax expense (benefit)		(13,000)		(19,500)
Tax expense (benefit)		$ 13,000		$ 21,200
ASC 842
Valuation Allowance [Line Items]
Change in valuation allowance			13,800
Current operating loss
Valuation Allowance [Line Items]
Change in valuation allowance			21,700
CCRC Ventures, LLC
Valuation Allowance [Line Items]
Gain (loss) on sale of assets, net	$ 93,100
Healthpeak
Valuation Allowance [Line Items]
Change in valuation allowance			$ 117,600

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Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Revenue	$ 865,909	$ 1,019,457	$ 1,880,048	$ 2,061,501
Private pay
Disaggregation of Revenue [Line Items]
Revenue	604,192	640,222	1,244,968	1,288,901
Government reimbursement
Disaggregation of Revenue [Line Items]
Revenue	102,790	129,049	213,322	256,457
Other third-party payor programs
Disaggregation of Revenue [Line Items]
Revenue	24,647	32,592	56,046	65,984
Total resident fee revenue
Disaggregation of Revenue [Line Items]
Revenue	731,629	801,863	1,514,336	1,611,342
Independent Living | Private pay
Disaggregation of Revenue [Line Items]
Revenue	129,678	135,348	264,968	270,393
Independent Living | Government reimbursement
Disaggregation of Revenue [Line Items]
Revenue	600	603	1,172	1,252
Independent Living | Other third-party payor programs
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Independent Living | Total resident fee revenue
Disaggregation of Revenue [Line Items]
Revenue	130,278	135,951	266,140	271,645
Assisted Living and Memory Care | Private pay
Disaggregation of Revenue [Line Items]
Revenue	414,276	433,589	854,889	875,500
Assisted Living and Memory Care | Government reimbursement
Disaggregation of Revenue [Line Items]
Revenue	17,880	16,636	34,746	33,251
Assisted Living and Memory Care | Other third-party payor programs
Disaggregation of Revenue [Line Items]
Revenue	0	0	0	0
Assisted Living and Memory Care | Total resident fee revenue
Disaggregation of Revenue [Line Items]
Revenue	432,156	450,225	889,635	908,751
CCRCs | Private pay
Disaggregation of Revenue [Line Items]
Revenue	59,980	71,092	124,683	142,625
CCRCs | Government reimbursement
Disaggregation of Revenue [Line Items]
Revenue	13,744	20,196	33,149	41,683
CCRCs | Other third-party payor programs
Disaggregation of Revenue [Line Items]
Revenue	5,301	9,965	15,740	20,672
CCRCs | Total resident fee revenue
Disaggregation of Revenue [Line Items]
Revenue	79,025	101,253	173,572	204,980
Health Care Services | Private pay
Disaggregation of Revenue [Line Items]
Revenue	258	193	428	383
Health Care Services | Government reimbursement
Disaggregation of Revenue [Line Items]
Revenue	70,566	91,614	144,255	180,271
Health Care Services | Other third-party payor programs
Disaggregation of Revenue [Line Items]
Revenue	19,346	22,627	40,306	45,312
Health Care Services | Total resident fee revenue
Disaggregation of Revenue [Line Items]
Revenue	$ 90,170	$ 114,434	$ 184,989	$ 225,966

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Revenue - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Monthly resident fees	$ 34.7		$ 34.7		$ 38.9
Revenue recognized			55.2	$ 72.7
Facility expense, allowance for credit loss	3.6	$ 3.6	7.6	$ 7.1
Deferred Revenue and Credits
Disaggregation of Revenue [Line Items]
Contract with customer, liability	154.7		154.7		$ 72.5
CARES Act | Accelerated and Advance Payment Program
Disaggregation of Revenue [Line Items]
Amount received from Accelerated and Advance Payment Program	$ 85.0		$ 85.0

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Segment Information (Details) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) segment	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | segment			5
Revenue	$ 865,909	$ 1,019,457			$ 1,880,048	$ 2,061,501
Segment operating income	158,364	227,066			461,304	466,194
General and administrative expense (including non-cash stock-based compensation expense)	52,518	57,576	$ 107,113	$ 113,887	107,113	113,887
Facility lease expense	62,379	67,689	126,860	136,357	126,860	136,357
Depreciation and amortization	93,154	94,024	183,892	190,912	183,892	190,912
Asset impairment	10,290	3,769	88,516	4,160	88,516	4,160
Loss (gain) on facility lease termination and modification, net	0	1,797	0	2,006	0	2,006
Income (loss) from operations	(59,977)	2,211	(45,077)	$ 18,872	(45,077)	18,872
Total assets	7,424,543		7,424,543		7,194,433
Operating Segments | Independent Living
Segment Reporting Information [Line Items]
Revenue	130,278	135,951			266,140	271,645
Segment operating income	41,038	51,459			92,452	104,335
Asset impairment	0	0			31,317	0
Total assets	1,510,783		1,510,783		1,441,652
Operating Segments | Assisted Living and Memory Care
Segment Reporting Information [Line Items]
Revenue	432,308	450,225			889,787	908,751
Segment operating income	87,708	133,144			219,709	273,843
Asset impairment	10,290	1,180			43,088	1,537
Total assets	4,043,817		4,043,817		4,157,610
Operating Segments | CCRCs
Segment Reporting Information [Line Items]
Revenue	88,571	101,253			183,118	204,980
Segment operating income	13,850	17,847			33,781	39,484
Asset impairment	0	0			12,173	0
Total assets	792,989		792,989		742,809
Operating Segments | Health Care Services
Segment Reporting Information [Line Items]
Revenue	107,165	114,434			201,984	225,966
Segment operating income	9,692	9,167			571	17,340
Asset impairment	0	0			0	0
Total assets	248,702		248,702		256,715
Operating Segments | Management Services
Segment Reporting Information [Line Items]
Revenue	107,587	217,594			339,019	450,159
Segment operating income	6,076	15,449			114,791	31,192
Asset impairment	0	$ 2,589			1,938	$ 2,623
Total assets	828,252		$ 828,252		$ 595,647
CARES Act | CCRCs
Segment Reporting Information [Line Items]
Cash made available for Emergency Fund	9,700
CARES Act | Health Care Services
Segment Reporting Information [Line Items]
Cash made available for Emergency Fund	$ 17,000

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Subsequent Events (Details) $ / shares in Units, shares in Millions		6 Months Ended
	Jul. 26, 2020 USD ($) extension_option community $ / shares shares	Jun. 30, 2020 USD ($) $ / shares	Dec. 31, 2019 $ / shares
Subsequent Event [Line Items]
Aggregate minimum rent amount		$ 1,878,787,000
Capital expenditures incurred but not yet paid		$ 50,000,000
Common stock, par value (in dollars per share) | $ / shares		$ 0.01	$ 0.01
Ventas, Inc | Subsequent Event
Subsequent Event [Line Items]
Term of extensions	10 years
Number of communities leased | community	120
Aggregate minimum rent amount	$ 100,000,000
Reduction in rent amount to be paid	$ 83,000,000
Annual escalator rate	3.00%
Term of lease	24 months
Number of extensions | extension_option	2
Capital expenditures incurred but not yet paid	$ 37,800,000
Minimum tangible net worth	600,000,000
Control fees	$ 25,000,000
Number of owned communities transferred | community	5
Extinguishment of debt	$ 78,000,000
Cash payments to related party	115,000,000
Deposit disbursements	42,400,000
Repayments of lines of credit	4,200,000
Community Level Basis | Ventas, Inc | Subsequent Event
Subsequent Event [Line Items]
Escrow amount	1,500
Aggregate Community Basis | Ventas, Inc | Subsequent Event
Subsequent Event [Line Items]
Escrow amount	$ 3,600
Disbursement Multiplier | Ventas, Inc | Subsequent Event
Subsequent Event [Line Items]
Annual escalator rate	50.00%
Multiplier Percentage | Ventas, Inc | Subsequent Event
Subsequent Event [Line Items]
Annual escalator rate	4.50%
Unsecured Debt | Ventas, Inc | Subsequent Event
Subsequent Event [Line Items]
Debt face amount	$ 45,000,000
Interest rate, stated percentage	9.00%
Interest rate percentage increase per anniversary	0.50%
The Warrant | Ventas, Inc | Subsequent Event
Subsequent Event [Line Items]
Number of shares authorized to be purchased | shares	16.3
Common stock, par value (in dollars per share) | $ / shares	$ 0.01
Share price (in usd per share) | $ / shares	$ 3.00
Shares voting percentage ownership cap	9.60%